DCIT, Kumbakonam V. P.Pawan Kumar Jain, CHENNAI

ITA 672/CHNY/2015

• Counselvise Citation: 67221714 RSA 2015
• Duration Of Justice: 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 26-11-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 01-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A B KOLI
• Assessee Lawyers: S SRIDHAR
• Keywords: Unexplained investment; Valuation report
• Section: 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , . !' , $ % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.672/MDS/2015 & C.O. NO.44/MDS/2015 (IN I.T.A. NO.672/MDS/2015) ' (' / ASSESSMENT YEAR : 2007-08 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE I, KUMBAKONAM 612 001. V. SHRI P. PAWAN KUMAR JAIN, NO.8/3, 105, PAMMAL CORT APARTMENTS, 1 ST FLOOR, RAJA ANNAMALAI STREET, PURASAVAKKAM, CHENNAI - 600 084. PAN : AFUPJ 4906 P (*+/ APPELLANT) ( RESPONDENT & CROSS-OBJECTOR) *+ , - / APPELLANT BY : SHRI A.B. KOLI, JCIT ./*+ , - / RESPONDENT BY : SHRI S. SRIDHAR, ADVOCATE 0 , 1$ / DATE OF HEARING : 26.11.2015 2!( , 1$ / DATE OF PRONOUNCEMENT : 09.12.2015 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THE APPEAL BY THE REVENUE AND CROSS-OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE COMM ISSIONER OF 2 I.T.A. NO.672/MDS/15 C.O. NO.44/MDS/15 INCOME TAX (APPEALS)-2, TIRUCHIRAPPALLI, DATED 18.1 2.2014 AND PERTAINS TO ASSESSMENT YEAR 2007-08. 2. SHRI A.B. KOLI, THE LD. DEPARTMENTAL REPRESENTAT IVE, SUBMITTED THAT THE ASSESSEE IS ENGAGED IN THE BUSIN ESS OF MANUFACTURING AND SALE OF GOLD JEWELLERY. THERE WA S A SURVEY IN THE PREMISES OF THE ASSESSEE ON 22.03.2007. DURING THE COURSE OF SURVEY OPERATION, 32875.318 GMS OF GOLD JEWELLERY W AS FOUND. APART FROM THAT, A SUM OF ` 9,49,535/- WAS ALSO FOUND IN THE BUSINESS PREMISES OF THE ASSESSEE. THE REPUTED VALUER SHRI H. GOPALDAS & COMPANY DETERMINED THE PURE GOLD AT 9229.094 GMS OU T OF 32875.318 GMS OF JEWELLERY FOUND. THE ASSESSEE COU LD NOT ESTABLISH THE SOURCE FOR PURCHASE OF ENTIRE JEWELLE RY. THEREFORE, THE ASSESSING OFFICER ESTIMATED THE COST OF JEWELLERY A T ` 955/- PER GRAM AND ACCORDINGLY COMPUTED THE TOTAL INCOME. THE ASS ESSING OFFICER MADE AN ADDITION OF ` 1,02,08,552/- UNDER SECTION 68 OF THE INCOME- TAX ACT, 1961 (IN SHORT 'THE ACT'). THE LD. D.R. F URTHER SUBMITTED THAT IT IS NOT IN DISPUTE ABOUT THE QUANTUM OF JEWELLERY FOUND. THE DISPUTE BEFORE THIS TRIBUNAL IS THE RATE ADOPTED BY THE CIT(APPEALS). THE CIT(APPEALS) WHILE ACCEPTING THE JEWELLERY FOUN D DURING SURVEY OPERATION, ESTIMATED THE VALUE AT ` 635/- PER GRAM INSTEAD OF ` 955/- 3 I.T.A. NO.672/MDS/15 C.O. NO.44/MDS/15 AND ACCORDINGLY THE UNEXPLAINED INVESTMENT IN GOLD JEWELLERY UNDER SECTION 68 OF THE ACT WAS TAKEN AS ` 29,33,836/- INSTEAD OF ` 1,02,08,552/-. REFERRING TO THE STATEMENT RECORDED FROM THE ASSESSEE, THE LD. D.R. SUBMITTED THAT IN RESPONSE T O QN.NO.30, THE ASSESSEE ADMITTED THAT THE VALUE OF THE GOLD JEWELL ERY IS ` 955/- PER GRAM. THEREFORE, THE CIT(APPEALS) OUGHT NOT HAVE D ELETED THE ADDITION MADE BY THE ASSESSING OFFICER. 2. ON THE CONTRARY, SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSEE, SUBMITTED THAT THE GOLD JEWELLERY FOUND D URING THE COURSE OF SURVEY OPERATION IS NOT IN DISPUTE. AS RIGHTLY SUBMITTED THE LD. D.R. WHAT IS DISPUTED IS ONLY THE RATE ADOPTED BY T HE ASSESSING OFFICER. THE ASSESSING OFFICER ADOPTED ` 955/- PER GRAM ON THE BASIS OF THE VALUE MADE BY ONE SHRI H. GOPALDAS & C OMPANY. REFERRING TO THE COPY OF THE VALUATION, THE LD.COUN SEL SUBMITTED THAT THE VALUER HAS NOT VALUED THE GOLD JEWELLERY UNIFOR MLY AT ` 955/- PER GRAM. IN FACT, THE ENTIRE GOLD JEWELLERY FOUND WAS CATEGORIZED INTO FOUR ITEMS RANGING FROM ` 255/- PER GRAM TO ` 635/- PER GRAM BY THE VALUER. ACCORDING TO THE LD. COUNSEL, THE JEWELLER Y CONTAINS IMPURITIES LIKE COPPER, DUST, ETC. THE VALUER AFTE R TAKING INTO CONSIDERATION OF ALL THE MATERIAL FACTS, ESTIMATED THE COST OF GOLD 4 I.T.A. NO.672/MDS/15 C.O. NO.44/MDS/15 JEWELLERY AT ` 255/- TO ` 635/- PER GRAM. THE ASSESSING OFFICER IGNORING THIS VALUATION, ADOPTED THE RATE UNIFORMLY AT ` 955/- PER GRAM. THEREFORE, THE CIT(APPEALS) FOUND THAT THE A SSESSING OFFICER CANNOT IGNORE THE VALUATION REPORT AND ESTIMATE UNI FORM RATE AT ` 955/- PER GRAM. EVEN THOUGH SOME OF THE GOLD JEWEL LERY WAS ESTIMATED AT ` 255/- PER GRAM, THE CIT(APPEALS) HIMSELF ESTIMATED THE SAME AT HIGHER RATE OF ` 635/- PER GRAM. THE LD.COUNSEL FURTHER CLARIFIED THAT THE ASSESSEE HAS FILED CROSS-OBJECTI ON TO SUPPORT THE ORDER OF THE CIT(APPEALS). 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ASSESSEE CLAIMS THAT THE SURVEY WAS MADE IN THE RESIDENTIAL PREMISES OF THE ASSESSEE AND NOT IN THE BUSINESS PREMISES. THE FAC T REMAINS THAT DURING THE SURVEY OPERATION, 32875.381 GMS GOLD JEW ELLERY WERE FOUND. THE GOLD VALUER, NAMELY, SHRI H. GOPALDAS & COMPANY ESTIMATED THE PURITY OF GOLD AT 10689.584 GMS. THE ASSESSING OFFICER ADOPTED `9 55/- PER GRM AND TAKEN THE ENTIRE AMOUNT AS UNDISCLOSED INCOME UNDER SECTION 68 OF THE ACT. WE HAVE CAREFULLY GONE THROUGH THE COPY OF VALUATION REPORT FILED BY SHRI H. GOPALDAS & COMPANY. AS RIGHTLY SUBMITTED BY THE LD.COUNSEL FOR THE 5 I.T.A. NO.672/MDS/15 C.O. NO.44/MDS/15 ASSESSEE, THE ENTIRE GOLD JEWELLERY WAS CATEGORIZED IN TO FOUR ITEMS AND IT WAS VALUED FROM ` 255/- PER GRM TO ` 635/- PER GRM. WHEN THE VALUER ESTIMATED THE VALUE FROM ` 255/- TO ` 635/- PER GRM DEPENDING UPON THE QUALITY OF THE JEWELLERY, THE STATEMENT OF THE ASSESSEE, IF ANY, LOSES ITS IMPORTANCE. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT WHEN THE ASSESSING OFFICER HIMSELF VALUED THE GOLD JEWELLERY THROUGH SHRI H. GOPALDAS & COMPANY AND THEY ESTIMAT ED THE SAME RANGING FROM ` 255/- TO ` 635/- PER GRM, THE ASSESSING OFFICER MAY NOT BE JUSTIFIED IN TAKING ` 955/- PER GRM. IT IS WELL SETTLED PRINCIPLE OF LAW THAT THE STATEMENT RECORDED DURING SURVEY OPERA TION DOES NOT HAVE ANY EVIDENTIARY VALUE. THEREFORE, NO RELIANCE COULD BE PLACED ON THE STATEMENT RECORDED DURING THE COURSE OF SURV EY OPERATION. EVEN THOUGH THE VALUATION WAS MADE BY THE VALUER AT ` 255/- TO ` 635/- PER GRM, THE CIT(APPEALS) HAS ADOPTED UNIFORM LY AT ` 635/- PER GRM. THEREFORE, THIS TRIBUNAL IS OF THE CONSID ERED OPINION THAT THE REVENUE CANNOT HAVE ANY GRIEVANCE AT ALL. THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(APPEALS) AND ACCORDINGLY THE SAME IS CONFIRMED. 4. SINCE THE CROSS-OBJECTION FILED BY THE ASSESSEE IS ONLY TO SUPPORT THE ORDER OF THE CIT(APPEALS), THIS TRIBUNA L IS OF THE 6 I.T.A. NO.672/MDS/15 C.O. NO.44/MDS/15 CONSIDERED OPINION THAT THE CROSS-OBJECTION OF THE ASSESSEE BECOMES INFRUCTUOUS. 5. IN THE RESULT, BOTH THE APPEAL FILED BY THE REVE NUE AND THE CROSS-OBJECTION FILED BY THE ASSESSEE ARE DISMISSED . ORDER PRONOUNCED ON 9 TH DECEMBER, 2015 AT CHENNAI. SD/- SD/- (. !' ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 9 TH DECEMBER, 2015. KRI. , .156 76(1 /COPY TO: 1. *+ /APPELLANT 2. ./*+ /RESPONDENT 3. 0 81 () /CIT(A)-2, TIRUCHIRAPPALLI 4. 0 81 /CIT-2, TIRUCHIRAPPALLI 5. 69 .1 /DR 6. :' ; /GF.