TaxTMI 
TaxTMI 
TaxTMI 
2012 (12) TMI 893
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....investment in diamond jewellery and addition of Rs. 6,05,000, on account of unexplained investment in art work and painting. Similarly, in the case of Mr. Dinesh G. Vazirani, (for short "Dinesh"), the addition of Rs. 4,63,750, has been made on account of diamond jewellery and Rs. 14,17,700, on account of art work / paintings. 3. Brief facts of the case are that a search and seizure action under section 132(1) of the Act, was carried out in the case of Saffron Group on 17th April 2007, and both the assesses were also covered under the search. During the course of search and seizure action, gold and diamond jewellery, articles and art works / paintings were found at the residence of Padma, situated at 602, Prabhu Kutir, 15, Altamount Road, Mumbai, and at the residence of Dinesh, situated at 6, Rushi House, Durab Shaw Lane, Nepean Sea Road, Mumbai. A locker bearing no.780, in Union Bank of India, was also subjected to search, which belongs to Mrs. Minal D. Vazirani (for short "Minal") wife of Dinesh and daughter-in-law of Padma. From these cases, following diamond and gold jewellery were found:- In the case of Padma - Rs. 92,32,470 In the case of Dinesh - Rs. 29,42,210 In the ca....
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....0, in the case of Padma and diamond jewellery worth Rs. 4,63,750, in case of Dinesh, proper explanation could not be furnished. Accordingly, he added the same. 5. At the time of search and seizure, ten pieces of art work in the case of Padma and 133 pieces of art work in the case of Dinesh were also found at the residence. Out of the same, seven pieces to the tune of Rs. 8,05,000, in the case of Padma and 33 pieces to the tune of Rs. 57,60,000, was seized in the case of Dinesh. For evaluating such art work / painting, an expert committee was appointed to work out the value of these art work / painting. The assessee was required to reconcile these art works and in response to which reconciliation and details of each and every art work purchased from time to time and also, which were gifted from various persons were provided. Insofar as certain items given in the form of gift and purchases made from outside country, the Assessing Officer held that the assessee's explanation were not proper. He tabulated such description of art pieces in the assessment order and accordingly, the addition of Rs. 6,05,000, was made in the hands of Padma. Rs. 14,17,700, was made in the hands of Dinesh. ....
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.... Learned Counsel for the assessee, before us, submitted that all the diamond jewellery which were found from the possession of the assessee, were duly recorded in the books of account and each & every item of jewellery were reconciled. He drew our attention to the summary of total jewellery found and summary of total jewellery reconciled. Further, he referred to the details of various cheques and bank account from which jewelleries were purchased along with yearwise description, name of jeweler from whom purchases were made, cheque details, date of purchase and the amount paid. He submitted that upto the date of search, the jewellery purchased through cheques aggregated to Rs. 83,46,695. These details are appearing at Pages-6 and 7 of the paper book. He further submitted that the valuer's report dated 22nd May 1990, in the case of Padma, wherein caratwise details of diamond were provided to show that most of them were prior to 31st March 1990. Relying on these documents, he submitted that most of the jewelleries have been purchased and recorded in the books of account. Regarding jewellery received by way of gift, he submitted that the major part of the gift have come from Mrs. Vina....
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....sing Officer has already accepted the same. Even in the case of diamond jewellery, he has accepted most of the items. It was, in respect of certain items, which were received by way of gift, the Assessing Officer has not accepted the same. Further, he submitted that even though there were heavy drawings by the assessee but the same has to be co-related with the jewellery. Regarding conversion of diamond jewellery, which was argued by the learned Counsel to counter the allegation of the Assessing Officer that caratwise matching of jewellery has not been done by the assessee, he submitted that no evidence whatsoever has been produced before the Assessing Officer. Regarding art work and painting, no proper explanation was given as to how it was acquired and the valuation has been done by the experts, therefore, dispute regarding valuation cannot be raked up at this stage. He, thus, heavily relied upon the findings of the Commissioner (Appeals) as well as the Assessing Officer and submitted that no further benefit should be given as the Assessing Officer has himself given substantial benefit with regard to the jewellery and paintings found from the possession of the assessees. 10. In ....
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....ivals and occasions such as birth of children etc. As regards the balance details, I am in the process of compiling all my bills and other documentary evidences, which will be submitted to you shortly." 12. In another statement recorded on 12th May 2007, in respect of question no.1, the assessee submitted various evidences and documents regarding jewelleries. For the sake of reference and record, question no.1 and answer thereto is also reproduced herein below:- During the P.O. operation you were able to give the documentary evidence for item no. 2, 3, 8, 10(a), 10(b), 10(c), 11(a), 11(b), 11(c), 16(a), 16(b), 18, 1.9, 22(a), 22(b), 22(c), 25(a), 26, 27(a), 27(b), 30(c), 32(a), 32(b), 33(a), 33(b), 34, 38(a), 38(b), 41(a), 41(b), 42, 43(a), 43(b), 49, 52, 53, 54, 55, 56, 57 and 59 amounting to Rs.14,84,274/- in respect of the diamond jewelery found at residence during the course of search action on 17.04.2007 and the same was valued by Pradeep Kumar J. Jhaverl, Government approved valuer. In absence of documentary evidence, why the balance Jeweflery should not be seized as per the Income Tax Act, 1961, and that the same should be treated as an unaccounted inves....
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....e aggregate value of details of these cheques comes to Rs. 83,46,695 in the case of Padma. In the case of Dinesh and his wife Minal, the aggregate value of cheque payment for the purchase of jewellery were Rs. 10,59,828 and Rs. 19,91,302, respectively. Besides this, as stated above, valuation report dated 22nd May 1990, showing various jewellery were also available to the assessee prior to 31st March 1990. Regarding jewellery received by way of gift, the assessee has mainly relied upon the letter of Vina , mother of Minal and daughter-inlaw of Padma. In the said certificate, the details of entire jewellery given at the time of marriage have been mentioned. From these documentary evidences, the assessee has tried to explain that all the jewelleries which have been found are fully accounted for and nothing is unexplained. In fact, the assessee's claim has been that what has been recorded by the assessee in the books is more than what has been found at the time of search. On the other hand, the Assessing Officer's case is that some of the items of jewellery, the assessee was unable to file any evidences or could tally in terms of carats with the item disclosed. He has short listed cer....
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....unt mentioned in the gift certificate, it would be seen that almost the entire jewellery stands explained. While drawing any kind of adverse inference for treating the jewellery found as unexplained, one has to look into various preponderance of probabilities because in our Indian custom, gifting of jewellery at the time of marriage is normal practice and custom and it becomes very difficult to give a direct evidence of the acquisition of the jewellery received at the time of marriage. One goes by certain corroborative evidences like marriage photos, gift letters issued by the relatives, etc. In case of the assessee, most of the items have been shown to be purchased by the assessee for which details of cheque payments and the names of the jeweler have been given. It is only on few of the items, the assessee has claimed to have received at the time of her marriage and at the time of her son's marriage. These gifted jewelleries cannot be treated as unexplained as the same is duly supported by such corroborative evidence like gift certificate issued by the mother of daughterin- law and photographs of marriages shown before the investigation unit. Under these facts, the reasons given b....