PRAVEEN KUMAR GOEL, NEW DELHI V. ACIT, CENTRAL CIRCLE- 28, NEW DELHI

ITA 5948/DEL/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2839 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 19-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K JIWANI
• Assessee Lawyers: V K AGARWAL
• Keywords: Unexplained investment; Search and seizure; Valuation report
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH SMC : NEW DELHI) BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 5948/DEL/2017 ASSESSMENT YEAR: 2014-15 PRAVEEN KUMAR GOEL, VS. ACIT, CC-28, NEW DELHI C-1/72, RAJSTHALI APARTMENT, MADHUBAN CHOWK, DELHI 110 034 (PAN: AEPPG5274B) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. V.K. AGARWAL, A.R. REVENUE BY : SH. V.K. JIWANI, SR. DR. ORDER THE ASSESSEE HAS FILED THE APPEAL AGAINST THE ORDE R DATED 02.04.2016 OF THE LD. CIT(A)-XXVI, NEW DELHI PERTAI NING TO ASSESSMENT YEAR 2014-15 ON THE FOLLOWING GROUNDS:- 1. THE LD. CIT(A) HAS GROSSLY ERRED ON FACTS AS WELL A S IN LAW IN CONFIRMING THE ADDITION ON ACCOUNT OF 203.29 GMS. OF JEWELLERY TREATING IT AS UNEXPLAINED U/S. 69A. 2. THE LD. CIT(A) HAS GROSSLY ERRED ON FACTS AS WELL A S IN LAW IN IGNORING THE FACT THAT THE JEWELLERY FOUN D DURING THE SEARCH ON 7.3.2014 WAS IN EXISTENCE PRIOR TO THE BLOCK PERIOD AS EVIDENT FROM THE VALUATION REPORT AS ON 31.3.2016 OF THE APPROVED VALUER WHOSE STATEMENT WAS ALSO RECORDED BY THE AO. 3. THE LD. CIT(A) HAS GROSSLY ERRED ON FACTS AS WELL A S IN LAW IN IGNORING THE FACT THAT IN THE APPEALS OF 2 OTHER FAMILY MEMBERS, SIMILAR ADDITION HAS EARLIER BEEN DELETED BY THE THEN LD. CIT(A) RELYING ON EXACTLY THE SAME FACTS. 4. THE LD. CIT(A) HAS GROSSLY ERRED ON FACTS AS WELL A S IN LAW IN CONSIDERING THE FINANCIAL STATUS OF THE APPELLANT IN PROPER PERSPECTIVE. 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, MODIFY AND WITHDRAW ANY GROUNDS BEFORE OR DURING THE COURSE OF APPELLATE PROCEEDINGS. 2. THE BRIEF FACTS OF THE CASE ARE THAT IN THIS CAS E RETURN WAS FILED ON 17.10.2013 DECLARING AN INCOME OF RS. 17,75,300/ - WHICH WAS PROCESSED U/S. 143(1) OF THE INCOME TAX ACT, 1961 ( HEREINAFTER REFERRED AS THE ACT). SEARCH AND SEIZURE ACTION WA S CONDUCTED IN THE BINDAL GROUP OF CASES U/S. 132(1) OF THE ACT ON 7.3 .2014. DURING THE COURSE OF SEARCH, JEWELLERY WEIGHTING 1351.290 GMS. (NET) VALUING RS. 55,65,999/- WAS FOUND FROM THE ASSESSEE AND HIS WIFE. THE AO CONSIDERED ONLY 800 GMS. OF JEWELLERY AS EXPLAINED CONSIDERING THE CBDT INSTRUCTION NO. 1916 AND ADDED THE BALANCE O UT OF 1351.290 GMS. BY WAY OF UNEXPLAINED INVESTMENT OF RS. 15,58, 980/- VIDE HIS ORDER DATED 07.3.2016 PASSED U/S. 143(3) OF THE ACT . AGAINST THE ASSESSMENT ORDER, THE ASSESSEE APPEALED BEFORE THE LD. CIT(A), WHO VIDE HIS IMPUGNED ORDER DATED 21.8.2017 HAS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE AND ALLOW ANOTHER 350 GRAMS OF THE ASSESSEE JEWELLERY AS EXPLAINED AND THE BALANCE QUANTUM OF J EWELLERY OF 203.29 GRAMS WAS ADDED BACK AS INCOME OF THE ASSES SEE. 3 3. AGGRIEVED WITH THE IMPUGNED ORDER DATED 21.8.20 17 ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4. AT THE TIME OF HEARING, LD. COUNSEL OF THE ASSES SEE STATED THAT LD. CIT(A) HAS WRONGLY CONFIRMED THE ADDITION ON AC COUNT OF 203.29 GRAMS OF JEWELLERY TREATING IT AS UNEXPLAINED U/S. 69A OF THE ACT, WITHOUT CONSIDERING THE STATUS OF THE ASSESSEE WHO IS A DIRECTOR OF M/S. NEERAJ PAPER MARKETING LTD. WHICH IS ENGAGED IN TRADING AND MARKETING BUSINESS OF PAPER; HE WAS MARRIED TO MRS. POONAM GOEL, WHOSE FATHER NAMELY SH. ISHWAR CHAND GUPTA WAS A FA MOUS PRACTICING DOCTOR IN MUZAFFARNAGAR AND WITHOUT APPR ECIATING THE FACT THAT THE JEWELLERY RECEIVED AND SHOWN BY THE ASSESS EE IS ACCEPTABLE UNDER HINDU CUSTOMS. HE FURTHER STATED THAT LD. CIT (A) HAS ON AN ESTIMATED BASIS ALLOWED ANOTHER 350 GRAMS OF THE AS SESSEE JEWELLERY AND THE BALANCE QUANTUM OF JEWELLERY OF 203.29 GRAM S ADDED BACK TO THE INCOME OF THE ASSESSEE, WHICH IS NOT SUSTAIN ABLE IN THE EYES OF LAW. HE ALSO FILED A PAPER BOOK CONTAINING PAGES 1 TO 71 IN WHICH HE HAS ATTACHED THE COPY OF WRITTEN SUBMISSION DATED 1 1.8.2017 FILED BEFORE THE CIT(A); WRITTEN SUBMISSIONS FILED BEFORE THE AO; TWO VALUATION REPORTS DATED 29.3.2014; VALUATION REPORT DATED 7.3.2014; VALUATION REPORTS DATED 12.5.2006; CHART BIFURCATED THE JEWELLERY FOUND IN THE HANDS OF THE ASSESSEE AND HI S WIFE AS ON 31.3.2014; RECONCILIATION CHART AS ON 31.3.2006; LE TTER DATED 29.4.2014 FILED BEFORE THE LD. ADI (INV.); STATEMEN T OF SH. SATYA PRAKASH; AFFIDAVIT OF SATYA PRAKASH; COPY OF THE ST ATEMENT OF THE 4 APPELLANT U/S. 132(4)/133A; COPY OF THE STATEMENT O F THE APPELLANT U/S. 131(1A); ORDER PASSED BY OTHER CIT(A) IN THE C ASE OF SH. ASHOK KUMAR AND COPY PASSED BY THE CIT(A) IN THE CASE OF SACHIN KUMAR GOEL WHEREIN ON SIMILAR FACTS THE CONTENTIONS OF TH E ASSESSEE WAS ALLOWED. 5. ON THE CONTRARY, LD. DR RELIED UPON THE ORDERS O F THE LD. CIT(A) AND STATED THAT LD. CIT(A) HAS CONSIDERED T HE ECONOMIC STATUS OF THE ASSESSEE FAMILY, SOCIAL CUSTOMS AND F ACTUAL MATRIX OF THE CASE WHERE A VALUATION REPORT WAS FURNISHED LAT ER ON, RIGHTLY CONSIDERED ANOTHER 350 GRMS OF THE ASSESEE JEWELLER Y AS EXPLAINED AND THE BALANCE QUANTUM OF JEWELLERY OF 203.29 GRAM S SHALL BE ADDED BACK AS INCOME OF THE ASSESSEE, WHICH DOES N OT NEED ANY INTERFERENCE. 6. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS, ESPECIALLY THE ORDERS OF THE AUTHORITIES BELOW. I F IND THAT ASSESSEES COUNSEL DURING THE HEARING HAS FILED A PAPER BOOK CONTAINING PAGES 1 TO 71 IN WHICH HE HAS ATTACHED THE COPY OF WRITTEN SUBMISSION DATED 11.8.2017 FILED BEFORE THE CIT(A); WRITTEN SUBMISSI ONS FILED BEFORE THE AO; TWO VALUATION REPORTS DATED 29.3.2014; VAL UATION REPORT DATED 7.3.2014; VALUATION REPORTS DATED 12.5.2006; CHART BIFURCATED THE JEWELLERY FOUND IN THE HANDS OF THE ASSESSEE AN D HIS WIFE AS ON 31.3.2014; RECONCILIATION CHART AS ON 31.3.2006; LE TTER DATED 29.4.2014 FILED BEFORE THE LD. ADI (INV.); STATEMEN T OF SH. SATYA PRAKASH; AFFIDAVIT OF SATYA PRAKASH; COPY OF THE ST ATEMENT OF THE 5 APPELLANT U/S. 132(4)/133A; COPY OF THE STATEMENT O F THE ASSESSEE U/S. 131(1A); ORDER PASSED BY OTHER CIT(A) IN THE C ASE OF SH. ASHOK KUMAR AND COPY PASSED BY THE CIT(A) IN THE CASE OF SACHIN KUMAR GOEL WHEREIN ON SIMILAR FACTS THE CONTENTIONS OF TH E ASSESSEE WAS ALLOWED BY THE LD. CIT(A). I FURTHER FIND THAT DURI NG THE COURSE OF SEARCH, JEWELLERY WEIGHTING 1351.290 GMS. (NET) VAL UING RS. 55,65,999/- WAS FOUND FROM THE ASSESSEE AND HIS WIF E. THE AO CONSIDERED ONLY 800 GMS. OF JEWELLERY AS EXPLAINED CONSIDERING THE CBDT INSTRUCTION NO. 1916 AND ADDED THE BALANCE OUT OF 1351.290 GMS. BY WAY OF UNEXPLAINED INVESTMENT AT RS. 15,58, 980/-. I FURTHER NOTE THAT THE ASSESSEE BELONGS TO REPUTED AND RENOW NED FAMILY HAVING HIGH ESTEEM AND STATUS IN THE SOCIETY AND TH AT THE WIFE OF THE ASSESSEE ALSO COMES FROM A RICH FAMILY. HOWEVER, TH E AO HAS ALLOWED 800 GRMS. AS REASONABLE, BUT LD. CIT(A) CONSIDERED IT PRUDENT TO ALLOW ANOTHER 350 GRMS. OF THE ASSESSEE JEWELLERY A S EXPLAINED AND THE BALANCE QUANTUM OF JEWELLERY OF 203.29 GRMS WA S ADDED BACK AS INCOME OF THE ASSESSEE, WITHOUT ANY BASIS, WHICH I S NOT PERMISSIBLE IN THE EYES OF LAW. IN MY CONSIDERED OPINION, THE ASSESSEE BELONGS TO REPUTED AND RENOWNED FAMILY HAVING HIGH ESTEEM A ND STATUS IN THE SOCIETY AND THAT THE WIFE OF THE ASSESSEE ALSO FROM A RICH FAMILY, THEREFORE, KEEPING IN THE ECONOMIC STATUS OF THE AS SESSEE FAMILY, SOCIAL CUSTOMS AND FACTUAL MATRIX OF THE CASE WHERE IN A VALUATION REPORT WAS FURNISHED LATER, THE ASSSESSEES EXPLA NATION IS GENUINE. IN THIS REGARD, I DRAW MY SUPPORT FROM THE DECISI ON OF THE HONBLE 6 HIGH COURT OF DELHI IN THE CASE OF ASHOK CHADHA VS . ITO REPORTED IN 14 TAXMANN.COM 57 (DELHI.)/202 TAXMANN 395 HAS ACC EPTED THE JEWELLERY OF 906.60 GRAMS IN THE CASE OF MARRIED LA DY EVEN WITHOUT DOCUMENTARY EVIDENCE AS THE DENYING THE EXPLANATION WOULD TANTAMOUNT TO OVERLOOKING THE REALITIES OF LIFE BY HOLDING AS UNDER:- 'AS FAR AS ADDITION QUA JEWELLERY IS CONCERNED, DUR ING THE COURSE OF SEARCH, JEWELLERY WEIGHING 906.900 GRAMS OF THE VALUE AMOUNTING TO RS. 6,93,582 WAS FOUND. THE APPELLANT'S EXPLANATION WAS THAT HE WAS MARRIED ABO UT 25 YEARS BACK AND THE JEWELLERY COMPRISED 'STREEDHA N' OF SMT. JYOTI CHADHA, HIS WIFE AND OTHER SMALL ITEM S JEWELLERY SUBSEQUENTLY PURCHASED AND ACCUMULATED OV ER THE YEARS. HOWEVER, THE ASSESSING OFFICER DID NOT A CCEPT THE ABOVE EXPLANATION ON THE GROUND THAT DOCUMENTAR Y EVIDENCE REGARDING FAMILY STATUS AND THEIR FINANCIA L POSITION WAS NOT FURNISHED BY THE APPELLANT. THE ASSESSING OFFICER ACCEPTED 400 GRAMS OF JEWELLERY A S EXPLAINED AND TREATED JEWELLERY AMOUNTING TO 506.90 0 GRAMS AS UNEXPLAINED AND MADE AN AD HOC ADDITION OF RS. 3,87,364 UNDER SECTION 69A OF THE ACT WORKING O N UNEXPLAINED JEWELLERY, BY APPLYING AVERAGE RATE OF THE TOTAL JEWELLERY FOUND. THE RELEVANT PORTION OF THE ASSESSMENT ORDER READS AS FOLLOWS:- 7 'A VERY REASONABLE ALLOWANCE OF OWNERSHIP OF GOLD JEWELLERY TO THE EXTENT OF 400 GRAMS IS CONSIDERED REASONABLE AND THE BALANCE QUANTITY OF 506 GRAMS BY APPLYING AVERAGE RATE, THE UNEXPLAINED GOLD JEWELLERY IS CONSIDERED AT RS. 3,87,364 (506/900 X 6,93,582) U/S 69A OF THE ACT.' THE CIT (A) CONFIRMED THIS ADDITION STATING THAT THE ASSESSING OFFICER HAD BEEN FAIR IN ACCEPTING THE PART OF JEWELLERY AS UNEXPLAINED. THE ITAT HAS ALSO ENDORSED THE AFORESAID VIEW. LEARNED COUNSEL FOR APPELLANT MS. KAPILA SUBMITTED THAT THERE WAS NO BASIS FOR THE ASSESSING OFFICER TO ACCEPT THE OWNERSHIP OF THE GOLD JEWELLERY TO THE EXTENT OF 400 GRAMS ONLY AS 'REASONABLE ALLOWANCE' AND TREAT THE REMAINING JEWELLERY OF RS. 506.900 AS UNEXPLAINED. SHE ALSO SUBMITTED THAT ANOTHER GLARING FACT IGNORED BY THE ASSESSING OFFICER AS WELL AS OTHER AUTHORITIES WAS THAT AS THE DEPARTMENT HAD CONDUCTED A SEARCH OF ALL THE FINANCIAL DEALINGS WHICH WERE WITHIN HIS KNOWLEDGE AND NO PAPER OR DOCUMENT WAS FOUND TO INDICATE THAT THIS JEWELLERY BELONGED TO THE APPELLANT AND THAT IT WAS UNDISCLOSED INCOME OF THE ASSESSMENT YEAR 2006-07. IN A SEARCH OPERATION, NO SCOPE IS LEFT WITH THE TAX DEPARTMENT TO MAKE ADDITION ON SUBJECTIVE GUESS WORK, CONJECTURES AND SURMISES. IT WAS ALSO ARGUED THAT JEWELLERY IS 'STREEDHAN' OF THE ASSESSEE'S WIFE, EVIDENCED IN THE FORM OF 8 DECLARATION WHICH WAS FURNISHED BY MOTHER- IN-LAW OF THE ASSESSEE STATING THAT SHE HAD GIVEN THE JEWELLERY IN QUESTION TO HER DAUGHTER. SHE ARGUED THAT IT IS A NORMAL CUSTOM FOR A WOMAN TO RECEIVE JEWELLERY IN THE FORM OF MARRIAGE AND OTHER OCCASIONS SUCH AS BIRTH OF A CHILD. THE ASSESSEE HAD BEEN MARRIED MORE THAN 25-30 YEARS AND ACQUISITION OF THE JEWELLERY OF 906.900 GRAMS COULD NOT BE TREATED AS EXCESSIVE. 3. LEARNED COUNSEL FOR THE RESPONDENT ON THE OTHER HAND RELIED UPON THE REASONING GIVEN BY THE AUTHORITIES BELOW. AFTER CONSIDERING THE AFORESAID SUBMISSIONS WE ARE OF THE VIEW THAT ADDITION MADE IS TOTALLY ARBITRARY AND IS NOT FOUNDED ON ANY COGENT BASIS OR EVIDENCE. WE HAVE TO KEEP IN MIND THAT THE ASSESSEE WAS MARRIED FOR MORE THAN 25-30 YEARS. THE JEWELLERY IN QUESTION IS NOT VERY SUBSTANTIAL. 'THE LEARNED COUNSEL FOR THE APPELLANT/ASSESSEE IS CORRECT IN HER SUBMISSION THAT IT IS A NORMAL CUSTOM FOR WOMAN TO RECEIVE JEWELLERY IN THE FORM OF 'STREEDHAN' OR ON OTHER OCCASIONS SUCH AS BIRTH OF A CHILD ETC. COLLECTING JEWELLERY OF 906.900 GRAMS BY A WOMAN IN A MARRIED LIFE OF 25-30 YEARS IS NOT ABNORMAL. FURTHERMORE, THERE WAS NO VALID AND/OR PROPER YARDSTICK ADOPTED BY THE ASSESSING OFFICER TO TREAT ONLY 400 GRAMS AS 'REASONABLE ALLOWANCE' AND TREAT THE OTHER AS 'UNEXPLAINED'. MATTER 9 WOULD HAVE BEEN DIFFERENT IF THE QUANTUM AND VALUE OF THE JEWELLERY FOUND WAS SUBSTANTIAL. 4. WE ARE, THEREFORE, OF THE OPINION THAT THE FINDINGS OF THE TRIBUNAL ARE TOTALLY PERVERSE AND FAR FROM THE REALITIES OF LIFE. IN THE PECULIAR FACTS OF THIS CASE WE ANSWER THE QUESTION IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE THEREBY DELETING THE AFORESAID ADDITION OF RS. 3,87,364. 5. APPEAL IS ALLOWED IN THE AFORESAID TERMS.' 6.1 KEEPING IN VIEW OF THE AFORESAID FACTS AND CIRC UMSTANCES OF THE CASE AS WELL AS THE STATUS OF THE FAMILY AND ON THE ANVIL OF THE JUDGEMENT OF THE HIGH COURT OF DELHI IN THE CASE OF ASHOK CHADHA VS. ITO REPORTED IN 14 TAXMANN.COM 57 (DELHI.)/202 TAXMANN 395, AS AFORESAID THE EXPLANATION GIVEN BY THE ASSESSEE S COUNSEL IS ACCEPTED AND ACCORDINGLY BALANCE QUANTUM OF JEWELLE RY OF 203 GRMS IS ALLOWED. ACCORDINGLY THE IMPUGNED ORDER OF THE LD. CIT(A) IS REVERSED. 7. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED ON 21-03-2018. SD/- (H.S. SIDHU) JUDICIAL MEMBER DATED : 21-03-2018 SR BHATANGAR COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.