24 February 2014

Case Law on Gold to Daughter


Coram : Shri Abraham P. George (Accountant Member)
and Shri George Mathan (Judicial Member)
I.T .A. No. : 1400/Kol./ 2011
Assessment year : 2007-2008

Shri Harish Kumar Manikant Goda Vs Income Tax Officer

Appearances by:
Shri Subash Agarwal, Advocate, for the assessee
Shri P.B. Pramanick, JCIT, Sr. D.R, for the Department
Date of concluding the hearing : February 14, 2014
Date of pronouncing the order : February 19, 2014
Per Abraham P. Geroge :

1. In this appeal, assessee assails an addition of Rs.3,62,100/- which was scaled down by ld. Commissioner of Income Tax (Appeals)-XIX, Kolkata to Rs.2,68,150/-.

2. Facts apropos are that assessee is an individual , had filed his return for the impugned assessment year declaring income of Rs.1,69,635/-. It seems that return was originally subject only to a processing under section 143(1) of the Act. The assessment was reopened under section 147 of the Act. Reason for reopening is not available in the assessment order. During the course of reassessment proceedings, Assessing Officer based on certain documents came to a finding that jewellery worth Rs.5.5 lakhs was handed over by the assessee to the in-laws of his daughter. As per Assessing Officer, said jewellery was not shown in assessee's balance- sheet. No return of wealth was filed by the assessee. According to the Assessing Officer, the maximum gold jewellery that can be possessed by a married man, who has not filed any wealth-tax return, can be only 200 grams. Taking per gram rate of Rs.939.5, Assessing Officer reached a figure of Rs.1,87,900/-, as the maximum value of gold jewellery that can be possessed by the assessee. The difference of Rs.3,62,100/- was added as unaccounted income.

3. In its appeal before ld. CIT(A ppeals), argument of the assessee was that only 400 grams of jewellery was handed over to the in-laws of his daughter at the time of marriage and on various occasions. As per the assessee, such jewellery was purchased over a large number of years out of savings. Assessee further submitted that there were regular withdrawals made by him from his accounts and, therefore, surplus money was available with him for purchasing small quantities of gold ornaments over a long period of time. As per the assessee, the total amount spent by him for the marriage of his daughter was Rs.12.32 lakhs and the jewellery given to the in-laws of his daughter was only 400 grams.

4. Ld. CIT(Appeals) partly accepted the claim of assessee. According to him, withdrawals were made by the assessee over a number of years from his accounts and, therefore, the cl aim that some of jewellery was purchased in the earlier years out of savings, could not be brushed aside.

He was of the opinion that credit to the extent of 300 grams of jewellery coul d be allowed to the assessee. He, therefore, held that at the rate of Rs.939.5 per gram the maximum value of jewellery that could be held by the assessee was only Rs.2,81,850/-. He, therefore, directed the Assessing Officer to restrict the addition to Rs.2,68,150/-.

5. Now before us, l d. A.R. strongly assailing the order of ld. CIT(Appeals) submitted that 400 grams of jewellery was not a huge holding and not something which was not achievable for a common man.

According to him, reopening of assessment was based on complaint given by the son-in-law of the assessee who was trying for a divorce from assessee's daughter. As per l d. A.R. when withdrawals were found sufficient for more than 400 grams, ld. CIT(A ppeals) erred in coming to a conclusion that assessee could at the best hold onl y 300 grams of jewellery.

6. Per contra, ld. D.R. supported the order of ld. CIT(Appeals).

7. We have heard the rival contentions and perused the material available on record. Ld. CIT(Appeals) has not disputed the claim of assessee that he was having drawings from his accounts in the earlier years. Admittedly assessee was having only 400 grams of jewellery, which was given by him to the in-laws of his daughter at the time of marriage.

Assessee who was regularl y filing return of income claimed that he had acquired such jewellery over a number of years. Since he was having a daughter to marry off, this is not an unbelievable version. Endeavour of every Indian is to accumulate some jewellery which can be used at the time of marriage of his/her daughter. At the best, assessee can only be considered as a doting father. It is not required for an assessee to file personal balance-sheet along with the return of income. Hence, the question of jewellery not appearing in the balance-sheet, in our opinion, is irrelevant. The reopening, as well as assessment, in our opinion, was an aftermath of family disputes between the daughter of the assesese and her husband. This is not a case where undisclosed income or unaccounted income could have been assessed. The addition made is deleted in full.

8. In the result, appeal of the assessee is allowed.

Order pronounced in the open court on 19th day of February, 2014.

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