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Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
Before: SHRI SHAILENDRA KUMAR YADAV, JM & SHRI RAJESH
आदेश / O R D E R PER RAJESH KUMAR, A. M: This appeal by the assessee is directed against the order dated 05/09/2011 of Commissioner of Income Tax (Appeals)-23, Mumbai (hereinafter called as the CIT(A)) for assessment year 2008-09. The assessee has raised the following grounds of appeal:
(A.Y: 2008-09) Anil Verma HUF Vs. ITO
On the facts and in the circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals) has erred in confirming the addition of Rs.28,93,750/- on account of sale of jewellery without appreciating the facts of the case.
On the facts and in the circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals) has erred in coming to the conclusion that the details submitted for sale of jewellery by the appellant were not satisfactory.
2 The common issue raised in the grounds of appeal of the assessee relates to the confirmation of addition of Rs.28,93,750/- on account of sale of jewellery as made by the AO.
3 The facts in brief are that assessee filed his return of income at Rs.1,02,914/- on 9/01/2009. The assessee was a partner in M/s. Unique Finance & Investment . During the year, the assessee sold jewellery worth Rs.28,93,750/- and the same was shown as addition in the capital account. The ld. AO added the sale of jewellery as income of the assessee on the ground that there was mismatch in the valuation report and the sale bills, discrepancies in the sales bills and also jewellery was not shown in the balance-sheet of the assessee as at 31/03/2007.
4 The ld. CIT(A) confirmed the addition by holding that the appellant had not discharged his onus of proving its ownership or any such jewellery having been received as gift. As no value added tax returns filed and no other evidence other than the list of donors were filed and also there was no proofs whether items of jewellery held by HUF and sold were same.
5 The ld. AR vehemently submitted that the ld.AO had made the addition on the basis of his observation as contend in paragraph 4 of the assessment order which mentioned that there was mismatch in the valuation report and sale bills. The ld. AR
(A.Y: 2008-09) Anil Verma HUF Vs. ITO further submitted that there was no mismatch in the valuation report and sale bills as observed by the AO in paragraph 4 (ii) by clarifying that the valuation report was wrongly dated as 31/12/2007 which was clarified by way of affidavit of Shri Jivanlal Shah S/o Jaskaran Shah aged 76 having office at 16, Walkeshwar Road, Goenka House, Mumbai-400 006 and also having office at Burtolla Street, Kolkata -7 stating that the date of the valuation report should be read as 30/09/2007 instead of 31/12/2007. Copy of the affidavit is placed at page no. 7 of the paper book. The ld. counsel also drew our attention to page nos. 8-29 which comprised of the replies furnished in response to notice u/s133(6) of the Act by three purchasers of jewellery furnishing the document comprising of copy of account of Anil Verma H.U.F., acknowledgment of IT return and purchases confirmation and copy of bank statements of the purchaser Sai Krupa Trading Co. at page no. 8-13 and likewise Maulik Diamonds at page no.14-18 and Vardhman Jewels page no. 19-24.The ld. Counsel further pointed out that the jewellery was gifted to the Anil Verma and his wife Lata Verma at the time of marriage on 09/12/1983 as stated in the letter to CIT(A) filed at page no.48 & 49 of the paper book. The ld. Counsel further submitted that ld. AO has nowhere doubted the receipt of jewellery by way of gifts at the time of marriage and simply added the sale proceeds of the jewellery of Rs.28,93,750/- to the income of the assessee by giving unconvincing reasons as contained in the paragraph 4 of the assessment order. The ld. Counsel also submitted that the jewellery was not mentioned in the balance-sheet dated 31/03/2007 as it was not customary and traditional to show the jewellery in the balance-sheet. Finally he prayed for the deletion of addition of the above amount by reversing the order of CIT(A) by placing strong reliance on the decisions in the case of ITO vs. Madhu Gopal Goel (in dated 14/06/2013) and Smt. Amita Devi Sanganeria v/s Asst. CIT (in ITA No. 52/Gau/2006). The ld. DR, per contra, relied heavily on the orders of the authorities below.
(A.Y: 2008-09) Anil Verma HUF Vs. ITO 7 We have considered the rival submissions of the counsel and the ld. Departmental Representatives and perused the material on record. We note that the AO has added the sale receipts of the jewellery in the income of the assessee by stating the various reasons such as discrepancies in valuation report and sales bills , discrepencies in sales bills, mismatching of dates and not showing the amount of gain or loss in the return of income and also that the balance-sheet at 31/03/2007 did not contain any details of the said jewellery sold. The ld. AO did not doubted or enquired about the acquisition of jewellery by way of giving gift at the time of marriage of the assessee karta and his wife in 1983. We, however, note that the discrepancies in valuation report and sale bills were clarified by the registered valuer by filing affidavit which is on page no. 7 of the paper book stating thereon that the date of the report should be read as 30/09/2007 instead of 31/12/2007.In the case of ITO v/s Madhu Gopal Goel Delhi Bench ‘E’ (supra) similar issue came up for consideration and the same was decided in favour of the assessee. The facts of the case are squarely covered by the above decision. Considering the facts of the case, the acquisition of jewellery by way of gift at the time of marriage which was not doubted by AO. Besides the CIT(A) upheld the addition on the basis that the assessee did not filed value added tax return and furnished no proof of ownership of jewellery. In our opinion, the assessee has furnished the details of gifts received at the time of marriage and also the valuation report of jewellery in 1984 and also on the current date. We, however, note that the assessee has sold its jewellery to jewelers who have confirmed to have purchased the same by filing replies to the letters issued by the ld AO u/s 133(6) by filing the copies of the ledger account of assessee, acknowledged by filing return copies of balance-sheet and bank accounts thereby proving that the said transactions had taken place on which the ld AO had not been given any observations or comments. Under these circumstances, we are of the view that the addition made
(A.Y: 2008-09) Anil Verma HUF Vs. ITO by the AO as confirmed by CIT(A) cannot be sustained and, therefore, we delete the addition by reversing the order of the CIT(A).
In the result, the assessee’s appeal is allowed प�रणामतः �नधा�रती क� अपील� क� जाती है । Order pronounced in the open court on November 20th, 2015 Sd/- Sd/- (Shailendra K. Yadav) (Rajesh Kumar) �या�यक सद�य / Judicial Member लेखा सद�य / Accountant Member मुंबई Mumbai; �दनांक Dated :20.11.2015 Ashwini Gajakosh आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent 3. आयकर आयु�त(अपील) / The CIT(A) 4. आयकर आयु�त / CIT - concerned 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, मुंबई / DR, ITAT, Mumbai 6. गाड� फाईल / Guard File आदेशानुसार/ BY ORDER,