P.N. RAMASWAMY, MUMBAI V. DCIT CEN CIR 45, MUMBAI

ITA 989/MUM/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100611 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2015
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 12-02-2014
• Court: TRIBUNAL
• Department Lawyers: DEEPKANT PRASAD
• Assessee Lawyers: MRS CHAMPA L PUROHIT
• Keywords: Gift
• Section: 132

Judgement Text

IN THE INCO ME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER I.T.A. NO. 989/M/2014 (AY: 2009 - 20 10 ) SHRI P.N. RAMASWAMY, 501, SAND PEBBLE, 3 RD AZA LINE, ANDHERI (W), MUMBAI. / VS. DCIT, CENTRAL CIR. 45, AAYAKAR BHAVAN, MUMBAI. ./ PAN : AAAPR4696R ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : MRS. CHAMPA L PUROHIT / RESPONDENT BY : SHRI DEEPKANT PRASAD DR / DATE OF HEARING : 27 .07.2015 / DATE OF PRONOUNCEMENT : 05 .08 .2015 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 12.2.2014 IS AGAINST THE ORDER OF THE CIT (A) - 38, MUMBAI DATED 11.12.2013 FOR THE ASSESSMENT YEAR 2009 - 2010. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. THE LD CIT (A) HAS GROSSLY ERRED IN CONFIRMING ADDITION OF RS. 4,88,462/ - ON ACCOUNT OF JEWELLERY. 2. THE LD CIT (A) FAILED TO APPRECIATE THAT THE CIRCULAR NO.1916 WHICH DEALS WITH JEWELLERY TO BE RELEASED TO THE ASSESSEE POST SEARCH, WAS APPLICABLE TO THE ASSESSEE. RELYING ON THE SAME, THE JEWELLERY WAS RELEASED TO THE ASSESSEE AFTER SEARCH AND THE CIT (A) OUGHT TO HAVE CONSIDERED THE SAME AS EXPLAINED AND DELETED THE ADDITION MADE. 2. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE BELONGS TO M/S. DORT KETAL GROUP OF CASES, WHICH WAS COVERED U/S 132 OF THE ACT ON 30.5.2008 . DURING THE SEARCH ACTION ON THE ASSESSEE, JEWELLERY WORTH RS. 11,54,862/ - WAS FOUND. ASSESSEE EXPLAINED THAT THE SAID JEWELLERY IS OLD ONE AND BELONG TO THE PERIOD PRIOR TO 1.4.2002. AFTER ALLOWING DEDUCTION OF RS. 2,66, 400/ - (BEING BELONGING TO MRS. SUBA N. RAMASWAMY) AND ALSO RS. 4 LAKHS (BEING DEDUCTIBLE DUE TO THE CIRCULAR), BALANCE OF RS. 4,88,462/ - WAS ADDED U/S 69A OF THE ACT AS UNEXPLAINED JEWELLERY. AGGRIEVED, ASSESSEE CARRIED THE MATTER TO THE FIRST APPELLATE AUTHORITY. 2 3. DURING THE PROCEED INGS BEFORE THE FIRST APPELLATE AUTHORITY, ASSESSEE RELIED HEAVILY ON THE CIRCULAR NO.1916, DATED 11.5.1994 AND SUBMITTED THAT IN CASE OF NON - WEALTH TAX ASSESSEE, THE GOLD ORNAMENTS WORTH 500 GMS IN CASE OF MARRIED LADY; 250 GMS IN THE CASE OF UNMARRIED LA DY; 100 GMS AND IN THE CASE OF MALE MEMBER NEED NOT BE SEIZED AND SHOULD BE DEEMED EXPLAINED IN THE ASSESSMENTS. HOWEVER, CIT (A) REJECTED THE ABOVE INTERPRETATION OF THE CIRCULAR (SUPRA) AND PROCEEDED TO CONFIRM THE ADDITION MADE U/S 69A OF THE ACT. AGAI N AGGRIEVED WITH THE SAID DECISION OF THE CIT (A), ASSESSEE IS IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 4. DURING THE PROCEEDINGS BEFORE US, LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT AN IDENTICAL ADDITION WAS MADE IN THE CASE OF OTHER DIRECTOR OF T HE GROUP COMPANY AND THE ADDITION WAS KNOCKED DOWN BY THE FIRST APPELLATE AUTHORITY AND THE REVENUE IS NOT IN APPEAL. FURTHER, INTERPRETING THE SAID CIRCULAR, LD AR FILED AN ORDER OF THE TRIBUNAL IN THE CASE OF DCIT VS. SHRI HAROON MOHD. UNNI IN ITA NO.46 3/M/2012 (AY 2009 - 2010), DATED 31.1.2014 AND ANOTHER DECISION IN THE CASE OF DCIT VS. RAFIQ MOHD. NAZIR VIDE ITA NO.465/M/2012 (AY 2009 - 2010), DATED 17.5.2013 AND DEMONSTRATED THAT THE TRIBUNAL UPHELD THE ASSESSEES WAY OF INTERPRETATION OF THE SAID CIRCUL AR. FURTHER, LD COUNSEL FOR THE ASSESSEE ALSO RELIED ON THE JUDGMENT OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. RATANLAL VYAPARILAL JAIN 235 CTR (GUJ.) 568 FOR THE PROPOSITION THAT THE LIMITS SET IN THE SAID CIRCULAR ARE APPLICABLE FOR NOT M AKING ADDITIONS IN THE ASSESSMENTS, UNLESS, THE REVENUE SHOW ANYTHING CONTRARY. PARA 4 OF THE SAID ORDER OF THE TRIBUNAL DATED 17.5.2013 (SUPRA) IS RELEVANT. 5. ON THE OTHER HAND, LD DR RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES AND EXPLAINED THE NE ED FOR LITERAL INTERPRETATION OF THE CIRCULAR AND RESTRICT THE SAME FOR SEIZURE OF GOLD ORNAMENTS ONLY. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE CITED ORDERS OF THE TRIBUNAL (SUPRA). AFTER HEARIN G BOTH THE PARTIES AND ON PERUSAL OF THE SAID TRIBUNALS ORDERS, WE FIND THE CONTENTS OF PARA 4 OF THE ORDER OF THE TRIBUNAL (SUPRA) DATED 17.5.2013 ARE RELEVANT IN THIS REGARD. FOR THE SAKE OF COMPLETENESS, WE EXTRACT THE SAID PARA 4 AS FOLLOWS: - 4. AT THE TIME OF HEARING BEFORE US, NONE HAS APPEARED ON BEHALF OF THE ASSESSEE DESPITE THE FACT THAT THE DATE OF SAID HEARING WAS ANNOUNCED IN THE OPEN COURT AT THE TIME OF EARLIER HEARING HELD ON 17.1.2013 WHEN THE ASSESSEE SOUGHT ADJOURNMENT IN 3 WRITING. THI S APPEAL OF THE REVENUE IS THEREFORE, BEING DISPOSED OF EX - PARTE QUA THE RESPONDENT ASSESSEE AFTER HEARING THE ARGUMENTS OF THE LD DR AND PERUSING THE MATERIAL ON RECORD. THE ONLY CONTENTION THAT HAS BEEN RAISED BY THE LD DR IS THAT THE CBDT CIRCULAR 1916, DATED 11.5.1994 LAYS DOWN CERTAIN GUIDELINES FOR SEIZURE OF JEWELLERY FOUND DURING THE COURSE OF SEARCH AND THE SAME CANNOT BE RELIED UPON TO TREAT THE JEWELLERY FOUND DURING THE COURSE OF SEARCH AS EXPLAINED, UNLESS THERE IS OTHER EVIDENCE TO CORROB ORATE THE EXPLANATION OF THE ASSESSEE AS REGARD THE SOURCE OF JEWELLERY FOUND DURING THE COURSE OF SEARCH. IT IS HOWEVER OBSERVED THAT THIS ASPECT OF THE MATTER HAS ALREADY BEEN CONSENTED BY THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. RATANLAL V YAPARILAL JAIN (SUPRA) RELIED UPON BY THE LD CIT (A) WHEREIN IT WAS HELD THAT EVEN THOUGH THE CBDT INSTRUCTION NO.1916 DATED 11.5.1994 LAYS DOWN GUIDELINES FOR SEIZURE OF JEWELLERY IN THE COURSE OF SEARCH, THE SAME TAKEN INTO ACCOUNT THE QUANTITY OF JEWELL ERY WHICH COULD GENERALLY BE HELD BY FAMILY MEMBERS BELONGING TO AN ORDINARY HOUSE HOLD. HONBLE GUJARAT HIGH COURT THEREFORE UPHELD THE APPROACH ADOPTED BY THE TRIBUNAL IN FOLLOWING THE SAID CIRCULAR AND GIVING BENEFIT TO THE ASSESSEE, OBSERVING THAT THE SAME IS IN CONSONANCE WITH THE GENERAL PRACTICE IN THE INDIAN FAMILIES WHERE JEWELLERY IS GIFTED BY THE RELATIVES AND FRIENDS AT THE TIME OF SOCIAL FUNCTIONS SUCH AS MARRIAGE, BIRTHDAYS AND OTHER FESTIVALS ETC. IN OUR OPINION, THE ISSUE INVOLVED IN THIS APPEAL OF THE REVENUE THUS IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. RATANLAL VYAPARILAL JAIN AND RESPECTIVELY FOLLOWING THE SAME. WE UPHOLD THE IMPUGNED ORDER OF THE CIT (A) TRE ATING THE JEWELLERY OF RS. 13,36,997/ - FOUND DURING THE COURSE OF SEARCH AS EXPLAINED RELYING ON THE CBDT CIRCULAR NO.1916 DATED 11.5.1994. 7. THUS, ON FACTS, WE FIND THAT THE REVENUE DID NOT HAVE ANY INCRIMINATING MATERIAL TO SUGGEST THAT THE SAID ORN AMENTS ARE NOT ACQUIRED PRIOR TO 1.4.2002. FURTHER, THE QUANTITY OF THE GOLD ORNAMENTS WORTH RS. 11,54,862/ - OF THE ASSESSEES FAMILY (SPOUSE + 2 CHILDREN), STANDS COVERED BY THE CIRCULAR. IN SUCH CIRCUMSTANCES, THE ABOVE EXTRACTED LEGAL PROPOSITION IS R ELEVANT AND THE ASSESSEES CASE IS COVERED BY THE SAID LEGAL PROPOSITION, WHICH IS IN FAVOUR OF THE ASSESSEE. ACCORDINGLY, GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 0 5 T H AUGUST, 2015. S D / - S D / - (AMIT SHUKLA) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 5 .8 .2015 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI