PALLAVUR KRISHNAN MAHADEVAN, PUNE V. DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-8(3), MUMBAI

ITA 5643/MUM/2017

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 8836 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 05-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H N SINGH
• Assessee Lawyers: ARVIND SONDE WITH SHRI V MOHAN
• Keywords: Unexplained investment; Gift; Search and seizure; Validity of assessment
• Section: 143(3); 153A; 143(1); 132

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL C BENCH MUMB AI BEFORE SHRI G.S. PANNU, VICE- PRESIDENT AND SHRI PAWAN SINGH JUDICIAL MEMBER ITA NO. 5643/MUM/2017 (ASSESSMENT YEAR 2007-08 ) ITA NO. 5644/MUM/2017 (ASSESSMENT YEAR 2008-09 ) ITA NO. 5645/MUM/2017 (ASSESSMENT YEAR 2009-10 ) ITA NO. 5646/MUM/2017 (ASSESSMENT YEAR 2010-11 ) ITA NO. 5647/MUM/2017 (ASSESSMENT YEAR 2011-12 ) ITA NO. 5648/MUM/2017 (ASSESSMENT YEAR 2012-13 ) ITA NO. 5649/MUM/2017 (ASSESSMENT YEAR 20013-14 ) SHRI PALLAVUR KRISHNAN MAHADEVAN, C/O V. SANKAR AIYAR & CO., 2-C, COURT CHAMBERS 35, NEW MARINE LINES, MUMBAI-400020 . PAN: AEDPM2993K VS. DCIT CC-8(3) ROOM NO. 659, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020. APPELLANT RESPONDENT APPELLANT BY : SHRI ARVIND SONDE WITH SHRI V.MOHAN (AR) RESPONDENT BY : SHRI H.N. SINGH (CIT-DR) DATE OF HEARING : 18.09.2018 DATE OF PRONOUNCEMEN T : 12.12.2018 ORDERUNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER; 1. THIS GROUP OF SEVEN APPEALS BY ASSESSEE ARE DIRECTE D AGAINST ORDER OF LD. CIT(A)-5-, MUMBAI FOR ASSESSMENT YEAR 2007-08 TO 20 13-14. IN ALL ITA NO. 5643 TO 5649 MUM 2017-SHRI PALLA VUR KRISHNAN MAHADEVAN 2 APPEALS, THE ASSESSEE HAS RAISED THE CERTAIN COMMON GROUNDS OF APPEAL, THEREFORE, ALL THE APPEALS WERE CLUBBED TOGETHER HE ARD AND ARE DECIDED BY COMMON ORDER FOR THE SAKE OF BREVITY. IN APPEAL FOR ASSESSMENT YEAR 2007-08, THE ASSESSEE HAS RAISED THE FOLLOWING GROU NDS OF APPEAL: EACH OF THE FOLLOWING GROUNDS IS INDEPENDENT OF AND WITHOUT PREJUDICE TO ONE ANOTHER: (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW AND FROM THE IMPUGNED ORDER OF ASSESSMENT, THE DEPARTMENT HAD NO INFORMATION IN ITS POSSESSION AS REQUIRED UNDER SECTION 132 OF THE INC OME TAX ACT 1961 (THE ACT), THAT ANY MONEY, BULLION, JEWELLERY OR OTHER V ALUABLE ARTICLE OR THING, WHICH REPRESENTED UNDISCLOSED INCOME OR PROPERTY OR INCOME/PROPERTY THAT WOULD NOT BE DISCLOSED BY THE ASSESSEE, WAS IN THE ASSESSEE'S POSSESSION AND HENCE THE SEARCH ACTION INITIATED UNDER SECTION 132 OF THE ACT IS WITHOUT JURISDICTION AND, CONSEQUENTLY, THE NOTICE ISSUED U NDER SECTION 153A OF THE ACT AND THE ORDER PASSED UNDER SECTION 153A R/W SEC TION 143(3) OF THE ACT ARE INVALID IN LAW AND OUGHT TO BE CANCELLED. (2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE APPROVAL GRANTED BY THE ADDITIONAL COMMISSIONER OF INCOME TAX UNDER SECTION 153D OF THE ACT BEING MECHANICAL AND WITHOU T APPLICATION OF MIND, THE ORDER PASSED UNDER SECTION 153A R/W SECTION 143 (3) OF THE ACT IS BAD IN LAW AND OUGHT TO BE ANNULLED. (3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT (A) ERRED IN CONFIRMING THE ADDITION OF RS.54,500/- MADE BY THE A.O. UNDER SECTION 69A OF THE ACT. (4) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) OUGHT TO HAVE ACCEPTED THE AFFIDAVITS FILED BEFORE HIM IN SUPPORT OF THE AMOUNTS RECEIVED BY WAY OF GIFTS BY THE ASSESSE E'S MOTHER AND OUGHT TO HAVE DELETED RS.29,000/- OUT OF THE ADDITION OF RS. 54,500/- MADE BY THE A.O. UNDER SECTION 69A OF THE ACT. 2. VIDE APPLICATION DATED 01.12.2017, THE ASSESSEE HAS RAISED THE FOLLOWING ADDITIONAL GROUNDS OF APPEAL: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ADDITION OF RS. 54,400/- MADE BY THE LD. A.O. IN THE UNABATED A SSESSMENT FOR A.Y. 2007-08 IS NOT BASED ON ANY INCRIMINATING MATERIAL FOUND IN THE COURSE OF ITA NO. 5643 TO 5649 MUM 2017-SHRI PALLA VUR KRISHNAN MAHADEVAN 3 SEARCH AND SEIZURE AND CONSEQUENTLY IS WITHOUT ANY JURISDICTION, ILLEGAL AND INVALID IN LAW AND OUGHT TO BE DELETED. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL, FILED HIS RETURN OF INCOME FOR ASSESSMENT YEAR 2007-08 ON 30. 07.2007 DECLARING TOTAL INCOME OF RS. 10,60,074/-. THE RETURN OF INCO ME WAS PROCESSED UNDER SECTION 143(1) AND WAS ACCEPTED ON RETURNED I NCOME. A SEARCH AND SEIZURE ACTION WAS CARRIED OUT UNDER SECTION 132 IN CASE OF M/S WALCHANDNAGAR INDUSTRIES LTD. ON 04.12.2012 BY ADIT , PUNE. THE ASSESSEE WAS EMPLOYED WITH WALCHANDNAGAR INDUSTRIES ; HENCE, THE ASSESSEE WAS ALSO COVERED. IN THE SEARCH CERTAIN JE WELRY ITEMS OF GOLD, SILVER AND CASH OF RS. 16,00,000/- WAS FOUND. NO JE WELRY ITEM WAS SEIZED BY THE INVESTIGATION TEAM. HOWEVER, THE CASH SEIZED BY THE INVESTIGATION TEAM IS STILL WITH DEPARTMENT. THE OTHER DOCUMENT W HICH WAS ALSO FOUND DURING THE SEARCH ACTION WAS ALSO SEIZED AND INVENT ORISED. STATEMENT OF ASSESSEE WAS ALSO RECORDED DURING THE SEARCH UNDER SECTION 132(4) OF THE ACT. 4. CONSEQUENT UPON THE SEARCH, A NOTICE UNDER SECTION 153A WAS ISSUED TO THE ASSESSEE ON 28.11.2013. IN RESPONSE TO THE NOTI CE, THE ASSESSEE FILED RETURN OF INCOME ON 27.12.2013 DECLARING INCOME AT RS. 13,26,060/-. THE ASSESSMENT WAS COMPLETED UNDER SECTION 153A R.W.S 1 43(3) ON 11.03.2015. THE ASSESSING OFFICER WHILE PASSING THE ASSESSMENT ORDER ITA NO. 5643 TO 5649 MUM 2017-SHRI PALLA VUR KRISHNAN MAHADEVAN 4 MADE THE ADDITION UNDER SECTION 69A OF RS. 54,400/- ON ACCOUNT OF CASH DEPOSITED IN THE BANK ACCOUNT OF MOTHER OF ASSESSEE (SMT. RAJAM KRISHAN). THE ASSESSING OFFICER MADE THE ADDITION ON HIS OBSERVATION THAT ASSESSEE HAS NOT FURNISHED ANY EVIDENCE TO SUB STANTIATE THE SOURCE OF CASH DEPOSIT IN THE BANK ACCOUNT OF HIS MOTHER OF R S. 54,400/-. THEREFORE, THE ADDITION OF RS. 54,400/- WAS MADE ON ACCOUNT OF UNEXPLAINED MONEY. ON APPEAL BEFORE THE LD. CIT(A), THE ADDITION WAS C ONFIRMED. THEREFORE, FURTHER AGGRIEVED BY THE ORDER OF LD. CIT(A), THE A SSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. 5. WE HAVE HEARD THE SUBMISSION OF LD. AUTHORIZED REPR ESENTATIVE (AR) OF THE ASSESSEE AND LD. DEPARTMENTAL REPRESENTATIVE (D R) FOR THE REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN SU PPORT OF ADDITIONAL GROUNDS OF APPEAL LD A FOR THE ASSESSEE SUBMITS THA T THE ISSUE RAISED BY THE ASSESSEE IS PURELY LEGAL IN NATURE AND DOES NOT REQUIRE ANY INVESTIGATION OF FACTS AND MAY BE ADMITTED. THE ADD ITIONAL GROUND OF APPEAL GOES TO THE ROOT OF THE CASE AND MAY BE DECI DED FIRST. 6. ON THE OTHER HAND THE LD DR OPPOSED THE ADMISSION O F ADDITIONAL GROUND OF APPEAL AT THIS STAGE. THE LD DR SUBMITS THAT THE ASSESSEE HAS NOT RAISED SUCH GROUNDS OF APPEAL BEFORE FIRST APPELLATE STAGE AND THE APPLICATION FOR ADMISSION OF ADDITIONAL GROUNDS OF APPEAL MAY BE RE JECTED. ITA NO. 5643 TO 5649 MUM 2017-SHRI PALLA VUR KRISHNAN MAHADEVAN 5 7. WE HAVE CONSIDERED THE SUBMISSIONS OF THE ASSESSEE AND NOTED THAT NO NEW FACTS ARE TO BE INVESTIGATED OR TO BE BROUGHT O N RECORD FOR ADJUDICATION OF THE ADDITIONAL GROUND OF APPEAL. TH E FACTS RELATED WITH THE ADDITIONAL GROUND ARE AVAILABLE ON RECORD; MOREOVER , THE ADDITIONAL GROUND OF APPEAL IS PURELY LEGAL IN NATURE. CONSIDE RING THE CONTENTION OF THE PARTIES AND THE RELEVANCY OF THE ADDITIONAL GRO UND, THE ADDITIONAL GROUND IS ALLOWED. 8. IN SUPPORT OF ADDITIONAL GROUND OF APPEAL THE LD. A R OF THE ASSESSEE SUBMITS THAT NO INCRIMINATING MATERIAL EXCEPT CERTA IN JEWELRY AND CASH OF RS. 12,00,000/- WERE FOUND IN THE SEARCH. THE AMOUN T LYING DEPOSITED IN THE ACCOUNT OF ASSESSEES MOTHER WAS HER OWN MONEY. NO INCRIMINATING MATERIAL QUA THE MONEY DEPOSITED IN HIS MOTHERS AC COUNT WAS FOUND OR SEIZED IN THE SEARCH. ON MERITS, THE LD. AR FOR THE ASSESSEE SUBMITS THAT ASSESSEES MOTHER WAS AS CLASSICAL CARNATIC MUSIC ( VOCAL) AND PERFORMED VARIOUS SHOWS AT PUBLIC PLATFORM IN PUNE. SHE ALSO USED TO TRAIN THE STUDENTS WHO ARE SCATTERED ACROSS THE WORD. THE AMO UNT LYING DEPOSIT IN THE ACCOUNT OF ASSESSEES MOTHER WAS GIFTED TO HER BY RELATIVE ON VARIOUS OCCASIONS. THE RELATIVE OF THE ASSESSEE HAS CONFIRM ED THE GIFT GIVEN ON VARIOUS OCCASION. THEREFORE, NO ADDITION IS LIABLE TO BE MADE UNDER SECTION 69A IN ABSENCE OF INCRIMINATING MATERIAL FO UND DURING THE SEARCH. ITA NO. 5643 TO 5649 MUM 2017-SHRI PALLA VUR KRISHNAN MAHADEVAN 6 9. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SUPPO RTED THE ORDER OF LOWER AUTHORITIES. THE LD. DR FOR THE REVENUE FURTH ER SUBMITS THAT DURING THE SEARCH, THE INCRIMINATING MATERIAL WAS FOUND AN D ON THE BASIS OF ADDITION WAS MADE. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF THE PART IES AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE ASSESS ING OFFICER MADE THE ADDITION OF RS. 54,400/- ON ACCOUNT OF DEPOSITS IN THE ACCOUNTS IN THE NAME OF ASSESSEES MOTHER. THE ASSESSING OFFICER WA S OF THE VIEW THAT THE ASSESSEES MOTHER HAS NO INDEPENDENT SOURCE OF INCO ME. THE LD. CIT(A) CONFIRMED THE ACTION OF ASSESSING OFFICER HOLDING T HAT SMT. RAJAM KRISHNAN, MOTHER OF ASSESSEE HAS NO SUFFICIENT INCO ME TO EXPLAIN THE SOURCE OF DEPOSIT IN THE BANK. THEREFORE, THE ASSES SING OFFICER WAS JUSTIFIED. 11. WE HAVE NOTED THAT THE ASSESSING OFFICER NOWHERE IN HIS ORDER HAS MENTIONED THAT THE ADDITION IS BASED ON INCRIMINATI NG MATERIAL FOUND DURING THE SEARCH ACTION. THE HONBLE BOMBAY HIGH C OURT IN CONTINENTAL WAREHOUSING (58 TAXMANN.COM 78) HAS ALSO TAKEN THE SAME VIEW THAT NO ADDITION IN THE ASSESSMENT UNDER SECTION 153A IS PE RMISSIBLE IN ABSENCE OF INCRIMINATING MATERIAL. THEREFORE, WE ARE IN AGR EEMENT WITH THE SUBMISSION OF LD. AR OF THE ASSESSEE THAT NO ADDITI ON CAN BE MADE IN THE ITA NO. 5643 TO 5649 MUM 2017-SHRI PALLA VUR KRISHNAN MAHADEVAN 7 ASSESSMENT UNDER SECTION 153A IN ABSENCE OF INCRIMI NATING MATERIAL FOUND DURING THE SEARCH UNDER SECTION 132. THEREFOR E, WE ALLOWED THE ADDITIONAL GROUND OF APPEAL RAISED BY ASSESSEE. 12. SINCE, WE HAVE ALLOWED THE ADDITIONAL GROUND OF APP EAL RAISED BY ASSESSEE, THEREFORE, DISCUSSION ON OTHER GROUNDS OF APPEAL HAVE BECOME ACADEMIC. 13. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ITA NO. 5644/MUM/2017 (A Y 2008-09) ITA NO. 5645/MUM/2017 (A Y 2009-10) ITA NO. 5646/MUM/2017 (A Y 2010-11) ITA NO. 5647/MUM/2017 (A Y 2011-12) ITA NO. 5648/MUM/2017 (A Y 2012-13) 14. IN ALL APPEALS THE ASSESSEE HAS RAISED IDENTICAL A DDITIONAL GROUND OF APPEAL AS RAISED IN APPEAL FOR AY 2007-08, EXCEPT T HE VARIATION OF FIGURE OF ADDITIONS; THE FACTS OF ALL THE YEAR ARE COMMON. CONSIDERING THE FACTS THAT WE HAVE ALREADY ALLOWED THE SIMILAR ADDITIONAL GROUND OF APPEAL IN APPEAL FOR AY 2007-08, THEREFORE, FOLLOWING THE PRI NCIPAL OF CONSISTENCY ALL THESE APPEALS ARE ALLOWED WITH SIMILAR OBSERVAT ION. 15. IN THE RESULT ALL THE APPEALS FOR AY 2008-09 TO 20 12-13 ARE ALLOWED. ITA NO. 5649/MUM/2017 FOR AY 2013-14 16. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEA L: (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW AND FROM THE IMPUGNED ORDER OF ASSESSMENT, THE DEPARTMENT HAD NO INFORMATION IN ITS ITA NO. 5643 TO 5649 MUM 2017-SHRI PALLA VUR KRISHNAN MAHADEVAN 8 POSSESSION AS REQUIRED UNDER SECTION 132 OF THE INC OME TAX ACT 1961 (THE ACT), THAT ANY MONEY, BULLION, JEWELLERY OR OTHER V ALUABLE ARTICLE OR THING, WHICH REPRESENTED UNDISCLOSED INCOME OR PROPERTY OR INCOME/PROPERTY THAT WOULD NOT BE DISCLOSED BY THE ASSESSEE, WAS IN THE ASSESSEE'S POSSESSION AND HENCE THE SEARCH ACTION INITIATED UNDER SECTION 132 OF THE ACT IS WITHOUT JURISDICTION AND, CONSEQUENTLY, THE NOTICE ISSUED U NDER SECTION 153A OF THE ACT AND THE ORDER PASSED UNDER SECTION 153A R/W SEC TION 143(3) OF THE ACT ARE INVALID IN LAW AND OUGHT TO BE CANCELLED. (2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE APPROVAL GRANTED BY THE ADDITIONAL COMMISSIONER OF INCOME TAX UNDER SECTION 153D OF THE ACT BEING MECHANICAL AND WITHOU T APPLICATION OF MIND, THE ORDER PASSED UNDER SECTION 153A R/W SECTION 143 (3) OF THE ACT IS BAD IN LAW AND OUGHT TO BE ANNULLED. (3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT (A) ERRED IN CONFIRMING THE ADDITION OF RS.34,000/- MADE BY THE A.O. UNDER SECTION 69A OF THE ACT. (4) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) OUGHT TO HAVE ACCEPTED THE AFFIDAVITS FILED BEFORE HIM IN SUPPORT OF THE AMOUNTS RECEIVED BY WAY OF GIFTS BY THE ASSESSE E'S MOTHER AND OUGHT TO HAVE DELETED RS.34,000/- MADE BY THE A.O. UNDER SEC TION 69A OF THE ACT. (5) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, LD CIT(A) OUGHT TO HAVE DELETED THE ADDITION OF RS.13,57,165/- MADE BY AO UNDER SECTION 69A OF THE ACT AS UNEXPLAINED INVESTMENT IN JEWELLERY . (6) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, LD CIT(A) OUGHT TO HAVE DELETED THE ADDITION OF RS.99,000/- MADE BY AO UNDER SECTION 69A OF THE ACT AS UNEXPLAINED INVESTMENT IN SILVER AND O THER VALUABLE ARTICLE. (7) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, LD CIT(A) OUGHT TO DIRECTED THE AO TO ADJUST THE CASH SEIZED OF RS. 16 ,00,000/- AT THE TIME OF SEARCH AGAINST THE ADVANCE TAX LIABILITY OF THE ASS ESSEE FOR AY 2013-14 AND GRANT CONSEQUENTIAL RELIEF AND REFUND THE EXCESS AM OUNT, IF ANY, LYING WITH THE DEPARTMENT. (8) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE ASSESSEE SUBITS THAT THE AO MAY BE DIRECTED TO ADJUST THE CA SH SEIZED OF RS. 16,00,000/- AT THE TIME OF SEARCH AGAINST THE ADVAN CE TAX LIABILITY OF THE ASSESSEE FOR AY 2013-14 AND GRANT CONSEQUENTIAL REL IEF AND REFUND OF THE EXCESS AMOUNT, IF ANY, LYING WITH THE DEPARTMENT. ITA NO. 5643 TO 5649 MUM 2017-SHRI PALLA VUR KRISHNAN MAHADEVAN 9 17. GROUND NO. 1 RELATES TO THE VALIDITY OF THE SEARCH ACTION AND GROUND NO. 2 RELATES TO VALIDITY OF ASSESSMENT ORDER IN ABSENC E OF APPROVAL UNDER SECTION 153D. THE LD. AR FOR THE ASSESSEE NOT ARGUE D ANYTHING IN SUPPORT OF THESE GROUNDS OF APPEAL, THEREFORE, BOTH THE GRO UNDS OF APPEAL ARE TREATED AS NOT PRESSED AND DISMISSED. 18. GROUND NO.3 & 4 RELATES TO THE ADDITION OF DEPOSIT S IN THE BANK ACCOUNT OF MOTHER OF ASSESSEE. THE LD. AR FOR THE ASSESSEE SUBMITS THAT THE ASSESSEES MOTHER WAS AS CLASSICAL CARNATIC MUSIC ( VOCAL) AND PERFORMED VARIOUS SHOWS AT PUBLIC PLATFORM IN PUNE. SHE ALSO USED TO TRAIN THE STUDENTS WHO ARE SCATTERED ACROSS THE WORD. THE AMO UNT LYING DEPOSIT IN THE ACCOUNT OF ASSESSEES MOTHER WAS GIFTED TO HER BY RELATIVE ON VARIOUS OCCASIONS. THE RELATIVE OF THE ASSESSEE HAS CONFIRM ED THE GIFT GIVEN ON VARIOUS OCCASION. THE COPIES OF VARIOUS CONFIRMATIO NS PROVIDED TO THE LD CI(A) AND ARE ALSO FILED ON RECORD AT PAGE NO. 70 T O 79 OF THE PAPER BOOK. THE LD AR FOR THE ASSESSEE SUBMITS THAT ENTIRE ADDI TION IS LIABLE TO BE DELETED. ITA NO. 5643 TO 5649 MUM 2017-SHRI PALLA VUR KRISHNAN MAHADEVAN 10 19. ON THE OTHER HAND THE LD. DR FOR THE REVENUE SUPPOR TED THE ORDER OF THE AUTHORITIES BELOW. THE LD. DR FOR THE REVENUE SUBMI TS THAT THE ASSESSEE HAS FILES SELF SERVING EVIDENCES ON WHICH NO RELIAN CE CAN BE MADE. 20. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIES AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND ALS O PERUSED THE RECORD. THE ASSESSING OFFICER MADE THE ADDITION HOLDING THA T THE ASSESSEE FAILED TO SUBMITS ANY DOCUMENTARY EVIDENCES IN SUPPORT OF HIS SUBMISSIONS THAT THE MONEY DEPOSITED IN THE ACCOUNT OF HER MOTHER WA S PART OF GIFT REVIEWED ON VARIOUS FUNCTIONS. THE LD CIT(A) CONFI RMED THE ACTION OF ASSESSING OFFICER. THE EVIDENCES FILED BY THE ASSES SEE WAS NOT ACCEPTED BY LD CIT(A) ON TAKING HIS VIEW THAT THE AFFIDAVITS FILED BY ASSESSEE LACKS CREDIBILITY AND ARE UNVERIFIABLE. WE HAVE NOTED THA T THE LD CIT(A) DISCARDED THE DOCUMENTARY EVIDENCES IN THE FORM OF CONFIRMATION AND THE AFFIDAVITS WITHOUT EXAMINING AND VERIFYING THE SAME . WE HAVE ALSO PERUSED THE CONTENTS OF THE AFFIDAVITS FILED BY MR. N.L. GANAPATHI R/O OF E -206, YAMUNA APARTMENT, ALAKNANDA, NEW DELHI AND SMT. HEMLATA RAMESH R/O 15/16, ALLWYN NAGAR, SANGAM BY PASS COIM BATORE. N.L. GANAPATHI IN HIS AFFIDAVIT HAS DEPOSED THAT HE HAS GIVEN RS. 12,000/- AND SMT HEMLATA DEPOSED THAT SHE HAS GIVEN RS.12,000/- DURING THE PERIOD RELEVANT FOR THE YEAR UNDER CONSIDERATION. THE CONT ENTS OF BOTH THE ITA NO. 5643 TO 5649 MUM 2017-SHRI PALLA VUR KRISHNAN MAHADEVAN 11 AFFIDAVITS WERE DISCARDED BY LD CIT(A) WITHOUT ANY ADVERSE MATERIAL ON RECORD. IN OUR VIEW THE EXPLANATION OFFERED BY THE ASSESSEE THAT THE AMOUNT IN THE BANK ACCOUNT OF HIS MOTHER WAS HER OW N MONEY AND WAS PARTS OF GIFT INSPIRE CONFIDENCE. MOREOVER, THE MON EY DEPOSITED IN THE AMOUNT IS NOT A BIG AMOUNT WHICH CAN BE PRESUMED AS UNUSUAL. THEREFORE, WE DIRECT THE ASSESSING OFFICER TO DELET ED THE ADDITION OF RS. 34,000/-. IN THE RESULT THE GROUND NO. 3 & 4 IS ALL OWED. 21. GROUND NO. 5 & 6 RELATES TO ADDITION UNDER SECTION 69A FOR UNEXPLAINED INVESTMENT IN JEWELLERY. THE LD AR FOR THE ASSESSEE SUBMITS THAT DURING THE SEARCH CERTAIN JEWELRY AND SILVER ARTICLE WERE FOUND, HOWEVER, THE ASSESSEE SUFFICIENTLY EXPLAINED, THUS NO PART OF I T WAS SEIZED. DURING THE SEARCH GOLD ARTICLE OF 1189.30 GMS AND 4500 GMS OF SILVER ARTICLE WERE FOUND. STATEMENT OF ASSESSEE WAS ALSO RECORDED AND ASSESSEES EXPLANATION WAS FOUND SATISFACTORY. AGAIN DURING TH E ASSESSMENT THE ASSESSEE WAS ASKED TO EXPLAIN THE NATURE AND SOURCE OF ACQUISITION OF THE JEWELRY FOUND DURING THE SEARCH. THE ASSESSEE FURNI SHED THE COMPLETE DETAILS AND COPY OF THE BILLS AND INVOICES OF THE P URCHASES IN THE NAME OF ASSESSEE AND HIS SPOUSE. THE ASSESSEE ALSO FILED AF FIDAVIT OF HIS WIFE REGARDING THE OWNERSHIP OF JEWELRY OF HER SHARE. T HE ASSESSING OFFICER GRANTED THE ALLOWANCE OF 500 GMS OF NET WEIGHT OF G OLD FOR ASSESSEE AND ITA NO. 5643 TO 5649 MUM 2017-SHRI PALLA VUR KRISHNAN MAHADEVAN 12 66.70 GMS OF HIS WIFE AND 199 GMS OF MARRIED DAUGHT ER. THE LD AR FOR THE ASSESSEE ALSO FURNISHED THE TABULATED CHART OF JEWELRY OWNED BY VARIOUS MEMBER OF HIS FAMILY IN THE FOLLOWING MANNE R; NAME RELATION WITH ASSESSEE METAL WEIGHT GMS ASSESSEE SELF GOLD 71.50 USHA MAHADEVAN WIFE GOLD 826 ARUNA SANTOSH MARRIED DAUGHTER GOLD 66.70 ANANDI MAHADEVAN MARRIED DAUGHTER GOLD 199.70 RAJAM KRISHNAN MOTHER GOLD 25.80 TOTAL GOLD 1189.30 USHA MAHADEVAN WIFE SILVER ARTICLE 4500 22. THE LD AR FOR THE ASSESSEE THAT THE ADDITION UNDER SECTION 69A IS UNWARRANTED, ALL THE SOURCE AND OWNERSHIP OF THE JE WELRY ARTICLE WERE DULLY EXPLAINED TO THE ASSESSING OFFICER AND ENTIRE ADDITION IS LIABLE TO BE DELETED. IN SUPPORT OF HIS SUBMISSION THE LD AR FOR THE ASSESSEE RELIED ON THE CBDT CIRCULAR NO.119 DATED 11/05/1994 AND THE D ECISION OF HONBLE RAJASTHAN HIGH COURT IN CIT VS SATYA NARAIN PATNI ( 2014) 366 ITR 325 (RAJ). ITA NO. 5643 TO 5649 MUM 2017-SHRI PALLA VUR KRISHNAN MAHADEVAN 13 23. ON THE OTHER HAND THE LD. DR FOR THE REVENUE SUPPOR TED THE ORDER OF THE AUTHORITIES BELOW. THE LD. DR SUBMITS THAT THE CIR CULAR OF CBDT RELIED BY LD. AR RELATES TO THE INSTRUCTION TO THE SEARCHE D PARTIES. THE LOWER AUTHORITIES HAVE ALREADY ALLOWED ALLOWANCE IN RESPE CT OF THE FAMILY MEMBERS RESIDING WITH THE ASSESSEE. 24. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF THE PART IES AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. DURING THE SEARCH GOLD AND SILVER JEWELRY WAS FOUND WHICH WAS INVENTORISED BY THE SEARCH PARTIES. NO GOLD OR SILVER ARTICLE WAS SEIZED BY THE SEARCH PARTIES. DURING THE ASSESSMENT THE ASSESSEE WAS ASKED TO EXPLAIN THE NA TURE AND SOURCE OF THE GOLD AND SILVER ARTICLE. THE ASSESSEE FURNISHED IT REPLY DATED 05.09.2014. IN THE REPLY THE ASSESSEE CONTENDED THAT THE JEWELR Y ARTICLE BELONGS TO HIS WIFE, HIMSELF, HIS MOTHER AND TWO MARRIED DAUGHTER. THE ASSESSEE FURTHER CONTENDED THAT HE GOT MARRIED IN THE YEAR 1978 AND RECEIVED APPROXIMATELY OF 450 GMS OF JEWELRY AND HIS MOTHER HAD AROUND 600 GMS OF GOLD PRIOR TO HIS MARRIAGE. HIS FATHER PASSE D AWAY IN 2005. AFTER THE DEATH OF HIS FATHER, HIS MOTHER DISTRIBUTED HER JEWELRY AMONG HER THREE CHILDREN. THE ASSESSEE FURTHER PURCHASED 250 GMS TO 300 GMS UP TO 2005. DURING THE LAST 35 YEARS HIS RELATIVES HAVE G IFTED GOLD ON VARIOUS OCCASIONS. FOR SILVER ARTICLES AND UTENSILS THE ASS ESSEE CONTENDED THAT THEY ITA NO. 5643 TO 5649 MUM 2017-SHRI PALLA VUR KRISHNAN MAHADEVAN 14 ARE PART OF ANCESTRAL PROPERTY. THE ASSESSEE AGAIN VIDE HIS SUBMISSIONS DATED 17.01.2015 AND 11.02.2015 CONTENDED THAT THE GOLD AND SILVER ITEMS BELONGS TO HIM, HIS WIFE, MARRIED DAUGHTER AND MOTH ER. THE ASSESSEE SPECIFICALLY CONTENDED THAT 70% OF THE JEWELRY BELO NGS TO HIS WIFE AND FURNISHED AFFIDAVIT OF HIS WIFE. THE CONTENTION OF THE ASSESSEE WAS NOT ACCEPTED BY THE ASSESSING OFFICER. THE ASSESSING OF FICER CONCLUDED THAT THE ASSESSEE HAS NOT PRODUCED THE EVIDENCES OF GIFT S AND FOR PURCHASE INVOICES THE ASSESSING OFFICER CONCLUDED THAT MOST OF THE PURCHASES ARE IN CASH, SOURCE OF WHICH IS NOT EXPLAINED. THE ASSESSI NG OFFICER GRANTED ALLOWANCE OF 500GMS FOR SELF AND HIS WIFE, 66.70 GM S FOR MARRIED DAUGHTER ARUNA SANTOSH AND 199 GMS FOR ANANDI MAHAD EVAN, THUS TOTAL ALLOWANCE OF 765.7 GMS AND COST OF REMAINING WAS BR OUGHT TO TAX AS UNEXPLAINED INVESTMENT. NO ALLOWANCE FOR ASSESSEES MOTHER WAS ALLOWED. FOR SILVER ARTICLE THE ASSESSEE WAS GRANT ED ALLOWANCE OF 3 KGS AND REMAINING WAS BROUGHT TO TAX AS UNEXPLAINED INV ESTMENT. 25. THE LD CIT(A) CONFIRMED THE ACTION OF ASSESSING OFF ICER HOLDING THAT THE ASSESSING OFFICER HAS FAIRLY AND REASONABLE ACCEPTE D THAT PART OF THE ARTICLE OF GOLD BELONGS TO MARRIED DAUGHTER. THE ASSESSING OFFICER HAS NOT ALLOWED RELIEF FOR THE GOLD BELONGING TO HIS MOTHER , THEREFORE, THE LD CIT(A) ALLOWED RELIEF OF 25.80 GMS BELONGING TO HIS MOTHER. FOR ITA NO. 5643 TO 5649 MUM 2017-SHRI PALLA VUR KRISHNAN MAHADEVAN 15 ADDITIONS ON ACCOUNT OF SILVER ARTICLE THE LD CIT ( A) CONCLUDE THAT NO DOCUMENTARY EVIDENCES IS FURNISHED, THUS CONFIRMED THE ACTION OF THE ASSESSING OFFICER. WE HAVE CONSIDERED THE EXPLANATI ON FURNISHED BY THE ASSESSEE BEFORE THE LOWER AUTHORITIES INDEPENDENTLY . THE ASSESSEE THROUGHOUT THE PROCEEDINGS CONTENDED THAT THE SEARC HED TEAM WAS FULLY SATISFIED; THEREFORE, NO GOLD OR SILVER ARTICLE WAS SEIZED DURING THE SEARCH. FURTHER, THE ASSESSEE ALSO EXPLAINED HIS POSITION A T THE TIME OF RECORDING HIS STATEMENT UNDER SECTION 132(4) OF THE ACT. THE CENTRAL BOARD OF DIRECT TAXES VIDE ITS CIRCULAR NO. 1916 DATED 11.05 .1994 ISSUED FOLLOWING INSTRUCTIONS: 'INSTANCES OF SEIZURE OF JEWELLERY OF SMALL QUANTIT Y IN COURSE OF OPERATIONS UNDER SECTION 132 HAVE COME TO THE NOTICE OF THE BO ARD. THE QUESTION OF A COMMON APPROACH TO SITUATIONS WHERE SEARCH PARTIES COME ACROSS ITEMS OF JEWELLERY HAS BEEN EXAMINED BY THE BOARD AND FOLLOW ING GUIDELINES ARE ISSUED FOR STRICT COMPLIANCE. I. IN THE CASE OF A WEALTH-TAX ASSESSEE, GOLD JEWELLER Y AND ORNAMENTS FOUND IN EXCESS OF THE GROSS WEIGHT DECLA RED IN THE WEALTH-TAX RETURN ONLY NEED BE SEIZED. II. IN THE CASE OF A PERSON NOT ASSESSED TO WEALTH-TAX GOLD JEWELLERY AND ORNAMENTS TO THE EXTENT OF 500 GMS PE R MARRIED LADY, 250 GMS PER UNMARRIED LADY AND 100 GMS PER MA LE MEMBER OF THE FAMILY NEED NOT BE SEIZED. III. THE AUTHORIZED OFFICER MAY, HAVING REGARD TO THE ST ATUS OF THE FAMILY, AND THE CUSTOM AND PRACTICES OF THE COMMUNI TY TO WHICH THE FAMILY BELONGS AND OTHER CIRCUMSTANCES OF THE CASE, DECIDE TO EXCLUDE A LARGER QUANTITY OF JEWELLERY AN D ORNAMENTS FROM SEIZURE. THIS SHOULD BE REPORTED TO THE DIRECT OR OF INCOME ITA NO. 5643 TO 5649 MUM 2017-SHRI PALLA VUR KRISHNAN MAHADEVAN 16 TAX/COMMISSIONER AUTHORIZING THE SEARCH AT THE TIME OF FURNISHING THE SEARCH REPORT. IV. IN ALL CASES, A DETAILED INVENTORY OF THE JEWELLERY AND ORNAMENTS FOUND MUST BE PREPARED TO BE USED FOR ASSESSMENT PU RPOSES. 26. THE HONBLE RAJASTHAN HIGH COURT IN CIT VS SATYA N ARAIN PATNI (SUPRA), WHILE REFERRING THE ABOVE CIRCULAR OF CBDT PASSED FOLLOWING ORDER : 12. IT IS TRUE THAT THE CIRCULAR OF THE CBDT, REFERRED TO SUPRA DT. 11/05/1994 ONLY REFERS TO THE JEWELLERY TO THE EXTENT OF 500 G MS PER MARRIED LADY, 250 GMS PER UNMARRIED LADY AND 100 GMS PER MALE MEMBER OF T HE FAMILY, NEED NOT BE SEIZED AND IT DOES NOT SPEAK ABOUT THE QUESTIONING OF THE SAID JEWELLERY FROM THE PERSON WHO HAS BEEN FOUND WITH POSSESSION OF TH E SAID JEWELLERY. HOWEVER, THE BOARD, LOOKING TO THE INDIAN CUSTOMS A ND TRADITIONS, HAS FAIRLY EXPRESSED THAT JEWELLERY TO THE SAID EXTENT WILL NO T BE SEIZED AND ONCE THE BOARD IS ALSO OF THE EXPRESS OPINION THAT THE SAID JEWELLERY CANNOT BE SEIZED, IT SHOULD NORMALLY MEAN THAT ANY JEWELLERY, FOUND IN P OSSESION OF A MARRIED LADY TO THE EXTENT OF 500 GMS, 250 GMS PER UNMARRIED LAD Y AND 100 GMS PER MALE MEMBER OF THE FAMILY WILL ALSO NOT BE QUESTIONED AB OUT ITS SOURCE AND ACQUISATION. WE CAN TAKE NOTICE OF THE FACT THAT AT THE TIME OF WEDDING, THE DAUGHTER/DAUGHTER-IN-LAW RECEIVES GOLD ORNAMENTS JE WELLERY AND OTHER GOODS NOT ONLY FROM PARENTAL SIDE BUT IN-LAWS SIDE AS WEL L AT THE TIME OF 'VIDAI' (FAREWELL) OR/AND AT THE TIME WHEN THE DAUGHTER-IN- LAW ENTERS THE HOUSE OF HER HUSBAND. WE CAN ALSO TAKE NOTICE OF THE FACT THAT T HEREAFTER ALSO, SHE CONTINUES TO RECEIVE SOME SMALL ITEMS BY VARIOUS OTHER CLOSE FRIENDS AND RELATIVES OF BOTH THE SIDES AS WELL AS ON THE AUSPICIOUS OCCASIO N OF BIRTH OF A CHILD WHETHER MALE OR FEMALE AND THE CBDT, LOOKING TO SUCH CUTOMS PREVAILING THROUGHOUT INDIA, IN ONE WAY OR THE ANOTHER, CAME OUT WITH THI S CIRCULAR AND WE ACCORDINGLY ARE OF THE FIRM OPINION THAT IT SHOULD ALSO MEAN THAT TO THE EXTENT OF THE AFORESAID JEWELLERY, FOUND IN POSSESSION OF THE VARIOUS PERSONS, EVEN SOURCE CANNOT BE QUESTIONED. IT IS CERTAINLY 'STRID HAN' OF THE WOMAN AND NORMALLY NO QUESTION AT LEAST TO THE SAID EXTENT CA N BE MADE. HOWEVER, IF THE AUTHORIZED OFFICERS OR/AND THE ASSESSING OFFICERS, FIND JEWELLERY BEYOND THE SAID WEIGHT, THEN CERTAINLY THEY CAN QUESTION THE S OURCE OF ACQUISITION OF THE ITA NO. 5643 TO 5649 MUM 2017-SHRI PALLA VUR KRISHNAN MAHADEVAN 17 JEWELLERY AND ALSO IN APPROPRIATE CASES, IF NO PROP ER EXPLANATION HAS BEEN OFFERED, CAN TREAT THE JEWELLERY BEYOND THE SAID LI MIT AS UNEXPLAINED INVESTMENT OF THE PERSON WITH WHOM THE SAID JEWELLE RY HAS BEEN FOUND. 13. ADMITTEDLY, LOOKING TO THE STATUS OF THE FAMILY AN D THE JEWELLERY FOUND IN POSSESSION OF FOUR LADIES, WAS HELD TO BE REASONABL E AND THEREFORE, THE AUTHORIZED OFFICERS, IN THE FIRST INSTANCE, DID NOT SEIZE THE SAID JEWELLERY AS THE SAME BEING WITHIN THE TOLERABLE LIMIT OR THE LIMITS PRESCRIBED BY THE BOARD AND THUS, IN OUR VIEW, SUBSEQUENT ADDITION IS ALSO NOT JUSTIFICABLE ON THE PART OF THE ASSESSING OFFICER AND RIGHTLY DELETED BY BOTH THE T WO APPELLATE AUTHORITIES NAMELY' CIT(A) AS WELL AS THE TRIBUNAL. 27. CONSIDERING THE DECISION OF RAJASTHAN HIGH COURT I N SATYA NARAIN PATNI (SUPRA) AND RESPECTFULLY FOLLOWING THE SAME WE FIND THAT THE ASSESSEE HAS SUFFICIENTLY EXPLAINED BEFORE THE SEARCH TEAM, AS I T IS EVIDENT THAT NO SEIZURE OF GOLD AND SILVER ARTICLE WAS MADE AT THE TIME OF SEARCH. WE ALSO DEEM IT APPROPRIATE TO REFER HERE THAT WHILE RECORD ING THE STATEMENT UNDER SECTION 132(4) THE ASSESSEE STATED THAT HIS QUALIFI CATION IS BACHELOR OF ENGINEERING (BE), WAS WORKING AS PRESIDENT (MATERIA L) WITH WALCHANDNAGAR INDUSTRIES, HAVING LAST DRAWN SALARY PACKAGE OF RS.39.96 LAKHS PER ANNUM, RESIDING AT ERANDWANE PUNE. BESIDE S THAT THE ASSESSEE OWNED FOUR RESIDENTIAL PROPERTIES, WHICH WERE NO QU ESTIONED BY THE DEPARTMENT. THUS, KEEPING IN VIEW THE STATUS OF TH E ASSESSEE AND HIS FAMILY MEMBERS, WHICH CONSIST OF FOUR MARRIED LADIE S IN THE FAMILY, WE ARE OF THE VIEW THE ASSESSEE HAS SATISFACTORY EXPLA NATION. THEREFORE, WE ITA NO. 5643 TO 5649 MUM 2017-SHRI PALLA VUR KRISHNAN MAHADEVAN 18 DIRECT THE ASSESSING OFFICER TO DELETE THE ENTIRE A DDITION UNDER SECTION 69A. IN THE RESULT GROUNDS NO.4&5 OF THE APPEAL IS ALLOWED. 28. GROUND NO. 7& 8 RELATES TO DENIAL OF ADJUSTMENT OF CASH SEIZED DURING THE SEARCH AGAINST THE ADVANCE TAX LIABILITY. THE L D. AR FOR THE ASSESSEE SUBMITS THAT THE CASH SEIZED DURING THE SEARCH IS S TILL LYING WITH THE DEPARTMENT. THE ASSESSEE AT THE TIME OF FILING THE RETURN OF INCOME IN RESPONSE TO THE NOTICE UNDER SECTION 153A ASKED THE ASSESSING OFFICER TO ADJUST THE SAID CASH AGAINST THE TAX LIABILITY. THE ASSESSING OFFICER DESPITE REQUEST OF THE ASSESSEE NOT ADJUSTED THE SAID CASH LYING WITH THE DEPARTMENT. THE LD. AR PRAYED TO PASS NECESSARY DIR ECTION TO THE ASSESSING OFFICER TO ADJUST THE TAX LIABILITY AND R ETURN THE REMAINING AMOUNT. 29. ON THE OTHER HAND THE LD. DR FOR THE REVENUE RELIE D ON THE ORDER OF THE LOWER AUTHORITIES. 30. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE PA RTIES AND PERUSED THE ORDER OF LD CIT(A). THE LD CIT(A) DISMISSED THE GRO UND OF APPEAL ON HIS OBSERVATION THAT NO EXPRESS REQUEST FROM THE ASSESS EE TO ADJUST THE SEIZED CASH TOWARD HIS TAX LIABILITY. THE ORDER PASSED BY LD CIT(A) IN REFUSING TO DIRECT THE ASSESSING OFFICER IS UNREASONABLE. WE IN STEAD OF EXAMINING THE LEGALITY AND ILLEGALITY OF THE ORDER IMPUGNED BEFOR E US, DIRECT THE ITA NO. 5643 TO 5649 MUM 2017-SHRI PALLA VUR KRISHNAN MAHADEVAN 19 ASSESSING OFFICER TO ADJUST THE CASH SEIZED DURING THE SEARCH AGAINST THE TAX LIABILITY FOR THE ASSESSMENT YEAR UNDER CONSIDE RATION AND REFUND THE BALANCE AMOUNT TO THE ASSESSEE IN ACCORDANCE WITH L AW. IN THE RESULT GROUND N. 7& 8 ARE ALLOWED. 31. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWE D. 32. ORDER PRONOUNCED IN THE OPEN COURT ON 12/12/2018. SD/- SD/ - G.S. PANNU PAWAN SINGH VICE-PRESIDENT JUDI CIAL MEMBER MUMBAI, DATE: 12.12.2018 SK COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. DR C BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR ITAT, MUMBAI