Aditi Aggarwal, Ambala City V. ACIT, Patiala

ITA 658/CHANDI/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9094 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 30-05-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGHDR
• Assessee Lawyers: ROHIT BEC TOR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 658/CHD/2016 ASSESSMENT YEAR: 2007-08 SMT. ADITI AGGARWAL, VS THE ACIT, 938/7, URBAN ESTATE, CENTRAL CIRCLE, AMBALA CITY. PATIALA. PAN: ADUPA1849E & ITA NO. 659/CHD/2016 ASSESSMENT YEAR: 2007-08 SMT. MONIKA AGGARWAL, VS THE ACIT, 938/7, URBAN ESTATE, CENTRAL CIRCLE, AMBALA CITY. PATIALA. PAN: ADUPA1851E & ITA NO. 657/CHD/2016 ASSESSMENT YEAR: 2007-08 SMT. UMA RANI, VS THE ACIT, 938/7, URBAN ESTATE, CENTRAL CIRCLE, AMBALA CITY. PATIALA. PAN: AAOPR6968C (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ROHIT BECTOR RESPONDENT BY : SHRI MANJIT SINGH,DR DATE OF HEARING : 29.08.2016 DATE OF PRONOUNCEMENT : 14.09.2016 O R D E R ALL THE ABOVE APPEALS BY THREE DIFFERENT ASSESSEES ARE DIRECTED AGAINST DIFFERENT ORDERS OF LD. CIT(AP PEALS)-5, LUDHIANA DATED 18.03.2016 FOR ASSESSMENT YEAR 2007- 08. 2 2. I HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PAR TIES AND PERUSED THE MATERIAL ON RECORD. LD. REPRESENTA TIVES OF THE PARTIES MAINLY ARGUED IN THE CASE OF SMT. AD ITI AGGARWAL AND SUBMITTED THAT ISSUE IS SAME IN REMAIN ING APPEALS. ITA 658/2016 (SMT. ADITI AGGARWAL ) 3. ON GROUND NO. 1, ASSESSEE CHALLENGED THE ADDITIO N ON ACCOUNT OF UNEXPLAINED JEWELLERY OF RS. 1,76,156 /-. BRIEFLY THE FACTS OF THE CASE ARE THAT DURING THE C OURSE OF SEARCH ON 13.10.2006 AT THE RESIDENCE OF THE ASSESS EE, JEWELLERY OF RS. 3,51,056/- ( WEIGHING 320.40 GMS INCLUDING DIAMOND JEWELLERY) WAS FOUND FROM THE BED ROOM OF ASSESSEE AND STATEMENT ON OATH OF HER FATHER-I N-LAW SHRI RAJINDER KUMAR WAS RECORDED WHO ADMITTED 15 TO 20 TOLAS OF JEWELLERY ONLY. THE ASSESSEE WAS, THEREFOR E, SHOW CAUSED AS TO WHY VALUE OF REMAINING JEWELLERY MAY N OT BE TREATED AS UNEXPLAINED AND ADDED TO THE INCOME. TH E ASSESSEE SUBMITTED THAT ALL UNACCOUNTED JEWELLERY I N THE HOUSE STANDS DULY DECLARED BY HER FATHER-IN-LAW SHR I RAJINDER KUMAR IN HIS SETTLEMENT PETITION. THE TOT AL DECLARED AMOUNT ON THIS ACCOUNT IS RS. 4 LACS. THE ASSESSING OFFICER DID NOT ACCEPT EXPLANATION OF THE ASSESSEE AND NOTED THAT SHRI RAJINDER KUMAR AGGARWA L DECLARED JEWELLERY OF RS. 4 LACS ONLY BEFORE SETTLE MENT COMMISSION. THE ABOVESAID JEWELLERY HAS BEEN CONSIDERED IN THE CASE OF WIFE OF SHRI RAJINDER KUM AR 3 AGGARWAL I.E. SMT. UMA RANI, THEREFORE, NO EFFECT C AN BE GIVEN IN THE CASE OF THE ASSESSEE. 4. DURING THE COURSE OF SEARCH, JEWELLERY WAS FOUND FROM THE BEDROOM OF THE ASSESSEE AND OWNED BY HER W AS GOT VALUED FROM THE REGISTERED VALUER. THE REGISTE RED VALUER VALUED THE JEWELLERY AT RS. 3,51,056/-. FAT HER-IN- LAW OF THE ASSESSEE ADMITTED ONLY 15 TO 20 TOLAS JE WELLERY AT THE RESIDENCE BELONGING TO THE ASSESSEE ONLY. T HE REGISTERED VALUER HAS VALUED THE GOLD JEWELLERY OF 22 CARATS @ 8,000/- PER 10 GRAMS AND VALUED GOLD JEWEL LERY OF 18 CARATS @ RS. 7,000/- PER 10 GRAMS THEREFORE, THE AVERAGE RATE FOR VALUATION OF THE JEWELLERY WAS ADO PTED AT RS. 7,500/- PER TEN GRAMS AND VALUE OF 20 TOLAS OF JEWELLERY WORKED OUT TO RS. 1,74,900/-. THEREFORE, DIFFERENCE IN THE VALUE OF THE JEWELLERY IS RS. 1,7 6,156/- ( RS. 3,51,056/- MINUS RS. 1,74,900/-) WAS ADDED TO THE INCOME OF THE ASSESSEE TREATING AS UNEXPLAINED JEWE LLERY. 5. THE SAID ADDITION WAS CHALLENGED BEFORE LD. CIT(APPEALS) AND WRITTEN SUBMISSION OF THE ASSESSEE IS REPRODUCED IN THE APPELLATE ORDER. THE ASSESSEE WA S MARRIED ON 13.12.1999 AND RECEIVED GOLD ORNAMENTS I N MARRIAGE AND EVEN AFTER MARRIAGE ON VARIOUS SOCIAL CEREMONIES I.E. ON CHILD BIRTH AND OTHER FAMILY FUN CTIONS. THE JEWELLERY FOUND 262.500 GMS. IS NEITHER EXCESSI VE NOR UNREASONABLE AS COMPARED TO SOCIAL AND FINANCIAL ST ATUS OF THE FAMILY WHICH IS HER EXCLUSIVE ISTRI DHAN. TH E 4 ASSESSEE RELIED UPON CBDT CIRCULAR NO. 1916 DATED 11.05.1994 IN WHICH IT HAS BEEN CLEARLY INSTRUCTED THAT 500 GRAMS PER MARRIED LADY MAY BE CONSIDERED AS EXPLAINED WITH REGARD TO STATUS OF THE FAMILY AND T HE CUSTOMS AND PRACTICE OF THE COMMUNITY TO WHICH FAMI LY BELONGS AND ASSESSEE RELIED UPON DECISION OF THE DE LHI HIGH COURT IN THE CASE OF ASHOK CHADHA V ITO IN ITA 274/2011 DATED 05.07.2011 IN WHICH THE HON'BLE HIGH COURT CONSIDERED THAT ASSESSEE WAS MARRIED FOR MORE THAN 25-30 YEARS. THE JEWELLERY WAS NOT VERY SUBSTANTIAL. THE NORMAL CUSTOM FOR WOMAN TO RECEIVE JEWELLERY IN THE FORM OF ISTRI DHAN OR OTHER OCCASI ONS WAS ACCEPTED WHICH IN THIS CASE WAS ABOUT 906.900 GRAMS . THE POSSESSION OF JEWELLERY WAS CONSIDERED REASONAB LE AS PER CUSTOM AND ADDITION WAS DELETED. THE ASSESSEE ALSO EXPLAINED THAT SHRI RAJINDER AGGARWAL, FATHER-IN-LA W OF THE ASSESSEE HAS MADE SURRENDER OF RS. 04 LACS TO C OVER ANY UNEXPLAINED JEWELLERY IN THE HANDS OF LADIES OF THE ENTIRE FAMILY BEFORE SETTLEMENT COMMISSION AND COPY OF THE ORDER OF THE SETTLEMENT COMMISSION DATED 20.06. 2014 IS FILED IN THE PAPER BOOK IN WHICH THE SETTLEMENT COMMISSION ALSO ACCEPTED THE JEWELLERY BASED ON ABO VE BOARDS CIRCULAR. THE REMAND REPORT FROM THE ASSES SING OFFICER WAS CALLED FOR IN WHICH THE ASSESSING OFFIC ER SUBMITTED THAT INSTRUCTION OF THE CBDT IS FOR THE P URPOSE OF SEIZURE AT THE TIME OF SEARCH. IT WOULD NOT ABS OLVE THE ASSESSEE FROM EXPLAINING THE SOURCE OF ACQUIRING TH E JEWELLERY. 5 6. THE LD. CIT(APPEALS) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE NOTED THAT ASSESSING OF FICER HAS ALREADY GIVEN SET OFF OF 20 TOLAS OF THE JEWELL ERY AND CBDT INSTRUCTION IS APPLICABLE FOR THE PURPOSE OF S EIZURE AT THE TIME OF SEARCH AND IT WOULD NOT ABSOLVE THE ASSESSEE FROM EXPLAINING THE SOURCE OF ACQUISITION OF THE JEWELLERY. THE APPEAL OF THE ASSESSEE ON THIS GROU ND WAS, ACCORDINGLY, DISMISSED. 7. AFTER CONSIDERING RIVAL SUBMISSIONS, I AM OF THE VIEW ADDITION IS WHOLLY UNJUSTIFIED. HON'BLE KARNATAKA HIGH COURT IN THE CASE OF SMT. PATI DEVI VS ITO & ANR. 2 40 ITR 727 HELD AS UNDER : THE INSTRUCTIONS COULD ONLY BE RETROSPECTIVE IN TH E SENSE THAT EVEN IF A SEIZURE IS MADE TODAY IRRESPECTIVE OF THE DATE OF ACQUISITION OF GOLD JEWELLERY, THE BENEFIT HAS TO BE GIVEN TO T HAT EXTENT. IT IS NOT THE VALUE WHICH IS INCREASED BUT IT IS THE WEIG HT WHICH IS CONSIDERED REASONABLE LOOKING TO THE SOCIAL CIRCUMS TANCES PREVAILING IN THE COUNTRY. SIMPLY BECAUSE IN A PART ICULAR CASE THE SEIZURE IS MADE ON A DATE EARLIER TO THE DATE OF IN STRUCTION THE BENEFIT OF INSTRUCTION DT. LLTH 1994, CANNOT BE DEN IED. 8. HON'BLE GUJRAT HIGH COURT IN THE CASE OF CIT VS RATANLAL VYAPARILAL JAIN 339 ITR 351 HELD AS UNDER : INSTRUCTION NO. 1916, DT. LLTH MAY, 1994 WHICH LAY S DOWN GUIDELINES FOR SEIZURE OF JEWELLERY IN THE COURSE OF SEARCH TA KES INTO ACCOUNT THE QUANTITY OF JEWELLERY WHICH WOULD GENERALLY BE HELD BY THE FAMILY MEMBERS OF AN ASSESSEE AND, THEREFORE, UNLESS ANYTH ING CONTRARY IS SHOWN, IT CAN BE SAFELY PRESUMED THAT THE SOURCE TO THE EXTENT OF THE JEWELLERY STATED IN THE CIRCULAR STANDS EXPLAINED. 6 9. THE SAME VIEW HAS BEEN TAKEN BY HON'BLE DELHI HI GH COURT IN THE CASE OF ASHOK CHADHA VS ITO (SUPRA). THE ASSESSEE EXPLAINED THAT SHE WAS MARRIED ON 13.12.19 99 AND THE JEWELLERY FOUND DURING THE COURSE OF SEARCH WAS BELOW THE CBDT INSTRUCTION AS REFERRED TO ABOVE. TH E VARIOUS HIGH COURTS, AS REFERRED TO ABOVE, AFTER CONSIDERING THE BOARDS CIRCULAR HAVE OBSERVED THAT SOURCE TO THE EXTENT OF JEWELLERY STATED IN THE CIR CULAR STANDS EXPLAINED. THE ASSESSING OFFICER HAS ALSO G RANTED SUBSTANTIAL BENEFIT TO THE ASSESSEE ON THE PROPOSIT ION OF THE SAME BOARDS CIRCULAR. THEREFORE, THERE WAS NO JUSTIFICATION TO MAKE ANY ADDITION AGAINST THE ASSE SSEE. FURTHER, THE SETTLEMENT COMMISSION IN THE CASES OF RAJINDER AGGARWAL ETC. BY FOLLOWING THE CIRCULAR AL SO DIRECTED THAT NO ADDITION IS CALLED FOR OVER AND AB OVE THE AMOUNT OF RS. 4 LACS COVERED IN THE SOF. COPY OF T HE ORDER IS PLACED AT PAGE 38 OF THE PAPER BOOK. I AM , THEREFORE, OF THE VIEW ASSESSEE IS ABLE TO EXPLAIN SOURCE OF ACQUISITION OF JEWELLERY ON VARIOUS OCCASIONS I. E. HER MARRIAGE AND OTHER LATER ON SOCIAL FUNCTIONS, THERE FORE, NO ADDITION SHOULD BE MADE AGAINST THE ASSESSEE. T HE ADDITION OF RS. 1,76,156/- IS, ACCORDINGLY, DELETED . GROUND NO. 1 OF APPEAL OF THE ASSESSEE IS ALLOWED. 10. ON GROUND NO. 2, ASSESSEE CHALLENGED THE ADDITI ON OF UNEXPLAINED CASH OF RS. 22,250/-. BRIEFLY THE F ACTS OF THE CASE ARE THAT DURING THE COURSE OF SEARCH, CASH OF RS. 22,250/- WAS FOUND FROM THE BEDROOM OF THE ASSESSEE . 7 STATEMENT OF SHRI SACHIN KUMAR, HUSBAND OF THE ASSESSEE WAS RECORDED DURING THE COURSE OF SEARCH W HO ADMITTED NO CASH AT THE RESIDENCE. THE ASSESSEE EXPLAINED THAT CASH FOUND AT THE RESIDENCE BELONGS TO HER FATHER-IN-LAW WHO HAD DECLARED THE SAME BEFORE SETTLEMENT COMMISSION. THE ASSESSING OFFICER, HOWE VER, NOTED THAT NO SUCH CASH HAS BEEN SURRENDERED BEFORE SETTLEMENT COMMISSION. ACCORDINGLY, ADDITION OF RS. 22,250/- WAS MADE ON ACCOUNT OF UNEXPLAINED CASH. 11. THE ASSESSEE EXPLAINED BEFORE LD. CIT(APPEALS) THAT ABOVE CASH WAS ACQUIRED BY HER ON VARIOUS SOCIAL FUNCTIONS ETC. AND IS HER ISTRI DHAN PROPERTY. THE ASSESSING OFFICER IN THE REMAND REPORT, HOWEVER, REITERATED THE FACTS STATED IN THE ASSESSMENT ORDER . THE LD. CIT(APPEALS) CONFIRMED THE ADDITION BECAUSE SOU RCE OF THE CASH FOUND FROM THE BEDROOM OF THE ASSESSEE WAS NOT EXPLAINED AND NO SURRENDER HAVE BEEN MADE BEFORE SETTLEMENT COMMISSION. 12. AFTER CONSIDERING RIVAL SUBMISSIONS, I AM NOT INCLINED TO INTERFERE WITH THE ORDERS OF AUTHORITIE S BELOW SINCE CASH WAS FOUND FROM THE POSSESSION OF THE ASS ESSEE I.E. HER BEDROOM DURING THE COURSE OF SEARCH, THERE FORE, ONUS IS UPON ASSESSEE TO PROVE SOURCE OF CASH FOUND DURING THE COURSE OF SEARCH. HOWEVER, ASSESSEE FAI LED TO EXPLAIN ANY SOURCE OF CASH FOUND DURING THE COURSE OF SEARCH. MERELY EXPLAINING THAT CASH WAS RECEIVED O N 8 SOCIAL FUNCTIONS ETC. IS NOT SUFFICIENT TO DISCHARG E BURDEN UPON THE ASSESSEE TO EXPLAIN SOURCE OF THE CASH. T HIS GROUND OF APPEAL OF THE ASSESSEE HAS, THUS, NO MERI T, SAME IS ACCORDINGLY, DISMISSED. 12(I) GROUND NO. 2 IS, ACCORDINGLY, DISMISSED. 13. ON GROUND NO. 3, ASSESSEE CHALLENGED THE ADDITI ON ON ACCOUNT OF PAYMENT OF INTEREST OF RS. 21,010/-. THE ADDITION OF RS. 21,010/- ON ACCOUNT OF DISALLOWANCE OF INTEREST PAID TO M/S S.S. SCRIPTS PVT. LTD. WAS CHA LLENGED BEFORE LD. CIT(APPEALS). THE ASSESSING OFFICER HAS MENTIONED THAT ASSESSEE HAS RAISED LOAN OF RS. 3,50,000/- ON 28.03.2006 FROM THIS CONCERN AND IN T URN ADVANCED THIS AMOUNT ON 28.06.2006 TO M/S SULTAN SINGH GIAN CHAND, AMBALA CITY. THE ASSESSING OFFICE R HAS NOTED THAT ASSESSEE PAID INTEREST OF RS. 21,010 /- TO M/S S.S. SCRIPTS PVT. LTD. FROM WHOM MONEY WAS BORROWED BUT HAS NOT CHARGED ANY INTEREST FROM M/S SULTAN SINGH GIAN CHAND TO WHOM THE MONEY WAS LENT. THE LD. CIT(APPEALS) NOTED THAT ASSESSEE'S CONTENTI ON IS THAT NO INTEREST WAS CHARGED FROM M/S SULTAN SINGH GIAN CHAND BECAUSE THE FIRM IS FAMILY CONCERN AND INTERE ST WAS NOT CHARGED DUE TO CLOSE FAMILY RELATIONS. THE ARGUMENT OF THE ASSESSEE WAS NOT FOUND CONVINCING. THE FUNDS WHICH WERE GIVEN TO M/S SULTAN SINGH GIAN CHA ND HAD THE INTEREST PAYMENT LIABILITY, THEREFORE, INTE REST SHOULD HAVE BEEN CHARGED FROM THIS CONCERN ALSO. T HE 9 LD. CIT(APPEALS), THEREFORE HELD THAT CREATING PAYM ENT LIABILITY ON BEHALF OF OTHER PERSON WHO IS USING TH E FUNDS, IS NOT AN ALLOWABLE EXPENSE. THE ADDITION WAS, ACCORDINGLY, CONFIRMED. 14. AFTER CONSIDERING RIVAL SUBMISSIONS, I AM NOT INCLINED TO INTERFERE WITH THE ORDERS OF AUTHORITIE S BELOW. THE ASSESSEE HAS RAISED LOANS FROM M/S S.S. SCRIPTS PVT. LTD. AND PAID INTEREST AND THE SAME LOAN AMOUNT WAS DIVERTED TO M/S SULTAN SINGH GIAN CHAND BUT NO INTE REST HAS BEEN CHARGED. IT, THEREFORE, CLEARLY PROVES TH AT ASSESSEE HAS MADE INVESTMENT NOT TO EARN INCOME, THEREFORE, DISALLOWANCE WAS JUSTIFIED. THIS GROUND OF APPEAL OF THE ASSESSEE IS, ACCORDINGLY, DISMISSED. 15. NO OTHER GROUND IS ARGUED OR PRESSED. 16. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ITA 659/2016 ( SMT. MONIKA AGGARWAL ) ITA 657/2016 ( SMT. UMA RANI ) 17. IN ITA 659/2016, ASSESSEE CHALLENGED THE ADDITI ON OF RS. 1,22,851/- ON ACCOUNT OF UNEXPLAINED JEWELLE RY AND IN ITA 657/2016, THE ASSESSEE CHALLENGED THE ADDITION OF RS. 2,03,449/- ON ACCOUNT OF UNEXPLAINE D JEWELLERY. THESE ISSUES ARE SAME AS HAVE BEEN CONSIDERED IN THE CASE OF SMT. ADITI AGGARWAL (SUPR A). 10 FOLLOWING THE REASONS FOR DECISION IN THE CASE OF S MT. ADITI AGGARWAL ON GROUND NO. 1, I SET ASIDE THE ORD ERS OF AUTHORITIES BELOW AND DELETE BOTH THE ADDITIONS. 18. IN THE RESULT, BOTH APPEALS OF DIFFERENT ASSESS EES ARE ALLOWED. 19. IN THE RESULT, APPEAL OF THE ASSESSEE SMT. ADIT I AGGARWAL IS PARTLY ALLOWED AND APPEALS OF OTHER ASS ESSEES SMT.MONIKA AGGARWAL AND SMT. UMA RANI ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED : 14 TH SEPT.,2016. POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT,DR ASSISTANT REGISTRAR, ITAT CHANDIGARH