NARESH SABOO, MUMBAI V. ACIT CEN CIR 12, MUMBAI

ITA 6770/MUM/2010

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93133 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 9 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 03-06-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 24-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S J SINGH
• Keywords: Unexplained cash credit; Gift; Search and seizure; Sham transactions
• Section: 32; 131; 68; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH B, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NOS.6769, 6770 & 6771/M/2010 ASSESSMENT YEARS: 2005-06, 2006-07 & 2007-08 SHRI NARESH SABOO, B-34, WALCHAND TERRACE OPP AC MARKET, TARDEO, MUMBAI 400 034 PAN: ACAPS 9713L VS. ACIT, CENTRAL CIRCLE-12, 8 TH FLOOR, OLD CGO BLDG., M.K. ROAD, MUMBAI - 400020 (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI JAYANT BHATT, A.R. REVENUE BY : SHRI S.J. SINGH, D.R. DATE OF HEARING : 03.06.2015 DATE OF PRONOUNCEMENT : 30.06.2015 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE ABOVE TITLED THREE APPEALS RELATING TO A. Y. 20 05-06, 2006-07 & 2007-08 HAVE BEEN PREFERRED BY THE ASSESSEE AGAINST THE ORDERS ALL DATED 7.7.2010 OF THE COMMISSIONER OF INCOME TAX (APPEALS ) [HEREINAFTER REFERRED TO AS CIT(A)] AND FOR THE SAKE OF CONVENIENCE, THE SAME ARE TAKEN TOGETHER FOR DISPOSAL BY THIS COMMON ORDER. FIRST WE TAKE ASSESSEES APPEAL FOR AY 2005- 06. ITA NO.6769/M/2010 FOR A.Y. 2005-06 2. THE ASSESSEE IN THIS CASE IS AGGRIEVED BY THE D ECISION OF LD. CIT(A) IN CONFIRMING THE ASSESSMENT OF LONG TERM CAPITAL GAIN AS UNEXPLAINED CASH CREDITS U/S 68 OF THE ACT. ITA NOS.6769, 6770 & 6771/M/2010 SHRI NARESH SABOO 2 3. THE BRIEF FACTS OF THE CASE RELEVANT TO THE ISSU E UNDER CONSIDERATION ARE THAT ARE THAT THE ASSESSEE IS A CHARTERED ACCOUNTAN T AND DIRECTOR IN M/S. SOBOO CAPITALS & SECURITIES PVT. LTD. THE ASSESSEE DECLAR ED LONG TERM CAPITAL GAIN (LTCG) ON SALE OF SHARES OF M/S ROBINSON WORLDWIDE TRADE LTD AND CLAIMED THE SAME AS EXEMPT. THERE WAS A SEARCH AND SEIZURE ACTION U/S. 132 OF THE ACT UNDERTAKEN ON 18/1/2007 IN THE PREMISES OF THE APPE LLANT INCLUDING HIS RESIDENCES. CONSEQUENT TO THE SAID SEARCH OPERATION S, IT CAME TO LIGHT THAT THE TRANSACTION OF PURCHASE OF THE ABOVE SAID SHARES WA S CARRIED THROUGH M/S DPS SHARES & SECURITIES P LTD. HOWEVER THE DIRECTOR OF ABOVE SAID SHARE BROKER COMPANY NAMELY SHRI SUJAL C. SHAH, IN HIS STATEMENT U/S 131 OF THE ACT RECORDED ON 18-01-2007 CONFESSED THAT IT DID NOT AC TUALLY PURCHASE THE SHARES OF M/S ROBINSON WORLDWIDE TRADE LTD, BUT PROVIDED O NLY ACCOMMODATION BILLS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER AGAIN SUMMONED ANOTHER THE DIRECTOR OF M/S DPS SHARES & S ECURITIES P LTD NAMELY SHRI PRATIK C. SHAH ON 18.11.2008 AND RECORDED HIS STATEMENT, WHEREIN THE SAID DIRECTOR ALSO CONFIRMED THE FACT OF PROVIDING ONLY ACCOMMODATION BILLS IN THE SHARES OF M/S ROBINSON WORLDWIDE TRADE LTD. ACCORDI NGLY, THE ASSESSING OFFICER (HEREINAFTER REFERRED TO AS THE AO) PROPOSE D TO ASSESS THE LONG TERM CAPITAL GAIN AS INCOME OF THE ASSESSEE. THE ASSESSE E SOUGHT FOR CROSS EXAMINATION OF THE DIRECTOR OF M/S DPS SHARES & SEC URITIES P LTD AND THE SAME WAS PROVIDED BY THE ASSESSING OFFICER. IN THE CROSS EXAMINATION, THE DIRECTOR ADMITTED THAT HE HAD NOT ACCOUNTED FOR THE TRANSACTIONS RELATING TO ACCOMMODATION BILLS IN ITS BOOKS OF ACCOUNT, BUT MA INTAINED ITS STAND THAT THERE WAS NO ACTUAL DELIVERY OF SHARES, BUT ONLY ACCOMMOD ATION BILLS WERE GIVEN. THOUGH THE SHARES WERE FOUND TO HAVE BEEN SOLD THRO UGH THE D-MAT ACCOUNT, YET THE AO DOUBTED THE SAME SINCE THE PURCHASES WER E NOT MADE THROUGH BANKING CHANNELS, I.E., THE PURCHASES WERE MADE EIT HER BY ADJUSTING THE SPECULATION PROFITS CLAIMED TO HAVE BEEN EARNED BY THE ASSESSEE OR BY PAYING ITA NOS.6769, 6770 & 6771/M/2010 SHRI NARESH SABOO 3 CASH. ACCORDINGLY, THE AO CAME TO THE CONCLUSION TH AT THE PURCHASES HAD BEEN BACK DATED IN ORDER TO DECLARE LONG TERM CAPITAL GA IN. ACCORDINGLY, THE AO CAME TO THE CONCLUSION THAT THE WHOLE OF TRANSACTIO NS OF PURCHASE AND SALE WERE SHAM TRANSACTIONS. HE, ACCORDINGLY, ASSESSED THE LO NG TERM CAPITAL GAIN AS INCOME OF THE ASSESSEE UNDER INCOME FROM OTHER SOUR CES. THE AO ALSO ASSESSED 5% OF THE LTCG AS THE CHARGES INCURRED BY THE ASSES SEE IN OBTAINING BOGUS LTCG. 4. THE LD. CIT(A) ALSO CONFIRMED THE ADDITIONS BY H OLDING THAT THE ASSESSEE HAD FAILED TO DISCHARGE ITS BURDEN OF PRO OF REGARDING THE GENUINENESS OF THE TRANSACTIONS. HE HOWEVER TREATED THE AMOUNT OF ADDITION AS UNEXPLAINED CASH CREDITS U/S 68 OF THE ACT. AGGRIEVED, THE AS SESSEE HAS FILED THIS APPEAL BEFORE US. 5. THE LD. AR OF THE ASSESSEE, BEFORE US, HAS SUBMI TTED THAT THE ASSESSEE HAD SOLD 1500 SHARES OF ROBINSON IN F.Y. 2004-05 R ELEVANT TO A.Y. 2005-06, WHICH RESULTED INTO LONG TERM CAPITAL GAIN OF RS.1, 86,375/-. THE SAID EQUITY SHARES OF ROBINSON WERE PURCHASED ON 22/5/2003@ RS. 5.05 PER SHARE THROUGH M/S.DPS SHARES AND SECURITIES PVT. LTD, WHO WAS A M EMBER OF STOCK EXCHANGE. HE HAS FURTHER SUBMITTED THAT COPIES OF T HE SALES BILLS WERE FURNISHED BEFORE THE ASSESSING OFFICER. THE SALE PR OCEEDS WERE RECEIVED BY THE ASSESSEE THROUGH ACCOUNT PAYEE CHEQUE AND THE DELIV ERY OF THE SHARES WAS GIVEN TO THE POOL ACCOUNT OF THE SAID BROKER AND FR OM THIS POOL ACCOUNT THE SHARES WERE DELIVERED TO THE BOMBAY STOCK EXCHANGE. THE BSE HAD CONFIRMED THE SALE TRANSACTIONS OF THE SAID ROBINSON SCRIPTS. HE HAS FURTHER SUBMITTED THAT THESE EVIDENCES WERE NOT CONSIDERED BY THE ASSESSIN G OFFICER AND HE SOLELY RELIED ON THE STATEMENTS GIVEN BY THE DIRECTOR OF T HE SAID M/S.DPS SHARES & SECURITIES PVT. LTD. THE CONTENTION OF THE LD A.R H AS BEEN THAT THE ABOVE SAID SHARE BROKING FIRM HAS NOT ACCOUNTED THE SHARE TRAN SACTIONS CARRIED ON BY THE ITA NOS.6769, 6770 & 6771/M/2010 SHRI NARESH SABOO 4 ASSESSEE AND HENCE, IN ORDER TO SUIT ITS CONVENIENC E, THE DIRECTOR OF THE ABOVE SAID COMPANY HAS STATED THE TRANSACTIONS OF PURCHAS E TO BE BOGUS TRANSACTIONS. THE LD A.R HAS FURTHER PLACED RELIANCE ON THE DECIS ION RENDERED BY THE CO- ORDINATE BENCH OF THIS TRIBUNAL IN I.T.A. NO.6747/M UM/2010 FOR AY 2007-08 IN THE CASE OF SMT.ROOPLATA JAIN VS. ACIT DECIDED ON 8.4.2015. ON THE CONTRARY, THE LD D.R PLACED STRONG RELIANCE ON THE ORDERS OF TAX AUTHORITIES. 6. WE HAVE CONSIDERED THE RIVAL CONTENTIONS. WE HA VE ALSO PERUSED THE DECISION RELIED UPON BY THE ASSESSEE IN THE CASE OF SMT.ROOPLATA JAIN VS. ACIT (SUPRA), WHEREIN, THE TRIBUNAL HAS CONSIDERED THE IDENTICAL ISSUES OF PURCHASE AND SALE OF SHARES OF M/S ROBINSON WORLDWI DE TRADE LTD AND HAS OBSERVED THAT THE EVIDENCES FURNISHED BY THE ASSESS EE WITH REGARD TO THE PURCHASE AND SALE OF SHARES SHOULD HAVE BEEN DISCRE ETLY EXAMINED AND THEN A HOLISTIC VIEW OF THE MATTER SHOULD HAVE BEEN TAKEN BY THE TAX AUTHORITIES. THE TRIBUNAL IN THE SAID CASE HAS RESTORED THE MATTER F OR FRESH EXAMINATION TO THE ASSESSING OFFICER. THE TRIBUNAL HAS ALSO DIRECTED THE AO TO TAKE INTO ACCOUNT THE DECISION RENDERED BY THE CO-ORDINATE BENCH IN T HE CASE OF SHRI ARVIND M KARIYA ITA NO.787/M/2010 DECIDED ON 30.12.2011. THE RELEVANT PART OF THE ORDER OF THE TRIBUNAL IN T HE CASE OF SMT.ROOPLATA JAIN VS. ACIT(SUPRA), FOR THE SAKE O F CONVENIENCE, IS REPRODUCED AS UNDER: 6. BEFORE US, THE ASSESSEE FILED COPIES OF INCOME TAX RETURNS FILED FOR AY 2005-06 AND 2006-07; COPIES OF BROKER NOTES FOR PURCHASE OF SHARES, DEMATERIALISATION DETAILS, COPIES OF BROKER NOTES FOR SALE OF SHARES, BANK STATEMENTS, LEDGER ACCOUNT COPIES ISSUED BY M/S DPS SHARES AND SECURITIES P LT D ETC. WE NOTICE THAT BOTH THE TAX AUTHORITIES HAVE FAILED TO EXAMINE THEM IN ORD ER TO FIND OUT ABOUT THE VERACITY OF THE CLAIM PUT FORTH BY THE ASSESSEE. INSTEAD BOT H THE TAX AUTHORITIES HAVE BEEN SWAYED AWAY BY THE STATEMENT GIVEN BY THE DIRECTORS OF M/S DPS SHARES & SECURITIES LTD. THERE MAY BE MERIT IN THE CONTENTIO NS OF THE ASSESSEE THAT THE STATEMENT GIVEN BY THE DIRECTORS OF THE ABOVE SAID COMPANY SHOULD NOT BE RELIED ITA NOS.6769, 6770 & 6771/M/2010 SHRI NARESH SABOO 5 UPON, SINCE THEY HAVE GIVEN THE STATEMENT TO SUIT T HEIR OWN CONVENIENCES, SINCE THESE TRANSACTIONS WERE NOT ACCOUNTED FOR BY THEM. UNDER THESE CIRCUMSTANCES, IN OUR VIEW, IT MAY NOT BE PROPER TO DRAW ADVERSE INFE RENCES AGAINST THE ASSESSEE BASED UPON THE STATEMENT GIVEN BY THE DIRECTORS OF M/S DPS SHARES & SECURITIES P LTD ALONE. IN OUR VIEW, THE EVIDENCES FURNISHED BY THE ASSESSEE WITH REGARD TO THE PURCHASE AND SALE OF SHARES SHOULD HAVE BEEN DISCRE ETLY EXAMINED AND THEN A HOLISTIC VIEW OF THE MATTER SHOULD HAVE BEEN TAKEN BY THE TAX AUTHORITIES. SINCE THE TAX AUTHORITIES HAVE FAILED TO EXAMINE THE BASIC EV IDENCES, WE ARE OF THE VIEW THAT THIS ISSUE REQUIRES FRESH EXAMINATION AT THE END OF THE ASSESSING OFFICER. WHILE EXAMINING THE SAME, THE AO SHOULD ALSO TAKE INTO AC COUNT THE DECISION RENDERED BY THE CO-ORDINATE BENCH IN THE CASE OF SHRI ARVIND M KARIYA (REFERRED SUPRA). ACCORDINGLY, WE SET ASIDE THE ORDER OF LD CIT(A) AN D RESTORE ALL THE ISSUES TO THE FILE OF THE ASSESSING OFFICER FOR FRESH EXAMINATION IN T HE LIGHT OF DISCUSSIONS MADE SUPRA. 7. SINCE THE FACTS OF THE CASE IN HAND ARE ALSO IDE NTICAL, THE CONTENTIONS RAISED BY THE ASSESSEE ARE ALSO ON THE SAME LINE, W E THEREFORE FOLLOWING THE ABOVE DECISION OF THE CO- ORDINATE BENCH OF THE TRI BUNAL, WE SET ASIDE THE ORDER OF LD CIT(A) AND RESTORE ALL THE ISSUES TO TH E FILE OF THE AO TO DECIDE THE SAME A FRESH IN THE LIGHT OF THE DIRECTIONS GIVEN BY THE TRIBUNAL IN THE CASE OF SMT.ROOPLATA JAIN VS. ACIT (SUPRA). THE APPEAL OF THE ASSESSEE IS THEREFORE ALLOWED FOR STATISTICAL PURPOSES. ITA NO.6770/M/2010 FOR A.Y. 2006-07. 8. SINCE THE FACTS AND ISSUES UNDER CONSIDERATION A RE IDENTICAL FOR THIS YEAR ALSO, HENCE, IN VIEW OF OUR DISCUSSION OF THE MATTE R AS ABOVE, THE ORDER OF THE LD. CIT(A) FOR THE YEAR UNDER CONSIDERATION IS ALSO SET ASIDE AND THE MATTER IS RESTORED TO THE FILE OF THE AO FOR DECISION A FRESH AS PER THE DIRECTIONS GIVEN ABOVE FOR A.Y. 2005-06. ITA NO.6771/M/2011 FOR 2007-08 9. THE ASSESSEE IN THIS APPEAL HAS CHALLENGED THE A CTION OF THE LD. CIT(A) IN CONFIRMING THE ADDITIONS MADE BY THE AO AS UNEXP LAINED INVESTMENTS IN RELATION TO JEWELLERY FOUND DURING THE SEARCH ACTIO N. ITA NOS.6769, 6770 & 6771/M/2010 SHRI NARESH SABOO 6 10. DURING THE COURSE OF THE SEARCH OPERATION U/S 1 32 OF THE ACT, TOTAL JEWELLERY WEIGHING 1798 GMS WAS FOUND FROM THE PREM ISES OF THE ASSESSEE. THE GOLD CONTENT IN DIAMOND SET WAS REPORTED BY THE ASSESSEE AT 181 GMS AND THE REMAINING GOLD ORNAMENTS AND JEWELLERY WEIGHE D 1617 GMS. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER ASKED THE ASSESSEE TO SHOW CAUSE WHY JEWELLERY TO THE EXTENT REFLECTED IN THE RETURN OF INCOME SHOULD NOT BE CONSIDERED AS EXPLAINED AND THE REST OF JEWELLERY S HOULD NOT BE TREATED AS UNEXPLAINED AND ADDED TO THE INCOME OF T HE ASSESSEE. 11. THE ASSESSEE EXPLAINED THAT THE GOLD JEWELLERY BELONGED TO HIM AND HIS FAMILY MEMBERS I.E. HIS WIFE, HIS UNMARRIED DAUGHTE R, HIS SON AND PARENTS WHO HAVE BEEN LIVING WITH HIM. THAT THE JEWELLERY WEIGH ING 307.01 GMS AND DIAMOND SET WERE SHOWN IN THE BALANCE SHEET OF KUM. MADHU MALPANI (NOW SMT. MADHU SABOO) SINCE 1980. THE BALANCE JEWELLERY OF MADHU SABOO WAS RECEIVED DURING MARRIAGE DATED 2.12.88. THE DETAILS WERE FILED WITH THE RETURN FILED FOR AY 89-90. THAT JEWELLEIY WEIGHING 649.400 GMS WAS SHOWN IN THE BALANCE SHEET OF HIS MOTHER SMT. SARASWATI DEVI IN A. Y. 89-90 AND ALSO IN AY 92-93.HIS MOTHER HAS BEEN ASSESSED FOR THE LAST 30 YEARS AND HIS FATHER HAS ALSO BEEN ASSESSED TO TAX FROM LAST 40 YEARS .FURTH ER THAT THE ASSESSEE, HIMSELF, A CHARTERED ACCOUNTANT HAS BEEN ASSESSED TO TAX FRO M LAST 20 YEARS. DURING SCRUTINY ASSESSMENT FOR A.Y. 98-99 IN HIS THE SUBMI SSIONS HE HAD MENTIONED THAT ALONG WITH THE ASSETS SHOWN IN THE BALANCE SHE ET, HE ALSO OWNED SOME HOUSEHOLD FURNITURE AND JEWELLERY WEIGHING 160 GMS IN ADDITION TO JEWELLERY OF HIS WIFE WHICH WAS GIVEN BY HER PARENTS AT THE TIM E OF MARRIAGE. THE JEWELLERY FOUND WAS THE PERSONAL EFFECT HIS WIFE & MOTHER. T HE MAJOR PORTION OF JEWELLERY WAS SHOWN IN THE BALANCE SHEET AND DISCLO SED DURING THE SCRUTINY ASSESSMENT PROCEEDINGS. HE FURTHER SUBMITTED THAT LOOKING TO THE STATUS OF FAMILY AND THE CUSTOMS AND THE PRACTICE OF THE COMM UNITY TO WHICH THE FAMILY ITA NOS.6769, 6770 & 6771/M/2010 SHRI NARESH SABOO 7 BELONGED, THE JEWELLERY FOUND SHOULD BE TREATED AS DULY EXPLAINED. THE AO HOWEVER DID NOT AGREE WITH THE EXPLANATION OFFERED BY THE ASSESSEE. HE HOWEVER OBSERVED THAT THE FOLLOWING ITEMS HAD BEEN DULY EXPLAINED - 1. SMT.MADHU SABOO AS PER HER RETURN OF WEALTH GOLD JEWELLERY OF 307.010 GMS @ RS.774 PER GM RS. 237620/- 2. SMT. SARSWATI S. SABOO (MOTHER OF ASSESSEE) AS PER HER RETURN OF EARLIER YEARS GOLD JEWELLERY OF 649.40 GMS. @ RS.774 PER GM RS. 502330/- 3. DIAMOND SET AS PER VALUE DECLARED RS. 200 00/- TOTAL EXPLAINED JEWELLERY RS. 759950/-. 12. THE AO, THEREFORE, OBSERVED THAT OUT OF THE T OTAL VALUE OF JEWELLERY FOUND VALUING TO RS. 24,75,237/-, JEWELLERY VALUING TO RS.7,59,950/- ONLY COULD BE TREATED AS EXPLAINED. JEWELLERY VALUING TO RS.1 7,15,287/- REMAINED UNEXPLAINED. HE ACCORDINGLY ADDED THE SAID AMOUNT I NTO THE INCOME OF THE ASSESSEE. AGGRIEVED BY THE ADDITION MADE BY THE AO, THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A). 13. THE LD. CIT(A) OBSERVED THAT APART FROM THE JEW ELLERY TREATED BY THE AO AS EXPLAINED ,THE ASSESSEE WAS ENTITLED TO FURTH ER RELIEF OF 160GMS. OF JEWELLERY AS DECLARED BY THE ASSESSEE DURING THE CO URSE OF SCRUTINY ASSESSMENT PROCEEDINGS FOR A.Y. 1998-99. HE ACCORDINGLY GRANTE D RELIEF TO THE ASSESSEE PERTAINING TO 160 GMS OF JEWELLERY @ RS.774/- PER G RAM AS ADOPTED BY THE ASSESSING OFFICER CALCULATED AT RS.1,23,840/-. HE A CCORDINGLY REDUCED THE ADDITION MADE BY THE ASSESSING OFFICER TO RS.15,91 ,447/- . AGGREIVED BY THE ORDER OF THE CIT(A), THE ASSESSEE HAS COME IN APPEA L BEFORE US. 14. WE HAVE HEARD THE RIVAL CONTENTIONS. AS PER T HE CBDT CIRCULAR NO.1916 DATED 11.5.1994, THE GOLD JEWELLERY AND ORN AMENTS TO THE EXTENT OF 500 GMS PER MARRIED LADY, 250 GMS PER UNMARRIED LAD Y AND 100 GMS PER MALE ITA NOS.6769, 6770 & 6771/M/2010 SHRI NARESH SABOO 8 MEMBER OF THE FAMILY NEED NOT BE SEIZED. THE FAMIL Y OF THE ASSESSEE CONSISTS OF 3 MALE MEMBERS I.E. ASSESSEE HIMSELF, HIS FATHER AND SON, TWO MARRIED LADIES I.E. HIS WIFE AND MOTHER, ONE UNMARRIED LADY I.E. H IS DAUGHTER. THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. RATANLAL VYAPARILAL JAIN 235 CTR (GUJ) 568 HAS HELD THAT THOUGH THE SAID CIRCULAR HA D BEEN ISSUED FOR THE PURPOSE OF NON- SEIZURE OF THE JEWELLERY, BUT THE BASIS FOR THE SAME RECOGNIZES CUSTOMS OF GIFTS OF JEWELLERY BY THE RELATIVES AND FRIENDS ON CERTAIN OCCASIONS SUCH AS MARRIAGES, BIRTHDAYS, MARRIAGE ANNIVERSARY AND OTHE R FESTIVALS. IN SUCH CIRCUMSTANCES, UNLESS THE REVENUE SHOWS ANYTHING TO THE CONTRARY, IT CAN BE SAFELY PRESUMED THAT SOURCE TO THE EXTENT OF THE JE WELLERY STATED IN THE CIRCULAR STANDS EXPLAINED. EVEN AS PER CLAUSE (III) OF THE CBDT CIRCULAR (SUPRA), IT HAS BEEN MENTIONED THAT THE AUTHORIZED OFFICER MAY, HAV ING REGARD TO THE STATUS OF THE FAMILY, AND THE CUSTOM AND PRACTICES OF THE COM MUNITY TO WHICH THE FAMILY BELONGS AND OTHER CIRCUMSTANCES OF THE CASE, DECIDE TO EXCLUDE A LARGER QUANTITY OF JEWELLERY AND ORNAMENTS FROM SEIZURE. WE FURTHER FIND THAT THE AO THE ADDITION MADE BY THE AO ALSO INCLUDES RS. 61500 /- ON ACCOUNT OF SILVER ITEMS. AS OBSERVED ABOVE, OUT OF THE SEIZED JEWELL ERY WORTH ABOUT RS.24.75 LAKHS, THE ASSESSEE EXPLAINED THE SOURCE OF ACQUISI TION OF THE JEWELLERY WORTH ABOUT RS. 8.85 LAKHS WHICH HAS BEEN DULY DISCLOSED IN THE RETURNS OF HIS FAMILY MEMBERS. IT IS ALSO EVIDENT THAT THE ASSESSEE IS A CHARTED ACCOUNTANT AND HIS FAMILY IS HAVING GOOD FINANCIAL STATUS. THE POSSES SION OF A JEWELLERY WORTH VALUE OF ABOUT RS.24.75 LAKHS BY THE ASSESSEE AND H IS FAMILY MEMBERS CANNOT BE SAID TO BE IMPROBABLE OR BEYOND THE SOURCE OF IN COME OF THE ASSESSEE AND HIS FAMILY MEMBERS. SOME OF THE JEWELLERY HAD BEEN DULY SHOWN BY THE WIFE OF THE ASSESSEE IN HER RETURN EVEN PRIOR TO HER MAR RIAGE. HIS MOTHER HAS BEEN ASSESSED TO INCOME TAX FOR THE LAST 30 YEARS. ASSES SEE HIMSELF IS ASSESSED TO TAX FOR THE LAST 20 YEARS. ASSESSEE AND HIS MOTHER HAVE ALSO DISCLOSED A PART OF THE JEWELLERY PURCHASED IN EARLIER YEARS IN THEIR RETUR NS. IT IS ALSO VERY COMMON THAT ITA NOS.6769, 6770 & 6771/M/2010 SHRI NARESH SABOO 9 AS PER THE CUSTOMS AND PRACTICES PREVALENT IN OUR C OUNTRY, THE JEWELLERY/GOLD ETC. IS GIFTED BY THE RELATIVES AND FRIENDS OF A PE RSON AT THE TIME OF CERTAIN OCCASIONS LIKE MARRIAGES, BIRTH OF A CHILD, BIRTHDA YS, MARRIAGE ANNIVERSARIES ETC. THE QUANTUM AND THE WORTH OF THE GIFTS ALSO DEPEND UPON THE SOCIAL AS WELL AS FINANCIAL STATUS NOT ONLY OF THE DONOR BUT OF THE D ONEE ALSO. CONSIDERING THE STATUS OF THE ASSESSEE AND HIS FAMILY MEMBERS, CBDT CIRCULAR GUIDELINES(SUPRA) AND FURTHER IN THE LIGHT OF THE D ECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. RATANLAL VYAPARI LAL JAIN(SUPRA) AS WELL AS THE EXPLANATION SUBMITTED BY THE ASSESSEE, IT CANNO T BE SAID TO BE A CASE OF UNEXPLAINED JEWELLERY. THE ADDITION MADE BY THE AO AND FURTHER CONFIRMED BY THE CIT(A) ON THIS ACCOUNT ARE, THEREFORE, HELD TO BE NOT SUSTAINABLE AND THE SAME ARE ACCORDINGLY SET ASIDE. THIS APPEAL OF THE ASSESSEE IS THEREFORE ALLOWED. 15. IN THE RESULT, THE APPEALS OF THE ASSESSEE FOR AY 2005-06 AND AY 2006- 07 ARE ALLOWED FOR STATISTICAL PURPOSES AND APPEAL FOR AY 2007-08 IS HEREBY ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 30.06.2015. SD/- SD/- (G.S. PANNU) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 30.06.2015. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT ITA NOS.6769, 6770 & 6771/M/2010 SHRI NARESH SABOO 10 THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.