PREM PRAKASH SETHI ,NEW DELHI vs. ACIT, CENTRAL CIRCLE 14 NEW DELHI , DELHI

The ld. counsel thereafter referred to Wealth Tax Return filed by the assessee for the A.Y. 2001-02 annexed to the Income Tax Return for the A.Y. 2001-02 wherein jewellery of 650 gms belonging to the assessee was declared. The ld. counsel for the assessee likewise referred to wealth tax computation of wife Mrs. Sharda Rani Sethi for A.Y. 2004-05 annexed to the return income for A.Y. 2004-05 wherein jewellery of 1460 gms belonging to the wife of the assessee was declared. The ld. counsel thus submitted that it is a matter of record that jewellery aggregating to 2110 gms was available with the assessee along with his wife out of which a part was handed over to the daughter at the time of marriage. Such jewellery, in turn, was kept back with the assessee (father) and such conduct resonates with the ordinary customs of the Indian society. The ld. counsel thus submitted that the whole of jewellery found in possession when seen along with the jewellery found relatable to daughter, is slightly lesser than the total jewellery in question. The ld. counsel thus submitted that in the light of facts and evidence of clinching nature placed before the CIT(A), complete relief ought to have been granted by the first Appellate Authority while passing order under Section 250 of the Act.

As regards the other grievance viz., additions on account of unexplained cash found in the course of search amounting to Rs.24,91,700/-, the ld. counsel submitted that the aforesaid cash belongs to companies wherein the assessee is associated as a director are as follows:

The ld. counsel submitted that these cash are relatable to the cash books of the respective parties. These facts were placed before the CIT(A). However, CIT(A) overlooked such explanation and confirmed the additions. The ld. counsel accordingly submitted that suitable relief should be given to the assessee.

The ld. DR for the Revenue, on the other hand, strongly supported the first appellate order and submitted the explanation offered by the assessee are vague and without corroborations. Adverting to additions of jewellery, the ld. DR for the Revenue submits that maximum possible relief has been given to the CIT(A) in terms of benevolent CBDT Instruction. However, it is farfetched to say that jewellery of married daughter is kept with the assessee, such explanation is difficult to appreciate. The CIT(A) has rightly thus denied relief on this count. The ld. DR thus relied upon observations and findings of the First Appellate Authority. Adverting to unexplained cash contested on behalf of the assessee, the ld. DR pointed out that the CIT(A) has applied his mind to the factual matrix and declined to entertain the farfetched plea of the assessee that said cash in hand belonging to the company and other family members is sourced out of cash available with the companies and other family members.

We have carefully considered the rival submissions and perused the case records. The relevant pages of the paper book adverted to in the course of hearing has been taken into account in terms of Rule 18(6) of the ITAT Rules, 1963.

As regards additions on account of unexplained jewellery, it is the case of the assessee that the additions are not justified on two counts. (i) the jewellery to the tune of 2110 gms has been duly declared in aggregate in the respective Wealth Tax return of the assessee and his wife. The jewellery declared in the Wealth Tax Return override the jewellery found in the course of search of 1903.97 gms and therefore, the jewellery found is broadly explained by direct and circumstantial evidences, (ii) credit of jewellery of belonging to married daughter to the extent of 500 gms in any case, is available to the assessee in terms of CBDT Instruction. It is common knowledge that a married daughter do at times, keep her jewellery and other belongings at the maternal place to safeguard and protect her interest. It is thus the case of the assessee that the entire jewellery is explained. On being inquired by the bench, the ld. counsel for the assessee fairly submitted that once the credit for jewellery relatable to married daughter namely, Priya Sethi is given in terms of CBDT Instruction to the extent of 500 gms, the grievance of the assessee would be broadly redressed and therefore, urged for granting relief to the extent of 500 gms without any riders. In respect of remaining 103.97 gms, in order to avoid the protracted allegation, the ld. counsel under the circumstances has given the concession to treat the 103.97 gms as unexplained jewellery. The ld. counsel further hastens to add that no adverse inference however shown drawn for 103.97 gms in penalty proceedings etc. Such concession is being given to bring an end to ongoing litigation.

We find traction in the aforesaid plea raised on behalf of the assessee. We are convinced with the assertions raised on behalf of the assessee that jewellery are, at times, kept by the married daughters with the maternal family. There is no warrant to deny credit of 500 gms on account of married daughter in terms of CBDT Instruction No. 1916 dated 11th May, 1994. The assessee thus gets the relief to the extent of 500 gms as against aggregate 603.97 gms for which the additions were sustained before the CIT(A).

In the result, Ground No.1 of the appeal of the assessee is allowed in part.

Ground No.2 concerns additions on account of unexplained cash to the extent of 24,91,700/-. The assessee has tried to explain the source of such cash as relatable to companies in which the assessee is a Director and out of the cash in hand generated by the family towards as noted in the preceding paragraphs. On being inquired, the ld. counsel fairly submitted that the paper book giving evidence in relation to source of cash was never confronted to the AO and no remand report was obtained either.

In view of the delineations made above, Ground No.2 of the appeal of the assessee is allowed for statistical purposes.

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