DCIT, CENTRAL CIRCLE, VIJAYAWADA vs. SRI BHAVANSI ANJANEYULU, PIDUGURALLA

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ITA 350/VIZ/2017Status: DisposedITAT Visakhapatnam19 January 2018AY 2011-20125 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The CIT(A) deleted the addition, finding that a significant portion of the gold was explained by purchases in earlier years. The Tribunal upheld the CIT(A)'s order, finding no infirmity.

What were the facts?

During a search operation, gold jewellery was found. The assessee claimed the gold was purchased in earlier assessment years and accounted for. The Assessing Officer treated the entire value as unexplained investment.

What were the issues?

Whether the gold jewellery found during the search was an unexplained investment, or if it was adequately explained by purchases in earlier assessment years.

Which sections of the Income-tax Act were involved?

Section 132

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM

Before: SHRI V. DURGA RAO & SHRI D.S. SUNDER SINGH

For Appellant: Shri G.V.N. Hari, AR
Hearing: 09.01.2018Pronounced: 19.01.2018

PER D.S. SUNDER SINGH, Accountant Member:

This appeal filed by the revenue is directed against order of the Commissioner of Income Tax (Appeals)-3 {CIT(A)} vide ITA No.85/2015-16/CIT-(A)-3/VSP/2016-17 dated 21.2.2017 for the assessment year 2011-12. 2. The assessee is an individual deriving income from house property, engaged in the business of lime stone, making of burnt lime, 1 Sri Bhavanasi Anjaneyulu, Guntur trading in lime products and quarrying of lime stone etc., A search & seizure operation u/s 132 of the Income Tax Act, 1961 (hereinafter called as 'the Act') was conducted on 21.1.2011 in the case of the assessee and during the course of search, the Income tax department has found gold jewellery weighing 4112 gms. After giving benefit of 1488.24 gms., the Income tax department has seized 2624.64 gms., the value of which was amounting to ` 49,92,936/- was admitted as additional income by the assessee. While filing the return of income, the assessee had not admitted any additional income towards the gold jewellery found and seized by the revenue. The assessee explained before the A.O. that the gold and jewellery found during the course of search was related to the assessment year 2002-03 and 2004-05 and the purchase of the gold and jewellery was explained in the income tax returns filed by the respective assessment years. Hence, argued that there is no unexplained investment in gold and jewellery. Not being convinced with the explanation of the assessee, the assessing officer valued the entire gold and jewellery found during the course of search at ` 76,85,593/- and brought to tax as unexplained investment in gold and jewellery.

2 Sri Bhavanasi Anjaneyulu, Guntur

3.

Aggrieved by the order of the A.O., the assessee went on appeal before the CIT(A) and the Ld. CIT(A) deleted the addition made by the A.O.

4.

Aggrieved by the order of the CIT(A), the revenue is in appeal before this Tribunal.

5.

We have heard both the parties, perused the materials available on record and gone through the orders of the authorities below. As per the arguments placed before us and as per the order of the Ld. CIT(A), the total gold weighing around 4112.88 gms. was found and after giving benefit of 1488.24 gms the revenue has seized 2624.64 gms of gold jewellery. The CIT(A) during the appeal hearing observed that the assessee had purchased 2400 gms during the assessment year 2002-03 and 1000 gms. during the assessment year 2004-05. In aggregate, the assessee had purchased 3400 gms during the assessment year 2002-03 and 2004-05 which was duly accounted in the books of accounts and the remaining gold was 712.88 gms The CIT(A) considered 712 gms. and allowed the appeal of the assessee. For ready reference, we extract relevant paragraph of the CIT(A) in page No.6 which reads as under:

“I have carefully considered the submissions made by the appellant, the findings of the Assessing Officer in the assessment order. It is seen from the order that though the total gold weighing was arrived at 4112.88 gms. giving benefit of 1488.24 gms., the department has 3 Sri Bhavanasi Anjaneyulu, Guntur seized 2624.64 gms. The rate per gram comes to Rs.1,868/-. Therefore, the seized gold would be valued at Rs.49,04,572/-. However, the Assessing Officer has considered the entire investment as unaccounted investment which is not correct. I have verified assessment records for the Assessment year 2002-03 wherein it is noticed that the appellant has purchased 2400 gms. and for the Assessment year 2004-05 the appellant had purchased 1000 gms. In total, the appellant has explained the sources to an extent of 3400 gms. If this is considered as explained, the amount of gold needs to be reduced from the gross gold jewellery of 4112.88 gms. Thus, the remaining gold jewellery would be about 712.88 gms. The Assessing Officer himself has considered that there are two male members and two female members in the family. If this fact is considered, there would be no addition on account of investment in the gold and jewellery. Hence, the addition made by the Assessing Officer is deleted.”

6.

Since the CIT(A) has verified the assessment records and given finding with detailed reasoning, we do not find any infirmity in the order of the CIT(A) and the same is upheld.

7.

In the result, the appeal of the revenue is dismissed.

The above order was pronounced in the open court on 19th Jan’18. (धड.एस. सुन्दर ससह) (िी. दुगााराि) (D.S. SUNDER SINGH) (V. DURGA RAO) लेखा सदस्य/ACCOUNTANT MEMBER न्याधयक सदस्य/JUDICIAL MEMBER धिशाखापटणम /Visakhapatnam: ददनांक /Dated : 19.01.2018 VG/SPS 4 Sri Bhavanasi Anjaneyulu, Guntur

आदेश की प्रधतधलधप अग्रेधर्त/Copy of the order forwarded to:- 1. अपीलाथी / The Appellant – The DCIT, Central Circle, Vijayawada 2. प्रत्याथी / The Respondent – Sri Bhavanasi Anjaneyulu, S/o Satyanarayana, C/o Sri Balaji Chemical Industries, 19-1084, Guntur Road, Piduguralla, Guntur Dist. 522 413 3. आयकर आयुक्त / The Principal CIT(Central), Visakhapatnam 4. आयकर आयुक्त (अपील) / The CIT (A)-3, Visakhapatnam 5. धिभागीय प्रधतधनधध, आय कर अपीलीय अधधकरण, धिशाखापटणम / DR, ITAT, Visakhapatnam 6. गाडा फ़ाईल / Guard file आदेशानुसार / BY ORDER //// Sr. Private Secretary ITAT, VISAKHAPATNAM

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