Ram Niwas Gupta, Dehradun v. DCIT, Dehradun

ITA 2802/DEL/2016 | 2009-2010
Pronouncement Date: 31-05-2021 | Result: Allowed

Appeal Details

RSA Number 280226014 RSA 2016
Assessee PAN ABIPG9411E
Bench Dehradun
Appeal Number ITA 2802/DEL/2016
Duration Of Justice 5 year(s) 15 day(s)
Appellant Ram Niwas Gupta, Dehradun
Respondent DCIT, Dehradun
Appeal Type Income Tax Appeal
Pronouncement Date 31-05-2021
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 31-05-2021
Last Hearing Date 04-03-2021
First Hearing Date 04-03-2021
Assessment Year 2009-2010
Appeal Filed On 16-05-2016
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DEHRADUN CIRCUIT BENCH: DEHRADUN BEFORE SHRI SUDHANSHU SRIVASTAVA JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI ACCOUNTANT MEMBER ITA NO.2801/DEL/2016 (ASSESSMENT YEAR 2007-08) ITA NO.2802/DEL/2016 (ASSESSMENT YEAR 2009-10) RAM NIWAS GUPTA 59/6 TYAGI ROAD DEHRADUN. PAN ABIPG 9411E VS. DY. CIT CENTRAL CIRCLE DEHRADUN (APPELLANT) (RESPONDENT) APPELLANT BY SH. SAURABH GUPTA FCA RESPONDENT BY SH. N.C. UPPADHAY SR. DR DATE OF HEARING 04.03.2021 DATE OF PRONOUNCEMENT 31.05.2021 ORDER PER SUDHANSHU SRIVASTAVA JM: THESE APPEALS FILED BY THE ASSESSEE ARE RELATING TO ASSESSMENT YEARS (AY) 2007-08 AND 2009-10 AND ARE D ECIDED VIDE THIS COMMON ORDER AS IDENTICAL ISSUE IS INVOLVED. 2 ITA NOS.2801 & 2802/DEL/2016 RAM NIWAS GUPTA VS. DCIT 2.0 WE ARE FIRST TAKING UP THE APPEAL FOR AY 200 7- 08 BEARING ITA NO. 2801/DEL/16. THE APPEAL IS AGAIN ST ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEA LS) - MUZZAFARNAGAR {CIT (A)} VIDE ORDER DATED 02/02/2016 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE AUTHORITIES BELOW ERRED IN HOLDING- 1. THAT THE CLAIM OF THE APPELLANT THE ADDITION OF RS. 2 07 218.00 ON ACCOUNT OF ALLEGEDLY UNEXPLAINED INVESTMENT IN J EWELLERY. IT IS PRAYED THAT THE ABOVE ACTIONS BEING MISCONCEI VED ARBITRARY AND UNLAWFUL MUST BE QUASHED. 3.0 THE BRIEF ISSUE INVOLVED IN THE APPEAL IS ADD ITION ON ACCOUNT OF JEWELLERY FOUND DURING THE COURSE OF SEA RCH ACTION U/S 132 OF THE INCOME TAX ACT 1961 (HEREINAFTER CALLED THE ACT). AT THE TIME OF SEARCH ON 26/04/2012 THE SEARCH PARTY FOUND INVOICES OF JEWELLERY WORTH RS. 10 83 958/- PERTAINING TO PE RIOD COVERING FROM FINANCIAL YEAR 2006-07 TO 2010-11 I.E. AY 2007 -08 TO 2011- 12. ON THE BASIS OF JEWELLERY INVOICES SO FOUND TH E ASSESSING OFFICER ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE IN RESPONSE TO WHICH THE ASSESSEE SUBMITTED THAT THE JEWELLERY INVOICES WERE IN RESPECT OF 3 ITA NOS.2801 & 2802/DEL/2016 RAM NIWAS GUPTA VS. DCIT JEWELLERY PURCHASED FOR RELATIVES AND FRIENDS AND N O ADVERSE INFERENCE WAS WARRANTED IN ASSESSEES CASE. THE ASSE SSING OFFICER WHILE REJECTING THE ASSESSEES SUBMISSION MADE ADDI TION OF RS. 2 07 218/- ON THE GROUND OF UNEXPLAINED INVESTMENT IN JEWELLERY IN AY 2007-08 I.E. YEAR UNDER CONSIDERATION. SIMILAR A DDITION WAS MADE IN OTHER YEARS ON THE BASIS OF DATES MENTIONED ON THE INVOICES. THE ORDER OF THE ASSESSING OFFICER WAS UPH ELD BY THE LD. FIRST APPELLATE AUTHORITY AND HENCE THE ASSESSEE I S IN APPEAL BEFORE US. 4.0 THE LD. COUNSEL APPEARING FOR THE ASSESSEE SUBMITTED THAT THE ISSUE IN THE APPEAL IS COVERED B Y THE ORDER OF THE ITAT IN ASSESSEES OWN CASE FOR AY 2010-11 AND 2013- 14 AND THEREAFTER ORDER HAS ALREADY BEEN PASSED BY THE AS SESSING OFFICER U/S 254 GIVING EFFECT TO THE DIRECTION OF HONBLE I TAT. COPIES OF ORDER OF COORDINATE BENCH IN ITA NO. 4881/DEL/16 AN D 4882/DEL/16 DATED 06/02/19 AND APPEAL EFFECT ORDER PASSED BY THE ASSESSING OFFICER WERE PLACED ON RECORD. IT WAS SUBM ITTED THAT THE TRIBUNAL WHILE DECIDING THE VERY SAME ISSUE OF ADDI TION OF JEWELLERY AFTER TAKING NOTE OF CBDT CIRCULAR NO. 1916 DATED M AY 11 1994 4 ITA NOS.2801 & 2802/DEL/2016 RAM NIWAS GUPTA VS. DCIT SET ASIDE THE MATTER TO ASSESSING OFFICER TO CALCUL ATE THE QUANTITY OF JEWELLERY FROM THE INVOICES AND ASSESS THE SAME AFT ER GIVING BENEFIT OF CBDT CIRCULAR. PURSUANT TO THE DIRECTION ISSUED BY ITAT THE ASSESSING OFFICER COMPUTED THE QUANTUM OF TOTAL JEWE LLERY FOUND IN THE SEARCH AT 858.70 GRAMS AS AGAINST AVAILABLE LIM IT OF 950 GRAMS AS PER THE CBDT CIRCULAR. IT WAS ACCORDINGLY SUBMITT ED BEFORE US THAT SINCE THE TOTAL JEWELLERY FOUND WAS LESS THAN T HE PRESCRIBED LIMIT BY CBDT THE ADDITION MADE WAS NOT SUSTAINABLE . 5.0 THE LD. DR ON THE OTHER HAND RELIED UPON TH E ORDER PASSED BY THE LD. CIT (A) AND THE ASSESSING O FFICER. 6.0 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS AND DOCUMENTS AVAILABLE ON THE RE CORD. WE FIND THAT IDENTICAL ISSUE CAME UP FOR CONSIDERATION BEFO RE THE COORDINATE BENCH IN APPEAL RELATING TO AY 2010-11 IN ITA NO. 4 881 AND THE SAME WAS DECIDED VIDE ORDER DATED 06/02/2019 AS UNDE R: 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTI ONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. FACT S HOWS THAT DURING THE COURSE OF SEARCH CONDUCTED AT THE RESIDE NCE OF THE ASSESSEE ON 26/4/2012 CERTAIN DOCUMENTS WERE FOUND WHICH WERE THE INVOICES OF THE PURCHASE OF GOLD AND DIAMO ND JEWELLERY 5 ITA NOS.2801 & 2802/DEL/2016 RAM NIWAS GUPTA VS. DCIT WORTH INR 1083958 FOR PERIOD FROM FINANCIAL YEAR 20 06 07 TO FINANCIAL YEAR 2010 11. THE ASSESSEE WAS ASKED TH E QUESTION ABOUT THE SOURCE OF FUNDS FOR PURCHASE OF THE JEWEL RY. THE ASSESSEE SUBMITTED THAT THESE ARE THE PURCHASES MAD E BY HIM FOR HIS RELATIVES AND FRIENDS ON THEIR BEHALF. THIS ARGUMENT OF THE ASSESSEE WAS NEGATED AND THE ADDITION WAS MADE AND CONFIRMED BY THE LEARNED LOWER AUTHORITIES. THE ONL Y PLEA BEFORE US OF THE LEARNED AUTHORISED REPRESENTATIVE IS THAT THE ASSESSEE SHOULD BE GRANTED THE BENEFIT OF THE CIRCULAR OF TH E CBDT WHICH HAS BEEN CONSIDERED BY THE HONOURABLE GUJARAT HIGH COURT. THE HONOURABLE GUJARAT HIGH COURT IN CIT V RTANLALVYAPA RILAL JAIN 339 ITR 351 HAS HELD WITH RESPECT TO THE POSSESSION OF THE JEWELRY AND THE SOURCE OF ACQUISITION OF THE JEWELR Y QUA CIRCULAR ISSUED BY CBDT AS UNDER :- 9. AS CAN BE SEEN FROM THE IMPUGNED ORDER OF THE TRIBUNAL THE TRIBUNAL HAS REFERRED TO THE CENTRAL BOARD OF DIRECT TAXES CIRCULAR NO. 1916 AND OBSERVED THAT IN AN EARLIER DECISION OF THE TRIBUNAL THE TRIBUNAL HAS ACCEPTED THE APPLICABILITY OF THE CIRCULAR AND HAS HELD THAT HAVING REGARD TO THE CIRCULAR AND SIZE OF THE FAMILY THE ORNAMENTS TO THE EXTENT SPECIFIED IN THE CIRCULAR SHOULD BE A CCEPTED AS REASONABLE. THE TRIBUNAL ACCORDINGLY FOUND THAT T HE JEWELLERY HELD BY THE ASSESSEE AND HIS FAMILY MEMBE RS WAS WELL WITHIN THE LIMIT LAID DOWN UNDER THE CENTR AL BOARD OF DIRECT TAXES CIRCULAR AND ACCORDINGLY DE LETED THE WHOLE ADDITION ON THE GROUND THAT THE JEWELLERY HELD BY EACH OF THE FAMILY MEMBERS WAS BELOW THE LIMITS SPECIFIED IN THE SAID CIRCULAR. 6 ITA NOS.2801 & 2802/DEL/2016 RAM NIWAS GUPTA VS. DCIT 10. THOUGH IT IS TRUE THAT THE CENTRAL BOARD OF DIR ECT TAXES CIRCULAR NO. 1916 DATED MAY 11 1994 LAYS DOWN GUIDELINES FOR SEIZURE OF JEWELLERY AND ORNAMENTS I N THE COURSE OF SEARCH THE SAME TAKES INTO ACCOUNT THE Q UANTITY OF JEWELLERY WHICH WOULD GENERALLY BE HELD BY THE F AMILY MEMBERS OF AN ASSESSEE BELONGING TO AN ORDINARY HIN DU HOUSEHOLD. THE APPROACH ADOPTED BY THE TRIBUNAL IN FOLLOWING THE SAID CIRCULAR AND GIVING BENEFIT TO T HE ASSESSEE EVEN FOR EXPLAINING THE SOURCE IN RESPECT OF THE JEWELLERY BEING HELD BY THE FAMILY IS IN CONSONANCE WITH THE GENERAL PRACTICE IN THE HINDU FAMILIES WHEREBY JEWELLERY IS GIFTED BY THE RELATIVES AND FRIENDS AT THE TIME OF SOCIAL FUNCTIONS VIZ. MARRIAGES BIRTHDAYS MA RRIAGE ANNIVERSARY AND OTHER FESTIVALS. THESE GIFTS ARE CU STOMARY AND CUSTOMS PREVAILING IN A SOCIETY CANNOT BE IGNOR ED. THUS ALTHOUGH THE CIRCULAR HAD BEEN ISSUED FOR THE PURPOSE OF NON-SEIZURE OF JEWELLERY DURING THE COUR SE OF SEARCH THE BASIS FOR THE SAME RECOGNIZES CUSTOMS PREVAILING IN THE HINDU SOCIETY. IN THE CIRCUMSTANC ES 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 B E A REASONABLE QUANTITY CANNOT BE FAULTED WITH. IN THE CIRCUMSTANCES IT IS NOT POSSIBLE TO STATE THAT THE TRIBUNAL HAS COMMITTED ANY LEGAL ERROR SO AS TO GIVE RISE TO A QUESTION OF LAW. IN THE PRESENT CASE THE BILLS OF PURCHASE OF JEWELR Y WERE FOUND INSTEAD OF JEWELLERY ITSELF AND ASSESSEE HAS EXPLAI NED THAT THE JEWELLERY IS PURCHASED FOR THE FRIENDS AND RELATIVE S OF THE ASSESSEE. IN THE ABOVE DECISION OF HON GUJARAT HIGH COURT THE 7 ITA NOS.2801 & 2802/DEL/2016 RAM NIWAS GUPTA VS. DCIT PURPOSE OF THE ISSUE OF THE CIRCULAR WAS ACCEPTED. WHEN THE JEWELRY ITSELF IS FOUND BUT THE BILLS ARE NOT FOUND THE ADDITION IS MADE U/S 69 OF THE ACT. FURTHER WHEN THE BILLS ARE FOUND BUT THE JEWELLERY IS NOT AVAILABLE WITH THE ASSESSEEDURING THE COURSE OF SEARCH THE ADDITION IS ALSO REQUIRED TO BE MADE U/S 69 OF THE ACT. THEREFORE WE DO NOT FIND ANY DIFFERENCE IN THE ABOVE THOSE SITUATIONS SO FAR AS THE OVERALL JEWELLERY FOUND DU RING THE COURSE OF SEARCH AS WELL AS THE BILLS OF SUCH JEWELLERY DO NOT EXCEED THE LIMITS SPECIFIED IN THE ABOVE INSTRUCTIONS. IN VIEW OF THIS FACTS AND RESPECTFULLY FOLLOWING THE DECISION OF THE HONO URABLE GUJARAT HIGH COURT WE SET ASIDE THIS ISSUE BACK TO THE FILE OF THE LEARNED AO WITH A DIRECTION TO THE ASSESSEE TO IDENTIFY THE TOTAL GRAMS OF THE JEWELRY CONTAINED IN THE PURCHAS E BILLS AS WELL AS THE ACTUAL JEWELLERY FOUND ALONG WITH THE D ETAILS OF THE FAMILY MEMBERS STAYING WITH THE ASSESSEE THEREAFTE R THE AO MAY EXAMINE THE SAME AND GRANT BENEFIT OF INSTRUCTI ON NUMBER 1994 DATED 11/05/1994 TO THE ASSESSEE. IN VIEW OF T HIS THE ISSUE ON ACCOUNT OF ADDITION OF JEWELRY OF INR 1 25 240/ IS SET ASIDE TO THE FILE OF THE ASSESSING OFFICER WITH ABO VE DIRECTION. GR. NO 1 IS DECIDED ACCORDINGLY. 6.1 IT IS FURTHER NOTED THAT THE ASSESSING OFFICE R WHILE GIVING EFFECT TO THE ABOVE SAID ORDER OF ITAT DELE TED THE ADDITION AFTER RECORDING THAT TOTAL JEWELLERY SO FOUND IN TH E SEARCH WAS WELL 8 ITA NOS.2801 & 2802/DEL/2016 RAM NIWAS GUPTA VS. DCIT WITHIN THE ALLOWABLE LIMIT AS PER CBDT CIRCULAR NO. 1 914 DATED MAY 11 1994. THE RELEVANT PORTION OF APPEAL EFFECT ORD ER DATED 29/03/2019 IS REPRODUCED HEREUNDER: 4.LN THE LIGHT OF ABOVE DISCUSSION AND CALCULATI ON TOTAL JEWELLERY CONTAINED IN THE SEIZED MATERIAL AND TOTA L JEWELLERY PHYSICALLY FOUND COMES TO 858.70 GRAMS (762.37+96.3 3). SINCE THE WEIGHT OF TOTAL JEWELLERY SO CALCULATED IS BELO W THE ALLOWABLE LIMITS TO THE ASSESSEE AND HIS FAMILY. THEREFORE T HE ADDITION OF RS.1 25 2401/- DOES NOT STAND TO THE TEST OF DIRECT IONS OF HON'BLE ITAT. THEREFORE RESPECTFULLY FOLLOWING THE DIRECTIONS OF HON'BLE ITAT RELIEF OF RS 1 25 240/- IS BEING ALL OWED TO THE ASSESSEE ON THIS ISSUE. 6.2 IN THE AFORESAID BACKGROUND AND RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH FOR A Y 2010-11 AND 2013-14 WE ARE OF THE CONSIDERED VIEW THAT ADDITIO N OF RS. 2 07 218/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN JEWELLERY IS IN TEETH OF CBDT CIRCULAR NO. 1914 AND DESERVES TO BE DELETED. ACCORDINGLY WE DIRECT THE ASSESSING OFFICER TO DEL ETE THE ADDITION. 6.3 IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. 9 ITA NOS.2801 & 2802/DEL/2016 RAM NIWAS GUPTA VS. DCIT 7.0 AS FAR AS APPEAL RELATING TO ASSESSMENT YEAR 2009- 10 (ITA NO. 2802/DEL/2016) IS CONCERNED THE GROUND S RAIDED BY THE ASSESSEE ARE AS UNDER: THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE AUTHORITIES BELOW ERRED IN HOLDING- 1. THAT THE CLAIM OF THE APPELLANT THE ADDITION OF RS. 4 78 000.00 ON ACCOUNT OF ALLEGEDLY UNEXPLAINED INVESTMENT IN J EWELLERY. IT IS PRAYED THAT THE ABOVE ACTIONS BEING MISCONCEI VED ARBITRARY AND UNLAWFUL MUST BE QUASHED. 7.1 AS THE ISSUE INVOLVED IN THIS APPEAL IS IDENT ICAL TO THAT DECIDED BY US IN ITA NO. 2801/DEL/16 THEREFOR E BY PARITY OF REASONING WE HEREBY ORDER THE DELETION OF ADDITION OF RS.4 78 000/- MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN JEWELL ERY. 7.2 IN THE RESULT THE APPEAL FILED BY TH E ASSESSEE IS ALLOWED. 10 ITA NOS.2801 & 2802/DEL/2016 RAM NIWAS GUPTA VS. DCIT 8.0 IN THE FINAL RESULT BOTH THE A PPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED ON 31/05/2021. SD/- SD/- (PRASHANT MAHARISHI) (SUDHANSHU SRIVASTAVA ) ACCOUNTANT MEMBER JUDICIAL MEMBE R DATED: 31/05/2021 *DRAGON* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI (DEHRADUN CIRCUIT BENCH DEHRADUN)