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2023 (2) TMI 507
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....he assessing officer were also confirmed partly by the Commissioner of Income Tax (Appeals) without appreciating the facts of the case correctly hence the assessment is invalid. 3. That in any view of the matter undisclosed income/investment was not determined on the basis of any search material and the assessing officer simply proceeded to make the additions arbitrarily as if it is a normal assessment and his action as partly confirmed by the first appellate authority is also highly unjustified and illegal. 4. That in any view of the matter a part sum of Rs. 6,95,541.00 out of the addition of Rs. 9,49,003.00 made by the assessing officer on count jewelleries as maintained by the Commissioner of Income Tax (Appeals) is highly unjustified, incorrect and illegal in the facts and circumstances of the case. Because the addition was made based on pure conjectures and surmises ignoring the status of appellant's family, social/religious customs and traditions prevailing in community and without supporting any search material, hence the part of the addition so maintained is liable to be deleted. 5. That in any view of the matter addition of Rs. 1,07,651.00 ma....
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....as the year of search therefore, regular assessment was framed by the AO under section 143(3) on the basis of seized material. In response to the notice issued under section 142(1), the assessee explained the source of acquisition of gold jewellery as it belongs to the assessee, her two daughters and some of the jewellery belongs to her mother Smt. Indra Devi. The assessee further explained that she married in the year 1995 with Sh. Ramesh Kumar s/o Mata Saran Kesarwani. Her husband belongs to a respectable business family of Allahabad. The assessee received jewellery from both sides at the time of marriage as well as on subsequent occasions namely birthdays of children and on other occasion. The assessee further stated that her husband deposited 623 gram gold under tax free gold bond scheme and received back the same on 29.12.1998. The said declared gold was found at the time of search and mentioned at Sr. No. 13 of jewellery inventory in panchnama. Similarly, there was disclosure under VDIS-97 of 796.150 grams of jewellery. The rest of the jewellery was claimed as stridhan of the assessee as well as her two daughters. The AO did not accept the explanation of the assessee and afte....
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....l dated 06.07.2018 in the case of Shri Praveen Kumar Kesarwani vs. Jt. CIT (OSD), Allahabad and submitted that an identical issue has been considered and decided by the Bench in favour of the assessee. He has also relied upon the judgment of Hon'ble Rajasthan High Court in the case of CIT vs. Satya Narain Patni 106 DTR 436 and submitted that the Hon'ble High Court has held that as per the CBDT instruction dated 11th May, 1994, the jewellery to the extent of 500 grams per married lady, 250 grams per unmarried lady and 100 grams per male member of the family need not be seized and therefore, to that extent, the jewellery found in the possession of the assessee cannot be questioned about its source and acquisition. Thus, the learned AR has submitted that the addition sustained by the CIT(A) is not justified and same may be deleted. 5. On the other hand, learned DR has submitted that the explanation of the assessee cannot be accepted as the quantities of the jewellery explained by the assessee are not tallying with the actual jewellery found during the course of search. He has relied upon the orders of the authorities below. 6. We have considered the rival submissions as well as ....
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....at jewellery weighing 678 gms belong to the assessee which she held to be acquired from undisclosed sources and made the addition of Rs 949,003/- u/s 69B of the Act. The main arguments of the appellant against the said addition in her written submissions was that the assessee got married in the year 1975 with Shri Ramesh Kumar Son of Late Shri Mata Saran Kesarwani. Her husband belongs to respectable business family of Allahabad and at the time of marriage she received the jewellery from both side of her relation / relatives and on subsequent occasion which is her STRIDHAN and thus the addition as made is unwarranted. The fact that the appellant belongs to a status family and that gold is given at the time of marriage and other occasions as stated by the appellant on social and religious occasions as per practice prevailing in the community is not in doubt and accepted. Even as per the board's circular, benefit with regard to possession of jewellery was not allowed to the assessee. Therefore considering the stated facts I hold and allow the benefit of 500 gms of jewellery to the appellant on account of her Stridhan. The appellant had argued that regard....
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....nt, only the jewellery weighing (1796- 500796.150) = Rs 499.85 gms is held to be the jewellery acquired by the appellant from undisclosed sources. The value of the said jewellery weighing 499.85 gms on the same basis as valued by the AO comes to Rs 695,541/-, which addition is confirmed. The appellant get relief of Rs (949,003- 695,541)= Rs 253,461/-. (v) The ground of appeal no.8 is against the addition of Rs 107,651/- made by the AO u/s 69Aof the Act. The cash amounting to Rs 107,100/- was found during search the appellant claimed that Rs 24,000/- belonged to her husband, Rs 53,451/- belonged to her firm M/s Gupta Traders and Rs 30,200/- belonged to her children. The AO rejected the contention of the assessee in this regard and made the addition of Rs 107,651/-." 9. Without going into the controversy regarding the jewellery belonging to the mother of the assessee first we consider the explanation supported by undisputed evidences such as the gold bar weighting 623 grams which were received by the husband of the assessee under tax free Gold Bond Scheme, 1998 for which the assessee has produced a certificate issued by the Reserve Bank of India giving the details of gold....
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....ment purposes. These guidelines may please be brought to the notice of the officers in your region. Yours faithfully, Sd/- Siddhartha Mukherjee Secretary (CBDT) (F.No.286/63/93-IT(Inv.II)" 7. We have gone through the order of CIT(A) wherein it has been observed as under:- Belongs to/Found from Smt. Anita W/o Satyendra Patni (self) Smt. Aparna W/o Chandra Prakash Patni (Eldest son) Smt. Priyanka W/o Pushpendra Patni (2nd son) Smt. Ruchi W/o Girish Patni (3^rd son) Bank Locker Bed 139.5 240.3 210.8 137.6 Bed rooms 315 163.2 195.1 Bed room of Satyendra patni 395 232.4 229.7 246.5 Found one person 40 15 19 32 Total gross wt. 574.5 802.7 622.7 611.2 Total net wt. 500.5 722.5 529.5 449.764 In the statements recorded on 25th Aug.. 2004 during search under s. 132(4) the assessee and various family members stated as below: Satyendra Patni: In reply to question No. 5 he stated that he possesses one gold ring and 2 gold chains and his wife possesses 30 Tola gold jewellery. He further stated that all his 3 daughter-in-....
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....of the community. came down with the said circular and one has to go with the weight and not with the value as the value may fluctuate over the years. The Tribunal has also appreciated the fact on record that the marriages of three sons were performed in the years 1996, 2000 and 2003 and all the marriages including the assessee and three sons were performed prior to 2003. It is also on record that the statements of various family members were recorded and none has stated that these are not personal wearing jewellery and same were received by the respective ladies/daughter-in- law on/or at the time of their marriages either from the parental side or in-laws side and even subsequently at the time of birth of their children. 11. On perusal of the circular of the Board. quoted supra, it is clear that in the case of wealth-tax assessee, whatever gold jewellery and ornaments have been found and declared in the WT return, need not be seized. However, sub cl. to prescribes that in case of a person not assessed to wealth tax gold jewellery and ornaments to the extent of 500 gms per married lady, 250 gms per unmarried lady and 100 gms per male member of the family need not be seized....
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....the said limit as unexplained investment of the person with whom the said jewellery has been found. 13. Admittedly, looking to the status of the family and the jewellery found in possesssion of four ladies, was held to be reasonable and therefore. the authorized officers, in the first instance, did not seize the said Jewellery as the same being within the tolerable limit or the limits prescribed by the Board and thus, in our view, subsequent addition is also not justificable on the part of the AO and rightly deleted by both the two appellate authorities namely CIT(A) as well as the Tribunal. 14. It can also be observed here that prior to 1992. when the exemption limit under the WT Act was about Rs. 1.00.000 or Rs. 1.50.000, then in most of the cases, returns were filed under the WT Act because even in case of possession of 500 gms per lady and the other assets namely: capital investments in firms/shares, landed property etc. etc. being taxable return of wealth were invariably filed by the assessees. However, by the Finance Act, 1992, w.e.f. 1st April. 1993, drastic change was introduced under the WT Act where only some assets under s. 2(ea) came within the perview....
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.... acquisition. We further note that the co-ordinate Bench of this Tribunal in the case of Shri Praveen Kumar Kesarwani vs. Jt. CIT (OSD), Allahabad (supra) has considered this issue in para 8.5 as under:- "8.5 Now coming to last addition which learned CIT(A) has sustained on account of unexplained jewellery. In this respect we find that the assessee during the initial recording of statement itself had explained the jewellery to be belonging to his wife, son and himself and he further explained that he and his wife had received the jewellery on the occasion of his marriage from his father-in-law and mother and their statements were recorded by the authorities below. We further find that assessee's mother Smt. Urmila Kewarwani had declared jewellery under VDIS scheme, a copy of which is placed at page No. 185 of the paper book. The mother of the assessee had also stated in her statement that the jewellery declared by her in the VDIS Scheme was used for making certain jewellery which she had given to his son. Copy of letter written by the mother of the assessee is placed at page 181 of the paper book. We further find that the grand-father of the assessee Shri Vishwanath Pr....
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....AO did not accept the explanation of the assessee and after allowing the cash balance as on 25th August, 2009 of Rs. 5475.50/-, as per the books of accounts, made the addition of the balance amount of Rs. 100,625.50/- as income from undisclosed sources. Accordingly, the AO rejected the explanation of the assessee that the cash amounting to Rs. 24,000/- belonging to the husband of the assessee and Rs. 30,200/- belonging to the children as a saving for want of any supporting evidence. The CIT(A) confirmed the addition made by the AO on this account. 14. Before the Tribunal, the learned AR of the assessee has submitted that the assessee explained the source of cash in her statement recorded under section 132(4) in reply to question no. 4 and submitted that the assessee has explained that a sum of Rs. 30,200/- was found from the purse of assessee and her daughter which is the money for the household expenditure. The balance was explained by the assessee as belongs to the business entity of M/s Gupta Traders and a sum of Rs. 24,000/- belong to the husband of the assessee Shri. Ramesh Kumar. The learned AR has referred to the assessee's reply before the CIT(A) and submitted that the a....
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.... stock register as well as collection from the debtors however, the CIT(A) was not impressed with the said explanation and sustained the addition. It is pertinent to note that the CIT(A) has held the entire cash of Rs. 1,07,651/- found during the course of search belongs to the assessee and addition to the said extent has been confirmed whereas the AO has already allowed the credit of cash balance available in the books of M/s Gupta Traders to the extent of Rs. 5,475.50 paisa. Therefore, to that extent, there is a mistake in the impugned order of the CIT(A). The CIT(A) has dealt with this issue in para (v) as under:- (v) The ground of appeal no.8 is against the addition of Rs 107,651/- made by the AO u/s 69Aof the Act. The cash amounting to Rs 107,100/- was found during search the appellant claimed that Rs 24,000/- belonged to her husband, Rs 53,451/- belonged to her firm M/s Gupta Traders and Rs 30,200/- belonged to her children. The AO rejected the contention of the assessee in this regard and made the addition of Rs 107,651/-. The AO observed in the assessment order that with regard to the source of cash amounting to Rs 53,451/- claimed to belong to her Firm M/....
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....on here that on 26.08.2009 her husband was out of station. Anyhow other staff sold the goods and challans and cash- memo were issued and necessary entry passed in the stock Register viz. transaction took place on 26.08.2009. In this way the cash was generated / available on the date of search. In connection with Rs. 30,200/- it is submitted that the same belongs to the children of assessee and was kept in Almirah. Thus the amount found and seized was from definite source and for such small amount question of drawing any adverse inference does not arise. In this connection it is also necessary to mention here that on 24.08.2009 there was opening cash balance of Rs. 85,978/- and earlier also on different dates there was sufficient cash balance. In these background declared cash balance as on 26.08.2009 may please be accepted in the facts and circumstances of the case." The above explanation of the appellant about the source of cash found during the course of search is considered. As regards the explanation about the source of cash amounting to Rs 53,451/- belonging to M/s Gupta Traders, there is no evidence of sale through cash memo to the extent of Rs 28,006/. Though the ap....
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..... Accordingly, in the facts and circumstances of the case, we do not find any error or illegality in the impugned order of the CIT(A) except the mistake regarding the quantum of addition sustained by it as already discussed in the foregoing part of this order. Ground no. 5 is dismissed. 19. Ground no. 6 is regarding the addition of Rs. 56,310/- made by the Assessing Officer on account of excess stock of Kimam. The AO issued notice under section 142(1) seeking explanation from the assessee about the stock position as found on the date of search in comparison to the stock recorded in the stock register and the books of accounts. After considering the reply of the assessee, the AO has decided this issue as under:- "Issue of excess stock of kimam: The reply of assessee with regard to 260Kg. Kimam lying and found at the platform on the date of survey in the factory premises (Idgah Road) is not convincing. It is a fact that the assessee manufactures Kimam from raw tobacco and this process will take certain period of time. As per stock register found and seized as annexure "A 12" there was only 1160 kg of Kimam which was shown as opening stock as on 27-08-2009. Manufa....
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....ch in the factory / survey premises at Sultanpur. The learned AR has referred to the statement of the assessee recorded under section 132(4) and submitted that the explanations were already furnished by the husband of the assessee in his statement recorded by the survey party. Thus, the learned AR has contended that this is a hypothetical addition made by the AO without considering the correct facts of available unfinished product and thereby the AO presumed that the raw tobacco issued from the stock register on 22.8.2009 would have yielded the finished product of kimam of 260 kg and the same was not recorded in the books of accounts. The AO doubted the explanation of the assessee for the unfinished product as to cover the excess stock of kimam of 260 kg found at the time of search and survey. He has thus contended that without verifying the correct position of the stock of kimam, the AO has made the addition by treating the entire stock as finished product. On the other hand, the learned DR has submitted that the Assessing Officer has made the addition on the basis of the seized / impounded material as per annexure A-11 and 12 which is the stock inventory as well as stock register....
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....he stock of 260 kg kimam which was found on the date of survey found lying on the platform in the factory premises and the same was not supported with any evidence. Therefore the addition of Rs 56,310/- on account of undisclosed stock of 260 kg of kimam is confirmed." 23. In view of the above discussion, the ground no. 6 of the assessee's appeal is dismissed being de void of merit. 24. In the result, the appeal of the assessee is partly allowed. Order pronounced in the open Court on 05.01.2023 at Allahabad, U.P. Vide separate concurring order dated 4/1/2023 ============= Document 1 "पà¥à¤°à¤¶à¥à¤¨ 6 तलाशी के दौरान आपके बेडरूम की अलमारी से 1182 गà¥à¤°à¤¾à¤® सोने के जेवरात पà¥à¤°à¤¾à¤ªà¥à¤¤ हà¥à¤ हैं तथा बरामदे की अलमारी से 623 गà¥....
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....¤µà¤¾à¤° मेरे पति शà¥à¤°à¥€ रमेश कà¥à¤®à¤¾à¤° के हैं, शेष 678 गà¥à¤°à¤¾à¤® जà¥à¤µà¥ˆà¤²à¤°à¥€ मेरी तथा मेरी पà¥à¤¤à¥à¤°à¤¿à¤¯à¥‹à¤‚ डाली तथा ओमी की है।" Document 2 00146 HESLAV Certified the Sh... Lane CERTIFICATI Gold Bonds, 1998 Khm (hereinafter called recipients Kasarwan zanda Bhandar. ORIGINAL Delivery Order No. C/172 rusading at Salon, Aleatosul 623. grammes of gold of 0.995 vas/ were the last holder(s) of the undernoted Gold Bond(s), for....... ineness. Gold Bond 1998 No. 08/22/142 Grammes 623 Sm .229/12/98 to the said. and that the repayment of the above bond(s) has been made on recipient(s) in the form of bar/s bearing National Emblem (Ashoka Pillar) and discs of gold of 0.995 fineness bearing India Government Mint markings as per ....
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.... above the quantity accepted for issue of the Gold Bond is enclosed, under paragraph 4(5) of the Notification bid Encl 1 draft cheque as above. Place Bombay Date: 31/5/93 For Reserve Bank of India p. Manager 2 Issued under paragraph 5(3) of Government of India, Ministry of Finance, (Department of Economic Affairs) Notification bearing GSR 76(E) dated 18-2-93. To be deleted wherever not relevant deleted LIKE NOTE: This receipt should be preserved carefully 21: बही ऋण पà¥à¤°à¤®à¤¾à¤£à¤ªà¤¤à¥à¤° सं. 1998 ONDS 199 DERT GERUSICATE NO. BY /RKN- 142 0.10/10/97 Manget. FOR. 623-GRAMMES OF GOLD गà¥à¤°à¤¾à¤® सà¥à¤µà¤°à¥à¤£ के लिठयह पà¥à¤°à¤®à¤¾à¤£à¤¿à¤¤ किया जाता है कि à¤à¤¾à¤°à¤¤ सरकार को परिदतà¥à¤¤ सà¥à¤µà¤°à¥à¤£ के पà¥à¤°à¤¤à¤¿à¤«à¤²à¤....
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....ck, on the expiry of five years from the date of this Bond, is entitled to receive the aforesaid quantity of Gold of 0.995 fineness and also a lumpsum interest at the rate of rupees forty only. per gramme of such gold. This Bond is transferable by means of transfer deed specified on the reverse. С. Праці वरà¥à¤¨à¤° à¤à¤¾à¤°à¤¤à¥€à¤¯ रिज़रà¥à¤µ बैंक Governor, Reserve Bank of India सोन Public Debl Qilice ખાશીય હિત ધારà«àª¯à«àª‚ Reserve Bank pl India,Bombay 215 1993 Dated the पà¥à¤° Manager BISE May 1993 Document 3 "पà¥à¤°à¤¶à¥à¤¨ 4 तलाशी के दौरान आपके इस रिहायशी à¤à¤µà¤® वà¥à¤¯à¤¾à¤ªà¤¾à¤°à¤¿à¤• परिसर से रà¥à¥¦ 1,07,100/- की नकदी मिà¤....