DEPUTY COMMISSIONER OF INCOME TAX,CENTRAL CIRCLE-1, GUNTUR V. SRI BOLISETTY KAMESWARA RAO, GUNTUR

ITSSA 1/VIZ/2022

• Counselvise Citation: [2022] 103 COUNSELVISE.COM (IT) 9526 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 month(s) 27 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 27-10-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 27-09-2022
• Assessment Year: 2020-2021
• Appeal Filed On: 30-06-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3); 69A

Judgement Text

आयकरअपीलȣयअͬधकरण, ͪवशाखापटणमपीठ, ͪवशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM Įीदुåवूǽआरएलरेɬडी, ÛयाǓयकसदèयएवंĮीएसबालाकृçणन, लेखासदèयकेसम¢ BEFORE SHRI DUVVURU RL REDDY, HON’BLE JUDICIAL MEMBER & SHRI S BALAKRISHNAN, HON’BLE ACCOUNTANT MEMBER आयकरअपीलसं./ I.T.(SS).A. No.01/Viz/2022 (Ǔनधा[रणवष[/ Assessment Year :2020-21) Deputy Commissioner of Income Tax, Central Circle-1, Guntur. Vs. Sri Bolisetty Kameswara Rao, 3-29-40/4, 2 nd Lane, Krishna Nagar, Guntur, Andhra Pradesh – 522006. (अपीलाथȸ/ Appellant) (Ĥ×यथȸ/ Respondent) CO No.8/Viz/2022 (In आयकरअपीलसं./ I.T.(SS).A. No.01/Viz/2022) (Ǔनधा[रणवष[/ Assessment Year :2020-21) Sri Bolisetty Kameswara Rao, 3-29-40/4, 2 nd Lane, Krishna Nagar, Guntur, Andhra Pradesh – 522006. Vs. Deputy Commissioner of Income Tax, Central Circle-1, Guntur. (अपीलाथȸ/ Appellant) (Ĥ×यथȸ/ Respondent) अपीलाथȸकȧओरसे/ Assessee by : Sri GVN Hari, Advocate Ĥ×याथȸकȧओरसे/ Revenue by : Sri MN Murthy Naik, CIT-DR सुनवाईकȧतारȣख/ Date of Hearing : 28/09/2022 घोषणाकȧतारȣख/Date of Pronouncement : 28/10/2022 O R D E R 2 PERBENCH: The captioned appeal is filed by the Revenue against the order of the Learned Commissioner of Income Tax (Appeals)-3, Visakhapatnam [Ld. CIT(A)] in appeal No. 10837/2019-20/CIT(A)- 3/VSP/2021-22, dated 19/4/2022 arising out of the order passed U/s. 143(3) r.w.s 153B(1)(b) of the Income Tax Act, 1961 [the Act] dated 20/09/2021 for the AY 2020-21. The assessee has filed the Cross Objection No.8/Viz/2022. 2. Briefly stated the facts of the case are that the assessee filed his return of income by declaring income from Real Estate Business, salary and agriculture and is also a partner of M/s. Durga Marketing Corporation. The assessee filed his return of income on 26/8/2018 admitting a total income of Rs. 17,18,840/-. The Asst. Director of Income Tax (Inv.), Unit-IV(3), Guntur, received information from Joint Director, Directorate General of GST, Intelligence Unit, Chandigarh that huge quantity of jewellery worth of Rs. 2,17,17,455/- was available at the residential premises of the assessee. Based on the information a search was conducted in the residential premises of the assessee on 17/7/2019. During the search operation, the assessee was not available at the residence however, Smt. K. Radhika, sister of 3 the assessee was present. The details of the jewellery found and seized are as follows: Gold Found in Grams Value of Gold found in Rs. Silver found in grams Value of silver found in Rs. Gold seized in Grams Value of gold seized in Rs. 5731.420 2,26,92,575 24,378 9,75,120 5210.97 1,61,89,738 3. In his own deposition U/s. 131(1A) of the Act recorded on 31/7/2019 by the assessee, it was stated that the jewellery found at his residence belongs to himself and family members which was declared in the income tax returns filed by the assessee and his family members. Further, the assessee has also submitted that in the capacity of HUF, he held 600 grams of gold as on 31/3/2015 and the relevant details were submitted at the time of survey assessments in the respective years. The assessee further stated that his two daughters namely Smt. Lakshmi Harika and Smt. Geetha Sindhoori has declared 4,828 Grams of Gold jewelry and 4514 Grams of Gold jewelry respectively under the IDL Scheme, 2016 and has paid the taxes thereupon. Smt. Bolisetty Annapurna, wife of the assessee has declared gold of 1500 Gms while filing her Wealth Tax Returns and has disclosed 2000 gms of gold in the Balance Sheet filed along with the returns. The Ld. AO partly accepted the submissions made by the assessee with respect to 1500 grams of Gold and 10 kgs of Silver articles 4 declared by the assessee’s wife in her wealth tax returns and treated it as explained and taxed the remaining Gold jewellery of 4231.420 Grams and Silver articles weighing 14.378 kgs as unexplained under section 69A of the Act. The Ld. AO valued the above Gold and Silver at Rs. 1,66,10,585/- and added the same to the returned total income of the assessee. Aggrieved by the order of the Ld. AO, the assessee carried the matter in appeal before the Ld. CIT(A). The assessee’s Representative filed the same submissions again before the Ld. CIT(A). The Ld. CIT(A) considering the submissions made by the Ld. AR, partly allowed the appeal by giving the effect to the Circular No. 1916 of 1994 to the family members of the assessee. The Ld. CIT(A) also considered the declaration of gold by Smt. Geetha Sindoori under IDS 2016 and gave relief to that extent. Aggrieved by the order of the Ld. CIT(A), the Revenue carried the matter in appeal to the Tribunal. 4. The Revenue has raised the following grounds of appeal: 1. The order of the Ld. CIT(A) is erroneous in l aw an d the f acts an d circums tances of the case. 2. The Ld. CIT(A) ought to have appreci ated the fact th at Sri B. Kames wara Rao (HUF) has not discl osed any gol d or sil ver in the We al th Tax re turns fil ed for AY 2015-16 and the AO cl earl y stated th at the survey decl aration made by the assessee was to wards investment in l and and house and not gol d jewel l ery. 5 3. The Ld. CIT(A) h as erred in al l owing addi tional credi t of 500 gms in the hands of Smt. Bol isetty Ann apurna, over and above the credit for 1500 gms gol d jewel l ery al re ady given by the AO in the assessment order, sol el y based o n the manual financi al statement. 4. The Ld. CIT(A) h as erre d in al l owing cre dit of 10Kgsil ver int eh hands of Smt. B. Kasi Annapurn a (mo ther of the assessee) since it was not decl ared in the weal th tax returns. 5. The Ld. CIT (A) h as e rred in al l owi ng the cl aims of the assessee th at the gol d found during the course of se arch bel onged to his married daughters, which was decl ared by them in the IDS scheme in the absence of independent documentary proof. 6. Any other ground th at may be urged at the time of hearing.” 5. Ground no.1 and 6 are general in nature and therefore they need not be adjudicated. 6. Grounds no. 2, 3, 4 and 5 relate to the addition made by the Ld. AO being inter related and therefore they are adjudicated together. 7. At the outset, the Ld. DR submitted that Smt. Bolisetty Annapurna has declared only 1500 Gms while filing her Wealth Tax Returns and hence AO has allowed the same. The declaration by Smt. B. Annapurna in the balance sheet filed during the assessment could not be accepted. The Ld. DR also submitted that the declaration given by the asessee’s daughters during Income Disclosure Scheme,2016 (ID Scheme) cannot be considered as the daughters have not filed their returns disclosing the same every year. The Ld. DR also submitted that 6 both the daughters of the assessee are married and were not staying in the house of the assessee to claim the benefit of Circular No. 1916 of 1994 (supra). The Ld. DR therefore pleaded that the order of the Ld. AO be upheld. Per contra, the Learned Authorized Representative submitted that the benefit of Circular No. 1916 of 1994 to be given to the assessee and his family members which was rightly done by the Ld. CIT(A). Further, the Ld. AR argued that the elder daughter Smt. Lakshmi Harika was married and settled at Mumbai along with her husband and hence the Ld. CIT(A) has considered 500 Grams for the elder daughter in accordance with the Circular No. 1916 (supra). Similarly, the Ld. AR also argued that the younger daughter Smt. Geetha Sindhoori got married in February, 2019 and was still staying with the assessee due to performance of certain marriage rituals which were not completed on the date of search. The Ld. AR therefore pleaded that the entire Gold jewellery declared by the younger daughter Smt. Geetha Sindhoori in ID scheme to be considered fully available in the residential premises of the assessee. The Ld. AR pleaded that the order of the Ld. CIT(A) be upheld. 7 8. We have heard both the sides and perused the material available on record and the orders of the Ld. Revenue Authorities. Admittedly it is seen from the assessment order that the benefit of Circular 1916 of 1994 was not considered by the Ld.AO. Further, the Ld. AO also erred in considering the declaration of Gold of 2000 Gms by Smt. B. Anuradha in the balance sheet of the assessee filed along with the return of income for the AY 2015-16, which was also not disputed by Ld.AO. Similarly, the Ld. AO also erred in considering the Gold declared by Smt. Lakshmi Harika for 4828 Grams of Gold and Smt. Geetha Sindhoori of 4514 Grams of Gold in Form No.1 filed under Income Declaration Scheme, 2016. The Ld. AR also submitted Form-3 for the taxes paid during the declaration in the ID scheme in the paper book. We cannot ignore the argument of the Ld. AR that the benefit of Circular No. 1916 shall be granted to the assessee and his family members staying along with the assessee and the dependents of the assessee. Considering the same, the Ld. CIT(A) has rightly granted the benefit of Circular No. 1916 for 500 Grams towards the Gold held by Mother of the assessee Smt. B. Kasi Annapurna. Similarly, the Ld. CIT(A) has also rightly considered the Gold declared by Smt. B. Annapurna in the balance sheet while filing the return of income for which 8 the assessment was made U/s. 143(3) of the Act on 27/2/2017 accepting the income filed by Smt. B. Annapurna after scrutinizing the information for the AY 2015-16. We find that the Ld. AO has failed to consider the same while framing the assessment U/s. 143(3) r.w.s 153B(1)(b) of the Act. Similarly, the Ld. AO also failed to consider 600 Grams of Gold and 10 Kgs of Silver articles declared by the HUF while filing the return of income for the AY 2015-16. It is also find from the documents submitted by the Ld. AR that Smt. Lakshmi Harika, elder daughter of the assessee who has accepted 4828 Grams of Gold under ID Scheme, 2016 was not considered by the Ld. AO. However, we find that Smt. Lakshmi Harika resides in Mumbai along with her husband and accordingly considering the common practice of allowing some portion of the jewellery at the parent’s house, the Ld. CIT(A) has allowed 500 Grams of jewellery in the hands of Smt. Lakshmi Harika. It is not disputed by the Revenue that Smt. Geetha Sindhoori who got married in the month of February, 2019 was still staying with her parents’ house due to pendency of some rituals to send her to her in-laws house. It is also not disputed by the Revenue that Smt. Geetha Sindhoori has declared 4514 Grams of gold under ID Scheme, 2016. Further, Smt. Geetha Sindhoori has also declared 300 Grams of Gold 9 while filing her return of income. Considering the above, the Ld. CIT(A) has rightly allowed 4814 Grams in the hands of Smt. Geetha Sindhoori. In a nutshell, as per the table given below the Ld CIT(A) allowed the gold held by family members of the assessee. Sl No Name Relation Quantity of Gold allowed by the Ld. CIT(A) Quantity of Silver allowed by the Ld. CIT(A) 1. Smt. B. Kasi Annapurna Mother 500 Grams 10 kgs 2. Smt. Lakshmi Harika Daughter 500 Grams 3. Smt. Geetha Sindhoori Daughter 4814 Grams 4. Smt Anuradha Bolisetty Wife 500 grams 10 kgs 5. B. Kameswara Rao, Huf 600 Grams 10 kgs 9. Therefore we are of the considered view that the Ld. CIT(A) has rightly considered the submissions in accordance with law and hence no interference is required in the order of the Ld. CIT(A). It is ordered accordingly. 10. In the result, appeal of the Revenue is dismissed. CO No.8/Viz/2022 (In आयकरअपीलसं./ I.T.(SS).A. No.01/Viz/2022) (Ǔनधा[रणवष[/ Assessment Year :2020-21) 10 11. This Cross Objection raised by the assessee is in support of the decision of the Ld. CIT(A). While adjudicating the appeal of the Revenue, we have upheld the decision of the Ld. CIT(A) and therefore the adjudication of Cross Objection becomes infructuous. 12. In the result, Cross Objection raised by the assessee is dismissed as infructuous. 13. Conclusively, appeal of the Revenue is dismissed and the Cross Objection raised by the Assessee is also dismissed as infructuous. Pronounced in the open Court on the 28 th October, 2022. Sd/- Sd/- (दुåवूǽआर.एलरेɬडी) (एसबालाकृçणन) (DUVVURU RL REDDY) (S.BALAKRISHNAN) ÛयाǓयकसदèय/JUDICIAL MEMBER लेखासदèय/ACCOUNTANT MEMBER Dated : 28.10.2022 OKK - SPS 11 आदेशकȧĤǓतͧलͪपअĒेͪषत/Copy of the order forwarded to:- 1. Ǔनधा[ǐरती/ The Assessee–Sri Bolisetty Kameswara Rao, 3-29-40/4, 2 nd Lane, Krishna Nagar, Guntur, Andhra Pradesh – 522006. 2. राजèव/The Revenue –Deputy Commissioner of Income Tax, Central Circle-1, 3 rd Floor, Raj Kamal Complex, Lakshmipuram Main Road, Guntur-522007. 3. The Principal Commissioner of Income Tax (Central), Visakhapatnam. 4. आयकरआयुÈत (अपील)/ The Commissioner of Income Tax (Appeals)-3, Visakhapatnam. 5. ͪवभागीयĤǓतǓनͬध, आयकरअपीलȣयअͬधकरण, ͪवशाखापटणम/ DR,ITAT, Visakhapatnam 6. गाड[फ़ाईल / Guard file आदेशानुसार / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam