TMI Blog2015 (8) TMI 554X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee and RMKV & Sons. In the absence of any reference about the investment of funds by RMKV & Sons and the liability of the assessee to reimburse the same, this Tribunal is of the considered opinion that the claim of the assessee that the donation paid to the temples is only reimbursement of the expenditure is not justified. This Tribunal do not find any infirmity in the order of the CIT(A) on this issue and the same is confirmed. - decided against assessee. Addition towards unexplained investment in silver articles to the extent of 18.23 kgs. - Held that:- streedhan has to be estimated depending upon the social status of the respective family in the society. Similarly, depending upon the social status, it cannot be totally ruled out the possibility of receiving gold and silver ornaments as gift. Admittedly, the assessee was married for the last 25 years and there are many occasions for them to receive gift from the close relatives. Here again, expecting documentary evidence to establish the receipt of gift is impossible one. Therefore, everything has to be estimated depending upon the facts of each case by taking into account the social status of the family in the locali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diamond jewellery to the extent of ₹ 1,38,800/- - Held that:- 240 gms of gold jewellery belongs to the assessee’s daughter might have been kept in the house of the assessee. Now the difference is 133.59 gms. The assessee claims that this is the difference between the gross and net weight. On a query from the Bench, the ld. Counsel explained that this difference is due to the weight of the stone embedded in the jewellery and impurities. This Tribunal is of the considered opinion that it is common practice in all jewellery shop that stones are valued at the gold rate and in addition to the rate which prevails for the gold. The assessee has also required to pay charges for wastage, making charges besides the applicable taxes. Therefore, this Tribunal is of the considered opinion that the difference between the gross and net weight of 133.59 gms cannot be allowed. Now, coming to the diamond jewellery, the dispute is only with regard to 9.93 carats of diamond jewellery. As rightly pointed out by the ld. Counsel, it is usual practice in custom to gift diamond ear stud and diamond ring to the bride and bridegroom apart from diamond necklace. Since the assessee was married 45 yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, the orders of the lower authorities are modified and the Assessing Officer is directed to make addition to the extent of 204 gms of gold jewellery. - Decided partly in favour of assessee. Unexplained investment made in gold jewellery to the extent of 261.54 gms. - Held that:- This Tribunal is of the considered opinion that instead of 800 gms of jewellery found by the Assessing Officer as streedhan on the occasion of marriage, credit has to be given to the extent of 1000 gms. Therefore, the balance comes to only 61.54 gms of jewellery. As already observed in the case of other assessees, the difference between the gross and net weight cannot be taken into consideration since the assessee has to pay the price for the gross weight. In view of the above discussion, this Tribunal is of the considered opinion that 61.54 gms of gold jewellery remains to be unexplained. Accordingly, the orders of the lower authorities are modified and the Assessing Officer is directed to make addition of 61.54 gs of gold jewellery as unexplained investment. Coming to the diamond jewellery, as rightly submitted by the ld. Counsel, it is common in this part of the country to give streedhan to the gir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee towards housing loan. 3. Shri G. Baskar, ld. Counsel for the assessee submitted that the assessee is a co-owner of the property at 176-F, Trivandurm Road, Vannarapettai, Tirunelveli. The said property was let out to RMKV group of firms by an agreement dated 19.10.2007. According to the ld. Counsel, the assessee alongwith other co-owners, availed housing loan of ₹ 5 crores for the purpose of construction of the building. In fact, the above said ₹ 5 crores was disbursed by Indian Bank, Tirunelveli Branch on four installments. Out of the first installment of ₹ 25 lakhs received on 28.6.2007, a sum of ₹ 13.50 lakhs was utilized for purchase of the land to the extent of 206.5 cents. Since ₹ 13.50 lakhs was utilized for purchase of the landed property, according to the ld. Counsel, the assessee is not pressing the disallowance of interest to that extent. The ld. Counsel has made an endorsement in the file to this effect. Now the dispute is with regard to interest on the balance amount of ₹ 70 lakhs. The ld. Counsel further submitted that the second and third installments of ₹ 1 crore and ₹ 2 crores respectively, was in f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hs Iv Kuthalam Arulmigu Parasakthi Ladies College - ₹ 20 lakhs 3. Consequent to this direction of the Commissioner, HR CE, RMKV Sons instructed the assessee and other co-owners to pay ₹ 70 lakhs directly to the respective temples. Accordingly, the same was paid and an agreement was also entered into between Arulmighu Mutharamman Temple, Palayamkottai and RMKV Sons represented by Shri Mahesh. According to the ld. Counsel, the assessee and other co-owners had a liability to reimburse the cost of construction of the building to RMKV Sons, therefore, instead of repaying the cost of construction to RMKV Sons, the co-owners/ assessee paid the amount directly to the temples as per the direction of HR CE. Therefore, the interest paid by the assessee on ₹ 70 lakhs has to be allowed. On a query from the Bench, the ld. Counsel clarified that the assessee is not a partner in RMKV Sons. 4. On the contrary, Shri S. Das Gupta, ld. Departmental Representative submitted that the assessee is a partner in RMKV group of concerns. This is apparent from the assessment order as well as CIT(A) s order. A s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t a sum of ₹ 13.50 lakhs was diverted for purchasing the land therefore, he is not pressing the disallowance of interest on this ₹ 13.50 lakhs. Now the dispute is with regard to ₹ 70 lakhs which was given to four temples as donation. The contention of the assessee is that RMKV Sons constructed the building by using their funds therefore, this sum of ₹ 70 lakhs has to be reimbursed to them. Instead of reimbursing that amount to RMKV Sons, it was paid to various temples on the instruction of RMKV Sons. It is also brought to the notice of the Bench that RMKV Sons took 50 cents of land from Arulmighu Mutharamman Temple, Palayamkottai, on the basis of the order of the Commissioner, HR CE subject to the condition that they give donation to four temples as indicated in the order and the lease period is for three years. The copy of the lease agreement said to be entered into between the assessee and RMKV Sons is available at page 1 of the paper book. As per this lease agreement, there is no reference about the liability of the assessee to reimburse any of the expenditure said to be incurred by RMKV Sons, partnership firm. The lease period is for 20 years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard to 18.23 kgs of silver. The ld. Counsel pointed out that the Revenue has although filed appeal against the order of the CIT(A) deleting 10kgs of silver, according the ld. Counsel, the entire jewellery was received as streedhan and gift from various relatives. Therefore, the CIT(A) ought to have deleted the entire addition made by the Assessing Officer. 9. On the contrary, Shri S. Das Gupta, ld. Departmental Representative submitted that the Revenue authorities found 43.28 kgs of silver jewellery during the course of search operation. However, the Assessing Officer himself found 15.05 kgs of jewellery was declared in the wealth tax return therefore, it was allowed. The Assessing Officer also was very reasonable in deducting 10kgs of silver jewellery as streedhan property and made addition only the value of silver jewellery to the extent of 28.23 kgs. However, the CIT(A) found that the assessee might have received another 10 kgs of silver jewellery as gift during the past 25 years. Therefore, he confirmed the addition towards 18.23 kgs of silver jewellery. 10. The Revenue has also filed appeal challenging the correctness of the order of the CIT(A) giving relief to the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remains to be explained is only 13.23 kgs of silver articles. It is made clear this estimation is made by taking into consideration the business of the assessee s family and the social status maintained by them in the area in which they are living. Therefore, the balance silver article remains to be explained is only 13.23 kgs. Accordingly, the orders of the lower authorities are modified and the Assessing Officer is directed to make addition only in respect of 13.23 kgs of silver articles. I.T.A.No. 320/Mds/2013 12. In this Revenue s appeal, the first ground is with regard to addition of ₹ 3,76,470/- towards jewellery purchases without invoices. 13. Shri S. Das Gupta, ld. Departmental Representative submitted that during the course of search operation, the Revenue authorities found the following jewellery even though the same was not supported by invoices: (i) Shoba Hazar jewellery valuing ₹ 1,77,500 (ii) Jaipur Gems - jewellery valuing ₹ 1,98,970/- Since the above purchases were not supported by any vouchers, the Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the assessee received the said diamond from her mother-in-law. According to the ld. DR, in the absence of any material to indicate that the assessee has received 2.38 carats of diamond from her mother-in-law, the CIT(A) ought not to have deleted the addition. 17. On the contrary, Shri G. Baskar, ld. Counsel for the assessee submitted that the assessee s family is engaged in business at Tirunelveli and Chennai, therefore, inheritance of 2.38 carats of diamond from her mother-in-law cannot be doubted by the Revenue authorities. 18. We have considered the rival submissions on either side and also perused the material available on record. The claim of the assessee that 2.38 carats of diamond was inherited from her motherin- law, cannot be doubted since the status of the family in society would indicate that they are used to wear diamond jewellery. this Tribunal is of the considered opinion that it is not known how the assessee could establish by material evidence to indicate the inheritance of 2.38 carats of diamond from her mother-in-law. This Tribunal is of the considered opinion that in view of the smallness of the value, the CIT(A) has rightly deleted the addition. In fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to the ld. Counsel, the assessee has only one daughter who was married. The assessee s son-in-law is living at Chennai. Being an only one daughter, she used to live with the assessee at Tirunelveli. According to the ld. Counsel, even the grandchildren is studying at Tirunelveli by staying in the assessee s house. According to the ld. Counsel, part of the assessee s daughter s jewellery was kept in the assessee s house. Therefore, if that is taken into account, there is no difference at all. Therefore, the entire explanation of the assessee has to be accepted and the CIT(A) ought to have deleted the entire addition. Referring to the answer given by the assessee with reference to Question No.3 recorded during the course of search operation, the ld. Counsel pointed out that about 80 sovereigns of gold jewellery belongs to assessee s daughter was available with him. However, the Assessing Officer accepted the claim only to the extent of 417 gms. The balance jewellery acquired by the assessee s daughter subsequent to her marriage to the extent of 248 gms was not even considered. Referring to the diamond jewellery, the ld. Counsel pointed out that the assessee was married 45 years back ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered opinion that receiving or gifting of streedhan property cannot be totally ruled out. It is also an undisputed fact that the assessee is having only one daughter and it is not uncommon that the daughter to come and stay with her parents especially when they have no other children. Therefore, the claim of the assessee that part of the jewellery which was gifted to their daughter was left in their house cannot be doubted. Moreover, the claim of the assessee that the assessee s daughter has acquired 240 gms of gold jewellery subsequent to the marriage also cannot be ruled out by taking into consideration their family status. Of course, material evidence is necessary to establish the claim in the judicial proceedings and at the very same time, the customary practice prevails in the society cannot be ruled out to estimate the available jewellery with the assessee. Therefore, this Tribunal is of the considered opinion that 240 gms of gold jewellery belongs to the assessee s daughter might have been kept in the house of the assessee. Now the difference is 133.59 gms. The assessee claims that this is the difference between the gross and net weight. On a query from the Bench, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , ld. Counsel for the assessee submitted that the Revenue authorities found 1594.5 gms of gold jewellery and 11.35 carats of diamond jewellery in the residence of the assessee. Out of the above jewellery, 599 gms was found in the residence of the assessee s father. The Assessing Officer accepted jewellery to the extent of 600 gms and the balance 1092.2 gms was added as undisclosed investment in the jewellery. On appeal by the assessee, the CIT(A) deleted addition of 492 gms of jewellery. However, sustained the addition made by the Assessing Officer to the extent of 600.2 gms of jewellery. According to the ld. Counsel, the assessee s marriage took place 11 years back and about 1200 gms of gold jewellery was received as streedhan property by his wife. Out of this 601 gms was found at the residence of the assessee and the balance 599 gms jewellery was found in the residence of the assessee s father. The ld. Counsel further submitted that some of the jewellery were exchanged and converted into new jewellery. The ld. Counsel further submitted that about 200 gms of jewellery was received by his two children which was not considered by the authorities below. The ld. Counsel further submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the extent of ₹ 2.41 lakhs and the CIT(A) has also accepted the claim of the assessee that the jewellery of two minor sons to the extent of 100 gms each. The contention of the assessee appears to be before this Tribunal is that even though the assessee claimed 1200 gms of streedhan jewellery belongs to his wife, the Assessing Officer accepted only 492 gms of jewellery. This Tribunal is of the considered opinion that gifting jewellery at the time of marriage is common in this part of the country. By taking into consideration the social status of the assessee s family and the nature of business they are carrying on, the assessee s wife might have received gold jewellery to the extent of 1000 gms. Therefore, this Tribunal is of the considered opinion that this fact was not taken into consideration by the authorities below. If this is considered then the balance jewellery remains unexplained would be 200.2 gms. The assessee claims that difference between the gross and net weight of the jewellery is 97.7 has to be taken into consideration. This Tribunal is of the considered opinion that while purchasing jewellery the assessee has to make payment on the gross weight and not on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A) ought to have deleted the entire addition made by the Assessing Officer. 37. On the contrary, the ld. DR submitted that the CIT(A) deleted the addition to the extent of 1100.2 gms and sustained the addition only to the extent of 404 gms of gold jewellery and 11.74 carats of diamond. The CIT(A) has given credit for personal jewellery to the extent of 100 gms for the assessee and another 100 gms was given credit for the assessee s son. The CIT(A) has also given credit for the assessee s daughter 250 gms of gold jewellery. The CIT(A) further accepted explanation of the assessee with regard to diamond jewellery to the extent of 13.25 carats. The acquisition of jewellery by drawings made from the business was accepted to the extent of 650.2 gms. Therefore, no material was available on record either to support the investment in jewellery from the drawings said to be made from the business or receipt of streedhan property. Therefore, the CIT(A) ought not to have deleted the addition made by the Assessing Officer. 38. We have considered the rival submissions on either side and also perused the material available on record. Admittedly, 2511.2 gms of gold jewellery and 24.99 cara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered opinion that the assessee might have received 24.94 carats of diamond jewellery both by streedhan and from her wife and mother and also might have purchased in the course of period. Therefore, this Tribunal is of the considered opinion that making addition to the extent of 11.74 carats of diamond may not be correct. After estimating the gold jewellery to the extent of 1000 gms as streedhan, the balance remains is only 204 gms of jewellery. The assessee also claims the difference between the gross and net weight to the extent of 224.6 gms. As already observed, the assessee has to necessarily pay the price of the jewellery on the gross weight and not on the net weight, therefore, the difference between the gross weight and net weight cannot be allowed as deduction while computing the value. After giving deduction of 1000 gms instead of 800 gms as streedhan jewellery to the assessee s wife, the balance remains to explain is only 204 gms of gold jewellery. Accordingly, the orders of the lower authorities are modified and the Assessing Officer is directed to make addition to the extent of 204 gms of gold jewellery. 39. In the assessee s appeal, the assessee has taken an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the addition to the extent of 261.54 gms of gold jewellery. According to the ld. Counsel, the difference between the gross and net weight comes to 156 gms. If this is deleted then there will be a substantial reduction in the addition sustained by the CIT(A). According to the ld. Counsel, the Assessing Officer made addition only on estimate basis therefore, the difference has to be allowed in the hands of the assessee. According to the ld. Counsel, when compared to net weight, the difference is hardly 6%, therefore, the difference has to be excluded. At the best, an addition could be made only to the extent of 106 gms of gold jewellery. 46. On the contrary, the ld. DR submitted that the CIT(A) deleted the unexplained investment in gold jewellery to the extent of 537 gms merely on the basis of the submission made by the representative for the assessee. According to the ld. DR, there was no substantial evidence available before the CIT(A) to delete 537gms of gold jewellery. Referring to the claim of the assessee before the lower authorities that some of the jewellery were purchased out of the drawings, the ld. DR pointed out that originally the assessee claimed that the jewellery ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not also be totally ruled out. Therefore, this Tribunal is of the considered opinion that the CIT(A) has rightly deleted the addition to the extent of 437 gms of gold jewellery. This Tribunal is of the considered opinion that instead of 800 gms of jewellery found by the Assessing Officer as streedhan on the occasion of marriage, credit has to be given to the extent of 1000 gms. Therefore, the balance comes to only 61.54 gms of jewellery. As already observed in the case of other assessees, the difference between the gross and net weight cannot be taken into consideration since the assessee has to pay the price for the gross weight. In view of the above discussion, this Tribunal is of the considered opinion that 61.54 gms of gold jewellery remains to be unexplained. Accordingly, the orders of the lower authorities are modified and the Assessing Officer is directed to make addition of 61.54 gs of gold jewellery as unexplained investment. 48. Now coming to the diamond jewellery, ld. Counsel for the assessee submitted that the Revenue authorities found 38.01 carats of diamond jewellery. The Assessing Officer accepted the explanation of the assessee for 17.40 carats and made addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of diamond jewellery. 51. The next ground of appeal is with regard to unexplained investment in silver articles. 52. Shri G Baskar, ld. Counsel for the assessee submitted that the Revenue authorities found 28.17 kgs of silver articles during the course of search operation. The net weight was 43.28 kgs. The Assessing Officer accepted the explanation of the assessee to the extent of 10.60 kgs and the difference of 17.57 kgs was taken as unexplained investment by the Assessing Officer. However, on appeal by the assessee, the CIT(A) deleted the addition to the extent of 10 kgs silver articles and sustained the addition of 7.57 kgs. According to the ld. Counsel, the assessee has received streedhan property at the time of her marriage. 53. The ld. Counsel further submitted that silver articles found were mostly kamatchi lamps, kuthuvilakku, panner fan, camphor stand, kumkum bowk, sandal bowl and plates. Number of tumblers which are used during gathering were also found by the Revenue authorities. According to the ld. Counsel, they are acquired over a period of time, received as gift on various occasions and family functions. 54. On the contrary, the ld. DR submitted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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