Nita Puri vs DCIT, CC-20

PER MAHAVIR SINGH, VP :

This appeal of the assessee is arising out of the order of the Ld. Commissioner of Income Tax (Appeals-27), New Delhi [hereinafter referred as CIT(A)], in Appeal No. CIT(A), Delhi-27/10523/2019-20 dated 30.10.2023. Assessment was framed by the DCIT, CC-20, Delhi for the asstt. year 2020-21 u/s. 143(3) of the Income Tax Act, 1961 (hereinafter referred as ‘Act’) vide his order dated 29.9.2021.

The first issue in this appeal is as regards the order of the Ld. CIT(A) confirming the action of the AO in partly sustaining the addition of Rs. 2,17,625/- out of the addition Rs. 6,35,250/- u/s. 69A read with section 115BBE of the Act on account of unexplained cash found during the course of search.

We have heard the rival contentions and gone through the facts and circumstances of the case. We noted the facts that a search u/s. 132 of the Act was conducted at the residential and business premises of Moserbaer/ Hindustan Power Projects Limited & Group of cases including the assessee. During the course of search action, an amount of Rs. 12,70,5000/- was found from the residence of the assessee viz. 27A, Aurangzeb Road, Delhi. It was explained before the AO that cash found amounting to Rs. 12,70,500/- from the residential premises belong to the family as a whole. Assessee contended that Smt. Nita Puri being the senior most member of the family keep the cash in her possession to attend the urgent household contingencies. The AO did not believe this explanation of the assessee and treated the cash found belonging to the assessee in person i.e. 03 persons Nita Puri, Deepak Puri and Ratul Puri. According to the AO the assessee is found to be the owner of half of the cash seized i.e. amounting to Rs. 6,35,250/- and treated the same as unexplained money as per the provisions of section 69A of the Act read with section 115BBE of the Act and accordingly addition was made. Aggrieved, assessee preferred appeal before the ld. CIT(A).

The Ld. CIT(A) after considering the submissions of the assessee allowed the past savings and gifts in the hands of 04 persons namely the assesee, Deepak Puri, Ratul Puri and Mrs. Kavita Puri and divided the cash into four hands i.e. assessee share comes to Rs. 2,17,625/-. The CIT(A) also allowed the benefit of Rs. 1 lac each in the hands of these 04 persons and therefore, sustained the addition of Rs. 2,17,625/-. Aggrieved, assessee is in appeal before us against the order of the CIT(A).

We noted that Ld. CIT(A) has rightly divided the cash found as belong to four adult family members as noted above. We also noted that Ld. CIT(A) has fairly given a reasonable allowance of Rs. 1 lac each in the hands of these 04 persons as cash out of past savings and gifts etc. thereby rightly restricted the addition of Rs. 2,17,625/- in assessee’s hands. We accordingly, confirmed the finding of the CIT(A) and addition in dispute is upheld. Thus, this issue of assessee is dismissed accordingly.

The next issue in this appeal of assessee is as regards the order of the CIT(A) confirming the action of the AO in making the addition of Rs.45,45,768/- as unexplained jewellery found during the course of search u/s. 69A of the Act.

We have heard the rival contentions and perused the records. The brief fact are that during the course of search at the residential premises of the assessee a total jewellery gross weight 2857.5 grams and net weight 2335.93 grams was found from the searched premises. The assessee filed the complete details as per the Panchnama recorded as under:-

Aggrieved assessee preferred appeal before the CIT(A). The CIT(A) allowed relief of 600 grams and reduced the addition of Rs. 50,29,856/- to Rs. 45,45,768/- found from the assessee’s room in accordance with CBDT Circular No. 1916. Aggrieved, assessee is in appeal before the Tribunal.

Now before us, ld. Counsel for the assessee stated that the entire jewellery belong to various family members and is very well explained in terms of CBDT’s Instruction No. 1916 dated 11.5.1994. Ld. Counsel further argued that the revenue has accepted the proposition that as per CBDT Instruction no. 1916 (supra), the jewellery is not to be assessed to that extent and it is presumed that the same is explained. Ld. Counsel for the assessee filed a chart that the assessee alongwith other family members were residing at the searched premises namely:-

Late Mr. Deepak Puri – Husband (who was alive at that time) Mrs. Nita Puri – self (Year of marriage – 1964) Mr. RatulPuri – son (Year of marriage – 1996)

Mrs. KavitaPuri – Daughter in law Mr. Arman Puri – Grandson Mr. MadhavPuri – Grandson Ms. KairaPuri – Granddaughter Mrs. SabeenPuri (Year of marriage – 1995) Married daughter who has settled abroad but kept her belongings with the appellant)

Ld. Counsel for the assessee further submitted that once Ld. CIT(A) has accepted the proposition of CBDT’s Instruction no. 1916 (supra); he has to allow the rebate in regard to other family members who resides with the assessee at the searched premises. Ld. Counsel further argued that there are two more married ladies i.e. Ms. Nita Puri self and Ms. Kavita Puri, Daughter in-law for these two ladies the rebate of 500 grams each is to be given. As regards jewellery to Deepak Puri, Ratul Puri of 100 gram each is to be allowed there means that for each one person rebate of 100 gram each is to be allowed. As regards balance jewellery in respect of Mrs. Sabeena Puri, Daughter & Ms. Kaira Puri, Grand Daughter are to be allowed @ 500 & 250 grams of jewellery as per the CBDT’s instruction and Mr. Arman Puri and Madhav Puri, the grandsons of the assessee are to be allowed @100 grams each. It was further submitted that the assessee and her family is already eligible for benefit upto 2150 grams of jewellery since her family to whom the jewellery pertained included 3 married female, 1 unmarried female, and 4 male members. Thus, considering facts and status of the family such quantity of jewellery is already allowed as per the provisions of the Act without any documentary evidence. It was further submitted that both the lower authorities failed to appreciate the total factual matrix and limited benefit of the circular no.1916 to the assessee and her late spouse Sh. Deepak Puri, the jewelleries as found from the searched premises was acquired by the assessee and her family from explained sources of income only and belonged to the joint family residing together at the searched premises. Thus, it was prayed to delete the addition sustained on account of jewellery.

On the other hand, Ld. CIT(DR) supported the orders of the authorities below on this issue.

It is an admitted fact that jewellery having net weight of 2335.93 grams was found during the course of search and seizure proceedings belong to whole family including the assessee, Late Shri Deepak Puri, Shri Ratul Puri, Ms. Sabeena Puri, Ms. Kavita Puri, Sh. Arman Puri, Ms. Kaira Puri and Shri Madhav Puri. It is noted that in order to ascertain the value of the jewellery and ornaments held by the family, valuation of jewellery and ornaments was undertaken by the assessee on 31.3.2009 through Govt. Registered Valuer, copies whereof are attached at page no. 77-79 of the APB, which clearly demonstrates that the family members held 2418.068 grams of jewellery and ornaments. As per CBDT’s Circular No. 1916 dated 11.5.1994 the family members are entitled for rebate to the extent of 500 grams per married lady, 250 grams per unmarried lady and 100 grams per male member of the family. It transpires from records that assessee’s husband Late Mr. Deepak Puri was a founder, Chairman and Managing Director of Moser Baer Group and her son Mr. Ratul Puri is the Chairman of the Board of Directors of Hindustan Power Projects. The assessee hails from a well to do family having high level of status in the society/community. It is not disputed that the assessee being the senior most female member being mother / mother-in-law /grandmother to keep the jewelleries belonging to the whole family with her for safe custody, which belonged to the entire family who were residing at same premises, acquired over the several years on various family occasions. It is noted that Ld. CIT(A) in para 5.2 of his order has himself accepted that at the time of search 4 adult members were occupying the searched premises. We find considerable cogency in the contention of the Assessee that in view of the CBDT’s Circular No. 1916 (supra) the assessee and her family is already eligible for benefit upto 2150 grams of jewellery since her family to whom the jewellery pertained included 3 married female, 1 unmarried female and 4 adult male members. In view of the above background and keeping in view CBDT’s Circular No. 1916 dated 11.5.1994 and taking into account the family status of the assessee and her family, in our considered view, the addition sustained on account of jewellery deserve to be deleted, thus, the same is deleted and accordingly, the ground raised by the assessee is allowed.

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