S.p.geetha v. The Commissioner Of Income Tax,Madurai

IN THE HIGH COURT OF JUDICATURE AT MADRAS THE HONOURABLE MR. JUSTICE T.S.SIVAGNANAMANDTHE HONOURABLE MR. JUSTICE N.SATHISH KUMAR Tax Case Appeal No.240 of 2011 and M.P.No.1 of 2011 S.P.Geetha -vs- The Commissioner of Income Tax,Madurai. ... Respondent Tax Case Appeal filed under Section 260A of the Income Tax Act,1961 against the order of the Income Tax Appellate TribunalMadras 'B' Bench, dated 03.01.2011 in IT (SS) A No.0015/Mds/2007for the assessment years 1991-92 to 2001-02, against theproceedings of the Commissioner of Income Tax(Appeals)-II,Madurai in ITA No.199/2005-06 dated 13/10/2006 against theDeputy Commissioner of Income Tax Central Circle -II, Maduraidated 21/01/2003 for the assessment year 91-92 to 2000-01 and2001-02 (part0 in PAN/GIR No:-ABAPG23681. For Appellant: Mr.T.N.SeetharamanFor Respondent: Mrs.V.Pushpa Standing Counsel (Delivered by T.S.Sivagnanam, J.] This appeal is directed against the order passed by theIncome Tax Appellate Tribunal, Madras 'B' Bench, dated03.01.2011 in IT (SS) A No.0015/Mds/2007. 2. Heard Mr.T.N.Seetharaman, learned Standing Counselfor the appellant and Ms.V.Pushpa, learned junior StandingCounsel for the respondent/Revenue. https://hcservices.ecourts.gov.in/hcservices/ 3. This Appeal has been admitted on the followingSubstantial Questions of Law:- "1.Whether on the facts and circumstancesof the case, the Appellate Tribunal was justifiedin law in reversing the order of the Commissionerof Income Tax (Appeals) partly and restoring theaddition of the value of gold jewellery of 250gms as unexplained? 2.Whether on the facts and circumstancesof the case, the Appellate Tribunal was right innot accepting the claim of the assessee regardingpurchase of gold jewellery merely because of theabsence of purchase bill and denial by thejeweller, when the assessee had proved and theAppellate Tribunal had accepted the source ofmoneys for purchase of the gold jewellery?" 4. The issue involved in this case lies in a very narrowcompass. We are called upon to decide as to whether the Tribunalwas right in rejecting the asssessee's contention with regard tothe purchase of 250 gms of gold jewellery and whether the saidjewellery can be termed to be "unexplained jewellery". We neednot adjudicate the factual thicket except to note that sale ofthe property by the assessee to a dealer in Madurai resulted insearch operation, which ultimately led to the impugned blockassessment. Gold Jewellery said to have been found in thepremises of the assessee and her sons and after thoroughenquiry, the assessee was able to explain the source of thejewellery as well as her sons. However, in respect of 300 gmsof gold jewellery, it appears that there was no purchase bills.This led to treating the said gold jewellery as unexplained goldjewellery. 5. The assessee carried the matter by way of appealbefore the Commissioner of Income Tax (Appeals) II, Madurai.The CIT (A) had called for remand report and considered thefactual matrix and held that the assessee has established thesource of funds for the purchase of gold jewellery to the tuneof Rs.2 lakhs. Further, the CIT(A) discredited the statement ofone N.S.R.Mohan, gold merchant, who admittedly had transactionswith the family members of the assessee and it is his ownstatement that he had sold gold jewellery without bills. Atthis juncture, it will be worthwhile to take note of thefollowing finding recorded by the CIT(A):-" 14.2 I have considered the submissions of therepresentative. The assessing officer is notcorrect in stating that the sons of the appellant https://hcservices.ecourts.gov.in/hcservices/ https://hcservices.ecourts.gov.in/hcservices/ never claimed during the search and post searchenquires that they had paid money to theappellant. Shri.S.P.Sanjal submitted letterdated 28.9.2002 before the assessing officer andin para 4 of the above letter it is clearlymentioned that he had paid his mother Rs.1 lakhsduring July to September, 2000. Similarly, in thecopy of account of the appellant in the books ofShri S.P.Karthick, there were entries for paymentof Rs.1 lakh on various dated from 14.7.2000 to11.08.2000. Thus, the contention of the appellantthat she received Rs.2 lakhs from her sons iscorrect and it was claimed so even at the time ofrecording sworn statement on 27.2.2001. Theassessing officer has not established that thesworn statement given by the appellant on27.2.2001 is wrong by bringing cogent materialson record. The mere fact that there was nopurchase vouchers for the jewellery cannot be theground for making addition. As contended by therepresentative the jewellery could be purchasedin the market without bills. The statement fromShri N.S.R.Mohan cannot be relied upon as he adsold jewellery without bills to the appellantand, therefore, it is natural that he would saythat he did not sell any jewellery to theappellant. As there is source for purchase ofjewellery, I direct the assessing officer todelete the addition on the value of __ grams goldjewellery. Thus, the entire addition ofRs.3,64.705/- on account of unexplained jewelleryis deleted." 6. From the above finding, it is clear that the CIT (A)had analysed the entire factual matrix and found that theassessee had received Rs.2 lakhs from her sons. Further, theCIT(A) after considering the conduct of the said N.S.R.Mohanheld that his statement cannot be relied. When the Departmentfiled the appeal before the Tribunal, the Tribunal examined thematter and granted partial relief to the assessee to the extentof 50 gms as there were purchase bills produced by the assesseein respect of 250 gms. The Tribunal solely relied upon thestatement of N.S.R.Mohan stating that he had no transaction withthe assessee and in the absence of purchase bill treated thesame as unexplained jewellery. In our considered view, theapproach of the Tribunal is incorrect because the statement ofN.S.R.Mohan was that he did not sell any gold jewellerry to theassessee and it was the said N.S.R.Mohan has accepted the factthat the had more than seven transactions with the familymembers of the assessee. Furthermore, the CIT(A) found that N.S.R.Mohan sold gold jewellery without bills and that is why hehad stated that there were no transaction between himself andthe assessee. Thus, if the Tribunal was of the view that thestatement of N.S.R.Mohan should not be discredited, then itshould have remanded the matter to the authority but could nothave taken a contrary view based on the statement which wasappreciated by the CIT(A) and factual finding was recorded.That apart, the Tribunal should have held that theinterpretation given by the CIT(A) is either perverse orunsustainable. In the absence of any such finding, we are ofthe considered view that the Tribunal was not justified ininterfering with the order passed by the CIT(A). That apart,the Tribunal also found that the assessee had sufficient fundsand had proved the source of funds. In such circumstances,merely because gold merchant stated that he has no transactionswith the assessee could not have been a reason to disbelieve theclaim of the assessee. This is more so because admittedlyN.S.R.Mohan had more than seven transactions with the familymembers of the assesssee and whenever he sold gold jewellery, itwas without bills. Thus, for the above reasons, we find that theTribunal erred in interfering with the order passed by the CIT(A). 7. For the above reasons, the appeal filed by theassessee is allowed and the substantial questions of law areanswered in favour of the assessee. No costs. Consequently,connected miscellaneous petition is closed. Sd/-Assistant Registrar //True copy// svki Sub Assistant Registrar To 1. The Income Tax Appellate Tribunal Madras 'B' Bench. 2. The Commissioner of Income Tax (Appeals) II, Madurai 3. The Deputy Commissioner of Income Tax Central Circle -II, Madurai. Madurai. +1cc to Mr.T.N.Seetharaman, Advocate SR.No.5636 +1cc to Mr.M.Swaminathan, Advocate SR.No.5195 RK(CO)GMY(18/03/2019) T.C.A.No.240 of 2011