Income Tax Appellate Tribunal - Chandigarh
Sh. Satish Goyal, Chandigarh vs Assessee on 28 September, 2015
IN THE INCOME TAX APPELLATE TRIBUNAL
DIVISION BENCH, CHANDIGARH
BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER
AND MS. RANO JAIN, ACCOUNTANT MEMBER
ITA No.588/Chd/2015
(Assessment Year : 2012-13)
Sh.Satish Goyal, Vs. The D.C.I.T.,
SCF 153, Sector 26, Central Circle-1,
Chandigarh. Chandigarh.
PAN: AGSPK9083D
ITA No.589/Chd/2015
(Assessment Year : 2012-13)
Sh.Pradeep Goyal, Vs. The D.C.I.T.,
SCF 153, Sector 26, Central Circle-1,
Chandigarh. Chandigarh.
PAN: AEAPG7356M
And
ITA No.590/Chd/2015
(Assessment Year : 2012-13)
Sh.Kunal Goyal, Vs. The D.C.I.T.,
# 54, Sector 28-A, Central Circle-1,
Chandigarh. Chandigarh.
PAN: AHJPG8172D
(Appellant) (Respondent)
Appellant by : S/Shri Sudhir Sehgal
& Ashok Goyal
Respondent by : Shri Jitender Kumar, DR
Date of hearing : 16.09.2015
Date of Pronouncement : 28.09.2015
2
O R D E R
PER RANO JAIN, A.M. :
These three appeals filed by the different assesses of the same group having similar facts and similar issues are directed against the separate orders of learned Commissioner of Income Tax (OSD), Gurgaon dated 20.4.2015, 20.4.2015 and 30.3.2015 respectively for assessment year 2012-13. Since the detailed findings are given by the learned CIT (Appeals) in the case of Shri Pradeep Goyal in ITA No.589/Chd/2015, we are first dealing with the same.
2. Briefly, the facts of the case are that a search and seizure operation was conducted at Pavitra Group of cases as on 16.2.2012. The assessee was also covered under the operation. During the course of search, jewellery amounting to Rs.1,75,13,644/- was found from the residence and bank lockers in the name of different family members as follows:
s. Amount
No.
1. Gold & Diamond Jewellery found from Rs. 1,08,75,149/-
residence H.No.-54, Sector-28 A, Chandigarh
2. Locker No.-458 of Punjab National Rs..29,25,510/-
Bank, Sector-28, Chandigarh in the name of Sh. Kunal Goyal and Smt, Anita Goyal
3. Locker No.-376 of Punjab National Rs.25,04,550/-
Bank, Sector-28, Chandigarh in the name of Sh. Kunal Goyal and Smt, Pooja Goyal
4. Locker No.- 67, Punjab National Bank, Rs.12,08,435/-
Sector-26, Chandigarh in the name of
3
Sh. Harsh Goyal
Total Rs.1,75,13,644/-
3. During the course of search, a surrender of
Rs.93,75,000/- was also made in the name of different
members of the family on account of jewellery as follows :
Names of the persons Amount surrender u/s 132(4)
i). Sh. Satish Goyal Rs. 50,00,000/-
ii). Sh. Kunal Goyal Rs. 20,00,000/-
iii). Smt. Pooja Goyal Rs. 10,00,000/-
iv). Smt. Anita Goyal Rs. 8,75,000/-
v). Sh. Harsh Goyal Rs. 5,00,000/-
Rs.93,75,000/-
4. When the assessee was confronted regarding he
source of jewellery found during the course of search by the Assessing Officer, it was submitted that all these family members stay together, as such hold the jewellery in a common kitty and even the bank lockers opened in different names were having jewellery jointly owned by all the members of the family. The assessee asked the relief on account of gold jewellery as per Board's Instruction No.1916 per member of the whole family. The quantity of the gold jewellelry as per Board's Instruction No.1916 dated 11.5.1994 was computed by the assessee at 4200 gms. The value of the said jewellery as per Board's Instruction came to Rs.1,19,70,000/-. In view of this, the submission of the assessee was that the amount of excess jewellery was only Rs.55,43,644/- (Rs.1,75,13,644/-
- Rs.1,19,70,000/-). Further, the submission of the assessee 4 was that since an amount of Rs.93.75 lacs was surrendered under section 132(4) of the Act, the excess jewellery can be covered by the said surrendered amount. In view of this, the prayer of the assessee was that no addition on account of jewellery found during the course of search can be made. However, the Assessing Officer was of the view that the provision of Instruction No.1916 is applicable for the seizure of jewellery only and no benefit of the same can be allowed to the assessee. Since the assessee has not furnished any evidence regarding the acquisition of the jewellery, the submission of the assessee cannot be accepted. The total jewellery found from the residence of Goyal family was of Rs.1,08,75,149/-. Since out of this jewellery, an amount of Rs.50 lacs has been surrendered by the assessee in the hands of Shri Satish Goyal, the same was accepted by the Assessing Officer and the remaining amount of Rs.58,75,149/- was treated unexplained in the hands of Shri Satish Goyal and Shri Pradeep Goyal equally. This way, an addition of Rs.29,37,575/- was made in the hands of the assessee.
5. Aggrieved by this order, the assessee went in appeal before the learned CIT (Appeals). The submissions made before the Assessing Officer were reiterated before the learned CIT (Appeals) and it was emphasized that the family headed by Smt.Kamla Devi and their children were staying in House No.54, Sector 28, Chandigarh and since it was a joint family, the jewellery was used by all the ladies together and as such, the jewellery cannot be segregated in the name of every family 5 member and the same has to be considered in totality. It was also submitted that the jewellery lying in two lockers in the name of S/Shri Harsh Goyal and Kunal Goyal was also joint jewellery. Even at the time of search operation at both the residence and bank lockers of the members of the family, it was stated that the jewellery belong to joint family and there cannot be any segregation of jewellery under individual heads. In view of the same, it was prayed that the benefit of Board's Instruction No.1916 may be given to each member of the family and the addition made by the Assessing Officer be deleted.
6. However, the learned CIT (Appeals) did not find herself in agreement with the submissions of the assessee. Her view was that the Board's Instruction relates only to non- seizure of jewellery. However, she observed that the contention of the assessee as regards the stridhan, prevalent customary practices etc. are quite acceptable. But there being no logical method at hand she considered that the most fitting way to give the benefit on this account to the assessee, would be to allow the jewellery of a certain quantity in the hands of each of the six married ladies, which can cover the other family members too. In this way, she considered the jewellery to the tune of 750 gms (250 gms x 3) as explained and taking the value of gold at Rs.2800/- per gm gave the benefit of Rs.21,37,500/-. Since the surrender consists of Rs.50 lacs by Shri Satish Goyal, the total value of jewellery to be treated as unexplained came to Rs.37,327,649/- 6 (Rs.1,08,75,149/- - Rs.71,37,500/-). Thus, the amount of Rs.37,37,649/- was directed to be added equally in the hands of S/Shri Satish Goyal and Shri Pradeep Goyal. In this way, a relief of Rs.10,68,750/- was given to the assessee.
7. The assessee aggrieved by this has come up in appeal before us, raising the following grounds of appeal :
"1. That the Worthy Pr. Commissioner of Income Tax, Gurgaon has erred in Upholding addition of Rs. 18,68,824/- out of Rs. 29,37,575/- made by the Assessing Officer as value of unexplained jewellery u/s 69 of the Income Tax Act, 1961 after giving relief of Rs. 10,68,7507- as benefit of Istridhan.
2. That the Worthy Pr. CIT has erred in not accepting the contention of the assessee that it is a case of Joint family and during the course of search, the family had been residing at House No. 54, Sector 28A, Chandigarh, where two brothers namely Sh. Satish Kumar and Sh. Pardeep Goyal with their sons and daughter in laws were residing together. As such, the action of the Worthy Pr. CIT in not giving credit/relief by accepting the Board Circular No. 1916 of CBDT is against the facts and circumstances of the case.
3. That the Worthy Pr. CIT has erred in not considering that the jewellery as per Board Circular has to be considered and accepted. The quantity of Gold jewellery as per Board Circular by taking into consideration the members of the family as per para 4(g) of her order is 4200 gms and value of the same as per prevalent rate as on date of search amounted to Rs. 1,19,70,0007- and by considering the amount offered during search to the tune of Rs. 93,75,000/-, no case of unexplained jewellery can be there leading to addition u/s 69 of the Act.7
4. That addition as above as confirmed by the Worthy Pr. CIT is against the facts and circumstances of the case and detailed submission filed during the course of hearing has not been considered properly.
5. That the Appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off."
8. The learned counsel for the assessee during the course of hearing before us first drew our attention to the fact that during the course of search and seizure operation, the statement of Shri Pradeep Goyal was recorded, which was placed at page 11 of the Paper Book. In answer to question No.4, Shri Pradeep Goyal has categorically stated that jewellery is of the joint family. Similar statements were given by S/Shri Harsh Goyal and Kunal Goyal, which were recorded at the time of search operation on various bank lockers in the name of said persons. The copies of these statements recorded were also placed in the Paper Book and our attention was also invited to the specific question raised in regard to the jewellery found during the course of search operation. Further, it was again reiterated before us that both the families of S/Shri Pradeep Goyal and Satish Goyal headed by Smt.Kamla Devi, mother of S/Shri Pradeep Goyal and Satish Goyal were staying together in House No.54, Sector 28, Chandigarh. Since it is a joint family, the jewellery was used by all the ladies together and as such, the jewellery cannot be segregated in the name of any specific member of the family. 8 It was again emphasized that the jewellery lying in two lockers is also of the joint family. The same prayer of giving benefit of gold jewellery as per Board's Instruction by taking into consideration the members of the family, as was made before the lower authorities, was made. A chart showing the gold as per Board's Instruction with respect to each member of the family was also filed before us. As per the learned counsel for the assessee, the jewellery weighing 4200 gms has to be accepted as per Board's Instruction. Reliance was placed on a number of judgments of various Courts and that of the various Benches of the Tribunal to the effect that out of the jewellery found during the course of search, the benefit as per Board's Instruction with respect to each member of the family is to be given.
9. The learned D.R. relied upon the order of the Assessing Officer as well as of the learned CIT (Appeals).
10. We have heard the learned representatives of both the parties, perused the findings of the authorities below and considered the material available on record. The first issue to be decided here is that whether the jewellery found during the course of search at the residence as well as at the bank lockers can be considered as jointly held by the family. It is an admitted fact that all the members of the family have maintained the same stance all through the proceedings that the jewellery is being held jointly by all of them. The 9 statement of Shri Pradeep Goyal recorded as early as at the time of search is evident to this fact. The statements of two family members recorded at the time of search on bank lockers also point out to the said fact. The Assessing Officer in his order has nowhere denied the said fact, neither he has been able to bring on record any contradictory fact. If he was not satisfied with this submission of family members, he could have gone ahead and make further enquiries to figure out which jewellery belong to which member of the family. Even the learned CIT (Appeals) in her order has not been able to bring on record any such fact. The fact that all the members are living together, has also not been controverted at any stage. In this background, it is not improbable that the jewellery was being held jointly by all members of the family, as it is customary in our society, where the concept of joint family system is still existing, that the members keep their jewelleries jointly and ladies wear them at times as per their wish. Even the learned CIT (Appeals) while giving arbitrary relief to the assessee has considered the jewellery to be common. In this background, we find ourselves in agreement with the submission of the assessee that the jewellery was being held jointly by the family.
11. The second question to be decided is whether the benefit of jewellery as per Instruction No.1916 of the CBDT, dated 11.5.1994 has to be given to each member of the family. 10 The plea of both the lower authorities i.e. the Assessing Officer as well as the learned CIT (Appeals) is that the instruction lays down guidelines to the search party with regard to seizure only and its provision cannot be stretched to the extent of holding the said amount of jewellery to be explained. In this regard, the reliance placed by the learned counsel for the assessee on the judgment of the Hon'ble Gujarat High Court in the case of CIT Vs. Ratanlal Vyaparilal Jain (2011), 339 ITR 351 is not out of place. The Hon'ble High Court has observed as follows :
"10. Though it is true that the CBDT Circular No. 1916, dt. llth May, 1994 lays down guidelines for seizure of jewellery and ornaments in the course of search, the same takes into account the quantity of jewellery which would generally be held by family members of an assessee belonging to an ordinary Hindu household. The approach adopted by the Tribunal in following the said circular and giving benefit to the assessee, even for explaining the source in respect of the jewellery being held by the family is in consonance with the general practice in Hindu families whereby jewellery is gifted by the relatives and friends at the time of social functions, viz., marriages, birthdays, marriage anniversary and other festivals. These gifts are customary and customs prevailing in a society cannot be ignored. Thus although the circular had been issued for the purpose of non-seizure of jewellery during the course of search, the basis for the same recognizes customs prevailing in Hindu society. In the circumstances, unless the Revenue shows anything to the contrary, it can safely be presumed that the source to the extent of the jewellery stated in the circular stands explained. Thus, the approach adopted by the Tribunal in considering the extent of jewellery specified under the said circular to be a reasonable quantity, cannot be faulted with. In the circumstances, it is not possible to state that the Tribunal 11 has committed any legal error so as to give rise to a question of law."
12. In view of the above decision of the Hon'ble Gujarat High Court, the benefit of Instruction No.1916 dated 11.5.1994 is to be given to the members of the assessee family. As per the Instruction 500 gms to married ladies, 250 gms to unmarried ladies and 100 gms in case of male members has to be given. The approach of the learned CIT (Appeals) in allowing partial benefit to the assessee is very arbitrary. There is no basis for treating the jewellery amounting to Rs.21,37,500/- to be explained. Once the learned CIT (Appeals) decides to give benefit of customary practices and stridhan etc., she could have very easily adopted the yardstick laid down through the CBDT Instruction, her plea of having no yardstick is not tenable. The Assessing Officer is directed to give benefit of jewellery as per Instruction No.1916 dated 10.5.1994 to each member of the family from the total jewellery found during the course of search. Further, the remaining jewellery can be covered by the surrender specifically made on account of jewellery.
13. The appeal of the assessee is allowed.
ITA No.588/Chd/2015 & ITA No.588/Chd/2015 :
14. Since the issues are common in all these appeals and the learned CIT (Appeals) has also relied upon her findings in appeal of Shri Pradeep Goyal, in these cases also 12 the Assessing Officer is directed to give relief to the assessee as per above terms.
15. In the result, all the appeals of the assessees are allowed.
Order pronounced in the open court on this 28th day of September, 2015.
Sd/- Sd/- (BHAVNESH SAINI) (RANO JAIN) JUDICIAL MEMBER ACOUNTANT MEMBER Dated : 28 t h September, 2015 *Rati*
Copy to: The Appellant/The Respondent/The CIT(A)/The CIT/The DR.
Assistant Registrar, ITAT, Chandigarh