2017 (9) TMI 473

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....epartment circular no. 1916 whilst determining any unexplained jewellery in the hands of the appellant has grossly erred in allowing partial relief to the appellant instead of total relief and hence the ld. CIT (A) ought to have allowed total credit of jewellery available to the appellant. 2. In law and in facts and in the circumstances of the appellant's case, the learned CIT (A), Central has erred in not appreciating the facts, as evident from his own finding, whilst rejecting the bonafide claim of the appellant interalia; (a) That Smt. Roshni Mishra being married lady credit of jewellery of 500 grams is available to the appellant and not 250 grams as held by the ld. CIT (A). He therefore ought to have directed to allow 500 grams of....

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....he said provision. The impugned addition is therefore ultra virus, and bad in law as it being notional should have been deleted. 6. The appellant craves leave to add, alter, amend and/or withdraw any ground or grounds of appeal either before or at the time of hearing of the appeal. 2. Briefly stated the facts of the case are that the assessee Shri Udai Kant Mishra is a part of the Trimurty Group, on whom a search operation under section 132 of the Income Tax Act, 1961 (hereinafter referred to as the Act) was conducted on 03.05.2007 whereby certain incriminating documents were found and seized. The assessee filed his e-return declaring total income of Rs. 1,05,32,110/-. The AO framed the assessment under section 153A/143(3) of the Act vi....

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.... and dowry in her marriage in Feb'2007 in the form of jewellery from her family members for which no confirmation was available on record. 3.3. Lower authorities have irrelevantly indulged into the issue that Smt. Roshni Mishra was married in Feb 2007 and which was very close to the date of search, i.e. 03/05/2017. Similarly, the age of minor grand-daughters was irrelevant. 3.4. CBDT Circular No. 1916, looking to the Indian social circumstances, allows blanket benefit of 500 grams per married lady and 250 grams per unmarried lady, without considering any other parameter. 3.5. It is submitted that where jewellery found in possession of assessee's family was personal wearing of ladies and if the same is within permissible limit stipu....

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....he assessee premises, is not in consonance with the CBDT Circular and deserves to be deleted." 3.2. Per contra, the ld. D/R opposed the submissions. 3.3. We have heard rival contentions, perused the material available on record and gone through the orders of the authorities below. The ld. CIT (A) has not given any reason for denying the benefit/set off to the extent of 250 gms in case of Aditi Mishra and Aanchal Mishra (minor grand-daughters) and partly allowing the benefit to the extent of 250 gms to Smt. Roshni Mishra. We find that the case of the assessee is covered by the CBDT Circular No. 1916 dated 11.05.1994 whereby the CBDT had issued guidelines stating that " In the case of a person not assessed to wealth-tax gold jewellery an....

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.... on such loan amount, incurred during the relevant previous year, amounting to Rs. 1,30,061/-. 3.3. thus entire investment had been made by the assessee, in shares of the companies, out of his own funds. Disallowance made by the lower authorities is on completely wrong appreciation of facts. 3.4. Hon'ble Bombay High Court in the case of Reliance Utilities & Power Ltd. (2009) 313 ITR 340 (Bombay) held that " ..... The principle therefore would be that if there are funds available both interest-free and over draft and/or loans taken, then a presumption would arise that investments would be out of the interest-free fund generated or available with the company, if the interest-free funds were sufficient to meet the investments....." 3.....

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....R 282 (Delhi) CIT vs. Shivam Motors (P) Ltd. (2014) 272 CTR 277 (Allahabad) CIT vs. Lakhani Marketing Inc. (2014) 272 CTR 265 ( P&H) CIT vs. Corrtech Energy P. Ltd. (2015) 372 ITR 97 (Gujarat) 3.8. Even otherwise, as the assessee's own funds are greater than the borrowed fund, no disallowance can be made under section 36(1)(iii) as presumption can be drawn that own funds were used for the purpose of such investments. Reliance is placed on the below mentioned judicial pronouncements :- CIT vs. Vijay Solvex Ltd. (2015) 59 taxmann.com 294 (Raj.HC) CIT vs. Sharada Erectors P. Ltd. (2016) 76 taxmann.com 107 (Bom.HC) CIT vs. R.L. Kalthia Engineering & Automobiles P Ltd. (2013) 33 taxmann.com 14 (Gujarat HC). In view of the....