ACIT, Chandigarh V. Smt.Sneh Jain, Chandigarh

ITSSA 10/CHANDI/2009

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9640 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 year(s) 6 month(s) 12 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 06-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 22-07-2013
• Assessment Year: misc
• Appeal Filed On: 25-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Gift
• Section: 132

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE SHRI T.R.SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER IT(SS)A NO.9/CHD/2009 BLOCK PERIOD 1.4.1988 TO 30.9.1998 SMT.SNEH JAIN, VS. THE A.C.I.T., 2218, SECTOR 15-C, CIRCLE-2(1), CHANDIGARH. CHANDIGARH. PAN: AND IT(SS)A NO.10/CHD/2009 BLOCK PERIOD 1.4.1988 TO 30.9.1998 THE A.C.I.T., VS. SMT.SNEH JAIN, CIRCLE 2(1), 2218, SECTOR 15-C, CHANDIGARH. CHANDIGARH. PAN: (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ASHWANI KUMAR DEPARTMENT BY : SHRI MANJIT SINGH, DR DATE OF HEARING : 18.09.2013 DATE OF PRONOUNCEMENT : 06.12.2013 O R D E R PER SUSHMA CHOWLA, J.M. : THE CROSS APPEALS FILED BY THE ASSESSEE AND THE REV ENUE ARE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEAL S), CHANDIGARH DATED 19.01.2009 RELATING TO BLOCK PERIOD 1.4.1988 TO 30.9.1998 AGAINST THE ORDER PASSED UNDER SECTION 250(6)/143(3) OF THE INCOME TAX ACT, 1961. 2 2. THE CROSS APPEALS FILED BY THE ASSESSEE AND REVE NUE WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS CONSOLI DATED ORDER FOR THE SAKE OF CONVENIENCE. IT(SS)A NO.9/CHD/2009 :: ASSESSEE'S APPEAL 3. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THAT ORDER PASSED U/S 250(6) BY THE LD. CIT(A), CHA NDIGARH IS BAD IN LAW IN AS MUCH AS THERE WAS NEITHER ANY PROPER SERVICE OF NOT ICE FOR FILING THE RETURN AND EVEN THE STATUTORY TIME TO FILE THE RETURN WAS PROV IDED TO THE APPELLANT. 2. THAT LD. CIT(A) GRAVELY ERRED IN UPHOLDING THE ADDI TION OF : I) RS.39,000/- REPRESENTING THE ALLEGED UNEXPLAINED CA SH FOUND AT THE RESIDENT DURING THE COURSE OF SEARCH U/S 132 ON 30. 09.2000. II) AN ADDITION OF RS.2,99,715/- REPRESENTING ALLEGED U NEXPLAINED CREDIT ENTRIES IN BANK ACCOUNTS BY IGNORING THE FACTUAL SU BMISSIONS. IT(SS)A NO.10/CHD/2009 :: REVENUES APPEAL 4. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED C .I.T. (APPEAL) IN APPEAL NO.500/P/06-07, VIDE ORDER DATED 19.01.20 09, HAS ERRED IN DELETING I) THE ADDITION OF RS.48,297/- ON ACCOUNT OF UNEXPLAIN ED JEWELLERY. II) THE ADDITION OF RS. 16,31,800/- BY ACCEPTING THE PL EA OF THE ASSESSEE THAT THE ADDITION WAS MADE ON PROTECTIVE BASIS AND THAT THE ENTRIES MAY BE CONSIDERED IN THE HANDS OF SH.VIPIN JAIN. III) THE ADDITION OF RS.1,00,000/- BY OBSERVING THAT TH E DEPOSIT STANDS EXPLAINED WITH THE AMOUNT OF RS.3,00,000/- RAISED BY WAY OF O VERDRAFT. 2. IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) BE CANCELLED AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED. 5. GROUND NO. 1 RAISED BY THE ASSESSEE IS NOT PRESS ED AND HENCE THE SAME IS DISMISSED AS NOT PRESSED. 6. THE ISSUE IN GROUND NO. 2(I) RAISED BY THE ASSES SEE IS AGAINST THE ADDITION OF RS. 39,000/- BEING UNEXPLAINED CASH FOU ND AT THE RESIDENCE OF THE ASSESSEE. 3 7. THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT D URING THE COURSE OF SEARCH & SEIZURE PROCEEDINGS AT THE RESIDENCE OF TH E ASSESSEE, CASH OF RS. 259,310/- WAS FOUND WHICH BELONGED TO THE ASSES SEE AND HER HUSBAND. ADDITION OF RS. 39,000/- WAS MADE IN THE HANDS OF THE ASSESSEE BEING UNEXPLAINED CASH. THE PLEA OF THE A SSESSEE BEFORE THE CIT(APPEALS) THAT IT REPRESENTED HER PERSONAL SAVIN GS ACCUMULATED OVER THE YEARS WAS REJECTED AND THE ADDITION MADE BY THE ASSESSING OFFICER WAS CONFIRMED IN VIEW OF THE CONTRADICTORY STATEMEN TS GIVEN BY THE ASSESSEE. THE ASSESSEE IS IN APPEAL AGAINST THE SA ME. 8. WE FIND NO MERIT IN THE ADDITION OF RS. 39,000/- IN THE HANDS OF THE ASSESSEE. IT CANNOT BE DENIED THAT A LADY OF T HE HOUSE WOULD NOT HAVE A SAVING OF RS. 39,000/- WHICH IS ACCUMULATED OVER A PERIOD OF TIME. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND NO MERIT IN THE AFORESAID ADDITION OF RS. 39,000/- BEING CASH F OUND AT THE RESIDENCE OF THE ASSESSEE AND WE DELETE THE SAME. THE GROUND NO. 2(I) RAISED BY THE ASSESSEE IS THUS, ALLOWED. 9. THE ISSUE IN GROUND NO. 2(II) IS AGAINST ADDITIO N OF RS. 299,715/- 10. THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT THE ASSESSEE WAS MAINTAINING A JOINT ACCOUNT WITH HER HUSBAND SHRI V IPIN JAIN. IT WAS PROPOSED BY THE ASSESSEE THAT THE BANK ENTRIES IN R ESPECT OF THE SAID JOINT ACCOUNT MAYBE CONSIDERED IN THE HANDS OF SHRI VIPIN JAIN. HOWEVER, THE ASSESSING OFFICER IN THE ORIGINAL ROUN D OF ASSESSMENT PROCEEDINGS HAD TOTALED THE CREDIT ENTRIES IN THE B ANK ACCOUNT AT RS. 19,31,515/- AND AFTER EXCLUDING THE PROTECTIVE ADDI TION OF RS. 16,31,800/- BALANCE ADDITION OF RS. 299,715/- WAS M ADE ON SUBSTANTIVE BASIS IN THE HANDS OF THE ASSESSEE. 4 11. THE CIT(APPEALS) DELETED THE PROTECTIVE ADDITIO N IN THE HANDS OF THE ASSESSEE AS THE ADDITION WAS CONSIDERED IN THE HANDS OF SHRI VIPIN JAIN. IN RESPECT OF THE SECOND ADDITION OF RS. 299, 715/- MADE ON SUBSTANTIVE BASIS IN THE HANDS OF THE ASSESSEE, THE CIT(APPEALS) HAS TABULATED DATE-WISE EXPLANATION OF THE ENTRIES AT P AGES 26 TO 29 OF THE PAPER BOOK AND HAS CONSIDERED EACH ITEM AND CONFIRM ED CERTAIN ADDITIONS AND DELETED SOME ADDITIONS, AS MENTIONED AGAINST EACH ONE OF THEM. 12. IT MAYBE POINTED OUT THAT THE ASSESSEE IS IN AP PEAL AGAINST THE CONFIRMATION OF THE SAID ADDITION VIDE GROUND NO. 2 (II) AND THE REVENUE IS ALSO IN APPEAL AGAINST THE DELETION OF PROTECTIV E ADDITION VIDE GROUND NO. 1(II) AND FURTHER ADDITION OF RS. 1 LAC VIDE GR OUND NO. 1(III). WE PROCEED TO DECIDE THE ISSUE IN TOTALITY. 13. THE FIRST ISSUE RAISED IN THE PRESENT CASE IS A GAINST THE DELETION OF PROTECTIVE ADDITION OF RS. 16,31,800/-. THE CREDIT ENTRIES IN THE JOINT BANK ACCOUNT OF THE ASSESSEE AND HER HUSBAND SHRI V IPIN JAIN HAVE BEEN CONSIDERED IN THE HANDS OF SHRI VIPIN JAIN AND WE H AVE ALREADY GIVEN OUR DECISION IN RESPECT OF THE ABOVESAID ENTRIES IN THE APPEAL FILED BY SHRI VIPIN JAIN I.E. IT(SS)A NO 21/CHD/2009. IN VIE W THEREOF, WE FIND NO MERIT IN MAKING ANY ADDITION AT PROTECTIVE BASIS IN THE HANDS OF THE ASSESSEE. THE GROUND NO. 1(II) RAISED BY THE REVEN UE IS THUS, DISMISSED. 14. NOW COMING TO THE SUBSTANTIVE ADDITION MADE IN THE HANDS OF THE ASSESSEE. THE ASSESSEE TRIED TO EXPLAIN VARIOUS EN TRIES BEING ON ACCOUNT OF VARIOUS WITHDRAWALS FROM THE BANK ACCOUN T AND THEIR REDEPOSIT AND ALSO ON THE BASIS OF CERTAIN BALANCE SHEETS PREPARED BY THE ASSESSEE AFTER THE SEARCH PROCEEDINGS. THE CIT (APPEALS) HAS 5 CONSIDERED THE EXPLANATION OF THE ASSESSEE IN ENTIR ETY AND HAS ALLOWED CERTAIN RELIEFS TO THE ASSESSEE. IN THE FIRST INSTA NCE, WE ARE IN CONFORMITY WITH THE OBSERVATION OF CIT(APPEALS) THA T NO RELIANCE CAN BE PLACED ON THE BALANCE SHEET PREPARED BY THE ASSE SSEE RELATING TO ASSESSMENT YEARS 1989-90 TO 1998-99 WHICH WERE, FOR THE FIRST TIME FILED ON 19.03.2001 I.E. DURING THE COURSE OF SECON D APPELLATE PROCEEDINGS, AFTER A PERIOD OF ABOUT 11 YEARS FROM THE DATE OF SEARCH. NO EXPLANATION WAS FILED BEFORE THE ASSESSING OFFIC ER AND NO INVESTIGATION COULD BE CARRIED OUT BY THE ASSESSING OFFICER IN RESPECT OF THE EXPLANATION SO FILED. ACCORDINGLY, WE CONFI RM THE FOLLOWING AMOUNTS AS UNDISCLOSED INCOME OF THE ASSESSEE WHICH THE ASSESSEE TRIES TO EXPLAIN TO BE ROUTED THROUGH BALANCE SHEETS FOR THE RELEVANT YEARS : DATE AMOUNT PARTICULARS 16.7.1993 RS. 40,000/- BY TRANSFER 28.02.1995 RS. 25,000/- BY CLEARING 04.06.1996 RS. 76,215/- BY TRANSFER 15. ANOTHER ADDITION WAS MADE BY THE CIT(APPEALS) O N ACCOUNT OF CASH DEPOSIT OF RS. 25,000/- ON 24.03.1994 IN THE A BSENCE OF ANY EVIDENCE PRODUCED THAT THE AMOUNT WAS RECEIVED FROM M/S S.K.METALS. THE ASSESSEE HAS FAILED TO PRODUCE ANY EVIDENCE BEF ORE US AND HENCE, THE SAID ADDITION OF RS.25,000/- IS ALSO CONFIRMED. THUS, ADDITION OF RS. 166,215/- IS UPHELD IN THE HANDS OF THE ASSESSE E. THE GROUND NO. 2(II) RAISED BY THE ASSESSEE IS THUS, DISMISSED. 16. THE ASSESSEE HAD WITHDRAWN A SUM OF RS. 25,000/ - ON 16.03.1995 WHICH IN-TURN WAS OUT OF DEPOSIT OF RS. 25,000/- ON 28.02.1995. WE HAVE CONFIRMED THE ADDITION OF RS. 25,000/- IN THE HANDS OF THE 6 ASSESSEE AND HENCE THE SAID WITHDRAWAL STANDS EXPL AINED AND NO ADDITION OF THE SAID AMOUNT IS MERITED. 17. THERE ARE CASH DEPOSITS OF RS. 5000/- + RS. 150 00/- + RS. 2000/- WHICH HAVE BEEN TELESCOPED AGAINST THE INCOME ASSES SED IN THE HANDS OF THE FIRM IN WHICH THE ASSESSEE IS A PARTNER AND WE ARE IN CONFORMITY WITH THE ORDER OF CIT(APPEALS) IN THIS REGARD. 18. THE LAST AMOUNT TO BE CONSIDERED IS CASH DEPOSIT OF RS. 1,00,000/- ON 01.09.1998 WHICH THE ASSESSEE EXP LAINED THAT THE SOURCE WAS OUT OF OVER DRAFT OF RS.3,00,000/- RAISE D FROM THE BANK. IN VIEW OF THE EXPLANATION OF THE ASSESSEE THAT THE SO URCE WAS OUT OF THE OVER DRAFT FACILITIES DRAWN BY THE ASSESSEE, WE FIN D NO MERIT IN THE GROUND OF APPEAL RAISED BY THE REVENUE IN THIS REGA RD AND CONSEQUENTLY, GROUND NO. 1(III) RAISED BY THE REVENUE IS DISMISSE D. 19. THE ONLY ISSUE LEFT IS VIDE GROUND NO. 1(I) RAI SED BY THE REVENUE I.E. ON ACCOUNT OF UNEXPLAINED JEWELLERY. THE FACT S RELATING TO THE ISSUE ARE THAT DURING THE COURSE OF SEARCH, TOTAL J EWELLERY OF 879.500 GMS. WAS FOUND OUT OF WHICH, JEWELLERY MEASURING 21 8.800 GMS. BELONG TO MRS. NIRMAL JAIN AND THE BALANCE WAS HELD TO BEL ONG TO THE ASSESSEE AND HER HUSBAND SHRI VIPIN JAIN. SIMILAR ISSUE ON A CCOUNT OF THE INVESTMENT IN UNEXPLAINED JEWELLERY AROSE BEFORE TH E TRIBUNAL IN THE CASE OF SHRI VIPIN JAIN VS ACIT IT(SS)A NO. 21/CHD/ 2009 AND VIDE PARAS 14 TO 17 WE HAVE HELD AS UNDER : 14. THE ASSESSEE VIDE GROUND NO. 2(A) HAS RAISED T HE ISSUE AGAINST ADDITION OF RS. 1,48,400/- ON ACCOUNT OF TH E JEWELLERY FOUND DURING THE COURSE OF SEARCH. THE JEWELLERY W EIGHING 524 GMS. WAS FOUND FROM THE RESIDENCE OF THE ASSESSEE A ND HIS WIFE AND 345.500 GMS. WAS FOUND FROM THE LOCKER IN UNION BANK OF INDIA. THE EXPLANATION OF THE ASSESSEE IN RESPECT OF THE SAID JEWELLERY WAS THAT PART OF IT BELONG TO HIS SISTER- IN-LAW AND PART 7 OF THE JEWELLERY I.E. 269 GMS. WAS REFLECTED IN THE WEALTH TAX RETURN OF HIS WIFE SMT. SNEH JAIN AND THE BALANCE W AS RECEIVED AS GIFTS FROM CLOSE RELATIVES. THE ASSESSING OFFICER ACCEPTED THE CLAIM OF OWNERSHIP OF 218.800 GMS. JEWELLERY BY THE SISTER-IN-LAW OF THE ASSESSEE. HOWEVER IN RESPECT OF THE BALANCE , THE EXPLANATION WAS REJECTED AND ADDITION WAS MADE. TH E CIT(APPEALS) IN THE SECOND ROUND OF APPELLATE PROCE EDINGS NOTED THAT RELIEF TO THE EXTENT OF 93.600 GMS. WAS GIVEN IN THE HANDS OF SMT. SNEH JAIN AND FURTHER RELIEF OF 100 GMS. OF JE WELLERY WAS GIVEN TO THE ASSESSEE BEING RECEIVED ON MARRIAGE AN D OTHER FUNCTIONS. FURTHER, RELIANCE OF THE ASSESSEE UPON B OARDS CIRCULAR REGARDING SEIZURE OF JEWELLERY WAS REJECTE D BY THE CIT(APPEALS). THE ASSESSEE IS IN APPEAL AGAINST TH E SAME. 15. THE LD. AR FOR THE ASSESSEE POINTED OUT THAT TH ERE WAS NO MERIT IN THE AFORESAID ADDITION IN VIEW OF THE ASSE SSEE HAVING RECEIVED 250 GMS. OF JEWELLERY AT HIS MARRIAGE AND THE BALANCE HAVING BEEN DECLARED IN THE HANDS OF HIS WIFE MRS. SNEH JAIN. 16. THE LD. DR FOR THE REVENUE PLACED RELIANCE ON T HE ORDERS OF THE CIT(APPEALS). 17. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE ALONGWITH HIS WIFE WAS FOUND TO BE IN POSSESSION OF JEWELLERY DURING THE COURSE OF SEARCH AT HIS RESIDENCE AND ALSO FROM HIS LOCKER. OUT OF THE TOT AL JEWELLERY OF 869.500 GMS. FOUND FROM THE POSSESSION OF THE ASSES SEE, BENEFIT OF JEWELLERY OF 218.800 GMS. BELONGING TO HIS SISTE R-IN-LAW, 93.600 GMS. BELONGING TO HIS WIFE AND 100 GMS. RECE IVED BY THE ASSESSEE ON HIS MARRIAGE AND VARIOUS OCCASIONS WAS ALLOWED TO THE ASSESSEE. HOWEVER, IN RESPECT OF THE BALANCE J EWELLERY, WE FIND MERIT IN THE CLAIM OF THE ASSESSEE IN VIEW OF RELIANCE ON THE CBDT CIRCULAR. AS PER THE CIRCULAR CREDIT FOR JEWE LLERY WEIGHING 500 GMS IS TO BE ALLOWED IN RESPECT OF MARRIED LADY AND 100 GRMS FOR THE MALE MEMBERS. THE JEWELLERY FOUND IN POSSES SION OF ASSESSEE FROM HIS RESIDENCE AND FROM HIS LOCKER TOT ALED 869.500 GMS, OUT OF WHICH CREDIT FOR 218.800 GMS WAS ALLOWE D TO THE ASSESSEE. THE BALANCE JEWELLERY BEING LESS THAN PRE SCRIBED LIMIT OF 500 GMS IN THE HAND OF MARRIED LADY AND 100 GMS IN THE HANDS 8 OF MALE MEMBERS DOES NOT MERIT ANY ADDITION ON ACCO UNT OF JEWELLERY AND THE ADDITION IS THUS DELETED. THUS, GROUND NO. 2(A) RAISED BY THE ASSESSEE IS ALLOWED. 20. IN LINE WITH OUR DECISION IN DELETING THE ADDIT ION IN THE HANDS OF SHRI VIPIN JAIN, WE FIND NO MERIT IN ANY ADDITION I N THE HANDS OF THE ASSESSEE BEFORE US. THE GROUND NO. 1(I) RAISED BY THE REVENUE IS THUS, DISMISSED. 21. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED AND THAT OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 6 TH DAY OF DECEMBER, 2013. SD/- SD/- (T.R.SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 6 TH DECEMBER, 2013 POONAM COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH