TaxTMI 
TaxTMI 
2014 (2) TMI 1327
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....On the facts and in the circumstances of the case and in law the learned Commissioner of Income-tax (Appeals), Central, Jaipur has erred in confirming/sustaining the addition of Rs. 22,99,753/- in the hands of the assessee in respect of 2699.53 grams gold jewellery out of the total addition of Rs. 48,11,437/- made by Assessing Officer on account of alleged unexplained investment in Gold jewellery and Silver articles under section 69B of I.T. Act, 1961. 2. On the facts and in the circumstances of the case and in law the learned Commissioner of Income-tax (Appeals) Central, Jaipur has erred in not allowing the benefit of telescoping, recycling and rotation of funds. 3. The assessee prays for leave to Add, to amend, to delete, or modify the all or any grounds of appeal on or before the hearing of appeal." 3. From the above grounds, it is gathered that the grievance of the department and the assessee relates to deletion/sustenance of the addition made by the Assessing Officer on account of unexplained jewellery and silver articles found during the course of search u/s 69B of the I.T. Act, 1961 (hereinafter referred as the Act). 4. Facts of the case in brief are that a searc....
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.... sheet. The value of which should have been Rs. 3,59,440/- and the assessee's father Shri Shyam Sunder Lashkary's balance sheet showed total gold of Rs. 6,52,520/-. The Assessing Officer accepted the gold worth Rs. 10,11,960/- (Rs. 6,52,520/-+Rs. 3,59,440/-) as explained since the same was shown in their respective returns of income and the rest of the gold jewellery worth Rs. 42,74,903/- and silver worth Rs. 5,36,534/- was treated as unexplained. The Assessing Officer did not accept this plea of the assessee that the ladies and the children had received gifts in the form of jewellery, as such the gifts could not have been shown in the capital account. Accordingly, the addition of Rs. 48,11,437/- (Rs. 42,74,903/-+ Rs. 5,36,534/-) was added to the income of the assessee. 5. Being aggrieved, the assessee carried the matter to the Ld. CIT(A) and furnished a chart of total jewellery found by the search party from the possession of the family members of the assessee and other members of Lashkary group which reads as under:- Ann. No. Particulars Net Weight of Metal (in Gms) Weight of Stones in Cts Total Value Metal + Stone Annexure-1 (Gold Jewellery) B-304, Janta ....
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....Lashkary recorded u/s 132(4) of the Act wherein they had admitted the receipt of jewellery at the time of marriage. It was further stated that as per circular No. 1916 dated 11/5/1994, the CBDT has prescribed the limit at 500 gms. gold in the case of married lady, 250 gms. for unmarried lady and 100 gms. for male persons in the family. Therefore, the claim of the benefit of the circular was to be given as under:- S.No. Name of the persons Status for the benefit of Jewellery claimed for benefit under CBDT Source CBDT Circle Instruction No. 1916 Weight Value of Metal 1. Shri Shyam Sunder Lashkari Male 100.00 78000 Receive on the occasion of marriage etc. 2. Smt. Parwati Devi Lashkari Married lady 524.83 451988 Receive on the occasion of marriage etc. 3. Shri Pawan Lashkari Male 93.20 80803 Receive on the occasion of marriage etc. 4. Late Smt. Saroj Lashkari (Wife) Married Lady (Expired) 500.00 413000 Belonging to Late Smt. Saroj Lashkari. 5. Shri Arun Lashkari Male 90.50 108600 Receive on various occ....
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....ome derived from M/s Pawan Enterprises, in which Shri Shyam Sunder Lashkary, Shri Pawan Lashkary and Shri Murari Lal Lashkary are having 40%, 40% and 20% shares respectively and the following jewellery were declared in the hands of the partnership firm:- S. No. Name of the person from whom possession jewellery was found Declared as undisclosed income in the hands of Firm M/s Pawan Enterprises. Weight (Grams) Value 1 Shri Shyam Sunder Lashkary and Smt. Parwati Devi Lashkary 1019.50 856464 2. Shri Pawan Lashkary, Smt. Hemant Lashkary, Late Smt. Saroj Lashkary,Arun Lashkary and Arjun Lashkary 953.00 787178 3. Shri Murari Lal Lashkary, Neelam Lashkary, Durgesh Lashkary, Komal Lashkary 545.70 457758 Total 2518.2 2101400 It was stated that that the partnership firm M/s Pawan Enterprises had confirmed this fact and has shown income of Rs. 21 lacs in its return for the A.Y. 2009-10 on account of utilization of undisclosed income of the firm in purchases of jewellery by the partners but the Assessing Officer rejected the explanation merely on surmises and conjectures and converted good pro....
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.... 0.00 0.00 5136 106128 2. Smt. Neelam Lashkary 9280 132993 0.00 0.00 9280 132993 3. Smt. Parwati Devi Lashkary 6450 92235 0.00 0.00 6450 92235 `4. Late smt. Saroj Lashkary 1800 25740 0.00 0.00 1800 25740 Total 22666 357096 0.00 0.00 22666 357096 It was contended that that the Assessing Officer treated the entire silver items as invested by the assessee alone without assigning any reason and that the assessee did not make any investment in silver articles during the period covered for assessment u/s 153A of the Act. Therefore, no addition was called for on this account. The assessee also furnished copy of one bill of the jewellery worth Rs. 2,95,495/-, which was already reflected in the balance sheet of Shri Shyam Sunder Lashkary for the A.Y. 2000-01, the same was technically treated as addition evidence and was sent to the Assessing Officer alongwith written submissions filed by the assessee for his remand report. The Assessing Officer vide letter dated 22/2/2012 objected to the admission of copy of bill as an additional evidence. However, ....
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....ed the jewellery weighing 2518.20 gms worth Rs. 21 lacs out of undisclosed income of the firm M/s Pawan Enterprises but this fact had never been stated during the course of search. He, therefore, did not allow the benefit as claimed by the assessee on account of jewellery declared in the hands of the firm M/s Pawan Enterprises. Regarding unexplained silver articles weighing 22666 gms valued at Rs. 3,57,156/- which were found from the possession of various family members of the assessee. The Ld. CIT(A) was of the view that it was customary to receive silver utensils and articles in the marriage and auspicious occasions, therefore, considering the family status of the assessee, the silver articles found by the search party was not unreasonable. He, accordingly, worked out the unexplained gold jewellery as under:- Particulars Total Aty in Gms. Total jewellery found 6235.73 Purchases shown in Balance Sheet Shown in Balance Sheet of Shri Shyam Sunder Lashkary Gold AY 2002-03 Rs. 165003/- weight 357.30 grams 357.3 Shown in Balance Sheet of Shri Shyam Sunder Lashkary AY 1993-94 Rs. 192022.11/- weight 501.200 501.2 Shown in Balance Sh....
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.... the said instruction, it cannot be presumed that the jewellery was explained. He accordingly, submitted that the benefit given by the Ld. CIT(A) for the gold jewellery weighing 2150 gms was not justified. 10. We have considered the submissions of both the parties and carefully gone through the material available on record. In the instant case, as regards to the benefit of jewellery to the extent of 111.83 gms purchased by Shri Shyam Sunder Lashkary is concerned, it is noticed that the said jewellery was purchased by Shri Shyam Sunder Lashkary from M/s JKJ and Sons jewelers through cheque No. 378627 dated 19/11/1999 of SBI and it was disclosed in the balance sheet dated 31/3/2000, therefore, the Ld. CIT(A) was justified in allowing the benefit for the said jewellery. Now the controversy remains on account of declaration of jewellery weighing 2518.20 gms of Rs. 21 lacs declared in the hands of the firm M/s Pawan Enterprises. In the present case, it is noticed that the statement of the assessee was recorded during the course of search and the assessee stated that the firm is compendious name for partners and acts through the partners, therefore, the income may be utilized by the p....
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....mentioned hereinabove and the instruction No. 1916 of the CBDT, the benefit of 200 gms gold jewellery is also directed to be given as per the ratio laid down by the Hon'ble Jurisdictional High Court in the case of CIT Vs Kailash Chand Sharma (2005) 198 CTR (Raj) 201 (supra) wherein it has been held as under:- "The Tribunal reached its finding on two-fold grounds. Firstly, it accepted the explanation submitted by the assessee about acquisition of possession of gold jewellery and silver in excess of what was declared in WT returns of two ladies. Secondly, it also referred to the circular issued by CBDT. It was found by the Tribunal that there is no dispute that assessee was and his wife also in their statement at the time of search told that the jewellery was received in the marriage and some jewellery was also received in other ceremonies from time to time. The Tribunal also found that the benefit of CBDT Instructions No. 1916 dated 11th May, 1994, was not allowed to two ladies on the ground that the said instruction is not applicable in the case of a person, who is being assessed to wealth-tax and therefore, the exemption was allowed only to the extent of gold ornaments and ....