Smt. Beena Agarwal , Kanpur V. Dy. Commissioner of Income Tax, Kanpur

ITA 75/LKW/2013

• Counselvise Citation: 7523714 RSA 2013
• Duration Of Justice: 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 04-06-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 12-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Search and seizure; Valuation report
• Section: 143(3); 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B : LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER I.T.A. NO. 75 /LKW/ 2013 ASSESSMENT YEAR: 2007 - 08 SMT. BEENA AGARWAL, VS. DY. C.I.T., 59/44, NAYAGANJ, CENTRAL CIRCLE, KANPUR. KANPUR. PAN:AESPA9656A (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAKESH GARG, ADVOCATE RESPONDENT BY : SHRI PRAVEEN KUMAR, CIT, D.R. DATE OF HEARING : 06 /0 6 /201 3 DATE OF PRONOUNCEMENT :07/08/2013 ORDER PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) ON A SOLITARY GROUND THAT CIT(A) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING THE ADDITION OF ` 3,63,35/ - AS UNEXPLAINED INVESTMENT IN JEWELLERY U/S 69B OF THE I.T. ACT. 2. BRIEF FACTS, BORNE OUT FROM THE ASSESSMENT ORDER, ARE AS UNDER: 2 'DURING THE COURSE OF SEARCH AND SEIZURE OPERATION, GOLD JEWELLERY WEIGHING 1585 GMS. WAS FOUND FROM THE POSSESSION OF THE ASSESSEE. I N HER STATEMENT RECORDED DURING THE COURSE OF SEARCH IT WAS STATED BY THE ASSESSEE T H AT THE IMPUGNED JEWELLERY BELONGED TO HER TWO DAUGHTERS AND ELDER SISTER - IN - LAW, HOWEVER, NEITHER THE JEWELLERY BELONGING TO OTHER PERSONS WERE IDENTIFIED NOR THE SOURCE OF INVESTMENT IN JEWELLERY WAS EXPLAI NED DURING THE COURSE OF SEARCH. DURING THE EARLIER 263 PROCEEDINGS CULMINATING IN ORDER PASSED ON 27.01.2010, THE ASSESSEE DID NOT FURNISH THE DETAILS OF SOURCE OF INVESTMENT IN THE SAID JEWELLERY. HOWEVER, BEFORE THE HON'BLE ITAT AND L D. CIT(C) DURING TH E COURSE OF LATER PROCEEDINGS UNDER SECTION 263, THE ASSESSEE EXPLAINED THAT JEWELLERY FOUND DURING THE COURSE OF SEARCH FROM THE ASSESSEE'S POSSESS I ON WAS PART OF THE JEWELLERY WHICH WAS DISCLOSED BY THE ASSESSEE UNDER THE VOLUNTARY DISCLOSURE OF INCOME SCHEME, 1997. THE VALUATION CERTIFICATE OF O NE APPROVED VALUER AS WELL AS CERTIFICATE ISSUED UNDER SECTION 68(2) OF VDIS, 1997 DATED 29.10.1997 WAS PR ODUCED BY THE ASSESSEE AND COPIES SUPPLIED FOR RECORD. AS PER THE CERTIFICATE, THE QUANTUM OF JEWELLERY DISCLOSED WAS 8457.100 GMS. IN THIS REGARD THE ASSESSEE ALSO EXPLAINED THAT - OUT OF THE JEWELLERY DISCLOSED BY THE PETITIONER UNDER THE VD IS, 1997, PA RT OF THE JEWELLERY WEIGHING 7129.500 GMS WAS SOLD BY HER ON 16.10.1997 FOR A SUM OF RS.28,51,800/ - . THE SALE PROCEED WAS RECEIVED BY MEANS OF ACCOUNT PAYEE CHEQUE AND WAS DEPOSITED IN THE BANK AT KANPUR. PART OF THE JEWELLERY BEING DIAMOND WAS ALSO SOLD O N 03.11.1997. THE PROCEED OF THE SAME AMOUNTING TO RS.10,65,750/ - WAS ALSO RECEIVED BY CHEQUE AND DEPOSITED IN BANK. THE BALANCE JEWELLERY L EFT WITH THE PETITIONER WAS 1226. 100 GMS. THE ASSESSEE FURTHER EXPLAINED THAT 1585 GMS. OF JEWELLERY FOUND, INCLUDED JEWELLERY OF HER BHABHI SMT. LAXMI AGARWAL. HOWEVER, TH E ASSESSEE WAS NEITHER ABLE TO IDENTIFY THE ITEMS OF JEWELLERY BELONGING TO SMT. LAXMI AGARWAL NOR SHE WAS ABLE TO PROVE WITH INDEPENDENT EVIDENCE AS TO HOW T HI S 3 JEWELLERY BELONGED TO SMT. LAX MI AGARWAL WHEN THE JEWELLERY BELONGING TO SMT LAXMI AGARWAL WAS ALSO FOUND FROM HER ROOM AT THE TIME OF SEARCH. THE ASSESSEE'S EXPLANATION WAS CONSIDERED. THE EXPLANATION OF THE ASSESSEE THAT THE JEWELLERY WAS DISCLOSED UNDER VDIS, 1997, WEIGHING 8457.10 0 GMS IS NOT DENIABLE. THEREFORE, THIS PART OF HER EXPLANATION IS ACCEPTED. EVEN ACCEPTING THE ASSESSEE'S STATEMENT THAT THE JEWELLERY WEIGHING 1226.100 GMS . WAS AVAILABLE AS EXPLAINED JEWELLERY FORMING PART OF JEWELLERY DISCLOSED UNDER VDIS, 1997, 358.900 GMS OF JEWELLERY REMAINS UNEXPLAINED. THE EXPLANATION THAT SOME OF THIS UNEXPLAINED JEWELLERY BELONGED TO SMT. LAXMI AGARWAL IS NOT BELIEVABLE AS DURING THE COURSE OF SEARCH, JEWELLERY BELONGING TO BOTH THE LADIES WERE FOUND FROM THEIR ROOMS SEPARATELY AND THERE MAY NOT BE ANY POSSIBILITY OF ANY OTHER PERSONS JEWELLERY BEING KEPT WITH THE JEWELLERY OF THE ASSESSEE. THUS IT IS FOUND THAT JEWELLERY WEIGHING 358 .990 GMS . WAS FOUND IN EXCESS OF JEWELLERY AVAILABLE WITH THE ASSESSEE, AFTER CONSIDERING THE JEWELLERY DISCLOSED UNDER VDIS, 1997, THE SOURCE OF WHICH IS STILL UNEXPLAINED. ADOPTING PRO RATA VALUE OF THIS UNEXPLAINED JEWELLERY OF 358.99 GMS, VALUE OF UNEX PLAINED INVESTMENT UNDER SECTION 69 B OF I.T. ACT WORKS OUT TO RS.3,63,335/ - . ACCORDINGLY , AN ADDITION OF RS.3,63,335/ - IS MADE TO THE ASSESSEE'S INCOME AS UNEXPLAINED INVESTMENT MADE IN ACQUISITION OF JEWELLERY UNDER SECTION 69B OF THE I .T. ACT, 1961. 3. AGAINST THE AFORESAID ADDITION , THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WITH THE SUBMISSIONS THAT IN RESPONSE TO NOTICE ISSUE D TO THE ASSESSEE CONSEQUENT TO THE SEARCH OPERATION, THE RETURN OF INCOME SHOWING INCOME OF ` 2,14,185/ - WAS FILED AND THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT ACCEPTING THE RETURNED INCOME AND THE SOURCE OF INVESTMENT IN JEWELLERY (WEIGHING 1585 GMS.) FOUND IN POSSESSION OF THE ASSESSEE WHICH INCLUDED THE JEWELLERY OF HER BHABHI SMT. LAX MI AGARWAL AS ALREADY EXPLAINED AT THE TIME OF ASSESSMENT FOR 4 ` 5,14,460/ - . THE CIT PASSED ORDER U/S 263 OF THE ACT HOLDING THAT THE ASSESSEE HAS NO GENUINE SOURCE OF ACQUISITION OF JEWELLERY AND ACCORDINGLY THE ASSESSING OFFICER WAS DIRECTED TO TREAT ONLY 200 GMS. OF JEWELLERY AS STRIDHAN AND BALANCE JEWELLERY BE ADDED AS UNEXPLAINED INVESTMENT U/S 69 OF THE ACT. AN APPEAL WAS FILED BEFORE THE TRIBUNAL AND CERTAIN DOCUMENTS WERE FURNISHED BY THE ASSESSEE. THE TRIBUNAL ADMITTED THESE DOCUMENTS AND REMANDE D THE BATTER BACK TO THE FILE OF CIT FOR ADJUDICATION OF THE ISSUE AFRESH. BEFORE THE CIT, IT WAS EXPLAINED THAT THE EXCESS JEWELLERY OVER AND ABOVE THE JEWELLERY DECLARED IN VDIS BELONGS TO HER BHABHI SMT. LAXMI AGARWAL. THESE FACTS WERE ALSO EXPLAINED DURING THE COURSE OF ASSESSMENT OF SHRI VIJAY PRAKASH AGARWAL , HUSBAND OF THE ASSESSEE, AT THE TIME OF HIS ASSESSMENT AND DURING THE COURSE OF ASSESSMENT PROCEEDINGS SHRI VIJAY PRAKASH AGARWAL HAS FILED AN AFFIDAVIT TO THIS EFFECT. IT WAS ALSO CONTENDED B EFORE THE CIT THAT SMT. LAXMI AGARWAL HAS ALSO FILED AN AFFIDAVIT DURING THE COURSE OF HEARING AND THESE FACTS WERE ALSO BROUGHT TO THE NOTICE BEFORE THE SEARCH PARTY IN THE STATEMENT RECORDED AT THE TIME OF SEARCH. THE LEARNED COUNSEL FOR THE ASSESSEE FU RTHER CONTENDED THAT IN THE LIGHT OF THESE FACTS IT CANNOT BE SAID THAT THE JEWELLERY OF SMT. LAXMI AGARWAL, BHABHI OF THE ASSESSEE, WAS NOT INCLUDED IN THE JEWELLERY OF THE ASSESSEE I.E. IN 1585 GMS. JEWELLERY FOUND. IT WAS ALSO CONTENDED THAT SINCE SMT. LAXMI AGARWAL WAS HAVING JEWELLERY OF 1058.600 GMS. BEING THE BALANCE JEWELLERY LEFT WITH HER AS PER VALUATION REPORT DATED 18/05/1998 FROM WHICH 478.700 GAMS. OF JEWELLERY WAS FOUND FROM HER POSSESSION AND 385 .000 GMS. OF JEWELLERY WAS KEPT WITH SMT. BEE NA AGARWAL AS PER ASSESSEE AND STATEMENT OF SMT. LAXMI AGARWAL HERSELF, TOTAL JEWELLERY BEING 863.700 GMS., WHICH IS WITHIN THE LIMIT . BEING NOT 5 CONVINCED WITH THE EXPLANATION OF THE ASSESSEE, THE CIT(A) HAS CONFIRMED THE ADDITION. 4. NOW THE ASSESSEE HA S PREFERRED AN APPEAL BEFORE THE TRIBUNAL WITH THE SUBMISSION THAT THE ASSESSEE HAS DECLARED THE JEWELLERY IN THE VDIS AND DURING THE COURSE OF SEARCH CERTAIN JEWELLERY WAS FOUND FROM THE ASSESSEE WHICH WAS DULY EXPLAINED TO THE REVENUE AUTHORITIES. THE J EWELLERY FOUND INCLUDES 385 GMS. JEWELLERY OF SMT. LAXMI AGARWAL. SMT. LAXMI AGARWAL HAS ALSO FILED AN AFFIDAVIT TO THIS EFFECT BUT IT WAS NOT ACCEPTED BY THE REVENUE AUTHORITIES. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER CONTENDED THAT EXCESS JEWELLE RY FOUND FROM THE ASSESSEE DURING THE COURSE OF SEARCH BELONGS TO SMT. BEENA AGARWAL AND CANNOT BE ADDED IN THE HANDS OF THE ASSESSEE. THE REVENUE AUTHORITIES COULD HAVE EXAMINED THE THIRD PERSON ABOUT THE SOURCE OF THE JEWELLERY, WHICH HAS NOT BEEN DONE. 5. THE LEARNED CIT, D.R., ON THE OTHER HAND, HAS PLACED HEAVY RELIANCE ON THE ORDER OF THE CIT(A). 6. HAVING GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW, WE FIND THAT THE ASSESSEE HAS FURNISHED THE EXPLANATION ABOUT THE JEWELLERY FOUND DURING THE C OURSE OF SEARCH. THE ASSESSEE HAS MADE A CATEGORICAL STATEMENT THAT THE JEWELLERY OF 385 GMS. WHICH IS THE PART OF THE JEWELLERY FOUND FROM THE ASSESSEE DURING THE COURSE OF SEARCH IN FACT BELONGS TO SMT. LAXMI AGARWAL, BHABHI OF THE ASSESSEE. AN AFFIDAV IT TO THIS EFFECT WAS ALSO FILED BY SMT. LAXM AGARWAL. SINCE EXCESS JEWELLERY FOUND FROM THE ASSESSEE WAS OWNED BY SMT. LAXMI AGARWAL IT CAN ONLY BE EXAMINED 6 IN THE HANDS OF SMT. LAXMI AGARWAL AND NOT IN THE HANDS OF THE ASSESSEE. WE, THEREFORE, DO NOT F IND ANY MERIT IN THIS ADDITION MADE IN THE HANDS OF THE ASSESSEE. ACCORDINGLY, WE SET ASIDE THE ORDER OF CIT(A) AND DELETE THE ADDITION. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 07/08/2013 ) SD/. SD/. ( PRAMOD KUMAR) ( SUNIL KUMAR YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 07/08/2013 *SINGH COPY FORWARDED TO THE: 1. APPELLANT. 2. RESPONDENT. 3. CIT (A) 4. CIT 5. DR. ASSISTANT REGISTRAR