Mrs. Rene Singh, Delhi V. DCIT, New Delhi

ITA 6177/DEL/2012

• Counselvise Citation: 617720114 RSA 2012
• Duration Of Justice: 1 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 24-11-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 13-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIKRAM SAHAY
• Assessee Lawyers: R K KAPOOR
• Keywords: Gift

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH F FF F : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND PRESIDENT AND PRESIDENT AND PRESIDENT AND SHRI SHRI SHRI SHRI H.S. SIDHU H.S. SIDHU H.S. SIDHU H.S. SIDHU, JUDICIAL , JUDICIAL , JUDICIAL , JUDICIAL MEMBER MEMBER MEMBER MEMBER ITA NO ITA NO ITA NO ITA NO. .. .6177/DEL/2012 6177/DEL/2012 6177/DEL/2012 6177/DEL/2012 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2004 2004 2004 2004- -- -05 0505 05 MRS. RENE SINGH, MRS. RENE SINGH, MRS. RENE SINGH, MRS. RENE SINGH, PROP. ADWEL ADVERTISING, PROP. ADWEL ADVERTISING, PROP. ADWEL ADVERTISING, PROP. ADWEL ADVERTISING, B BB B- -- -16, ANAND VIHAR 16, ANAND VIHAR 16, ANAND VIHAR 16, ANAND VIHAR, ,, , DELHI. DELHI. DELHI. DELHI. PAN : AARPS5237L. PAN : AARPS5237L. PAN : AARPS5237L. PAN : AARPS5237L. VS. VS. VS. VS. DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -35(1), 35(1), 35(1), 35(1), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PRADEEP DINODIA AND SHRI R.K. KAPOOR, CA. RESPONDENT BY : SHRI VIKRAM SAHAY, SR.DR. ORDER ORDER ORDER ORDER PER G. PER G. PER G. PER G.D. AGRAWAL, VP D. AGRAWAL, VP D. AGRAWAL, VP D. AGRAWAL, VP : :: : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LEARNED CIT(A)-XXVII, NEW DELHI DATED 26 TH SEPTEMBER, 2012 FOR THE AY 2004-05. 2. THE GROUNDS RAISED BY THE ASSESSEE READ AS UNDER :- 1. THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN SUSTAINING PENALTY OF RS.3,40,989/- U/S 27 1(1)(C) OF THE INCOME-TAX ACT, ON WHOLLY ERRONEOUS, ILLEGAL AND UNTENABLE GROUNDS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE PENALTY OF RS.3,40,989/- LEVIED U/S 271(1)(C) DESERVES TO BE DELETED. 3. THE FACTS OF THE CASE ARE THAT THE ASSESSING OFF ICER HAD LEVIED THE PENALTY OF `3,40,989/- IN RESPECT OF TWO ADDITI ONS SUSTAINED BY THE ITA-6177/DEL/2012 2 APPELLATE AUTHORITIES VIZ., (I) ADDITION FOR UNEXPL AINED JEWELLERY `9,97,291/- AND (II) ADDITION FOR UNEXPLAINED CASH - `36,010/-, TOTAL `10,33,301/-. 4. WE HAVE HEARD BOTH THE SIDES WITH REGARD TO BOTH THE ABOVE ADDITIONS REGARDING UNEXPLAINED JEWELLERY. DURING THE COURSE OF SEARCH OF THE ASSESSEES PREMISES, TOTAL JEWELLERY FOUND W AS WORTH `21,47,291/-, OUT OF WHICH, THE JEWELLERY SEIZED WA S `15,89,891/-. THE ASSESSING OFFICER TREATED THE JEWELLERY OF `18,97,2 91/- TO BE UNEXPLAINED AND MADE THE ADDITION THERE FOR WHICH W AS SUSTAINED BY THE LEARNED CIT(A). ON APPEAL BEFORE THE ITAT, THE ITAT SUSTAINED THE ADDITION OF `9,97,000/- VIDE ORDER DATED 27 TH MARCH, 2009 IN ITA NO.990/DEL/2007. THE RELEVANT FINDING OF THE ITAT READS AS UNDER:- 15. WE HAVE GONE THROUGH THE PHOTOGRAPHS PLACED ON RECORD AS WELL AS THE CERTIFICATE OF GIFT BY GRANDM OTHER OF THE ASSESSEE, SMT. MOTIA KAUR AND FOUND THAT BOT H THE LOWER AUTHORITIES HAVE BRUSHED ASIDE ALL THESE DOCUMENTARY EVIDENCE AND CERTIFICATE MERELY ON THE GROUND THAT IN THE STATEMENT, THE ASSESSEE HAD NOT STATED THE JEWELLERY OF THIS WORTH WHICH WERE RECOR DED U/S 132(4). WE HAD GONE THROUGH THE STATEMENT RECORDED AND FOUND THAT IN REPLY TO QUESTION NO.18, THE ASSESSEE HAD CATEGORICALLY STATED THAT JEWELLERY WA S GIVEN BY HER PARENTS AS WELL AS IN-LAWS AT THE TIME OF MARRIAGE AND ALSO GIFTS RECEIVED ON DIFFERENT OCCAS IONS. THE ASSESSEE HAS ALSO SUBMITTED THE BILLS FOR REMAK ING THE JEWELLERY OUT OF JEWELLERY RECEIVED FROM HER GR AND MOTHER. BOTH FATHER AND MOTHER OF THE ASSESSEE WER E WELL TO DO AND ASSESSEE HERSELF WAS DRAWING RS.1 LA CS EVERY YEARS FROM HER FIRM M/S ADWELL ADVERTISING. KEEPING INTO VIEW ALL THESE FACTS AND CIRCUMSTANCES AND ALSO THE DOCUMENTARY EVIDENCE PLACED ON RECORD, WE ARE INCLINED TO DIRECT THE A.O. TO TREAT JEWELLERY OF RS.NINE LACS AS DULY EXPLAINED WHICH WAS RECEIVED B Y THE ASSESSEE OUT OF THESE GIFTS AND ACQUIRED OUT OF HER DRAWINGS. ACCORDINGLY, ADDITION OF RS.18.97 LACS I S REDUCED TO THE EXTENT OF RS.9.97 LACS. IN THE RESU LT, GROUND TAKEN BY THE ASSESSEE WITH REGARD TO THE ITA-6177/DEL/2012 3 JEWELLERY IS ALLOWED IN PART, IN TERMS INDICATED HEREINABOVE. 5. FROM THE ABOVE, IT IS EVIDENT THAT THE ASSESSEE HAS FURNISHED THE EXPLANATION WITH REGARD TO JEWELLERY FOUND FROM HER PREMISES. SHE HAS EXPLAINED THAT THE JEWELLERY WAS RECEIVED AT THE TI ME OF HER MARRIAGE FOR WHICH THE CERTIFICATE OF GIFT BY THE GRANDMOTHE R OF THE ASSESSEE WAS FURNISHED AS WELL AS PHOTOGRAPHS TAKEN AT THE TIME OF MARRIAGE WERE ALSO PLACED ON RECORD. THE ASSESSING OFFICER AS WE LL AS LEARNED CIT(A) DID NOT ACCEPT THE ABOVE EVIDENCES ON THE GROUND OF STATEMENT RECORDED AT THE TIME OF SEARCH. HOWEVER, THE ITAT ALSO NOTICED THAT DURING THE COURSE OF SEARCH IN HER STATEMENT IN REP LY TO QUESTION NO.18, THE ASSESSEE HAS STATED THAT THE JEWELLERY W AS GIVEN BY HER PARENTS AS WELL AS HER IN LAWS AT THE TIME OF HER M ARRIAGE. THE ASSESSEE HAS ALSO SUBMITTED THE BILLS FOR REMAKING OF THE JEWELLERY OUT OF THE JEWELLERY RECEIVED FROM HER GRANDMOTHER. TH E ITAT ALSO RECORDED THE FINDING THAT THE FATHER AS WELL AS MOT HER OF THE ASSESSEE WERE WELL TO DO. HOWEVER, AFTER NOTING ALL THESE F ACTS, THE ITAT DEEMED IT PROPER TO ACCEPT THE JEWELLERY WORTH `9 L AKHS AS EXPLAINED AND REMAINING AS UNEXPLAINED. FROM THE ABOVE, IT I S EVIDENT THAT THE ITAT ACCEPTED THE ASSESSEES EXPLANATION PARTLY ON ESTIMATED BASIS. NO DEFECT IN THE ASSESSEES EXPLANATION WAS FOUND. THE EXPLANATION/EVIDENCES SUBMITTED BY THE ASSESSEE WER E NOT FOUND TO BE FALSE OR BOGUS. IN VIEW OF THE ABOVE FACTS, IN OUR OPINION, MERELY BECAUSE THE ITAT ACCEPTED THE ASSESSEES EXPLANATIO N WHICH WAS DULY SUPPORTED BY DOCUMENTARY EVIDENCE PARTLY, IT CANNOT BE SAID THAT THE ASSESSEE HAS CONCEALED INCOME OR FURNISHED INACCURA TE PARTICULARS OF INCOME. WE ARE, THEREFORE, OF THE OPINION THAT THE ADDITION FOR UNEXPLAINED JEWELLERY DOES NOT CALL FOR LEVY OF PEN ALTY UNDER SECTION 271(1)(C) OF THE ACT. ITA-6177/DEL/2012 4 6. REGARDING THE ADDITION OF CASH OF `36,010/-, IT IS OBSERVED THAT THE TOTAL CASH FOUND FROM THE ASSESSEES PREMISES W AS `17,50,360/-. THE ASSESSING OFFICER HAD MADE THE ADDITION FOR UNE XPLAINED CASH OF `17,35,360/- TREATING ONLY `15,000/- TO BE EXPLAINE D CASH. ON APPEAL, LEARNED CIT(A) ACCEPTED THE CASH TO THE EXTENT OF ` 16,99,350/- OUT OF THE TOTAL ADDITION OF `17,35,360/-. THE REVENUE HA D FILED THE APPEAL BEFORE THE ITAT AGAINST THE REDUCTION OF ADDITION F OR UNEXPLAINED CASH IN HAND. HOWEVER, THE ITAT UPHELD THE FINDING OF T HE LEARNED CIT(A). THUS, OUT OF THE TOTAL CASH OF MORE THAN `17 LAKHS FOUND FROM THE ASSESSEES PREMISES, ONLY THE CASH OF `36,010/- WAS TREATED AS UNEXPLAINED. WE FIND THAT THE ITAT WHILE DEALING W ITH THE JEWELLERY IN PARAGRAPH 15 OF ITS ORDER HAS RECORDED THE FINDING THAT THE ASSESSEE WAS DRAWING `1 LAKH EVERY YEAR FROM HER FIRM M/S AD WEL ADVERTISING. THE RETURN OF INCOME OF THE ASSESSEE IS MORE THAN ` 31 LAKHS. DESPITE ALL THESE FACTS, THE ASSESSING OFFICER HAD TREATED ONLY CASH OF `15,000/- AS EXPLAINED CASH. CONSIDERING THE TOTALITY OF THE ABOVE FACTS, I.E., OUT OF THE TOTAL CASH OF `17 LAKHS ONLY, `36,010/- WAS TREATED AS UNEXPLAINED, THAT TOO ON ESTIMATED BASIS, THEREFORE , IT CANNOT SAID THAT THE ASSESSEE IS LIABLE FOR PENALTY UNDER SECTION 27 1(1)(C) IN RESPECT OF CASH WHICH WAS TREATED AS UNEXPLAINED ON ESTIMATED BASIS. THEREFORE, WE ARE OF THE OPINION THAT THE LEVY OF PENALTY ON T HE CASH OF `36,010/- IS NOT JUSTIFIED. IN VIEW OF THE ABOVE, WE CANCEL THE PENALTY LEVIED UNDER SECTION 271(1)(C) AT `3,40,989/-. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. DECISION PRONOUNCED IN THE OPEN COURT ON 28 TH NOVEMBER, 2014. SD/- SD/- ( (( (H.S. SIDHU H.S. SIDHU H.S. SIDHU H.S. SIDHU) )) ) (G.D. AGRAWAL (G.D. AGRAWAL (G.D. AGRAWAL (G.D. AGRAWAL) )) ) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 28.11.2014 VK. ITA-6177/DEL/2012 5 COPY FORWARDED TO: - 1. APPELLANT : MRS. RENE SINGH, MRS. RENE SINGH, MRS. RENE SINGH, MRS. RENE SINGH, PROP. ADWEL ADVERTISING, PROP. ADWEL ADVERTISING, PROP. ADWEL ADVERTISING, PROP. ADWEL ADVERTISING, B BB B- -- -16, ANAND VIHAR, DELHI. 16, ANAND VIHAR, DELHI. 16, ANAND VIHAR, DELHI. 16, ANAND VIHAR, DELHI. 2. RESPONDENT : DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -35(1), NEW DELHI. 35(1), NEW DELHI. 35(1), NEW DELHI. 35(1), NEW DELHI. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR