IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: G NEW DELHI BEFORE SHRI R.K.GUPTA, JUDICIAL MEMBER AND SHRI S.V.MEHROTRA, ACCOUNTANT MEMBER I.T.A .NO.-92/DEL/2010 ASSESSMENT YEAR-2006-07 SADHNA RANI, VS. ACIT, P/O-BRIJWASI JEWELLERS, CENT. CIRCLE-12, 1170, KUCHA MAHAJANI, NEW DELHI. CHANDNI CHOWK, DELHI-48 PAN-ABHPA9255J (APPELLANT) (RESPONDENT) I.T.A .NO.-82/DEL/2010 ASSESSMENT YEAR-2006-07 ACIT, VS. SADHNA RANI, CENT. CIRCLE-12, P/O-BRIJWASI JEWELLERS, R.NO-330, ARA CENTRE, 1170, KUCHA MAHAJANI, JHANDEWALAN EXTN.,NEW DELHI. CHANDNI CHOWK, DELH I-48 (APPELLANT) (RESPONDENT) APPELLANT BY: SH. S.P.AGARWAL, FCA RESPONDENT BY: SH. RAMESH CHANDER, CIT DR DATE OF HEARING:-04.10.2012 DATE OF PRONOUNCEMENT:- 11.10.2012 ORDER PER R.K.GUPTA, JM THESE ARE TWO APPEALS FILED BY THE ASSESSEE AND TH E DEPARTMENT AGAINST THE ORDER OF LD. CIT(A)-I, NEW DELHI DATED 30.10.2009 RELATING ASSESSMENT YEAR 2006-07. 2. COMMON ISSUES ARE INVOLVED IN APPEAL OF DEPARTME NT AS WELL AS IN APPEAL OF ASSESSEE. THE ASSESSEE IS OBJECTING SUSTAIN OF ADD ITION OF RS. 8,95,058/- WHICH IS I.T.A .NO.-92 & 82/DEL/2010 2 SUSTAINED BY CIT(A) OUT OF TOTAL ADDITION OF RS. 13 ,70,058/- AND DEPARTMENT IS OBJECTING OF REDUCING THE ADDITION BY RS.4,25,000/ - OUT OF TOTAL ADDITION MADE BY ASSESSING OFFICER I.E RS. 13,70,058/-. 3. THE DEPARTMENT IS ALSO OBJECTING OF DELETING THE ADDITION OF RS. 12,36,164/- AND 30,21,912/- BY GROUND NOS. 2 & 3. SINCE COMMON ISSUES ARE INVOLVED IN BOTH THE APPEALS, THEREFORE, THEY ARE DISPOSED OFF TOGET HER. 4. THE FACTS OF THE CASE ARE THAT A SEARCH & SEIZUR E OPERATION WAS CONDUCTED AT THE RESIDENCE OF ASSESSEE ON 09.12.2005. IN SEARCH , JEWELLERY BELONGING TO ASSESSEE AND OTHER FAMILY MEMBER WAS FOUND. THE JEWELLERY WAS INVENTORISED AND VALUED BY A REGISTERED VALUER AS PER PAGE NO-1-7 ON ANNEXU RE TO THE PANCHNAMA. THE PARTICULARS OF FAMILY MEMBER TO WHOM JEWELLERY BELO NGING WAS ALSO NOTED BY THE SEARCH PARTY. ON THE DATE OF SEARCH, PART OF THE J EWELLERY AS PER PAGE NO-4-7 OF VALUATION REPORT WAS RELEASED. THE REMAINING JEWEL LERY AFTER INVENTORISATION AND VALUATION WAS KEPT IN A LOCKER IN THE STEEL ALMIRAH ON THE FIRST FLOOR OF THE HOUSE AND A RESTRAINED ORDER WAS IMPOSED U/S 132(3) OF TH E ACT. IT IS EVIDENT IN THE PARA 8 OF THE PANCHNAMA DATED 09.12.2005. THE RESTRAINE D JEWELLERY WAS RELEASED ON 18.05.2006 BY REVOKING THE RESTRAINED ORDER AND IT IS ALSO MENTIONED IN THE PANCHNAMA PREPARED ON 18.05.2006. THE JEWELLERY RE LEASED ON 18.05.2006 INCLUDED THE JEWELLERY BELONGING TO SMT. SAVITA BAN SAL ALSO. (A) SMT. SAVITA BANSAL IS ASSESSED SEPARATELY VIDE PAN NO. AEPJB6993J. IN HER CASE, JEWELLERY FOUND, WAS ACCEPTED AS STRI DHAN AND NO I.T.A .NO.-92 & 82/DEL/2010 3 ADDITION WAS MADE BY THE ASSESSING OFFICER AS HE IS THE ASSESSING OFFICER ALSO. (B) AFFIDAVIT FILED ON BEHALF OF ASSESSEE DURING HER AS SESSMENT PROCEEDINGS WAS ACCEPTED AND THE ASSESSMENT WAS COM PLETED WITHOUT MAKING ANY ADDITION OF JEWELLERY FOUND DURING THE C OURSE OF SEARCH. (C) DURING ASSESSMENT PROCEEDINGS, IT WAS SUBMITTED BEF ORE ASSESSING OFFICER THAT SMT. SADHNA RANI WAS MARRIED IN THE YE AR 1981 AND THE JEWELLERY FOUND WITH HER WAS GIFTED TO HE HER AT TH E TIME OF MARRIAGE BY HER PARENTS, RELATIVES AND IN LAWS. SHE HAD TWO UNMARRIED DAUGHTERS AND ONE SON. TOTAL JEWELLERY BELONGING W AS VALUED AT RS. 17,95,058/- ON THE DATE OF SEARCH AT MARKET PRICE. IT WAS SUBMITTED THAT JEWELLERY WAS HER STRI DHAN RECEIVED AS GIFT A T THE TIME OF MARRIAGE AND NOT ACQUIRED OUT OF INCOME. (D) IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER ADDE D RS.43,91,970/- ON ACCOUNT OF UNEXPLAINED JEWELLERY TO HER INCOME. THE DETAIL OF ADDITION IS AS UNDER :- JEWELLERY OF SMT. SAVITA BANSAL RS.12,36,164/- JEWELLERY OF SMT. SADHNA RANI RS.17,95,058/- ------------------ TOTAL RS. 30,31,222/- ------------------ JEWELLERY OF SMT. SADHNA RANI RS.17,95,058/- LESS: ALLOWANCE OF 500 GRAMS VALUED AT RS.4,25,000 /- ------------------ BALANCE RS. 13,70,058 ------------------ I.T.A .NO.-92 & 82/DEL/2010 4 THE FIGURE COMES TO RS. 44,01,280/- BUT A.O. HAS AD DED RS. 43,91,970/- THE APPELLANT ARGUED THAT THE ABOVE ADDITION IS APP ARENTLY WRONG. THE ADDITION OF RS.30,21,912/- AS PER ASSESSMENT OR DER, IS WRONG, UNFOUNDED AND MULTIPLE. THE ASSESSING OFFICER HAS ADDED AMOUNT OF JEWELLERY RS.17,95,058/- OF SMT. RADHA RANI TWICE A ND HAS ADDED VALUE OF JEWELLERY OF SMT. SAVITA BANSAL WAS SEPARATELY I DENTIFIED AT THE TIME OF SEARCH. A SEPARATE VALUATION REPORT FOR RS. 12, 36,164/- WAS MADE. IT MAY PLEASE BE NOTED THAT SMT. SAVITA BANSAL RECEIVE D HER BANGLES BACK AT THE TIME OF SEARCH, WHICH IS EVIDENCED FROM THE VALUATION REPORT. IN VIEW OF THE ABOVE IT IS PRAYED THAT THE ADDITION MA DE IN DUPLICATE AND IN RESPECT OF JEWELLERY NOT BELONGING TO HER MAY BE OR DERED TO BE DELETED. IT IS ALSO SUBMITTED THAT THE JEWELLERY BELONGING T O THE ASSESSEE HAS BEEN EXPLAINED DURING ASSESSMENT PROCEEDINGS AND IN SUBM ISSIONS MADE AT THE TIME OF APPELLATE PROCEEDINGS. THEREFORE, IT I S PRAYED THAT THE ADDITION MADE ON ACCOUNT OF UNEXPLAINED JEWELLERY R EQUIRES TO BE DELETED IN TOTO. (VII) IT WAS EXPLAINED IN ASSESSEES SUBMISSIONS T HAT THE JEWELLERY RELEASED TO SMT. SADHNA RANI, VALUING RS. 30,21,912 /-, ON 18.05.2006 WAS THE SAME JEWELLARY WHICH WAS FOUND AT THE TIME OF SEARCH ON 09.12.2005 FROM THE PREMISES OF AT B-26, SWASTHYA V IHAR, DELHI- 110092 FROM GROUND FLOOR AND FIRST FLOOR. THE DETA ILED CHART ABOUT OWNERSHIP OF JEWELLERY AND COPY OF PANCHNAMAS WERE FILED. IN THE SUBMISSIONS, IT WAS EXPLAINED THAT THE JEWELLERY RE LEASED ON 18.05.2006 WAS INCLUDING JEWELLERY BELONGING TO SMT. SAVITA BA NSAL. IN THE SEARCH ON 09.12.2005 JEWELLERY AMOUNTING TO RS.12,36,164/- WAS FOUND FROM SMT. SAVITA BANSAL ON GROUND FLOOR AND THE SAME WAS ASSESSED IN HER HAND. I.T.A .NO.-92 & 82/DEL/2010 5 (VIII) LD. A.O. HAS ALREADY ENQUIRED ABOUT THE SOUR CE OF THE SAID JEWELLERY FROM SMT. SAVITA BANSAL IN HER ASSESSMENT PROCEEDINGS VIDE LETTER DT. 14.12.2007. IN REPLY TO WHICH A LETTER DT. 20.12.2007, WAS FILLED BY SMT. SAVITA BANSAL, EXPLAINING THE SOURCE OF ACQUISITION OF SAID JEWELLERY. SATISFIED BY THE REPLY, THE LD. A. O. DID NOT MAKE ANY ADDITION IN THE HANDS OF SMT. SAVITA BANSAL IN CONN ECTION WITH THE SAID JEWELLERY. COPY OF QUERY LETTER DT. 14.12.2007 AND REPLY DT. 20.12.2007 WAS ENCLOSED. ACCORDINGLY, THE JEWELLERY BELONGING TO SMT. SAVITA BANSAL WAS CONSIDERED EXPLAINED AND ACCEPTED BY THE LD. A.O. NOW THE SAME JEWELLERY HAD BEEN ONCE AGAIN ADDED IN THE HANDS OF SMT. SADHNA RANI, WHICH IS UNJUSTIFIED AND REQUIRES TO B E DELETED. (IX) TOTAL AMOUNT OF JEWELLERY FOUND FROM SMT. SADH NA RANI AT THE TIME OF SEARCH FROM 1 ST FLOOR WAS WEIGHING 1164.010 GRAMS AND VALUED AT RS. 17,95,058/- BY THE DEPARTMENT VALUER. LD. A SSESSING OFFICER HAS ADDED RS. 13,70,058/- TO THE INCOME OF THE ASSESSEE AS UNEXPLAINED JEWELLERY, AFTER ALLOWING ALLOWANCE OF RS. 4,25,000 /- FOR 500 GRAMS ONLY. THE ALLOWANCE HAS BEEN MADE ARBITRARILY AND ON ESTIMATE BASIS. IT IS SUBMITTED THAT ADDITION OF JEWELLERY BEING ST RI DHAN OF A HINDU MARRIED WOMEN, CANNOT BE MADE AS UNEXPLAINED INCOME WITHOUT GOING INTO THE COMPLETE FACTS, SUCH AS COMPOSITION OF FAM ILY, YEAR OF MARRIAGE AND OTHER FACTORS. (X) IT WAS SUBMITTED THAT THE JEWELLERY FOUND FROM SMT. SADHNA RANI AND VALUED AT RS. 17,95,058/- ALSO INCLUDING JEWELL ERY BELONGING TO HER UNMARRIED DAUGHTERS AT THE TIME OF SEARCH. IT IS A LSO SUBMITTED THAT SMT. SADHNA RANI GOT MARRIED IN YEAR 1981, WHEN THE RATE OF 24 CARAT GOLD WAS ABOVE RS. 1,670/- PER 10 GRAMS ONLY. AN AFFIDA VIT OF THE APPELLANT IS ENCLOSED, WHERE SHE HAS CLAIMED THAT THE TOTAL J EWELLERY VALUING RS. 17,95,058/-, WHICH INCLUDES JEWELLERY BELONGING TO HER TWO UNMARRIED DAUGHTERS. SHE HAS AFFIRMED IN HER AFFIDAVIT THAT THE JEWELLERY HAS BEEN I.T.A .NO.-92 & 82/DEL/2010 6 RECEIVED BY HER AT THE TIME OF MARRIAGE IN 1981 AND LATER ON THE OCCASIONS OF BIRTH OF HER DAUGHTERS FROM PARENTS, P ARENT-IN-LAWS AND RELATIVES FROM TIME TO TIME. THE WHOLE OF JEWELLER Y HAS BEEN CLAIMED AS HER STRI DHAN RECEIVED AS GIFTS. THEREFORE, ARE NOT ACQUIRED OUT OF UNDISCLOSED INCOME OR OTHER SOURCES. (XI) LD. ASSESSING OFFICER HAS CONSIDERED THE JEWEL LERY RELASED TO SMT. SADHNA RANI ON DT. 18.05.2006 AMOUNTING TO RS. 30,21,912/- SEPARATE FROM THE JEWELLERY FOUND AT THE TIME OF SE ARCH ON 09.12.2005 VALUED AT RS.17,95,058/-. THIS IS FACTUALLY WRONG SINCE THERE IS NO SEPARATE VALUATION REPORT AND PANCHNAMA FOR THE JEW ELLERY VALUING RS. 30,21,912/- PURPORTED TO BE BELONGING TO SMT. SADHN A RANI. THE FACT THAT IT IS THE SAME JEWELLERY IS EVIDENT FROM THE C OLUMN 8 OF PANCHNAMA DT. 10.12.2005, PREPARED AT THE TIME OF SEARCH, WHI CH MENTIONS THE SEARCH COMMENCED ON 09.12.2005 AT 8.30 AM THE PROCE EDINGS WERE CLOSED ON 10.12.2005 AT 12.30 PM. AS TEMPORARILY CO NCLUDED FOR THE DAY TO BE COMMENCED SUBSEQUENTLY FOR WHICH PURPOSE, SEALS WERE PLACED ON THE LOCKER IN STEAL ALMIRAH IN THE STORE ROOM ON FIRST FLOOR IN OUR PRESENCE. COPY OF THE PANCHNAMA DT. 09-10/ 12/2005 WAS SUBMITTED. THIS IS A DOUBLE ADDITION AND ADDITION OF JEWELLERY BELONGING TO OTHERS, IN HER HAND, WITHOUT ANY BASIS . 5. ACCORDINGLY, IT WAS SUBMITTED THAT ENTIRE ADDITI ON MADE BY ASSESSING OFFICER IS LIABLE TO BE DELETED. LD. CIT(A) CONSID ERED THE ORDER OF ASSESSING OFFICER AND THE SUBMISSIONS AND GAVE HIS FOLLOWING FINDING IN PARA 6-11:- 6. I HAVE CONSIDERED THE SUBMISSION OF THE APPELL ANT AND THE ASSESSMENT OF THE A.O CAREFULLY. IN THIS CASE, OPE RATION U/S 132 TOOK PLACE ON 9 TH DEC, 2005 IN THE RESIDENTIAL PREMISES AT B-26, SWA STHYA VIHAR, DELHI-92. AS PER PANCHNAMA DATED 10/12/2005 JEWELLERY I.T.A .NO.-92 & 82/DEL/2010 7 WORTH 12,36,164/- OF SMT. SAVITA BANSAL WAS FOUND I N THE GROUND FLOOR AND JEWELLERY WORTH RS.17,95,058/- OF SMT. SA DHNA RANI WERE FOUND AT 1 ST FLOOR OF THE BUILDING AND SEPARATE VALUATION WAS D ONE ACCORDINGLY BY APPROVED VALUER DATED 09/12/05. JEW ELLERY WORTH RS. 59,350/- WAS RELEASED ON THAT DAY TO SAVITA BAN SAL AND REST OF THE JEWELLERIES WERE RESTRAINED U/S 132(3) AND KEPT IN AN ALMIRAH IN FIRST FLOOR OF THE HOUSE. HOWEVER, VIDE REVOCATION ORDER DATED 18/05/2006, THE ENTIRE JEWELLERY WERE RELEASE TO SM T. SADHNA RANI BANSAL. 7. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE HAD EXPLAINED THAT THE JEWELLERY FOUND FROM SMT. SAVITA BANSAL VALUADED AT RS.12,36,164/- BELONGS TO SMT. SAVITA BANSAL & O THERS, AS PER EXPLANATION SUBMITTED VIDE LETTER DATED 20/12/07. REGARDING THE JEWELLERY FOUND FROM SMT. SADHNA RANI VALUADED AT R S. 17,95,058/-, THE ASSESSEE EXPLAINED THAT THE JEWELLERY INCLUDES JEWELLERY OF TWO UNMARRIED DAUGHTERS & THE REST BELONGINGS TO SADHNA RANI WHICH WAS RECEIVED AS STREE DHAN ETC. THE A.O HAD NOT AC CEPTED THE CONTENTION OF THE ASSESSEE. HOWEVER, THE A.O HAD A LLOWED 500 GMS OF JEWELLERY OF SMT. SADHNA RANI VALUADED AT RS. 4, 25,000/- AS STREE DHAN & REST OF THE AMOUNT (RS.17,95,058-RS.4,25,000 ) = RS.13,70,058/- HAS BEEN CONSIDERED AS UNEXPLAINED J EWELLERY OF THE ASSESSEE. AS PER THE CONTENTION OF THE A.O TOTAL A DDITION SHOULD HAVE BEEN (RS.17,95,058-RS.4,25,000) = RS.13,70,058 /- BELONGING TO SMT. SADHNA RANI FOUND IN THE IST FLOOR OF THE HOUS E & JEWELLERY WORTH RS. 12,36,164/- FOUND FROM SMT. SAVITA BANSAL IN THE GROUNDS FLOOR OF THE HOUSE. THEREFORE, THE TOTAL ADDITION COULD BE MAXIMUM (RS.13,70,058-RS.12,36,164) = RS.26,06,222/-. HOWE VER, THE A.O HAD MADE TOTAL ADDITIONS OF RS. 43,91,970/- AS UNEX PLAINED JEWELLERY WHICH IS APPARENTLY NOT CORRECT. I.T.A .NO.-92 & 82/DEL/2010 8 8. THE JEWELLERY FOUND IN THE GROUND FLOOR OF THE R ESIDENTS FROM SMT. SAVITA BANSAL HAS BEEN CLEARLY MENTIONED IN THE PAN CHNAMA DATED 10/12/05 & THE VALUATION REPORT DATED 09/12/05 THAT JEWELLERY WORTH RS. 12,36,164/- WERE OWNED BY SMT. SAVITA BANSAL RE SIDENTS OF B-26, GROUND FLOOR, SWASTHYA VIHAR, DELHI. THE A.O HIMSE LF HAD SPECIFICALLY SEND A QUESTIONNAIRE ON THIS JEWELLERY TO SMT. SAVITA BANSAL TO EXPLAIN AND STATED THAT THE JEWELLERY WER E FOUND FROM HER ONLY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE A.O VIDE LETTER DATED 14/12/07 SPECIFICALLY ASKED THE FOLLOW ING QUESTIONS TO SMT. SAVITA BANSAL. DURING THE COURSE OF SEARCH & SEIZURE OPERATION U/S 132 OF THE INCOME TAX ACT, 1961 ON 09 /12/2005 AT THE PREMISES B-26, SWASTHYA VIHAR, DELHI. JEWELLERY OW NED BY YOU AMOUNTING TO RS. 12,36,164/- AS PER VALUATION REPOR T BY THE REGISTERED VALUER WAS FOUND AT THE PREMISES GROUND FLOOR OF B-26, SWASTHYA VIHAR, DELHI AND ALSO JEWELLERY AMOUNTING TO RS. 1,68,100/- FOUND IN YOUR POSSESSION THE PREMISES OF GROUND FLOOR OF B-26, SWASTHYA VIHAR, DELHI. REPLY TO THE ABOVE L ETTER WAS FILED BY THE ASSESSEE VIDE LETTER DATED 20/12/07. UNDER THE CIRCUMSTANCES, THIS JEWELLERY VALUADED AT RS.12,36,164/- SHOULD BE CONSIDERED ONLY IN THE HAND OF SMT. SAVITA BANSAL, WHO IS AN INCOME TAX ASSESSEE (PAN NO. AEPJB6993J). THERE IS NO REASON OR ANY EV IDENCE TO CONCLUDE THAT THE SAME SHOULD BE TREATED AS JEWELLE RY BELONGING TO SMT. SADHNA RANI. SMT. SADHNA RANI HAD ALSO POINTE D OUT THAT THESE JEWELLERY BELONGED TO SMT. SAVITA RANI ONLY. AFFID AVIT TO THIS EFFECT WERE SUBMITTED BY SMT. SADHNA RANI & SAVITA BANSAL. THE A.O HAS NOT CONTROVERTED THE CONTENTS OF THE AFFIDAVIT. AS PER PANCHNAMA DATED 10/12/05, JEWELLERY VALUADED AT RS.12,36,164/ - WAS FOUND FROM SAVITA BANSAL. SECTION 132(4A) READS AS UNDER :- I.T.A .NO.-92 & 82/DEL/2010 9 WHERE ANY BOOKS OF ACCOUNT, OTHER DOCUMENTS, MON EY BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THI NG ARE OR IS FOUND IN THE POSSESSION OR CONTROL OF ANY PERSON IN THE C OURSE OF A SEARCH, IT MAY BE PRESUMED :- (I) THAT SUCH BOOKS OF ACCOUNT, OTHER DOCUMENTS, MONEY BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING BELONG OR BELONGS TO SUCH PERSON; (II) THAT THE CONTENTS OF SUCH BOOKS OF ACCOUNT AND OTHE R DOCUMENTS ARE TRUE; AND (III) THAT THE SIGNATURE AND EVERY OTHER PART OF SUCH BOO KS OF ACCOUNT AND OTHER DOCUMENTS WHICH PURPORT TO BE IN THE HANDWRITING OF ANY PARTICULAR PERSON OR WHICH MAY REASONABLE BE ASSUMED TO HAVE BEEN SIGNED BY, OR TO BE IN THE HANDWRITING OF , ANY PARTICULAR PERSON, ARE IN THAT PERSONS HANDWRITING, AND IN TH E CASE OF A DOCUMENT STAMPED, EXECUTED OR ATTESTED, THAT IT WAS DULY STAMPED AND EXECUTED OR ATTESTED BY THE PERSON BY WHOM IT P URPORTS TO HAVE BEEN SO EXECUTED OR ATTESTED. AS PER THE SAID SECTION THE JEWELLERY FOUND IN THE POSSESSION OR CONTROL OF SAVITA RANI BANSAL SHOULD BE PRESUMED TO BE HER ONLY UNLESS PROVED OTHERWISE. IN THIS CASE, NO EVIDENCE HAS BEEN POINTED OUT TO PROVE THAT THE JEWELLERY BELONG TO ANY OTHER PERSON THAN SAVITA RANI BANSAL. SAVITA RANI BANSAL IS ASSESSED TO TAX SEPARATELY (PAN NO-AEPJB6993J) BY THE SAME A.O(ACIT, CENTRAL C RCLE-12). THE A.O HAS NOT BROUGHT OUT ANY REASONS OR EVIDENCE WHY THE SAID JEWELLERY HAS BEEN ASSESSEE IN THE HANDS OF SMT. SA DHNA RANI. THEREFORE, THE ADDITIONS MADE OF JEWELLERY WORTH 12 ,36,164/- FOUND FROM SAVITA RANI SHOULD BE EXCLUDED FROM THE ASSESS MENT OF THE APPELLANT AND MAY BE CONSIDERED IN THE HAND OF MRS. SAVITA RANI ONLY. I.T.A .NO.-92 & 82/DEL/2010 10 9. IN REGARDS TO JEWELLERY WORTH RS.17,95,058/- FOU ND FROM THE APPELLANT AT THE TIME OF SEARCH IN THE FIRST FLOOR OF THE B-26, SWASTHYA VIHAR, DELHI. THE APPELLANT HAD SUBMITTED UNDER TOTAL AMOUNT OF JEWELLERY FOUND FROM SMT. SADHNA RANI AT THE TIME OF SEARCH FROM IST FLOOR WAS WEIGHING 1164.00 GRAMS AN D VALUED AT RS.17,95,058/- BY THE DEPARTMENT VALUER. LD. A.O H AS ADDED RS.13,70,058/- TO THE INCOME OF THE ASSESSEE AS UNE XPLAINED JEWELLERY, AFTER ALLOWING ALLOWANCE OF RS.4,25,000/ -. IT IS SUBMITTED THAT ADDITION OF JEWELLERY BEING STRI DHAN OF A HIN DU MARRIED WOMEN CANT BE MADE AS UNEXPLAINED INCOME WITHOUT G OING INTO THE COMPLETE FACTS, SUCH AS COMPOSITION OF FAMILY, YEAR OF MARRIAGE AND OTHER FACTORS. IT WAS SUBMITTED THAT THE JEWELLERY FOUND FROM SMT. SADHNA RANI AND VALUED AT RS. 17,95,058/- ALSO INCLUDING JEWELLERY BELONGING TO HER UNMARRIED DAUGHTERS AT THE TIME OF SEARCH. IT WAS ALSO SUBMITTED THAT SMT. SADHNA RANI GOT MARRIED IN YEAR 1981, WHE N THE RATE OF 24 CARAT GOLD WAS ABOVE RS. 1,670/- PER GMS ONLY. AN AFFIDAVIT OF THE APPELLANT IS ENCLOSED, WHERE SHE HAS CLAIMED THAT T HE TOTAL JEWELLERY VALUING RS.17,95,058/- WHICH INCLUDES JEWELLERY BEL ONGING TO HER TWO UNMARRIED DAUGHTERS. SHE HAS AFFIRMED IN HER A FFIDAVIT THAT THE JEWELLERY HAS BEEN RECEIVED BY HER AT THE TIME OF M ARRIAGE IN 1981 AND LATER ON THE OCCASION OF BIRTH OF HER DAUGHTERS FROM PARENTS, PARENTS-IN-LAW AND RELATIVES FROM TIME TO TIME. TH E WHOLE OF JEWELLERY HAS BEEN CLAIMED AS HER STRI DHAN RECEIVE D AS GIFTS. THEREFORE, THESE ARE NOT ACQUIRED OUT OF UNDISCLOSE D INCOME OR OTHER SOURCES. 10. OUT OF THE JEWELLERY BELONGING TO THE APPELLANT VALUADED AT RS. 17,95,058/-, THE A.O HAD CONSIDERED 500 GMS VALUADE D AT RS. 4,50,000/- AS STRI DHAN OF THE HINDU MARRIED WOMAN. HOWEVER, I.T.A .NO.-92 & 82/DEL/2010 11 DURING THE COURSE OF APPELLATE PROCEEDINGS THE APPE LLANT HAD ARGUED THAT THE FAMILY OF THE APPELLANT CONSISTS OF THE HUSBAND AND GROWN UP SON & THE DAUGHTER-IN-LAW, WHO HAVE ALSO R ECEIVED GOLD ORNAMENTS AND OTHER VALUABLES AS CUSTOMARY GIFTS ET C. FROM THE RELATIVES ON DIFFERENT OCCASIONS. THE JEWELLERY FO UND IN THE RESIDENCE BELONG TO NOT ONLY THE APPELLANT BUT ALSO TO THE OTHER FAMILY MEMBERS. DURING THE COURSE OF SEARCH & SEIZ URE PROCEEDINGS NO OTHER JEWELLERY HAS BEEN FOUND. CONS IDERING THE SUBMISSION OF THE APPELLANT, AND ON THE FACTS AND C IRCUMSTANCES OF THE CASE AND ALSO CONSIDERING THE CUSTOMS & TRADITI ONS OF INDIAN FAMILY, I FIND IT FAIR AND REASONABLE TO CONSIDER A NOTHER 500GMS OF JEWELLERY AS RECEIVED CUSTOMARY, GIFT ON DIFFERENT OCCASIONS BY OTHER FAMILY MEMBERS, WHICH CAN ALSO BE VALUADED AT RS. 4 ,50,000/- ON THIS GROUND. THE APPEAL IS ALLOWED PARTLY AS ABOVE. 11. DURING THE ASSESSMENT PROCEEDINGS THE A.O HAD MA DE ANOTHER ADDITIONS OF RS. 30,21,912/- AS UNEXPLAINED JEWELLE RY. THE SAID AMOUNT ACTUALLY CONSIST OF JEWELLERY WORTH RS. 17,9 5,058/- FOUND FROM SMT. SADHNA RANI IN FIRST FLOOR AND JEWELLERY WORTH RS. 12,36,164/- FOUND FROM SMT. SAVITA BANSAL IN THE GR OUND FLOOR OF THE BUILDING AS PER RECORDS AVAILABLE. APPARENTLY, THE RE IS AN ARRIDMATIC ERROR IN THE TOTALING. AFTER THE SEARCH THESE JEWELERS WERE KEPT IN THE ALMIRAH IN IST FLOOR OF THE HOUSE AND RESTRAINT ORDER WAS PASSED. LATER ON THESE WERE RELEASED TO SMT. S ADHNA RANI VIDE ORDER DATED 18/05/06. SINCE BOTH THESE JEWELLERIES HAD BEEN CONSIDERED SEPARATELY AS DISCUSSED ABOVE THERE IS N O NECESSITY OF ADDING THE SAME AGAIN IN THE INCOME OF THE APPELLAN T AS UNDISCLOSED JEWELLERY. THEREFORE, THE ADDITION MADE BY THE A.O OF THESE AMOUNTS OF RS. 30,21,912/- IS WITHOUT ANY BASIS AND HENCE D IRECTED TO BE DELETED. I.T.A .NO.-92 & 82/DEL/2010 12 6. NOW, BOTH ARE IN APPEAL HERE BEFORE TRIBUNAL. L D AR OF THE ASSESSEE FILED RETURN SUBMISSIONS. ON THE OTHER HAND, LD. DR FIRS TLY, STATED THAT ASSESSEE HAS NOT FILED ANY STATEMENT OF FACT AS REQUIRED. ON MERIT, IT WAS SUBMITTED THAT ENTIRE JEWELLERY WAS FOUND FROM THE POSSESSION OF THE ASSE SSEE, THEREFORE, IN VIEW OF NATURAL PRESUMPTION, ENTIRE JEWELLERY HAS TO BE TRE ATED IN HER HAND. ACCORDINGLY, ASSESSING OFFICER HAS ADDED THE ENTIRE INCOME IN TH E HANDS OF THE ASSESSEE. IT WAS FURTHER SUBMITTED THAT BOARD CIRCULAR DOES NOT SAY THAT JEWELLERY SHOULD BE ACCEPTED WITHOUT SOURCE OF ACQUIRING THE SAME. ONL Y RESTRICTION ON THE DEPARTMENTAL AUTHORITY IS IMPOSED THAT JEWELLERY TO THE EXTENT OF 500GMS IN CASE OF MARRIED LADY AND 200 GMS IN CASE OF UNMARRIED DAUGH TER AND 100 GMS IN CASE OF OTHER MALE MEMBER SHOULD NOT BE SEIZED. FURTHER, R ELIANCE WAS PLACED ON THE ORDER OF ASSESSING OFFICER. 7. WE HAVE HEARD RIVAL SUBMISSION CONSIDER CAREFULL Y. AFTER THE CONSIDERING THE SUBMISSIONS AND THE ORDER THE AUTHORITIES BELOW, W E FIND THAT THERE IS NO SUBSTANCE IN THE APPEAL OF THE DEPARTMENT, HOWEVER ASSESSEE DESERVED TO BE SUCCEED IN HER APPEAL. IT IS SEEN THAT DURING THE COURSE OF SEARC H, ENTIRE JEWELLERY WAS INVENTORISED AND NAME-WISE VALUATION REPORT WAS OBT AINED BY THE DEPARTMENT WHICH WAS ANNEXED TO THE PANCHNAMA. JEWELLERY AMO UNT TO RS. 12,36,164/- WAS VALUED IN THE NAME OF SMT. SAVITA BANSAL. SMT. SAV ITA BANSAL IS ASSESSED TO TAX SEPARATELY. THE SAME AO WHO IS THE AO OF THE ASSES SEE ALSO, COMPLETED THE ASSESSMENT OF SMT. SAVITA BANSAL. A QUERY LETTER W AS ISSUED IN RESPECT OF JEWELLERY OF RS. 12,36,164/- TO EXPLAIN THE SOURCE. AFFIDAVI T WAS FILED AND THEREAFTER THE I.T.A .NO.-92 & 82/DEL/2010 13 ASSESSMENT WAS COMPLETED WITHOUT MAKING ANY ADDITIO N OF THE IMPUGNED JEWELLERY FOUND. THEREFORE, LD. CIT(A) WAS JUSTIFIED IN DELE TING THE ADDITION OF RS. 12,36,164/- AND ACCORDINGLY WE CONFIRM HIS ORDE R ON THIS ISSUE. (A) IN RESPECT OF ADDITION OF RS.30,21,912/E DELETED BY LD. CIT(A), IT IS SEEN THAT THE AO MADE AN ADDITION OF RS. 30,21,912/ - WHICH INCLUDES JEWELLERY OF RS. 12,36,164/- AND RS. 17,95,058/- BELONGING TO AS SESSEE. LD. CIT(A) DELETED THIS ADDITION ALSO BY OBSERVING THAT A SEPARATE ADDITIO N OF RS.17,95,058/- HAS ALSO MADE BY THE AO IN THE HANDS OF THE ASSESSEE. THERE FORE, IT WAS A DOUBLE ADDITION TO THIS EXTENT AND ACCORDINGLY AN ADDITION OF RS.17 ,95.058/- & BALANCE ADDITION OF RS. 12,36,164/- BELONGING TO SMT. SAVITA BANSAL WAS DELETED AS STATED ABOVE. (B) THE DEPARTMENT SAYS SEPARATE JEWELLERY WAS FO UND WHICH IS NOT CORRECT. VALUATION WAS OBTAINED WHICH WAS ANNEXED TO THE PANCHNAMA AND TOTAL VALUATION WAS OF RS. 30,21,912/-. THEREFORE, WE HO LD THAT LD. CIT(A) APPEAL WAS JUSTIFIED IN DELETING THE DOUBLE ADDITION MADE BY T HE AO AND ADDITION MADE BELONGING TO SMT. SAVITA BANSAL. THEREFORE, GROUND NOS. 2 & 3 OF THE DEPARTMENT FAILS. (C) EVEN WE NOTED THAT GROUNDS ARE NOT TAKEN COR RECTLY BECAUSE IN GROUND NO. 2, DEPARTMENT HAS CHALLENGED DELETION OF ADDITI ON OF RS. 12,36,164/- AND IN GROUND NO-3, THE DEPARTMENT IS CHALLENGING THE ADDI TION DELETED THE AMOUNT OF RS. 30,21,912/- WHICH INCLUDES THE JEWELLERY OF RS. 12,36,164/- ALSO BELONGING TO SMT. SAVITA BANSAL. IN THIS WAY, GROUNDS IN RESPEC T TO JEWELLERY BELONGING TO SMT. SAVITA BANSAL IS TAKEN TWICE. I.T.A .NO.-92 & 82/DEL/2010 14 IN VIEW OF THESE FACTS AND CIRCUMSTANCES, GRO UND NOS. 2 & 3 OF THE DEPARTMENT FAILS. 8. NOW, WE WILL TAKE UP THE ISSUE IN RESPECT TO JEWELLERY BELONGING TO ASSESSEE AT RS.17,95,058/-. THE AO MADE AN ADDITIO N OF RS. 13,17,058/- GIVING A BENEFIT OF JEWELLERY WEIGHING 500 GMS AS STRI DHA N OF THE ASSESSEE. LD. CIT(A) HAS GIVEN FURTHER BENEFIT OF 500 GMS OF JEW ELLERY BELONGING TO OTHER FAMILY MEMBER I.E SON AND WIFE OF THE ASSESSEE, HUS BAND AND TWO UNMARRIED DAUGHTERS OF THE ASSESSEE. IN THIS WAY, LD. CIT(A) HAS SUSTAINED AN ADDITION OF RS. 9,45,058/-. AFTER CONSIDERING THE SUBMISSIONS, WE FIND THAT AS SESSEE DESERVE TO SUCCEED IN HER APPEAL ON TWO ACCOUNTS. VALUATION OF JEWELL ERY DONE BY DVO COMES TO RS. 1542.13 PER GRAMS AND THE VALUATION REDUCED BY AO OF 500 GMS REDUCED @ 850 PER GRAM. NO REASON HAS BEEN GIVEN BY THE AO T HAT WHY HE IS TAKING THE VALUE OF 500 GMS AT RS. 4,25,000/- WHICH COMES TO @ RS.850 PER GM WHEREAS DVO HAS TAKEN THIS VALUE AT RS.1542.13 PER GM. TH EREFORE, THE VALUE OF 500 GMS IS TO BE REDUCED @ RS.1542.13 PER GRAM AND NOT @ RS. 850/- PER GRAM. LD. CIT(A) HAS ALSO REDUCED A FURTHER VALUE OF JEWE LLERY OF 500 GMS AGAIN @ RS.850 PER GMS WHICH SHOULD HAVE BEEN VALUED @ RS. 1542 PER GM TAKEN BY THE DVO. THE REMAINING JEWELLERY REMAINS 164 GRAM ONLY WHICH HAS BEEN ADDED BY THE LD. CIT(A). IN OUR VIEW, 164 GMS IS A LSO SHOULD HAVE BEEN TREATED AS EXPLAINED BECAUSE THERE ARE SIX FAMILY M EMBERS I.E ASSESSEES HUSBAND, SON OF THE ASSESSEE, DAUGHTER-IN-LAW AND T WO UNMARRIED DAUGHTERS. I.T.A .NO.-92 & 82/DEL/2010 15 TOTAL JEWELLERY IN HANDS OF ASSESSEE WAS FOUND AS 1 164 GMS VALUED AT RS.17,95,058/-. THEREFORE, IN OUR CONSIDERED VIEW, ENTIRE JEWELLERY SHOULD HAVE BEEN TREATED ACQUIRED BY THE FAMILY ON ACCOUNT OF M ARRIAGE AND ON ACCOUNT OF GIFT RECEIVED AT VARIOUS OCCASIONS I.E ON OCCASION OF BIRTH OF THE CHILDREN AND OTHER CEREMONIES UPTO THE PERIOD OF SEARCH I.E DECE MBER 2005. THIS VIEW OF OUR FINDINGS SUPPORT BY THE DECISION IN THE CASE OF ASHOK CHADDA OF HONBLE DELHI HIGH COURT RELIED UPON BY LD. AR WHICH WAS DE CIDED IN ITA NO. 274/2011 VIDE ORDER DATED 05.07.2011. THE HONBLE DELHI HIGH COURT IS HELD AS UNDER :- AFTER CONSIDERING THE AFORESAID SUBMISSIONS WE ARE OF THE VIEW THAT ADDITION MADE IS TOTALLY ARBITRARY AND IS NOT FOUNDED ON ANY COGENT BASIS OR EVIDENCE. WE HAVE TO KEEP IN MIND THAT THE ASSESSEE WAS MARRIED FOR MORE THAN 25-30 YEARS. THE JEWELLE RY IN QUESTION IS NOT VERY SUBSTANTIAL. THE LEARNED COUNSEL FOR THE APPELLANT/ASSESSEE IS CORRECT IN HER SUBMISSION THAT IT IS A NORMAL CU STOM FOR WOMAN TO RECEIVE JEWELLERY IN THE FORM OF STREE DHAN OR ON OTHER OCCASIONS SUCH AS BIRTH OF A CHILD ETC. COLLECTING JEWELLERY OF 906.900 GRAMS BY A WOMAN IN A MARRIED LIFE OF 25-30 YEARS IS NOT ABNORMAL. FURTHERMORE, THERE WAS NO VALID AND/OR PROPER YARDS TICK ADOPTED BY THE ASSESSING OFFICER TO TREAT ONLY 400 GRAMS AS R EASONABLE ALLOWANCE AND TREAT THE OTHER AS UNEXPLAINED. M ATTER WOULD HAVE BEEN DIFFERENT IF THE QUANTUM AND VALUE OF THE JEWELLERY FOUND WAS SUBSTANTIAL. 4. WE ARE, THEREFORE, OF THE OPINION THAT THE FINDI NGS OF THE TRIBUNAL ARE TOTALLY PERVERSE AND FAR FROM THE REALITIES OF LIFE. IN THE PECULIAR FACTS OF THIS CASE WE ANSWER THE QUESTION IN FAVOUR OF THE ASSESSEE I.T.A .NO.-92 & 82/DEL/2010 16 AND AGAINST THE REVENUE THEREBY DELETING THE AFORES AID ADDITION OF RS.3,87,364/-. 9. THE DECISION OF THE HONBLE DELHI HIGH COUR T WHICH IS BINDING IN NATURE, IS APPLICABLE ON THE FACTS OF THE PRESENT CASE. IN THIS CASE, THERE WAS JEWELLERY OF ONLY 906 GMS, THE TRIBUNAL ALLOWED BENEFIT OF 40 0 GMS AND REMAINING ADDITION WAS CONFIRMED. THE HONBLE DELHI HIGH COU RT HAS DELETED BY HOLDING AS ABOVE. 10. IN THE PRESENT CASE ALSO THE MARRIAGE OF TH E ASSESSEE TOOK PLACE 25 YEARS AGO FROM THE DATE OF SEARCH AND ONLY JEWELLERY WAS FOUND OF 1164 GMS CONSISTING OF SIX FAMILY MEMBERS. THEREFORE, THESE ARE NOT SUCH JEWELLERY WHICH COULD NOT BE SAID THAT COULD NOT ACQUIRED ON ACCOUNT OF MARRIAGE OF THE ASSESSEE AND ON ACCOUNT OF THE OTHER OCCASIONS I.E BIRTHDAYS OF THE CHILDREN AND VARIOUS OTHERS RELIGIOUS OCCASIONS ETC. 11. THE HONBLE GUJARAT HIGH COURT ALSO DECIDED SIMILAR ISSUE BY OBSERVING THAT BOARD CIRCULAR IS APPLICABLE AND IN VIEW OF TH E BOARD CIRCULARS,THE JEWELLERY MENTIONED SHOULD BE ACCEPTED AS EXPLAINED. THE HON BLE GUJARAT HIGH COURT IN CASE OF CIT VS RATAN LAL VYAPARI LAL ITR 351 HAS HE LD AS UNDER :- THOUGH IT IS RUE THAT THE CENTRAL BOARD OF DIRECT TAXES CIRCULAR NO. 1916, DATED MAY 11,1994, LAYS DOWN GUI DELINES FOR SEIZURE OF JEWELLERY AND ORNAMENTS IN THE COURSE OF SEARCH, THE SAME TAKES INTO ACCOUNT THE QUANTITY OF JEWELLERY WHICH WOULD GENERALLY BE HELD BY THE FAMILY MEMBERS OF AN ASSESSEE BELONGING TO AN ORDINARY HINDU HOUSEHOLD. THE APPROACH ADOPTED BY THE TRIBU NAL IN FOLLOWING I.T.A .NO.-92 & 82/DEL/2010 17 THE SAID CIRCULAR AND GIVING BENEFIT TO THE ASSESSE E, EVEN FOR EXPLAINING THE SOURCE IN RESPECT OF THE JEWELLERY B EING HELD BY THE FAMILY IS IN CONSONANCE WITH THE GENERAL PRACTICE I N THE HINDU FAMILIES WHEREBY JEWELLERY IS GIFTED BY THE RELATIV ES AND FRIENDS AT THE TIME OF SOCIAL FUNCTIONS, VIZ. MARRIAGES, BIRTHDAYS , MARRIAGE ANNIVERSARY AND OTHER FESTIVALS. THESE GIFTS ARE C USTOMARY AND CUSTOMS PREVAILING IN A SOCIETY CANNOT BE IGNORED. THUS, ALTHOUGH THE CIRCULAR HAD BEEN ISSUED FOR THE PURPOSE OF NON-SEI ZURE OF JEWELLERY DURING THE COURSE OF SEARCH, THE BASIS FOR THE SAME RECOGNIZES CUSTOMS PREVAILING IN THE HINDU SOCIETY. IN THE CIRCUMSTAN CES, UNLESS THE REVENUE SHOWS ANYTHING TO THE CONTRARY, IT CAN SAFE LY BE PRESUMED THAT THE SOURCE TO THE EXTENT OF THE JEWELLERY STAT ED IN THE CIRCULAR STANDS EXPLAINED. THUS, THE APPROACH ADOPTED BY T HE TRIBUNAL IN CONSIDERING THE EXTENT OF JEWELLERY SPECIFIED UNDER THE SAID CIRCULAR TO BE A REASONABLE QUANTITY, CANNOT BE FAULTED WITH. IN THE CIRCUMSTANCES, IT IS NOT POSSIBLE TO STATE THAT THE TRIBUNAL HAS COMMITTED ANY LEGAL ERROR SO AS TO GIVE RISE TO A Q UESTION OF LAW. 12. THE RATIO OF THE HONBLE GUJARAT HIGH COU RT ALSO SQUARELY APPLIES ON THE FACTS OF THE PRESENT CASE. IN VIEW OF THE ABOVE FA CTS AND CIRCUMSTANCES AND IN VIEW OF THE REASONING GIVEN BY LD. CIT(A) WHEREAS H E HAS DELETED THE ADDITION. WE DELETE THE ENTIRE ADDITION MADE BY AO ON ACCOUNT OF JEWELLERY ACQUIRED BY THE ASSESSEE. THE GROUNDS OF THE DEPARTMENTS FAILS AND THE GROUNDS OF THE ASSESSEE IS ALLOWED. I.T.A .NO.-92 & 82/DEL/2010 18 13. THERE IS ONE MORE GROUND IN APPEAL OF THE ASSESSEE THAT IT IS THAT THERE WAS NO SPECIFIC AUTHORIZATION U/S 132 OF THE ACT, T HEREFORE, THE ASSESSMENT SHOULD HAVE BEEN QUASHED. NO ARGUMENTS WERE ADVANCED IN RESPECT TO THIS GROUND, THEREFORE, THIS GROUND IS DISMISSED. 14. IN THE RESULT, THE APPEAL OF THE DEPARTME NT IS DISMISSED AND THE APPEAL OF THE ASSESSEE IS ALLOWED IN PART. ORDER PRONOUNCED IN THE OPEN COURT ON 11.10.20 12. SD/- SD/- (S.V.MEHROTRA) (R.K.GUPTA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 11/10/2012 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI