BALASUBRAMANIAN,CHENNAI vs. ACIT, MADURAI

Shri D. Anand, the Ld.counsel for the assessees, submitted that both the assessees are partners in M/s Sri Ganapathy Silks, engaged in textile business. According to the Ld. counsel, there was a search operation in the premises of one of the partners at Coimbatore. Simulataneously, search was also conducted at the godown of the partnership firm at Raja Street, Coimbatore.

According to the Ld. counsel, Revenue authorities found 617.19 gms of gold jewellery in the residence of the assessee, Shri Balasubramanian and 679.43 gms of gold jewellery in the residence of Shri G. Murugan. Jewelleries of both the assessees were examined. The Ld.counsel further submitted that during the course of marriage, the respective spouses of the assessees received Sridhan property in the form of gold jewellery. They have also purchased some of the jewellery after their marriage. The Assessing Officer found that no evidence was filed by the assessees to support the claim of gold jewellery. Therefore, an addition was made to the extent of `4,66,115/- in the hands of Shri Balasubramanian and another sum of `5,76,772/- in the hands of Shri G. Murugan. The Ld.counsel submitted that it is a customary practice to give gold jewellery at the time of marriage and ceremonial occasions by the parents to the daughters. Therefore, according to the Ld. counsel, the addition made by the Assessing Officer is not justified.

On the contrary, Shri A.V. Sreekanth, the Ld. Departmental Representative, submitted that admittedly, there was search in the residential premises of the assessees and gold jewellery was found at the residences of both the assessees. In the absence of any evidence to show that the respective spouses of the assessees received Sridhan property at the time of marriage and they have also acquired part of jewellery after their marriage, the Assessing Officer found that the claim of the assessees cannot be accepted.

We have considered the rival submissions on either side and perused the relevant material available on record. Both the assessees are partners in a partnership firm, which engaged in the textile business. During the course of search operation at the residential premises of the assessees, gold jewellery to the extent of 617.19 gms was found in the case of Shri Balasubramanian and 679.43 gms in the case of Shri Murugan. The Assessing Officer found that the value of gold jewellery was undisclosed investment in the absence of any material evidence to support the purchases. It is customary practice in this part of country to give gold jewellery to the daughters by the respective parents, depending upon their financial and social status in the locality. Both the assessees are engaged in the business of textile and they are partners in the partnership firm. Therefore, acquisition of gold jewellery by their wives cannot be ruled out totally. Both the authorities below made addition on the ground that no material is available on record to support the acquisition of gold jewellery. When the jewellery was given as Sridhan property at the time of marriage, the parents of the daughters do not give any evidence to their daughters for acquisition of the jewellery. The daughters also would not demand evidence for acquisition. It is a customary practice to give gold jewelleries at the time of marriage. This customary practice prevailing in this part of country cannot be ignored by the authorities below while framing assessment in the income-tax proceeding. The assessing authority has to examine whether the spouses of the respective assessees would have received so much of jewellery from their respective parents after considering the financial and social background of the respective parents. This Tribunal is of the considered opinion that when the assessees are engaged in the business of textile at Coimbatore and Sankarankovil, they would commend social respect in both the localities. Therefore, receipt of Sridhan property by the respective wives of the assessees cannot be totally ruled out. What was found at the residences of the assessees were only 617.19 gms of gold jewellery in the case of Shri Balasubramanian and 679.43 gms of gold jewellery in the case of Shri Murugan. This Tribunal is of the considered opinion that it is quite natural that wives of the respective assessees would have received the same at the time of their marriage. It is also possible that some of the jewellery would have been acquired by their spouses in due course after their marriage. Under ordinary circumstances, no one maintains the supportive evidence / vouchers for purchase of jewellery. This customary practice prevailing in the society cannot be totally ignored by the authorities below. This Tribunal is of the considered opinion that by taking into consideration the social status and financial background of respective assessees and parents of respective wives, they would have received Sridhan from their parents. Therefore, consideration of the gold jewelleries as undisclosed investment in the hands of the assessee is not justified. Accordingly, the orders of the authorities below are set aside and the entire addition made towards the cost of gold jewellery is deleted in the case of both the assessees.

In the result, appeals of both the assessees are allowed.