2015 (5) TMI 261 - HC - Income Tax

Non- genuine gifts - ITAT holding that the addition made by AO on account of non- genuine gifts was covered by the addition confirmed on account of peak of unexplained credits in various bank accounts - Held that - Admittedly, ₹ 4,92,325 on account of non-genuine gifts was already included in the addition of ₹ 9,75,333 made by the Assessing Officer. The Tribunal, therefore, rightly deleted this addition. - Decided against revenue. Benefit of past savings of ₹ 4 lakhs granted to the appellant, the Assessing Officer himself held that jewellery belongs to the appellant and was, therefore, required to apportion some amount towards investment or savings. The Tribunal, therefore, rightly granted the benefit of ₹ 4 lakhs as past savings. The plea with respect to shridhan is similarly unfounded as the benefit has been granted on account of shridhan of the assessee's wife, Smt. Surbhi Kohli. The benefit granted to Suresh Kumar Kohli, father of the assessee, pertains to the latter's wife, i.e., mother of the appellant and then also in the assessment pertaining to Suresh Kumar Kohli.- Decided against revenue. Unexplained jewellery found in locker No. 72 - Held that - After appraisal of the evidence adduced before the Assessing Officer, namely, an affidavit by Harbans Lal and his statement recorded before the Assessing Officer, it was held as a matter of fact that the jewellery does not belong to the assessee. We are not inclined and nor can we while exercising the jurisdiction as a second appellate court reappraise evidence much less the statement made by Harbans Lal, etc., till such time as consideration of this evidence is perverse or arbitrary. The Tribunal has, after appraising the affidavit and the statements, recorded a plausible finding. Counsel for the Revenue is unable to point out any misreading of evidence or perversity in the process of reasoning as would enable us to interfere with the findings of fact recorded by the Tribunal. - Decided against revenue.

Summary

Issues:
1. Addition of non-genuine gifts in block assessment years
2. Benefit of past savings for jewellery found in locker
3. Allowance of jewellery as stridhan for wife
4. Addition of unexplained jewellery found in locker

Analysis:

Issue 1:
The Revenue challenged the Tribunal's order adding Rs. 4,92,325 for non-genuine gifts, contending it should not have been covered in the peak of unexplained credits. The Tribunal deleted this addition, stating it was already included in the Rs. 9,75,333 addition. The Court upheld the Tribunal's decision, emphasizing the need for substantial legal questions and found no violation of the Income-tax Act.

Issue 2:
Regarding the benefit of Rs. 4 lakhs as past savings for jewellery found in a locker, the Revenue argued it was incorrect as there were no records of withdrawals for jewellery purchase. However, the Tribunal granted this benefit, considering the jewellery belonged to the appellant. The Court affirmed this decision, stating the Tribunal rightly granted the past savings benefit.

Issue 3:
The Tribunal allowed 400 grams of jewellery as stridhan for the appellant's wife, despite a similar benefit granted to the appellant's father. The Court clarified that the benefit was correctly granted as per CBDT circular, and the benefit to the father was for ancestral jewellery, not the same as the wife's stridhan.

Issue 4:
The addition of Rs. 8,29,936 for unexplained jewellery found in a locker was deleted by the Tribunal, as it was claimed by another individual. The Court upheld this decision, stating the Tribunal's detailed consideration of evidence and the owner's claim justified the deletion of this addition. The Court found no grounds to interfere with the Tribunal's factual findings.

In conclusion, the Court dismissed the appeal, ruling against the Revenue on all substantial legal questions raised, affirming the Tribunal's decisions on the issues related to non-genuine gifts, past savings benefit, stridhan allowance, and unexplained jewellery addition.