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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI KUL BHARAT & SHRI MANISH BORAD
आदेश / O R D E R
PER KUL BHARAT, J.M: This appeal by the assessee is directed against order of
the CIT(A)-III, Bhopal dated 13.9.2017 pertaining to the
[ITA 684/Ind/2017] [Smt. Neeta Rai, Bhopal]
assessment year 2015-16. The assessee has raised
following grounds of appeal:
The order of the learned CIT(A)-3, Bhopal is unjustified and is beyond the facts and circumstances of the case. 2. The learned CIT(A)-3, Bhopal has erred in passing the order under section 250 of the Income Tax Act, 1961, the Learned CIT(A)-3 has proportionately allowed the gold jewellery and ornaments weighing 700 grams and disallowed the remaining 266.5 grams. CBDT Instruction No.1916 prescribes the limit that “gold jewellery and ornaments to the extent of 500 grams per married lady, 2520 grams per unmarried lady and 100 grams per male member of the family need not be seized.” The learned CIT(A)-3 has not considered the relief for gold jewellery belonging to Mrs. Mandakini Rai, Daughter in Law of the assessee (eligible for holding gold jewellery weighing 500 grams) and Ku. Ananya Rai, Grand daughter of the assessee (eligible for holding gold jewellery weighing 250 grams.) 3. The appellant craves leave to add, to amend or alter any of the grounds of appeal as and when necessary. 2. Briefly stated facts are that search & seizure operation
u/s 132(1) of the Income Tax Act, 1961 (hereinafter called
as ‘the Act’) was carried out at the residential and business
premises of the persons/partners and associate concerns
of Regal Homes and Dwarkadheesh Haveli Builders Group
of Bhopal on 12.8.2014. The assessee being one of the
member of the Regal Homes Group, search operation was
carried out at her premises and the assessment u/s 153A
[ITA 684/Ind/2017] [Smt. Neeta Rai, Bhopal]
r.w.s. 153(3) of the Act was framed vide order dated
28.9.2016. While framing the assessment, the A.O. made
addition of Rs.24,52,309/- on account of investment in
jewellery. Against this, the assessee preferred an appeal
before Ld. CIT(A). The Ld. CIT(A) deleted the addition to the
extent of investment in 700 gms. Jewellery. Rest of the
addition was sustained. Against this, the assessee is in
appeal before this Tribunal.
Ld. Counsel for the assessee reiterated the
submissions as made in the written synopsis. The
contents of the same are reproduced as under:
“With reference to the hearing of above referred appeal, we have to submit the short facts of the case are as under: 1. Search operation u/s 132(1) of the Income Tax Act were carried out in the residential and business premises of M/s. Regal Home and Dwarkadheesh Haveli Builders Group. Assessee’s husband Shri Rakesh Kumar Rai was also connected with the said group, thus search u/s 132 was also carried out at her residential premises. 2. During the course of search locker bearing No.632 held with Bank of Baroda was found by the search party. In the said locker the search party found gold jewellery and silver articles detailed as under
[ITA 684/Ind/2017] [Smt. Neeta Rai, Bhopal]
S.No. Particulars Jewellery found (in Rs.) 1. Gold jewellery weighing 966.00 gram 24,52,309/- (net wt.) 2. Silver articles weighing 1960.00 gram 73,923/- (net wt.) Total 25,26,332/-
During the course of search statement u/s 132(4) of the assessee was recorded and in reply to question no.7 assessee stated that his family consists of herself, her husband Shri Rakesh Kumar Rai, Son Shri Rishin Rai, Daughter-in-law Smt. Mandakini Rai and Daughter Smt. Mansi Rai. A copy of statement u/ 132(4) is enclosed herewith. 4. During the course of assessment proceedings it was explained that the jewellery and silver articles found during the course of search is covered within the guidelines prescribed by the CBDT Circular No.1916 dated 11.5.1994 as tabulated below: Name of the family member Ornaments allowed as per notification (Grams) Mrs. Neeta Rai (appellant) 500 Mr. Rakesh Rai (Husband) 100 Mr. Rishin Rai (son) 100 Mrs. Mandakini Rai (daughter in 500 law) Mrs. Mansi Rai Shrivastava 500 (daughter) Ku. Anaya Rai (grand daughter) 250 1950 ms. Total 5. It was contended before the Ld. A.O. that as per Board’s Circular the assessee family can hold 1950 grams of gold jewellery against which the said party was found only 966 grams gold jewellery. Thus the quantum of jewellery found during the search is below the guideline prescribed by CBDT. 6. The Ld. A.O. has not accepted assessee’s above submission by stating that assessee is not Income Tax payer, no bills and vouchers in respect of acquisition of jewellery is submitted nor the proof of receipt of jewellery in gift at the time of marriage and other occasions from relatives have been produced. Thus the Ld. A.O. has not accepted that assessee or his any of the family members is hold any gold jewellery or received by them in marriage or other family ceremonies, thus he made addition of total value of jewellery at Rs.24,52,309/-found during the course of search.
[ITA 684/Ind/2017] [Smt. Neeta Rai, Bhopal]
Aggrieved by the order of the Ld. A.O. assessee preferred appeal and reiterated the submission before the Ld. CIT(A) who hold that in view of the CBDT circular and decision relied by the assessee gold jewellery to the extent of 700 grams is reasonable and maintained the addition 266 grams. 8. Being dissatisfied from the order of Ld. CIT(A) assessee filed present appeal. Now our humble submissions before your honour are as under: (i) The Ld. CIT(A) hold that jewellery to the extent of 700 grams is reasonable the break up of which is as under: Neeta Rai (Appellant assessee) 500 grams Rakesh Kumar Rai (Assessee’s husband) 100 grams Rishin Rai (assessee’s son) 100 grams Total 700 grams (ii) We could not understand why the Ld. CIT(A) has not allowed the deduction of jewellery of daughter in law, grand daughter and married daughter particularly when in the statement recorded u/s 132(4) assessee specifically mentioned that her family consists of herself, her husband, son, daughter in law. (iii) It is submitted that in view of the Board’s Circular referred herein above the jewellery fund is below the prescribed limit. Reliance is placed on the following decisions: a. Sunita Nigam Vs. DCIT (Central) ITA No.310/Ind/2017 order dated 27.6.2018 (2018) 33 ITJ 837 (Indore) b. Suresh Chand Agrawal Vs. DCIT (2014) 23 ITJ 46 (Indore) c. CIT Vs. M.s. Agrawal (HUF)(2008) 11 ITJ 721 (MP) In view of above facts it is prayed that entire jewellery found be treated as disclosed and addition confirmed by the Ld. CIT(A) be deleted.”
On the contrary, Ld. D.R. opposed the submissions
and supported the orders of the authorities below. He
submitted that before assessing officer, no evidence was
adduced in support of the contention, therefore, A.O. was
[ITA 684/Ind/2017] [Smt. Neeta Rai, Bhopal]
justified in not giving benefit of circular of CBDT. It was
incumbent upon the assessee to the contention of placing
supporting evidences.
We have heard the rival submissions, perused the
materials available on record and gone through the orders
of the authorities below. We find that before the A.O. the
assessee had categorically submitted as under:
7.6 In the written reply dated 22.9.2016 the assessee has stated as under:- “Out of 966.50 Gram Gold jewellery, 346.90 gram, Gold jewellery belongs to Smt. Neeta Rai, 477.20 Gram Gold Jewellery belongs to Smt. Mandakni Rai (Daughter-in-law) and 142.40 gram Gold Jewllery belongs to Smt. Mansi Rai Shrivastava. Out of 1960.00 Gram Silver articles, 1187.00 gram silver articles belongs to Smt. Neeta Rai, 400.00 Silver articles belongs to Smt. Mandakni Rai and 200.00 gram silver articles belongs to Smt. Mansi Rai Shrivastava. 1. Mrs. Neeta Rai did not purchase any gold or silver after her husband’s retirement from Banks service in 2008. All her ornaments were acquired/received as gifts, prior to that. 2. Mrs. Mandkini (daughter in law) received all her gold as gifts from various relatives and her parents at the parents at the time of her wedding. Her husband also received 4 rings and a chain. A list of gifts received was prepared at that time in Nov.2010. A copy of the same is enclosed for your perusal. Her daughter, born in March 2013 also received 3 small chains, bangals and 3 coins as gifts. All these items are consolidated in Mandakini’s list. She resides in Mumbai with her husband and find it unsafe to keep valuables there.
[ITA 684/Ind/2017] [Smt. Neeta Rai, Bhopal]
Mrs. Mansi Rai Shrivastava (daughter) is married to Mrs. Varun (Canadian citizen) in Oct 2012 and migrated there. They are residing in Canada with Varun’s family. She was working with Infosys before marriage. She has kept some of her ornaments and clothes for use, during her visits for attending wedding and other family functions in India. Since only lightweight, white gold/white metal ornaments are preferred over yellow gold jewellery in Canada, she decided not to carry these along.” 6. However, these submissions were rejected by
observing as under:
“7.7 the submission of the assessee has been examined and found to be not acceptable for the following reasons:- i. It is observed that the assessee was a non filer & not regularly filing her return. She has no source of income to explain the jewellery found in the locker clearly establishing that the jewellery was acquired through undisclosed sources. ii. No bills and vouchers have been submitted by the assessee. iii. No documentary evidence with regard to the receipts of gifts has been submitted by the assessee. iv. No documentary evidence has been submitted to prove that the jewellery is related to Smt. Mandakni Rai or Smt. Mansi Rai Shrivastava. v. The assessee has merely submitted a list of some of the relatives and has claimed that the jewellery has been received as gift from them, however, no documentary evidence has been submitted by the assessee to prove the gift paying capacity of these persons. vi. The assessee has failed to explain that the jewellery has been acquired out of accounted income.” 7. Ld. CIT(A) gave benefit of CBDT circular to the extent
of 700 gms. only. Rest of the addition was sustained. It is
undisputed that before A.O., the assessee had stated that
[ITA 684/Ind/2017] [Smt. Neeta Rai, Bhopal]
the jewellery recovered from her locker belong to other
individuals. The A.O. rejected the contention on the basis
that no return was being filed. Further, no documentary
evidence was submitted in respect of gifts, etc. Further, no
evidence was produced to prove that jewellery is related to
other individuals namely Smt. Mandakini Roy and Smt.
Mansi Roy Srivatsav. In our view, the A.O. ought to have
made enquiry from other persons. However, no such
enquiry was made. Ld. CIT(A) also in a mechanical manner
without conducting any enquiry from the other members of
the family proceeded to give benefit to the extent of 700
gms. only. Under these facts, the A.O. ought to have made
enquiries from the other persons. In the absence of such
enquiry, in our view, addition so made is not justified. It is
also common practice in Indian household that ladies
share their locker for storing ornaments with other family
members. Moreover, it is stated that the jewellery is
[ITA 684/Ind/2017] [Smt. Neeta Rai, Bhopal]
received in the form of gift, then the A.O. should have
atleast made enquiries from the persons from whom such
gift was received. Therefore, considering the totality of the
facts, addition made by the A.O. is not sustained. We
direct the A.O. to give benefit of the circular of CBDT and
delete the addition. Grounds raised in this appeal are
allowed.
In the result, appeal filed by the assessee is allowed.
Order was pronounced in the open court on 08 .01.2019.
Sd/- Sd/- (MANISH BORAD) (KUL BHARAT) ACCOUNTANT MEMBER JUDICIALMEMBER
Indore; �दनांक Dated : 08/01/2019 VG/SPS Copy to: Assessee/AO/Pr. CIT/ CIT (A)/ITAT (DR)/Guard file. By order
Assistant Registrar, Indore