GEETA SUBHASH DALAL L/H OF LATE SUBHASH B. DALAL,VADODARA vs. THE DY.CIT, CENT. CIRCLE-2, VADODARA

O R D E R

PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER:

2. On the facts and in the circumstances of the case and in law, the ld. CIT (A) has grossly erred in not considering the facts that the locker operated during search operations was in the joint name of the appellant, her daughter, Ms. Kanan Dalai & (husband of Ms. Kanan Dalai), Settled in United Kingdom. The ld. CIT (Appeals] has failed to appreciate the facts that while recording statement on oath, the appellant has categorically stated that the jewelley found from the locker, belongs to her daughter and in support of the same, the appellant has duly produced an affidavit of Ms. Kanan Dalal, a daughter & valuation report of Government Approved Valuer. Further, the ld. CIT has failed to appreciate the Geeta Subhash Dalal (L/h. of Late Subhash B. Dalal) vs. DCIT Asst.Year –2018-19 - 2– facts that neither the AO nor the ld. CIT(Appeals) himself have not raised any objections regarding these facts that the jewellery found from the locker, do not belong to the daughter of the appellant.

3. On the facts and in the circumstances of the case and in law, the ld. CIT (Appeals) has grossly erred in contending that the appellant has not produced documentary evidence, such as purchase bills or invoices that therefore, the impounded jewellery remains unexplained, whereas the appellant has duly produced the evidences in the form of an affidavit of Ms. Kanan Dalai, during assessment proceedings & even appellate proceedings.

4. On the facts and in the circumstances of the case and in law, the ld. CIT (Appeals) has failed to appreciate the facts that In India, it is common trend and customs to keep the jewellery of the daughters, though they are married, with her mother. Further, the ld. CIT (Appeals) has also failed to appreciate the facts that nowhere, in the entire Act, it is prohibited that the daughter, after marriage, cannot keep her jewellery with her mother.

5. In view of the above, both the assessing officer & even the ld. CIT (Appeals) have interpreted the subject matter in arbitrary manner and therefore, the appellant prays your honour to treat the jewellery as explained and delete the impugned additions.

6. The appellant craves liberty to add, alter or amend any of the aforesaid ground or grounds, if necessary.”

3. The brief facts of the case are that during the course of search action at the residential premises of the assessee, a locker key for locker No. 543 at Karnataka Bank Ltd. was seized and impounded. The said locker was in the joint name of Smt. Geeta Dalal (wife of the assessee) and Ms. Kanan Dalal (daughter of the assessee). Out of the gold jewellery found and inventorised from the aforesaid locker, in the statement of oath of Smt. Geeta Dalal on 03.10.2017, she stated that the gold jewellery belongs to her daughter Ms. Kanan Dalal. During the course of assessment proceedings, the assessee vide submission dated 18.11.2019 submitted the “confirmation letter” of the Ms. Kanan Dalal, her daughter, who had settled in UK stating that the gold jewellery belonged to her and her family members. However, the Assessing Officer noted that no supporting evidence was submitted for the source of acquisition of jewellery. The Assessing Officer noted that the said locker was frequently operated by Smt. Geeta Dalal and therefore, the presumption is Geeta Subhash Dalal (L/h. of Late Subhash B. Dalal) vs. DCIT Asst.Year –2018-19 - 3– that the gold jewellery belonged to Smt. Geeta Dalal. Accordingly, the Assessing Officer made an addition of unexplained jewellery amounting to Rs. 6,16,620/- as unexplained income of the assessee under Section 69A of the Act.

4. In appeal, Ld. CIT(A) dismissed the appeal of the assessee with the following observations:

“5.3 On perusal of the submission provided by the legal heir of the appellant, it is observed that during the statement recorded on 03.10.2017 u/s 132(4) of the Act, Smt. Geeta Dalai, the appellant's wife, had stated that the jewellery placed in the locker belonged to her daughter. Further, during the course of the assessment proceedings, the appellant submitted a confirmation from Ms. Kanan Dalai, who is settled in the UK, stating that the gold jewelry belonged to her and her family members. However, it is pertinent to note that the AO, in the assessment order, referenced a letter dated 29.11.2019 submitted by the late Shri Subhash Dalai, the appellant. In this letter, the appellant requested that any addition on account of the gold jewellery found and seized from Locker No. 543 be made in his case. In light of this request, the AO proceeded to make the addition of the unexplained gold jewelry in the hands of the appellant. Further, it is an undisputed fact that no documentary evidence, such as purchase bills or invoices, was furnished either during the assessment proceedings or in the appellate proceedings. As a result, the source of acquisition of the seized jewellery valued at Rs.6,16,620/- remains unexplained due to the absence of supporting documentary evidence. Further, the case laws relied upon by the legal heir of the appellant are clearly distinguishable on the facts of the case, as discussed herein above. Therefore, the action taken by the AO to make an addition for the unexplained jewellery in the hands of the appellant is justified. Accordingly, addition of Rs.6,16,620/- is confirmed. Ground of appeal no.1 is dismissed.”

5. The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(A).

6. The Counsel for the assessee drew our attention to Page 9 of the Paper Book viz. statement of the assessee under Section 132(4) of the Act, wherein at the time of search itself, the assessee had submitted that the jewellery belonged to her daughter Ms. Kanan S. Dalal. The assessee submitted that the locker is jointly held in the name of Smt. Geeta Dalal (legal heir of late Subhash B. Dalal) and Ms. Kanan Dalal (daughter of the assessee). Further, Geeta Subhash Dalal (L/h. of Late Subhash B. Dalal) vs. DCIT Asst.Year –2018-19 - 4– Affidavit of Ms. Kanan Dalal dated 18.11.2019 was also filed stating that the jewellery which was seized belongs to her and her family members and that the said jewellery was received by her from her parents and relatives at the time of her marriage and the occasion of the birth of her children and on other occasions. It is also not a disputed fact that the locker was jointly held by the assessee along with her daughter. The Counsel for the assessee submitted that just because the assessee is operating the locker (which was jointly held by the assessee and her daughter) cannot lead to the inference that the jewellery lying in the locker belonged to the assessee alone, especially keeping in light the fact that the daughter was residing in UK and it was not practically possible for her to operate the locker. Accordingly, in light of the above facts, it was submitted that there is no basis for sustaining the addition and accordingly, looking into the instant facts the additions are liable to be deleted.

7. In response, Ld. D.R. placed reliance on the observations made by the Assessing Officer and Ld. CIT(A) in their respective orders.