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Income Tax Appellate Tribunal, DELHI BENCH: ‘E’ NEW DELHI
Before: SHRI N. K. BILLAIYA & MS SUCHITRA KAMBLE
This appeal is filed by the assessee against the order dated 21/12/2016 passed by CIT(A), Karnal for Assessment Year 2013-14.
The grounds of appeal are as under:-
“1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in allowing part relief, out of the total addition made by Ld. A.O. of Rs. 10,22,435/- on account of jewellery found in the search.
2. That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in making an addition of Rs. 10,22,435/- is bad in law and against the facts and circumstances of the case.
3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in upholding the action of the Ld. A.O. in making an addition of Rs. 50,000/- on account of cash found during the search.
4. That in any case and in any view of the matter action of Ld. CIT(A) in confirming the action of Ld. A.O. in making the impugned additions are bad in law and against the facts and circumstances of the case.
5. That the appellant craves the leave to add, alter or amend the grounds of appeal at any stage and all the grounds are without prejudice to each other.”
During the previous year relevant to the assessment year 2013-14 the assessee was drawing income from salary and income from house property. In accordance with the provisions of section 142(1) of the Income Tax Act, 1961 notice dated 01.07.2014 u/s 153A(1) (a) was issued and properly served upon the assessee. In this case the search was conducted on 09.05.2012. In response with the same notice, the assessee filed his return of income, duly verified and signed as per the provisions of section 140 of the Act. A total income of Rs. 6,14,370/- plus agricultural income of Rs. 1,00,000/- was filed as return of income on 07.07.2014. Notices u/s 143(2) and 142(1) along with a questionnaire were issued to the assessee on 08.08.2014, which were duly served upon the assessee. In response to the said notices, Chartered Accountant/ Authorised Representative on behalf of the assessee attended the assessment proceedings from time to time and filed the necessary details. During the course of search and seizure operation u/s 132 of the Act jewellery of Rs. 66,31,229/- was found from the residential premises of the assessee. At the time of recording of statement Sri Suresh Bansal, Son of the assessee stated that jewellery amounting to Rs. 10,22,435/- belongs to his mother Smt. Indervati who is the wife of the assessee. The Assessing Officer made the addition of Rs. 10,22,435/- in the hands of assessee instead of taking proper cognizance of the actual fact that the said jewellery belongs to assessee’s wife and not of assessee. The assessing officer also made addition of Rs. 50,000/- as unaccounted cash.
Being aggrieved by the assessment order the assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee.
The Ld. AR submitted that the jewellery found during search and seizure operation belongs to wife of the assessee which can be clearly seen from the valuation report prepared at the time of search. The Ld. AR also relied upon the CBDT instruction no. 1916 [F.No. 286/63/93-IT(INV. II)] dated 11th May, 1994. The Ld. AR submitted that the CIT(A) has given the credit of 100 gms. to the assessee but overlooked the fact that the jewellery belongs to assessee's wife and not to assessee. The Ld. AR as regards Ground No. 3 submitted that the amount of Rs. 50,000/- was kept in house because the assessee and his wife are senior citizens and required medical attention at any time.
The Ld. DR relied upon the assessment order and order of the CIT(A).
We have heard both the parties and perused all the relevant material available on record. From the perusal of the records it can be seen that the jewellery belongs to wife of the assessee and not belong to the assessee. Thus, the said jewellery cannot be added in the income of the assessee. The CIT(A) was not justified in confirming this addition to the extent of 200 gms. jewellery in the hands of the assessee, because the entire jewellery belong to the wife of the assessee as per the statement of the son of the assessee. Therefore Ground Nos. 1 and 2 are allowed. As regards Ground No. 3, it is pertinent to note that the assessee and his wife are senior citizens who required medical attention at any instance and therefore the cash is required at home for emergency situations. Therefore Ground no. 3 is allowed.