Sh. Vikas Jain, New Delhi V. DCIT, New Delhi

ITA 6585/DEL/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7113 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 29-08-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 11-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: UMESH CHANDRA DUBEY
• Keywords: Search and seizure; Valuation report
• Section: 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: D: NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI CHANDRA MOHAN GARG, JUDIC IAL MEMBER ITA NO. 6585/DEL /2013 ASSESSMENT YEAR: 2011-12 SHRI VIKAS JAIN VS. THE DY. C.I.T B-1/118, 2 ND FLOOR CENTRAL CIRCLE - 16 PASCHIM VIHAR, NEW DELHI NEW DELHI PAN : AAGPJ 3118 G [APPELLANT] [RESPONDENT] DATE OF HEARING : 29.08.2016 DATE OF PRONOUNCEMENT : 05.09.2016 APPELLANT BY : SHRI VED JAIN, AD V SHRI ASHISH CHADHA, CA SHRI ASHISH GOEL, CA RESPONDENT BY : SHRI UMESH CHANDRA DUBEY, SR. DR ORDER PER CHANDRA MOHAN GARG, JUDICIAL MEMBER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE CIT(A)-XXXII, NEW DELHI, DATED 26/09/2 013 FOR AY 2011-12. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUND OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)[CIT(A)] IS BAD BOTH IN THE EYE OF LAW AND ON FACTS. 2 ITA NO. 6585/ DEL/2013 2 2(I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING TH E ADDITION OF RS.39,37,010/- MADE BY THE AO AS UN-EXPLAINED JEWEL LERY FOUND DURING THE COURSE OF THE SEARCH. (II) THAT THE ABOVESAID ADDITION HAS BEEN CONFIRM ED BY IGNORING THE FACT THAT THIS JEWELLERY WAS NEITHER FOUND FROM ASSESSEES RESIDENCE NOR FROM HIS LOCKER BUT WAS FOUND FROM TH E LOCKER OF MRS. SANTOSH JAIN AND MR. VINOD JAIN AND MRS. SANTO SH JAIN, DURING THE COURSE OF THE SEARCH IN HER STATEMENT HA S CONFIRMED THAT THIS JEWELLERY BELONGS TO HERSELF AND HER FAMI LY MEMBERS RESIDING WITH HER. (III) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, L EARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN NOT APPRECIAT ING THE EVIDENCES AND THE EXPLANATION GIVEN BY THE ASSESSEE IN RIGHT PERSPECTIVE. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LEA RNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN REJECTING THE CONTENTION OF THE APPELLANT THAT ASSESSMENT FRAMED BY THE AO IS B EYOND THE SCOPE OF THE PROVISIONS OF SECTION 153A OF THE ACT . 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PER USED THE ASSESSMENT ORDER, THE IMPUGNED ORDER OF THE CIT(A) AND THE PAPER BOOK OF THE ASSESSEE SPREAD OVER 37 PAGES AND WRITTEN ARGUMENTS/SYNOPSIS OF THE ASSESSEE. THE LD. AR FIR STLY DREW OUR ATTENTION TOWARDS THE ASSESSMENT ORDER PARAS 4 AND 5 AND 3 ITA NO. 6585/ DEL/2013 3 CONTENDED THAT THE AO NOTED THE CONTENTION OF THE A SSESSEE THAT OUT OF TOTAL JEWELLERY FOUND DURING THE COURSE OF S EARCH AND SEIZURE OPERATION, JEWELLERY AMOUNTING TO RS. 39,37 ,010/- REMAINED UNEXPLAINED. THE LD. AR VEHEMENTLY CONTEN DED THAT THESE OBSERVATIONS OF THE AO ARE FACTUALLY INCORREC T AS IS EVIDENT FROM THE STATEMENT OF THE MOTHER OF THE ASSESSEE SM T. SANTOSH JAIN, AVAILABLE AT PAGES 28 TO 33 OF THE ASSESSEES PAPER BOOK [APB], IT WAS STATED THAT THE JEWELLERY FOUND IN TH E HOUSE AND LOCKERS BELONGED TO THE PERSONS MENTIONED IN ANSWER TO QUESTION NO. 3 WHEREIN THE NAMES OF THE ASSESSEE, HIS WIFE A ND CHILDREN HAVE NOT BEEN MENTIONED. THE LD. AR ALSO POINTED O UT THAT JEWELLERY AMOUNTING TO RS. 19,47,300/- WAS FOUND IN THE LOCKER NO 297, DENA BANK, PASCHIM VIHAR, NEW DELHI IN THE NAME OF SMT. SANTOSH JAIN AND SHRI VINOD JAIN, WHICH IS EVIDENT FROM THE VALUATION REPORT PLACED AT PAGES 24 AND 25 OF THE A PB. THE LD. AR FURTHER POINTED OUT THAT JEWELLERY WORTH RS. 19, 87,710/- WAS FOUND IN THE LOCKER NO. 286 WHICH WAS IN THE NAME O F SMT. SANTOSH JAIN, WHICH IS ALSO EVIDENT FROM THE VALUAT ION REPORT AT PAGES 24 AND 25 OF THE APB. THE LD. AR STRONGLY CO NTENDED THAT IN RESPONSE TO QUESTION NO. 3, SMT. SANTOSH JAIN CA TEGORICALLY STATED THAT THE JEWELLERY FOUND IN THE LOCKERS BELO NGED TO PERSONS MENTIONED IN ANNEXURE TO QUESTION NO. 3, I. E. TOTAL SEVEN PERSON BUT THE ASSESSEE, HIS WIFE AND CHILDRENS NA MES WERE NOT 4 ITA NO. 6585/ DEL/2013 4 MENTIONED THEREIN. THE LD. AR FURTHER CONTENDED THA T THE ASSESSEE HAS GIVEN EXPLANATION VIDE LETTER DATED 4. 2.2013 [APB PAGES 18 & 19] AND THIS EXPLANATION WAS LIMITED TO THE JEWELLERY FOUND AT THE RESIDENCE OF THE ASSESSEE AND IN THE L OCKER BELONGING TO HIM REGARDING JEWELLERY OF RS. 51,27,0 06/- AND REMAINING JEWELLERY FOUND IN THE TWO LOCKER OF SMT. SANTOSH AND SHRI VINOD JAIN AND SHRI VIPUL JAIN WAS BELONGING T O THEM AND NOT THE ASSESSEE. THE LD. AR LASTLY SUBMITTED THAT THE CIT(A) UPHELD THE ADDITION BY PLACING RELIANCE ON THE INCORRECT F ACTS. THEREFORE, THE ORDER OF THE AUTHORITIES BELOW MAY B E SET ASIDE AND THE AO MAY BE DIRECTED TO DELETE THE ADDITION. 4. PER CONTRA, THE LD. DR PLACED HIS RELIANCE ON TH E ORDER OF THE AO AS WELL AS THE CIT(A) AND SUBMITTED THAT IN THE ABSENCE OF ANY PROPER EXPLANATION, THE AO WAS RIGHT IN TREATIN G THE ENTIRE SEIZE JEWELLERY AS BELONGING TO THE ASSESSEE AND QU ITE JUSTIFIED IN MAKING THE IMPUGNED ADDITION. 5. ON CAREFUL CONSIDERATION OF THE ABOVE RIVAL SUBM ISSIONS, FROM THE DOCUMENTS PLACED ON RECORD BY THE ASSESSEE , IN HIS PAPER BOOK, WE NOTE THAT AT THE TIME OF SEARCH, JEW ELLERY AMOUNTING TO RS. 19,87,710/- WAS FOUND IN THE LOCKE R NO. 286 AND JEWELLERY AMOUNTING TO RS. 19,47,300/- WAS FOUND IN THE LOCKER 5 ITA NO. 6585/ DEL/2013 5 NO. 297. BOTH THE LOCKERS WERE IN DENA BANK, PACHI M VIHAR IN THE NAME OF SMT SANTOSH JAIN AND SHRI VINOD JAIN, F ATHER OF THE ASSESSEE, WHICH IS EVIDENT FROM THE VALUATION REPOR T AVAILABLE AT PAGES 24 TO 27 OF THE APB. FURTHER, FROM THE STATE MENT OF SMT. SANTOSH JAIN, RECORDED DURING THE COURSE OF SEARCH AND SEIZURE OPERATION [APB PAGES 28 TO 33], WE NOTE THAT SHE CA TEGORICALLY STATED THAT SHE IS RESIDING AT B-1/118, PASCHIM VIH AR AND REPLYING TO QUESTION NO. 3, SHE STATED THAT OTHER FAMILY MEM BERS RESIDING WITH HER ARE SMT. SHEILA JAIN, SHRI V.K. JAI, SHRI VIPUL JAIN, SMT. ANU KIRAN, MS. SHUBHI JAIN, MASTER DAKSH AND SELF. REPLYING TO QUESTION NO. 6, SMT. SANTOSH JAIN STATED THAT THE J EWELLERY FOUND IN THE HOUSE AS WELL AS THE LOCKERS BELONGED TO THE PERSONS MENTIONED IN ANNEXURE TO QUESTION NO. 3 AS STATED A BOVE, WHICH CONSISTED OF ANCESTRAL JEWELLERY AS WELL AS THE JEW ELLERY RECEIVED IN AUSPICIOUS OCCASIONS LIKE MARRIAGE, BIRTH OF CHI LDREN DURING THE LAST 50 YEARS. SHE FURTHER STATED THAT THE JEWELLE RY HAD BEEN RECEIVED IN MARRIAGES AND OTHER AUSPICIOUS OCCASION S FROM BOTH SIDES OF FAMILY I.E. PARENTS AND IN-LAWS. FROM THE RELEVANT OPERATIVE PART OF THE FIRST APPELLATE ORDER AT PAGE S 5 TO 7, WE NOTE THAT THE CIT(A) OBSERVED THAT FROM THE COPIES OF VALUATION REPORT FILED BY THE ASSESSEE, IN THE COURSE OF APPE LLATE PROCEEDINGS, THAT THE VALUER HAS MADE TWO SEPARATE RECORDS OF VALUATION IN RESPECT OF JEWELLERY FOUND FROM THE TW O LOCKERS, 6 ITA NO. 6585/ DEL/2013 6 NAMELY, 286 AND 297, APART FROM THE VALUATION OF J EWELLERY FOUND FROM THE RESIDENTIAL PREMISES WHICH WAS SEPAR ATELY VALUED. FROM THIS OPERATIVE PARA, WE NOTE THAT THE CIT(A) R ECORDED INCORRECT FINDING THAT SMT. SANTOSH JAIN COULD NOT SATISFACTORILY EXPLAIN THE POSSESSION OF THE SAID JEWELLERY AND TH E SOURCE OF ACQUISITION THEREOF AS ANSWER TO QUESTION NO. 3 AND 6 CLEARLY EXPLAIN THAT THE JEWELLERY FOUND IN THE HOUSE AND L OCKER BELONGED TO PERSONS MENTIONED IN ANSWER TO QUESTION NO. 3 WHEREIN NAMES OF OTHER FAMILY MEMBERS HAVE BEEN NOT ED AND THE NAMES OF THE ASSESSEE AND HIS WIFE AND CHILDREN HAV E NOT BEEN NAMED. THEREFORE, WE HAVE NO HESITATION IN HOLDING THAT THE CIT(A) CONFIRMED UNJUSTIFIED ADDITION BY OBSERVING INCORRECT FINDINGS AND THUS THE ORDERS OF THE AUTHORITIES BEL OW CANNOT BE HELD AS SUSTAINABLE AND WE, THEREFORE, SET ASIDE TH E SAME. IN VIEW OF THE ABOVE NOTED FACTUAL FINDINGS, WE ARE IN CLINED TO HOLD THAT THE ASSESSEE SATISFACTORILY EXPLAINED THE POSS ESSION AND SOURCE OF JEWELLERY AMOUNTING TO RS. 39,37,010/-. ACCORDINGLY, WE HOLD THAT THE ADDITION MADE BY THE AO IN THE HAN DS OF THE ASSESSEE AND UPHELD BY THE CIT(A) CANNOT BE HELD AS SUSTAINABLE. THUS WE DEMOLISH THE SAME. ACCORDINGLY, GROUND NOS . 1, 2 AND 3 OF THE ASSESSEE ARE ALLOWED. 7 ITA NO. 6585/ DEL/2013 7 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 05.09. 2016. SD/- SD/- ( G.D. AGRAWAL ) (C.M. GARG) VICE PRESIDENT JUDICIAL MEMBER DATED: 05 TH SEPTEMBER, 2016 VL/ COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI