R.CHANDRASEKAR,CHENNAI vs. ACIT, TRICHY

This is an appeal filed by the assessee against the order of the Commissioner of Income-tax (Appeals), Tiruchirapalli in dated 26.02.2013 for the assessment year 2010-11.

It was submitted by ld.AR that Ground No.1 was general in nature. In respect of Ground Nos.2 to 5, ld.AR submitted that in the course of search on the assessee on 26.08.2009, cash, to an extent of Rs.64,84,850/-, had been found in the residence of the assessee. It was a submission that the assessee had claimed that an amount of Rs.15,84,850/- was part of unaccounted trade discount income, out of the amount Rs.1,26,00,000 offered in the hands of the firm M/s.Sree Vijaya Plywoods. It was submitted that the balance was an amount of Rs.1,10,00,000/- found in the form of cash in the locker of the assessee. It was submitted that out of the balance Rs.9/- lakhs represented cash drawn from M/s.Sree Vijaya Plywoods and M/s.Green Marketing Services, Rs.20/- lakhs represented the amount received from Relatives, and Rs.20/- lakhs represented family agricultural income. It was further submitted that the Assessing Officer did not accept the claim of assessee in respect of withdrawals from M/s.Sree Vijaya Plywoods and M/s.Green Marketing Services, as also the amount received from relatives and family agricultural income. It was a submission that the assessee had produced the relatives, who had also confirmed the transactions before the Assessing Officer. It was a further submission that the addition was liable to be deleted.

In reply, the ld.DR vehemently supported the orders of the Assessing Officer and the ld.CIT(A). The ld.DR drew our attention to para-12 of the order of ld.CIT(A) and submitted that out of Rs.9/- lakhs representing cash withdrawals from M/s.Sree Vijaya Plywoods and M/s.Green Marketing Services, the ld.CIT(A) had allowed the assessee”s claim of Rs.2,79,205/- as that was the amount shown as cash available in the group company books. It was submitted that in respect of balance of Rs.6,20,795/-, no evidence had been produced to show that cash was available in the books of the firm, or that cash was withdrawn from the books of the firm. In respect of amount of Rs.20/- lakhs representing the amount received from assessee”s brother-in- laws, it was submitted that the brother-in-laws have not filed any return of income nor any evidence to show that they were having agricultural income. Other than stating that they owned agricultural land. Ld.DR submitted that owning the agricultural land was totally different from earning agricultural income. It was submitted that where this cash was being maintained or what was the total agricultural income, in the absence of any evidence, the claim of assessee was not liable to be accepted. In respect of the agricultural income of the family of the assessee to an extent of Rs.20/- lakhs, it was submitted by ld.DR that no evidence was found in the course of search to show that the assessee had earned any agricultural income.

We have heard the rival contentions and perused the material available on record. Admittedly, a perusal of para-12 of the order of ld.CIT(A) clearly shows that in respect of amount of Rs.6,20,795/-, the assessee has not been able to show any evidence that the amounts were the cash withdrawn from the firms. In fact, the Revenue has successfully proved to contrary that the firms did not have necessary cash availability in their books for substantiating or justifying the said alleged cash withdrawal. In respect of the agricultural income of the relatives, which is claimed to be given to the assessee also, no evidence whatsoever has been produced before the lower authorities, nor before this Tribunal. Similarly, in respect of amount of Rs.20/- lakhs representing the assessee’s family agricultural income, no evidence has been produced, nor any evidence was found in the course of search. This being so, we find no reason to interfere in the order of the ld.CIT(A) on this issue and consequently, Grounds Nos. 2 to 5 stand dismissed.

In respect of Grounds Nos.6 to 8, it was submitted by the ld.AR that in the course of search 2,988.020 grams of jewellery was found. The assessee had given an explanation in respect of 1824 grams and the balance of gold jewellery of 1164.020 grams was treated as unexplained jewellery found in the hands of the assessee and the same was added as unaccounted investment in jewellery. It was submitted that the assessee may be granted the benefit of 250 grams for each of the two children of the assessee, which is as per the Circular issued by the CBDT in instruction No.1916 dated 11th May 1994. It was submitted that as per the said instruction, 250 grams for unmarried lady was not to be seized.

In reply, the ld.DR submitted that the source of jewellery has not been explained by the assessee nor the assessee has claimed the same in his return or before the lower authorities nor has the assessee proved such a claim.

We have heard the rival contentions and perused the material available on record. A perusal of the CBDT circular in instruction No.1916 dated 11th May 1994 clearly shows that the same is in respect of seizure of jewellery. However, the fact that in respect of jewellery, the CBDT has issued the instructions to not seize 250 grams per unmarried lady in the family, shows that the CBDT was of the view that normally well to do tax-paying assessee would be able to afford at least a minimum of so much of jewellery for each of the unmarried ladies in the family. In the assessee’s case, clearly assessee’s father was found with 960 grams of jewellery having been received by way of will from his mother, assessee’s wife was found to have received 648 grams by way of Sreedhan and 216 grams as gift from her mother-in-law. It is not as if the assessee is one, who has no means. Clearly, the principles laid down by CBDT circular in instruction No.1916 dated 11th May 1994 can be applied to the facts in this case.

In respect of Grounds Nos.9 to 11, which is against the sustaining of an addition representing purchases from M/s.Royal Traders, ld.AR has not placed any substantial arguments before us.

Grounds Nos.12 to 14 are general in nature and no specific argument has been raised. Consequently, the same stands dismissed.

In the result, the appeal of assessee is partly allowed.