D.C.I.T., Circle-V, Kolkata, Kolkata V. Sri Raj Kr. Saraogi, Kolkata

ITSSA 97/KOL/2013

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 1027 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 9 month(s) 18 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 01-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 13-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIRAJ KUMAR
• Assessee Lawyers: K K CHHAPARIA
• Keywords: Search and seizure
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH A KOLKATA BEFORE SHRI, S.V. MEHROTRA, ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH, JUDICIAL MEMBER ITA NO. 1776 / KOL / 2012 & IT(SS) NO.97/KOL/2013 ASSESSMENT YEAR :2010-11 DCIT CC-V/KOL, AAYKAR BHAWAN POORVA, 4RD FLOOR, 110 SHANTIPALLY, KOLKATA 700 107 V/S . RAJ KUMAR SARAOGI 3, SATYAM TOWERS, 3- ALIPORE ROAD, KOLKATA 700 027 [ PAN NO. AKRPS 8971 P ] /APPELLANT .. / RESPONDENT / BY ASSESSEE SHRI K.K. CHHAPARIA, FCA /BY REVENUE SHRI NIRAJ KUMAR, CIT-DR /DATE OF HEARING 12-08-2015 /DATE OF PRONOUNCEMENT 01-09-2015 / O R D E R PER S.V.MEHROTRA, ACCOUNTANT MEMBER:- BOTH APPEALS HAVE BEEN FILED BY REVENUE AGAINST TH E SEPARATE ORDERS OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-I, KOLK ATA DATED 03.10.2012 AND 11.09.2013 FOR THE ASSESSMENT YEAR 2010-11. 2. IN BOTH THE APPEALS OF REVENUE UNDER CONSIDERATI ON THE MAIN ISSUE IS REGARDING THE ADDITION OF RS.24,72,221/- MADE BY AS SESSING OFFICER FIRST IN ASSESSMENT ORDER U/S. 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER ITA NO.1776/KOL/2012 & IT(SS)97/KOL/2013 A.Y. 2010-11 DCIT CC-V KOL V. RAJ KUMAR SARAOGI PAGE 2 REFERRED TO AS THE ACT;) ON 12.05.2011 AND, THEREA FTER, IN PURSUANCE TO ASSESSMENT ORDER PASSED U/S 153A/153B/147 OF THE AC T. AS THE ISSUE INVOLVED IN BOTH THE APPEALS ARE SAME, HENCE, WE PROCEED TO DISPOSE OF BOTH THE APPEALS BY THIS COMMON ORDER. 3. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE HAD FI LED RETURN SHOWING TOTAL INCOME OF RS.1,59,33,480/-. A SEARCH AND SEIZURE OP ERATION WAS CONDUCTED ON 11.09.2009 IN THE RESIDENTIAL PREMISES OF THE AS SESSEE AT FLAT NO. 7B/2,3, ALIPORE ROAD, KOLKATA 27. IN COURSE OF SEARCH AND S EIZURE OPERATION IN HIS RESIDENTIAL FLAT ALONG WITH HIS BROTHER, SRI PRADEE P KR. SARAOGI, INTER ALIA THAT A JEWELLERY WORTH OF RS.3,38,98,933/- WAS FOUND OUT O F WHICH JEWELLERY OF RS.1,78,93,857/- WAS SEIZED AND ASSESSEE IN ITS DIS CLOSURE PETITION U/S 132(4), INTER ALIA, DISCLOSED HIS UNDISCLOSED JEWEL LERY AT RS. 75 LAKHS. IN ORDER TO EXPLAIN THE DIFFERENCE BETWEEN THE INVENTORISED JEWELLERY AND JEWELLERY DISCLOSED IN PETITION U/S. 132(4) OF THE ACT, THE A SSESSEE POINTED OUT THAT THE WEALTH TAX RETURN WERE FILED BY THE FAMILY MEMBERS BEFORE THE DATE OF SEARCH SHOWING THEIR RESPECTIVE JEWELLERY. THE DETAILS OF THE RETURN OF JEWELLERY WERE AS UNDER:- SL. NO. NAME OF THE FAMILY MEMBER GROSS WT. (GMS) AS PER W.T GOLD WT. (GMS) AS PER W.T. DIAMOND CTS AS PER WT REMARKS 1 SUSHILA SARAOGI 1759.200 1539.958 195.690 2 RAJ KUMAR SARAOGI 1102.400 1000.170 56.850 3 PRADEEP KR. SARAOGI 693.940 582.790 27.750 4 BHAGWATI DEVI SARAWOGI 312.000 293.590 13.150 NO RETURN WAS FILED AS THE TAXABLE NET WEALTH WAS BELOW THE EXEMPTION LIMIT. ITA NO.1776/KOL/2012 & IT(SS)97/KOL/2013 A.Y. 2010-11 DCIT CC-V KOL V. RAJ KUMAR SARAOGI PAGE 3 IT WAS FURTHER STATED THAT APART FROM ABOVE, THE FA MILY MEMBERS PURCHASED JEWELLERY ON THE OCCASION OF MARRIAGE OF SHYAM SARA OGI, SON OF THE ASSESSEE DURING THE FINANCIAL YEAR 2008-09 AND ASSESSEE FILE D COPY OF BILLS ALONG WITH COPY OF THE RELEVANT BANK STATEMENT IN SUPPORT OF T HE SAID PURCHASES OF JEWELLERY. THE DETAILS OF JEWELLERY ARE NOTED AS UN DER:- SL NO NAME OF THE FAMILY MEMBER GROSS WT. (GMS) AS PER W.T. GOLD WT. (GMS) AS OER W,T. DIAMOND CTS AS PER WT REMARKS 1 SUSHILA SARAOGI 210.930 196.804 70.660 2 RAJ KUMAR SARAOGI 3 PRADEEP KR SARAOGI 11.030 9.786 6.220 4 BHAGWATI DEVI SARAWOGI 5 RANJANA SARAOGI 68.540 63.142 26.990 6 PRIYANKA SARAOGI 9NEE DHANUKA) 1424.090 1310.792 347.820 7 SHYAM SARAOGI 145.150 132.894 44.530 TOTAL (B) 1859.740 1713.418 496.220 TOTAL (A+B) 7277,080 6374.056 1005.010 THE DETAILS OF JEWELLERY OFFERED BY ASSESSEE AS UND ISCLOSED VIDE THE RECONCILIATION STATEMENT WAS AS UNDER:- SL NO PARTICULARS GROSS WT. (GMS) AS PER W.T GOLD WT. (GMS) AS PER W.T. DIAMOND CTS AS PER WT REMARKS 1 NOT RECONCILED 3164.160 2495.662 199.670 GRAND TOTAL (A+B+C) 10441.240 8869.718 1204.680 THE TOTAL JEWELLERY FOUND IN THE COURSE OF SEARCH A S PER DEPARTMENT OF VALUERS REPORT WAS AS UNDER:- ITA NO.1776/KOL/2012 & IT(SS)97/KOL/2013 A.Y. 2010-11 DCIT CC-V KOL V. RAJ KUMAR SARAOGI PAGE 4 SL NO PARTICULARS GROSS WT. (GMS) AS PER W.T. GOLD WT. (GMS) AS PER W.T. DIAMOND CTS AS PER WT REMARKS 1 AS PER DVR 8905.410 7655.910 968.230 IN VIEW OF THE ABOVE STATEMENT, THE ASSESSEE CONTEN DED THAT NO ADDITION SHOULD BE MADE ON ACCOUNT OF JEWELLERY FOUND IN SEA RCH BECAUSE JEWELLERY AS PER BOOKS INCLUDING UNDISCLOSED JEWELLERY DISCLOSED VIDE RECONCILIATION STATEMENT WAS MORE THAN THAT JEWELLERY FOUND DURING THE COURSE OF SEARCH. THE AO COMPARED THE JEWELLERY ITEMWISE AND CONCLUDE D THAT JEWELLERY AMOUNTING TO RS.33,95,444/- COULD NOT BE TALLIED. H E FOUND THAT ASSESSEE HAD DISCLOSED THE UNDISCLOSED JEWELLERY OUT OF JEWELLER Y FOUND VALUING AT RS.65,76,777/- AND, THEREFORE, HE CONCLUDED THAT JE WELLERY AMOUNTING AT RS.99,72,221/- REMAINED NOT TALLIED. AS THE ASSESSE E HAD MADE THE DISCLOSURE OF RS.75 LAKH, THE AO MADE THE ADDITION OF RS.24,72 ,221/-. AGGRIEVED, ASSESSEE WENT IN APPEAL BEFORE LD. CIT(A). 4. THE ASSESSEE HAD, INTER ALIA, SUBMITTED THAT GRO SS WEIGHT OF DIAMOND AND GOLD AS PER REGULAR RETURNS (INCLUDING VOLUNTAR ILY OFFERINGS BY ASSESSEE) WAS HIGHER THAN THE JEWELLERY INVENTORIZED ON SEARC H. IT WAS POINTED OUT THAT THE LADIES ARE IN THE HABIT OF JEWELLERY HAVING DIF FERENT COMBINATIONS I.E. SOME PART OF ONE SET MAY BE MIXED WITH ANOTHER SET AND, THEREFORE, ITEM TO ITEM RECONCILIATION COULD NOT BE POSSIBLE SINCE JEWELLER Y INVENTORIZED MAY NOT BE EXACTLY BE IN THE LOT AS PER IN THE RETURN. LD. CIT (A) RELYING ON VARIOUS DECISIONS OF CO-ORDINATE BENCHES WHEREIN IT HAS BEE N HELD THAT JEWELLERY HAS TO BE CONSIDERED ON THE BASIS OF GROSS WEIGHT EVEN IF ITEM TO ITEM RECONCILIATION OF JEWELLERY WAS NOT POSSIBLE AND HE DELETED THE ADDITION. 5. BEING AGGRIEVED, DEPARTMENT IS IN APPEAL BEFORE US AND SUBMITTED THE FOLLOWING GROUNDS OF APPEAL:- WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD. CIT(A) HAS ERRED IN HOLDING THAT ITEM TO ITEM RECON CILIATION OF JEWELLERY WAS NOT REQUIRED IN A CASE WHERE VALUE OF JEWELLERY DECLARED AS PER WT ITA NO.1776/KOL/2012 & IT(SS)97/KOL/2013 A.Y. 2010-11 DCIT CC-V KOL V. RAJ KUMAR SARAOGI PAGE 5 RETURN, PURCHASES MADE THEREAFTER AND DISCLOSURE MA DE DURING SEARCH EXCEEDED THE VALUE OF JEWELLERY FOUND IN SEARCH. II) WHETHER THE LD. CIT(A) ERRED IN HOLDING THAT JE WELLERY ITEMS COULD BE ALTERED ON REMAKING WHEN NO EVIDENCE OF REMAKING CO ULD BE FILED BY THE ASSESSEE? II) DEPARTMENT CRAVES TO ADD, ALTER AND MODIFY THE GROUNDS OF APPEAL MENTIONED ABOVE. 6. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES. LD. CIT(A) HAS OBSERVED THAT GOLD JEWELLERY OF GROSS WEIGHT 7277.0 80 GRAMS (NET WEIGHT : 6374.056 1005.010 CARATS OF DIAMONDS WAS DULY EXP LAINED IN THE HANDS OF ASSESSEE AND HIS FAMILY MEMBERS. FURTHER, ASSESSEE SURRENDERED GOLD JEWELLERY OF GROSS WEIGHT 3164.160 (NET WEIGHT 2495 .62 GMS) AND 199.670 CARATS OF DIAMOND IN COURSE OF SEARCH. CONSEQUENTLY , GOLD JEWELLERY OF GROSS WEIGHT 10441.240 GMS (NET WEIGHT 8869.718 GMS) AND 1204.680 CARAT OF DIAMOND WAS EXPLAINED IN THE HANDS OF ASSESSEE AND HIS FAMILY MEMBERS WHICH IS NOT DISPUTED. ON THE OTHER HAND, GOLD JEWE LLERY OF GROSS WEIGHT 8905.410 GRAMS (NET WEIGHT 7655.910 GMS) AND 968.23 0 CARATS OF DIAMOND WAS FOUND AT THE TIME OF SEARCH. THESE BASIC DETAIL S ARE NOT DISPUTED/CONTROVERTED IN ANY MANNER BY THE DEPARTME NT. THE ONLY DISPUTE WAS THAT ASSESSEE WAS NOT BEING ABLE TO RECONCILE ITEM- WISE JEWELLERY WHICH WERE FOUND AT THE TIME OF SEARCH VIS--VIS THE WEALTH TA X AND PURCHASES MADE DURING THE FINANCIAL YEAR BY ASSESSEE. IN THIS REGA RD, WE ARE IN AGREEMENT WITH THE FINDINGS OF LD. CIT(A) THAT ITEMS OF JEWELLERY ARE OFTEN SUBJECTED TO RE- MAKING ON ACCOUNT OF CHANGING FASHION AND DESIGNS. IN INDIAN SOCIETY, THE YELLOW METAL AND DIAMOND HAS ASSUMED LOT OF SIGNIFI CANCE FOR LADIES WHICH IS A STATUS SYMBOL AND THEY BUY IT OR CONVERT THE JEWE LLERY AS PER THE PREVAILING FASHION. THERE HAS NO GAINSAYING THAT FASHION KEEPS ON CHANGING AND, ACCORDINGLY, THE JEWELLERY IS RE-MODELED FROM TIME TO TIME ACCORDING TO THE PREVAILING FASHION. UNDER THE FACTS AND CIRCUMSTANC ES, COMPARISON WITH THE ITEMS OF JEWELLERY FOUND AT THE TIME OF SEARCH WITH WEALTH TAX RETURN, WHICH WERE FILED MUCH EARLIER WAS PUTTING AN ONEROUS TASK ON ASSESSEE TO PROVE ITA NO.1776/KOL/2012 & IT(SS)97/KOL/2013 A.Y. 2010-11 DCIT CC-V KOL V. RAJ KUMAR SARAOGI PAGE 6 SOMETHING IMPOSSIBLE, AND ASSESSEE CANNOT BE AS BED TO PROVE SOMETHING WHICH IS BEYOND ITS CONTROL. WE, ACCORDINGLY, CONFI RM THE ORDER OF LD. CIT(A) AND THIS ISSUE OF REVENUES APPEALS ARE DISMISSED. 7. IN THE RESULT, BOTH APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT 01 /09/2015 SD/- SD/- (MAHAVIR SINGH) (S.V.MEHROTRA) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP ' 01/09/2015 / COPY OF ORDER FORWARDED TO:- 1. / ASSESSEE- RAJ KUMAR SARAOGI, 3, SATYAM TOWERS, 3 , ALIPORE RD. KOL-27 2. / REVENUE DCIT CC- AAYKAR BHAWAN POORVA, 3 RD FL, 110 SHANTIPALLY, KOL-107 3. . 0 / CONCERNED CIT KOLKATA 4. 0- / CIT (A) KOLKATA 5. 3 66., ., / DR, ITAT, KOLKATA 6. : / GUARD FILE. BY ORDER/ , /TRUE COPY/ / .,