Income Tax Appellate Tribunal - Delhi
Smt. Rita Gupta, New Delhi vs Dcit, New Delhi on 21 May, 2018
INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "F": NEW DELHI
BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER
AND
SHRI O.P. KANT, ACCOUNTANT MEMBER
ITA No.:- 917/Del/2015
Assessment Year: 2011-12
Rita Gupta DCIT
43/1, Rajpur Road, Central Circle-4
Civil Lines, Vs. New Delhi.
New Delhi-110 054
PAN AAAPG2570K
(Appellant) (Respondent)
ITA No.:- 918/Del/2015
Assessment Year: 2011-12
Kanika Gupta DCIT
43/1, Rajpur Road, Central Circle-4
Civil Lines, Vs. New Delhi.
New Delhi-110 054
PAN AIJPG5857E
(Appellant) (Respondent)
ITA No.:- 919/Del/2015
Assessment Year: 2011-12
Parul Gupta DCIT
43/1, Rajpur Road, Central Circle-4
Civil Lines, Vs. New Delhi.
New Delhi-110 054
PAN AF JPG8808C
(Appellant) (Respondent)
Appellant by: Shri O.P. Aggarwal, Advocate
Respondent by : Ms. Paramita Tripathi, CIT(DR)
Date of Hearing 21/05/2018
Date of 21/05/2018
pronouncement
ORDER
PER AMIT SHUKLA, J.M.
The aforesaid appeals have been filed by the above named assessees against impugned orders dated 28.10.2014 in the case of Miss Rita Gupta and Kanika Gupta; and order dated 30.10.2014 in the case of Smt. Parul Gupta, for the quantum of assessment passed u/s 153A/143(3) for the assessment year 2011-12, passed by Ld. CIT (Appeals) XXXIII, New Delhi. Since the issues involved in all these appeals are common almost arising out of identical set of facts, therefore same were heard together and are being disposed of by way of this consolidated order.
2. We first take up the appeal in the case of Miss Rita Gupta, wherein the assessee has challenged the addition of Rs. 4,13,652/- on account of difference in the valuation of jewellery. The facts in brief are that during the course of search and seizure proceedings u/s 132(1), jewellery amounting to Rs. 6,88,777/- was found from the residence and jewellery worth Rs.14,03,780/- was found from her locker. In the course of assessment proceedings the assessee submitted that the jewellery found from the possession was either received by her on occasion of marriage or on various other family and social occasions; and also she has been filing her return of wealth. The 2 details of filing of return as wealth and value of jewellery declared was as under:-
A.Y. Date of filing of return of wealth Value of jewellery declared 2004-05 31.03.2005 Rs. 12,23,896/-
2005-06 31.03.2006 Rs. 14,40,474/- 2006-07 23.03.2007 Rs. 14,64,704/- 2007-08 31.10.2007 Rs. 17,80,085/- 2008-09 08.12.2008 Rs. 15,93,377/- 2009-10 30.12.2009 Rs. 16,68,905/- 2010-11 30.03.2012 Rs. 20,31,108/-
3. AO noted that wealth tax return for 2010-11 was filed on 30.3.2012, which was after the date of search and the valuation report filed by the assessee alongwith the wealth tax return for the assessment year 2009-10 do not tally with the valuation report. Since the source of acquisition was not properly explained, AO treated jewellery worth Rs. 4,23,652/- as unexplained. Ld. CIT (A) too has affirmed the action of the AO after observing and holding as under:-
"I have considered the assessment order, written submission and oral arguments of Ld. AR.
Total jewellery found during the search at residence as well as locker was valued at Rs. 20.82.557/- out of which jewellery worth Rs. 4,04,730/- was seized. The Ld. Assessing officer made addition of Rs. 4,23,652/- on account of unaccounted jewellery.
During the assessment proceedings, the appellant has explained the source of jewellery as declared in the wealth tax return. The value of jewellery declared for A.Y. 2009-10 and A.Y. 2010-11 was Rs. 16,68,905/- and Rs. 20,31,108/- respectively. Return of wealth for 3 A. Y. 2009-10 and A.Y. 2010-11 was filed on 30.12.2009 and 30.03.2012 respectively. Date of search is 21.01.2011. The Ld. Assessing Officer has not considered the jewellery declared in the Wealth Tax return for A.Y. 2010-11 on the ground that this return of Wealth was filed much after the date of search.
The main arguments of Ld. AR is that the Ld. Assessing Officer, without assigning any valid reason, rejected the claim of the appellant merely on the ground of late filing of return of weal th for A. Y. 2010-11. The Ld. AR has explained increase in value of jewellery on account of purchase during the year and claimed that the purchase bills are enclosed in the paper book from page 3 to 16. Ld. AR argued that mostly the payment is made by cheque and out of past saving. I have perused all the bills. These bills were submitted alongwith the reply during the assessment proceedings. Copy of which are part of the paper book (page 1 & 2). The details of such bills produced during the assessment proceedings and contained in the paper book are as under:-
Jewellery Trishla Jewellers Bill No 2344 dt. 1.12.2005 for Rs. 22884/-
Mittal Enterprises Bill no. 1154 dt. 26.02.2005 for Rs. 36280/-
Heart of Gold Bill no. 570 dt. 12. 08.2001 for Rs. 25952/-
Jagdishwar Lal Jewellers Bill No. 3294 dt. 15.03.2001 for Rs. 29795/-
RBS Jewellers (P) Ltd.
Bill No. 228 dt. 3.3.2001for Rs. 26238/-4
Radiant jewelers (P) Ltd.
Bill No. 144 dt. 22.12. 1999 for Rs. 192780/-
Guptasons Jewellers & Gems (P) Ltd.
Bill no. 57 dt. 5.10.2003 for Rs. 66902/-
A perusal of the above bills reveals that all these bills are much prior to A. Y. 2009-10 and wealth tax filed for A. Y. 2009-10 filed prior to date of search is not questioned. Therefore, the source of jewellery acquired after A.Y. 2009-10 till A.Y. 2010-11 cannot be explained on the basis of these bills, which is the sole explanation of the appellant. In view of these facts, the jewellery to the extent declared in the Wealth tax return for A.Y. 2009-10 is explained. Total value of jewellery found is Rs. 20,82,557/- and value of jewellery declared in wealth tax return for A. Y. 2009-10 is Rs. 16,68,905/-. Therefore, the jewellery to the extent of Rs. 4,13,652/- remains unexplained .
Ld. AR's argument that the assessing officer has to prove the year of acquisition of jewellery before making addition cannot be accepted as the jewellery was found on the date of search and addition is made by virtue of deeming provision u/s 69A on the date of search when, the asset was found and remained unexplained.
Ld. AR's other argument to give effect to Board's circular 1916 is also misplaced as the appellant is filing wealth tax return and all the gifts/acquisition are supposed to be declared in wealth tax return.
Considering the entire facts and circumstances of the case addition to the extent of Rs. 4,13,652/- being difference between the value of a jewellery found during search and jewellery declared in wealth tax return for A.Y. 2009-10 is hereby confirmed."5
4. Before us Ld. Counsel for the assessee submitted that the. AO should have taken the total gross weight of the jewellery found in the terms of grams and not the value as on the date of search. The total jewellery found was 901.210 gms, as against this, 857.80 gms was disclosed in the wealth tax return. The difference is only 43.4 gms and if jewellery of husband is taken into consideration which as per the CBDT instruction No. 1916 dated 11.5.94, is considered then atleast 100 gms belonging to her husband should have been excluded. Thus, there would remain no difference which can be said to the unexplained.
5. On the other hand Ld. DR strongly relied upon the order of Ld. CIT (A) and submitted that assessee could not explain the differences between the jewellery valued at the time of search and net value of jewellery disclosed in the wealth tax return. Thus, order of the Ld. CIT (A) should be confirmed.
6. After considering the rival submissions and on perusal of relevant finding given in the impugned order as well as material referred to before us, we find that nowhere the AO has mentioned as to how much quantity of jewellery in terms of grams was found during the course of search. Prima facie it appears that the difference which has been worked out by the AO for making the addition in the hands of the assessee appears to be on the basis of the valuation adopted by the valuer at the time of search and the value disclosed in the wealth tax return. Before us, based on the quantity mentioned in the valuation report submitted alongwith the wealth tax return and the quantity of jewellery found during search as given in the valuation report, following details was given in order to reconcile the difference between the quantity:-
6Rita Gupta Particulars Weight (Gms.) Jewellery found at Residence 347.110 Gms Jewellery found at Locker 554.100 Gms Total Jewellery found 901.210 Gms Jewellery belongs to Husband 100.000 Gms Balance Jewellery belongs to 801.210 Gms Assessee Jewellery as per valuation 857.802 Gms report submitted alongwith wealth Tax Return Excess Jewellery NIL
7. Thus, the difference between the jewellery found and the jewellery said to have been disclosed in the wealth tax return is only 43.4 gms. Such a minor difference looking to the fact that certain jewellery can be said to belong to her husband, i.e., adult male of the family which in view of the instruction No. 1916 dated 11.5.94 issued by the CBDT though for the guidelines of seizure of jewellery, clearly states that 100 gms per male member of the family need not be seized. Now various courts have held that such an instruction giving guidelines for seizure of jewellery should also be taken as guidance explanation of the jewellery specifically in the context of Indian family system where jewellery are received by way of gift during marriages and customary practice. This has been held so by the Hon'ble Gujarat High Court in the case of CIT vs. Rattanlal Vyaparilal Jain, reported in (2011) 339 ITR 351. However, the figure of the quantity which has 7 been reproduced in the above chart needs to be verified from the record of the AO after taking assistance from the assessee and if the quantity shows in the wealth tax return and the quantity found during the course of search are as per the above chart and if the difference comes to only 43.4 grams as highlighted above, then no addition should be made in view of the observations made above by us. With this direction appeal of the assessee is treated as partly allowed for statistical purposes.
8. Similarly in the case of Kanika Gupta, it has been explained that the jewellery as per the valuation report submitted alongwith the wealth tax return is more than the quantity of jewellery found and therefore, no addition on account of such difference should be made. Relevant chart in this regard where the quantity of jewellery found and disclosed is reproduced hereunder:-
Kanika Gupta Total Jewellery found 1288.154 Gms Jewellery as per valuation report 1308.978 Gms submitted alongwith wealth Tax Return Excess Jewellery Nil
8. However, these figures of quantity wise needs to be examined at the end of the AO from the records with the assistance of the assessee and if it is found that the quantity of jewellery disclosed is more than what has been found, then no addition should be made. Thus, with this direction the appeal of the assessee is treated as partly allowed for statistical purposes.8
9. In the case of Parul Gupta, again the addition has been made on account of difference in the valuation without referring to the quantity of jewellery disclosed in the Wealth Tax Return and the quantity found during the course of search. In this case also, the following chart relating to the quantity found and disclosed is reproduced as under:-
Particulars Weight(Gms)
Jewellery found at Residence 691.704 gms.
Jewellery found at Locker 495.000 gms
Total Jewellery Found 1186.704 gms.
Jewellery allowed by Ld. 350.00 gms
CIT(A)-33 belongs to husband
and daughter
Balance Jewellery belongs to 836.704 gms.
assessee as Ld. AO Jewellery as per Valuation 898.816 gms.
report submitted alongwith Wealth Tax Return
10. Here in this case also the addition has been made on account of difference in valuation without considering the quantity found and the Ld. CIT (A) in the impugned order has already given benefit of 350 gms which can be said to belonging to her husband and daughter. In that case after giving such benefit, there appears to be no difference. This fact is clearly evident from the impugned CIT (A) order. Like in the above appeals, we direct the AO to verify the quantity as mentioned above and in case the quantities of jewellery in grams are found to be tallied, then no addition should be made. With this direction the appeal of the assessee is treated as partly allowed for the statistical purposes.
911. In the result the appeals of the assessee are partly allowed for statistical purposes.
Order pronounced in the Open Court on 21st May, 2018.
sd/- sd/-
(O.P. KANT) (AMIT SHUKLA)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated: 21/05/2018
Veena
Copy forwarded to
1. Applicant
2. Respondent
3. CIT
4. CIT (A)
5. DR:ITAT
ASSISTANT REGISTRAR
ITAT, New Delhi
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