TaxTMI 
TaxTMI 
2018 (7) TMI 120
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....to notice u/s 153 A of the IT Act 1961, the assessee filed her return of income on 29.09.2011 declaring total income of Rs. 1,37,950/-. During the course of assessment proceedings the Assessing Officer observed that during the course of search and seizure proceedings u/s 132 (1) of the IT Act at the residence of the assessee at 43/1, Rajpur Road, New Delhi the following jewellery as per the valuation made by the government registered valuer was found. Description Residence Weight Jewellery found Rs.95,60,586/- (48 items) 4514.084 grams precious metal & 129.58 grams stones Jewellery seized Rs.62,65,670/- 4. On being questioned by the Assessing Officer to explain the sources of acquisition of the said jewellery, the assessee filed the following reply which has been reproduced by the Assessing Officer at page 2 and 3 of the assessment order. "Smt. Vinod Kumari and Smt. Shalini Gupta are wealth tax assessee and they have been filing wealth tax return, entirely declaring jewellery purchased by them in their respective wealth tax return regularly. At the time of search following jewellery was found which has been valued by ....
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....y explanation regarding source of acquisition of the specific jewellery items which were not tallying with the Government valuer's report for which those were seized during the course of proceedings u/s 132 (1) of the IT Act. The Assessing Officer further noted that during the course of search at her residence the assessee failed to offer any satisfactory explanation with regard to the jewellery items not matching in description with the items disclosed in the wealth tax return. He, therefore, held that the investment in the jewellery items which were not tallying in description as well as in weight of precious metals and stones with the valuation report of the assessee and which were seized during the course of search and seizure proceedings, value of which as per the valuation report comes to Rs. 62,65,670/-, as unexplained investment u/s. 69 A of the IT Act. He accordingly made addition of Rs. 62,65,670/- to the total income of the assessee u/s 69A of the IT ACT, 1961. 6. Before the CIT (A) it was submitted that wealth tax return for A. Y. 2009-10 was filed much before the date of search declaring the jewellery at Rs. 32,08,705/-. It was this very jewellery which was availabl....
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....oked. I have considered these arguments. These arguments are not applicable to the facts of the case. In the present case, there is a search & seizure action u/s 132 at the residence at 43/1, Rajpur Road, Delhi of the appellant who is a member of D. S. Group & Jewellery was found & seized as mentioned in para 3 of the assessment order in appellant's hand. Therefore, it is proved beyond doubt that there was a search action u/s 132 against the appellant. Further, date of search is 21.01.2011. Therefore, the present assessment year 2011-12 is the search assessment year. Hence the assessment has been made u/s. 143 (3) & not u/s 153 A of I. T. Act, 1961. Hence this argument is not based on facts of the case. On merits I have carefully considered the assessment order, written submission and oral arguments of Ld. AR. It is fact that the appellant and her mother in-law Smt. Vinod Kumari Gupta are wealth tax assessee. I do not agree with the arguments of ld. AR that the assessing officer has not considered the claim of the appellant for declaration of jewellery item in wealth tax return, as Ld. assessing officer has made addition only for the items of jewellery which are not tallie....
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....ereby sustain 10% of jewellery addition amounting to Rs. 6,26,567/- & balance addition is deleted. Accordingly this ground of appeal is partly allowed." 9. Aggrieved with such part relief by Ld. CIT(A) the revenue as well as the assessee are in appeal before the Tribunal by raising the following grounds :- ITA No. 6103/Del/2014 (Assessee) 1. That on the facts and circumstances of the case, the Ld. CIT (A) has erred in holding 10% value of jewellery i.e. Rs. 6,26,567/- as unexplained jewellery in view of the explanation given and documentary evidence submitted. Therefore, the same is liable to be deleted. 2. The appellant craves leave for addition, modification, alteration, amendment of any of the ground of appeal. ITA No.5938/Del/2014 (Revenue) 1. On the facts and in the circumstances of the case, the CIT (A) has erred in restricting the addition of Rs. 62,65,670/- made by the AO on account of unexplained investment to Rs. 6,26,567/- and directing the AO to delete 90% of the investment made by the assessee when it was clearly established that the assessee could not substantiate the source of investment. 2. On the facts and in the circumstan....
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.... ITA No. 5296/Del/2013 and 5369/Del/2013 order dated 12.02.2016, he submitted that the Tribunal has deleted the entire addition by dismissing the appeal filed by the revenue and allowing the appeal filed by the assessee. He submitted that both the above assessees belong to the same group. Therefore, following the decisions of the Tribunal the entire addition made by the Assessing Officer should be deleted and the appeal filed by the revenue should be dismissed. He also filed the jewellery reconcilement statement. 12. We have considered the rival arguments made by both the sides, 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. We find during the course of search u/s 132 of the IT Act on 21.01.2011, jewellery valued at Rs. 95,60586/- were found out of which jewellery valued at Rs. 62,65,670/- were seized. We find during the course of assessment proceedings, the Assessing Officer asked the assessee to explain the sources of jewellery which were seized during the course of search. The explanation of the assessee that jewellery valued at Rs. 124.48 lacs was declared in the w....
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....hat the jewellery found during the course of search did not match with the jewellery declared in the wealth tax return. Therefore, the Id. CIT(A) was not justified in allowing the relief to the assessee. It was further submitted that the assessee failed to offer any satisfactory explanation with regard to the acquisition of jewellery items not matching in description with the items disclosed in the wealth tax return. Therefore, the addition was ri ghtly made by the AO and the Id. CIT(A) was not justified in allowing the relief to the assessee. 11. We have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it is noticed that the jewellery valuing Rs. 6,05,33,471/- was found during the course of search, out of the said jewellery, the department seized the jewellery valuing Rs. 3,34,98,409/- weighting 3825.166 gms and the remaining jewellery weighting 5124.612 gms valued at Rs. 2,70,35,062/- had been given back on the spot to the assessee and her husband Sh. Rajiv Kumar in whose name the valuation report was made. In the instant case, the assessee and her husband were regularly filing their weal....
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....n the part of the Id. CIT(A) in sustaining the addition which was made on the basis of surmises and conjecture. Accordingly, the addition sustained by the Id. CIT(A) is deleted. We, therefore, do not see any merit in the appeal of the department and the appeal of the assessee is allowed. 13. Similarly in the case of Rita Kumari (Supra) the Tribunal also deleted the entire addition made by the Assessing Officer and thereby dismissed the appeal filed by the revenue and allowed the appeal filed by the assessee. The relevant observations of the Tribunal from para 8 onwards read as under :- 8. We have perused the submissions and the wealth-tax returns filed by the assessee in the paper book placed before us. The addition in dispute has been made on account of variation in description of jewellery disclosed in the reports filed with the Revenue authorities 8.1 It is observed that the Id. AO has made the addition without considering the latest report. In our view, the assessee is entitled to the benefit of weight of jewellery disclosed in the return, as it is a well known fact that Indian ladies keep changing the design of jewellery from time to time. Simply because t....