M. Sushil Kumar, KGF V. DCIT, Bangalore

ITA 644/BANG/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 95442 (ITAT-BANGALORE)
• Duration Of Justice: 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 18-11-2015
• Assessment Year: 2012-2013
• Appeal Filed On: 27-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift; Search and seizure; Corroborative evidences
• Section: 142(1); 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE B BENCH, BANGALORE BEFORE SMT ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA NO.644(BNG)/2015 (ASSESSMENT YEAR : 2012-13) SHRI M. SUSHIL KUMAR, PROP: M/S ABHISHEK BANKERS, SANTHOSH NIVAS, MAHARAJA ROAD, ROBERTSONPET K.G.F-563 122 PAN NO.ADMPK2632H APPELLANT VS THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2(1), BANGALORE RESPONDENT AND S.P NO.87(BNG)/2015 (IN ITA NO.644(BNG)/2015) (BY ASSESSEE) ASSESSEE BY : SHRI NAGINCHAND KHINCHA, CA REVENUE BY : SHRI NARENDRA REBELLA, ASST.CIT DATE OF HEARING : 18-11-201 5 DATE OF PRONOUNCEMENT : 30-12-2015 O R D E R PER SHRI INTURI RAMA RAO, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-11, BANGAL ORE DATED 16-01- 2015 FOR THE ASSESSMENT YEAR : 2012-13. 2 ITA NO.644 & SP NO.87(B)/2014 2. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APP EAL; 1. THE LEARNED AO HAD ERRED IN MAKING AN ADDITION OF RS.83,73,748/- BY HOLDING 4226.58 GRAMS OF GOLD JEWELLERY AS UNEXPLAINED AND THE LD.CIT(A) HAS ERRE D IN SUSTAINING THE ABOVE ADDITION EXCEPT IN RESPECT OF GOLD JEWELLERY OF ABOUT 900 GRAMS. 2, ON PROPER APPRECIATION OF FACTS AND DATA AVAILAB LE IT WILL BE CLEAR THAT ON SUBMISSIONS AS MADE BY ASSESS EE, THERE IS NO EXCESS GOLD JEWELLERY AND THE ADDITION AS MADE/SUSTAINED ARE TO BE DELETED IN ENTIRETY. 3. IN ANY CASE WITHOUT PREJUDICE THE VALUE AS ADOPT ED FOR MAKING/SUSTAINING THE ADDITION IS EXCESSIVE. 4. THE ASSESSEE DENIES LIABILITY TO PAY INTEREST. T HE INTEREST HAVING BEEN LEVIED ERRONEOUSLY IS TO BE DE LETED. 5. IN VIEW OF THE ABOVE AND ON OTHER GROUNDS TO BE ADDUCED AT THE TIME OF HEARING, IT IS REQUESTED THA T THE ADDITION AS MADE TO THE INCOME BE DELETED AND INTER EST LEVIED BE ALSO DELETED.. 3. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF PAWN BROKING AND MONEY L ENDING UNDER THE NAME STYLE OF ABHISHEK BANKERS. THE RETURN OF INC OME WAS FILED FOR THE ASSESSMENT YEAR 2012-13. A SEARCH AND SEIZURE OPER ATION WAS CONDUCTED IN 3 ITA NO.644 & SP NO.87(B)/2014 THE CASE OF SHRI MANGALCHAND BATHIA ALONGWITH OTHER S ON 12-03-2012. BASED ON THE SEARCH MATERIAL A NOTICE U/S 153A WAS ISSUED TO THE ASSESSEE CALLING UPON THE ASSESSEE TO FILE THE RETURN OF INC OME. THE RETURN OF INCOME WAS FILED ON 06-02-2013 DECLARING A TOTAL INCOME OF RS.30,68,900/- WHICH INCLUDES UNDISCLOSED INCOME OF RS.25,90,000/- ADMIT TED AS ADDITIONAL INCOME FOR THE ASSESSMENT YEAR 2012-13 ON ACCOUNT O F EXCESS JEWELLERY O 1036 GRAMS OF GOLD, DURING THE COURSE OF SEARCH. T HE CASE WAS SELECTED FOR SCRUTINY ASSESSMENT AFTER ISSUING STATUTORY NOTICES UNDER SECTIONS 143(2) AND 142(1) OF THE IT ACT, 1961. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESEE WAS CALLED UPON TO EXPLAIN THE GOLD JEWLLERY FOUND TO THE TUNE OF 4226.58 GRAMS. THE DETAILS OF THE G OLD SEIZED ARE AS UNDER; SL.NO. NATURE OF ITEMS FOUND WHERE IT WAS FOUND 1 GOLD JEWELLERY TO TUNE OF 2082.86 GRAMS GRAMS (NET) IN THE ROOM OF SUSHEEL KUMAR AT HIS RESIDENCE 2 GOLD JEWELLERY TO THE TUNE OF 1428.61 GRAMS (NET) IN THE ROOM OF MANGALCHAND (RESIDENCE OF SUSHEEL KUMAR) 3 GOLD JEWELLERY TO THE TUNE OF 263.21 GRAMS (NET) IN THE BANK LOCKER OF SBM (RESIDENCE OF SUSHEEL KUMAR) 4 ITA NO.644 & SP NO.87(B)/2014 4 GOLD JEWELLERY TO THE TUNE OF 451.88GRAMS (NET) THE ASSESSEE WAS CALLED UPON TO EXPLAIN THE SOURCE OF JEWELLERY DURING THE COURSE OF SEARCH OPERATION. IN THE STATEMENT RECOR DED U/S 132(4) DATED 12- 03-2012, HE WAS QUESTIONED ON THE SOURCES FOR THE G OLD FOUND. THE SAME IS REPRODUCED BELOW; Q.NO.17 DURING THE COURSE OF SEARCH ACTION U/S 132 AT YOUR RESIDENCE CERTAIN JELWELLERY WAS FOUND AND THE SAME WAS INVENTORISED AS 4/SKB, AS PER WHICH THE TOTAL JEWELLERY IS WEIGHING A GROSS WEIGHT OF 5094.24 GMS , THE NET WEIGHT OF 4226.57 GMS. THE DIAMOND FOUND IS 2 4.04 CARAT. IN ABSENCE OF THE WEALTH TAX RETURN FILED BY YOU, PLEASE EXPLAIN THE SOURCES OF THE SAME? ANS; MOST OF THE JELWEELLERY IS ACQUIRED AT THE TIME OF MY MARRIAGE. PART OF THE JELWELLERY IS GIVEN TO MY WI FE BY MY MOTHER AT THE TIME OF HER DEATH IN TE YEAR 2006. SO ME JEWELLERY WAS ALSO RECEIVED AT THE TIME OF MARRIAGE OF MY SON. FURTHER, SOME OF OF THE JEWELLERY OF AROUND 1 KG WEIGHT WERE ACQUIRED BY ME IN THE LAST 6 YEARS. HOWEVER, I DO NOT HAVE IN POSSESSION ANY BILLS OR DOCUMENTS TO SUPPORT THE SAME. I HAVE NO OBJECTIO N IN SEIZING THE JEWELLERY AFTER ALLOWING THE ADMISSIBLE LIMIT. 5 ITA NO.644 & SP NO.87(B)/2014 Q.NO.18 I AM PROPOSING TO SEIZE THE NET WEIGHT OF JEWELLERY 2713.62 GMS AFTER RELEASING THE ADMISSIBLE LIMIT. ANS: I HAVE NO OBJECTION FOR THE SAME. THE ANALYSIS OF THE REPLIES FURNISHED BY THE ASSESS EE UNDER 132(4) STATEMENT EXPLAINING THE SOURCES FOR JEWELLERY IS VAGUE, UNEXPLAINED AND NOT SUBSTANTIAT ED WITH EVIDENCES. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS CALLED UPON AGAIN VIDE SHOW CAUSE NOTICE DATED 14- 11-2013 TO EXPLAIN THE SOURCE FOR THE ENTIRE GOLD FOUND 4226.58 GMS. IN R ESPONSE TO THE SHOW CAUSE NOTICE, THE ASSESSEE FURNISHED EXPLANATION AS UNDER; IT IS CUSTOMARY IN OUR COMMUNITY FOR THE FAMILY MEMBERS TO RECEIVE SMALL QUANTITIES OF JEWELLERY ON OCCASIONS LIKE BIRTHDAYS, MARRIAGE, MARRIAGE ANNIVERSARIES, MAAYRA ETC. THE GIFTS HAVE ACCUMULA TED OVER A PERIOD OF YEARS. ON THE ABOVE SUBMISSION, THE AO HELD AS FOLLOWS; 6 ITA NO.644 & SP NO.87(B)/2014 THE ABOVE SUBMISSION MADE BY THE ASSESSEE IS NOT AC CEPTABLE AS THE ASSESEE HIMSELF STATED THEY BELONG TO MARWAD I BUSINESS FAMILY AND THERE IS A TRADITION IN FAMILY TO GET GOLD AND SILVER ITEMS ON VARIOUS FESTIVE OCCASIONS. THEREFORE, IT IS ONUS ON THE ASS ESSEE TO KEEP THE ENTIRE RECEIPTS ACCOUNTED AND BE ABLE TO EXPLAIN TH E SAME WHENEVER REQUIRED. BUT ON THE HAND, SIMPLY TAKING PLEA THA T HE BELONGS TO MARWADI BUSINESS FAMILY WHERE THERE IS PRACTICE OF GIVING AND TAKING GIFTS S NOT ACCEPTABLE. THE SECOND SUBMISSION PLACED BY THE ASSESEE IS CBDT CIRCULAR NO.1916 DATED 11-05-1994 PROVIDES NON-SEIZURE OF JE WELLERY WHICH WOULD GENERALLY BE HELD BY THE FAMILY MEMBERS. THE INSTRUCTION IS REPRODUCED BELOW; ABOUT 500 GRAMS OF GOLD JEWELLERY AND ORNAMENTS PE R MARRIED LADY, 250 GRAMS PER UNMARRIED LADY AND 100 GRAMS PER MALE MEMBER OF THE FAMILY WERE DIRECTED N OT TO BE SEIZED. THE ABOVE SUBMISSION WAS CONSIDERED BY THE AO AND H ELD AS FOLLOWS; 7 ITA NO.644 & SP NO.87(B)/2014 THE SUBMISSION PLACED BY THE ASSESEE IS REJECTED. THE CIRCULAR HIGHLIGHTS ONLY NON-SEIZURE OF CERTAIN MINIMUM AMOUNT OF GOLD JEWELLERY ONLY. NO WHERE T HE CIRCULAR MENTIONS THE ASSESSEE IS IMMUNE FROM EXPLAINING THE TOTAL QUANTUM OF GOLD OR SILVER ITEM S FOUND. THE CIRCULAR CLEARLY STATES CERTAIN AMOUNT O F JEWELLERY NOT TO BE SEIZED AND CREDIT TO BE GIVEN T O MARRIED WOMEN IN THE FAMILY, UNMARRIED WOMEN AND MEN OF THE FAMILY. THIS CREDIT DOES NOT MEAN THE ASSESEE SHOULD NOT EXPLAIN THE SOURCES FOR THE TOTA L QUANTUM AND ACCOUNT THE ENTIRE GOLD AND SILVER FOUN D IN HIS BOOKS. HENCE, THE SUBMISSION GIVEN BY THE ASSE SSEE IS REJECTED. WITHOUT PREJUDICE TO THE ABOVE, IT IS NARRATED THAT THE ASSESSEE ALSO MADE A CLAIM OF ALLOWANCE OF 500 GRAMS AS ANCESTRAL JEWELLERY, WHICH IS NO WHERE PROVIDED FOR IN THE INSTRUCTION 1916. THE AO FURTHER HELD THAT THE DECISION OF THE JURIS DICTIONAL HIGH COURT IN THE CASE OF PATI DEVI (240 ITR 727) IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. THE WEALTH TAX RETURN AND THE CLAIM OF THE ASSESSE E THAT THE GOLD 8 ITA NO.644 & SP NO.87(B)/2014 JEWELLERY WEIGHING 1390 GRAMS HELD BY SMT.SARITHA B AI, IS ALSO NOT ACCEPTABLE ON THE GROUND THAT THE WEALTH TAX RETURN IN THE NAME OF SMT.SARITHA BAI, FOR THE ASSESSMENT YEAR 2012-2013 WAS FILED ON 10- 07-2013, MUCH AFTER THE DATE OF SEARCH OPERATION AN D THEREFORE, THE AO CAME TO THE CONCLUSION THAT THE ASSESEE HAD FAILED TO FURNISH EVIDENCE IN SUPPORT OF GOLD FOUND OF 4226.58 GRAMS , AFTER D EDUCTING THE ADDITIONAL INCOME DECLARED AT RS.25,90,000/-, A SUM OF RS.83,73,748/- WAS ADDED TO THE TOTAL INCOME. 5. BEING AGGRIEVED BY THIS ASSESSMENT ORDER, AN AP PEAL WAS FILED BEFORE THE LEARNED CIT(A)-11, BANGALORE, WHO VIDE I MPUGNED ORDER PARTLY ALLOWED THE APPEAL. WHILE DOING SO, THE LEAR NED CIT(A) DIRECTED THE AO TO ALLOW CREDIT IN RESPECT OF 990 GRAMS IN T HE HANDS OF ASSESSEES WIFE AS THE WEALTH TAX RETURN WAS FILED ON 08-12-1997 AND DEDUCTION IN TERMS OF CBDT INSTRUCTION IN RESPECT O F EACH FAMILY MEMBERS WAS TURNED DOWN BY THE LEARNED CIT(A). 6. BEING AGGRIEVED, THE ASSESSEE IS IN PRESENT APP EAL BEFORE US. 9 ITA NO.644 & SP NO.87(B)/2014 7. THE ASSESSEE RAISED AS MANY AS FIVE GROUNDS. T HE EFFECTIVE GROUNDS OF APPEAL ARE ONLY 1 & 2. GROUND NO.3, IS DISMISSED AS THIS GROUND WAS NOT RAISED BEFORE THE LOWER AUTHORITIES AND GROUND NO.4 IS ONLY CONSEQUENTIAL IN NATURE AND DOES NOT REQUIRE A NY ADJUDICATION AND GROUND NO.5 IS GENERAL IN NATURE. 7.1 NOW WE PROCEED TO DEAL WITH GROUND NO. 1 & 2. 8. IT WAS SUBMITTED BEFORE US BY THE LEARNED COUNSE L FOR THE ASSESSEE THAT IN RESPECT OF EACH FAMILY MEMBER CRED IT OF 500 GRAMS SHOULD BE GIVEN IN TERMS OF INSTRUCTION NO.1916 DAT ED 11-05-1994. IN CASE OF ASSESSEES WIFE SMT.SARITHA BAI, GOLD OF 13 90 GRAMS WHICH WAS ALSO DECLARED IN HER RETURN IN THE WEALTH TAX FILED , THEN THE ENTIRE GOLD AND JEWELLERY STANDS EXPLAINED AND THEREFORE, NO AD DITION IS CALLED FOR. IN SUPPORT OF HIS PROPOSITION, HE RELIED ON THE FOL LOWING JUDGMENTS; A. CIT VS GHANSHYAM DAS JOHRI 41 TAXMANN.COM 295 (A LL.) B. CIT VS RATANLAL VYPARILAL JAIN 339 ITR 351 10 ITA NO.644 & SP NO.87(B)/2014 C. HARISH S PATEL VS DCIT (2012) 6 TAX CORP (AT) 28 617 D. CIT VS SAYTA NARAIN PATNI 46 TAXMANN.COM 440 (RA J.) E. PATI DEVI 240 ITR 727 8.1 ON THE OTHER HAND, LEARNED DR RELIED ON THE ORD ERS OF THE AUTHORITIES. 8.2 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE MATERIAL ON RECORD. 8.3. IT IS UNDISPUTED FACT THAT GOLD WEIGING NET W EIGHT OF 4226.58 GRAMS WAS FOUND DURING THE TIME OF SEARCH AND SEIZU RE OPERATIONS. THE EXPLANATION OFFERED BY THE ASSESSEE BOTH DURING THE COURSE OF SEARCH & SEIZURE OPERATIONS AS WELL AS THE ASSESSMENT PROCEE DINGS WAS THAT OUT OF 4226.58 GRAMS VALUE OF 1036.58 GRAMS WAS OFFERED TO TAX AS UNEXPLAINED AND 1800 GRAMS WAS CLAIMED TO HAVE RECE IVED FROM THE RELATIVES AS GIFT ON VARIOUS OCCASIONS AND 1390 GRA MS OF JEWELLERY WAS CLAIMED TO HAVE BEEN DECLARED BY HIS WIFE SMT.SARIT HA BAI, IN HER WEALTH TAX RETURN. OUT OF WHICH ONLY 990 GRAMS WAS TREATED AS EXPLAINED BY THE CIT(A) IT WAS DECLARED IN HER WEA LTH TAX RETURN FILED IN THE YEAR 1997 BEFORE THE DATE OF SEARCH AND THE BAL ANCE WAS TREATED AS 11 ITA NO.644 & SP NO.87(B)/2014 UNEXPLAINED. THE EXPLANATION OFFERED BY THE ASSESS EE IS THAT IF THE CREDIT IS GIVEN FOR 500 GRAMS FOR EACH FAMILY MEMBE RS IN TERMS OF INSTRUCTION NO.1916 DATED 11-05-1994 WHICH GOVERNS THE SEIZURE, DURING THE COURSE OF SEARCH AND SEIZURE OPERATIONS SOURCE FOR 1300 GRAMS CAN BE TREATED AS EXPLAINED. OUT OF THE BALA NCE, IT WAS CLAIMED THAT 1390 GRAMS BELONGS TO HIS WIFE AND THE BALANCE IS CLAIMED TO BE ANCESTRAL JEWELLERY. NOW WE DEAL WITH THE APPLICABI LITY OF CBDT INSTRUCTION IN TERMS OF WHICH CREDIT OF 1300 GRAMS OF JEWELLERY WAS CLAIMED BY THE ASSESSEE. IT IS THE DUTY OF THE ASS ESSEE TO BRING ON RECORD THE FAMILY MEMBERS WITH SUPPORTING EVIDENCE AND ALSO PROVE THAT OTHER FAMILY MEMBERS I.E. FATHER OF ASSESSEE H AD NOT CLAIMED THE SAME RELIEF. WE FIND FROM MATERIAL ON RECORD THAT IT IS FATHER OF THE ASSESEE, WHO OFFERED THE EXPLANATION IN SUPPORT OF SOURCE OF JEWELLERY FOUND. WE ALSO FIND THAT FATHER OF THE ASSESSEE AN D ASSESSEE ARE RESIDING JOINTLY. MERE RELIANCE ON THE CASE LAWS D OES NOT COME TO THE RESCUE OF THE ASSESSEE WITHOUT BRINGING ANY SUPPORT ING MATERIAL ON RECORD IN SUPPORT OF LEGAL PROPOSITION. THEREFORE, IN ABSENCE OF ANY MATERIAL ON RECORD, WE ARE NOT ABLE TO GRANT ANY RE LIEF ON THIS GROUND. 12 ITA NO.644 & SP NO.87(B)/2014 9. REGARDING THE ANCESTRAL JEWELLERY OF 500 GRAMS THE ASSESSEE HAD NOT PRODUCED ANY EVIDENCE PROVING THE EXISTENCE OF ANCESTRAL JEWELLERY OF 500 GRAMS THEREFORE, IT CANNOT BE TREA TED AS EXPLAINED. REGARDING THE BALANCE JEWELLERY OF 400 GRAMS IN THE HANDS OF THE ASSESSEES WIFE SMT.SARITHA BAI, THE ORDER OF LEARN ED CIT(A) IS WELL REASONED SINCE THE WEALTH TAX RETURN OF THE ASSESSE ES WIFE WAS FILED AFTER CONCLUSION OF SEARCH & SEIZURE OPERATION, IT CANNOT BE TREATED AS EXPLAINED. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. 11. SINCE APPEAL OF THE ASSESSEE IS DISPOSED OF ITS STAY PETITION HAS BECOME INFRUCTUOUS AND IS DISMISSED ORDER PRONOUNCED IN THE OPEN COURT ON THE 30 TH DECEMBER, 2015. SD/ - (ASHA VIJAYARAGHAVAN SD/ - (INTURI RAMARAO) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: BANGALORE D A T E D : 30-12-2015 AM* 13 ITA NO.644 & SP NO.87(B)/2014 COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A)-II BANGALORE 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER, AR,ITAT, BANGALORE