TaxTMI 
TaxTMI 
2020 (1) TMI 1134
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....r or amend the aforesaid ground of appeal before or at the time of hearing. 3. Brief facts of the case as culled out from the records are that the assessee is an individual. The assessee has filed the original return of income on 28.03.2011 declaring total income of Rs. 6,70,502/-. A search u/s 132 was carried out at the residential premises of the assessee on 23.7.2009. The case for Assessment Year 2009-10 and 2010-11 were taken up for compulsory scrutiny. In Assessment Year 2010-11 addition of cash deposit of Rs. 1,47,000/- in the bank account and addition of Rs. 9,51,090/- in respect of jewellery found. Assessment u/s 143(3) for A.Y. 2010-11 was completed at Rs. 17,68,590/-. Aggrieved assessee preferred an appeal before Ld. CIT(A) and partly succeeded. 4. Now the assessee is in appeal before the Tribunal against the addition of Rs. 6,51,090/-. 5. Ld. Counsel for the assessee argued referring to the following submissions:- * Jewellery belonging to the assessee was found during the course of search (680 grams approx.- 580 gms gold jewellery and 117.63 gms diamond jewellery - pg 31 of PB) * The Ld. AO treated the entire jewellery as unexplained investm....
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....94 held that the possession of the gold jewellery weighing 250 grams was quite normal for an unmarried girl in an Indian family. Ld. CIT(A) accordingly gave relief of Rs. 3,00,000/- and sustained the remaining addition. Ld. CIT(A) also did not give any weightage to the affidavits filed by the assessee which were issued by the assessee's relatives who have gifted gold jewellery to the assessee on various auspicious occasions. Ld. CIT(A) found them to be after thought as no such information was given during the course of search. 8. On perusal of the records and the submissions given by the Ld. Counsel for the assessee as an officer of the court, that during the course of search no specific question was asked to the assessee about the source of jewellery. In the affidavit given by the assessee on page 32 of paper book the assessee has claimed to have received jewellery weighing approximate 700 gram as gift from her late grand mother Smt. Kalawati Gupta, two maternal aunts Smt. Laxmi Gupta and Smt. Saojini Chouskey. Further on pages 33 & 34 of the paper book affidavit given by Smt. Laxmi Gupta and Smt. Saojini Chouskey are also filed, both of whom are senior citizens and were employ....
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....low and the case laws referred by Assessee's counsel. We find that in this case a search & seizure operation under section 132 of the IT Act was conducted at the business premises of M/s Best Group and as well as in the residential premise of the Directors on 28.03.2011, in consequence to which the case of the assessee was taken up for scrutiny. The AO called for an explanation during the assessment proceedings explaining all the items of jewellery found during the course of search. In reply, the assessee explained that the jewellery belongs to the assessee's parents, their HUF, assessee's family members and his HUF. Most of the jewellery items were inherited from his grandparents and received as gifts on the occasion of marriage and birth of his children and also gifts were received on marriage anniversary, birthdays of children etc. and there was no occasion to file the wealth tax as the net wealth did not exceed the minimum limit prescribed under the Wealth Tax from period to period in each case, therefore neither the assessee nor his family members were assessed to wealth tax. The AO has completed the assessment by making an addition of 40,73,373 on account of unexp....
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.... as under:- "As far as addition qua jewellery is concerned, during the course of search, jewellery weighing 906.900 grams of the value amounting to Rs. 6,93,582 was found. The appellant's explanation was that he was married about 25 years back and the jewellery comprised "streedhan" of Smt. Jyoti Chadha, his wife and other small items jewellery subsequently purchased and accumulated over the years. However, the Assessing Officer did not accept the above explanation on the ground that documentary evidence regarding family status and their financial position was not furnished by the appellant. The Assessing Officer accepted 400 grams of jewellery as explained and treated jewellery amounting to 506.900 grams as unexplained and made an ad hoc addition of Rs. 3,87,364 under section 69A of the Act working on unexplained jewellery, by applying average rate of the total jewellery found. The relevant portion of the assessment order reads as follows:- "a very reasonable allowance of ownership of gold jewellery to the extent of 400 grams is considered reasonable and the balance quantity of 506 grams by applying average rate, the unexplained gold jewellery is con....
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.... treat only 400 grams as "reasonable allowance" and treat the other as "unexplained". Matter would have been different if the quantum and value of the jewellery found was substantial. 4. We are, therefore, of the opinion that the findings of the Tribunal are totally perverse and far from the realities of life. In the peculiar facts of this case we answer the question in favour of the assessee and against the revenue thereby deleting the aforesaid addition of Rs. 3,87,364. 5. Appeal is allowed in the aforesaid terms." (ii) Jurisdiction High Court in the case of Sushila Devi (supra) wherein it has been held as under:- "The income tax authorities rationale or justification is entirely insubstantial. The assessee says that she was married in mid 1960s and her daughters were born in 1967. She was 70 when these proceedings were started. The income tax authorities do not deny this. In the circumstances, the further explanation that the jewellery belonged to her and represented accumulations of gifts received from family members over a period of time, and also acquired during the subsistence of her marriage is reasonable and logical [para 9]. Th....