TaxTMI 
TaxTMI 
2016 (4) TMI 249
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.... in the circumstances of the case, the CIT(A) has erred in law and on facts in deleting the addition of Rs. 80,64,000/- made by the AO u/s. 69A of the Income Tax Act, 1961 on account of unexplained investment without appreciating the fact that the assessee has not discharged its onus to explain the source of acquisition of precious watches. 2. The order of the Ld. CIT(A) is erroneous and is not tenable on facts and in law. 3. The appellant craves leave to add, alter or amend any / all of the grounds of appeal before or during the course of the hearing of the appeal. 2. The brief facts of the case are the assessee has filed original return u/s. 139 of the Act on 29.8.2008 declaring income of Rs. 84,07,792/-. Subsequently....
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.... The AO after considering the reply of the assessee has held that assessee has not given the details of his past withdrawals to show how much have been invested in these watches from the past withdrawals and assessee has also not given any evidence to show the acquisition of these precious items through the Bank account entry or book entries. The AO further held that assessee has not discharged onus to prove the source of acquiring the assets and lastly he has given the benefit of Rs. 20 lacs to the assesee and added the balance of Rs. 80,64,000/- to the income of the assessee as unexplained investment in wrist watches. Secondly, the AO also held in the assessment order that during the course of search action a cash amounting to Rs. 6,26,00....
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....there in the present case. He finally stated that material on record shows that AO provided sufficient opportunity to the assessee and he applied his mind to form an opinion on the basis of the material available and formed 'opinion' that the explanation of the assessee is not satisfactory and the assessment order is as per law and the impugned order may be cancelled and allow the Appeal of the Revenue. 6. On the other hand, Ld. Counsel of the Assessee relied upon the order of the Ld. CIT(A) and stated that during the course of search action precious and branded wrist watches of foreign make were found and assessee has stated that these precious and branded wrist watches the assessee has purchased from the last 40 years and some of them ....
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....d formula exparte without giving opportunity to the assessee, which is contrary to the principle of natural justice. 7. We have heard both the parties and perused the relevant records available with us, especially the orders of the revenue authorities. As stated above, that during the course of search and seizure operation some precious and branded wrist watches of foreign make were found and the AO estimated the cost of these 50 wrist watches at Rs. Rs. 1,00,64,000. We find that AO at para no. 4 at Page No. 2 & 3 of the assessment order had estimated the cost of 50 wrist watches amounting to Rs. 50.32 lacs and multiplied to 50 which comes to Rs. 1,00,64,000/-. The AO asked the assessee to explain the source of this investment and the re....
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....ches over a period of time from his personal drawings and also some watches were received by him on various occasions from his friends and relatives as gift. After going through the impugned order, we are of the considered view that the estimation made by the AO on the cost of 50 wrist watches found during the search and seizure operation is on the assumption and presumption basis and without supporting any evidence and hence, is not sustainable in the eyes of law. Secondly, the estimation made by the AO on average cost is also baseless and without any evidence and is not judicious. Subsequent to such estimation the AO has proceeded to estimate the 50 watches based on average cost of 25 watches which is essentially estimated over earlier es....