Income Tax Appellate Tribunal - Jabalpur
Smt Sulochana Devi Jaiswal vs Dy. Cit on 29 November, 2002
Equivalent citations: (2004)90TTJ(JAB)974
ORDER
Keshawfrasad, A.M.:
The appeal has been directed by the assessee against the order under section 158BC/143/254 of the Income Tax Act, 1961, dated 21-3-2002; pertaining to block period 1-4-1986 to 15-11-1996. The original assessment was made on 31-12-1997. As certain additions were made, the appeal was filed to the Tribunal. The Tribunal vide its order dated 22-2-2000, set aside certain issues for fresh adjudication by the assessing officer. The assessing officer has since passed the order which is the subject-matter of appeal before us.
2. Ground Nos. 1 to 7 are general in nature and do not call for any comments.
3. Ground No. 8 related to the addition of Rs. 1,70,000 representing unexplained cash.
4. Briefly, the facts of the case are that the assessee is wife of Shri Kamal Narayan Jaiswal whose premises were searched on 15-11-1996. During the course of search, certain cash was found and the assessing officer made an addition of Rs. 1,70,000. Substantive addition of this amount was made in the hands of Shri Kamal Narayan Jaiswal and only protective addition has been made in the hands of the assessee.
5. We have considered this issue in the case of Shri Kamal Narayan Jaiswal and in view of our findings therein, the addition made by the assessing officer is deleted.
6. Ground No. 9 related to the addition of Rs. 27,04,539 representing unexplained investments in the FDRs along with accrued interest thereon.
7. As mentioned earlier, the assessee is wife of Shri Kamal Narayan Jaiswal. During the course of search and seizure operation, certain FDRs were found which were in different names. Few FDRs were also in the name of the assessee. In his original order, the assessing officer made certain additions on account of undisclosed investment in these FDRs.
8. On appeal, it was claimed before the Tribunal that there have been double additions on account of FDRs. Certain additions have been made on account of maturity value of the FDRs whereas the additions have been made again on their renewal. The Tribunal considered these facts and vide its order mentioned above, set aside this issue for fresh adjudication. Consequent to the order of the Tribunal, the assessing officer reconsidered the issue and vide his order dated 21-2-2002, the assessing officer had made the addition of Rs. 27,04,539 on account of undisclosed investment in the FDRs. This addition has been challenged before us.
9. It is argued by the learned counsel that the assessing officer has made the addition in respect of 25 FDRs which are mentioned at Annex. A to assessing officer's order. As per Annex. A, FDRs at Sr. Nos. 1, 4 and 16 were either in joint name of the assessee or in different names. The other FDRs stood in the name of the assessee.
10. It was stated that a deed of trust named and styled, Indrani Devi Benefit Trust, was executed on 29-8-1990. Such trust was created in view of the will dated 15-11-1988, of late Shiv Prasad Jaiswal Smt. Sulochana Devi, the assessee, who is daughter of late Shiv Prasad Jaiswal was made trustee of the trust. As per will of the late Shiv Prasad Jaiswal, the fund of the trust will be Rs. 3,50,000 which was invested in the FDRs and accrued interest thereon. It was stated that these FDRs were renewed from time to time and the maturity amount after renewal, etc., on the date of search came to Rs. 6,83,641. It was stated that the certificate from the bank was also furnished to the effect that these FDRs stood in the name of Smt. Sulochana Devi on behalf of Indrani Devi Benefit Trust. It was stated that as the trust was not assessed to tax, the following FDRs were offered for taxation under VDIS-1997.
Amount (Rs.) Date of Deposit Bank No. 27,865 20-1-1996 Cen. Bank of Ind., Nagpur 207741 8,517 20-1-1966
-do-
207744 36,909 20-1-1966
-do-
207745 1,71,069 20-1-1996
-do-
207746 50,943 20-1-1996
-do-
311750 2,08,946 20-1-1996 State Bank of Ind., Nagpur 311752 26,964 23-8-1996 Cen. Bank of Ind., Rajnandgaon 836873 46,685 13-8-1996
-do-
836871 18,675 13-8-1996
-do-
836872 88,068 27-12-1994
-do-
348531 20,000
-Cash-
7,03,641 Total
11. Declarations under VDIS have been duly accepted by the concerned CIT. It was stated that other FDRs were only the renewal of the FDRs and no fresh investment was made by the assessee. The addition made by the assessing officer was, therefore, unwarranted and deserves to be deleted.
12. On the other hand, learned Departmental Representative supported the order of the assessing officer.
13. We have considered the rival submissions. During the course of search and seizure operation, certain FDRs were found and seized. A note book which allegedly mentioned certain other FDRs was also found and seized. The value of all these FDRs even which was noted in the note book was also brought to tax by the assessing officer. We have verified all these FDRs and notings in the note book. As mentioned earlier, a trust was created in the name of Indrani Devi Benefit Trust. The beneficiary of the trust as well as managing trustee was the assessee. As per will of deceased, Shri Shiv Prasad Jaiswal, father of the assessee, the investment in various FDRs aggregating Rs. 3,50,000 became the property of the trust. In order to prove the genuineness of the trust, the assessee has produced the witnesses before whom the trust deed was executed. Even the notary was also examined by the assessing officer. As the FDRs which became the property of the trust were not taxed earlier, the same were offered for taxation under VDIS. The Commissioner has also accepted the declaration under VDIS. It is noteworthy that even the bank from where the FDRs were purchased/ renewed has certified that certain FDRs standing in the name of Smt. Sulochana Devi were issued in her name on behalf of Smt. Indirani Devi Benefit Trust. The FDRs at Sr. Nos. 17 to 25 of Annex. A to assessing officer's order were offered for taxation under VDIS and in view of their acceptance by the concerned Commissioner, the addition of the same to the income of the assessee does not arise. Thus, the addition on account of these FDRs including the interest which has been offered for taxation under VDIS is deleted.
14. The FDR at Sr. No. 1 is of Rs. 2,02,450. It is in the name of Shiv Kumari. This FDR was also considered in the case of Shri Kamal Narain Jaiswal. Smt. Shiv Kumari had offered this FDR for taxation under VDIS. The Commissioner has duly accepted the same. In view of these facts, the question of making the addition to the income of the assessee on account of FDR at Sr. No. 1 to Annex. A does not arise and the same is deleted.
15. The FDR at Sr. No. 2 is of Rs. 1,37,700. The original investment of Rs. 68,000 was made on 14-5-1987, and the maturity value on 14-11-1992, came to Rs. 1,37,700. This FDR was further renewed for one year whose maturity value came to Rs. 1,54,982. It was again renewed on 17-10-1994, (with effect from 14-11-1993), for one year whose value came to Rs. 1,71,069. The FDR of Rs. 1,71,069 finds place at Sr, No. 20 of Annex. A. This FDR has been already offered for taxation under VDIS which has been duly accepted by the Commissioner. In view of these facts, the question of any addition of the value of the FDR at Sr. No. 2 does not arise and the same is deleted.
16. The FDR at Sr. No. 3 is of Rs. 1,35,377. The FDR of such amount was neither found nor seized. The addition was made on the basis of noting in the diary seized.
17. We have examined this document. In the document under the head-Central Bank, Nagpur, 25-11-1991 - 1,04,173 = 20 has been mentioned. It does not give any number of the FDR or any other detail. The learned counsel has also confirmed that there was no FDR of this amount, The figures only indicate the accrued interest of any FDR on 25-11-1991. Such statement of the assessee has not been rebutted by any contrary evidence. We, therefore, hold that the addition to the total income as undisclosed income under Chapter XIV-B can not be made merely on the ground of surmises and doubts. The addition made by the assessing officer in respect of FDR at Sr. No. 3 is, therefore, deleted.
18. FDR at Sr. No. 4 is of Rs. 1,24,727. Similar is the position of this FDR as has been observed in the case of FDR at Sr. No. 3. The addition of this amount is also unwarranted and the same is deleted.
19. The FDR at Sr. No. 5 is of Rs. 1,01,225. This FDR was not found during the course of search. But the noting in the diary seized at the time of search indicated some details of this FDR. It gives the FDR No. 9/152/627820 - 24-3-1991 - 101225 under the head "Central Bank of India, Nagpur". Though the asses see claimed that no such FDR stood in the name of the assessee, we find that specific details about such FDR have been noted in the diary. The assessee could have rebutted the contention of the department by producing documentary evidence to the effect that the FDR number mentioned above did not really exist or the assessee has no concern with such FDR. That has not been done. At the same time when the specific details of the FDR was available with the assessing officer, he could have got it verified from the bank. This has also not been done. We, therefore, set aside the addition of this FDR and restore it back to the file of the assessing officer to make enquiries through the bank. After getting information from the bank, he will take a view on the basis of investigations made by him. The assessee is also at liberty to produce any evidence in support of the claim that no addition on account of this FDR to the total income of the assessee was warranted.
20. FDR at Sl. No. 6 is of Rs. 12,184. As per certificate from the bank, this FDR was renewed whose maturity value came to Rs. 18,675. This renewed FDR finds place at Sr. No. 25 of Annex. A which has already been declared for taxation under VDIS. As the declaration under VDIS has been accepted by the Commissioner, the question of making any addition on account of FDR at Sr. No. 6 does not arise and the same is deleted.
21. PDR at Sr. No. 7 is of Rs. 29,607. As per certificate from the bank, this FDR was renewed from time to time whose maturity value came to Rs. 45,685 which also finds place at Sr. No. 24 of Annex. A. This FDR was offered for taxation under VDIS which was accepted by the Commissioner. Thus, the question of making any addition on account of value of FDR at Sr. No. 7 does not arise and the same is deleted.
22. FDR at Sr. No. 8 is of Rs.60,926. 'Phis FDR is in the joint names of Navneet with the assessee. As per bank certificate, the original investment of Rs. 50,000 was made which was renewed for Rs. 60,925. This FDR of Rs. 60,925 (Sr. No. 8) was further renewed from time to time. Its maturity value on 9-9-1994, came to Rs. 88,068. This amount has been offered for taxation under VDIS and the CFP having accepted the same, the question of making any addition on account of value of FDR at Sr. No. 8 does not arise and the same is deleted.
23. FDR at Sr. No. 9 of Rs. 6,092. As per bank certificate, this FDR was renewed whose maturity value came to Rs. 8,517. This FDR finds place at Sr. No, 18 of Annex. A which has been offered for taxation under VDIS. The Commissioner has accepted the same and, therefore, the question of making any addition on account of FDR at Sr. No. 9 does not arise and the same is deleted.
24. FDR at Sr. No. 10 is of Rs. 1,04,173. This FDR was not found during the course of search. However, the details of this FDR were noted in the note book found during the course of search. As proper investigation in respect of this FDR has not been made, we set aside this issue and restore back to the file of the assessing officer to make investigation of this FDR through the bank. The assessee is also free to file any evidence in support of her claim that no addition of the value of the FDR, if any, to her income was warranted. The assessing officer will take a view on the basis of his investigation.
25. The FDR at Sr. No. 11 is of Rs. 2,960. After verification, we found that the FDR was of Rs. 29,607. This FDR which finds place at Sr. No. 9 has already been considered for taxation. Accordingly, the addition of the same does not arise and the same is deleted.
26. The FDR at Sr. No. 12 is of Rs. 25,586. This FDR was neither found nor seized during the course of search. Even in the note book, except mentioning the figure, no details whatsoever have been mentioned. We, therefore, hold that under Chapter XIV-B, no addition of the value of such alleged FDR was warranted. The addition made by the assessing officer is deleted.
27. The FDR at Sr. No. 13 is of Rs. 1,91,800. The addition has been doubly made. The addition of this FDR has been considered in the hands of Shri Kamal Narayan Jaiswal, the husband of the assessee. As we have considered this FDR in his hands, the addition made in the hands of the assessee is deleted.
28. The FDR at Sr. No. 14 is of Rs. 11,875. The FDR of such denomination was neither found nor seized during the course of search. Even in the note book except mention of such figure, no details whatsoever have been mentioned. We, therefore, hold that no addition under Chapter XIV-B could be made in respect of such FDR. The addition made by the assessing officer is deleted.
29. The FDR at Sr. No. 15 is of Rs. 19,663. This FDR was renewed whose maturity value came to Rs. 29,964. This FDR finds place at Sr. No. 23 of Annex.
A. As this FDR has already been offered for taxation under the VDIS and Commissioner having accepted the same, the question of making any addition of the value of FDR at Sr. No. 15 does not arise and the same is deleted.
30. The FDR at Sr. No. 16 is of Rs. 68,189. The original FDR was purchased for Rs. 50,000. It was renewed for a value of Rs. 60,925. The value of such FDR was brought to tax by the assessing officer which finds place at Sr. No. 8 of Annex. A. This FDR was further renewed whose maturity value came to Rs. 68,189. This FDR was further renewed whose maturity value came to Rs. 88,068 which has been al ready offered for taxation. The Commissioner having accepted the same, the question of making any addition of the value of FDR at Sr. No. 16 does not arise and the addition of the same is deleted.
31. The FDRs, from Sr. Nos. 17 to 25 have been offered for taxation under VDIS and earlier we have deleted the addition on account of these FDRs. The assessee gets partial relief in this ground of appeal.
32. Ground Nos. 10 and 11 related to the addition of Rs. 59,985 on account of undisclosed investment in gold jewellery and addition of Rs. 77,138 on account of undisclosed investment in silver ornaments weighing 11,545 gms. During search and seizure operation, gold jewellery weighing gross weight 470.400 gms. (net weight 441.200 gms.) valued at Rs. 1,85,805 was found from the residence as well as locker of the assessee. When the assessee was asked to explain the sources of investment, it was stated that out of 441 gms., jewellery weighing 266 gms. belonged to the assessee and 175.200 gms. belonged to Smt. Alpana Jaiswal daughter of the assessee. It was stated that 266 gms. of jewellery was received by her at the time of marriage and since the same is declared in her wealth-tax records right from assessment year 1982-83, the question of making any addition on account of undisclosed investment in jewellery does not arise. The copies of computation of wealth were also submitted. The balance jewellery belonged to her married daughter, Smt. Alpana Jaiswal. Looking to the status and customs in Hindu society, the jewellery to this extent could be possessed by any ordinary family. This issue travelled upto the Tribunal who vide its order dated 22-2-2000, set aside the issue to assessing officer with certain directions. On reconsideration, the assessing officer treated investment in jewellery weighing 155 gms. as unexplained and added the same to the income of the assessee as undisclosed income.
33. It was argued that the total weight of jewellery was less than 500 gms. There was no dispute that 266 gms. jewellery was declared by her in her WT return. So, the question of any addition on account of such jewellery does not arise. In view of Board's circular where it was prescribed that jewellery worth 500 gms. may not be seized indicates the intention of the Board that even an ordinary family could possess jewellery worth 500 gms. Regarding undisclosed investment in silver ornaments, the assessing officer on reconsideration treated investment in silver articles weighing 11,545 gms. as unexplained. It is argued that the silver articles included 7 Thalis, 1 Pandan, 19 glasses, 2 jugs or Lotas, 3 plates., 1 bowl, 19 Katories and 4 spoons. These belong to the daughter of the assessee who got it on her marriage. Even the nasmes: of the person who gave the silverwares were also mentioned in the specific articles. Looking to the customs in the Hindu family and the status of the assessee, the addition made by the assessing officer was unwarranted.
34. On the other hand, learned Departmental Representative supported the order of the assessing officer.
35. We have considered the rival submissions. The Board vide its Circular No. 1916, dated 11-5-1994, has prescribed the limit of 500 gms. for gold jewellery which is not to be seized. In other words, the Board has considered the issue and felt that gold jewellery to the extent of 500 gms. could be possessed by an ordinary family. The intention behind such circular was, therefore, very clear. As the unexplained jewellery found during the course of search was much less than 500 gms., we have no hesitation in holding that the addition on account of unexplained investment in jewellery is not justified and the same is deleted.
36. As regards the silverwares found during the course of search, the nature of the articles found clearly indicates that such items could be received at the time of ceremonial occasion like marriage. The weight of silverwares is also reasonable. Considering these facts, we hold that the addition made by the assessing officer on this account is not justified and, the same is deleted.
37. In the result, the appeal filed by the assessee is partly allowed.