ACIT, Trichy V. Shri P.Selvaraj, Trichy

ITSSA 81/CHNY/2008

• Counselvise Citation: [2012] 124 COUNSELVISE.COM (IT) 7710 (ITAT-CHENNAI)
• Duration Of Justice: 3 year(s) 5 month(s) 9 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 01-03-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 01-03-2012
• Assessment Year: misc
• Appeal Filed On: 22-09-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V SUBBARAYAN
• Keywords: Gift; Source of fund; Block assessment
• Section: 143(3); 132

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL CHENNAI C BENCH, CHENNAI. BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER & SHRI GEORGE MATHAN, JUDICIAL MEMBER I.T.(SS)A. NO. 81/MDS/2008 BLOCK ASSESSMENT PERIOD : 01.04.1996 TO 19.02.2003 RELEVANT TO THE ASSESSMENT YEARS 1997-98 TO 2003-04 (PART) THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE I, TIRUCHIRAPPALLI. VS. SHRI P. SELVARAJ, 25, N.S.C. BOSE ROAD, MALAIVASAL, TIRUCHY 620 002. [PAN: AAVPS5792L] (APPELLANT) (RESPONDENT) REVENUE BY : SHRI ASHOK KUMAR, C IT DR ASSESSEE BY : SHRI V. SUBBARAYAN, ADVOCATE DATE OF HEARING : 01.03.2012 DATE OF PRONOUNCEMENT : 01.03.2012 ORDER PER N.S. SAINI, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A) I, CHENNAI DATED 06.06.2008 PASSED IN ITA NO .13/08-09 IN BLOCK ASSESSMENT PERIOD 01.04.1996 TO 19.02.2003 RELEVANT TO THE ASSESSMENT YEARS 1997-98 TO 2003-04 (PART) . SHRI ASHOK KUMAR CIT-DR REPRESENTED ON BEHALF OF THE REVENUE AND SHRI V. SUBBARAYAN, ADVOC ATE REPRESENTED ON BEHALF OF THE ASSESSEE. 2. THE REVENUE HAS TAKEN 3 GROUNDS OF APPEAL AND T HE SOLE ISSUE INVOLVED IN THEM IS THAT THE LD. CIT(A) ERRED IN DE LETING THE ADDITION OF ` .3,62,440/- MADE ON ACCOUNT OF UNEXPLAINED GOLD JEW ELLERY FOUND DURING THE I.T. I.T. I.T. I.T.(SS) (SS) (SS) (SS)A. A.A. A. NO. NO. NO. NO.8 88 81 11 1/ // /M/ M/M/ M/08 0808 08 2 SEARCH UNDER SECTION 132 OF THE ACT. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED TH E ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE WAS ASSESSED TO INCOME TAX IN THE STATUS OF INDIVIDUAL. THERE WAS A SEARCH IN THE RESIDENTIAL PREMISES OF THE ASSESSEE ON 19.02.2003 IN CONNECTIO N WITH THE SEARCH CONDUCTED IN THE PREMISES OF M/S. MANGAL & MANGAL A ND NOTICE UNDER SECTION 158BC R.W.S. 158BD WAS ISSUED ON 20.01.2004 . IN RESPONSE TO IT, THE ASSESSEE FILED THE BLOCK RETURN IN FORM 2B ON 0 2.04.2004 ADMITTING NIL UNDISCLOSED INCOME. THE ASSESSMENT WAS COMPLETED UN DER SECTION 158BD R.W.S. 143(3) BY ORDER DATED 26.02.2005 DETERMINING THE UNDISCLOSED INCOME FOR THE BLOCK PERIOD AT ` .3,62,440/-. IN DOING SO, THE ASSESSING OFFICER MAD E THE FOLLOWING ADDITIONS AND TREATED IT AS THE UNDIS CLOSED INCOME OF THE ASSESSEE: 1. 400 GMS OF JEWELLERY OUT OF 800 GMS EXPLAINED AS RECEIVED BY ASSESSEES WIFE AS STRIDHANAM FROM THEIR PARENTS. - ` .2,13,000/- 2. 280 GMS OF JEWELLERY OUT OF 560 GMS EXPLAINED AS RECEIVED BY ASSESSEES CHILDREN AS MOI (GIFT) FROM RELATIVES AND FRIENDS. ` .1,49,200/- 5. THE LD. CIT(A) DELETED THE ADDITION UNDER APPEA L BY OBSERVING AS UNDER: 4.1.3 THE ARGUMENTS PUT FORWARD BY THE LEARNED A.R . HAVE CAREFULLY BEEN EXAMINED VIS-A-VIS THE CONTENTI ONS RAISED BY THE A.O. IN THE ASSESSMENT ORDER. AFTER CAREFULL Y ANALYZING I.T. I.T. I.T. I.T.(SS) (SS) (SS) (SS)A. A.A. A. NO. NO. NO. NO.8 88 81 11 1/ // /M/ M/M/ M/08 0808 08 3 THE FACTS RELATING TO THE APPELLANT'S CASE, I FIND THAT THE A.O. BASICALLY DID NOT DISPUTE THE RECEIPT OF 'STRIDHAN' JEWELLERY BY THE APPELLANT'S WIFE AND THE RECEIPT OF GOLD JEWELL ERY BY WAY OF GIFTS BY THE APPELLANT'S SON AND DAUGHTER FROM THE RELATIVES AND FRIENDS ON VARIOUS OCCASIONS. THE A.O. HAS ONLY DIS PUTED THE QUANTUM OF 'STRIDHAN' JEWELLERY AND THE ORNAMENTS R ECEIVED BY WAY OF GIFTS. IN BOTH THE CASES THE A.O. HAS ACCEPT ED THE POSSESSION OF 50% OF THE GOLD JEWELLERY AS REASONAB LE AND EXPLAINED. IN THIS REGARD, THE A.O. IS FOUND TO HAV E GUIDED HIMSELF BY HIS OWN SURMISES AND CONJECTURES. THE RE ASON FOR REJECTION OF 50% OF THE 'STRIDHAN' JEWELLERY HAS BE EN ATTRIBUTED BY THE A.O. TO NON-FURNISHING OF THE ASSESSMENT PAR TICULARS OF THE APPELLANT'S FATHER-IN-LAW IN SRI LANKA. THOUGH THE SAME COULD NOT BE FURNISHED BY THE APPELLANT, THE A.O. I S FOUND TO HAVE NOT DISPUTED THE APPELLANT'S CLAIM THAT HIS FA THER-IN-LAW WAS A ESTABLISHED BUSINESSMAN IN COLOMBO, AND ACCOR DINGLY, HE HAD SUFFICIENT SOURCES OF INCOME. AS THE APPELLA NT'S FATHER-IN- LAW HAPPENED TO BE A TEXTILE MERCHANT SINCE 1950, T HERE COULD NOT BE ANY AMBIGUITY OR DOUBT AS TO HIS FINANCIAL CAPACITY. GIFTING OF 'STRIDHAN' JEWELLERY BY HIM TO THE APPEL LANT'S WIFE HAS BEEN CLEARLY STATED BY SHRI PERIYASAMY PILLAI IN HI S AFFIDAVIT DATED 14.02.2005. I FIND THAT A.O. HAS NOT BROUGHT ON RECORD ANY COGENT EVIDENCE TO ESTABLISH THAT SHRI PILLAI WAS N OT FINANCIALLY CAPABLE OF GIFTING 800 GRAMS OF JEWELLERY TO HIS DA UGHTER. SINCE THE VALUE OF 800 GRAMS OF JEWELLERY IN 1984 WAS NOT VERY SIGNIFICANT, I AM UNABLE TO COMPREHEND AS TO WHAT P ROMPTED THE A.O. TO DISBELIEVE THE AVERMENT OF SHRI PILLAI IN HIS SW ORN AFFIDAVIT. SINCE THERE IS NO CONTRARY EVIDENCE ON R ECORD AGAINST THE GIFT OF 800 GRAMS OF 'STRIDHAN' JEWELLERY, I HO LD THAT THE A.O. WAS NOT JUSTIFIED IN REJECTING 50% OF THE APPELLANT 'S CLAIM IN RELATION TO THE 'STRIDHAN' ORNAMENTS. I, THEREFORE, FIND NO REASON IN SUSTAINING THE ADDITION OF ` .2,13,200/- U/S 69B, WHICH IS, ACCORDINGLY, DELETED. SO FAR AS THE RECEIPT OF GIFT IN THE FORM OF CASH A ND 384 GRAMS OF JEWELLERY BY THE APPELLANT'S DAUGHTER MS. SINDHUJA ON THE OCCASION OF HER PUBERTY ATTAINMENT CEREMONY IS CONCERNED, THE SAME IS FOUND TO BE CLEARLY EVIDENCED BY THE 'M OI NOTE BOOK', COPY OF WHICH WAS PRODUCED BEFORE ME IN THE COURSE OF THE APPELLATE PROCEEDING. THE A.O. WAS NOT JUSTIFIED IN BRUSHING ASIDE THIS PIECE OF EVIDENCE MERELY ON THE PLEA THA T THE MAINTENANCE OF 'MOI NOTE BOOK' WAS NOT BROUGHT TO T HE NOTICE OF THE INVESTIGATION WING AT THE TIME OF SEARCH. I NOT ICE THAT THE A.O. I.T. I.T. I.T. I.T.(SS) (SS) (SS) (SS)A. A.A. A. NO. NO. NO. NO.8 88 81 11 1/ // /M/ M/M/ M/08 0808 08 4 HAS NOT ALLEGED THAT THE 'MOI NOTE BOOK' WAS SUBSEQ UENTLY FABRICATED BY THE APPELLANT. HAD HE HARBOURED ANY D OUBT IN THIS REGARD, HE COULD HAVE EASILY EXAMINED THE FRIENDS A ND RELATIVES WHOSE NAMES FIGURED IN THE 'MOI NOTE BOOK' AND WHO WERE CLAIMED TO HAVE GIFTED CASH AND JEWELLERY TO MS. SI NDHUJA. SINCE NO INDEPENDENT ENQUIRY WAS CONDUCTED BY THE A.O. IN THIS REGARD DESPITE THE AVAILABILITY OF SUCH A SCOPE, THE A.O. WAS NOT AT ALL JUSTIFIED IN REJECTING THE EVIDENCE RECORDED IN THE 'MOI NOTE BOOK. THE QUANTITY OF JEWELLERY (I.E. 176 GRAMS) C LAIMED TO HAVE BEEN RECEIVED BY WAY OF GIFTS BY THE APPELLANT'S SO N AND DAUGHTER AT THE TIME OF THEIR BIRTH AND OTHER SUBSE QUENT AUSPICIOUS OCCASIONS IS ALSO FOUND TO BE NOT VERY S IGNIFICANT, IN VIEW OF THE CUSTOMARY PRACTICE FOLLOWED BY THE APPE LLANT'S COMMUNITY. SINCE THE PREVALENCE OF THIS PRACTICE HA S NOT BE REFUTED BY THE A.O., HE WAS NOT CORRECT IN APPLYING HIS OWN ESTIMATE TO THE EXTENT OF 50% OF THE CLAIM REGARDIN G THE GIFTED ORNAMENTS. THE A.O.'S ESTIMATION THAT ABOUT 280 GRA MS OF JEWELLERY WERE ACTUALLY RECEIVED BY WAY OF GIFTS ON VARIOUS OCCASIONS BY THE APPELLANT'S CHILDREN IS ALSO FOUND TO BE NOT CORROBORATED BY ANY EVIDENCE. HENCE THE A.O.'S PRES UMPTION IN THIS REGARD IS ALSO REBUTTABLE. ON THE STRENGTH OF SUCH VAGUE PRESUMPTION, THE A.D. IS NOT ENTITLED TO MAKE THIS KIND OF ADDITION. I AM, THEREFORE, LEFT WITH NO OTHER ALTER NATIVE, BUT TO DELETE THE ADDITION OF ` .L,49,240/-. THE GROUNDS OF THE APPELLANT IN THIS REGARD THUS SUCCEED. 6. THE LD. DR SUPPORTED THE ORDER OF THE ASSESSING OFFICER, WHEREAS THE LD. AR OF THE ASSESSEE SUPPORTED THE ORDER OF THE L D. CIT(A). 7. WE FIND THAT NO SPECIFIC ERROR IN THE FINDING O F THE LD. CIT(A) COULD BE POINTED OUT BY THE LD. DR. WE, THEREFORE, DO NOT FI ND ANY GOOD REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A). IT IS C ONFIRMED AND THE GROUNDS OF APPEAL OF THE REVENUE ARE DISMISSED. 8. NO OTHER POINT HAS BEEN URGED BY THE REVENUE EX CEPT THE ABOVE POINT. I.T. I.T. I.T. I.T.(SS) (SS) (SS) (SS)A. A.A. A. NO. NO. NO. NO.8 88 81 11 1/ // /M/ M/M/ M/08 0808 08 5 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED AT THE CLOSE OF THE HEARING IN THE PRESENCE OF THE PARTIES ON 01.03.2012. SD/- SD/- (GEORGE MATHAN) JUDICIAL MEMBER (N.S.SAINI) ACCOUNTANT MEMBER CHENNAI, DATED, THE 01.03.2012 VM/- TO: THE ASSESSEE//A.O./CIT(A)/CIT/D.R.