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आदेश/Order
PER N.K. SAINI, VICE PRESIDENT
This is an appeal by the Assessee against the order dt. 13/02/2018 of Ld. CIT(A)-2, Gurgaon.
The Registry has pointed out that there is delay in filing the appeal by 258 days. The Assessee moved an application for condonation of delay stating therein as under:
i). The orders of the CIT(A) were received on 23.03.2018. ii). The appeals were due to be filed on or before 22.05.2018. iii). The appeals were filed as per above notice on 04.02.2019.
It is submitted that in the above said case, the appeals were prepared on 10th of April 2018 and even the fee for filing the appeals were deposited on 16.04.2018, but the appeals were inadvertently filed in the office of the CIT, PR on
17.04.2018 as per necessary evidence being enclosed herewith in the form of receipt evidencing the fact that the appeals were filed on 17.04.2018 in the office of the CIT(DR) ITAT.
However, when no notice was received by the assessee from the registry and the above said mistake was noticed by the undersigned, we immediately prepared another set and filed the requisite appeals on 04.02.2019 in the office of ITAT, Chandigarh Bench, Chandigarh.
Then, we moved an application to the CIT(DR), ITAT, Chandigarh Bench, Chandigarh vide application, dated 15.02.2019 and, thereafter, the said original appeals as filed before the CIT (DR) were returned back to us as per necessary evidence in this regard being enclosed herewith.
In view of the above said facts and circumstances, it is very clear that the appeals were prepared in time and even the prescribed fees were also deposited in time, but the said appeals were filed on 17.04.2018 inadvertantly in the Office of CIT (DR), ITAT, Chandigarh, due to mistake on the part of the staff of the Assessee's counsel and which has now been confirmed by the office of the CIT (DR) and, as such, the delay of 258 is only on account of the bonafide mistake in filing the appeals in the office of CIT(DR), is highly regretted and the same, may, please, be condoned and oblige.
During the course of hearing the Ld. Counsel for the Assessee reiterated the contents of the aforesaid application and further submitted that the assessee deposited the requisite fee of Rs. 10,000/- on 16/04/2018 and thereafter the appeal memo was furnished by mistake in the office of CIT ITAT, 1 & 2, Chandigarh. In support of the above contention photocopy of the receipt issued by the office of CIT ITAT 1 & 2,Chandigarh and copy of Challan for making the payment in the State Bank of India were furnished which are placed on the record. It was contended that due to bonafide mistake the appeals were furnished in the office of the CIT DR’s instead of office of AR’s ITAT and when no notice was received by the Assessee from the Registry of the Tribunal for fixation of the appeals the assessee moved an application dt. 15/03/2019 in the office of the CIT DR, ITAT Chandigarh Benches, Chandigarh and the appeal memo filed in the said office was returned back, copy of the letter dt. 13/02/2019 written to the CIT (DR), ITAT, 1 &2 Chandigarh was furnished which is
placed on record. It was accordingly submitted that there was a bonafide mistake in not furnishing the appeal in the office of the AR’s ITAT Chandigarh Benches Chandigarh which wrongly was furnished in the office of the CIT DR, ITAT Chandigarh Benches Chandigarh.
In his rival submission although the Ld. CIT(DR) opposed the application moved by the Assessee for condonation of delay but could not controvert the aforesaid contention of the Ld. Counsel of the assessee.
We have considered the submissions of both the parties and perused the material available on the record. In the present case, tt is noticed that the assessee paid the Tribunal fee of Rs. 10,000/- vide Challan No. 00598 on 16/04/2018 in the SBI, however, by mistake furnished the appeal memo in the office of CIT(DR) ITAT, 1 & 2,Chandigarh on 17/04/2018 vide receipt no. 58 issued by the said office. On realizing the mistake, the assessee moved an application dt. 13/02/2019 in the office of the CIT (DR) ITAT, 1& 2, Chandigarh which was received in the said office on 15/02/2019, thereafter, the relevant record was returned which was received by the assessee on 19/02/2019. All the aforesaid documents were furnished by the assesse which are placed on record. We therefore are of the view that there was a reasonable cause for filing the appeal belated and the assessee has a plausible explanation. We therefore by considering the totality of the facts as discussed hereinabove, condone the delay and the appeal is admitted.
Following grounds have been raised in this appeal.
1a) That the Ld. CIT(A)-2, Gurgaon has erred in confirming the order of the Assessing Officer on account of alleged unexplained Jewellery amounting to Rs.59,59,890/- U/S 69A of the Act as per Ground No.2, Para 5 of her order. b) That the Ld. CIT(A)-2, Gurgaon has failed to appreciate the explanation given by the assessee during the course of post search enquiries that the Jewellery was, in fact, acquired after the search and redemption of Gold Bond, which was distributed by his father among the various family members and the
same explanation was given during the course of assessment proceedings and appellate proceedings, but the same has been rejected on flimsy grounds. c) That the Ld. CIT(A)-2, has ignored that the same Jewellery had been declared in the wealth tax returns and merely that such returns of wealth were filed after the search, but nevertheless, the source of acquisition of such Jewellery have not been doubted at all and has even accepted by the department in the scrutiny wealth assessments as per order passed u/s 16(3) has been ignored summarily. 2a) That the Ld. CIT(A)-2, Gurgaon has also erred in confirming order of the Assessing Officer in making addition of Rs.5,29,320/- on account of alleged unaccounted cash found during the course of search U/s 132 by resorting the provisions of Section 69A as per Ground No.3, Para 5 of her order. b) That the CIT (A) has not appreciated the assessee's preliminary statement recorded during search and also has not given the benefit of cash belonging to 'City Filling Station' and cash of M/s Sarvesh Spinners Pvt. Ltd., which is against the facts and circumstances of the case. c) That the appellant has its office in the premises owned by him, which has given on lease to 'M/s City Filling Station' and the Ld. CIT(A) has failed to appreciate the fact that in lieu of the maintenance of the office at the same premises, the assessee is also looking after the business of 'M/s City Filling Station' and even some of the notices of the department have been served at the address of the 'City Filling Station' and, as such, the finding of the CIT(A)-2, in not giving the benefit of such cash of "City Filling Station" with the assessee cannot be doubted at all. 3. That the detailed submissions filed during the course of assessment proceedings and also appellate proceedings has not been considered properly. 4. That the Appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off.
The grievance of the assessee vide ground no. 1(a) to (c) relates to the sustenance of addition of Rs. 59,59,890/- made by the A.O. under section 69A of the Income Tax Act, 1961 (hereinafter referred to as ‘Act’) on account of alleged unexplained Jewellery.
Facts of the case relating to this issue in brief are that a search and seizure operation under section 132 of the Act was carried out at the residential / business premises of the Assessee on 07/11/2013. The Assessee thereafter filed the return of income on 28/11/2014 declaring an income of Rs. 11,92,740/-. During the course of assessment proceedings the A.O. noticed that at the time
of search conducted on 07/11/2013, Jewellery with gross weight 669.650 gms valued at Rs. 15,92,977/- was found from the residential premises of the assessee and in the locker belonging to the assessee Jewellery including gold bars with gross weight of 3349.800 gms valued at Rs. 94,90,152/- was found. He asked the assessee to explain the source of Jewellery. In response the assessee submitted that the source of gold bars found in the locker was the redemption of Gold Bond Scheme. The A.O. observed that the serial numbers of the gold bars mentioned in the redemption certificate were different from one mentioned in the Gold Bond physically found from the locker and as the assessee could not offer any plausible explanation, the Jewellery from the locker valuing Rs. 94,90,152/- was seized. The A.O. asked the assessee to give source and year of purchase of Jewellery found during the course of search. In response the assessee submitted as under:
“Regarding your Honour’s query relating to the source of gold/gold Jewellery found from the Locker No. AA00006 with Punjab National Bank, Barnala valuing Rs. 94,90,152/- weighing 3349.800 grams, in reply it is respectfully submitted that the assessee alongwith his family members namely Smt. Kavita Bansal, wife of the assessee, his HUF styled as Rakesh Bansal (HUF) and Sh. Mohit BansaJ, son of the assessee had gold bonds under the Gold Bonds 1998 and SBI Gold Bond Deposit Scheme and his wife declared Jewellery weighing 45 Tolas in her Wealth Tax Return. All the gold / gold Jewellery comes to 5207.726 grams (detail of which is enclosed alongwith evidence), whereas the gold / gold Jewellery found from his locker with Punjab National Bank, Barnala is much less. It is further submitted that the assessee and his family members had also filed wealth tax returns as per their respective holding of gold / gold Jewellery which has been accepted by passing assessment orders u/s 16(3) of the Wealth Tax Act, 1956 by the respective Assessing Officer. As such, the Gold Jewellery / gold / bullion is out of the Jewellery owned by the assessee and his family members only. Copies of assessment orders for A.Y.2011-12 are enclosed alongwith copies of wealth tax returns for A.Y.2014-15 filed by him and his family members.
Smt. Kavita Bansal As per Gold Bonds 1998 532.000 gms As per SBI Gold Bond Deposit Scheme 996.000 gms As per Wealth Tax Return 450.000 gms (45 tolas) 1978.000 gms Less gifted to Shri Mohit Bansal, son F.Y. 2009-10 532.000 gms Balance 1446.000 gms (A)
Rakesh Bansal (HUF) As per SBI Gold Bond Deposit Scheme 900.000 gms (B) Rakesh Bansal (Individual) As per SBI Gold Bond Deposit Scheme 896.000 gms As per Gold Bonds 1998 855.000 gms As per Wealth Tax Return 588.726 gms 2329.726 gms Less gifted to Shri Mohit Bansal, son F.Y. 2007-08 886.000 gms Balance 1443.726 gms (C) Mohit Bansal Gift from father, Sh. Rakesh Bansal F.Y. 2007-08 886.000 gms Gift from mother, Smt. Kavita Bansal F.Y. 2009- 532.000 gms 10 1418.000 gms (D) Total
(A)+(B)+(C)+(D) = 1446+900+1443.726+1418= 5207.726 grams
From the above explanation it is very much clear that gold and gold Jewellery which was found from the locker and his residence is much less than the gold and gold Jewellery owned by the assessee and his family member. Thus no adverse inference is drawable on this account"
8.1 However the explanation given by the assessee was not acceptable to the A.O. for the following reasons:
i) Neither the assessee nor any of its family members were filing their wealth tax returns before the search. Wealth Tax Returns have been filed only by Rakesh Bansal (HUF) and that to upto the A.Y.2002-03. The assessee and his family members filed their wealth tax returns after the search was conducted upon unearthing Jewellery / gold with gross weight of 4019.45 gms. The details of filing of Wealth Tax Return as per returns are as under:-
Sr. Name of the A.Y. Gold declared Date of filing No. person in Wealth Tax wealth tax return Return 1. Shri Bansal Rakesh 2008-09 to 2011-12 1444 gms 11.12.2013 2012-13 & 2013-14 26.11.2013
2014-15 29.12.2014
Smt. Bansal Kavita 2008-09 & 2009-10 1978 gms 11.12.2013 2010-11 & 2011-12 1446 gms 11.12.2013
2012-13 & 2013-14 1446 gms 26.11.2013
2014-15 1446 gms 30.12.2014 3. Shri Mohit Bansal 2008-09 & 2009-10 886 gms 26.11.2013 2010-11 to 2013-14 (except 1418 gms.. 26.11.2013 2009-10 & 2011-12)
2014-15 1418 gms 30.12.2014
Rakesh Bansal HUF 2008-09 to 2011-12 900 gms 10.12.2013 2012-13 & 2013-14 26.11.2013
2014-15 30.12.2014
The family members of the assessee filed the wealth tax returns for the first time after the search operation i.e. after detection of possession of unrecorded gold / Jewellery. As is apparent from the date of filing the return for the A.Y.2008-09 to 2013-14, all the returns were filed after 07.11.2013 (the date of search). Some of the wealth tax returns were filed years later than the due date. The assessee filed these returns as an afterthought so as to cover up the Jewellery / gold found during the search. Merely filing of wealth tax returns does not prove the existence alongwith the source of acquisition of Jewellery / gold. This requires to be supported with documentary evidences of purchase and source of investments.
As per section 69A of the IT. Act, where in any F.Y. the assessee is found to be owner of any bullion, Jewellery etc. which is unrecorded and the assessee offers no explanation or the explanation offered is not satisfactory in the opinion of the AO regarding the nature and source of acquisition then the value of such bullion, Jewellery is deemed to be income of the assessee in such F.Y.”
The A.O. pointed out that the items of Jewellery and gold bars were not recorded in the books and that the assessee could not furnish any satisfactory explanation regarding the nature and source of acquisition but merely harped on the fact that Wealth Tax Returns were filed albeit post search. He also observed that the family members of the assessee filed the Wealth Tax Returns for the first time after search operation much beyond the due date. The A.O.
scanned the copies of the gold bonds in the name of assessee and certificate dated 27/10/2004 regarding the SBI Gold Deposit scheme redemption on maturity in the name of the assessee and his wife, in the paras 4.4 and 4.5 of the assessment order dt. 31/12/2015, for the cost of repetition the same are not reproduced herein. The A.O. made the impugned addition by observing in para 4.6 of the assessment order dated 31/12/2015 as under:
“4.6 During the course of search, gold bars weighing 2241.9 gms and Jewellery / coin weighing 1777.55 gms were found. As per the wealth tax return filed by Shri Rakesh Bansal (HUF) for the A.Y.2002-03, the HUF was in possession of gold weighing 900 gms, which was deposited in State Bank of India, Chandigarh. Therefore, the assessee is being allowed the credit of the gold to the extent of 900 gms being available with its HUF. Taking into consideration the decision of jurisdictional Punjab & Haryana High Court reported at 371 ITR 201 in the case of CIT vs. Naresh Kumar Kohli dated 17.11.2014, wherein the Hon'ble High Court has upheld the order of Hon'ble ITAT, Chandigarh in which 400 gms of Jewellery has been considered as Istridhan received at the time of marriage from parents and also held that appellant can get benefit of Rs. 4 lacs as savings from his past income and the benefit of such savings has been given for acquisition of the Jewellery. The referred case pertains to A.Y 1987 to 1997, taking the gold rate of Rs. 400 to Rs. 500 per gm, the savings of Rs. 4 lac at that time would mean Jewellery weighing approximately 800 gms. Hence, effectively the Hon'ble Court has accepted 400 gms of Jewellery as Istridhan for wife and 800 gms of Jewellery as to be purchased from assume savings of past of husband. Therefore, credit for 1200 gms is given to Smt. Kavita Bansal w/o the assessee as her stridhan and to the assessee. As regards, the balance gold weighing 1919.45 gms, which is valued at Rs.59,59,890/- (@ 3105 per gram) the assessee has not been able to provide any proof of purchase of the said gold and the explanation offered by him is not found to be satisfactory. Therefore, the same is treated as unexplained gold found and Rs. 59,59,890/- is treated as its deemed income u/s 69A of the IT. Act, 1961.”
Being aggrieved the assessee carried the matter to the Ld. CIT(A) and submitted as under:
“Vide the second ground of appeal, the appellant is agitating against the action of the Ld. Assessing Officer in making addition of Rs. 59,59,890/- on account of alleged unaccounted Jewellery found during the course of search u/s 132 on 07.11.2013 by resort to the provisions of Section 69A of the Act. The detailed submissions were made during the course of assessment proceedings with respect to the Jewellery found, both at the residence and locker bearing No. AA00006 with Punjab National Bank, Barnala of the appellant weighing 669.650 grams valued at Rs. 15,92,977/- and Jewellery including gold bars with gross weight of 3,349.800 grams valued at Rs. 94,90,152/-, respectively. Thus, the total Jewellery
found comes to 4,019.450 grams. The same were discussed by the Ld. Assessing Officer in the body of assessment order at Point No. 4.
The appellant and his family members had filed their Wealth Tax Returns, though after the date of search for various years i.e. for A.Y. 2008-09 to 2014-15. The Wealth Tax Returns of the appellant and his family members were regularized by issuing notice u/s 17 of the Wealth Tax Act, 1956 and the assessments were framed u/s 16(3) of the Wealth Tax Act, 1956 and the respective Officers for A. Y. 2008-09 to 2011-12. In all the assessments, the Jewellery / Gold declared by the appellant and his family members was duly accepted. Thus, as per the assessment orders, the appellant and his family members had gold/gold Jewellery weighing 5,207.726 grams as on 01.04.2007 relevant to first year of assessment i.e. A/Y 2008- 09. This fact was duly confirmed by the Wealth Tax Assessments framed. Thus, the Jewellery found both from residence and from locker, is out of the Jewellery declared by the appellant and his family members in their Wealth Tax Assessments and is holding the same prior to 01.04.2007. Copies of Wealth Tax Assessment Orders from AYs 2008-09 to 2011-12 in the case of the appellant and his family members are enclosed for Your Honour's ready reference along with copy of Wealth Tax Return filed by the appellant and his family members for A.Y. 2014-15 and 2015-16 evidencing Jewellery owned. Copy of income tax return for A.Y. 20015-16 and computation of income of Sh. Mohit Bansal is also enclosed, where the factum of sale of Jewellery owned by him is depicted. By no stretch of imagination, it can be said that the Jewellery found from the appellant during the course of search is in any way unexplained or acquired during the year under appeal and liable to be assessed as deemed income u/s 69A of the Act. The addition made on this account deserves to be deleted.
Vide the third ground of appeal, the appellant is agitating against the action of the Ld. Assessing Officer in treating the cash found from the residence of the appellant to the extent of Rs. 5,29,320/- as unaccounted and added to the income of the appellant as deeded income u/s 69A. The brief facts of the case are that the cash amounting to Rs. 24,78,045/- was- found from the residence of the appellant out of which Rs. 24,00,000/- was seized by alleging that the appellant could not explain the source of cash. However, the appellant had duly stated in his statement that this cash is out of the cash balance of his Proprietary Concern M/s Barnala Filling Station, company namely M/s Sarvesh Spinners Pvt. Ltd. in which he is Managing Director and also M/s City Filling Station and Dehati Sewa Kendra in which the appellant is serving as Manager. The works office of M/s Sarvesh Spinners Pvt. Ltd.is situated at Village Wazidke, Barnala-Ludhiana Road and having Head Office at Barnala where the Head Office of M/s Barnala Filling Station and works of M/s City Filling Station is situated i.e. at Dhanaula Road, Barnala. Being Managing Director of the company and Manager of M/s City Filling Station and also for the safe custody, cash belongs to these two concerns were also lying with the appellant at his residence. The cash found is duly explained and is as per the books of accounts of these three concerns.
However, during the course of assessment proceedings, the Ld. Assessing Officer has given credit of cash available as per cash book of his Proprietary Concern M/s Barnala Filling Station i.e. Rs. 19,39,725/- and the balance of Rs. 5,29,320/- treated as deemed income u/s 69A of the Act. The appellant had shown a
balance of Rs. 2,27,282/- which was as per cash book ( Head office ) of M/s Sarvesh Spinners Pvt. Ltd. was also lying with the appellant. As stated by the appellant, the same was brought by him at his residence. Otherwise also, even a single penny was not found from the Head Office of the said company. Due credit of this cash balance should also be given. Similarly, cash amounting to Rs. 11,51,728/- as per the cash book of M/s City Filling Station was there in which the appellant was a Manager. For the safe custody of the same, he used to take cash at his residence for further utilization the same in the morning hours. An evidence to the fact that this cash was available had already been filed during the course of assessment proceedings. A copy of the same is enclosed for ready reference along with copy of assessment order for A/Y 2014-15 in the case of Sh. Tarun Kumar Garg, Proprietor M/s City Filling Station ^evidencing that the appellant is a Manager of that concern. Thus, the total cash in all the three concerns including credit already allowed by the Ld. Assessing Officer is much more than cash found from the residence of the appellant. Thus, stands explained.
Vide the last ground of appeal, the appellant is agitating against the action of the Ld. Assessing Officer in not allowing the claim of deduction u/s 80C at Rs. 1,00,000/- and u/s 80TTA at Rs. 2,462/-. While computing income by the Ld. Assessing Officer, it appears that the figure of gross taxable income has been taken into consideration as against net taxable income after allowance of deduction under Chapter VIA. It is further submitted that as per the query letter dated 26.06.2015 (copy of which is enclosed), the appellant was asked to provide necessary evidence with respect to claim of deduction under Chapter VIA of the Act. The appelant had duty replied and submitted evidence vide letter dated 18.09.2015, copy of which is enclosed along with necessary evidence. Regarding deduction u/s 80TTA, the same is on account interest from saving account, which was declared by the appelant in his return of income. The deduction may kindly be ordered to be allowed in view of the above facts.
Keeping in view the submissions made above, the appeal may kindly be adjudicated accordingly.
Ld. CIT(A) after considering the submissions of the assessee sustained the addition by observing in para 5 of the impugned order as under:
I have gone through the fact of the case, Assessing Officer contentions and submissions of the appellant. From the assessment order, it is apparent that the Assessing Officer has considered entire facts of the case very comprehensively. The amount of Jewellery found from the residence of the appellant and the explanation of the appelant regarding the same have been considered by the Assessing Officer. At the stage of assessment proceedings, the appellant has placed reliance on the amount of Jewellery declared in the wealth tax return of the family members for A.Y. 2008-09 to 2014-15, which were filed after the date of search. This cannot be taken to explain the Jewellery found during search. It is clear that, the appellant as tried to regularize the gold Jewellery found during search by filing Wealth Tax Returns. The investment in Jewellery could have been considered as explained, had these wealth tax return been filed before the date
of search. Had the appellant produced evidences regarding acquisition of the Jewellery in form of bills etc. year wise, his explanation could have been accepted.
I therefore see no reason to interfere with the conclusions drawn by the Assessing officer and confirm the addition made on account of unexplained Jewellery found at the residence of appellant amounting to Rs. 59,59,890/-The ground of appeal is dismissed.
Now the assessee is in appeal.
Ld. Counsel for the Assessee submitted that during the course of search Jewellery with gross weight of 669.650gms was found from the residential premises of the Assessee and another Jewellery with gross weight of 3349.80 gm was found from the Locker in the name of the Assessee. Thus total Jewellery found was to the tune of 4019.45 gms. It was stated that during the course of search as well as assessment proceedings, it was duly explained that the said Jewellery belonged to four different heads i.e; the assessee himself, his wife Smt. Kavita Bansal, his HUF and his son. It was further stated that the complete break up was filed during the course of assessment proceedings, the assessee had filed the information with regard to 5207.73 gms of gold (jointly in the name of four persons) and that it was duly explained that the assessee alongwith his family members was having gold bond under the Gold Bond Scheme 1998, SBI Gold Bond Scheme and the remaining gold / Jewellery was duly declared in the Wealth Tax Returns. It was submitted that the A.O. had not accepted the version of the assessee for the reason that the Wealth Tax Returns were filed after the date of search and that the serial numbers as per the maturity certificate of Gold Bond Scheme were not matching with the actual gold bars found during the course of search. It was explained that the assessee had duly stated during his statement recorded at the time of operating the Locker that they were in the process of filing the Wealth Tax Returns, a reference was made to page no. 2 of the assessment order. As regards to the mismatch of the serial numbers of gold bars, it was stated that the investments in gold bond/scheme were also made
by the brother and father of the assessee, so at the time of maturity the gold bars must have been exchanged.
13.1 It was submitted that the assessee in his reply to the A.O. explained the Jewellery as per following details:
SI. Name of the Source of Gold/Jewellery Weight in Relevant Pg- Family Member Gms Nos 1. Kavita Bansal Gold Bonds 1998 532 Pg-39-41 of PB SBI Gold Bond Deposit Scheme 996 Pg-35-36 of PB Gold as per Wealth Tax Return AY 1992-1993 450 Pg-37-38 of PB Copy Of Wealth Tax Assessment Order of Smt. Kavita Pg-42-48 of PB Bansal, wife of the appellant for A/Y 2008-09 along with copy of computation and Wealth Tax Return Copies of Wealth Tax Assessment Orders of Smt. Pg-49-60 of PB Kavita Bansal, wife of the appellant for A/Y 2009-10 to 2011-12. Copy of wealth Tax Return of Smt. Kavita Bansal, wife Pg-61-64 ofPB of the appellant for A/Y 2015-16 along with copy of computation of wealth.(wherein 1446gms has been disclosed and duly been accepted at Pg-63) 2. Rakesh Bansal SBI Gold Bond Deposit Scheme 900 Pg-67-68 of PB HUF Copy of reply in the case of the Rakesh Bansal HUF Pg-65-72 of PB for AY 2011-12 as filed during the course of Wealth Tax assessment proceedings along with relevant proof of Gold Bonds and Wealth Tax return for the AY 2001-02 (reference of 896.13 gms at Page-70) Copy of Wealth Tax Assessment Order of Rakesh Pg-73-80 ofPB Bansal HUF (HUF of the Appellant) for A/Y 2008-09 along with copy of computation and Wealth tax Return filed.(pg-77) Copies Of Wealth Tax Assessment Order Of Rakesh Pg-81-92 ofPB Bansal HUF (HUF of the appellant) for A/Y 2009-10 to 2011-12. Copy of Wealth Tax Return Of Rakesh Bansal HUF (HUF Pg-93-96 of PB of the appellant) for A/Y 2014-15 along with copy of computation of wealth, (wherein 900 gms has been disclosed and duly been accepted-Pg-94) 3. Rakesh Bansal SBI Gold Bond Deposit Scheme 896 Pg-17ofPB (Assessee) Gold Bonds 1998 855 Pg-10-12 of PB
Gold as per Wealth Tax Return & Gold Bond 588.726 Pg-13-16ofPB Copy of common reply in the case of the Assessee Pg-9-17ofPB for AY 2008-09 to 2011-12 as filed during the course of Wealth Tax assessment proceedings alongwith relevant proof of Gold Bonds. Copy of Wealth Tax Assessment Order of the Pg-18-23 of PB appellant for A/Y 2008-09 along with copy of computation and Wealth Tax Return filed, (wherein 1444gms has been disclosed and duly been
accepted-Pg-20) Copies of wealth Tax Assessment Orders of the Pg-24-29 of PB appellant for A/Y 2009-10 to 2011-12 Copy of Wealth Tax Return of the appellant for A/Y Pg-30-33 of PB 2015-16 along with copy of computation of wealth 4. Mohit Bansal Gold Trf from Mother and Father and duly disclosed in 1418 Pg 97-102 of PB Wealth Tax Returns(Reference Pg-98)
13.2 It was further submitted that the A.O. out of the total gold / Jewellery found weighing 4019.45 gms, accepted 900 gms gold in the hands of Shri Rakesh Bansal HUF and 1200 gms gold in the hands of Shri Kavita Bansal and the remaining gold / Jewellery to the tune of 1919.45 gms had not been accepted for the reason that the wealth tax returns had been filed late and secondly the serial number of gold bars did not match with the gold bonds, but nowhere it was stated that the gold available as per the Gold Bonds was not genuine. It was contended that all the relevant documents in the form of Gold Bonds and the documents pertaining to the maturity of Gold Bonds were duly filed with the Department and even otherwise the fact remained that the quantity as found during the course of search was less than the quantity as proved by the assessee in the form of Gold Bonds and Wealth Tax Returns, therefore the Department could not have rejected the quantity available with the assessee only by holding that the serial number of the gold bars did not match and even if the gold bars had been exchanged with someone the weight remained the same and it could not have been ignored. It was further contended that the Department had duly accepted the Wealth Tax Returns filed by the assessee and his family members, therefore, no adverse inference could have been drawn in the Wealth Tax assessment. It was stated that the Wealth Tax Returns filed by the assessee and accepted by the A.O. clearly established that the gold weighing 1444 gms, 1446 gms, 1418 gms and 900 gms was acquired during the assessment year 2008-09 to 2010-11 or even prior thereto by the assessee, his wife, his son and his HUF respectively. Therefore, the source of the same could
not have been doubted in the assessment year under consideration. It was stated that the gold / Jewellery was invested by the assessee and his family members in the Gold Bond Scheme, therefore benefit of the same was to be given for all as had been given in the case of Shri Rakesh Bansal HUF. The reliance was placed on the following decisions of different Benches:
a. Shri Raj Kumar Kakraniavs DCIT in ITA No. 1397/Del/2015 order dt. 30/05/2018 (Delhi Bench) b. Mrs Nawaz Singhania Vs. DCIT in ITA No. 3979/Mum/2017 order dated 22/12/2017 (Mum Bench) c. Shalini Gupta Vs. DCIT in ITA No. 6103/Del/2014 order dated 28/06/2018 (Delhi Bench) d. Radha Mittal Vs. DCIT in ITA No. 2810/Del/2016 order dated 09/07/2018 e. Roshan Di Hatti Vs. CIT 107 ITR 938 (SC) 13.3 It was further submitted that the CBDT in the instruction no. 1916 dt. 11/05/1994 vide Para no. (iii) stipulates that status of the family cannot be ignored at the time of giving benefit of Jewellery. The reliance was placed on the following case laws:
a. Hon'ble Delhi High Court decision in the case of Sushila Devi vs. CIT in WPC No. 7620 of 2011 dated 21.10.2016 b. ITAT, Delhi Tribunal, in the case of Suneela Soni vs. DCIT in ITA No. 5259/Del/2007 dated 16.3.2018 c. Sh. Vibhu Aggarwal vs DCIT in ITA No. 1540/Del/2015 dated 04.05.2018 (as reported in 93 taxmann.com 275 (Del Bench) d. Radha Mittal vs DCIT in ITA No. 2810/Del/2016 order dated 09.07.2018 (Del Bench) e. ITAT, Mumbai Bench decision in the case of DCIT vs. HaroonMohd. Unni in ITA No. 463/Mum/2012 dated 31.1.2014 f. Naveen Bansal (HUF) vs ITO 146 TTJ 207 (Del) g. Dr.Sushil Rastogi vs Director of Investigation 128 Taxman 217 (All)
In his rival submissions the Ld. DR strongly supported the orders of the authorities below and reiterated the submissions made in their respective orders.
We have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it is an admitted fact that during the course of search, Jewellery weighing 669.650 gms was found from the residential premises of the assessee and Jewellery weighing 3349.80 gms was found from the locker belonging to the assessee, thus the total Jewellery found was 4019.45 gms, while the A.O. had given benefit of 2100 gms out of the aforesaid Jewellery. The benefit given was for 900 gms shown by the HUF of the assessee in the Wealth Tax Returns and 1200 gms belonging to Smt Kavita Bansal wife of the assessee on account of Jewellery purchased in past from savings and as Istridhan. The A.O. made the addition for the remaining Jewellery i.e; 1919.45 gms for the reason that Wealth Tax Returns filed by the assessee were belated and that the gold bars found did not match with the number mentioned in the Gold Bonds. In the present case it is noticed that the A.O. accepted the Jewellery shown by the HUF of the assessee i.e; Rakesh Bansal HUF but did not accept the Jewellery shown in the Wealth Tax Returns of another persons belonging to the family of the assessee. In our opinion when the facts were similar, the contrary stand taken by the A.O. was not justified particularly when Wealth Tax Returns even filed belated had been accepted by the Department in scrutiny assessment under section 16(3) of Wealth Tax Act, 1957 which is evident from the various assessment orders placed by the assessee in his Paper Book. In the present case the A.O. also doubted the gold claimed to be available from maturity of the Gold Bonds for the reason that serial number of gold bars found during the course of search did not match with the serial number mentioned in the Gold Bonds. As regard to this mismatch the assessee explained that Gold Bonds belonging to the assessee and all his family members
including his brother and father were matured and on maturity the gold bars belonging to different members of the family got exchanged. The aforesaid contention of the assessee was not rebutted by bringing any documentary evidence on record and moreover it is not the case of the Department that the gold bars obtained after the maturity of the Gold Bonds were utilized by the assessee or his family members elsewhere, therefore when the assessee was having sufficient quantity of the gold disclosed in the Wealth Tax Returns and SBI Gold Bond Deposit Scheme as well as Gold Bonds 1998 then there was no reason to make impugned addition particularly when total gold available with the assessee as shown in the Wealth Tax Return and obtained on maturity of Gold Bond Scheme was weighing 5208 gms which was more than the gold / Jewellery weighing 4019.45 found during the course of search. We therefore considering the totality of the facts as discussed hereinabove, delete the addition made by the A.O. and sustained by the Ld. CIT(A).
Vide Ground No. 2(a) to (c) the grievance of the assessee relates to the sustenance of addition of Rs. 5,29,320/- made by the A.O. on account of alleged unaccounted cash under section 69A of the Act.
Facts related to this issue in brief are that during the course of search and seizure operation on 07/11/2013 cash to the tune of Rs. 24,78,045/- was found, out of which cash of Rs. 24,00,000/- was seized. The Assessee in his statement during the course of search stated that the cash found at his business premises belonged to M/s City Filling Station, M/s Barnala Filing Station, M/s Dhiyati Filling Station and M/s Sarvesh Spinners Pvt. Ltd. The A.O. observed that the assessee could produce trial balance upto 30/09/2013 of M/s Barnala Filling Station only and no documentary evidence with regard to the cash belonging to other persons was furnished therefore the cash amounting to Rs. 24,00,000/- was seized.
17.1 The A.O. asked the assessee to reconcile the cash found with its books of account. In response the assessee submitted as under:
"Regarding your Honour's query relating to the source of cash found at Rs.24,78,045/- at the time of search on the residential premises of the assessee, it is submitted that the assessee has prepared month wise cash balances considering cash collection out of sales and deposit of cash into bank accounts till the date of search. Perusal of the details will reveal that the assessee had Rs. 19,48,725/- as cash in hand as on the date of search. But due to clerical mistake this figure was earlier reported at Rs.20,81,525/-. In addition to this, as stated earlier and representation made before the Ld. D.I. for release of cash, the assessee is Managing Director of M/s.Sarvesh Spinners Pvt. Ltd., as per its cash book of the said company, there was also a cash balance of Rs.2,27,282/- which was also lying with the assessee on the date of search. Further, the assessee was also acting as Manager of M/s City Filing Station, the cash balance of this concern was also lying with the assessee which was to the tune of Rs. 11,51,728/- as on the date of search, necessary evidence in this regards is also enclosed. The case available as per the above entities is much more than the cash found from the residential premises. As such, cash found and seized is as per the cash available in books of different concerns and thus stands explained." 17.2 The A.O. however was not satisfied from the explanation given by the assessee and made the addition of Rs. 5,29,320/- by invoking the provisions of Section 69A of the Act by observing as under:
5.3 The reply submitted by the assessee has been considered and its submission regarding the cash balance of Rs. 19,48,725/- as on 07.11.2013 as per its books of accounts is found to be acceptable and therefore, Rs. 19,48,725/- out of the cash found of Rs.24,78,045 out of which cash of Rs. 24,00,000/- was seized stands explained. However, regarding the submission that the balance cash pertained to M/s Sarvesh Spinners Pvt. Ltd. and M/s City Filing Station, the same is not acceptable as the assessee was not authorized to keep the cash of M/s Sarvesh Spinners Pvt. Ltd. with him. Also, he was not an employee of M/s City Filing Station and has not shown any remuneration from this concern in its return of income. If had only given building on rent to M/s City Filing Station for which rental income is being reflected by in its return of income. As he had no authority whatsoever to keep the cash of M/s City Filing Station or M/s Sarvesh Spinners Pvt. Ltd., his reply on this score is not acceptable being without any basis. The assessee has named these two concerns as an afterthought to cover up the excess cash found in its residential premises. As such the difference of Rs.5,29,320/- is found to be unexplained and treated as its deemed income u/s 69A of the IT. Act, 1961.
Being aggrieved the assessee carried the matter to the Ld. CIT(A) who sustained the addition by observing as under:
“ I have gone through the submissions of the appellant and assessment order. The total cash found during search at appellant’s premises was Rs. 24,78,045/-, out of this the Assessing officer has taken Rs. 19,48,725/- as explained and given credit for. The balance of Rs. 5,29,320/- was not accepted to be out of the cash books of M/s City Filing Station or Sarvesh Spinners Pvt. Ltd. and remained unexplained by the appellant. Since appellant was neither an employee nor was drawing any remuneration from City Filing Station or Sarvesh Spinners pvt. Ltd., the explanation of the appellant that it was cast from the business, cannot be accepted. The conclusions of the Assessing Officer are therefore on firm grounds and as per the facts. In the light of the above, I am of the opinion that the addition of Rs. 5,29,320/- made by the Assessing Officer on account of unexplained cash is justified. The ground of appeal is therefore dismissed.”
Now the assessee is in appeal.
The Ld. Counsel for the Assessee reiterated the submissions made before the authorities below and further submitted that the assessee during the course of search duly explained the source of cash found but the A.O. as well as the Ld. CIT(A) doubted that the assessee was not an employee in the two concerns so cash belonging to the two concerns could not be found from the premises of the assessee. It was submitted that before the Ld. CIT(A) as well as in the assessment proceedings it was duly stated that the Head Office of M/s Barnala Filling Station, City filling Station and M/s Sarvesh Spinners Pvt. Ltd. was at Dhanaula Road, Barnala. The Ld. Counsel for the Assessee drew our attention towards page no. 106 to 110 of the assessee’s Paper Book and submitted that in the copy of the assessment order of M/s City Filling Station for the A.Y. 2014-15 it has been mentioned that the assessee appeared before the Department in the capacity of Manager and the Registrar of Companies also recorded that the registered office address of M/s Sarvesh Spinners Pvt. Ltd. was at M/s Barnala Filling Station at Dhanaula Road Barnala, therefore the cash belonging to those two concern was found from the premises of M/s Barnala Filling Station. It was also stated that the assessee was a Director in M/s Sarvesh Spinners Pvt. Ltd. and the said fact was verifiable from the record of Registrar of Companies. It was
further stated that the Branch Manager of Punjab National Bank, Main Branch Barnala verified that the assessee was an authorized signatory in the current account of M/s City Filling Station since 2012, therefore it was clear that the assessee was holding responsible position in M/s City Filling Station and M/s Sarvesh Spinners Pvt. Ltd. and had been looking after the complete affairs of the said concerns, therefore the cash belonging to the said two concerns was kept by the assessee. So, there was no occasion to doubt the same, as such the addition made by the A.O. and sustained by the Ld. CIT(A) was not justified.
In his rival submissions the Ld. DR strongly supported the orders of the authorities below.
We have considered the submissions of both the parties and perused the material available on the record. In the present case it appears that the A.O. had not accepted the cash claimed to be belonging to M/s City Filling Station and M/s Sarvesh Spinners Pvt. Ltd. amounting to Rs. 5,29,320/-. However, the explanation of the assessee with regard to the cash belonging to the other concern namely M/s Barnala Filling Station amounting to Rs. 19,48,725/- was accepted. The reasons given by the A.O. for not accepting the cash belonging to M/s City Filling Station and M/s Sarvesh Spinners Pvt. Ltd. was that the assessee was not an employee of those two concerns. In the present case the explanation of the assessee that he appeared as a Manager before the A.O. during the course of assessment proceedings of M/s City Filling Station has not been rebutted. The cash in hand of the said concern i.e; M/s City Filling Station as on 06/11/2013 was Rs. 11,51,781.54 which is evident from page no. 127 of the assessee’s Paper Book i.e; the copy of cash book of the said concern, therefore the A.O. was not justified in doubting the availability of the cash belonging to M/s City Filling Station with the assessee who was working as a Manager of the said concern. In the present case, the Assessee was a Director of M/s Sarvesh Spinners Pvt., Ltd. so the cash belonging to that concern may
also be held by the assessee. In the instant case, the assessee was taking a consistent stand before the A.O. as well as the Ld. CIT(A) that he was holding position of Director in the Company namely M/s Sarvesh Spinners Pvt. Ltd. and nothing is brought on record to substantiate that the said contention of the assessee was not true, therefore this explanation of the assessee that cash amounting to Rs. 2,27,282/- was retained by him in capacity of the Director of M/s Sarvesh Spinners Pvt. Ltd. cannot be doubted particularly when this fact was verifiable from the record of Registrar of Companies. We therefore considering the totality of the facts are of the view that the impugned addition on account of cash found, made by the A.O. and sustained by the Ld. CIT(A) was not justified. Accordingly the same is deleted.
In the result, the appeal of the assessee is allowed.
(Order pronounced in the open Court on 27/09/2019)
Sd/- Sd/- संजय गग� एन.के.सैनी, (SANJAY GARG ) ( N.K. SAINI) �या�यक सद�य/ Judicial Member उपा�य� / VICE PRESIDENT AG Date: 27/09/2019
आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to :
अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकर आयु�त/ CIT 4. आयकर आयु�त (अपील)/ The CIT(A) 5. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड� फाईल/ Guard File