PALLAVI MITTAL,KAITHAL vs. DCIT, CENTRAL CIRCLE, KARNAL

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ITA 1794/DEL/2018Status: DisposedITAT Delhi21 September 2021AY 2014-154 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the father-in-law of the assessee, who was the head of the joint family, had declared an amount equivalent to the total undisclosed jewellery found as his undisclosed income, no separate addition in the hands of the assessee was warranted.

What were the facts?

During a search operation, jewellery worth Rs. 41,48,174/- belonging to the assessee was found. Of this, Rs. 14,14,638/- was seized, while the rest was released. The Assessing Officer added the entire amount to the assessee's income.

What were the issues?

Whether the entire value of jewellery found should be added to the assessee's income when the father-in-law declared equivalent undisclosed income.

Which sections of the Income-tax Act were involved?

Section 132(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘F’, NEW DELHI

Before: Sh. Amit ShuklaDr. B. R. R. Kumar

For Respondent: Ms. Shivani Bansal, Sr. DR
Hearing: 15.09.2021Pronounced: 21.09.2021

ORDER Per Dr. B. R. R. Kumar, Accountant Member:

The present appeal has been filed by the assessee against the order of ld. CIT(A)-2, Gurgaon dated 29.12.2017.

2.

Following grounds have been raised by the assessee:

1. The ld. CIT (A) erred in law and on facts in confirming the addition of Rs.41,48174/- as undisclosed investment in jewellery- (a) Even when the jewellery valued at Rs.27,33,536/- was not seized at the time of search and, thus, accepted to that extent by the Revenue as made from the disclosed sources following the CBDT Instruction No. 1916 dated 11.05.1994; and (b) Even when the remaining jewellery valued at Rs.14,14,638/- was the family jewellery acquired by the assessee’s father-in-law, Mr. Subhash Chander Mittal, and who had declared the equivalent sum as 2 Pallavi Mittal his undisclosed income in his return of income filed for the A.Y. 2014-15 relevant to the date of search.

Thus, total addition of Rs.41,48,174/- so made must be deleted.”

3.

Heard the arguments of both the parties and perused the material available on record.

4.

A search & seizure operation u/s 132(1) of the Income Tax Act, 1961 has been conducted at the residential as well as business premises of Sh. Vishnu Overseas Pvt. Ltd. on 17.01.2014. In connection with the proceedings, locker No. 6A of Union Bank of India, Ambala, Kiathal was operated and the jewellery found thereof belonging to the assessee worth Rs.41,48,174/- was found out of which jewellery amounting to Rs.14,14,638/- seized by the department. The Assessing Officer has brought the entire amount of jewellery to tax holding that the department has already given relief of jewellery worth Rs.23,26,432/- found from the residence at Kaithal in position of Sh. Subhash Chander Mittal, father-in-law of the assessee.

5.

We find from the records that the total jewellery found from the residential premises and the lockers of the family of Sh. S.C. Mittal amounts to Rs.2,05,55,951/-. The details of the total jewellery found as per the panchnama prepared against the single warrant issued in the name of Sh. S.C. Mittal and all other family members is as under: S. No. Name Items Amount(Rs.) 1. Sh. Subhash Chander Mittal (Joint Jewellery 15,25,117/- family with 8 members) Silver 8,01,315/- 2. Sh. Subhash Chander Mittal (Locker No. 81, PNB, Kaithal) Jewellery 12,55,654/- (Locker No. 277, PNB, Kaithal) Jewellery 40,27,042/- 3. Smt. Pallavi Mittal Jewellery 41,48,174/- 4. Sh. Hitesh Mittal Jewellery 52,30,179/- 5. Shruti Mittal Jewellery 35,68,470/- Total 2,05,55,951/-

3 Pallavi Mittal 6. Out of the jewellery worth of Rs.2,05,55,951/-, the jewellery worth Rs.77,52,900/- weighing about 2550 gms. was not seized and jewellery worth Rs.1,28,03,000/- has been seized by the department. Sh. S.C. Mittal has disclosed an amount of Rs.1,47,00,000/- as undisclosed speculative profit from rice in his return of income for the A.Y. 2014-15 the application of which resulted in the purchase of jewellery.

7.

The details of the jewellery found, seized, released and the undisclosed income declared is as under:

SUBHASH CHANDER Value Seized Released (joint with other 8 family members ) Cash 328310 - 328310 Jewellary 1525117 - 1525117 Silver 801315 - 801315

SUBHASH CHANDER (Locker No. 81 PNB Kaithal) Jewellary 1255654 1255654 -

SUBHASH CHANDER (Locker No. 277 PNB Kaithal ) Jewellary 4027042 4027042 -

NEERAJ MITTAL Value Seized Released (Joint with other 8 family members ) Cash - - - Jewellary - - - Silver - - -

Pallavi Mittal Value Seized Released (Joint with other 8 family members ) Cash - - - Jewellary - - - Silver - - -

Pallavi Mittal (Locker No. 6A UBI Kaithal) Jewellary 4148174 1414638 2733536

Hitesh Mittal Value Seized Released (Flat No. 1001, Sabri Basera Building, Opp. Diamond Garden, Chembur, Jewellary 5230179 3644840 1585339 Mumbai)

4 Pallavi Mittal SHRUTI MITTAL Value Seized Released (Locker No. 4 KOTAK MAHINDRA MUMBAI) Jewellary 3568470 2460870 1107600 BLANK SHARE TRANSFER DEED Total 20884261 12803044 8081217

Jewellary Seized Person wise Misc. Income Declared S.C. Mittal 1255654 Jewellary 12803044 S.C. Mittal 4027042 Cash 896956 Pallavi Mittal 1414638 Mittal & Co. 1000000 Hitesh 2460870 Hitesh 3644840 14700000 Total 1,28,03,044

8.

From the above, we find that Sh. S. C. Mittal, father-in-law of the assessee staying under the same roof, as the head of the joint family has disclosed an amount equal to the unaccounted jewellery seized belonging to the entire family as an undisclosed income. The vary purpose of centralization of the cases of the family members is to have a comprehensive understanding and determination of undisclosed income. In the instant case, since the undisclosed income determined tallies with the undisclosed income declared in the return, no separate addition in the hands of the assessee is called for.

9.

In the result, the appeal of the assessee is allowed. Order Pronounced in the Open Court on 21/09/2021.

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