Income Tax Appellate Tribunal - Panji
Netra Pritam Shah,, Pune vs Deputy Commissioner Of Income-Tax,, on 29 November, 2017
आयकर अपीऱीय अधिकरण पण
ु े न्यायपीठ "ए" पण
ु े में
IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCH "A", PUNE
सुश्री सुषमा चावऱा, न्याययक सदस्य एवं श्री अयिऱ चतुवेदी, ऱेखा सदस्य के समक्ष
BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM
आयकर अपीऱ सं. / ITA No.1504/PUN/2015
यििाारण वषा / Assessment Year : 2011-12
Netra Pritam Shah,
Parag Milk & Milk Products,
F-109, Adinath Society,
Pune - 41037 .... अऩीऱाथी/Appellant
PAN: ASUPS1093H
Vs.
The Dy. Commissioner of Income Tax,
Central Circle 1(1), Pune .... प्रत्यथी / Respondent
Assessee by : Shri Suhas P. Bora
Revenue by : Shri Ajay Modi, JCIT
सन
ु वाई की तारीख / घोषणा की तारीख /
Date of Hearing : 02.11.2017 Date of Pronouncement: 29.11.2017
आदे श / ORDER
PER SUSHMA CHOWLA, JM:
The appeal filed by the assessee is against the order of CIT(A)-13, Pune, dated 15.09.2015 relating to assessment year 2011-12 against order passed under section 143(3) of the Income-tax Act, 1961 (in short 'the Act').
2. The assessee has raised the following grounds of appeal:- 2 ITA No.1504/PUN/2015
Netra P. Shah
1. The learned CIT(A) erred in confirming the addition made by the AO of Rs.2,20,000/- on account of unexplained investment in silver articles without assigning any valid reason on the ground that details of seizure did not show any silver article.
2. The learned CIT(A) failed to appreciate that the silver articles were included in the total jewellery found and the declaration u/s 132(4) were given considering the said silver articles.
3. The learned CIT(A) erred in not appreciating the alternate submission regarding accumulation of the silver articles in the last 40 years on account of various occasions, which were raised without prejudice to the main contention.
4. The learned CIT(A) erred in confirming the addition of Rs.9,16,863/- on account of unexplained investment in jewellery on the ground that the declaration made in the hands of group but not in the hands of appellant.
5. The learned CIT(A) while confirming the addition made by the AO , erred in not appreciating the following factors:
a. Entire unexplained gold and silver jewellery were covered in the declaration u/s 132(4).
b. Benefit of CBDT instructions about giving credit of jewellery was not considered.
c. It is admitted that the source of income for acquisition of jewellery found was covered by declaration of additional income of the group. d. The appellant deserves for telescopic benefit of these additions against the declaration u/s 132(4).
3. The first issue raised in the present appeal is against addition of Rs.2,20,000/- made on account of unexplained investment in silver articles and the second issue which is raised in the present appeal is against addition of Rs.9,16,863/- made on account of unexplained investment in jewellery.
4. Briefly, in the facts of the case, search and seizure action under section 132 of the Act was conducted in the Parag Group of cases on 04.02.2011. Search was conducted at the residence of Shri Devendra Shah, Shri Pritam Shah, their business associates and the corresponding business premises on 04.02.2011. The said group was engaged in trading and manufacturing of milk products, wherein M/s. Parag Milk Foods Pvt. Ltd. was flagship concern of the 3 ITA No.1504/PUN/2015 Netra P. Shah group and M/s. Bhagyalaxmi Dairy Farms Pvt. Ltd. was sister concern of Parag group. Some of group concerns of Parag group as well as business associates were also covered under Survey under section 133A of the Act. Various loose papers, hand written chits and computer print outs, etc. supporting the practice adopted by the concern was seized from the business premises as well as residential premises. All these papers / loose documents were confronted to Shri Devendra Shah, Smt. Priti Shah, Smt. Netra Pritam Shah (assessee) and the employees and concerned officials during the search as well as during post search enquiries. During the course of search, cash of Rs.38,41,000/- was found from the residence of Shri Devendra Shah, out of which Rs.36 lakhs was seized. Further, cash of Rs.16,28,929/- was found at the residence of Shri Pritam Shah at Manchar, out of which, part of cash found was supported by bank withdrawals and as such cash of Rs.15 lakhs was seized. Further, during the course of search, jewellery to the tune of Rs.2.20 crores was seized out of Rs.2.88 crores found, which belonged to different family members of the group. In the statement of Shri Devendra Prakash Shah recorded under section 132(4) of the Act on 07.02.2011, he offered the investment in jewellery as undisclosed income for the financial year 2010-11 in the hands of family members. The group made certain disclosures during the course of search. However, the same were not offered as undisclosed income in the return of income; but thereafter, petition was moved before the Settlement Commission, which was pending till the date of passing of the assessment order.
5. The assessee during the search had disclosed Rs.41,14,225/- on account of jewellery found and seized. During the course of assessment proceedings, the assessee was asked to furnish the details. The Assessing Officer noted that Shri Devendra Shah had offered undisclosed income on 4 ITA No.1504/PUN/2015 Netra P. Shah account of investment in jewellery totaling Rs.2.19 crores, out of which sum of Rs.41,14,225/- related to the assessee. The Assessing Officer further noted that group had not offered the undisclosed income on account of jewellery on the basis of value of jewellery found but on the basis of value of jewellery seized. The explanation in this regard was sought from the assessee, in which it was pointed out that jewellery of 4375.150 grms. was found from Pritam Shah and jewellery of 5776.800 grms. was found from Shri Devendra Shah along with silver of 20 Kg. valued at Rs.8,80,000/-. The assessee also enlisted the details of family members and allowable jewellery in the hands of each of the family members i.e. 500 grms. in respect of married lady, 250 grms. in respect of unmarried lady and 100 grms. in respect of male members of family and in view of the total members as enlisted at page 6 of the assessment order, jewellery which was covered as per the CBDT Circular totaled 3450 grms. The plea of assessee was that jewellery upto the limit mentioned in the CBDT Circular was thus, to be considered as explained and the balance jewellery was offered as additional income in the hands of assessee. The Assessing Officer on the other hand, rejecting the plea of assessee pointed out that Instruction No.1916 issued by the CBDT dealt with non-seizure of gold ornaments under certain conditions only but did not deal with silver articles or diamond articles. Further, the assessee has failed to explain the source of jewellery to the extent of 3450 grms. and in the absence of the same, merely because CBDT Circular issues guidelines for non-seizure of jewellery, the same cannot be excluded while calculating undisclosed income of assessee. Accordingly, the balance unexplained investment in jewellery to the extent of Rs.9,16,863/- was added in the hands of assessee. Further, since the CBDT Circular did not apply to silver articles, addition was made on account of value of the same at Rs.8,80,000/-. 5 ITA No.1504/PUN/2015
Netra P. Shah Both the additions made by the Assessing Officer were confirmed by the CIT(A). Hence, the assessee is in appeal against the order of CIT(A).
6. The learned Authorized Representative for the assessee pointed out that out of total jewellery found valued at Rs.8,80,000/-, the assessee had shown the value of silver articles at Rs.2,20,000/-, which has accumulated over a period of time and the same is thus, explained in the hands of assessee. In respect of gold jewellery, it was pointed out by the learned Authorized Representative for the assessee that to the extent of limit prescribed in the CBDT Circular, the assessee is entitled to the benefit of value of the said jewellery and the balance jewellery, which was found has been declared by the assessee in the return of income and hence, there is no merit in the addition.
7. The learned Departmental Representative for the Revenue on the other hand, placed reliance on the orders of authorities below.
8. We have heard the rival contentions and perused the record. The first issue which arises in the present appeal is on account of value of gold jewellery found during the course of search. Search on Parag group was carried out on 04.02.2011. During the course of search, beside cash and loose papers, jewellery as well as silver articles were found from the possession of assessee and the family members, which comprised of Paras group of cases. The issue which is arising in the present appeal is in relation to jewellery and silver articles found during the course of search. The total value of jewellery of Rs.2.88 crores belonging to different family members was found, out of which jewellery to the extent of Rs.2.20 crores was seized. The assessee explained that jewellery to the extent as allowable as per the CBDT Circular to be held by 6 ITA No.1504/PUN/2015 Netra P. Shah each member of the family stands explained to that extent and in respect of balance, additional income was offered in the hands of different family members. There is no dispute vis-à-vis additional income offered on account of extra jewellery found from the possession of assessee and his family.
9. The limited issue which arises is in relation to jewellery which was claimed by the assessee to be explained in view of the CBDT Circular. The said Circular provides that jewellery to the extent of 500 grms. in the hands of married lady, 250 grms. in the hands of unmarried lady and 100 grms. in the hands of each male member of the family would not be seized during the course of search because of family traditions in India, jewellery to the said extents is held by them. Once jewellery to the said extent is assumed to be held by the individuals of family as per the family tradition, hence the sources of said jewellery is on account of various rituals of family tradition and the same stands explained in the hands of assessee. Once the jewellery is explained to that extent and the balance extra jewellery found from the possession has been offered as additional income by the assessee, then there is no merit in making any addition in the hands of assessee on account of gold jewellery. Accordingly, we hold so. We direct the Assessing Officer to delete the addition of Rs.9,16,863/- on this count.
10. Now, coming to the second addition on account of value of silver articles found from the assessee and her family members, which totaled to the value of Rs.8,80,000/-. The list of family members which is available at page 6 of the assessment order reflects 13 members of the said family and in view of family traditions, holding of silver articles to the extent of Rs.2,20,000/- merits to be accepted in the hands of assessee. Accordingly, we hold so. Thus, there is no 7 ITA No.1504/PUN/2015 Netra P. Shah merit in making aforesaid addition on account of silver of Rs.2,20,000/-. The grounds of appeal raised by the assessee are thus, allowed.
11. In the result, appeal of assessee is allowed.
Order pronounced on this 29th day of November, 2017.
Sd/- Sd/-
(ANIL CHATURVEDI) (SUSHMA CHOWLA)
ऱेखा सदस्य / ACCOUNTANT MEMBER न्याययक सदस्य / JUDICIAL MEMBER
ऩुणे / Pune; ददनाांक Dated : 29th November, 2017.
GCVSR
आदे श की प्रयतलऱपप अग्रेपषत/Copy of the Order is forwarded to :
1. अऩीऱाथी / The Appellant;
2. प्रत्यथी / The Respondent;
3. आयकर आयुक्त(अऩीऱ) / The CIT(A)-13, Pune;
4. The Pr.CIT(Central), Pune;
5. ववभागीय प्रतततनधध, आयकर अऩीऱीय अधधकरण, ऩुणे "ए" / DR 'A', ITAT, Pune;
6. गार्ड पाईऱ / Guard file.
ु ार/ BY ORDER, आदे शािस सत्यावऩत प्रतत //True Copy// वररष्ठ तनजी सधिव / Sr. Private Secretary आयकर अऩीऱीय अधधकरण ,ऩण ु े / ITAT, Pune