2011 (1) TMI 1378

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.... income for the AYs 2001-02 to 2006-07. 2.1 The Assessing Officer noted that during the search and seizure action u/s 132(1) in respect of locker no.756 held by the assessee with SSVL, gold jewellery net wt. 1739.400 grams, worth Rs. 13,91,520/-, as per Govt. Approved valuer's report dated 2.1.2007 was found. Out of these, jewellery of net weight of 1221.40 grams worth Rs. 9,77,120/- has been seized as per Annexure J-1 to the panchnama dated 2.1.2007. The statement of the assessee was recorded u/s 132(4) of the I T Act, 1961 on 2.1.2007. The assessee was asked to explain the source of investment in the said jewellery, vide Question no.3 thereof. In reply to the said question, the assessee had stated that "I am not filling my wealth tax return nor I am having valuation report and acquisition bills etc. Hence this jewellery is undisclosed jewellery. Now I am offering a sum of Rs. 9,77,120/- for FY 2006-07 as undisclosed income for taxation. I will submit demand draft by 5.1.2007. 2.2 During the course of assessment proceedings, the Assessing Officer asked the assessee to explain the source of jewellery found of Rs. 13,91,520/- with supporting documentary evidence. In compliance....

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....ngs to and the source of acquisition of each individual duly supported by the affidavits. The copy of the I T return and balance sheet of her mother Smt Leela Thakur wherein the jewellery belonging to her is reflected was filed. The assessee had also submitted the evidence regarding joint holding of the locker with Smt Laxmi Sharma. A copy of her ration card was filed to show that her sister Kusum Singh's name was included in the same. It was argued that two of the ladies were married long back and had received jewellery at the time of their marriage and the value at that time was negligible and there cannot be any evidence for such type of acquisition and considering the small amount of jewellery the wealth tax return were also not required to be filed. The CBDT instruction no. 1916 dated 11.5.1994 was also brought to the notice of the CIT(A) wherein certain guidelines were issued not to seize the Jewellery of 500 grams per married lady, 250 grms per un-married lady and 100 grms per male member. 4 Based on various arguments advanced by the assessee, the CIT(A) deleted the addition to the extent of 1255.700 grm . While doing so, he noted that the Assessing Officer has relied hea....

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....the assessee taken before the DDIT and before the Assessing Officer. While before the DDIT, it was time and again stated that the jewellery belonged to three ladies only as named above which included herself; however, in reply to the Assessing Officer, it was stated that apart from the jewellery belonged to three ladies, jewellery to the extent of 185.500 grm worth Rs. 1.84 lakhs and 110.100 grm worth Rs. 88,080/- respectively belonged to her aunt and minor children. Also, at certain points, it was stated that the jewellery belonged to three ladies in equal quantities while before the Assessing Officer, different quantities belonging to such ladies were mentioned. 4.3 Considering the above facts, he came to the conclusion that the said jewellery could be considered to be belonging to the three ladies only as per the stated stand of the assessee and no benefit to the extent of 1850.50 grm and 110.100 grm could be given. As regards the source of acquisition, the assessee has further claimed that such jewelleries were acquired by the ladies, who are all married, on the occasion of their marriage etc. Relying on the instruction of CBDT and considering the totality of the facts of th....

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....holder o the locker. 3) In the facts and circumstances of the case the ld CIT(A) erred in disallowing the jewellery of 185.100 gm belonging to the minor children of the appellant." 6 The ld counsel for the assessee, referring to the letter dated 8.1.2006 addressed to DDIT (Invt), which is placed at page 38 of the paper book, submitted that the jewellery in the said locker was belonging to the assessee, her mother and her elder sister. Referring to pages 6 to 8 of the paper book, he submitted that an explanation regarding the ownership of the jewellery were filed before the Assessing Officer giving the quantity wise jewellery belonging to the assessee, her mother, her sister, her aunt and two children. Referring to page 9 to 15 of the paper book, he drew the attention of the Bench to the affidavits filed by various persons giving the details of the jewellery belonging to each of them. 6.1 Referring to the letter dated 14.12.2006 addressed to the DDIT (Inv), Unit VII, Mumbai; he submitted that the locker belonging to three ladies was explained to the DDIT. Referring to page 5 of the paper book, he drew the attention of the Bench to the individual items of the jewellery....

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.... is merely an afterthought. 6.5 The ld counsel for the assessee, in his rejoinder submitted that the assessee can always clarify and retract the statement given during the course of search. 7 We have considered the rival submissions made by both the parties, perused the orders of the authorities below and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. There is no dispute to the fact that a search and seizure operation u/s 132(1) of the I T Act was initiated on the assessee's bank locker no.756 with Secure Safe Vaults Pvt Ltd on 6.11.2006. There is also no dispute to the fact that during the said search, jewellery net weight 1739.400 gm worth Rs. 13,91,520/- as per Govt Approved valuer report dated 2.1.2007 was found. Out of this, jewellery net weight of 1221.400 gm worth Rs. 9,77,120/- has been seized as per Annexure J-1 to the panchanama dated 2.1.2007. There is also no dispute to the fact that the assessee in her statement recorded u/s 132(4) of the Act on 2.1.2007 in reply to Question no.3 had stated that jewellery is undisclosed jewellery and therefore, she has offered a sum of Rs. 9,77,120/- for the FY 2006-....