Netra Pritam Shah,, Pune v. Deputy Commissioner of Income-tax,,

ITA 1504/PUN/2015 | 2011-2012
Pronouncement Date: 29-11-2017 | Result: Allowed

Appeal Details

RSA Number 150424514 RSA 2015
Assessee PAN ASUPS1093H
Bench Pune
Appeal Number ITA 1504/PUN/2015
Duration Of Justice 2 year(s) 10 day(s)
Appellant Netra Pritam Shah,, Pune
Respondent Deputy Commissioner of Income-tax,,
Appeal Type Income Tax Appeal
Pronouncement Date 29-11-2017
Appeal Filed By Assessee
Tags No record found
Order Result Allowed
Bench Allotted A
Tribunal Order Date 29-11-2017
Last Hearing Date 02-11-2017
First Hearing Date 02-11-2017
Assessment Year 2011-2012
Appeal Filed On 19-11-2015
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE MS. SUSHMA CHOWLA JM AND SHRI ANIL CHATURVEDI AM . / ITA NO. 1504 /P U N/201 5 / ASSESSMENT YEAR : 20 11 - 1 2 NETRA PRITAM SHAH PARAG MILK & MILK PRODUCTS F - 109 ADINATH SOCIETY PUNE 41037 . / APPELLANT PAN: A SUPS1093H VS. THE DY . COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 1(1) PUNE . / RESPONDENT ASSESSEE BY : SHRI SUHAS P. BORA REVENUE BY : SHRI AJAY MODI JCIT / DATE OF HEARING : 0 2 . 11 . 2017 / DATE OF PRONOUNCEMENT: 29 . 11 .201 7 / ORDER PER SUSHMA C HOWLA J M : TH E APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT (A) - 13 PUNE DATED 1 5 . 0 9 .201 5 RELATING TO ASSESSMENT YEAR 20 11 - 12 AGAINST ORDER PASSED UNDER SECTION 143(3) OF THE INCOME - TAX ACT 1961 (IN SHORT THE ACT) . 2 . THE ASSESSEE HAS RAI SED THE FOLLOWING GROUND S OF APPEAL : - ITA NO. 1504 /P U N/20 1 5 NETRA P. SHAH 2 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 N OT 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 APPREC IATING 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 FOLLOW ING 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 SEA RCH 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 O N 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 ITA NO. 1504 /P U N/20 1 5 NETRA P. SHAH 3 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 P OST 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 DIFFEREN T 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 MEMBER S. THE GROUP MADE CERTAIN DISCLOSURES DURING THE COURSE OF SEARCH. HOWEVER THE SAME W ERE 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 P ASSING 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 ITA NO. 1504 /P U N/20 1 5 NETRA P. SHAH 4 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 UNDI SCLOSED 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 FO UND 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 TOTALE D 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 A SSESSING 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. FU RTHER 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 UNDISCL OSED 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 VA LUE OF THE SAME AT RS.8 80 000/ - . ITA NO. 1504 /P U N/20 1 5 NETRA P. SHAH 5 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 BE EN 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 RIVA L 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 SILVE R 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 ITA NO. 1504 /P U N/20 1 5 NETRA P. SHAH 6 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 - - VIS ADDITION AL 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 FAMI LY 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 O F 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 MER IT 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 O F 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 TRA DITIONS 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 ITA NO. 1504 /P U N/20 1 5 NETRA P. SHAH 7 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. 1 1 . IN THE RESULT APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 29 TH DAY OF NOVEMBER 201 7 . SD/ - SD/ - (ANIL CHATURVEDI ) (SUSH MA CHOWLA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 29 TH NOVEMBER 201 7 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE A PPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A) - 13 PUNE ; 4. THE PR. CIT (CENTRAL) PUNE ; 5. / DR A ITAT PUNE; 6. / GUARD FILE . / BY ORDER // TRUE COPY // / SR. PRIVATE SECRETARY / ITAT PUNE