2014 (5) TMI 468

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....ll facts and circumstances of the case and in the process confirmed the above mentioned addition. 3. The CIT(A) erred in upholding the addition of unexplained jewellery without considering the submissions/plea of the assessee. The CIT(A) allowed a small portion of jewellery as explained while the rest of the jewellery was added as unexplained investment in jewellery." 2. Facts in brief as emerged from the corresponding assessment order passed u/s.143(3) r.w.s. 263 of IT Act, dated 31.12.2009 were that a survey was conducted at the premises of the firm which is partly used for the purpose of the business and partly as a residence of the partner, namely, Sri P. Sunder Raj Shetty and his family. The impugned gold ornaments were found at the ....

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....ight of 103.1g and the net weight of 103.1g was shown. Thus it would be seen that the total weight of the jewellery mentioned at serial number 1 and 3 in the list of jewellery found during the course of survey was 90.320g which was well within the rate of 103.1g of chains shown in the valuation report in the case of K S Prasanna. Thus the AO was not right in not accepting the contention of the appellant in relation to this jewellery. The AO should have treated this jewellery as belonging to KS Prasanna. 4.3 (ii) Serial No.2 in the list of jewellery found during the course of survey consists of Jatadhar (3 Line) but the gross weight of 99.300g and the net weight of 95.300g. The AR tired to explain that this jewellery belonged to Dwarkanath ....

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....ng, therefore, why the gold jewellery was taxed in the hands of the assessee-firm and why not in the hands of the respective partners? The partners have declared the value of ornaments as per the respective balance sheet and that fact could have been verified from their assessment records. The assessee has informed the PAN numbers of those partners. In the case of CIT Vs. Prafulbhai @ Rohitbhai J. Shah, 33 taxmann.com 147 (Guj.), order dated 20th of March, 2013 has held that in a situation when the jewellery belonged to different family members and it was a customary of owning the jewellery as permitted by the CBDT circular, the addition was deleted. There are several decisions on this subject, wherein it was held that the provisions of CBD....

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....y Rs.1,81,643/- Rs.5,20,106/- Assessed Total Income Rs.6,81,786/- i.e. Rs.6,81,790/- 7. When the matter was carried before the First Appellate Authority, the action of the AO was confirmed in the following cryptic manner: "In view of such categorical statement of the AR it is clear that there is no evidence in possession of the assessee to show that the sales of unaccounted stock was reflected in the regular books of accounts. The AR has also stated the books of accounts and vouchers cannot be produced which clearly indicates that the appellant does not want to produce the books of accounts because the sale of unaccounted stock has not been reflected in the profit and loss account and included in the gross sales. In view of the above it ....