IN THE INCOME TAX APPELLATE TRIBUNAL
`F' : NEW DELHI
DELHI BENCH `F
BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND
SIDHU, JUDICIAL MEMBER
SHRI H.S. SIDHU,
No.6177/Del/2012
ITA No.
2004-05
Assessment Year : 2004-
Mrs. Rene Singh, Vs. Deputy Commissioner of
Prop. Adwel Advertising, Income Tax,
Vihar,
B-16, Anand Vihar, Circle-
Circle-35(1),
Delhi. New Delhi.
PAN : AARPS5237L.
(Appellant) (Respondent)
Appellant by : Shri Pradeep Dinodia and
Shri R.K. Kapoor, CA.
Respondent by : Shri Vikram Sahay, Sr.DR.
ORDER
G.D. AGRAWAL, VP :
PER G.D.
This appeal by the assessee is directed against the order of
learned CIT(A)-XXVII, New Delhi dated 26th September, 2012 for the AY
2004-05.
2. The grounds raised by the assessee read as under:-
"1. That the learned CIT(A) has erred in law and on
facts in sustaining penalty of Rs.3,40,989/- u/s 271(1)(c)
of the Income-tax Act, on wholly erroneous, illegal and
untenable grounds.
2. On the facts and in the circumstances of the case,
the penalty of Rs.3,40,989/- levied u/s 271(1)(c)
deserves to be deleted."
3. The facts of the case are that the Assessing Officer had levied
the penalty of `3,40,989/- in respect of two additions sustained by the
2 ITA-6177/Del/2012
appellate authorities viz., (i) addition for unexplained jewellery
`9,97,291/- and (ii) addition for unexplained cash - `36,010/-, total
`10,33,301/-.
4. We have heard both the sides with regard to both the above
additions regarding unexplained jewellery. During the course of search
of the assessee's premises, total jewellery found was worth
`21,47,291/-, out of which, the jewellery seized was `15,89,891/-. The
Assessing Officer treated the jewellery of `18,97,291/- to be
unexplained and made the addition there for which was sustained by
the learned CIT(A). On appeal before the ITAT, the ITAT sustained the
addition of `9,97,000/- vide order dated 27th March, 2009 in ITA
No.990/Del/2007. The relevant finding of the ITAT reads as under:-
"15. We have gone through the photographs placed on
record as well as the certificate of gift by grandmother
of the assessee, Smt. Motia Kaur and found that both
the lower authorities have brushed aside all these
documentary evidence and certificate merely on the
ground that in the statement, the assessee had not
stated the jewellery of this worth which were recorded
u/s 132(4). We had gone through the statement
recorded and found that in reply to question No.18, the
assessee had categorically stated that jewellery was
given by her parents as well as in-laws at the time of
marriage and also gifts received on different occasions.
The assessee has also submitted the bills for remaking
the jewellery out of jewellery received from her grand
mother. Both father and mother of the assessee were
well to do and assessee herself was drawing Rs.1 lacs
every years from her firm M/s Adwell Advertising.
Keeping into view all these facts and circumstances and
also the documentary evidence placed on record, we
are inclined to direct the A.O. to treat jewellery of
Rs.nine lacs as duly explained which was received by
the assessee out of these gifts and acquired out of her
drawings. Accordingly, addition of Rs.18.97 lacs is
reduced to the extent of Rs.9.97 lacs. In the result,
ground taken by the assessee with regard to the
3 ITA-6177/Del/2012
jewellery is allowed in part, in terms indicated
hereinabove."
5. From the above, it is evident that the assessee has furnished the
explanation with regard to jewellery found from her premises. She has
explained that the jewellery was received at the time of her marriage
for which the certificate of gift by the grandmother of the assessee was
furnished as well as photographs taken at the time of marriage were
also placed on record. The Assessing Officer as well as learned CIT(A)
did not accept the above evidences on the ground of statement
recorded at the time of search. However, the ITAT also noticed that
during the course of search in her statement in reply to question
No.18, the assessee has stated that the jewellery was given by her
parents as well as her in laws at the time of her marriage. The
assessee has also submitted the bills for remaking of the jewellery out
of the jewellery received from her grandmother. The ITAT also
recorded the finding that the father as well as mother of the assessee
were well to do. However, after noting all these facts, the ITAT
deemed it proper to accept the jewellery worth `9 lakhs as explained
and remaining as unexplained. From the above, it is evident that the
ITAT accepted the assessee's explanation partly on estimated basis.
No defect in the assessee's explanation was found. The
explanation/evidences submitted by the assessee were not found to be
false or bogus. In view of the above facts, in our opinion, merely
because the ITAT accepted the assessee's explanation which was duly
supported by documentary evidence partly, it cannot be said that the
assessee has concealed income or furnished inaccurate particulars of
income. We are, therefore, of the opinion that the addition for
unexplained jewellery does not call for levy of penalty under Section
271(1)(c) of the Act.
4 ITA-6177/Del/2012
6. Regarding the addition of cash of `36,010/-, it is observed that
the total cash found from the assessee's premises was `17,50,360/-.
The Assessing Officer had made the addition for unexplained cash of
`17,35,360/- treating only `15,000/- to be explained cash. On appeal,
learned CIT(A) accepted the cash to the extent of `16,99,350/- out of
the total addition of `17,35,360/-. The Revenue had filed the appeal
before the ITAT against the reduction of addition for unexplained cash
in hand. However, the ITAT upheld the finding of the learned CIT(A).
Thus, out of the total cash of more than `17 lakhs found from the
assessee's premises, only the cash of `36,010/- was treated as
unexplained. We find that the ITAT while dealing with the jewellery in
paragraph 15 of its order has recorded the finding that the assessee
was drawing `1 lakh every year from her firm M/s Adwel Advertising.
The return of income of the assessee is more than `31 lakhs. Despite
all these facts, the Assessing Officer had treated only cash of `15,000/-
as explained cash. Considering the totality of the above facts, i.e., out
of the total cash of `17 lakhs only, `36,010/- was treated as
unexplained, that too on estimated basis, therefore, it cannot said that
the assessee is liable for penalty under Section 271(1)(c) in respect of
cash which was treated as unexplained on estimated basis. Therefore,
we are of the opinion that the levy of penalty on the cash of `36,010/-
is not justified. In view of the above, we cancel the penalty levied
under Section 271(1)(c) at `3,40,989/-.
7. In the result, the appeal of the assessee is allowed.
Decision pronounced in the open Court on 28th November, 2014.
Sd/- Sd/-
SIDHU)
(H.S. SIDHU) AGRAWAL)
(G.D. AGRAWAL)
JUDICIAL MEMBER VICE PRESIDENT
Dated : 28.11.2014
VK.
5 ITA-6177/Del/2012
Copy forwarded to: -
1. Appellant : Mrs. Rene Singh,
Prop. Adwel Advertising,
B-16, Anand Vihar, Delhi.
2. Respondent : Deputy Commissioner of Income Tax,
Circle-
Circle-35(1), New Delhi.
3. CIT
4. CIT(A)
5. DR, ITAT
Assistant Registrar
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