Commissioner of Income-tax v. Naresh Kumar Kohli
[Citation -2014-LL-1117-1]

Citation 2014-LL-1117-1
Appellant Name Commissioner of Income-tax
Respondent Name Naresh Kumar Kohli
Court HIGH COURT OF PUNJAB & HARYANA
Relevant Act Income-tax
Date of Order 17/11/2014
Judgment View Judgment
Keyword Tags substantial question of law • unexplained jewellery • unexplained credit • assessment record • business premises • stridhan
Bot Summary: Whether, on the facts and in the circumstances of the case, the Income- tax Appellate Tribunal was justified in deleting the addition of Rs. 8,29,936 made by the Assessing Officer on account of unexplained jewellery found from locker No. 72 with State Bank of Patiala, disregarding various contradictions which existed in the version of the assessee that the jewellery belonged to other persons Counsel for the Revenue submits that the Tribunal has erred in deleting addition of Rs. 4,92,325 made by the Assessing Officer on account of gifts on the ground that they are already covered in the peak of unexplained credit recorded in various bank accounts. The Tribunal, having accepted that the gifts were not genuine, should have held that the Assessing Officer was well within his jurisdiction to add Rs. 4,92,325 to the income of the assessee. The conclusions recorded by the Tribunal should be affirmed and even otherwise if the jewellery was held to belong to the appellant, the Tribunal was justified in granting the benefit of past savings of Rs. 4 lakhs. As regards question No. 3, it is argued that as the owner of the jewellery appeared before the Assessing Officer and claimed the jewellery as his own. The Tribunal has, after recording clear and cogent reasons, deleted the addition by holding that the jewellery belongs to one Harbans Lal who had filed an affidavit and appeared before the Assessing Officer. The question relating to the unexplained jewellery found in locker No. 72 has been considered in detail by the Tribunal. After appraisal of the evidence adduced before the Assessing Officer, namely, an affidavit by Harbans Lal and his statement recorded before the Assessing Officer, it was held as a matter of fact that the jewellery does not belong to the assessee.


JUDGMENT judgment of court was delivered by Rajive Bhalla J.-The Revenue is before us challenging order dated November 18, 1999, passed by Income-tax Appellate Tribunal, Amritsar Bench, Amritsar (hereafter referred to as "the Tribunal") pertaining to block assessment years 1987-88 to 1997-98 on following substantial questions of law: "1. Whether, on facts and in circumstances of case, Income- tax Appellate Tribunal was correct in holding that addition of Rs. 4,92,325 made by Assessing Officer on account of nongenuine gifts was covered by addition of Rs. 9,75,333 confirmed on account of peak of unexplained credits in various bank accounts when both additions were independent of each other? 2. Whether, on facts and in circumstances of case, Income- tax Appellate Tribunal was justified in allowing benefit of past savings of Rs. 4 lakhs invested in jewellery found from locker No. 39 with Canara Bank, Pathankot, when assessment record of assessee does not reflect any such withdrawals for acquisition of jewellery? (ii) Whether, on facts and in circumstances of case, Appellate Tribunal was justified in further allowing benefit of 400 grams of jewellery as stridhan of assessee's wife, Smt. Surbhi Kohli, out of aforesaid jewellery, ignoring fact that benefit on this account has already been allowed by Income-tax Appellate Tribunal while deciding appeal of Sh. Suresh Kumar Kohli, father of assessee? 3. Whether, on facts and in circumstances of case, Income- tax Appellate Tribunal was justified in deleting addition of Rs. 8,29,936 made by Assessing Officer on account of unexplained jewellery found from locker No. 72 with State Bank of Patiala, disregarding various contradictions which existed in version of assessee that jewellery belonged to other persons?" Counsel for Revenue submits that Tribunal has erred in deleting addition of Rs. 4,92,325 made by Assessing Officer on account of gifts on ground that they are already covered in peak of unexplained credit recorded in various bank accounts. Tribunal, having accepted that gifts were not genuine, should have held that Assessing Officer was well within his jurisdiction to add Rs. 4,92,325 to income of assessee. As his next argument, counsel for Revenue submits that benefit of past savings of Rs. 4 lakhs allowed with respect to jewellery found in locker No. 39 is contrary to record as assessee was unable to refer to any withdrawals for purchase of jewellery. It is further contended that benefit of 400 grams of jewellery, allowed to assessee's wife is incorrect as similar benefit had already been allowed in case of assessee's father, Sh. Suresh Kumar Kohli. benefit of shridhan could only have been allowed either to assessee in present case or to his father, who is assessee in I. T. A. No. 136 of 2000. It is also argued that additions of Rs. 8,29,936 made by Assessing Officer on account of unexplained jewellery found in locker No. 72, State Bank of Patiala have been deleted disregarding contradictions in version put forth by assessee and failure of assessee to prove that jewellery belonged to other persons. It is prayed that as impugned order is not only contrary to law but is perverse and arbitrary, appeal may be allowed, order passed by Tribunal may be set aside and additions made by Assessing Officer may be restored. Counsel for respondent submits that questions of law framed by Revenue are mere questions of fact as they do not indicate infraction of any provision of statute nor do they point out any legal flaw. Counsel for assessee further submits that after holding that gifts are not genuine and including them in Rs. 9,75,333, added to income of assessee, Assessing Officer could not have added another sum of Rs. 4,92,325. Tribunal has, therefore, rightly deleted this addition. As regards question No. 2, it is submitted that it is pure question of fact. discretion exercised by Tribunal is neither perverse nor arbitrary. conclusions recorded by Tribunal should, therefore, be affirmed and even otherwise if jewellery was held to belong to appellant, Tribunal was justified in granting benefit of past savings of Rs. 4 lakhs. As regards question No. 2 (ii), it is contended that as per CBDT circular, woman is entitled to retain 500 grams as shridhan. Tribunal has allowed 400 grams on account of shridhan in case of assessee's wife, i.e., Smt. Surbhi Kohli, and it is incorrect that this benefit has been ordered in case of assessee's father (Suresh Kumar Kohli). benefit to Suresh Kumar Kohli has been granted with respect to latter's wife and pertains to ancestral jewellery. As regards question No. 3, it is argued that as owner of jewellery appeared before Assessing Officer and claimed jewellery as his own. Assessing Officer was, therefore, not justified in adding cost of jewellery to income of appellant. Tribunal has, after recording clear and cogent reasons, deleted addition by holding that jewellery belongs to one Harbans Lal who had filed affidavit and appeared before Assessing Officer. We have heard learned counsel for parties, perused impugned order as well as order passed by Assessing Officer. search of assessee's business premises, his house and various banks is foundation of block assessments for years 1987-88 to 1997-98. Assessing Officer, after considering various transactions, jewellery and other documents added substantial amounts to income of assessee. assessee filed appeal. Tribunal by way of impugned order confirmed major part of assessment order but with respect to addition of Rs. 4,92,325 on account of non-genuine gifts, deleted this addition. Tribunal also granted benefit of Rs. 4 lakhs as past savings and allowed value of 400 grams of jewellery as shridhan of assessee's wife, Smt. Surbhi Kohli. Tribunal also deleted Rs. 8,29.936 added by Assessing Officer on account of unexplained jewellery by holding that jewellery belongs to one Harbans Lal. due consideration of arguments advanced by counsel for Revenue, does not enable us to hold that Tribunal has violated any provisions of Income-tax Act, 1961, much less does it indicate perversity of reasoning or arbitrary exercise of discretion. appeal, under Income-tax Act, 1961, is maintainable only if it raises substantial question of law and, therefore, inheres infraction of law, misreading of evidence, disregard of statutory provisions, consideration that is perverse and arbitrary or if it raises question of law that has not been answered. perusal of impugned order reveals that it does not suffer from any of these infractions and Tribunal has while recording its opinion considered matter in its entirety and only thereafter recorded findings against Revenue. Admittedly, Rs. 4,92,325 on account of non-genuine gifts was already included in addition of Rs. 9,75,333 made by Assessing Officer. Tribunal, therefore, rightly deleted this addition. As regards benefit of past savings of Rs. 4 lakhs granted to appellant, Assessing Officer himself held that jewellery belongs to appellant and was, therefore, required to apportion some amount towards investment or savings. Tribunal, therefore, rightly granted benefit of Rs. 4 lakhs as past savings. plea with respect to shridhan is similarly unfounded as benefit has been granted on account of shridhan of assessee's wife, Smt. Surbhi Kohli. benefit granted to Suresh Kumar Kohli, father of assessee, pertains to latter's wife, i.e., mother of appellant and then also in assessment pertaining to Suresh Kumar Kohli. question relating to unexplained jewellery found in locker No. 72 has been considered in detail by Tribunal. After appraisal of evidence adduced before Assessing Officer, namely, affidavit by Harbans Lal and his statement recorded before Assessing Officer, it was held as matter of fact that jewellery does not belong to assessee. We are not inclined and nor can we while exercising jurisdiction as second appellate court reappraise evidence much less statement made by Harbans Lal, etc., till such time as consideration of this evidence is perverse or arbitrary. Tribunal has, after appraising affidavit and statements, recorded plausible finding. Counsel for Revenue is unable to point out any misreading of evidence or perversity in process of reasoning as would enable us to interfere with findings of fact recorded by Tribunal. In view of what is recorded hereinabove, finding no merit, substantial questions of law are answered against Revenue and appeal is dismissed. *** Commissioner of Income-tax v. Naresh Kumar Kohli
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