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TMI Blog2018 (9) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... r M. V. Rao and Mr. Suresh Nanda. In view of this, ground No. 2 of the appeal of the revenue is partly allowed. Unexplained jewellery found from locker No. 5333 weighing 1748.80 out of which 999.10 grams was seized - Held that:- Merely because Dr. MV Rao has shown certain valuation of jewellery in his wealth tax return for AY 2008-09 which was found in the locker owned by the assessee is belonging to Dr. MV Rao and cannot be taxed as income u/s 69A in the hands of the assessee for AY 2007-08. We are not concerned with the wealth tax matters but Income tax matters. If the jewelry is from tax paid money of the assessee, then irrespective of whether same is shown in wealth tax return or not, it cannot be charges to tax under the Income tax Act. Conversely, if the same is shown in the wealth tax return, it cannot be excluded from the income tax computation if assessee fails to show that same was acquired out of tax paid money. Hence, we reject the contention of the ld AR that total of 819.4 and 288.4 gms of different purity of gold is owned by Dr. MV Rao. We also do not find any infirmity in his order to allow 750 gms to the mother and assessee as per CBDT Instructions. The balance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 56/Del/2015, ITA No. 7084 & 7085/Del/2014, ITA No. 4207/Del/2014 - - - Dated:- 30-8-2018 - Ms Suchitra Kamble, Judicial Member And Shri Prashant Maharishi, Accountant Member Revenue by : Ms. Meeta Singh, CIT DR Assessee by: Shri Anil Kumar Goel, CA ORDER Per Prashant Maharishi, A. M. 1. These are the bunch of six appeals in case of Ms padmarani Kapala and late Dr. M V Rao. All these appeals of both the assessee are emanating out of same search and therefore, at the request of the parties these are heard together and disposed off by this common order. 2. In case of Ms Padmarani Kapala for AY 2007-08 appeal is filed by the ld ACIT , Circle 3, New Delhi in ITA No 3612/Del/2014 against the order of the ld CIT (A)- I, New Delhi dated 13/10/2014 wherein addition of ₹ 1.70 Crores on account of cash found in the locker in the name of the assessee and addition on account of unaccounted jewelry found of ₹ 4777010/- out of addition of ₹ 4924152/- from the locker was deleted. Further Assessee has filed cross objection no. 56/Del/2015 against the order of the ld CIT (A) where he has confirmed the addition of ₹ 147142/- on account of balance u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring the course of search and seizure. 9. The brief facts of the issue are that a search u/s 132 was conducted on 24.02.2012 at the premises of Shri Suresh Nanda and Dr. M. V. Rao . During the course of search 10 lockers keys were found from his premises. Initially, Out of 10 lockers, two lockers are found in the name of M. Padmarani Kapala (assessee) one in the name of Smt M Swaranlata. Subsequently other keys were also traced and income tax department noticed that those locker keys also belong to the lockers in the name of the assessee. Therefore, notice u/s 153A was issued on 28.02.2013. In response to which the assessee filed her return of income on 12.06.2013 for ₹ 17,943/-. Subsequently, the revenue could locate the ownership of all the lockers belongs to the assessee and which were also admitted by the assessee in her affidavit dated 12.04.2012. In the post search proceedings, the assessee was confronted on 30.04.2012 and her statement was recorded. In question No. 11 it was asked to the assessee that in Locker No. 5333 a cash of ₹ 1.70 crores was found and seized and also jewellery of ₹ 49,24,152/- lacs out of which jewellery of ₹ 28 lacs was sei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tablishment. He further stated that receipt of commission is also still to be verified through the government of Israel as the reference is still pending. Therefore, he held that income-representing cash in the locker is belonging to Dr. M. V. Rao and assessable in his hands. He therefore, directed the ld AO to tax the same in the hands of the Dr. Rao on substantive basis and protective basis in the hands of the assessee. Therefore, aggrieved, the ld AO is in appeal on this ground. 12. The ld DR submitted that the ld CIT(A) has deleted the addition despite the same was found in the locker of the assessee. He therefore, submitted that the reasons given by the ld CIT(A) in his order vide para No. 5.3 and 5.4 are not in consonance to the Income Tax Act. He therefore, submitted that when the assessee is found to be the owner of cash then she should be taxed. 13. The ld AR vehemently supported the order of the ld CIT(A). He further stated that out of ₹ 1.70 crores previously assessed in the hands of the assessee are offered by Dr. M. V. Rao in his hands for Assessment Year 2007-08 in proceedings u/s 148 of the Act and are assessed in his hands by order dated 05.03.2015 for A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned commission on defense supplies. We state that those cases are not covered under the Income tax act but under the different laws altogether. Merely because the income is taxed u/s 69A of the Act in the hands of the assessee in the Income tax proceedings does not have any impact on proceedings under the other laws against Dr M. V. Rao and Mr. Suresh Nanda. In view of this, ground No. 2 of the appeal of the revenue is partly allowed. 15. Ground NO. 3 of the appeal of the revenue is that the ld CIT(A) has deleted the addition of ₹ 4924152/- on account of unexplained jewellery found from locker No. 5333 weighing 1748.80 out of which 999.10 grams was seized. Therefore, as the locker was last operated on 31.03.2007 the ld AO directed the assessee to explain the ownership of the jewellery amounting to ₹ 4924152/-. The assessee submitted that this jewellery belongs to her. In alternative, it was submitted that out of jewellery weighing 1748.80 gms jewellery directly related to her as per valuation report of 1993 is 826.80 gms and further 378 belongs to the mother of the assessee, the balance jewellery of 544 gms belongs to Dr MV Rao, which has been accumulated by the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry found is not owned by the assessee and not chargeable to tax in her hands. 19. The ld Dr vehemently contested that there is no reason that above quantum of jewellery if shown in the wealth tax return for Assessment Year 2008-09 , it cannot be taxed as income in Assessment Year 2007-08. 20. We have carefully considered the rival contentions. We found that the ld CIT(A) has categorically held that ornaments weighing to 833.10 gms are appearing in the case of probate as per the order of the District Judge Delhi, which are owned by Dr. MV Rao. In view of this, we do not find any infirmity in the order of the ld CIT(A) in holding that jewellery to that extent is owned by Dr. MV Rao. Further, merely because Dr. MV Rao has shown certain valuation of jewellery in his wealth tax return for AY 2008-09 which was found in the locker owned by the assessee is belonging to Dr. MV Rao and cannot be taxed as income u/s 69A in the hands of the assessee for AY 2007-08. We are not concerned with the wealth tax matters but Income tax matters. If the jewelry is from tax paid money of the assessee, then irrespective of whether same is shown in wealth tax return or not, it cannot be charges to ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cash found of ₹ 1.70 crores. He further held that the ld AO should have waited for the appellate order before imposing any penalty. With respect to jewellery taxed in the hands of the assessee of ₹ 147142/- he upheld the penalty of ₹ 44143/-. Therefore, aggrieved with the order of the ld CIT(A), ld AO has preferred this appeal. 26. The ld DR vehemently submitted that the ld CIT(A) should not have held that penalty is premature in the hands of the assessee on account of cash found. He submitted that when the assessee is found owned of ₹ 1.70 cores which is never denied by the assessee herself that same were found from the locker in her name. There was no reason to be tax the above amount in the hands of the assessee on protective basis. Further, with respect to the jewellery found he submitted that revenue has contested the quantum addition in toto and therefore, the ld CIT(A) should have upheld the penalty on the jewellery found in locker owned by the assessee. 27. The ld AR vehemently submitted that the ld CIT(A) has deleted the addition of cash found of ₹ 1.70 cores in the hands of the assessee and therefore, when the addition itself is delete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of the ld CIT(A) dated 10.04.2013, wherein, he has deleted the addition of ₹ 5.99 crores on account of unexplained cash treated as undisclosed income found and seized from the lockers in the name of the assessee during the search. 30. The brief facts of the case shows that a sum of ₹ 5.99 crores was found from locker No. 1012 and 1013 at Axis Bank, New Delhi and Locker No. 3090 at New Delhi Vaults Ltd in the name of the assessee. The said lockers were in the name of assessee and were operated in presence of her brother and Power of attorney holder. In affidavit dated 12.04.2012 it was stated by the assessee that said locker contained cash of ₹ 4 crores approximately and the same is owned by the assessee. In the same affidavit appellant also stated that the cash was given to her by late Dr. MV Rao as gift in contemplation of his death and became her property on his death on 10.10.2011. She further submitted that whether Dr. MV Rao has paid taxes thereon or not she is not aware and also undertook to pay the tax thereon. The assessee also stated that ₹ 65 lacs was deposited by Smt. M Swarnlata on 28.01.2009, ₹ 10 lacs by her on 05.10.2009 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 5.5 cores has already been offered and taxed conclusively by the revenue in the hands of Dr. MV Rao. According to us, it cannot be taxed once again in the hands of the assessee. Therefore, we the ld CIT (A) is right in deleting the addition to the extent of ₹ 5.50 Crores in the hands of the assessee. We confirm the order of the ld CIT (A) to the extent of this amount and also for the reason given by us in our order for AY 2007-08 in case of the assessee where similar addition of ₹ 1 Crore is deleted. Further, with respect to the balance of sum of ₹ 49 lacs the assessee has explained that this amount was from explained source and cash withdrawal from the bank earlier. No evidence were placed before us to show the correlation between the sum of ₹ 49 lacs found in the locker with respect to respective dates of deposits of cash in the bank lockers vis a vis withdrawal from bank accounts. In view of this, we confirm the addition to that extent of ₹ 49 lacs as undisclosed income of the assessee u/s 69A of the act on account of cash found from various lockers in her name. Hence, addition to that extent of ₹ 49 lacs is confirmed. Accordingly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .V Rao in his hands. Therefore to that extent there is no reason to sustain penalty u/s 271 (1) of the act. With respect to balance ₹ 49 Lakhs addition in quantum appeal of the revenue, the assessee could not explain satisfactorily the source from which the sum was found in the locker. In the quantum appeal, we have confirmed the addition to that extent. Therefore, in absence of any plausible, satisfactory explanation with respect to the above sum , we confirm the penalty on addition of ₹ 49 lakhs found in the locker in the name of the assessee , which is held to be the income of the assessee u/s 69A of the act, thereby the assessee has concealed her income to that extent. We direct the ld AO to re- compute the penalty on the addition of ₹ 49 lacs as concealed income. Accordingly, we confirm the action of the ld AO in levying penalty u/s 271 (1) (c ) of the act on account of undisclosed income of cash found in the locker in the name of the assessee to the extent of ₹ 49 Lakhs only. Accordingly, the appeal of the ld AO is partly allowed. 38. Accordingly, ITA NO. 7085/Del/2014 of the revenue for Assessment Year 2012-13 is partly allowed. ITA No. 4207/D ..... X X X X Extracts X X X X X X X X Extracts X X X X
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