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Income Tax Appellate Tribunal, DELHI BENCH: ‘G’, NEW DELHI
Before: SHRI H.S. SIDHU & SHRI O.P. KANT
ORDER PER O.P. KANT, AM:
This appeal by the assessee is directed against order dated 21/02/2015 passed by the Ld. CIT (Appeals)-2, New Delhi, [In short ‘the learned CIT(A)’] for assessment year 2011-12 raising following grounds:
1. The Learned Commissioner of Income-tax (Appeals) has erred in law and on facts in disregarding the intent of the CBDT instruction No. 1916 on mere surmise and conjecture that the appellant must be having jewellery other than what was found in the course of the search operations under section 132 of the Income-tax Act, 1961;
2. The Learned Commissioner of Income-tax (Appeals) has erred in law and on facts in applying the provisions of section 69A of the Income-tax Act, 1961 and holding that in the absence of documentary evidences, the value of jewellery received by the appellant on the occasion of her marriage in 1980 and other family occasions must be added to the income of the appellant; 3. The Learned Commissioner of Income-tax (Appeals) has erred in law and on facts in denying the natural justice to the appellant, as neither during the assessment proceedings nor during the appellant proceedings, the appellant was asked to submit affidavits/ confirmations from the relatives who gifted the alleged jewellery to the appellant; 4. Without prejudice to the above grounds, the learned Commissioner of Income-tax (Appeals) has grossly erred both on facts and in law in confirming the action of the Assessing Officer of considering the value of the jewellery on the basis of the market value of the gold at the time of search rather than considering the value at the time when the jewellery was received by the appellant; 5. Without prejudice to the above grounds, the learned Commissioner of Income-tax (Appeals) has erred both in facts and in law in confirming the addition of cash amounting to INR 110,000/- received during the search operation, in complete disregard of the fact that such cash belonged to the husband of the appellant and this fact was duly acknowledged by him on oath at the time of recording of his statement during the search operation; and 6. The assessee craves leave to add/alter any of the grounds of appeal before or at the time of hearing.
2. Briefly stated facts of the case are that the assessee, an individual is tax resident of United States of America (USA) for last many years. According to her, she was not having any source of income in India except nominal interest income from deposits in saving bank account and, therefore, no regular return of income was filed for the year under consideration. A search and seizure action under section 132 of the Income-tax Act, 1961 (in short ‘the Act’) was carried out at the premises and lockers of Mr. M. S. Gujral (now late Mr. M.S. Gujral) along with the premises of M/s Monnet Group. During the course of search of two banks lockers, certain jewellery and cash were found. In locker No. 707 maintained with Canara Bank in the name of Mr. M.S. Gujral, gold jewellery weighing 618gm was found, which was valued at ₹ 12,39,068/-. In locker No.4A, maintained with Union Bank of India in the name of assessee Smt. Ranju Sayali, cash of ₹ 1,10,000/- along with jewelry weighing 1125.7 gm. (worth ₹ 22,20,719/-) were found. Contents of lockers were claimed by the assessee. 2.1 In view of the Assessing Officer, the locker No. 707 (Canara bank) was last operated in March, 2010 and, therefore, value of the jewellery found from the said locker should be assessed in assessment year 2010-11 relevant to financial year 2009-10, whereas the cash and value of the jewelry found in the locker No. 4A should be assessed in assessment year 2011-12 in view of section 132(4A) of the Act. Accordingly, he issued notice under section 153A for AY 2010-11 and notice under section 142(1) for assessment year 2011-12 i.e. assessment year under consideration. The assessee filed return of income for the year under consideration declaring total income of ₹ 23/- under the head ‘income from other sources’. During the scrutiny proceedings, regarding the cash found, the assessee explained that same belongs to her husband who acknowledged at the time of recording statement under section 132(4) of the Act. The said contention was rejected by the Assessing Officer in absence of any documentary evidences in support and addition of ₹ 1,10,000/- was made in terms of section 69A of the Act in assessment year 2011-12. 2.2 In respect of jewellery found from the lockers, the assessee explained that same was received at the time of her wedding and some of the jewellery was also received by the assessee and her three daughters on various occasions prior to the year, 2000. The assessee contended that benefit of CBDT instruction No. 1916 dated 14/05/1994 should be allowed and to that extent no addition should be made in the case of the assessee. 2.3 The Assessing Officer rejected the claim of the assessee for benefit under CBDT instruction (supra) on the ground that assessee had been residing in USA for last 25 years, and she might be in possession of some jewellery with her at USA. The assessee also did not furnish any evidence with regard to her claim that jewellery was received by her at the time of marriage and other occasions. In view of the observations, the Assessing Officer made addition of ₹ 22,20,719/- in assessment year 2011- 12 i.e. year under consideration and ₹ 12,39,068/-in assessment year 2010-11. 2.4 On further appeal, the Ld. CIT(A) upheld the finding of the Assessing Officer that the assessee is not entitled for the benefit of CBDT Circular (supra). However, according to her, in view of the deeming provisions of section 132 (4A) read with section 69A of the Act, irrespective of the year in which locker was operated by the assessee, value of the entire jewellery was to be assessed in search year i.e. assessment year 2011-12. She, accordingly, deleted the addition of ₹ 12,39,068/- in assessment year 2010-11 and for assessment year 2011-12, not only upheld the additions made by the Assessing Officer but also enhanced the addition by way of ₹ 12,39,068/-. Aggrieved with the finding of the Ld. CIT(A), the assessee is in appeal before the Tribunal, raising the grounds as reproduced above.
3. Before us, both the parties appeared through videoconferencing facilities and filed paper-book and other documents electronically. The learned counsel of the assessee did not dispute the finding of learned CIT(A) considering entire addition for jewellery found in the present assessment year. The learned counsel submitted that entire jewellery was received by her as a gift at the time of her wedding in 1980 and at the time of various family occasions prior to the year, 2000. He also submitted that the assessee is married for more than 35 years and has three daughters and having regard to Indian customs, receipt of jewellery at the time of marriage/function is a recognized concept. The learned counsel of the assessee submitted that in view of the following decisions, the assessee should be allowed benefit of CBDT instruction No. 1916 (supra). 1. Ashok Chadha Vs. ITO, 2020 Taxman 395, order dated 5th July, 2011 ( Delhi HC) 2. Vibhu Agarwal Vs. DCIT, order dated 4th May, 2018 (Delhi ITAT) 3. Suneela Soni Vs. DCIT , ITA No.5259/Del/2017, order dated 16th March, 2018 (Delhi ITAT) 4. Rajesh Gupta Vs. ACIT, ITA No. 5429/Del/2014, order dated 17th July, 2015 (Delhi ITAT) 5. Shri Goverdhan Vanani Vs. ACIT, ITA No. 3271/Mum/2012, order dated 8th July, 2015 ( Mumbai ITAT) 6. DCIT Vs. Shri Haroon Mohd. Unni, ITA No. 463/Mum/2012, order dated 31st January, 2014 (Mumbai ITAT) 7. CIT Vs. Satya Narain Patni, 366 ITR 325, order dated 7th April, 2014 (Rajasthan HC). 8. CIT Vs. Ratanlal Vyaparilal Jain, 339 ITR 351, order dated 19th July, 2010 (Gujarat HC).
5. He also submitted that the assessee is willing to file necessary document in support of her claim of jewellery received at the time of marriage and on various occasions. Accordingly, the learned counsel submitted that issue in dispute may be restored back to the file of the Ld. CIT(A) or AO. Regarding the issue of the addition for cash of ₹ 1,10,000/- also the learned Counsel submitted that the assessee is willing to file documentary evidence in support of the claim of availability of cash in the hands of her husband. In view of the submissions, the learned counsel submitted that issue in dispute may be restored back to the file of either learned CIT or AO.
The learned DR, on the other hand, relied on the order of the lower authorities and submitted that in absence of any evidences, the learned CIT(A) is justified in upholding the additions made by the Assessing Officer. He, however, did not object for restoring the matter back to either learned CIT(A) or the AO for verifications of evidences in support of acquisition of jewellery/cash. 7. We have heard rival submission of the parties and perused the relevant material on record. In our opinion, the assessee is a non-resident and, if she could not file documentary evidence in support of her claim before the lower authorities, in the interest of substantial justice, one more opportunity can be granted to the assessee to file required documentary evidences. In view of the facts and circumstances of the case, we feel it appropriate to restore both the issues of addition of the jewelry and cash found to the file of the Ld. CIT(A) for deciding afresh with the direction to the assessee to produce all the necessary evidences in support of her claim on first date of hearing before the learned CIT(A). The learned CIT(A) is also directed to examine claim of the assessee for benefit of CBDT Instruction (supra) in view of the decisions cited by the learned counsel of the assessee. It is needless to mention that both the assessee as well as the Assessing Officer shall be afforded adequate opportunity of being heard. The grounds of the appeal raised by the assessee are accordingly allowed for statistical purposes. 8. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 16th December, 2020.