SMT. DALVINDER KAUR RYAIT,LUDHIANA vs. DCIT, CC-II, LUDHIANA

PER DIVA SINGH

The present appeal has been filed by the assessee assailing the correctness of the order dated 19.09.2017 of ld. CIT(Appeals) Ludhiana pertaining to 2008-09 assessment year on the following ground : 1. That order passed u/s 250(6) of the Income Tax Act, 1961 passed by Ld. Commissioner of Income Tax (Appeals)-5, Ludhiana is against law and facts on the file in as much he was not justified to arbitrarily uphold the addition of Rs. 8,08,737/- made by the Ld. Assessing Officer on account of unexplained investment in Jewellery found from locker u/s 69 of the Income Tax Act, 1961. 2. That the Ld. CIT(A) gravely erred in ignoring the fact that credit for Istri Dhan and some part of Jewellery belonging to children was to be allowed particularly in view of instruction No. 1916 dated 11.05.1994 issued by CBDT.

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Jasbir Singh Ryait, a son and a daughter and the said jewellery had been acquired over the years. The locker stood last operated on 11.01.2008. Thus, admittedly the jewellery therein was prior to that. Apart from this, jewellery found in locker No. 60/3 in Punjab & Sind Bank, Ferozepur Road, Ludhiana, it was submitted that jewellery had also been found from the residence on 03.12.2014 and locker No. 33 with HDFC Bank, B.R.S Nagar, Ludhiana which was valued at Rs. 1,21,21,980/-. It was submitted, that the assessee's husband had already surrendered an amount of Rs. 1,15,46,580/- and had declared it in his return for 2015-16 assessment year. The addition in the circumstances, by the AO when considered in the light of the CBDT Circular No. 1916 dated 11.05.2004, it was submitted, did not warrant any addition as jewellery weighing 900 gms. itself is allowable, 667 gms. was much below the said limit. Reliance was placed upon CIT V Satya Narain Patni (2014) 366 ITR 325 (Raj). The following proposition of law laid down therein as recorded in the impugned order and reiterated in the present proceedings by the ld. AR was relied upon : "Admittedly, looking to the status of the family and the jewellery found in possession of four ladies, was held to be reasonable and therefore, the authorized officers, in the first instance, did not seize the said jewellery as the same being within the tolerable limit or the limits prescribed by the Board and, thus, subsequent addition is also not justifiable on the part of the Assessing Officer and rightly deleted by both the two appellate authorities namely Commissioner (Appeals) as well as the Tribunal." 2.1 Thus, it was argued that no part of the jewellery remained unexplained. However, the said submission of the assessee was not accepted by the CIT(A) on the following reasoning : 3.2 Ground of Appeal No. 2 pertains to addition of Rs. 8,08,737/- made by the AO u/s 69 of the Income Tax Act, 1961 on account of unexplained jewellery found from locker. The facts of the case as mentioned in the assessment order are that jewellery worth Rs. 18,00,900/- was seized from the locker of the assessee with Punjab & Sind Bank on 15.12.2014. It was however noticed that the locker was last operated on 11.01.2008, therefore the jewellery was to be assessed in the assessment year 2008-09. It is further mentioned that Sh."Jasbir Singh Ryait, husband of the assessee offered excess amount of jewellery found during search for taxation and made a surrendered of Rs. 1,15,46,580/-(including the value of jewellery seized from the locker valued at Rs. 18,00,900/-) in his statement recorded u/s 132 on 02.01.2015 as unexplained investment in gold item and jewellery for financial year 2014-15. As per AO, since the jewellery in locker was to be assessed in the assessment year 2008-09, the case was re-opened u/s 147. After considering the reply of the assessee, the AO made addition of Rs. 8,08,737/- by applying the gold rate relevant to assessment year 2008-09 in respect of jewellery found from the locker. The facts of the case, the basis of addition by the AO and the arguments of the AR during the appellate proceedings have been considered. There is no difference of opinion that the jewellery found from the locker, which was last operated on 11.01.2008, was to be assessed in the assessment year 2008-09. It is also not contested by the AR that the jewellery was not declared in the returns filed with the Department. Hence, this jewellery was to be assessed as unexplained investment in the hands of the assessee during assessment year 2008-09. The argument of the AR is with respect to the amount of addition to be made in the hands of the assessee for the jewellery found from the locker. The AR has argued that

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assessee is entitled for benefit as per CBDT Circular No. 1916 dated 10.05.1994. Here it is relevant to note that the AR has also admitted in the submission that the surrender of Rs. 1,15,46,580/- on account of jewellery was made by Sh. Jasbir Singh Ryait after availing the benefit of 900 gms of jewellery valuing Rs. 23,73,300/- out of total jewellery found at the residence and the locker of the assessee. From the facts mentioned in the submissions filed by the AR it is clear that the assessee has already availed this benefit while making the surrendered on account of jewellery. Thus the additional income has been declared in the assessment year 2015-16 after availing the benefit. Under the facts the assessee cannot claim benefit of another 900 gms of jewellery for assessment year 2008-09 also. The benefit can be claimed only once and not year after year. Therefore, the arguments of the AR are not found acceptable and the addition made by the AO is confirmed. Accordingly, this Ground of Appeal is dismissed.” 3. On going through the material available on record, we find in the peculiar facts and circumstances of the present case, addition on facts was not justifiable in the hands of the assessee. It is seen that the assessee being a married lady with two children (a daughter and a son) in terms of the CBDT circular relied upon, in the light of the decision cited and specifically when considered in the peculiar background where her husband has surrendered an amount of Rs. 1,15,46,580/- specifically for jewellery, the departmental stand to make the addition in the peculiar facts of the present case in the hands of the assessee cannot be upheld. The assessee in the course of her arguments before the AO and CIT(A) has led arguments which stand un- rebutted on record that locker was last operated on 11.01.2008. We find that nothing has been placed on record to assume that jewellery would have necessarily been purchased in the year under consideration. The unrebutted submission on record remains that the specific jewellery has been accumulated over the years on various occasions i.e. at the time of marriage, birth of children etc. etc. and we find no good reason why in the case of the assessee, the said addition has been made or sustained. Accepting the arguments of the assessee, the addition is directed to be deleted. Ordered accordingly. 4. In the result, the appeal of the assessee is allowed. Order pronounced in the Open Court on 09.05. 2018.

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(ANNAPURNA GUPTA) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ‘Poonam’ Copy to: 1. The Appellant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR Asstt. Registrar ITAT Chandigarh