DCIT, New Delhi V. Mrs. Vinod Kumari Gupta, New Delhi

ITA 5939/DEL/2014

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 8245 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 10 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-10-2018
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: H
• Assessment Year: 2011-2012
• Appeal Filed On: 03-11-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIJAY VARMA
• Assessee Lawyers: STAYAJEET GOEL
• Keywords: Unexplained investment; Gift; Search and seizure
• Section: 56; 132

Judgement Text

PAGE | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D : NEW DELHI BEFORE SHRI AMIT SHUKLA , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 6105/DEL/2014 (ASSESSMENT YEAR: 2011 - 12 ) VINOD KUMAR I GUPTA, 43/1, RAIPUR ROAD, CIVIL LINES, NEW DELHI PAN: AADPG4176H VS. DCIT, CENTRAL CIRCLE - 04, NEW DELHI (APPELLANT) (RESPONDENT) ITA NO. 5939/DEL/2014 (ASSESSMENT YEAR: 2011 - 12) DCIT, CENTRAL CIRCLE - 04, NEW DELHI VS. VINOD KUMAR I GUPTA, 43/1, RAIPUR ROAD, CIVIL LINES, NEW DELHI PAN: AADPG4176H (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI STAYAJEET GOEL, CA REVENUE BY: SHRI VIJAY VARMA, CIT DR DATE OF HEARING 23/07 / 2018 DATE OF PRONOUNCEMENT 0 1 / 10 / 2018 O R D E R PER PRASHANT MAHARISHI , A. M. 1. TH ESE ARE THE APPEALS FILED BY THE ASSESSEE AND THE REVENUE AGAINST THE ORDER OF THE LD CIT(A) - XXXIII, NEW DELHI DATED 04.07.2014 FOR THE ASSESSMENT YEAR 2011 - 12. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD CIT(A) HAS ERRED IN HOLDING 10% VALUE OF JEWELLERY I.E. RS. 3,57,080/ - AS UNEXPLAINED JEWELLERY IN VIEW OF THE VINOD KUMARI GUPTA VS DCIT ITA NO. 6105/DEL/2014 & 5939/DEL/2014 (ASSESSMENT YEAR: 2011 - 12) PAGE | 2 EXPLANATION GIVEN AND DOCUMENTARY EVIDENCE SUBMITTED. THEREFORE, THE SAME IS LIABLE TO BE DELETED. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 1.5 LAC AS CASH IN HAND FOUND AT THE PREMISES OF THE ASSESSEE IN VIEW OF THE EXPLANATION GIVEN AND OTHER EVIDENCE SUBMITTED. THEREFORE, THE SAME IS LIABLE TO BE DELETED. 3. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA NO. 5939/DEL/2014 FOR THE ASSESSMENT YEAR 2011 - 12: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN RESTRICTING THE ADDITION OF RS. 35,70,806/ - MADE BY THE AO ON ACCOUNT OF EXPLAINED INVESTMENT TO RS. 3,57,080/ - AND DIRECTING THE AO TO DELETE 90% OF THE INVESTMENT MADE BY THE ASSESSEE WHEN IT WAS CLEARLY ESTABLISHED THAT THE ASSESSEE COULD NOT SUBSTANTIATE THE SOURCE OF INVESTME NT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN NOT APPRECIATING THE EVIDENCE GATHERED DURING THE COURSE OF SEARCH AND SEIZURE OPERATION WHICH VERY CLEARLY POINTED OUT THAT INVESTMENT IN JEWELLERY WAS FROM UNDISCLOSED SOU RCE. 3. THAT ORDER OF THE CIT(A) IS ERRONEOUS AND IS NOT TENABLE ON FACTS AND IN LAW. 4. COMING TO THE APPEAL OF THE REVENUE FIRST WHICH IS AGAINST THE ADDITION OF RS. 3570806/ - MADE BY THE LD AO ON ACCOUNT OF UNEXPLAINED INVESTMENT IN JEWELLERY RESTRICTED BY THE LD CIT(A) TO 10% AT RS. 357080/ - IS CONNECTED WITH THE GROUND NO. 1 OF THE APPEAL OF THE ASSESSEE. WE WILL DEAL WITH THIS ISSUE ALSO WHILE DECIDING GROUND NO. 1 THAT GROUND OF APPEAL OF THE ASSESSEE. 5. NOW COMING TO THE APPEAL OF THE ASSESSEE TWO EFFECTIVE GROUNDS OF APPEAL ARE RAISED BY THE ASSESSEE A) ADDITION OF RS. 3 57080/ OF JEWELRY B) ADDITION U/S 69A OF THE ACT OF 1.5 LAKHS AS CASH IN HAND FOUND AT THE PREMISES OF THE ASSESSEE VINOD KUMARI GUPTA VS DCIT ITA NO. 6105/DEL/2014 & 5939/DEL/2014 (ASSESSMENT YEAR: 2011 - 12) PAGE | 3 6. FACTS OF THE CASE SHOWS THAT SEARCH AND SEIZURE OPERATION U/ S 132 OF THE INCOME TAX WAS CARRIED OUT ON 21/1/2011 IN THE DHARMAPAL SATYAPAL GROUP OF CASES WHICH IS ENGAGED IN MANUFACTURING AND TRADING OF TOBACCO AND PREMIUM PAN MASALA BESIDES OTHER BUSINESSES. THE ASSESSEE IS AN INDIVIDUAL. SHE FILED HER RETURN OF INCOME FOR AY 2011 12 ON 27/2/2013 DECLARING TOTAL INCOME OF RS. 7, 11, 013/ . THE LEARNED AO NOTED THAT DURING THE COURSE OF SEARCH, JEWELRY AS PER THE VALUATION MADE BY THE GOVERNMENT REGISTERED VALUER WAS FOUND OF RS. 53, 29, 753/ CONTAINING 25 IT EMS AND OUT OF WHICH JEWELRY VALUED AT RS. 3570806/ WAS SEIZED. WEIGHT OF JEWELRY WAS GOLD OF 453.738 GRAMS AND 75.72 GRAMS OF STONES. THUS, ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF ACQUISITION OF THE ABOVE JEWELRY. ASSESSEE STATED THAT IN WEALTH TAX RETURNS FILED BY HER AND OTHER FEMALE MEMBERS OF THE FAMILY, DECLARED VALUE OF TOTAL JEWELRY OF RS. 1.24 CRORES AND COPIES OF THE WEALTH TAX RETURNS WERE SUBMITTED. IT WAS STATED THAT TOTAL DIFFERENCE IN THE JEWELRY IS RS. 24.07 LAKHS. THE ASSESSEE ALSO S TATED THAT SHE IS RESIDING IN JOINT FAMILY CONSISTING OF OTHER FAMILY MEMBERS AND THEREFORE AS PER INSTRUCTIONS OF CENTRAL BOARD OF DIRECT TAXES CREDIT FOR JEWELRY WITH RESPECT TO UNMARRIED FEMALE, MARRIED, AND UNMARRIED MALE MEMBERS SHOULD BE GRANTED. SHE ALSO SUPPORTED HER ARGUMENT WITH THE VARIOUS DECISIONS. THE LEARNED AO DID NOT ACCEPT THE ARGUMENT OF THE ASSESSEE AND MADE AN ADDITION OF RS. 3570806/ UNDER SECTION 69A OF THE ACT. MAIN REASON FOR THE ADDITION WAS THE STATEMENT RECORDED UNDER SECTION 13 2 (4) OF THE ACT WHEREIN ON THE DIFFERENCE OF THE JEWELRY, ASSESSEE DID NOT OFFER ANY EXPLANATION. VINOD KUMARI GUPTA VS DCIT ITA NO. 6105/DEL/2014 & 5939/DEL/2014 (ASSESSMENT YEAR: 2011 - 12) PAGE | 4 7. ASSESSEE CARRIED ABOVE ISSUE BEFORE THE LEARNED CIT - A, WHO ALSO CONFIRMED THE ADDITION TO THE EXTENT OF RS. 357080/ BEING 10% OF THE JEWELRY AND DELETED T HE BALANCE ADDITION. HE HAS RELIED UPON THE DECISION RENDERED BY HIM IN CASE OF ANOTHER FEMALE MEMBER OF THE SAME FAMILY UNDER SIMILAR CIRCUMSTANCES WHEREIN HE HAS DELETED THE ADDITION BECAUSE OF JEWELRY. THEREFORE, ASSESSEE, AGGRIEVED WITH THE ORDER OF TH E LEARNED COMMISSIONER APPEALS UPHOLDING THE ADDITION TO THE EXTENT OF 10% OF THE JEWELRY HAS PREFERRED APPEAL BEFORE US. 8. THE LEARNED AUTHORIZED REPRESENTATIVE SUBMITTED THAT ON IDENTICAL FACTS AND CIRCUMSTANCES IN CASE OF ANOTHER FEMALE FAMILY MEMBER OF T HE SAME GROUP WHERE IDENTICAL ADDITIONS WERE CONFIRMED BY THE LEARNED CIT A WAS DECIDED BY THE COORDINATE BENCHES IN FAVOUR OF ASSESSEE, THEREFORE THE ISSUE SQUARELY COVERED IN FAVOUR OF THE ASSESSEE. EVEN OTHERWISE, HE SUBMITTED THAT THE DIFFERENCE IS O NLY ON ESTIMATED BASIS BECAUSE OF VALUATION. HE SUBMITTED THE COPIES OF THE DECISION OF THE COORDINATE BENCH IN CASE OF ITA NO. 6103 AND 5938/2014 FOR ASSESSMENT YEAR 2011 12 DATED 28/06/2018 AND ITA NUMBER 5296 AND 5369 FOR ASSESSMENT YEAR 2011 12 DAT ED 12/2/2016. 9. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF THE LEARNED AO. 10. HAVING HEARD THE LEARNED COUNSELS AT LENGTH AND HAVING GIVEN OUR EARNEST CONSIDERATION TO THE RIVAL CONTENTIONS, THE MATERIAL PLACED ON RECORD AND CASE LAWS, WE A RE UNABLE TO SUSTAIN THE FINDINGS OF THE LEARNED CIT A IN UPHOLDING THE ADDITION TO THE EXTENT OF 10% OF JEWELRY SEIZED AMOUNTING TO RS. 357080/ AS UNEXPLAINED. THE REASON IS THAT ON IDENTICAL FACTS AND VINOD KUMARI GUPTA VS DCIT ITA NO. 6105/DEL/2014 & 5939/DEL/2014 (ASSESSMENT YEAR: 2011 - 12) PAGE | 5 CIRCUMSTANCES IN THE SIMILAR SEARCH AND IN CASE OF ANOTHER TWO FEMALE MEMBERS OF THE SAME FAMILY THE IDENTICAL ADDITIONS MADE BY THE REVENUE HAS BEEN DELETED BY THE COORDINATE BENCHES IN THE ABOVE STATED ORDERS SUBMITTED BY THE LEARNED AUTHORIZED REPRESENTATIVE. IN VIEW OF THIS, THE ISSUE IS SQUARELY C OVERED IN FAVOUR OF THE ASSESSEE AND RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCHES AS STATED BEFORE, WHERE THE LEARNED DEPARTMENTAL REPRESENTATIVE COULD NOT FIND ANY DIFFERENCE IN THE FACTS AND CIRCUMSTANCES, WE ALLOW GROUND NUMBER ONE OF THE APPEAL IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. SIMILARLY, AS THE ISSUE IS SQUARELY COVERED BY THE ABOVE TWO DECISIONS OF THE COORDINATE BENCH ON SIMILAR FACTS AND CIRCUMSTANCES IN CASE OF OTHER FEMALE MEMBERS OF THE SAME GROUP WE DO NOT FIN D ANY MERIT IN THE APPEAL OF THE REVENUE AND HENCE, THE SOLITARY ISSUE IN THAT APPEAL IS DECIDED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. ACCORDINGLY, GROUND NO. 1 AND 2 OF THE APPEAL OF THE REVENUE IS DISMISSED AND GROUND NO. 1 IN APPEAL OF THE ASSESSEE IS ALLOWED. 11. THE SECOND GROUND OF APPEAL IS WITH RESPECT TO THE ADDITION OF 1.5 LAKHS AS CASH IN HAND FOUND AT THE RESIDENCE OF THE ASSESSEE IN VIEW OF THE EXPLANATION GIVEN AND OTHER EVIDENCES SUBMITTED. FACTS SHOWS THAT DURING SEARCH, CASH OF RS. 9.60 LAKHS WERE F OUND AT THE RESIDENCE OF ASSESSEE AND ASSESSEE FAILED TO EXPLAIN THE SOURCE THEREOF AND THEREFORE RS. 8 LAKHS WERE SEIZED. THE EXPLANATION SUBMITTED BY THE ASSESSEE WAS THAT SHE IS A WIDOW OF MR. SATYANARAYAN GUPTA WHO PASSED AWAY ON 16/5/2009 AND AFTER TH E DEMISE OF HER HUSBAND; SHE GOT CASH AMOUNTING TO RS. 2.25 LAKHS IN APRIL 2010 BESIDES HER PETTY SAVINGS FROM VINOD KUMARI GUPTA VS DCIT ITA NO. 6105/DEL/2014 & 5939/DEL/2014 (ASSESSMENT YEAR: 2011 - 12) PAGE | 6 HOUSEHOLD EXPENSES OF RS. 0. 50 LAKHS. SHE FURTHER STATED THAT SHE RECEIVED RENTAL INCOME OF RS. 4 .26 LAKHS WHICH WAS DISCLOSED IN THE RETURN OF INCOME. SHE ALSO STATED THAT ON HER 65TH BIRTHDAY ON 20 AUGUST 2010, SHE ALSO RECEIVED CERTAIN GIFTS AND THEREFORE CASH SEIZED OF RS. 8 LAKHS DURING SEARCH IS NOT UNEXPLAINED. THE LEARNED ASSESSING OFFICER DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE BU T ACCEPTED THAT SHE MIGHT HAVE SAVED RS. 50,000 OUT OF THE FAMILY HOUSEHOLD EXPENDITURE LOOKING TO THE FINANCIAL STATUS OF THE ASSESSEE. HOWEVER, THE LEARNED AO CONFIRMED THE ADDITION OF CASH TO THE EXTENT OF RS. 1.50 LAKH AS UNEXPLAINED OUT OF THE CASH OF RS 2.25 LAKH ALLEGEDLY RECEIVED FROM HER HUSBAND ON HIS DEATH. AO ALLOWED BALANCE RS. 4.10 LAKHS WAS ALSO COVERED BY THE DISCLOSURE MADE BY THE ASSESSEE IN HER RETURN OF INCOME UNDER SECTION 56 OF THE INCOME TAX ACT AS TAXABLE GIFTS. 12. ASSESSEE AGGRIEVED WITH THE ORDER OF THE LEARNED AO PREFERRED APPEAL BEFORE THE LEARNED CIT A WHEREIN AT PAGE NUMBER 16 OF HIS ORDER, HE DECIDED THE ISSUE THAT THE CLAIM OF RS. 2.25 LAKHS RECEIVED ON THE DEMISE OF THE HUSBAND OF THE ASSESSEE THE AO HAS ALLOWED 1 LAKH S. IN ABSENCE OF ANY EVIDENCE FOR THE RECEIPT OF RS. 2 .5 LAKHS FILED BY THE APPELLANT HE DID NOT INTERFERE WITH THE FINDINGS OF THE ASSESSING OFFICER WHO TREATED RS. 1 LAKH OF CASH AS EXPLAINED ON THIS SCORE. THEREFORE, BASED ON THE EXPLANATION SUBMITTED BY THE ASSESSEE HE UPHELD THE ADDITION OF RS. 1.5 LAKHS OUT OF THE TOTAL EDITION OF RS. 4.10 LAKHS. HENCE, ASSESSEE AGGRIEVED WITH THE CONFIRMATION OF THE ADDITION OF RS. 1.5 LAKHS HAS PREFERRED AN APPEAL BEFORE US. VINOD KUMARI GUPTA VS DCIT ITA NO. 6105/DEL/2014 & 5939/DEL/2014 (ASSESSMENT YEAR: 2011 - 12) PAGE | 7 13. THE LEARNED AUTHORIZED REPRESENTATIVE REI TERATED THE SAME SUBMISSION AS WERE MADE BEFORE THE LEARNED COMMISSIONER APPEALS. HE SUBMITTED THAT THAT THE LOWER AUTHORITIES HAVE ONLY GRANTED THE RELIEF OF RS. 1 LAKHS OUT OF THE AMOUNT OF RS. 2.25 LAKHS STATED TO BE THE CASH LEFT BY THE HUSBAND OF THE A PPELLANT AT THE TIME OF HIS DEATH. HE FURTHER SUBMITTED THAT WHEN THEY LEARNED ASSESSING OFFICER HAS ACCEPTED THE FACT OF CASH HAVING BEEN LEFT BY THE HUSBAND OF THE ASSESSEE BUT WITHOUT ANY MATERIAL OR REASON HAS RESTRICTED IT TO THE EXTENT OF RS. 1 LAKHS ONLY. HE FURTHER STATED THAT LOOKING TO THE STATUS OF THE ASSESSEE AND THE FINANCIAL CONDITION OF THE WHOLE FAMILY IT IS NOT UNUSUAL THAT SHE MIGHT HAVE GOT THIS SUM ON DEMISE OF HER HUSBAND. 14. THE LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES AND SUBMITTED THAT LEARNED ASSESSING OFFICER HAS ALLOWED THE CLAIM OF THE ASSESSEE TO THE EXTENT OF RS. 1 LAKH EVEN WITHOUT EVIDENCE LOOKING TO THE FAMILY STATUS OF THE ASSESSEE. THEREFORE, NOW THE ASSESSEE CANNOT BE GRANTE D FURTHER RELIEF WITHOUT POINTING OUT ANY EVIDENCE OF HAVING SUCH CASH IN THE HANDS OF THE HUSBAND OF THE ASSESSEE AT THE TIME OF DEATH. HE FURTHER STATED THAT ASSESSEE HAS PRODUCED NEITHER THE BALANCE SHEET NOR THE AVAILABILITY OF CASH IN THE HANDS OF H ER HUSBAND. IN VIEW OF THIS HE SUBMITTED THAT THERE IS NO ERROR IN THE ORDER OF THE LEARNED CIT A OR THE LEARNED ASSESSING OFFICER IN ACCEPTING RS. 1 LAKHS ONLY AS EXPLAINED SOME OUT OF THE TOTAL SUM OF RS. 2.25 LAKHS STATED BY THE ASSESSEE. 15. HA VING HEARD THE COUNSELS AT LENGTH AND APPRECIATING THE MATERIAL AVAILABLE BEFORE US STATED IN THE ORDERS OF THE LOWER VINOD KUMARI GUPTA VS DCIT ITA NO. 6105/DEL/2014 & 5939/DEL/2014 (ASSESSMENT YEAR: 2011 - 12) PAGE | 8 AUTHORITIES, IT IS APPARENT THAT ASSESSEE HAS EXPLAINED THAT PART OF THE CASH SEIZED DURING THE COURSE OF SUCH AT HER RESIDENCE ARE SUM OF RS. 2.25 LAKHS WAS GIVEN TO HER BY HER DECEASED HUSBAND. LOWER AUTHORITIES ONLY GRANTED BENEFIT OF RS. 1 LAKH OUT OF THE SAME AND CONFIRMED THE BALANCE AS UNEXPLAINED CASH TAXABLE IN THE HANDS OF THE ASSESSEE. EXCEPT EXPLAINING, THE CASH LEFT BY HUSBAND O F THE APPELLANT NO OTHER EVIDENCES WERE SUBMITTED BEFORE THE LOWER AUTHORITIES. IT WAS ALSO NOT KNOWN WHETHER THE HUSBAND OF THE ASSESSEE WAS IN POSSESSION OF THE ABOVE SUM IN CASH AT THE TIME OF HIS DEATH OR NOT. WE ALSO APPRECIATE THAT LOWER AUTHORITIES HAVE ALREADY GRANTED BENEFIT OF RS. 1 LAKH TO THE ASSESSEE EVEN IN ABSENCE OF ANY EVIDENCE. HOWEVER IT CANNOT BE DENIED THAT LOOKING TO THE FINANCIAL STATUS OF THE ASSESSEE AND THE TOTAL AMOUNT OF JEWELRY FOUND AT THE RESIDENCE OF THE ASSESSEE AND THE SIZE OF THE BUSINESS CARRIED OUT BY THE FAMILY AND ALSO THE SIZE OF RENTAL INCOME EARNED BY THE ASSESSEE BEING A LADY MEMBER, GIFT OF RS 4.10 LKAHS RECEIVED ON HER BIRTHDAY FROM NON RELATIVES OFFERED IN HER RETURN OF INCOME AND ACCEPTED BY AO, THE SUM OF RS 1 LAKH TREATED AS EXPLAINED OUT OF THE TOTAL SUM RECEIVED OF RS 2.25 LAKHS BY THE ASSESSEE FROM HER HUSBAND SEEMS QUITE LOW. CONTRARILY THE ACCEPTANCE OF FULL SUM AS EXPLAINED IN ABSENCE OF ANY EVIDENCE IS NOT POSSIBLE. THEREFORE, IN TH E INTEREST OF JUSTICE AND LOOKING AT THE CIRCUMSTANCES AND FACTS STATED ABOVE, FURTHER REDUCTION IN THE ADDITION IS GRANTED OF RS 50,000/ - ON ACCOUNT OF ADDITION IN THE HANDS OF THE ASSESSEE ON ACCOUNT OF CASH RECEIVED FROM DECEASED HUSBAND OF THE ASSESSEE. HENCE, WE DIRECT THE LD AO TO RESTRICT THE ADDITION ONLY TO THE EXTENT OF RS 1 LAKHS INSTEAD OF VINOD KUMARI GUPTA VS DCIT ITA NO. 6105/DEL/2014 & 5939/DEL/2014 (ASSESSMENT YEAR: 2011 - 12) PAGE | 9 RS 1.50 LAKHS. ACCORDINGLY, GROUND NUMBER TWO OF THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 16. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PARTLY A LLOWED AND BY REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 0 1 / 10 / 2018 . - S D / - - S D / - ( AMIT SHUKLA ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 0 1 / 10 / 2018 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI