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Income Tax Appellate Tribunal, DEHRADUN BENCH, DEHRADUN
Before: Dr. B. R. R. KumarSh. Yogesh Kumar US
IN THE INCOME TAX APPELLATE TRIBUNAL DEHRADUN BENCH, DEHRADUN Before Dr. B. R. R. Kumar, Accountant Member Sh. Yogesh Kumar US, Judicial Member ITA No. 7350/Del/2017 : Asstt. Year: 2012-13 Gulshan Kumar, Vs Income Tax Officer, 40, Anand Chowk, Ward-1(3), Dehradun Dehradun (APPELLANT) (RESPONDENT) PAN No. ACDPK1177F Assessee by : Sh. Romal Jain, CA Revenue by : Sh. N. C. Upadhyay, Sr. DR Date of Hearing: 25.04.2022 Date of Pronouncement: 26.04.2022 ORDER Per Dr. B. R. R. Kumar, Accountant Member: This appeal has been filed by the assessee against the order of the ld. CIT(A), Haldwani dated 10.08.2017.
Following grounds have been raised by the assessee: “1. That on the facts and in law the orders passed by Assessing Officer (hereinafter referred to as the "AO7 and Commissioner of Income Tax (Appeals) {hereinafter referred to as the "CIT(A)) are void-ab-initio and bad in law. 2. That on facts and in law the CIT(A) has erred in upholding the addition made by learned AO of Rs 8,74,000/- on account of sale of jewellery made by the assessee despite of the fact that the said sale was truly declared by assessee in its return of income. The addition made by learned AO and sustained by Hon’ble CIT (A) has been done on erroneous and frivolous grounds such as item wise detail of sale of jewellery not provided, buyer not being in business of jewellery and other petty issues. Both,
2 ITA No.7350/Del/2017 Gulshan Kumar the learned AO and Hon’ble CIT (Appeals) failed to consider that out of Rs 8,74,000/- sale value, Rs 6,00,000 were deposited in bank and balance was handed over in cash, the total aggregate amount was truly declared by assessee in its return of income and corresponding evidence including confirmation of buyer were produced during assessment proceedings. Further the addition of Capital gain made by Learned AO out of said sale proceeds was deleted by Hon’ble CIT (Appeals), hence the sale ipso facto becomes a genuine transaction. 3. That on the facts and in law the CIT (A) has erred in upholding the addition made by learned AO of Rs 1,00,000 on account of disallowance of deduction u/s 80DD of the Income tax act, 1961. The Learned AO made addition on the ground that Form 10-1A was not signed by appropriate authority, despite of the fact that the same was signed and verified by Senior City Health Officer, Nagar Nigam, Dehradun. The said signatory is covered under provisions of income Tax Rules for Form 101A wherein it is mentioned that medical authority for the said purpose means any hospital or institution specified by appropriate government for the purposes of persons with disabilities (Equal Opportunities Protection of Rights and Full participation) Act, 1995. Section 2 (a) defines appropriate Government as "In relation to the state government or any establishment wholly or substantially financed by that government or ANYLOCAL AUTHORITY, other than Cantonment Board or State Government. 4. That on the facts and in law the CIT (A) has erred in upholding the addition made by learned AO of Rs. 1,50,000/- . The Learned AO made the addition by not considering the withdrawals made by assessee from a partnership firm, wherein he was a partner. The addition is erroneous as during assessment detailed day wise cash flow was submitted to the Learned AO and also copy of account of assessee in firm was also submitted. The assessee made the addition without considering the facts that cash was withdraw and by assessee from firm.” 3. The assessee is an individual, during the year under consideration, the assessee was deriving house property income,
3 ITA No.7350/Del/2017 Gulshan Kumar business income from own business of civil construction work and share of profit from partnership firms, long term capital gains and income from other sources. The assessee filed return of income on 03.03.2014 declaring total income of Rs.4,92,880/-.
Sale of Jewellery:
The cash flow statement of the assessee furnished during the course of assessment proceedings revealed receipt of Rs.6,00,000/- on 24.06.2011 and Rs.2,74,000/- on 30.06.2011 on account of sale of jewellery. The assessee explained that he sold jewellery worth Rs.8,74,000/- to Shri Anil Kumar Dawar, S/o Shri Gyan Chand Dawar, R/o Park Road, Kashipur. As per confirmation letter dated Nil from Shri Dawar, Shri.Dawar has paid Rs.8,74,000/- as under:
i) Rs.6,00,000/- deposited by him in the Bank account , A/c No. 14632191006658, Oriental Bank of Commerce on 24.06.2011 ii) Rs.2,74,000/- paid in cash on 30.06.2011
Owing to non submission of the account, the AO, under the provisions of Section 133(6) of the Income Tax Act, 1961 called for the account of the assessee from Oriental bank of Commerce, Doiwala, Dehradun and obtained the copy of statement of above account.
The AO made addition of Rs.8,74,000/- on the grounds that the account has been opened on 24.06.2011 and amount of Rs.6,00,000/- has been deposited on the same date. The AO held that the assessee failed to furnish item wise details of the jewellery, its gross weight, net weight after weight loss on account of wastage, rate at which the jewellery was sold. The AO also held that Sh. Anil Kumar Dawar was not shown to be a person dealing in the business of gold ornaments.
4 ITA No.7350/Del/2017 Gulshan Kumar 7. The ld. CIT(A) confirmed the addition.
Heard the arguments of both the parties and perused the material available on record.
In the instant case, the bank account shows the deposits of Rs.6,00,000/- on 24.06.2011 and Rs.2,74,000/- on 30.06.2011. During the enquiry before the AO, the assessee submitted that this amount was received on account of sale of gold jewellery to a person namely Sh. Anil Kumar Dawar and confirmation letter from Sh. Anil Kumar Dawar has been filed. The revenue made the addition holding that the account has been opened on the same date of depositing the amount and the item wise details of the jewellery has not been filed. The revenue alleged that except these two entries there were no other entries in the bank account. The ld. CIT(A) has also concurred with the view of Assessing Officer that the pay-in-slip does not bear the name of the depositor and while the assessee is having another bank account, apparently there is no reason for deposit of the cash in a new account.
We find that the contention of the revenue cannot be accepted as nothing precludes the assesseee to open a new account and to deposit the receipt in any new bank account. The action of the assessee cannot be given any superfluous shade. The assessee has categorically stated that the jewellery has been sold to Shri Anil Kumar Dawar and received amount from him. The revenue dismissed the explanation on the grounds that Sh. Anil Kumar Dawar is not a jeweler, in spite of the confirmation filed by the assessee. There is no bar for the assessee to vend his jewellery to a person who is not
5 ITA No.7350/Del/2017 Gulshan Kumar necessarily in the business of jewellery. The assessee can sell the jewellery to any individual and obtain the amount as long as he gets a desired price. Even the confirmation of Sh. Anil Kumar Dawar filed by the assessee has not been disproved or proved to be wrong. Hence, in the absence of any material brought contrary to the explanation given by the assessee, we hold that the addition made cannot withstand the legal scrutiny especially when no examination of the purchaser of the jewellery has been undertaken by the revenue.
Disallowance of Rs.1,00,000/- u/s 80DD:
The amount claimed by the assessee u/s 80DD has been rejected by the AO on the grounds that the certificate furnished by the assessee is faulty.
As regards the certificate in form 10-IA is concerned, it was submitted that medical authority for the said purpose means any hospital or institution specified by “Appropriate Government” for the purposes of persons with disabilities (Equal opportunities protection of Rights and full participation) Act, 1995.
Section 2(a) of the said Act defines, “Appropriate Government” as under:
“In relation to State Government or any establishment wholly or substantially financed by that Government of any local authority, other than a cantonment Board, the State Government.”
6 ITA No.7350/Del/2017 Gulshan Kumar 14. On perusal of above Section 2(a), the local authority is very well covered under the clause and therefore Senior City Healthy Officers, Nagar Nigam, Dehradun is also eligible or issuance of the said certificate.
On harmonious reading of the legislation with regard to the Income Tax Act and Equal opportunities protection of Rights and full participation Act, 1995, a certificate has been issued by the authority mentioned under equal opportunities protection of Rights and full participation Act, 1995, i.e. Senior City Health Officer, Nagar Nigam can be considered as a valid certificate. The legislative intention is to look into the realm of transaction and transaction, if form genuine, the same should be allowed. Since, in the case, the certificate issued by Senior City Healthy Officers, Nagar Nigam, Dehradun can be considered in accordance with the judgment of the Hon’ble Supreme Court in the case of CIT Vs. Simon Carves Ltd. 105 ITR 212, we hold that the assessee is eligible for claim for deduction u/s 80DD of the Act of Rs.1,00,000/-.
In the result, the appeal of the assessee is allowed. Order Pronounced in the Open Court on 26/04/2022.
Sd/- Sd/- (Yogesh Kumar US) (Dr. B. R. R. Kumar) Judicial Member Accountant Member Dated: 26/04/2022 *Subodh Kumar, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR