DCIT, Faridabad V. Mrs. Shobha Sardana, New Delhi

ITA 82/DEL/2013

• Counselvise Citation: 8220114 RSA 2013
• Duration Of Justice: 1 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 19-02-2014
• Assessment Year: 2010-2011
• Appeal Filed On: 04-01-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAMESH CHANDRA
• Assessee Lawyers: ASHWANI TANEJA; DR RAKESH GUPTA
• Keywords: Valuation report
• Section: 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: G NEW DELHI BEFORE SHRI R. S. SYAL, ACCOUNTANT MEMBER AND SHRI A. D. JAIN, JUDICIAL MEMBER ITA NO. 6398/DEL/2012 (ASSESSMENT YEAR-2010-11) MRS. SHOBHA SARDANA, H. NO. D-99, PANCHSHEEL, ENCLAVE, NEW DELHI VS ACIT, CENTRAL CIRCLE-1 FARIDABAD (APPELLANT) (RESPONDENT) ITA NO. 82/DEL/2013 (ASSESSMENT YEAR-2010-11) DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-I, FARIDABAD VS MRS. SHOBHA SARDANA, H. NO. D-99, PANCHSHEEL, ENCLAVE, NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. ABAPS9735M ASSESSEE BY: DR. RAKESH GUPTA & SHRI ASHWANI TANEJA REVENUE BY: SHRI RAMESH CHANDRA DATE OF HEARING 19.2.2014 DATE OF PRONOUNCEMENT 20.2.2014 ORDER PER R. S. SYAL, AM: THESE TWO CROSS APPEALS ONE BY THE ASSESSEE AND T HE OTHER BY THE REVENUE ARISE OUT OF THE ORDER PASSED BY THE CIT(A) ON 19.10.2012 IN RELATION TO THE ASSESSMENT YEAR 2010- 11. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT A SEARCH ACTION WAS TAKEN UPON THE ASSESSEE AND HER FAMILY MEMBERS ON 2.9.2009. DURING THE COURSE OF SEARCH PROCEEDINGS, CERTAIN JE WELLERY WAS ITA NO. 6398/DEL/2012 & 82/DEL/2013 SHOBHA SARDANA 2 FOUND IN POSSESSION OF THE ASSESSEE AND HER FAMILY MEMBERS AND ALSO IN LOCKERS, DETAILED AS UNDER:- S. NO. NAME OF THE PLACE/PERSON VALUE OF JEWELLERY AS PER VALUATION REPORTS 1. SMT. SHOBHA SARDANA AND SMT. VISHAN DEVI SARDANA RS. 37,15,400/- 2. LOCKER NO. L-38 WITH P.N.B, SHEIKH SARAI, NEW DELHI IN THE NAME OF SMT. SHOBHA SARDANA AND SMT. PREETI SARDANA. RS. 5,17,280/- 3. SMT. PREETI SARDANA RS. 21,60,660/- 4. LOCKER NO. AB00038 WITH P.N.B, CHIRAG DELHI, (SHEIKH SARAI), NEW DELHI IN THE NAME OF SMT. SHOBHA SARDANA. RS. 53,07,206/- TOTAL JEWELLERY FOUND RS. 1,17,00,546/- 3. STATEMENT OF THE ASSESSEE WAS RECORDED DURING TH E COURSE SEARCH PROCEEDINGS ITSELF. ON QUERIES ABOUT THE EXP LANATION OF JEWELLERY, REPRODUCED ON PAGES 2 AND 3 OF THE ASSES SMENT ORDER, THE ASSESSEE REPLIED IN RESPONSE TO QUESTION NO. 7 THAT THE ENTIRE JEWELLERY BELONGED TO HER AND FAMILY MEMBERS. THE S AME THING WAS ANSWERED IN RESPONSE TO QUESTION NO. 9. THEREAF TER, THE ASSESSEE AND HER FAMILY MEMBERS SURRENDERED CERTAIN ADDITIONAL INCOME ON ACCOUNT OF JEWELLERY FOUND AND SEIZED FRO M LOCKERS FOR THE ASSESSMENT YEAR 2010-11 AS UNDER: - (I) SH. SHYAM BIHARI SARDANA: RS. 43,00,000/- . (II) SMT. SHOBHA SARDANA: RS. 5,00,000/-. (III) SMT. PREETI SARDANA: RS. 5,00,000/-. (IV) SH. MANAV SARDANA: RS. 30,00,000/-. ITA NO. 6398/DEL/2012 & 82/DEL/2013 SHOBHA SARDANA 3 4. CONSIDERING THE FACT THAT ONLY A SUM OF RS. 83 L ACS WAS SURRENDERED IN THE HANDS OF FOUR FAMILY MEMBERS INC LUDING THE ASSESSEE AS AGAINST THE TOTAL JEWELLERY FOUND AT RS . 1.17 CRORE, THE ASSESSING OFFICER MADE ADDITION FOR THE REMAINING A MOUNT OF RS. 34,00,546/- IN THE HANDS OF THE ASSESSEE. THE LD. C IT(A) PARTLY ACCEPTED THE ASSESSEES CONTENTION AND HELD THAT TH E ASSESSEE DESERVED FURTHER REBATE FROM ADDITION TO THE TUNE O F 1000 GMS OF JEWELLERY. THE REMAINING AMOUNT OF ADDITION WAS SUS TAINED. BOTH THE SIDES IN ARE APPEAL AGAINST THEIR RESPECTIVE ST ANDS. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS AMPLY BORNE OUT FROM RECO RD THAT THE ASSESSEE WAS SUBJECTED TO SEARCH ALONG WITH HER FAM ILY MEMBERS. IT IS FURTHER CLEAR THAT THE ENTIRE JEWELLERY FOUND DU RING THE COURSE OF SEARCH WAS CONSIDERED FOR TAXATION IN THE HANDS OF THE ASSESSEE. ADDITION WAS MADE BY CONSIDERING TOTAL VALUE OF JEW ELLERY BELONGING TO THE ASSESSEE AND HER FAMILY MEMBERS AS REDUCED BY THE AMOUNTS SURRENDERED BY THE ABOVE REFERRED FOUR ASSESSEES TOTALING RS. 83 LACS. TWO THINGS ARE CLEAR FROM THE ABOVE NARRATION OF FACTS. FIRST, THAT THE ENTIRE ADDITION ON ACCOU NT OF UNEXPLAINED JEWELLERY HAS BEEN MADE IN THE HANDS OF THE ASSESSE E; AND SECOND, IT HAS BEEN IMPLIEDLY ADMITTED BY ACCEPTING THE SUR RENDER IN THE HANDS OF FOUR FAMILY MEMBERS THAT SAID JEWELLERY BE LONGED TO ALL THE FAMILY MEMBERS. THE LD. AR HAS RELIED ON INSTRU CTION NO. 1916 ITA NO. 6398/DEL/2012 & 82/DEL/2013 SHOBHA SARDANA 4 DATED 11.5.1994 ISSUED BY THE CBDT MENTIONING THAT GOLD JEWELLERY TO THE EXTENT OF 500 GMS PER MARRIED LADY , 250 GMS PER UNMARRIED LADY; AND 100 GMS PER MALE MEMBER NEED NO T BE SEIZED. HE ARGUED THAT THIS INSTRUCTION IS ALSO APPLICABLE IN SO FAR AS THE QUESTION OF ACCEPTING THE GENUINENESS OF ASSESSEES CLAIM FOR MAKING ADDITION IS CONCERNED. WE FIND THAT THE LD. CIT(A) ADMITTED THE APPLICABILITY OF SUCH INSTRUCTION ONLY IN RESPECT OF MAKING SEIZURE OF GOLD JEWELLERY AND NOT EXTENDING TO SECTIONS 69, 69A AND 69B. IN OUR CONSIDERED OPINION, THE VIEW C ANVASSED BY THE LD. CIT(A) IN THIS REGARD IS NOT SUSTAINABLE IN THE LIGHT OF THE DIRECT JUDGMENT OF THE HONBLE RAJASTHAN HIGH COURT IN CIT VS KAILASH CHAND SHARMA (2005) 146 TAXMAN 367 (RAJ.) I N WHICH THEIR LORDSHIPS HAVE APPROVED THE VIEW TAKEN BY THE TRIBUNAL IN DELETING THE ADDITION BY RELYING ON CBDT INSTRUCTIO N NO. 1916 DATED 11.5.1994. HERE IT IS RELEVANT TO MENTION TH AT THE CHANDIGARH BENCH OF THE TRIBUNAL IN THE CASE OF SMT. NEENA SYA L VS ACIT (1999) 70 ITD 62 (CHANDIGARH) ALSO APPLIED THIS INS TRUCTION IN DELETING THE ADDITION MADE BY THE AUTHORITIES U/S 6 9A OF THE ACT. NO CONTRARY AUTHORITY HAS BEEN BROUGHT TO OUR NOTIC E BY THE LD. DR. WE, THEREFORE, HOLD IN PRINCIPLE THAT INSTRUCTION N O. 1916 DATED 11.5.1994 APPLIES WITH FULL VIGOR IN RESPECT OF ADD ITIONS TO BE MADE U/S 69, 69A AND 69B. IN OTHER WORDS, NO ADDITION C AN BE MADE TO THE EXTENT OF THE PERMISSIBLE JEWELLERY AS PER THE ABOVE INSTRUCTION. ITA NO. 6398/DEL/2012 & 82/DEL/2013 SHOBHA SARDANA 5 6. THE LD. AR HAS MADE A CLAIM BY RELYING ON A CHAR T, A COPY OF WHICH IS PLACED ON PAGE 25 OF THE PAPER BOOK, TO TH E EFFECT THAT THERE WERE SIX FAMILY MEMBERS OTHER THAN THE ASSESS EE DULY COVERED UNDER THE INSTRUCTION. THROUGH THE SAME CHA RT, THE LD. AR HAS REQUESTED FOR A RELIEF BY CONSIDERING VALUE OF RS. 1522 PER GRAM OF GOLD JEWELLERY ON THE DATE OF SEARCH. THIS CHART ON PAGE 25 OF THE PAPER BOOK CANNOT BE ACCEPTED ON ITS FACE WI THOUT VERIFICATION. THE FIRST REASON FOR OUR SUCH CONCLUS ION IS THAT IT IS NOT EMANATING FROM THE ORDERS OF THE AUTHORITIES BELOW THAT THE ASSESSEE HAD SEVEN FAMILY MEMBERS IN TOTAL AT THE T IME OF SEARCH. THE SECOND REASON IS THAT THIS CHART WAS ADMITTEDLY NOT BEFORE THE AO. THE THIRD REASON IS THAT THERE APPEARS TO BE SO ME DIFFERENCE IN THE VALUE OF JEWELLERY. CONTRARY TO THE ASSESSEES CLAIM OF THE RATE OF RS.1522 PER GRAM, IT IS FOUND THAT THE LD. CIT( A) ALLOWED RELIEF OF 1000 GMS AND THE REVENUE IS IN APPEAL BY CONSIDE RING THE DELETION OF ADDITION OF RS. 14,40,000/-, THAT IS, B Y CONSIDERING THE RATE OF RS. 1440 PER GRAM. AS THE NECESSARY FACTS O N THESE ASPECTS REQUIRE PROPER VERIFICATION, WE SET ASIDE THE IMPU GNED ORDER AND REMIT THE MATTER TO THE FILE OF THE A.O FOR RECALCU LATING THE AMOUNT OF ADDITION, IF ANY, BY TREATING THE AMOUNT OF JEW ELLERY EXPLAINED IN LINE WITH THE LIMITS SET OUT IN INSTRUCTION NO. 1916 DATED 11.5.1994. NEEDLESS TO SAY, THE ASSESSEE WILL BE A LLOWED A REASONABLE OPPORTUNITY OF HEARING IN SUCH FRESH PRO CEEDINGS. ITA NO. 6398/DEL/2012 & 82/DEL/2013 SHOBHA SARDANA 6 7. IN THE RESULT, BOTH THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 20/02/2014. SD/- SD/- (A. D. JAIN) (R. S. SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 20/02/2014 *SUBODH* COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(APPEALS) 5.DR: ITAT ASSISTANT REGISTRAR DATE INITIAL 1. DRAFT DICTATED ON 19.02.2014 PS 2. DRAFT PLACED BEFORE AUTHOR 19.02.2014 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS PS/PS 6. KEPT FOR PRONOUNCEMENT ON 20.02.2014 PS 7. FILE SENT TO THE BENCH CLERK 20.02.2014 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER. *