NEMI CHAND vs. THE COMMISSIONER INCOME TAX

O R D E R (Passed on^L.7.2009) Dhirendra Mishra. J 1) The appellant-assessee has preferred this appeal under Section 260-A of the Income Tax Act, 1961 (for short 'the Act') again^t the order of the Income Tax Appellate Tribunal (for brevity 'the tribunal') dated 9.5.2008 (Annexure P-8) on t^he fotlowing substantial questions of law:- "(i) Whether in the facts and circumstances of the case the Income Tax Appellate Tribunal was justified in not/accepting the deed by which 970 gms. go\d ornaments and 5.25 gms Silver utensils were received by the assessee and in sustaining the assessment of the same as ' undisclosed income of the assessee without examining the witnesses. (ii) Whether ih the facts and circumstances of the case the Income Tax Appellate Tribunal was r ^^.^^^-^ .^^T",::

('-' justified in maintaining the addition of Rs.Z5,000/-,out of the estimated value of inventory of house hold articles and in canceling thereliefofRs.26,000/-granted by the C.I.T. (/\ppeals)on the ground that without any evidence retraction is not permitted." 2) The appellant-assessee QS well as respondent-revenue preferred appeals against the order dated 22.11.1997 of the CIT (Appeals) and both the appeals were disposed of by the tribunal vide impugned order, 3) Briefly stated facts of the case are that a search was conducted in the residential premises of the appeltant- assessee. buring the course of search, cash of Rs.7,97,920/-, gotd jewelry worth 6006.32 grams, sitver worth 40.19 Kg and other valuables worth Rs'.20,63,035/- were found. The appellant-assessee filed his return for the year 1997-98 and 1998-99 showing undisclosed income of Rs.1,85,190/- <& Rs.11,83,826/- During assessment proceedings the Assessment Officer (for short 'A.O') accepted the explanation of cash balance, however, the appetlant's exptanation that he received 970 gm of jewetry on partition of bigger HUF was not accepted on the ground that there is no proof, the partition deed does not mention the receipt of gold and sitver ornaments amongst the assessee and his brothers, it is not evident from the balance sheet or wealth tax return of father and mother of the assessee and receiptof jewelries from HUF is also not establt'shed from the deed. It was further observed that the assessee has not shown the individual wealth tax return to establish that he received the gold onty in the partition and accordingly entire jewelries were treated as undisclosed income for the assessment year

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1998-99 and value wasassessed at Rs.12,77,150/- by calculating at the rateof Rs.4,100/- per 10 gram. Since the assessee had shown only Rs.5,88,530/-, the difference of Rs.6,88,620/- was taxed as undisclosed income for the assessment year 1998-99. Rs.5,88,530/- shown by the assessee was also treated as undisclosed income for the assessment year 1998-99. Similarly, payment of Rs.45,635/- to bPS School in the name of Master Harsh Nahar was also added as unexplained expenditure in the hands of the assessee for the assessment year 1998-99. In the course of search/an inventory of household articles valued at Rs.1,11,000/- was prepared and the same was offered by the assessee in his statement recorded during search proceeding on 21.11.1997. However, in the return the same was reduced to Rs>60,000/- and thus an amount of Rs.51,000/- was added to the undisclosed income for the block period relevant to assessment year 1998-99. 4) In appeal by the appeilant-assessee, the CIT (Appeals) confirmed theorder of the A.O. whereby the appellant's claim re9°'rdi"9 rsceipt of 970 gm of jewelry in the partition was not accepted. However, the order of the /\.0. was modified and the valuation of the jewelry was done at the rate prevailing in the year 1997. With respect to the addition of Rs.45,365/-bein9 paid to the DPS School in the name of Master Harsh Nahar, the explanation regarding expenditure ,of Rs.30,000/- by Smt. Sugani Bai and Smt. Sire Kanwar Baiwds accep4ed and addition to the extent of Rs.30,000/- was deleted. However, additionwith respect to Rs.15,365/- was cohfirmed. The CIT (Appeals) also granted relief of Rs.26,000/- to the assessee and confirmed the addition to the extent of Rs.25,000/- towards unexplained investment in the household articles by the assessee. li WIf 11 1 r

5) The appellant-assessee as also respondent-revenue preferred appeal a9ainst the order of the CIT (Appeats) which uvere disposed of by the tribunal by the common impugned order of Annexure A-8. The tribunal, allowing

the appeal of the assessee as well as the revenue in part, confirmed the order of the /\.G. on the issue of 970 gm of jewelry rejecting claim of the assessee that he received the same in partition of bigger HUF. The tribunal also confirmed the addition of Rs.15,365/- by the CIT (Appeals) regarding payment made to DPS School in the name of Master Harsh Nahar, grandson of the assessee. However,

the appeal of theassessee agairrstconfirmation of addition of Rs,25,000/—outof Rs.51,000/- towards estimated difference for the value of household articles shown at Rs.60,000/- was dismissed^nd the appeal of the revenue a9ainst the finding of the CIT (Appeals) was allowed, the order of CIT (Appeals)on that Issue was reversed and the order of the A.O. was restored. 6) Mr. Jain, learned counsel for fhe appellant has pressed this appealonly with respect to above three issues. He vehementty argued that all the three forums below were not justified in not accepting the deed with respect to partition of bigger HUF on the ground that his brother Deepchand Nahar did not mention the fact of receipt of any jewelry in the partition of bigger HUF in his return and the appejlant himself did not show the same in his return. He submittecl that since beepchand Naharwas not a wealth tax assessee, therefore, the questionof mentioning this fa-ct in his return does not arise. Similarly, since the appellant's smatler HUF obtained the jewelry in partition from the bigger HUF, therefore, thesame did not find place in his individual return.

7) On the other hand, Mr. Rao, learned counsel appearing for the respondent-revenue vehemently ar9ued that a huge quantity of jewelry was seized during search operation which continued for a period of three days. The statement of assessee was recorded during search proceeding, however, he did not disclose that jewelries belonged to smaller HUF of the assessee and the same was receivedon of the bigger HUF and the explanation was offered only at the time of assessment proceedings. which is on the face of it an afterthought, and the partition deed has been created as self-serving document. The reasoning assigned by the A.O., which - has been subsequently confirmed by two appellate courts, is based on the material avai'lable on record and the same cannot be termed perverse. Finding record&.d by the courts below is a concurrent finding of fact and no substantial question of law arises for adjudication of this appeal. He further submitted that the CIT (Appeals) erroneously allowed the relief of Rs.26,000/- on the ground that household properties could hot have been procured only during the assessment year 1998-99 though it was not the case of the assessee and the assessee himself valued entire property at Rs.60,000/-, which was not accepted by the A.O. 8)

We have heard learned counsel for the parties. We have gone through the orders passed by the forums below. 9) We are entJrely in'agreement with the order of the tribunat whereby the .findin9 of the CIT (Appeals) confirming the order of the A.O. has been upheld. Wedo not find any merft in the contention of the Mr. Jain, learned counsel for the appellant that the explanation of the assessee regarding receipt of jewelry in partition of bigger HUF hasbeen rejected erroneously. The A.O., after

"'^'I^'^-^'.. ''::''' i~:'y:set!iwi. .:' •-t- w carefully examining the documents available on record, arguments advanced by the assessee in this regard and further considering the fact that document was not produced or even mentioned during the sedrch proceedings by the assessee, has not accepted the explanation of the assessee. We, therefore, of the opinion that no substantial question of taw, as proposed by the appellant- assessee, arises for adjudication of thisappeal. 1,0) In the result, the appeal has no substance, the same deserve to be dismissed and accordingly, it is hereby dismissed. No order as tocosts. DHBtENDRA MISHRA Judge R.N. Chandrakar Judge Roshan/- l^ \ ;^>\