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Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM
Before: SHRI DUVVURU RL REDDY, HON’BLE & SHRI S BALAKRISHNAN, HON’BLE
PER S. BALAKRISHNAN, Accountant Member :
This appeal filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)-12, Hyderabad [the Ld. CIT (A)] in ITA No.10432/2019-20, dated 24/01/2022 arising out of the order passed U/s. 143(3) of the Income Tax Act, 1961 [“the Act”] for the AY 2015-16. 2
In this appeal, there is a delay of 31 days in filing the appeal before the Tribunal. In this regard, the Ld. AR brought our attention to the affidavit filed by the assessee and submitted that during the relevant period the assessee was fully engaged in shifting of his office from Vijayawada to Hyderabad because of lack of business avenues at Vijayawada and this consumed time and moreover because of change of assessee’s address, the CIT(A)’s order could not be received in time. Under these circumstances, the assessee filed the appeal beyond the prescribed time limit. Therefore, the Ld. AR prayed for condonation of the delay. After hearing the Ld. AR and on perusal of the Affidavit filed by the assessee, we are of the view that there is a sufficient and reasonable cause for not filing the appeal before the Tribunal within the prescribed time limit and hence we hereby condone the delay of 31 days and proceed to adjudicate the appeal on merits.
Brief facts of the case are that the assessee is an individual deriving income from other sources and also a Director in M/s. Yugandhar Housing Private Limited. A search & seizure operation U/s. 132 of the Act was conducted in the group cases of M/s. Yugaandhar Housing Private Limited and others on 3 25/10/2017 including the residence of the assessee. Subsequently, notice U/s. 142(1) was issued calling for the return of income. As there was no response another notice U/s. 142(1) of the Act was issued once again on 04/12/2019 and a final opportunity once again was given on 13/12/2019. In response to the final notice, the assessee filed his return of income on 24/12/2019 declaring a total income of Rs.7,45,000/-. Subsequently, notice U/s. 143(2) was issued on 24/12/2019 and served on the same date.
As the assessee has admitted an amount of Rs.45,67,473/- towards cost of gold jewellery weighing 1632.99 grams as unexplained investment in the statement recorded during survey, U/s. 132(4) of the Act, the AO observed that the assessee has not disclosed income of Rs. 45,67,473/- in the return filed by the assessee, thereafter issued a show cause notice dated 24/12/2019 to the assessee. In response to the show cause notice, the assessee submitted the details and claimed that the gold jewellery during the course of search operation valued at Rs. 75,04,322/- belong to the family members as detailed in para 6 of the assessment order. The AO after considering the submissions considered 1632.99 grams valued at Rs.
4 45,67,473/- as undisclosed gold jewellery not belonging to the family members and accordingly taxed the same. Aggrieved by the order of the Ld. AO, the assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) observed that in spite of several opportunities provided to the assessee, since the assessee has not appeared for or furnished the details called for dismissed the appeal of the assessee in limine. Aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before us.
The assessee raised the following grounds of appeal:
“1. The Ld. CIT(A) erred in facts and law while passing the order.
The Ld. CIT(a) ought to have considered the appeal based on merits of the case instead of dismissing the appeal.
On the facts and circumstances of the case, the Ld. CIT(A) ought to have noticed that the Assessing Officer is not justified in making the additions towards unexplained investment in gold as the appellant has submitted that this gold belongs to mother in law, mother and grand mother of the appellant.
On the facts and circumstances of the case the Ld. CIT(A) ought to have noticed that the Assessing Officer is not justified in making the addition without relying on the statement recorded U/s. 132(4) without considering the Assessee’s explanation submitted during the course of assessment proceedings.
5
On the facts and circumstances of the case the Ld. CIT(A) ought to have noticed that the assessing officer is not justified in making the addition towards unexplained investment in gold as the gold jewellery seized is ancestral gold of old persons which cannot be proved with evidence. But the Department has not disproved that the appellant’s mother-in-law, mother and grand mother are not residing with the appellant. In the absence of such the addition is not justified.
On the facts and circumstances of the case, the Ld. CIT(A) ought to have noticed that the assessment is void as the AO has invoked section 68 which is not applicable to the present facts of the case.
Any other ground or grounds that may be urged at the time of hearing of the appeal.”
The Ld. Authorized Representative [Ld. AR] argued stating that at the time of recording statement U/s. 132(4) of the Act on 06/12/2017, the assessee declared the gold jewellery of 2682.99 grams as belonging to the family members staying in the same residential premises. The Ld.AR also submitted that the assessee relies on the Notification No. 1916, dated 11/05/1994 wherein 500 grams gold belong to the married women, 250 grams gold belong to the unmarried lady and 100 grams gold belong to the male member of the family need not be seized. Based on the statement recorded, the AO considered 950 grams of gold belonging to the family members and treated the excess gold of 6 Rs. 1732.99 grams valued at Rs. 48,47,173/- as undisclosed gold jewellery in the hands of the assessee. The Ld. AR pointed out that the Ld. AO erred in not allowing the gold belonging to the mother of the assessee, Grand Mother of the assessee and mother-in-law of the assessee totaling 1500 grams by not treating them as family members of the assessee. The Ld.AR submitted that the assessee’s Grand Mother, mother-in-law and mother of the assessee are staying in the same premises and accordingly the benefit of the Notification (supra) should be extended to them also. The Ld. AR also pointed that the same Assessing Officer while assessing the income of Smt. Muppavarapu Kavita u/s. 143(3) of the Act has considered the gold jewellery pertaining to mother, Grand Mother and mother-in-law in the case of Smt. Muppavarapu Kavitha vide his order dated 26/12/2019. The Ld. AR therefore pleaded that the AO has taken a different stand with respect to the treatment of undisclosed gold in the hands of Smt. Muppavarapu Kavitha and in the case of the assessee. Per contra, the Ld. DR could not controvert to the submissions made by the ld. AR and relied on the orders of the Authorities below.
We have heard both the sides and perused the materials available on record and the orders of the Authorities below.
7 Admitted facts are that the assessee in his statement recorded u/s. 132(4) of the Act has submitted that the Grand Mother Smt. K. Pullamma, Mother-in-law Smt. M. Kaleswaramma and Mother K. Jamuna are staying with the assessee and the gold belongs to the family members of the assessee. The Ld. DR could not controvert or produce any evidence regarding non-staying of Grand Mother, Mother-in-law and Mother with the assessee. In the case of Smt. Muppavarapu Kavitha, the same AO has allowed the gold pertaining to mother-in-law and mother whereas in the case of the assessee the benefit of CBDT Notification No.1916, dated 11/05/1994 was not extended to the mother, mother-in- law and Grand Mother. The AO erred in not adopting a consistent stand with respect to taxation of undisclosed gold jewellery and has passed different order with respect to the assessee in comparison with the order passed in the case of Smt. Muppavarapu Kavitha. In view of the above, we find that there is no consistent approach by the Ld. AO and therefore we are of the considered view as per the claim of the assessee the benefit of Notification No.1916, dated 11/05/1994 should be extended to the Mother, Mother-in-law and Grand Mother of the assessee and accordingly we direct the AO to allow 1500 grams of Gold and 8 assess the balance gold of 132.99 grams as undisclosed gold jewellery in the hands of the assessee. It is ordered accordingly.
In the result, appeal of the assessee is partly allowed. Pronounced in the open Court on the 27th July, 2022. (दुव्िूरु आर.एऱ रेड्डी) (एस बाऱाकृष्णन) (DUVVURU RL REDDY) (S.BALAKRISHNAN) न्याययकसदस्य/JUDICIAL MEMBER ऱेखा सदस्य/ACCOUNTANT MEMBER Dated :27.07.2022 OKK - SPS आदेश की प्रतिलिपि अग्रेपिि/Copy of the order forwarded to:- ननधधाररती/ The Assessee – Kandula Ranga Reddy C/o. MV Prasad,
D.No.60-7-13, Ground Floor, Siddhartha Nagar, 4th Lane, Vijayawada, Andhra Pradesh – 520010. रधजस्व/The Revenue – Asst. Commissioner of Income Tax, Central Circle,
Stalin Towers, Autonagar, Vijayawada, Andhra Pradesh – 520 007. 3. The Principal Commissioner of Income Tax (Central), Visakhapatnam. आयकर आयुक्त ( अऩीऱ)/ The Commissioner of Income Tax (Appeals)-12,
Hyderabad. ववभधगीय प्रनतननधध, आयकर अऩीऱीय अधधकरण, ववशधखधऩटणम/ DR, ITAT,
Visakhapatnam गधर्ा फ़धईऱ / Guard file 6. आदेशधनुसधर / BY ORDER
Sr. Private Secretary ITAT, Visakhapatnam