Revenue's appeal dismissed as unexplained investments deleted for watches, jewellery, and foreign currency under section 132B

ITAT Delhi dismissed revenue's appeal regarding unexplained investments. The tribunal upheld CIT(A)'s deletion of additions for two watches, finding they were exchanged items already declared in Wealth Tax Returns with proper reconciliation statements. For jewellery found in locker, ITAT confirmed deletion as items were acquired before the six-year block period starting from search date. Regarding foreign currency, the tribunal upheld relief granted as currency belonged to another individual who had signed seizure inventory and applied for return under section 132B.

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Issues Involved:
1. Deletion of addition on account of unexplained investment in two watches.
2. Deletion of addition on account of unexplained jewellery found in a locker.
3. Deletion of addition on account of unexplained foreign currency found during a search.

Summary:

Issue 1: Unexplained Investment in Two Watches
The Revenue contended that the CIT(A) erred in deleting the addition of Rs. 8,29,850/- for unexplained investment in two watches, arguing they were not included in the valuation report at the time of opting for the VDIS Scheme and were not declared in the Wealth Tax return. The CIT(A) deleted this addition after verifying that the two watches were indeed part of the declared watches in the Wealth Tax return. The Tribunal upheld the CIT(A)'s decision, noting that the watches were correctly included in the Wealth Tax Return and there was no valid reason to interfere with the findings.

Issue 2: Unexplained Jewellery Found in Locker
The Revenue argued that the CIT(A) wrongly deleted the addition of Rs. 1,15,36,269/- for jewellery found in locker no. 1984, U&I Vaults, Delhi, claiming it was part of the jewellery declared in the Wealth Tax Return/VDIS disclosure. The CIT(A) found that the jewellery was last operated on 26.06.2012, beyond the block assessment period, and thus could not be considered unexplained for the AY 2020-21. The Tribunal upheld this finding, citing relevant judicial precedents and confirming that the jewellery was acquired before the block assessment period, making the addition unsustainable.

Issue 3: Unexplained Foreign Currency Found During Search
The Revenue challenged the deletion of Rs. 5,51,570/- for unexplained foreign currency, arguing that the CIT(A) relied on a letter from Mrs. Ritu Suri claiming ownership after the assessment proceedings. The CIT(A) noted that the foreign currency was found at Mrs. Ritu Suri's residence and she had signed the inventory of the seized material. The Tribunal upheld the CIT(A)'s decision, finding no valid reason to interfere with the conclusion that the foreign currency belonged to Mrs. Ritu Suri and not the assessee.

Conclusion:
The Tribunal dismissed the Revenue's appeal, confirming the CIT(A)'s deletions of the additions for unexplained investment in watches, jewellery, and foreign currency. The order was pronounced on 06.09.2023.

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