SHRI KUNDALIK RAO SAIT MANOJ KUMAR,CHIDAMBARAM vs. INCOME TAX OFFICER WRD 3, CUDDALORE

Both the appeals of the assessee are directed against the respective orders of the Commissioner of Income Tax (Appeals), Puducherry, for the assessment years 2012-13 and 2013-14. Therefore, we heard both the appeals together and disposing of the same by this common order.

Let us first take the assessee’s appeal for assessment year 2013- 14.

Shri N. Quadir Hoseyn, the Ld.counsel for the assessee, submitted that the first issue arises for consideration is addition of ₹21,51,120/- towards unaccounted purchase of jewellery. The Ld.counsel submitted that the assessee is not pressing this ground of appeal. The Ld.counsel further submitted that except ground No.3 with regard to addition of ₹8,97,820/- towards unaccounted purchase of silver, all other grounds are not pressed. The Ld.counsel has also made an endorsement to that effect in the file. Accordingly, other than the ground, which relates to addition of ₹8,97,820/- towards unaccounted purchase of silver, all other grounds are dismissed as not pressed.

On the contrary, Shri AR.V. Sreenivasan, the Ld. Departmental Representative, submitted that even though the assessee claimed before the Assessing Officer that the jewelleries are personal jewelleries of the assessee’s wife and no such statement was made during the course of survey operation. Moreover, no evidence was filed before the Assessing Officer saying that the silver jewellery belongs to the assessee’s wife.

I have considered the rival submissions on either side and perused the relevant material available on record. The assessee claims that the silver jewellery belongs to his wife. The assessee is in the business of jewellery. Giving jewellery to the respective girl child by the parents is an usual practice in this part of country. Therefore, the Assessing Officer cannot deny the claim of the assessee merely because such a plea was not made during the course of survey operation. The quantum of silver jewellery may differ from person to person with regard to personal capability of each individual. The assessee being in the business of jewellery, this Tribunal is of the considered opinion that the assessee’s wife might have received jewellery valued to the extent of ₹8,79,820/-. At the time of marriage, when the parents give Sridhan in the form of silver / gold jewellery, the girl child may not have any evidence other than the jewellery. In other words, expecting material evidence for the gift received by the assessee’s wife at the time of marriage is tantamount to asking for impossible one to prove by the assessee. It is not a practice prevailing in this part of the country to give any evidence along with the gift to the girl child at the time of marriage with regard to jewellery. Therefore, expecting evidence may not be correct as far as the gift said to be received by the assessee’s wife at the time of marriage. Therefore, this Tribunal is unable to uphold the orders of the authorities below. Accordingly, orders of both the authorities below are set aside and the addition of ₹8,79,820/- is deleted.

Now coming to the assessment year 2012-13, the first ground of appeal is with regard to addition of ₹19,05,225/- being the value of the opening stock of jewellery. The second ground of appeal is with regard to addition of ₹9,36,041/- towards unaccounted purchase of jewellery. The third ground is with regard to addition of ₹6,40,000/- towards investment in refinery business.

Shri N. Quadir Hoseyn, the Ld.counsel for the assessee submitted that during the course of survey operation, the Assessing Officer found opening stock to the extent of ₹19,05,225/- and unaccounted jewellery to the extent of ₹9,36,041/- and investment in the refinery business to the extent of ₹6,40,000/-. However, the same were not offered in the return of income even though it was unearthed during the course of survey operation. According to the Ld. counsel, the assessee has not produced any material before the Assessing Officer.

On the contrary, Shri AR.V. Sreenivasan, the Ld. Departmental Representative, submitted that the assessee submitted before the Assessing Officer that source for investment in jewellery business and refinery business was from the redemption of money received from his late father’s pawn broking business. According to the Ld. D.R., the assessee has not filed the copies of return filed by the assessee’s father to ascertain the actual availability of the funds. The assessee has not filed any wealth-tax return also. During the course of survey operation, the assessee claimed that the opening stock represents his own old jewellery. However, on examination, according to the Ld. D.R., the assessee made statement that the initial capital was out of the redemption amount made from his father’s pawn broking business.

I have considered the rival submissions on either side and perused the relevant material available on record. It is not in dispute that the assessee’s father was in pawn broking business. The assessee made a statement during the course of examination that the redemption amount received from his late father’s pawn broking business was available for making investment in the jewellery and refinery business.