SHRUTI LAL,NEW DELHI V. DCIT, CENTRAL CIRCLE-05, NEW DELHI

ITA 2019/DEL/2023

AI Insights

The case involves an appeal by Shruti Lal against the order of the Commissioner of Income Tax (Appeals) which sustained an addition of Rs. 12,93,307 as unexplained jewellery found during a search and seizure operation under section 132 of the Income Tax Act, 1961. The search was conducted on the Kshitij Lal Group, and Shruti Lal was implicated due to the jewellery found in a locker. The primary legal issues revolved around the validity of the notices issued under sections 143(2) and the subsequent assessment order, as well as the substantive issue of whether the jewellery could be considered unexplained. The Tribunal dismissed the procedural grounds regarding the notices and focused on the substantive issue of the unexplained jewellery, ultimately deciding in favor of the assessee based on the evidence and affidavits presented.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 474887 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2020-2021
• Other Referred Cases: CIT (IT-1) Vs Brandix Mauritius Holdings Ltd. in ITA No.163/2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAYA CHAUDHARY
• Assessee Lawyers: RAJ KUMAR; SURAJ
• Keywords: Gift; Search and seizure
• Section: 143(1); 132; 69A; 139

Judgement Text

" 1 ITA No. 2019/Del/2023 ShrutiLal Vs. DCIT IN THE INCOME TAX APPELLATE TRIBUNAL DELHI (DELHI BENCH ‘G’ NEW DELHI BEFORE SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER AND SHRI BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER ITA No. 2019/DEL/2023 (A.Y. 2020-21) Shruti Lal C/o. M/s Raj Kumar & Associates L-7A (LGF), South Extension Part-2, New Delhi PAN: ABHPL4944L Vs. DCIT Central Circle-05 Jhandewalan Extension New Delhi Appellant Respondent Assessee by Shri Raj Kumar Adv and Shri Suraj Gupta, Adv Revenue by Ms. Jaya Chaudhary, CIT(DR) Date of Hearing 03/03/2025 Date of Pronouncement 07/03/2025 ORDER PER YOGESH KUMAR, U.S. JM: The present appeal is filed by the Assessee against the order of the Commissioner of Income Tax (Appeals) [‘Ld. CIT (A)’ for short] dated 20/06/2023 for the Assessment Year 2020-21. 2. The Grounds of Appeal are as under:- “1. That under the facts and circumstances the complete asstt. proceedings are non-est and without jurisdiction for the reason that No mandatory DIN is mentioned in the notice U/s.143(2) Dtd.13.04.21 and also no reason for non-quoting of DIN is 2 ITA No. 2019/Del/2023 ShrutiLal Vs. DCIT mentioned, which is the only notice under this section and the DIN thereof has been issued on 18.08.21 i.e. after more than 04 months, against, at the most, was required within 15 working days w.e.f. 13.04.21, hence in view of CBDT Circular No.19/2019 Dtd.14.08.19 as further so held by Hon'ble Delhi H.C in the case of CIT (IT-1) VsBrandix Mauritius Holdings Ltd. in ITA No.163/2023, Order Dtd.20.03.23, the notice Dtd.13.04.21 is illegal, non-est and deemed as never has been issued, consequently all subsequent proceedings becomes without jurisdiction. 2. That without prejudice to G.No.1, under the facts and circumstances, the copy of notice already issued U/s.143(2) Dtd.13.04.21, again served alongwith DIN Dtd.18.08.21 cannot be assumed as a fresh notice on 18.08.21 alongwith DIN Dtd.18.08.21, further, in any case, notice U/s.143(2) could had been issued only upto 30.06.21 i.e. within period of 03 months from the end of financial year in which the ITR has been filed, as per the law applicable at that time. 3. That under the facts and circumstances, the impugned asstt. order Dtd.27.09.21 communicated on ITBA is unsustainable in law and should be deemed to never has been issued for the reason of issuing DIN thereof on 29.09.21 and in the absence of quoting of DIN in body of asstt. order, as mandated by CBDT Circular No.19/2019 Dtd.14.08.19 and also for non- compliances of other mandatory conditions of the said circular in view of Hon'ble Delhi H.C. in CIT (IT-1)VsBrandix Mauritius Holdings Ltd. in ITA No.163/2023, Order Dtd.20.03.23\" 4. That under the facts and circumstances and in view of the explanations and evidences filed, both the lower authorities erred in law and on merits in making and sustaining addition of Rs.12,93,307/-u/s.69A as unexplained jewellery out of the total gold jewellery and silver articles of Rs.40,25,605/- found from Locker No 92, Central Bank of India, E.P Nagar, New Delhi. 5. That without prejudice, even on the basis of findings of A.O., the calculations of alleged unexplained jewellery at Rs.12,93,307/- is erroneous and excessive against correctly as Rs.11,23,600/-.” 3 ITA No. 2019/Del/2023 ShrutiLal Vs. DCIT 3. Brief facts of the case are that, a search and seizure operation u/s 132 of the Income Tax Act, 1961 (‘Act’ for short) was carried out in Sh. KshitijLal Group cases. A search warrant of authorization u/s 132 of the Act was issued in the name of the Assessee on 03/04/2019. The Assessee had furnished her return of income u/s 139 of the Act declaring income of Rs.6,77,886/-, which was processed u/s 143(1) of the Act. The return was processed u/s 143(1) of the Act since the search was initiated in the year under consideration being search year. An assessment order u/s 143(3)of the Actcame to be passed by making an addition of Rs. 12,93,307/- u/s 69A of the Act on account of unaccounted money. Aggrieved by the assessment order dated 27/09/2021, the Assessee preferred an Appeal before the CIT(A). The Ld. CIT(A) vide order dated 20/06/2023, dismissed the Appeal filed by the Assessee. Aggrieved by the order dated 20/06/2023 passed by the Ld. CIT(A), the Assessee preferred the present Appeal on the Grounds mentioned above. 4. The Ld. Counsel for the Assessee submitted that the Assessee will not be pressing Ground No. 1 to 3. Accordingly, Ground No. 1 to 3 of the Assessee are dismissed as not pressed. 4 ITA No. 2019/Del/2023 ShrutiLal Vs. DCIT 5. The Ld. counsel for the Assessee submitted that both the Lower Authorities have erred in law and on merits in making/sustaining addition of Rs. 12,93,307/- u/s 69A of the Act as unexplainedjewellery out of the total gold jewellery and silver article of Rs. 40,25,605/- found from the locker. The Ld. Counsel further submitted that the A.O. committed error in not accepting 350 grams gold gifted by her mother-in- law late Vimla Devi on the ground that he affidavit has not been filed. The Ld. Counsel further submitted that the said Vimla Devi died on 08/04/2021 prior to passing of the assessment order and her husband has given affidavit before the Ld. CIT(A) which has not been considered by Ld. CIT(A). The Ld. Counsel further submitted that the A.O. has also doubted gold jewellery weighing 27.900 gram of the Assessee, which is too small to be doubted considering the status of the family of the Assessee. The Ld. Counsel further submitted that the silver of 85.5 gram has been valued at gold rates, which ultimately resulted in making excess and erroneous addition of Rs. 1,69,697/-, thus, Ld. Assessee's Representative sought for allowing the Appeal. 6. Per contra, the Ld. Departmental Representative submitted that regarding the jewellery of 350 grams of late Vimla Devi, the Assessee has not given any explanation before the A.O. The husband of Vimla Devi i.e. Sh. S. S. Lal filed an affidavit before the Ld. CIT(A) which is contrary to 5 ITA No. 2019/Del/2023 ShrutiLal Vs. DCIT the stand taken by him before the A.O. and contended that in the affidavit filed before the A.O. by Shri S. S. Lal on his behalf statedthat he has gifted 300 grams on behalf of himself and his spouse and again contrary to the said affidavit, the said Sh. S. S. Lal filed an affidavit on behalf of his deceased wife before the Ld. CIT(A) stating that the 350 grams of gold has been gifted by the wife late Lalita Devi. Further contended that, in the earlier affidavit, the said Sh. S. S. Lal has not disclosed regarding individual gift given by his wife and filing of the affidavit before the Ld. CIT(A) is an afterthought. Thus, the Ld. Departmental Representative sought for upholding the addition. 7. We have heard both the parties and perused the material available on record. On perusal of the record, it is found that Smt. Vimla Devi died on 08/04/2021 i.e. prior to passing of the assessment order. Thus, the Assessee could not file the affidavit of Smt. Vimla Devi and substantiate the claim in so far as 350 grams of jewellery gifted by mother-in-law i.eSmt. Late Vimla Devi. However, the father-in-law of the Assessee Sh. S. S. Lal had filed affidavit on behalf of his wife late Vimla Devi and confirmed that the said 350 grams gold jewellery was indeed gifted by Vimla Devi independently. It is a matter of fact that the said Sh. S. S. Lal had already filed affidavit before the A.O. on his behalf stating that he along with his spouse have for jointly gifted 300 gram 6 ITA No. 2019/Del/2023 ShrutiLal Vs. DCIT jewelleryto the Assessee which has been accepted. There is no such bar on late Vimla Devi gift additional 350 grams jewelery on her behalfapart from gifting 300 grams of jewellery jointly along with husband. On keeping the relationship between the donor and the Assessee in mind and in the facts and circumstances of the case,we are of the opinion that the Ld. CIT(A) committed error in rejecting the claim of the Assessee regarding 350grams jewellerywithout appreciating the facts narrated in the affidavit. 8.In respect of the gold jewellery of 27.9 grams are concerned, the same has been valued at Rs. 82,703/-. Considering the statues of the family, which is admittedly been searched, the authorities below have committed error in doubting the same. In any case, the said 27.900 grams could have been accepted as ‘Stridhana’. Regarding the silver jewelry of 85.5 grams are concerned, as per the valuation the same is valued at Rs. 3,420/-, however, the A.O. committed error in valuing the said silver item at gold rates. Considering the smallness of the amount which is valued at Rs. 3,420/-, we are of the opinion that the Lower Authorities have committed error in doubting the same. Considering the above facts and circumstances, we find no reason to sustained the orders of the 7 ITA No. 2019/Del/2023 ShrutiLal Vs. DCIT Lower Authorities, accordingly, addition of Rs. 12,93,307/- made by the A.O. which was sustained by the Ld. CIT(A) is hereby deleted. 9. In the result, Appeal of the Assessee is allowed. Order pronounced in the open court on 07th March, 2025 Sd/- Sd/- (BRAJESH KUMAR SINGH) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Date:- 07.03.2025 R.N, Sr.P.S* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "