Smt. Neeta Rai, Bhopal V. Deputy Commissioner of Income Tax (Central)-1, Bhopal

ITA 684/Ind/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7966 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 26-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA GUPTA
• Assessee Lawyers: SHREYA JAIN A RS
• Keywords: Gift; Corroborative evidences
• Section: 153A; 132

Judgement Text

[ITA 684/IND/2017] [SMT. NEETA RAI, BHOPAL] , , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.684/IND/2017 ASSESSMENT YEAR: 2015-16 SMT. NEETA RAI E-6/74, ARERA COLONY BHOPAL (M.P.) / VS. DCIT - CENTRAL(1) BHOPAL ( APPELLANT ) ( REVENUE ) P.A. NO. ASMPR8277J APPELLANT BY SHRI PRAKASH JAIN & MISS SHREYA JAIN, A.RS RESPONDENT BY SMT. ASHIMA GUPTA, DR DATE OF HEARING: 18.12.2018 DATE OF PRONOUNCEMENT: 08.01.2019 / O R D E R PER KUL BHARAT, J.M: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER O F THE CIT(A)-III, BHOPAL DATED 13.9.2017 PERTAINING TO T HE [ITA 684/IND/2017] [SMT. NEETA RAI, BHOPAL] 2 ASSESSMENT YEAR 2015-16. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE LEARNED CIT(A)-3, BHOPAL IS UNJUST IFIED AND IS BEYOND THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LEARNED CIT(A)-3, BHOPAL HAS ERRED IN PASSING T HE ORDER UNDER SECTION 250 OF THE INCOME TAX ACT, 1961, THE LEARNED CIT(A) -3 HAS PROPORTIONATELY ALLOWED THE GOLD JEWELLERY AND ORNAMENTS WEIGHING 7 00 GRAMS AND DISALLOWED THE REMAINING 266.5 GRAMS. CBDT INSTRUC TION NO.1916 PRESCRIBES THE LIMIT THAT GOLD JEWELLERY AND ORNAM ENTS TO THE EXTENT OF 500 GRAMS PER MARRIED LADY, 2520 GRAMS PER UNMARRIED LA DY AND 100 GRAMS PER MALE MEMBER OF THE FAMILY NEED NOT BE SEIZED. THE LEARNED CIT(A)-3 HAS NOT CONSIDERED THE RELIEF FOR GOLD JEWELLERY BE LONGING TO MRS. MANDAKINI RAI, DAUGHTER IN LAW OF THE ASSESSEE (ELI GIBLE FOR HOLDING GOLD JEWELLERY WEIGHING 500 GRAMS) AND KU. ANANYA RAI, G RAND DAUGHTER OF THE ASSESSEE (ELIGIBLE FOR HOLDING GOLD JEWELLERY W EIGHING 250 GRAMS.) 3. THE APPELLANT CRAVES LEAVE TO ADD, TO AMEND OR ALTE R ANY OF THE GROUNDS OF APPEAL AS AND WHEN NECESSARY. 2. BRIEFLY STATED FACTS ARE THAT SEARCH & SEIZURE OPERATI ON U/S 132(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS THE ACT) WAS CARRIED OUT AT THE RESIDENTIAL AND BUSI NESS PREMISES OF THE PERSONS/PARTNERS AND ASSOCIATE CONCERNS OF REGAL HOMES AND DWARKADHEESH HAVELI BUILDERS GROUP OF BHOPAL ON 12.8.2014. THE ASSESSEE BEING ONE OF TH E MEMBER OF THE REGAL HOMES GROUP, SEARCH OPERATION WAS CARRIED OUT AT HER PREMISES AND THE ASSESSMENT U/S 153A [ITA 684/IND/2017] [SMT. NEETA RAI, BHOPAL] 3 R.W.S. 153(3) OF THE ACT WAS FRAMED VIDE ORDER DATED 28.9.2016. WHILE FRAMING THE ASSESSMENT, THE A.O. MAD E ADDITION OF RS.24,52,309/- ON ACCOUNT OF INVESTMENT I N JEWELLERY. AGAINST THIS, THE ASSESSEE PREFERRED AN APP EAL BEFORE LD. CIT(A). THE LD. CIT(A) DELETED THE ADDIT ION TO THE EXTENT OF INVESTMENT IN 700 GMS. JEWELLERY. REST O F THE ADDITION WAS SUSTAINED. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. 3. LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN SYNOPSIS. THE CONTENTS OF THE SAME ARE REPRODUCED AS UNDER: WITH REFERENCE TO THE HEARING OF ABOVE REFERRED AP PEAL, WE HAVE TO SUBMIT THE SHORT FACTS OF THE CASE ARE AS UNDER: 1. SEARCH OPERATION U/S 132(1) OF THE INCOME TAX ACT W ERE CARRIED OUT IN THE RESIDENTIAL AND BUSINESS PREMISES OF M/S. REGAL HOM E AND DWARKADHEESH HAVELI BUILDERS GROUP. ASSESSEES HUS BAND SHRI RAKESH KUMAR RAI WAS ALSO CONNECTED WITH THE SAID GROUP, T HUS SEARCH U/S 132 WAS ALSO CARRIED OUT AT HER RESIDENTIAL PREMISES. 2. DURING THE COURSE OF SEARCH LOCKER BEARING NO.632 H ELD WITH BANK OF BARODA WAS FOUND BY THE SEARCH PARTY. IN THE SAID LOCKER THE SEARCH PARTY FOUND GOLD JEWELLERY AND SILVER ARTICLES DETA ILED AS UNDER [ITA 684/IND/2017] [SMT. NEETA RAI, BHOPAL] 4 S.NO. PARTICULARS JEWELLERY FOUND (IN RS.) 1. GOLD JEWELLERY WEIGHING 966.00 GRAM (NET WT.) 24,52,309/- 2. SILVER ARTICLES WEIGHING 1960.00 GRAM (NET WT.) 73,923/- TOTAL 25,26,332/- 3. DURING THE COURSE OF SEARCH STATEMENT U/S 132(4) OF THE ASSESSEE WAS RECORDED AND IN REPLY TO QUESTION NO.7 ASSESSEE STA TED THAT HIS FAMILY CONSISTS OF HERSELF, HER HUSBAND SHRI RAKESH KUMAR RAI, SON SHRI RISHIN RAI, DAUGHTER-IN-LAW SMT. MANDAKINI RAI AND DAUGHTE R SMT. MANSI RAI. A COPY OF STATEMENT U/ 132(4) IS ENCLOSED HEREWITH. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS EXPLAINED THAT THE JEWELLERY AND SILVER ARTICLES FOUND DURING THE COUR SE OF SEARCH IS COVERED WITHIN THE GUIDELINES PRESCRIBED BY THE CBDT CIRCUL AR NO.1916 DATED 11.5.1994 AS TABULATED BELOW: NAME OF THE FAMILY MEMBER ORNAMENTS ALLOWED AS PER NOTIFICATION (GRAMS) MRS. NEETA RAI (APPELLANT) 500 MR. RAKESH RAI (HUSBAND) 100 MR. RISHIN RAI (SON) 100 MRS. MANDAKINI RAI (DAUGHTER IN LAW) 500 MRS. MANSI RAI SHRIVASTAVA (DAUGHTER) 500 KU. ANAYA RAI (GRAND DAUGHTER) 250 TOTAL 1950 MS. 5. IT WAS CONTENDED BEFORE THE LD. A.O. THAT AS PER BO ARDS CIRCULAR THE ASSESSEE FAMILY CAN HOLD 1950 GRAMS OF GOLD JEWELLE RY AGAINST WHICH THE SAID PARTY WAS FOUND ONLY 966 GRAMS GOLD JEWELLERY. THUS THE QUANTUM OF JEWELLERY FOUND DURING THE SEARCH IS BELOW THE G UIDELINE PRESCRIBED BY CBDT. 6. THE LD. A.O. HAS NOT ACCEPTED ASSESSEES ABOVE SUBM ISSION BY STATING THAT ASSESSEE IS NOT INCOME TAX PAYER, NO BILLS AND VOUCHERS IN RESPECT OF ACQUISITION OF JEWELLERY IS SUBMITTED NOR THE PROOF OF RECEIPT OF JEWELLERY IN GIFT AT THE TIME OF MARRIAGE AND OTHER OCCASIONS FR OM RELATIVES HAVE BEEN PRODUCED. THUS THE LD. A.O. HAS NOT ACCEPTED THAT ASSESSEE OR HIS ANY OF THE FAMILY MEMBERS IS HOLD ANY GOLD JEWELLERY OR RE CEIVED BY THEM IN MARRIAGE OR OTHER FAMILY CEREMONIES, THUS HE MADE A DDITION OF TOTAL VALUE OF JEWELLERY AT RS.24,52,309/-FOUND DURING THE COUR SE OF SEARCH. [ITA 684/IND/2017] [SMT. NEETA RAI, BHOPAL] 5 7. AGGRIEVED BY THE ORDER OF THE LD. A.O. ASSESSEE PRE FERRED APPEAL AND REITERATED THE SUBMISSION BEFORE THE LD. CIT(A) WHO HOLD THAT IN VIEW OF THE CBDT CIRCULAR AND DECISION RELIED BY THE ASSESS EE GOLD JEWELLERY TO THE EXTENT OF 700 GRAMS IS REASONABLE AND MAINTAINE D THE ADDITION 266 GRAMS. 8. BEING DISSATISFIED FROM THE ORDER OF LD. CIT(A) ASS ESSEE FILED PRESENT APPEAL. NOW OUR HUMBLE SUBMISSIONS BEFORE YOUR HON OUR ARE AS UNDER: (I) THE LD. CIT(A) HOLD THAT JEWELLERY TO THE EXTENT OF 700 GRAMS IS REASONABLE THE BREAK UP OF WHICH IS AS UNDER: NEETA RAI (APPELLANT ASSESSEE) 500 GRAMS RAKESH KUMAR RAI (ASSESSEES HUSBAND) 100 GRAMS RISHIN RAI (ASSESSEES SON) 100 GRAMS TOTAL 700 GRAMS (II) WE COULD NOT UNDERSTAND WHY THE LD. CIT(A) HAS NOT ALLOWED THE DEDUCTION OF JEWELLERY OF DAUGHTER IN LAW, GRAND DA UGHTER AND MARRIED DAUGHTER PARTICULARLY WHEN IN THE STATEMENT RECORDED U/S 132(4) ASSESSEE SPECIFICALLY MENTIONED THAT HER FAM ILY CONSISTS OF HERSELF, HER HUSBAND, SON, DAUGHTER IN LAW. (III) IT IS SUBMITTED THAT IN VIEW OF THE BOARDS CIRCULA R REFERRED HEREIN ABOVE THE JEWELLERY FUND IS BELOW THE PRESCRIBED LI MIT. RELIANCE IS PLACED ON THE FOLLOWING DECISIONS: A. SUNITA NIGAM VS. DCIT (CENTRAL) ITA NO.310/IND/2017 ORDER DATED 27.6.2018 (2018) 33 ITJ 837 (INDORE) B. SURESH CHAND AGRAWAL VS. DCIT (2014) 23 ITJ 46 (IND ORE) C. CIT VS. M.S. AGRAWAL (HUF)(2008) 11 ITJ 721 (MP) IN VIEW OF ABOVE FACTS IT IS PRAYED THAT ENTIRE JEW ELLERY FOUND BE TREATED AS DISCLOSED AND ADDITION CONFIRMED BY THE LD. CIT(A) BE DELETED. 4. ON THE CONTRARY, LD. D.R. OPPOSED THE SUBMISSIONS AND SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. H E SUBMITTED THAT BEFORE ASSESSING OFFICER, NO EVIDENCE WAS ADDUCED IN SUPPORT OF THE CONTENTION, THEREFORE, A.O . WAS [ITA 684/IND/2017] [SMT. NEETA RAI, BHOPAL] 6 JUSTIFIED IN NOT GIVING BENEFIT OF CIRCULAR OF CBDT. IT WAS INCUMBENT UPON THE ASSESSEE TO THE CONTENTION OF PLAC ING SUPPORTING EVIDENCES. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT BEFORE THE A. O. THE ASSESSEE HAD CATEGORICALLY SUBMITTED AS UNDER: 7.6 IN THE WRITTEN REPLY DATED 22.9.2016 THE ASSESS EE HAS STATED AS UNDER:- OUT OF 966.50 GRAM GOLD JEWELLERY, 346.90 GRAM, GOLD JEWELLERY BELONGS TO SMT. NEETA RAI, 477.20 GRAM GOLD JEWELLE RY BELONGS TO SMT. MANDAKNI RAI (DAUGHTER-IN-LAW) AND 142.40 GRAM GOLD JEWLLERY BELONGS TO SMT. MANSI RAI SHRIVASTAVA. OUT OF 1960.00 GRAM SILVER ARTICLES, 1187.00 GRAM SILVER ARTICLES BELONGS TO SMT. NEETA RAI, 400.00 SILVER A RTICLES BELONGS TO SMT. MANDAKNI RAI AND 200.00 GRAM SILVER ARTICLES BELONG S TO SMT. MANSI RAI SHRIVASTAVA. 1. MRS. NEETA RAI DID NOT PURCHASE ANY GOLD OR SILVER AFTER HER HUSBANDS RETIREMENT FROM BANKS SERVICE IN 2008. ALL HER ORN AMENTS WERE ACQUIRED/RECEIVED AS GIFTS, PRIOR TO THAT. 2. MRS. MANDKINI (DAUGHTER IN LAW) RECEIVED ALL HER GO LD AS GIFTS FROM VARIOUS RELATIVES AND HER PARENTS AT THE PARENTS AT THE TIME OF HER WEDDING. HER HUSBAND ALSO RECEIVED 4 RINGS AND A C HAIN. A LIST OF GIFTS RECEIVED WAS PREPARED AT THAT TIME IN NOV.201 0. A COPY OF THE SAME IS ENCLOSED FOR YOUR PERUSAL. HER DAUGHTER, B ORN IN MARCH 2013 ALSO RECEIVED 3 SMALL CHAINS, BANGALS AND 3 COINS A S GIFTS. ALL THESE ITEMS ARE CONSOLIDATED IN MANDAKINIS LIST. SHE RE SIDES IN MUMBAI WITH HER HUSBAND AND FIND IT UNSAFE TO KEEP VALUABL ES THERE. [ITA 684/IND/2017] [SMT. NEETA RAI, BHOPAL] 7 3. MRS. MANSI RAI SHRIVASTAVA (DAUGHTER) IS MARRIED TO MRS. VARUN (CANADIAN CITIZEN) IN OCT 2012 AND MIGRATED THERE. THEY ARE RESIDING IN CANADA WITH VARUNS FAMILY. SHE WAS WORKING WIT H INFOSYS BEFORE MARRIAGE. SHE HAS KEPT SOME OF HER ORNAMENTS AND C LOTHES FOR USE, DURING HER VISITS FOR ATTENDING WEDDING AND OTHER F AMILY FUNCTIONS IN INDIA. SINCE ONLY LIGHTWEIGHT, WHITE GOLD/WHITE ME TAL ORNAMENTS ARE PREFERRED OVER YELLOW GOLD JEWELLERY IN CANADA, SHE DECIDED NOT TO CARRY THESE ALONG. 6. HOWEVER, THESE SUBMISSIONS WERE REJECTED BY OBSERVING AS UNDER: 7.7 THE SUBMISSION OF THE ASSESSEE HAS BEEN EXAMINE D AND FOUND TO BE NOT ACCEPTABLE FOR THE FOLLOWING REASONS:- I. IT IS OBSERVED THAT THE ASSESSEE WAS A NON FILER & NOT REGULARLY FILING HER RETURN. SHE HAS NO SOURCE OF INCOME TO EXPLAIN THE JEWELLERY FOUND IN THE LOCKER CLEARLY ESTABLISHING THAT THE JEWELLERY WAS ACQUIRED THROUGH UNDISCLOSED SOURCES. II. NO BILLS AND VOUCHERS HAVE BEEN SUBMITTED BY THE AS SESSEE. III. NO DOCUMENTARY EVIDENCE WITH REGARD TO THE RECEIPTS OF GIFTS HAS BEEN SUBMITTED BY THE ASSESSEE. IV. NO DOCUMENTARY EVIDENCE HAS BEEN SUBMITTED TO PROVE THAT THE JEWELLERY IS RELATED TO SMT. MANDAKNI RAI OR SMT. MANSI RAI SHRI VASTAVA. V. THE ASSESSEE HAS MERELY SUBMITTED A LIST OF SOME OF THE RELATIVES AND HAS CLAIMED THAT THE JEWELLERY HAS BEEN RECEIVED AS GIF T FROM THEM, HOWEVER, NO DOCUMENTARY EVIDENCE HAS BEEN SUBMITTED BY THE A SSESSEE TO PROVE THE GIFT PAYING CAPACITY OF THESE PERSONS. VI. THE ASSESSEE HAS FAILED TO EXPLAIN THAT THE JEWELLE RY HAS BEEN ACQUIRED OUT OF ACCOUNTED INCOME. 7. LD. CIT(A) GAVE BENEFIT OF CBDT CIRCULAR TO THE E XTENT OF 700 GMS. ONLY. REST OF THE ADDITION WAS SUSTAINED . IT IS UNDISPUTED THAT BEFORE A.O., THE ASSESSEE HAD STATED T HAT [ITA 684/IND/2017] [SMT. NEETA RAI, BHOPAL] 8 THE JEWELLERY RECOVERED FROM HER LOCKER BELONG TO O THER INDIVIDUALS. THE A.O. REJECTED THE CONTENTION ON TH E BASIS THAT NO RETURN WAS BEING FILED. FURTHER, NO DOCUMENT ARY EVIDENCE WAS SUBMITTED IN RESPECT OF GIFTS, ETC. FU RTHER, NO EVIDENCE WAS PRODUCED TO PROVE THAT JEWELLERY IS RELAT ED TO OTHER INDIVIDUALS NAMELY SMT. MANDAKINI ROY AND SMT. MANSI ROY SRIVATSAV. IN OUR VIEW, THE A.O. OUGHT TO H AVE MADE ENQUIRY FROM OTHER PERSONS. HOWEVER, NO SUCH ENQUIRY WAS MADE. LD. CIT(A) ALSO IN A MECHANICAL MANNER WITHOUT CONDUCTING ANY ENQUIRY FROM THE OTHER MEMBERS OF THE FAMILY PROCEEDED TO GIVE BENEFIT TO THE EXTENT O F 700 GMS. ONLY. UNDER THESE FACTS, THE A.O. OUGHT TO HAVE MADE ENQUIRIES FROM THE OTHER PERSONS. IN THE ABSENCE OF SUCH ENQUIRY, IN OUR VIEW, ADDITION SO MADE IS NOT JUSTIFI ED. IT IS ALSO COMMON PRACTICE IN INDIAN HOUSEHOLD THAT LADIES SHARE THEIR LOCKER FOR STORING ORNAMENTS WITH OTHER F AMILY MEMBERS. MOREOVER, IT IS STATED THAT THE JEWELLERY I S [ITA 684/IND/2017] [SMT. NEETA RAI, BHOPAL] 9 RECEIVED IN THE FORM OF GIFT, THEN THE A.O. SHOULD HAVE ATLEAST MADE ENQUIRIES FROM THE PERSONS FROM WHOM SUCH GIFT WAS RECEIVED. THEREFORE, CONSIDERING THE TOTALI TY OF THE FACTS, ADDITION MADE BY THE A.O. IS NOT SUSTAINED. WE DIRECT THE A.O. TO GIVE BENEFIT OF THE CIRCULAR OF C BDT AND DELETE THE ADDITION. GROUNDS RAISED IN THIS APPEAL ARE ALLOWED. 8. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLO WED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 08 . 01.2019. SD/- (MANISH BORAD) SD/- (KUL BHARAT) A CCOUNTANT MEMBER JUDICIALMEMBER INDORE; DATED : 08/01/2019 VG/SPS COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR, INDORE