TaxTMI 
TaxTMI 
TaxTMI 
2014 (2) TMI 1327
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....ase 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 search was conducted on 06/08/2008 on the Lashkary group to....
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....40/- 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 Colony, Jaipur 4782.730 89.65 4086685.00 Annexure-JS (Gold Jewelle....
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....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 occasion 6. Shri Arjun Lashkari Male 102.00 104040 Receive on various occasion 7. Smt. Hemant Lashkari Married Lady 509.70 413185 Receive on the occasion of marriage etc. 8. Shri Murari Lal Lashkari Male 100.00 86700 Receive on the occasion of marriage etc. 9. Smt. Nee....
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....ises. 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 proof into no proof. The reliance was placed on the following case laws:- (i) Shreelekha Banerjee Vs. CIT (1963) 49 ITR 112 (SC) (ii) Uma Charan Shaw & Bros. Co. Vs. CIT 37 ITR 271. (iii) CIT Vs. Anupam Kapoor (2008) 299 ITR 179 (P&H). It was further stated that the search party had recorded the statement of the assessee wherein he stated that the jewellery found by the search party so included the jewellery belonging to his deceased wife ....
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....nvestment 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, on merits, accepted the claim of the assessee as the jewellery studded mistakenly taken as diamond. 6. The Ld. CIT(A) after considering the submissions of the assessee observed that the assessee filed the copy of balance sheet as on 31/3/2010 of Shri Shyam Sunder Lashkary alongwith acknowledgement of return and also filed copy of purchase bills showing purchase of diamond studded jewellery weighing 111.83 gms valued at Rs. 2,95,435/- from M/s JKJ & Sons jewelers. The Ld. CIT(A) observed that the noting over the bills shows that the payment of this bill was through ch....
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....arriage 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 Sheet of Shri Shyam Sunder Lashkary Gold AY 2000-01 Rs. 295495/- weight 111.83 grams 111.83 Shri Pawan Lashkary jewellery shown in Balance Sheet 31/3/1997 Rs. 196500/- rate of gold as on 31/3/1997 Rs. 472.50 thus weight comes to 415.87 grams. 415.87 Balance 4849.53 Benefit available as per CBDT instruction 2150.00 Balance unexplained jewellery 2699.53 Valued on the basis of average rate 2299753 Accordingly the addition of Rs. 25,11,684/- was deleted and the remaining addition of Rs. 22,99,753/- on account of unexplained gold jewellery was sustained. Now both the parties are in appeal. 7. The depa....
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....n 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 partners in the assets of the firm itself. The copy of the assessment order of the firm M/s Pawan Enterprises is placed at page Nos. 90 to 96 of the assessee's paper book wherein in para 5 it has been held that the undisclosed investment on account of jewellery was not to be taxed in the hands of the assessee firm but in whose hands, it was found and seized. It is not in dispute that the assessee surrendered the income of Rs. 21 lacs in the hands of the firm and claimed that the realization of the stock found short in the firm was utilized for purchasing the jewellery. In the instant case nothing is brought on record to substantiate that the amount ....
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....e 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 jewellery shown in the WT return. After considering the fact that both the ladies were assessed to wealth-tax much prior to the block period and they were not assessed to wealth-tax at the time of search, in view of the status of the assessee and his family members, including mother and in view of CBDT Instruction, the addition sustained by the CIT(A) on account of unexplained jewellery is not valid and directed to be deleted. The exclusion has not been found merely on the basis of circular of CBDT, but the Tribunal also accepted the explanation submitted by the assessee, which primarily relates to the facts of the case that two ladies were assessed for wealth....