Smt. Rajmati Kothari, Kolkata V. ACIT, Circle - 9, Kolkata, Kolkata

ITSSA 40/KOL/2017

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 3852 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 27 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 20-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 23-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K SRIHARI
• Assessee Lawyers: M D SHAH LD
• Keywords: Unexplained investment; Gift; Search and seizure; Source of fund; Question of law
• Section: 69C; 143(3); 153A; 69

Judgement Text

IT(SS)A.NO.40/KOL/2017 SMT. RAJMATI KOTHARI A.Y.200 8-09 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH D KOL KATA [BEFORE HONBLE SHRI S.S.GODARA, JM & DR.A.L.SAIN I, AM ] IT(SS)A NO.40/KOL/2017 ASSESSMENT YEAR : 2008-09 SMT. RAJMATI KOTHARI -VERSUS- A.C.I.T., CIR CLE-9 KOLKATA KOLKATA (PAN: AGBPK 3874 D) (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI M.D.SHAH, LD. AR FOR THE RESPONDENT: SHRI P.K.SRIHARI, CIT(DR) DATE OF HEARING : 09.07..2018. DATE OF PRONOUNCEMENT : 20.07.2018 ORDER PER S.S.GODARA, JM: THIS ASSESSEES APPEAL FOR A.Y.2008-09 ARISES AG AINST THE CIT(A)-19, KOLKATAS ORDER DATED 28.02.2017 PASSED IN APPEAL NO.356/CIT(A)-19/CIR- 9(1)/KOL/2014-15 UPHOLDING ASSESSING OFFICERS ACTI ON MAKING UNEXPLAINED INVESTMENT ADDITION OF RS.3,46,573/- U/S 69C INVOL VING PROCEEDINGS U/S 153A R.W.S. 143(3) OF THE INCOME TAX ACT, 1961 (ACT). HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. WE ADVERT TO THE RELEVANT FACTS REGARDING THE AB OVE SOLE ISSUE OF UNEXPLAINED INVESTMENT IN JEWELLERY ADDITION OF RS.3,46,573/- R EGARDING GOLD WEIGHING 325 GMS. THE INSTANT LIS ARISES FROM THE SEARCH IN QUESTION DATED 25.04.2007 IN ASSESSEES CASE. THE DEPARTMENTAL AUTHORITIES FOUND TOTAL GOLD WEIGH ING 783.280 GMS. THE ASSESSEE CLAIMED THE SAID GOLD JEWELLERY WEIGHING 567.88 GMS TO BE BELONGING TO HER AND 215.40 GMS TO BE THAT OF HER HUSBAND. SHE RELIED UP ON THE CBDT CIRCULAR NO.1916 DATED 11.05.1994 IN SEEKING RELIEF OF 500 GMS OF JE WELLERY PER MARRIED LADY. SHE FURTHER PLEADED BEFORE THE ASSESSING OFFICER THAT S HE HAD DECLARED GOLD JEWELLERY UNDER VDIS SCHEME OF 1975 AS WELL TO THIS EFFECT. T HE ASSESSING OFFICER DENIED THE BENEFIT OF THE ABOVE CIRCULAR IN HIS ASSESSMENT ORD ER DATED 31.12.2009 FOR THE REASON IT(SS)A.NO.40/KOL/2017 SMT. RAJMATI KOTHARI A.Y.200 8-09 2 THAT THE ABOVE CIRCULAR HAD NOT GIVEN ANY BLANKET R ELIEF OF 500 GMS OF GOLD JEWELLERY AS IT HAD BEEN MADE CLEAR THEREIN THAT THE SAME AP PLIED IN THE CASE OF A PERSON NOT ASSESSED TO WEALTH TAX, GOLD JEWELLERY AND ORNAMENT S TO THE EXTENT OF 50 GMS PER MARRIED LADY, 250 GMS PER UNMARRIED LADY AND 100 GM S PER MALE MEMBER OF THE FAMILY, NEED NOT BE SEIZED. ALL THIS RESULTED IN THE IMPUGNED ADDITON OF UNEXPLAINED INVESTMENT IN JEWELLERY MADE IN ASSESSEES HANDS TO THE TUNE OF RS.3,46,573/-. 3. THE ASSESSEE PREFERRED APPEAL. THE CIT(A) CONFIR MED THE IMPUGNED ADDITION AS UNDER :- 5. I HAVE GONE THROUGH THE CONTENTION OF THE ASSES SEE, THE ORDER PASSED BY THE AO AND THE SUBMISSIONS MADE BY THE APPELLANT. THE D ECISION OF - THIS APPEAL IS GIVEN AS UNDER:- IN THIS CASE, PERUSAL OF GROUND OF APPEAL SHOW THAT ADDITION HAS BEEN MADE U/S. 69 OF THE I.T. ACT. OF RS. 3,46,573/-. THE A.O. MADE A DDITION ON THE GROUND THAT THE APPELLANT COULD NOT PRO ED THE SOURCE OF FUND INVES TED IN THE JEWLLERY TO TWINE OF RS. 3,46,573/-. FOR WORKING ABOVE, THE A.O. ARISEN THE VALUE ON GOLD AS UNDER: PARTICULARS WEIGHT TOTAL WEIGHT OF 22 K GOLD 575.69 GMS TOTAL WEIGHT OF 18 K GOLD 89.32 GMS TOTAL WEIGHT OF 20 K GOLD IF CONVERTED TO 22 K GOLD 666.181 GMS TOTAL WEIGHT OF GUINNEA 15.097 GMS TOTAL WEIGHT OF WM 4.44 GMS TOTAL WEIGHT OF GOLD FOUND 686.591 GMS LESS : TOTAL WEIGHT OF GOLD 362.519 GMS THE A.O. FOUND THAT GOLD DISCLOSED IN VDIS WAS ALRE ADY GIVEN CREDIT TO THE APPELLANT. THE APPELLANT FAILED TO EXPLAIN THE SOUR CE OF 324.042 GMS OF GOLD AND RS. 58.500/- VALUING OF SILVER WHERE AS EXPLANATION WAS CALL FOR BY HE A.O. THE APPELLANT DID NOT EXPLAIN THE SAME RATHER IT RELIED ON CBDT INTIMATION NO. 1916 DATED- 11.05.1994, WHEREIN CERTAIN PARAMETERS ARE M ADE FOR NOT SEIZING THE JWELLERY. DURING THE COURSE OF APPELLATE PROCEED ING THE APPELLANT HAS MADE SUBMISSION THAT DURING THE COURSE OF SEARCH JEWELLE RY WEIGHING 783.280 WAS FOUND DURING THE COURSE OF SEARCH AND SEIZURE CONDU CTED ON THE ASSESSEE AND THE SAME WAS VALUED AT RS. 8,07,199/-. DURING THE COURS E OF ASSESSMENT PROCEEDINGS THE LEARNED ASSESSEING OFFICER ASKED THE ASSESSEE T O EXPLAIN THE SOURCE 'OF THE JEWELLERY WEIGHING 783.280 GMS. IN RESPONSE TO THE SAME THE A/R OF THE ASSESSEE EXPLAINED THAT OUT OF THE TOTAL JEWELLERY FOUND DUR ING THE COURSE OF SEARCH IT(SS)A.NO.40/KOL/2017 SMT. RAJMATI KOTHARI A.Y.200 8-09 3 JEWELLERY WEIGHING 215.40 GRNS BELONGED TO THE HUSB AND OF THE ASSESSEE AND THE BALANCE JEWELLERY OF 567.88 GMS BELONGED TO THE ASS ESSEE. THE A/R OF THE ASSESSEE ALSO EXPLAINED THAT AS PER INSTRUCTION NO. 1916 FOR THE CBDT DATED 11.05.1994 JEWELLER,.Y WEIGHING 500 GMS PER MARRIED LADY WAS DEEMED TO BE EXPLAINED. BUT THE LEARNED A.O. WAS NOT SATISFIED W ITH THE REPLY FILED BVTHE A/R OF THE ASSESSEE AND MADE AN ADDITION OF RS. 3,46,57 3/- IN THE HANDS OF THE ASSESSEE. THE APPELLANT HAS RELATED OVER THE DECISION OF HON'BLE ITAT MURNBAI IN THE CASE OF HARAKCHAND N. JAIN V. ASSTT. CIT{1998] 61 T TJ(MUM.)223, IT WAS OBSERVED AS FOLLOWS: '[II) A PERUSAL OF THE ABOVE CIRCULAR SHOWS THAT IN CASE OF PERSON NOT ASSESSED TO WEALTH TAX GOLD JEWELLERY AND ORNAMENTS TO THE EXTE NT OF 500 GRNS, PER MARRIED LADY, 250 GRNS PER UNMARRIED LADY AND 100 GMS. PER MADE MEMBER OF THE FAMILY NEED NOT BE SEIZED. IT FURTHER PROVIDES THIH NAVING REGARD TO THE STATUS OF HE FAMILY AND CUSTOM AND PRACTICE OF THE COMMUNITY TO WHICH THE FAMILY BELONGS, THE OFFICER MAY EXCLUDE A LARGE QUANTITY OF JEWELLE RY AND ORNAMENTS AND SEIZURE. IN THE PRESENT CASE, THERE ARE FOUR MALE MEMBERS IN THE FAMILY, THE ASSESSEE AND HIS THREE SONS. SIMILARLY, THERE ARE TWO MARRIED LA DIES AND ONE UNMARRIE3D LADY. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE JEWELLERY OF THE ASSESSEE AND HIS WIFE WAS LOW AND NAS RECEIVED BY VARIOUS OC CASIONS, LIKE MARRIAGE DELIVERY, BIRTH, ETC. AND THE JEWELLERY BELONGED TO THE CHILDREN WAS ALSO RECEIVED IN SIMILAR OCCASIONS. ON THE OTHER HAND, THE LEARNE D DEPARTMENTAL REPRESENTATIVE ARGUED THAT THE ASSESSEE HAS NOT PROVIDED ANY EVIDE NCE TO EXPLAIN THE SOURCE OF THE .INVESTMENT IN THE JEWELLERY.' (III) ON CAREFUL CONSIDERATION OF THE RIVAL SUBMISS ION WE FIND THAT THE ASSESSEE HAS NOT PLACED ON RECORD ANY EVIDENCE TO PROVE THAT THE JEWELLERY HAS BEEN RECEIVED AS GIFT BY HIM BY PRODUCING THE GT RETURN OR ANY OT HER EVIDENCE. HOWEVER, WE ARE ONSCIOUS OF THE FACT THAT IN INDIAN SOCIETY EVE RYONE RECEIVES GIFTS AT THE TIME OF MARRIAGE AND OTHER OCCASIONS. THEREFORE, KEEPING IN VIEW THE NUMBER OF FAMILY MEMBERS WE ARE OF THE VIEW THAT FURTHER REBA T OF 500 GMS. OUT OF THE ENTIRE JEWELLERY MAY BE TREATED AS EXPLAIN. THE BAL ANCE 426 GMS. OF JEWELLERY MAY BE TREATED AS ADDITION UNDER SECTION 69A OF THE INCOME TAX ACT.' 'IN VIEW OF THE AFORESAI DECISION, SINCE THE ASSESS EE LADY WAS POSSESSING. JEWELRY WEIGHING 567.88 GMS ONLY, THE ENTIRE JEWELLERY SHOU LD BE TREATED AS EXPLAINED AS JEWELLERY WEIGHING AS JEWELLERY WE3IGHING 364.90 GM S WAS DISCLOSED DURING VDS 1975 AND ACCEPTED BY THE LEARNED A.O. AND THE B ALANCE JEWELLERY WAS PURCHASED OUT OF PERSONAL DRAWINGS.' PERUSAL OF SUBMISSION SHOWS THAT THE AP PELLANT HAS NOT DISCLOSED THE SOURCE OF JEWELLERY AND INVEST IN SILVER ORNAMENT. THE INTRUCTION OF CBOT IS NOT TO SEIZES JEWLLARV UP TO 500 GMS PER MARRIED LADY, 250 GMS UNMARRIED LADY AND IT(SS)A.NO.40/KOL/2017 SMT. RAJMATI KOTHARI A.Y.200 8-09 4 100 GMS PER MADE MEMBER OF THE FAMILY DUE TO SENTIM EN AL VALUE. BUT IT IS NEVER TREATED EXPLAIN. IN THE CASE OF APPELLANT, THE APPELL ANT HERSELF HAS DISCLOSED IN THE VDIS DECLARATION FOR OWNING JEWELLARY OF 362.51 GMS. THEREFORE SUBSEQUENT INVESTMENT IN THE JEWELLERY AFTER VDIS WAS TO BE EX PLAINED WHICH WAS NOT DONE BY THE APPELLANT . KEEPING IN VIEW OF THE AFORESAID FACT THAT THE LADY WAS ALREADY MARRIED BEFORE VDIS. THEREFORE, THERE WAS NO CLAIM OF RECEI VING FURTHER GIFTS ON OCCASION OF MARRIAGE. NO CLAIM WAS MADE THAT IT WAS OVER AND ABOVE DISCLOSED JWELLERY OF VDIS THEREFORE THE ADDITION MADE BY THE A.O. IS HER EBY UPHELD AND THE GROUND OF APPEAL IS DISMISSED. 4. WE HAVE HEARD BOTH THE PARTIES REITERATING THEI R RESPECTIVE STAND AGAINST AND IN SUPPORT OF THE IMPUGNED ADDITION. THE SOLE QUESTION THAT ARISES FOR ADJUDICAITON IS WHETHER BOTH THE LOWER AUTHORITIES HAVE RIGHTLY HEL D THE THE ASSESSEE TO BE NOT ENTITLED FOR CLAIMING RELIEF OF UPTO 500 GMS OF GOLD JEWELLE RY AS PER CBDT CIRCULAR (SUPRA) OR NOT. WE FIND THIS QUESTION TO BE NO MORE RES INTEGRA AS A COORDINATE BENCH OF THIS TRIBUNALS DECISION IN SMT. SUCHITRA S.DHANANI, IND ORE VS THE ACIT IN ITA NO.3014/AHD/2014 DECIDED ON 04.01.2018 HAS ADJUDICA TED THE VERY ISSUE AGAINST THE REVENUE AS UNDER : 4. WE HAVE HEARD BOTH THE PARTIES REITERATING THEI R RESPECTIVE STANDS. CASE FILE PERUSED. THE SOLE QUESTION THAT ARISES FOR OUR ADJU DICATION IN THE INSTANT APPEAL IS AS TO WHETHER ASSESSEE'S JEWELLERY IN QUESTION NOT SEI ZED DURING SEARCH COULD BE TAKEN AS EXPLAINED SINCE FALLING WITHIN THE PRESCRIBED QU ANTITY UPTO 500 GRAMS AS PER CBDT'S ABOVESTATED CIRCULAR DATED 11.05.1994 (SUPRA ). WE FIND THAT THIS QUESTION IS NO MORE RES INTEGRA AS PER A CO-ORDINATE BENCH DECI SION IN ACIT VS. SHRI JERAMBHAI B. KHOKHARIYA ITA NO.2613/AHD/2009 DECIDED IN ASSES SEE'S FAVOUR ON 05.11.2015 QUOTING HON'BLE JURISDICTIONAL HIGH COURT'S JUDGMEN T IN CIT VS. RATANLAL VYAPARILAL JAIN (2010) 235 CTR 568 (GUJ) AS FOLLOWS: '7.2 THE CBDT INSTRUCTION NO.1916 DATED 11.05.1994 SUGGESTS THAT A FAMILY IS SUPPOSED TO HOLD CERTAIN JEWELLERY RECEIV ED AT THE TIME OF MARRIAGES FROM PARENTS AND IN LAWS WITHIN THE LIMIT OF 500 GR. OF JEWELLERY FOR A MARRIED WOMAN, 250 GR. FOR UNMARRIED DAUGHTER S AND 100 GR. WITH UNMARRIED CHILD. THOUGH, THE INSTRUCTION SPEAKS OF NOT SEIZING THE SAME DURING SEARCH OPERATION EXTENDED MEANING OF THE SAM E SHOWS EXTENSION THAT THE JEWELLERY SHOULD BE TREATED AS EXPLAINED O NE AND IS NOT TO BE TREATED AS UNEXPLAINED FOR THE PURPOSE OF INCOME TA X. HON'BLE IT(SS)A.NO.40/KOL/2017 SMT. RAJMATI KOTHARI A.Y.200 8-09 5 JURISDICTIONAL HIGH COURT IN CASE OF CIT VS. RATANLAL VYAPARILAL JAIN (2010) 235 CTR 0568 (GUJ) HAS HELD AS UNDER: 'THOUGH IT IS TRUE THAT THE CBDT CIRCULAR NO. 1916, DT.11TH MAY, 1994 LAYS DOWN GUIDELINES FOR SEIZURE OF JEWELLERY AND ORNAMENTS I N THE COURSE OF SEARCH, THE SAME TAKES INTO ACCOUNT THE QUANTITY OF JEWELLERY WHICH WOULD GENERALLY BE HELD BY FAMILY MEMBERS OF AN ASSESSEE BELONGING TO AN ORDINARY HIN DU HOUSEHOLD. THE APPROACH ADOPTED BY THE TRIBUNAL IN FOLLOWING THE SAID CIRCU LAR AND GIVING BENEFIT TO THE ASSESSEE, EVEN FOR EXPLAINING THE SOURCE IN RESPECT OF THE JEWELLERY BEING HELD BY THE FAMILY IS IN CONSONANCE WITH THE GENERAL PRACTICE I N HINDU FAMILIES WHEREBY JEWELLERY IS GIFTED BY THE RELATIVES AND FRIENDS AT THE TIME OF SOCIAL FUNCTIONS, VIZ., MARRIAGES, BIRTHDAYS, MARRIAGE ANNIVERSARY AND OTHE R FESTIVALS. THESE GIFTS ARE CUSTOMARY AND CUSTOMS PREVAILING IN A SOCIETY CANNO T BE IGNORED. THUS ALTHOUGH THE CIRCULAR HAD BEEN ISSUED FOR THE PURPOSE OF NON- SE IZURE OF JEWELLERY DURING THE COURSE OF SEARCH, THE BASIS FOR THE SAME RECOGNIZES CUSTOMS PREVAILING IN HINDU SOCIETY. IN THE CIRCUMSTANCES, UNLESS THE REVENUE S HOWS ANYTHING TO THE CONTRARY, IT CAN SAFELY BE PRESUMED THAT THE SOURCE TO THE EXTEN T OF THE JEWELLERY STATED IN THE CIRCULAR STANDS EXPLAINED. THUS, THE APPROACH ADOPT ED BY THE TRIBUNAL IN CONSIDERING THE EXTENT OF JEWELLERY SPECIFIED UNDER THE SAID CIRCULAR TOBE 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 QUESTION OF LAW.' FROM GOING THROUGH THE ABOVE JUDICIAL PRONOUNCEMENT , IT IS AMPLE CLEAR THAT GOLD JEWELLERY FOUND TO THE EXTENT OF LIMIT MENTIONED IN THE CIRCULAR IS TREATED AS EXPLAINED AND THIS CAN BE CLEARLY APPLIED ON THE AS SESSEE'S CASE, WHEREIN NO SPECIFIC DEDUCTION OF GOLD JEWELLERY POSSESSED BY FAMILY MEM BERS AND GRAND CHILDREN WAS GIVEN BY THE ASSESSING OFFICER FROM THE TOTAL GOLD JEWELLERY FOUND AT THE TIME OF SEARCH AND SEIZURE OPERATION AND DIFFERENTIAL GOLD JEWELLERY OF 1924.22 GR. IS THE GOLD JEWELLERY POSSESSED BY THE FEMALE MEMBERS AND MINOR CHILDREN OF THE ASSESSEE'S JOINT FAMILY AND THIS QUANTITY OF 1924.22 GR. IS WE LL WITHIN THE TOTAL LIMIT OF JEWELLERY AT 2100 GR. AS PER THE CBDT INSTRUCTION NO.1916 DAT ED 11.05.1994. THEREFORE BY RESPECTFULLY FOLLOWING THE DECISION OF HON'BLE JURI SDICTIONAL HIGH COURT IN CASE OF CIT VS. RATANLAL VYAPARILAL JAIN (SUPRA) AND IN VIEW OF OUR DISCUSSIONS MADE ABOVE, WE FIND NO INFIRMITY IN THE ORDER OF THE CIT (A) SO AS TO WARRANT INTERFERENCE AND ACCORDINGLY, THE GROUNDS TAKEN BY THE REVENUE A RE REJECTED. ACCORDINGLY APPEAL OF THE REVENUE IS DISMISSED.' IT IS THEREFORE CLEAR THAT GOLD JEWELLERY FOUND UPT O THE ABOVESTATED QUANTITY OF 500 GRAMS IS TO BE TREATED AS EXPLAINED AS PER THE BOAR D'S CIRCULAR HEREINABOVE. WE THEREFORE DELETE THE IMPUGNED ADDITION OF RS.6,7 1,113/- MADE BY BOTH THE LOWER AUTHORITIES. 5. THIS ASSESSEE'S APPEAL IS ALLOWED. IT(SS)A.NO.40/KOL/2017 SMT. RAJMATI KOTHARI A.Y.200 8-09 6 5. WE ADOPT THE ABOVE EXTRACTED REASONING MUTATIS MUTANDIS AND DIRECT THE ASSESSING OFFICER TO ACCEPT ASSESSEES CLAIM UPTO 500 GMS OF GOLD JEWELLERY AS EXPLAINED AS PER CBDT CIRCULAR HEREINABOVE TO BE FO LLOWED BY NECESSARY COMPUTATION AS PER LAW. 6. THIS ASSESSEES APPEAL IS ALLOWED. O RDER PRONOUNCED IN THE COURT ON 20.07.2018. SD/- SD/- [DR.A.L.SAINI ] [ S.S.GODARA ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 20.07.2018. [RG SR.PS] COPY OF THE ORDER FORWARDED TO: 1.SMT. RAJMATI KOTHARI, 195/1/1, M.G.ROAD, KOLKATA- 700007. 2. A.C.I.T., CIRCLE-9, KOLKATA. 3. C.I.T.(A)- 19, KOLKATA 4. C.I.T-21, KOLKA TA 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER, SENIOR PRIVATE SECRETARY HEAD OF OFFICE/D.D.O, ITAT KOLKATA BENCHES