Dr.s.rajamony Appellant/Appellant v. The Assistant Commissioner Of Income-Tax, Central Circle-Iv (3), Chennai. Respondent/Respondent

IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated : 21.01.2008 Coram : THE HONOURABLE MR.JUSTICE K.RAVIRAJA PANDIANandTHE HONOURABLE MRS.JUSTICE CHITRA VENKATARAMAN Tax Case (Appeal) No.922 of 2007 Dr.S.RajamonyAppellant/Appellantvs. The Assistant Commissioner of Income-tax,Central Circle-IV (3), Chennai.Respondent/Respondent Tax Case Appeal under section 260-A of the Income Tax Act,1961 against the order of the Income Tax Appellate Tribunal, 'A' Benchdated 15.09.2006 in I.T. (SS) A. No.180 (Mds)/2004 for the blockassessment period from 01.04.1995 to 28.03.2002 against the order ofthe Commissioner of Income-Tax, (Appeals)-I, Chennai - 600034, dated04.11.2004 and made in ITA.No.126/2004-05 against the order of theAssistant Commissioner of Income-Tax, Central Circle IV (3) Chennaidated 30.03.2004 and made in P.A.No./G.I.No.AAFPR6434A. For appellant: Mr.Philip GeorgeJUDGMENT The appeal is filed against the order passed by the Income TaxAppellate Tribunal, 'A' Bench dated 15.09.2006 in I.T. (SS) A.No.180(Mds)/2004 for the block assessment period from 01.04.1995 to28.03.2002. 2. The appellant is a Government doctor specialized in varmatreatment. There was a search in the premises of the appellant on28.03.2002. During the course of search, cash in a sum ofRs.13,34,210/-, fixed deposits in various banks, jewellery and loosesheets containing information regarding construction expenses werefound. A sum of Rs.13,00,000/- was seized. Notice under section 158-BC dated 06.03.2003 was served on the appellant on 15.07.2003. Theappellant had filed return in Form 2B on 14.08.2003 admitting anundisclosed income of Rs.4,31,797/-. The assessment was completedunder section 158-BC read with section 143(3) of the Income-tax Act,1961 on 30.03.2004 on a total undisclosed income of Rs.42,05,370/- byhttps://hcservices.ecourts.gov.in/hcservices/making additions as follows : 3. On appeal, the Commissioner of Income Tax (Appeals) partlyallowed the appeal by restricting the cash and fixed deposit toRs.12,34,210/- and the addition on jewellery was restricted to 2568gms valued at Rs.10,01,520/-. 4. As against that order, the appellant filed an appeal beforethe Income Tax Appellate Tribunal. The Tribunal, while partlyallowing the appeal, had confirmed the order of the Commissioner ofIncome Tax (Appeals) in respect of the two issues of restricting theaddition of cash and fixed deposits to Rs.12,34,210/- and restrictingthe addition of jewellery of 2568 gms valued at Rs.10,01,520/-. Notsatisfied with that order of the Tribunal, in respect of the abovesaid two issues, the present appeal is filed. 5. Learned counsel appearing for the appellant vehementlycontended that the Commissioner of Income Tax (Appeals) and theTribunal had miserably erred in rejecting a portion of the claim madein respect of cash and jewellery by partially accepting the swornstatement given by the assessee, but rejecting the other part of thestatement, which has been corroborated by the assessee's wife. 6. We have gone through the order of the Commissioner ofIncome Tax (Appeals) as well as the Tribunal. 5. Learned counsel appearing for the appellant vehementlycontended that the Commissioner of Income Tax (Appeals) and theTribunal had miserably erred in rejecting a portion of the claim madein respect of cash and jewellery by partially accepting the swornstatement given by the assessee, but rejecting the other part of thestatement, which has been corroborated by the assessee's wife. 6. We have gone through the order of the Commissioner ofIncome Tax (Appeals) as well as the Tribunal. 7. The Commissioner of Income Tax (Appeals), in respect ofthe additions made in a sum of Rs.18,01,112/- has held that during thesearch, cash in a sum of Rs.13,34,210/- was found and at the most, theassessing officer could make an addition to that extent only in theblock assessment order. He further observed that having regard to thestatus of the appellant, it could be deemed that a sum ofRs.1,00,000/- could be treated as the cash available out of theearlier year savings. He further found that the explanation offeredby the appellant that he received substantial cash gift from hispatients including Dr.M.G.Ramachandran was not substantiated with anydocumentary evidence and thus out of the cash found during the courseof search in a sum of Rs.13,34,210/- after giving credit a sum ofRs.1,00,000/- for possible savings out of the earlier year's income,restricted the addition in a sum of Rs.12,34,210/-. Before theTribunal also the only explanation given and the ground urged was thatthe assessee was a doctor and he treated Dr.M.G.Ramachandran and thesaid amount was received by way of gift from him. The Tribunal alsofound that there was no evidence to substantiate the contention of thehttps://hcservices.ecourts.gov.in/hcservices/ assessee and thus rejected the explanation offered. Before us alsothere is no other material made available so as to accept thesubmissions made by the counsel for the assessee. assessee and thus rejected the explanation offered. Before us alsothere is no other material made available so as to accept thesubmissions made by the counsel for the assessee. 8. The second issue is in respect of the jewellery of 4768gms found at the time of search. The assessing officer had givencredit for 150 sovereigns as stridhana of the appellant's wife and 25sovereigns as possible gift at various times to his daughter. Theassessing officer calculated the market value for the remainingjewellery of 3368 gms at Rs.390/- per gram, which amounted toRs.13,13,520/-. The Commissioner of Income Tax (Appeals) consideredthe explanation offered before him to the effect that the appellant'swife at the time of search had stated that she was given 200sovereigns of gold jewellery at the time of her marriage, thatSmt.Janaki Ramachandran has given 50 sovereign of gold jewellery, thata foreign doctor by name Mor Jones had given 50 sovereigns of goldjewellery and that the balance was given to the children at the timeof their birth days. The appellant, in his sworn statement, statedthat about 50 sovereigns of gold jewellery were gifted to him and hisfamily members by Smt. Janaki Ramachandran, that about 250 sovereignswere given to the appellant's wife at the time of her marriage andthat some sovereigns were gifted to his children during the birth daycelebration and concluded that there was no contemporaneousdocumentary evidence available regarding the quantum of jewelleryreceived by the appellant's wife at the time of her marriage, thequantity of jewellery given by Smt. Janaki Ramachandran, the quantumof jewellery given by the appellant's brother-in-law and the foreigndoctor Mor Jones. He has considered the sworn statement given by theappellant and his wife and having regard to the common elementavailable in both the statements, accepted the statement that the wifehas received 250 sovereigns of gold jewellery at the time of hermarriage even though in the statement of the wife, she has stated thatshe received only 200 sovereigns of gold. He has accepted thestatement that the appellant has received 50 sovereigns of gold fromSmt.Janaki Ramachandran and further given credit to 25 sovereigns ofgod supposed to have been given to the children during the birth daysand other auspicious occasions. Thus, out of the total quantity of4768 gms found at the time of search, the Commissioner has come to theconclusion that the appellant was not able to properly explain withregard to 2568 gms and directed the assessing officer to restrict theadditions in respect of the above said quantity at the rate ofRs.390/- per gm working out to Rs.10,01,520/- and thereby granted therelief in a sum of Rs.3,12,000/-. 9. Before the Tribunal it was contended that the wife of theassesee has received 50 sovereigns of jewels from foreign doctor byname Mor Jones and that has not been taken into account by theauthorities below. The Tribunal found that there is absolutely noevidence to support the claim and the other claims that 180 sovereignwas entrusted by the brother-in-law of the assessee to be given to hisdaughter at the time of marriage also is not established with therelevant materials.https://hcservices.ecourts.gov.in/hcservices/ 10. Before us also, except reiterating the very same grounds,no material worth mentioning was placed. 11. From the totality of the case stated above and uponhearing the learned counsel, we find that there is absolutely no meritin this appeal, as an appeal under section 260A of the Income Tax Act,1961 can only be maintained on substantial question of law. In thiscase the following questions of law have been formulated : (a) Addition of cash and fixed deposits : 10. Before us also, except reiterating the very same grounds,no material worth mentioning was placed. 11. From the totality of the case stated above and uponhearing the learned counsel, we find that there is absolutely no meritin this appeal, as an appeal under section 260A of the Income Tax Act,1961 can only be maintained on substantial question of law. In thiscase the following questions of law have been formulated : (a) Addition of cash and fixed deposits : i. Whether on the facts and in the circumstances of the case,the Income Tax Appellate Tribunal was right in law inupholding the addition of cash and fixed deposits asundisclosed income?ii. Whether on the facts and in the circumstances of the case,the Income Tax Appellate Tribunal was right in law in notappreciating the evidence relied on by the appellant todemonstrate the fact that the gifts had been received fromDr.M.G.Ramachandran? iii. Whether on the facts and in the circumstances of thecase, the Income Tax Appellate Tribunal was right in law innot appreciating that the cash left by the father of theappellant was distributed among the family members of theappellant? iv. Whether on the facts and in the circumstances of the case,the Income Tax Appellate Tribunal was right in law in notappreciating that the appellant had past savings to theextent of Rs.2,11,000/- (b) Addition on jewellery – 2568 gms : v. Whether on the facts and in the circumstances of the case,the Income Tax Appellate Tribunal was right in law inupholding the addition on account of jewellery, asundisclosed income? The above substantial questions of law formulated in this appeal, onthe facts of the case, in our view, cannot be regarded as substantialquestions of law as provided under section 260A of the Income Tax Act.The appeal is therefore dismissed. No costs. Sd/Asst.Registrar /true copy/ Sub Asst.Registrar ksv/mf To 1. The Assistant Registrar,Income-Tax Appellate TribunalRajaji Bhavan, III Floor,Besant Nagar, Chennai - 90. 2. The Assistant Commissioner of Income-tax,Central Circle-IV (3), Chennai. 3. The Commissioner of Income-Tax (Appeals) - I,Chennai - 600034. 1 cc To Mr.Philip George, Advocate, SR.2676. Tax Case (Appeal) No.922 of 2007 NG(CO)RVL 11.02.2008