Income Tax Appellate Tribunal - Delhi
Surpreet Singh Suri, New Delhi vs Acit, Central Circle- 6 , New Dlehi on 24 September, 2019
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH 'G', NEW DELHI
Before Sh. Amit Shukla, Judicial Member
Dr. B. R. R. Kumar, Accountant Member
ITA No. 6536/Del/2018 : Asstt. Year : 2014-15
Surpreet Singh Suri, Vs Asstt. Commissioner of Income
C/o Sanjiv Sapra & Associates Tax, Central Circle-6,
LLP, Chartered Accountants, New Delhi
C-763, New Friends Colony,
New Delhi-110025
(APPELLANT) (RESPONDENT)
PAN No. AOHPS9046K
Assessee by : Sh. Sanjiv Sapra, FCA
Revenue by : Sh. S. S. Rana, CIT DR
Date of Hearing: 21.08.2019 Date of Pronouncement: 24.09.2019
ORDER
Per Dr. B. R. R. Kumar, Accountant Member:
The present appeal has been fil ed by the assessee agai nst the order of the l d. CIT(A)-24, New Del hi dated 31.08.2018.
2. Foll owing grounds have been rai sed by the assessee:
"1. That there was no justification to ma ke an addition of Rs.2,94,000 on account of deemed/assumed rental income as against the fact that the prope rty in question remained vacant throughout the year under appeal because no tenant could be found.
2. That the authorities below had erred on facts and under the law in making an addition of Rs.2 ,37,08,07 6 on account of cash and jewelle ry found from the residence of the Appellant and bank l ocke rs in the names of family members of t he Appellant during search and seizure operations.2 ITA No. 6536/Del/2018
Surpreet Singh Suri
3. That without prejudice to Ground No. 1 & 2 above , the additions as ma de by the AO a nd confirmed ld. CIT (A) are very excessive.
Various obse rvations made by the authorities below in their respective orde rs are either incorrect or legally untenable. Detailed written subm issions as made by the Appellant supported by docum entary evidence and the case law s have either been ignored or had not been prope rly appre ciated.
4. That the levy of interest u/s 234A, 234B, 234C is illegal and at any rate, without prejudice, the interest as charged is very excessive. This ground was duly argued before the l d. CIT (A) bu t the same has not been disposed off."
3. The assessee has got 1/3 r d share i n the resi denti al house in Sai ni k Farms whi ch was being treated as sel f occupi ed property. Further, the assessee had acqui red another propert y at Aurobi ndo Marg on whi ch no rental i ncome has been offered under the provi si ons of Secti on 23 of the Income Tax Act, 1961. Hence, the Assessi ng Offi cer esti mated l etti ng val ue @ Rs.35,000/- per month and added an amount of Rs.294,000/- to the total i ncome on provi di ng for deducti ons u/s 24 of the Act. The l d. CIT (A) hel d that the benefit of the vacancy all owance u/s 23(1)(c) of the Act i s not avail abl e to the assessee as a property was not l et out anytime, at l east once.
4. Before us, duri ng the arguments, the l d. AR submi tted that i n spi te of the best efforts, the a ssessee coul d not get a ri ght tenant i n spi te of the having best i ntenti on to l et out the same. Hence, the ALV of the prope rty w as taken as Ni l . The assessee has quoted the foll owi ng case l aws in support of hi s arguments:
Ø Premsudha Exports P. Ltd. Vs ACIT 110 ITD 158 (ITAT Mumbai) Ø Smt. Indu Chandra Vs DC IT in ITA No. 96/Lkw/2011 3 ITA No. 6536/Del/2018 Surpreet Singh Suri Ø Smt. Shankuntala Devi Vs DCIT in ITA No. 1524/Bang/2010 Ø ACIT Vs Dr. Prabha Sanghi 139 ITD 504 (ITAT Delhi)
5. He argued that the l d. CIT (A) has not been abl e to di sti ngui sh these judgments and h as merel y deni ed the vacancy all owance as avail abl e u/s 23(1)(c) of the Act on the groun d that the same i s onl y avail abl e i f the property i s l et out at l east once. No con di ti on of such nature as al l eged by the l d. CIT (A) i s speci fied i n Secti on 23(1)(c) of the Act for al l owi ng vacancy all owance as al so cl ari fi ed by Mumbai ITAT in Premsudha Export's case as ci ted above.
6. Heard the a rguments of both the parti es and perused the materi al avail able on record. Secti on 23(1)(c) of the Act pertai ni ng to determi nati on of annual val ue or determi ned vacancy all owance reads as under:
"Section 23(1)(c)
(c) where the property or any part of the property is let and was vacant during the whole or any part of the previous year and owing to such vacancy the actual rent received or receivabl e by the owner in respect thereof is less than the sum referred to in clause (a), the amount so received or receivable."
7. Having regard t o the cl ear provi si ons of the Act, and harmoni ous readi ng of Secti on 23(1)(a) and 23(1)(c) of the Act, were hereby hol d that the rent re cei ved by the assessee ha s t o be treated a s the annual val ue of the house and li abl e to tax under i ncome from house property . The acti on of the l d. CIT (A) on thi s ground i s hereby uphel d.
8. Duri ng the search, the warrant was i ssued i n the name of the assessee. The Assessi ng Offi cer hel d in page no. 2 of the 4 ITA No. 6536/Del/2018 Surpreet Singh Suri assessment order that the jewel lery in the name of the assessee and other members of the fami l y as found at the resi dence as well as in bank l ockers was as under:
S l. Na m e S /S h /S m t P r e m is es Je w e lle r y Je w e lle r y No . fu n d (in Rs . ) fo u n d (in W t . )
1. SS Suri & Kin t y 1 9 2 -B , S a in ik 26380346 2539.486 S u r i (W ife 0 F a r m , M B Ro ad , Ne w D e lh i
2. Kin t y S u r i 5 0 1 , H D FC Ba n k, 4230938 786.930 S a ke t , Ne w D e lh i
3. Kin t y S u r i 20, S t a n da r d 2635061 651.86 C h a r t e re d Ba n k, E -2 6 , S a ke t , Ne w D e lh i
4. Mehru Suri 6 9 4 , H D FC Ba n k, 2359042 875.79 (M a r r ie d S is t e r ) S a ke t , Ne w D e lh i
5. Kin t y S u r i 5 0 0 , H D FC Ba n k, 8435039 1031.41 S a ke t , Ne w D e lh i
6. P P S u r i & Na r e n de r 5 7 8 , UC O Ba n k, 812676 268.50 Ka u r S u r i (F a t h e r D e fe n ce C o lo n y, & Mother Ne w D e lh i
7. Na r e n de r Ka u r S u r i 4 0 1 , H D FC Ba n k, 2839425 947.30 (F a t h e r & M o t he r ) E -1 4 3 , S a ke t , Ne w D e lh i T o tal 47692527 7 1 0 1 . 2 79
9. Duri ng the assessment, the assessee submi tted that jewell ery wei ghti ng 875.79 gms bel ongs to Nehru Suri the marri ed si ster of the assessee who i s livi ng abroad whi ch was accepted by the Assessi ng Offi cer.
10. The jewell ery hel d by the family members as per th e Weal th Tax return i s as under:
Sh. Surpreet Singh Suri 394.860 gms Smt. Kinty Suri 2086.812 gms Smt. Narende r Kaur Suri 1354.146 gms Sh. Pritpal Singh Suri 742.840 gms
11. The Assessi ng Offi cer hel d that the assessee and hi s wi fe Smt. Ki nty Suri fil ed the returns of Weal th Tax on 13.09.2013 decl ari ng total jewell ery of 2481 gms(394.8+2086.8) as a gai nst the 5009 gms found and i nventoried at the premi ses duri ng the 5 ITA No. 6536/Del/2018 Surpreet Singh Suri search and treate d the excess jewell ery wei ghting 2528 gms as unexpl ained i nvestment.
12. Duri ng the arguments, before us, the l d. AR submi tted that the assessee has purchase d jew ell ery out of the i mpressed money gi ven by the company. H e submi tted that the bill s of Swaran Sh ree Jewel s wherei n the jewell ery has been purchased in cash and a rgued that the jewell ery purchased by the assessee wi th the money of the company shoul d be consi dere d and the jewellery found be treated as expl ai ned.
13. The l d. DR argued that the expl anati on of the l d. AR pertai ni ng to the remai ning jewell ery cannot be accepted and filed hi s written arguments whi ch are as under:
"1. During the course of sea rch , jewellery weighing 5009.686 gms bel onging to the a ssessee and his wife was found valued at Rs. 4 ,16,81,384. Out of this jewellery weighing 394.860 gms was reflected in their wealth tax returns. Thus, jewelry weighing 2528.014 valued at Rs. 2,10,33,076 remained explained.
2. The assessee claimed that jewellery weighing 1645.548 gms wa s pu rchased from 1 .04.2013 t o 29.10.2013. Some bills we re produced but they did not contain name of the assessee. More over, mode of payment was cash, source of which the assessee could not explain. Some bills for purch ase of jewellery were found during search and credit of these bills has been allowed to the assessee. The bills for jewellery weighing 1645.548 gms were not found during course of sea rch.
3. Reliance is placed upon findings of AO on pages 2 to 4 of assessment orde r.
4. Reliance is placed upon findings of Ld.CIT(A) on pages 38 to 43 of his order in pa ra 5.1 to para 5.10.
".....................................6 ITA No. 6536/Del/2018
Surpreet Singh Suri 5.6 In case of the appellant, tot al jewellery weighing 5009.686 Gms {(2539.486 Gms from residence) + (786.930 Gms from locker no. 501 in HDFC Bank, Saket, New Delhi) + (651.86 Gms from locker no. 20 in Standard Chartere d Ban k, New Delhi) +(1031.41 Gms from locke r no. 500 in HDFC Ban k, Saket , New Delhi)} was found. All the three lockers were in the name of appellant's wife (Smt. Kinty Suri). The appclant furnished copies of wealth tax returns for assessment year 2013-14 of himself and his wife in which weight of declared jewellery was shown at 394.860 respectively. The A0 granted credit for the same weight of the jewellery. The appellant also su bmitted certain bills from Swarn Shree Jewels (Prop. Vihaan Eximis Company Pvt. Ltd.) showing purchases, of jewellery in cash from 01.04.2013 to 29.10.2013 (date of search) totaling to 1645.548 Gms. The Assessing Officer did not give any credit in respect of these bills because i) the purchases were claimed in cash, ii) the bills mentioned 'cash ' in place of the name of the Purchasing party (did not have na me of the appellant or his wife as purchaser) and iii) source of this cash was stated to be imprest received from the companies i.e. M/s Vista r Const ruction Pvt. Lt d. and M/s Three C Universal Developers Pvt. Ltd.
During the appellant proceedings, it was the argument of the AR that the AO was not right in ignoring the purchase bills su bmitted by the appellant. The appellant also su bmitted that credit wa s not given as per CBDT'S instructions no. 1916 dated 11.01.1994.
5.8 During the course of appellat e procee dings, the AR was aske d to produce original of the bills as there was certain doubts about authenticity of these bills, however, in spite of sufficient opportunities, the originals were not produced. I have made got independent enquiry and f ound that certified copies certain bills we re n ot identical of the corre spon ding photocopies submitted by the AR (as received f rom the seller, di rectly). In any ca se, the AR could not controve rt the observations of th e AO that these bills mentioned cash' in pla ce of the n ame of the purchasing party (did not have name of the or his wife as purchaser) and sou rce of this ca sh was stated t o be 7 ITA No. 6536/Del/2018 Surpreet Singh Suri imprest re ceived from the com panies which is n ot possible because company will not provide imprest for purchasing personal affects.
5.9 Regarding credit of jewell ery as per C BDT 's instructions no. 1916 dated 11 .01.1994, it is noted that once appellant and his wife filed wealth tax returns and full credit of jewellery shown in these (wealth tax) returns we re allowe d there is n o occasi on 1Or allowing any further benefit as per the said CRDT Instructions.
5.10 In view of the above discussion, this ground (no.
3) of appeal is dismissed and consequently the addition (of Rs.2,37,08,076/-) is confirmed."
5. In view of above facts, assessee has failed t o discharge the onus of proving the source of investment in above jewellery.
In the above ca se, it is humbl y submitted that the following decisions may kindly be conside red with regard to additi on made u/s 69 & 69A of I.T. Act:
1. R. Mallika Vs C IT [2017] 79 taxmann.com 117 (SC) (Copy Enclosed) where Hon'ble Supreme C ourt di smissed SLP against Madra s High Court's ruling that where assessee had not discharge d burden as regards source f rom which investment had been made, investment in property was an unexplained investment and sa me was rightly adde d to income of assessed.
CIT Vs R. Mallika [2013] 36 taxmann.com 231 (Madra s)/[2013] 219 Taxman 244 (Madra s) (Copy Enclosed) where Hon'ble Madras High Court held that where assessee had purchase d a prope rt y for Rs. 22 la khs and she had not di scharged bu rden as rega rds source from which investment had been made, investment in property wa s an unexplained investment and same w as rightly added to income of assesse e.
2. Ashokbhai H Jariwala Vs ACIT [2017] 84 taxmann.com 196 (SC/20171 250 Taxman 14 (SC), 2017-TIOL-236-SC-IT (Copy Enclosed) 8 ITA No. 6536/Del/2018 Surpreet Singh Suri where Hon'ble Supreme Court h eld that Where there was nothing on record to show t hat sister of assessee was in exclusive possession of bedroom in asse ssee's house from whe re ca sh was seized and further, there was contradi ction in statement of assessee and his sister with respe ct to ownership of actual amount in cash, seized cash would be included as unexplained income in hand of assessee under section 69A, SLP dismissed
3. Sukh Ram Vs ACIT 159 Taxm an 385 (Delhi/[2006] 285 ITR 256 (Delhi)/[2006] 204 CTR 336 (Copy Enclosed) where Hon'ble Delhi High Court held that where pursuant to a sea rch conducted a t residential premises of assessee, huge sum of cash was found, for which assessee explained that sai d cash belonged to certain organi zation but did not bring any material on record to substantiate his explanation and, moreover, verification of books of account of said organization showed no connection with cash recovered from assessee, in said circumstances assessee was to be treated as owner of said cash , and same was t o be added t o income of assessed under secti on 69A.
4. Maha beer Pra sad Jain Vs ACIT [2017] 88 taxmann.com 9 (Allahaba d)/[2018] 253 Taxman 152(Allahabad)/[2017] 399 ITR 600 (Allahabad) C opy Enclosed) where Hon'ble Allahaba d High Court held that where assessee had purchased drafts by depositing cash but failed to provide sou rce of said cash utilized to make such investment, additions made under section 69 was justified.
5. Amita Kochar Vs ACIT [20171 79 taxmann.com 432 (Patna)/2016 389 ITR 345 (Patna) (Copy Enclosed) where Hon'ble Allahabad High Court upheld addition where assessee , in block return, did not disclose t otal gold found during sea rch nor did i t give any reasonable explanation therefor and even figures given in belated explanation did not match with gold jewellery actually found in assessee's possessi on.
9 ITA No. 6536/Del/2018Surpreet Singh Suri
6. Vijay Kuma r Sa raf Vs ITAT [1 996] 85 Taxman 465 (Madhya Pradesh)/[1997] 226 ITR 860 (Ma dhya Pradesh) (Copy Enclosed) Certain jewellery and ornaments seized during raid on business premises of asse ssee were claimed to be assets of ancestral business of assessee's father. Assessee 's af oresai d plea having not been pressed before tax authorities n or substan tiated by any material evidence. Hon'ble MP High C ourt held that Tribunal ha d rightly upheld assessment by treating value of seized assets as also purchase of scooter as unexplained investments of assessee within meaning of section 69.
7. Karun Dutt Singh Vs CIT [2017] 85 taxmann.com 177 (Kerala) (Copy Enclosed) where Hon'ble Keral a High Court held that where AO made addition to assessee 's income in respect of gold ornaments recovered from him after rejecting his explanation that it belonged to his employer com pany, in view of fact that director of employer company in his statement recorded unde r sec. 131 denied to have given ornaments t o assessee f or sale or as samples, impugned addition was to be confi rmed."
14. Heard the arguments of both the parties and perused the material available on record. We are unable to appreciate the argument of the ld. AR that the jewellery was purchased with the imprest money of the company available with the assessee.
15. On examinati on of the materi al fil ed before us and from the readi ng of the panchnamas i n the tabl e menti oned i n the assessment orde r at page no. 2, the fol l owi ng facts ari ses regardi ng the jewell ery of the family members whi ch i s as under:
Sl. Nam e of the Rel at i on Prem i ses Net wei gh t Rem ark s No. own er as per wi t h th e pan ch n am a assessee
1. Naren der Kau r Paren t s Lock er No. 2 6 8 .5 00 Con si dered an d Preet Pal 578, U CO by A O S u ri B an k , Def en ce 10 ITA No. 6536/Del/2018 Surpreet Singh Suri Col on y , New Del h i
2. Naren der Kau r Paren t s 192 B, 1 3 8 8 .39 0 Con si dered an d Preet Pal S ai n ik by A O i n t h e S u ri Farm , New h an ds of t h e Del h i assessee
3. Naren der Kau r Paren t s Lock er 9 4 7 .3 00 Con si dered an d Preet Pal No.4 0 1 , by A O S u ri H DFC B an k , New Del h i
4. Ki n t y Su ri an d Wife 192 B, 1 1 5 1 .09 6 Con si dered S u rpreet S u ri S ai n ik by A O Farm , New Del h i
5. Ki n t y S uri Wife Lock er No. 1 0 3 1 .41 0 Con si dered 5 0 0 , H DFC by A O B an k , S ak et , New Del h i
6. Ki n t y S uri Wife Lock er No. 7 8 6 .9 00 Con si dered 5 0 1 , H DFC by A O B an k , S ak et , New Del h i
7. Ki n t y S uri Wife Lock er No. 6 5 1 .8 6 Con si dered 20, by A O S t an dard Ch art ered B an k , New Del h i
8. Meh ru Su ri S i st er Lock er No. 8 7 5 .7 9 No di spu t e 6 9 4 , H DFC B an k , S ak et , New Del h i Kinty Suri + Surpreet Suri - 1151.096 Kinty Suri - 2470.19 Narende r Kaur + Preet Pal Suri - 2604.19 Mehru Suri - 875.79 Total 7101.266
16. The Weal th Tax Return of Su rpreet Suri and Ki nty Suri shown a total amount of 2481.672 gms whereas the total jewell ery found and recorded a s per the panchanama pertai ni ng to Surpreet Suri and Ki nty Suri was 3622.15 gms. Si nce, the 11 ITA No. 6536/Del/2018 Surpreet Singh Suri assessee has got two sons and no provi si on has been gi ven by the revenue regardi ng the jewell ery possesse d by them i n vi ew of the Instructi on No. 1916 date d 11.05.1994 i n para (i i ) and
(iii), keepi ng i n vi ew the return i ncome of the a ssessee whi ch i s 4.5 crores for the assessment year 2013-14, we hereby consi der i t fai r to all ow 200 gms of jewellery per person and thus, an amount of 740 gms can be treated as unexpl ai ned excess jewell ery in the hands of the assessee a gai nst 2528 gms determi ned by the revenue. Thi s was due to the fact that the amount of jewel l ery of 1388 gms bel ongi ng to Naren der Kau r Suri and Preet Pal Suri parents of the assessee, found at th e resi dence of the assessee we re treated i n the hands of the assessee w rongl y, even though the panchnama reveal s cl early that the jewell ery bel ongs to the parents of the assessee. Th e appeal of the asse ssee on thi s ground i s treated as partl y all owed. Appl i cati on of Secti ons 234A, 234B and 234C of the Act i s consequenti al .
17. In the result, the appeal of the assessee is partly allowed. (Order Pron ounced i n the Open Court on 24/09/2019).
Sd/- Sd/-
(Amit Shukla) (Dr. B. R. R. Kumar)
Judicial Member Accountant Member
Dated: 24/09/2019
*Subodh*
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
ASSISTANT REGISTRAR