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Shri Udai Kant Mishra Versus The DCIT, Central Circle-3, Jaipur

2017 (9) TMI 473 - ITAT JAIPUR

Determining any unexplained jewellery in the hands of the appellant - circular no. 1916 - non-granting of relief as per CBDT Circular in respect of the jewellery belonging to the married female - Held that:- CIT (A) has not given any reason for denying the benefit/set off to the extent of 250 gms in case of Aditi Mishra and Aanchal Mishra (minor grand-daughters) and partly allowing the benefit to the extent of 250 gms to Smt. Roshni Mishra. We find that the case of the assessee is covered by the .....

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o allow gold jewellery weighing 250 gms [(500gms – 250 gms allowed by CIT (A)] in the hands of Roshni Mishra (daughter-in-law), 250 gms. each in the hands of Aditi Mishra and Aanchal Mishra (minor grand-daughter) - Decided in favour of assessee. - Disallowance of interest expense - Held that:- The assessee was having sufficient own funds as reflected in the capital account of the assessee as on 31.03.2008 so as to make investment for purchase of shares of other companies and generate exempt .....

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as raised the following grounds of appeal :- 1. In law and in facts and in the circumstances of the appellant s case, the learned CIT (A), Central, Jaipur having considered the validity of the department circular no. 1916 whilst determining any unexplained jewellery in the hands of the appellant has grossly erred in allowing partial relief to the appellant instead of total relief and hence the ld. CIT (A) ought to have allowed total credit of jewellery available to the appellant. 2. In law and i .....

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ren as bonafidely claimed by the appellant whilst explaining the total jewellery, the ld. CIT (A) ought to have therefore allowed the claim of the minor children available as per the said circular which he had grossly failed to take into consideration. 3. Without prejudice, in law and in facts of the case, the learned CIT (A) should have allowed the relief to the extent of 500 grams of jewellery as available to married lady as per the circular whilst deciding any unexplained jewellery. 4. In law .....

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s notional interest though in facts of the case there was no justification for confirming the same. The ld. CIT (A) should have deleted the same. 5.2. Without prejudice, in law and in facts and in the circumstances of the appellant s case, the learned CIT (A), Central, Jaipur has grossly erred in confirming the impugned addition by invoking the provision of section 14A of the Act when the assessing officer had not invoked the said provision. The impugned addition is therefore ultra virus, and ba .....

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ents were found and seized. The assessee filed his e-return declaring total income of ₹ 1,05,32,110/-. The AO framed the assessment under section 153A/143(3) of the Act vide order dated 24.12.2009 by making additions on account of deemed dividend income, Unexplained jewellery and on account of Disallowance of Interest and assessed the total income of ₹ 1,26,32,909/-. Aggrieved, the assessee preferred an appeal before ld. CIT (A), who after considering the submissions, partly allowed .....

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and Anchal Mishra and 500 grams of jewellery in the hands of Roshni Mishra in accordance with the CBDT Circular No. 1916 as no jewellery was recorded in their names in the books. This is evident from the chart submitted to the lower authorities, in this regard, also reproduced by the ld. CIT (A) in her order at page 5. 3.2. In not providing full credit in the hands of Smt. Roshni Mishra of the jewellery, lower authorities have wrongly taken shelter of the below mentioned points :- 3.2.i. Her Sta .....

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e of minor grand-daughters was irrelevant. 3.4. CBDT Circular No. 1916, looking to the Indian social circumstances, allows blanket benefit of 500 grams per married lady and 250 grams per unmarried lady, without considering any other parameter. 3.5. It is submitted that where jewellery found in possession of assessee s family was personal wearing of ladies and if the same is within permissible limit stipulated by CBDT Circular, no addition can be made by the Income Tax Authorities. For this propo .....

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ated that these were personal wearing jewellery and same were received by ladies/daughter-in-law on/or at time of their marriage either from parental side or in-laws side - Revenue could not place any material to show otherwise than that stipulated in CBDT Circular 1916, dated 11.5.1994 which states that if jewellery found in possession of a married lady, unmarried lady and male member of family is to extent of 500 gms., 250 gms and 100 gms. Each, officials would not question source and acquisit .....

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. Per contra, the ld. D/R opposed the submissions. 3.3. We have heard rival contentions, perused the material available on record and gone through the orders of the authorities below. The ld. CIT (A) has not given any reason for denying the benefit/set off to the extent of 250 gms in case of Aditi Mishra and Aanchal Mishra (minor grand-daughters) and partly allowing the benefit to the extent of 250 gms to Smt. Roshni Mishra. We find that the case of the assessee is covered by the CBDT Circular N .....

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ing 250 gms [(500gms - 250 gms allowed by CIT (A)] in the hands of Roshni Mishra (daughter-in-law), 250 gms. each in the hands of Aditi Mishra and Aanchal Mishra (minor grand-daughter). The grounds of the assessee are allowed. 4. Ground Nos. 5 & 6 relates to disallowance of interest expense of ₹ 10,56,769/-. 4.1. The ld. Counsel for the assessee has reiterated the submissions as made in the written brief. The submissions of the assessee are reproduced as under :- 3.1. It is submitted t .....

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hich had the potention of generating exempt income, was made from the personal books in which business loan was taken by the assessee. Interest expense on such loan amount, incurred during the relevant previous year, amounting to ₹ 1,30,061/-. 3.3. thus entire investment had been made by the assessee, in shares of the companies, out of his own funds. Disallowance made by the lower authorities is on completely wrong appreciation of facts. 3.4. Hon ble Bombay High Court in the case of Relian .....

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bsequently laid down by the Hon ble Gujarat High Court in the case of Hitachi Home and Life Solutions (I) Ltd. (2014) 221 Taxman 109 (Gujarat)(MAG.) and by Hon ble Karnataka High Court in the case of Microlabs Ltd. (2016) 383 ITR 490 (Karn.)(HC). 3.6. It is submit6ted that the assessee himself was engaged in the business of Real Estate wherein he acted as a broker for executing real estate deals. It is undisputed that investment made by the assessee was in to companies also engaged in Real Estat .....

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received. In the case at hand, no dividend income has been received by the assessee during the relevant previous year. The said fact has also been acknowledged by the ld. CIT (A) in her order at para 6.3(ii) page 10. Under such scenario, no disallowance under section 14A can be made. Reliance is placed on the following judicial pronouncements :- CIT vs. Holcim India (P) Ltd. (2014) 272 CTR 282 (Delhi) CIT vs. Shivam Motors (P) Ltd. (2014) 272 CTR 277 (Allahabad) CIT vs. Lakhani Marketing Inc. ( .....

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