Ita/195/2014 Of Monica Thapar v. Prem Pal_ , (2011) 330 Itr 499 Involving Similar Issue And Reversed The Findings Of The Tribunal By Holding That The Issuance Of N

ITA No.195 of 2014. IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH ITA No.195 of 2014Date of decision: 15.9.2014 Smt.Monica Thapar Vs, ..-.-- Appe Commissioner of Income Tax,Aayakar Bhawan, Rishi Nagar,Ludhiana, Punjab ..-.-Responde CORAM: HON’BLE MR. JUSTICE AJAY KUMAR MITTALHON’BLE MR. JUSTICE FATEH DEEP SINGH Present: Mr. Rajiv Sharma, Advocate for the appellant. Ajay Kumar Mittal,J. 1,This appeal has been preferred by the assessee under Section260A of the Income Tax Act, 1961 (in short, “the Act’) against the orderdated 24.9.2013, Annexure A.5 passed by the Income Tax AppellateTribunal, Chandigarh (in short, “the Tribunal”) in ITA No.58/CHD/2007 forthe assessment year 1998-99, claiming following substantial questions oflaw:- “A. Whether the finding of the ITAT in reversing the judgmentof learned CIT(A) and making the impugned addition byinvoking the provisions of Section 609A of the Income Tax Act1961 in 1998-99 is misconceived in view of the bills ofpurchase ofjewellery pertaining to assessment year 1987-88? B. Whether under the facts and in the circumstances of the caseand in view of legal provisions, the ITAT was justified inconfirming addition for assessment year 1998-99 on account of jewellery purchased and declared for assessment year 1987-88under VDIS Scheme? (. Whether under the facts and in circumstances of the caseand in view of legal provisions, the ITAT was justified in goinginto the source of acquisition of jewellery for assessment year1987-88 where no proceedings were pending for the said yearand thereby making addition in assessment year 1998-99? D. That without prejudice to above, the appellant disputes thefindings of ITAT on the above said issues/grounds beingperverse.” 2.A few facts relevant for the decision of the controversyinvolved as narrated in the appeal may be noticed. The appellant is engagedin business at Ludhiana. She purchased jewellery worth=a10,19,809/-during the year 1986-87. However, the same remained as unaccounted assetof the appellant till 1997 when the Central Government launched VoluntaryDisclosure of income Scheme 1997 (VDIS). The appellant declared=10,19,809/- under VDIS on 30.12.1997 stating before the Commissioner ofIncome Tax, Ludhaina that the jewellery was acquired in the year 1986-87.The appellant filed declaration to that extent alongwith affidavit andvaluation report as on 1|.4.1987 from the approved jewellery valuer M/New Kailash Jewellery House, New Delhi. Due to _ unforeseencircumstances, payment of due taxes by 31.12.1997 was not made at thetime of declaration under VDIS. Later on, the appellant offered to pay duetaxes by way of cheque vide letter dated 28.3.1998 which was filed beforethe income tax authorities on 16.4.1998 stating that she could not pay thetaxes by 31.12.1997 due to financial difficulty and further requested thedepartment to encash the cheque which was not accepted by the department. ITA No.195 of 2014..As period allowed under Section 67(1) of the VDIS had expired, thedeclaration by the assessee was not accepted and the cheque was returnedback to her. The appellant filed return of income declaring income atL28,956/- for assessment year 1998-99 and notice under Section 148 of theAct was issued to the appellant on 31.3.2005 for the assessment year 1998-99 on the ground that she had made declaration under VDIS 1997 but hadnot made payment of taxes due on declared amount and hence income of|410,19,809/- being the amount of jewellery declared therein escapedassessment. The Assessing Officer vide order dated 28.3.2006, AnenxureA.1 made addition ofv21,47,176/- valuing the jewellery declared in theyear 1936-37 at=a10,19,809/- as per approved valuer report as on 31.3.1997by adopting its value as on 31.3.1998 relevant to the assessment year 1998-99. Aggrieved by the order, the assessee filed appeal before theCommissioner of Income Tax (Appeals) [CIT(A)]. Vide order dated25.9.2006, Annexure A.2, the CIT(A) partly allowed the appeal. Aggrievedby the order, the revenue filed appeal before the Tribunal and the appellantfiled cross objections. The Tribunal vide order dated 18.1.2008, AnnexureA.3, dismissed the appeal of the revenue and allowed the cross objectionsfiled by the assessee. Aggrieved by the order dated 18.1.2008, the revenuefiled appeal before this Court under Section 260A of the Act. During thependency of the aforesaid proceedings/appeal, this Court passed judgmentin another set of cases titledCIT vs. Prem Pal, (2011) 330 ITR 499involving similar issue and reversed the findings of the Tribunal by holdingthat the issuance of notice under sections 147/148 of the Act for theassessment year 1998-99 was valid but remanded the second issue forredetermining the same on merits to the Tribunal vide order dated ITA No.195 of 2014. 14.12.2010, Annexure A.4. While deciding the appeal against the orderdated 18.1.2008, this Court following the judgment inPrem Pal's case(supra)upheld the issuance of notice under Sections 147/148 of the Act andremanded the second issue for reconsideration. Against the order dated14.12.2010, SLP has been filed before the Apex Court wherein notice hasbeen issued and the matter is stated to be pending for hearing. On the otherhand, the matter was under consideration before the Tribunal wherein theimpugned order dated 24.9.2013, Annexure A.5 was passed. Hence theinstant appeal by the assessee. 3,We have heard learned counsel for the appellant and perused the record. 4 The Tribunal while allowing the appeal of the revenue recorded as under:- “20. The learned AR for the assessee, time and again haspointed out that the said jewellery which was declared to bepurchased in the financial year 1986-87 cannot be included asincome from undisclosed sources in the hands of the assesseein assessment year 1998-99. In the abovesaid facts andcircumstances of the case, where the assessee has failed tooffer an explanation about the nature and source of acquisitionof the said items of jewellery in financial year 1986-87,Statutory presumption provided under section 69A of the Actcomes into play and the value of the said jewellery is deemedto be income of the assessee for the said financial year 1997-98. The said issue stands settled by the Hon'ble Punjab andHaryana High Court in CIT vs. Prem Pal (supra) whereinHon'ble High Court has held that the Assessing officer wasjustified in initiating the proceedings for reassessment undersection 148 of the Act and holding that the valuables foundwere liable to be added to the income of the assessee for theassessment year 1998-99 in the absence of valid explanation. As pointed out herein above, the assessee in the present casehas failed to justifiably explain the source of investment in theSaid items ofjewellery in financial year 1986-87 and in respectof one item of jewellery, no bill of acquisition had been filedand consequently, the market value of jewellery as on31.3.1998 1.e. the year in which the assessee was found to bein possession of the said items of jewellery amounting to421,47,176/- is to be added as income of the assessee undersection 609A of the Act. Reversing the order of CIT(Appealswe allow the ground No.2 raised by the revenue.” 5The Tribunal had categorically recorded that since the assesseefailed to explain the nature and source of acquisition of the items ofjewellery in the financial year 1986-87, presumption under section 609A othe Act came into play and the value of the said jewellery was deemed to beincome of the assessee for the assessment year 1998-99 in which theassessee was found to be in possession of the said items of jewellery. Noillegality or perversity could be demonstrated in the said finding which maywatrant interference by this Court. Accordingly, no substantial question oflaw arises. The appeal being devoid of any merit, stands dismissed. (Ajay Kumar Mittal)sudge September 15, 2014 (Fateh Deep Singh)svudg