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2020 (2) TMI 108
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....or revaluation of seized jewellery may please be allowed. 2. That the AO as well as ld. CIT(A) has erred in treating seized jewellery of Rs. 77,81,035/- as unaccounted for in hands of appellant whereas same is properly shown in books of account, income tax returns of Mr.Chandra Prakash Soni (owner of goods) and in which app was working/ engaged as broker in the case and for which several documentary evidences have been submitted and same is also accepted by Department while passing the assessment order u/s 143(3) of Mr. Chandra Prakash Soni (owner). 3. That ld. CIT(A) has erred in not allowing the additional ground for doing double addition of declared stock value of seized jewellery of Rs. 26,72,808/- which is shown in books of accounts of Shri Chandra Prakash Soni (owner) and further added in hands of Shri Chandra Prakash Soni on protective basis and same is again added in hands of appellant by treating as unaccounted for stock. That date of passing of assessment order of Shri Chandra Prakash Soni (owner) is later in date then date of passing of assessment order of appellant. Thus this ground taken before the ld. CIT(A) was not available at the time of filing of....
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....he given facts and circumstances of the case, the assessee was prevented by sufficient cause which was beyond his control. Therefore, the delay is condoned. 3.1 Brief facts in this case are that an information received by NSCBI Airport, Kolkata on 30.10.2013 as the assessee- Shri Kamal Mohan Gupta was carrying with him large quantity of gold ornaments. He was asked to produce the supporting documents in respect of the source, ownership, possession and application of the said Gold ornaments in his possession. In response, he could only submit an approval memo from M/s Amit Gems (Proprietorship concern of assessee himself.) As, at the time of verification, Sh. Kamal Mohan Gupta ( assessee) could not explain satisfactory explanation. In the light of the above, a warrant of authorization u/s 132(1) of the IT Act, 1961 was duly executed by the DIT Investigation Wing, on Mr. Kamal Mohan Gupta at the NSCBI Airport, Kolkata on 30.10.2013 and a Search and Seizure operation under section 132 of the Income Tax Act, 1961 was conducted on Mr. Kamal Mohan Gupta at NSCBI Airport, Kolkata resulting in the seizure of stone studded gold jewellery (Jadau) weighing 2141.000 Gms. The Order u/s. 1....
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.... ''4.1 During the appellate proceeding the appellant has filed written submission along with additional evidence. The submission is as under and also argued the case on the same basis. "That the Ld. AO has erred in passing of impugned assessment order dt. 22.3.2016 which is without providing proper opportunity of being heard. That appellant has made several request for getting revaluation of seized jewellery by stating that goods which were carrying by appellant were of studded jewellery which is containing WAX of about60% to 70% WAX of total weight whereas valuer has valued entire jewellery at the rate of pure gold-which is absolutely improper and Ld. AO has further erred in not allowing to provide opportunity for revaluation of seized jewellery which is against the principle of natural justice and is uncalled for. That Ld. AO has erred in contending that the appellant has himself has accepted the valuation whereas fact of the case is that the appellant was under acute mental pressure and was compelled to accept the valuation. He was suddenly caught by team of departmental officers at Kolkatta. Appellant belongs from average family and is also not so literate....
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....rakash Soni-owner was provided by Ld. AO dt. 18. 1.2016 for which application dt.25.5.2015 was submitted thus after pwsing of more than seven(7) months statements were provided. Thus appellant was unable to say anything without getting copy of the statements. The valuation of studded jewellery was got done within such a short span of two only, which is not at all possible to get the same done as it takes to value such type of Jadau, Studded jewellery of at least 1-2 whole day. The valuation report was got done by the then valuer Shri Hareram Roy, 21/B, Golap, Sastri Lane, P.L. Aluchipara, Kolkatta in the office of department and later on it has also come to know that he has also been suspended by I.T. department due to inconsistencies in doing valuation. That the valuation of studded jewellery seized is valued at Rs. 77,81,035/- which are manufactured from Gold (999 purity) and semi previous stones studded therein of which gross weight was counted for 3121.86 gms and net weight was conted for 2141.00 gms. By said valuer. That value of Gold has been taken at Rs. 2935/- per gms. and rates of precious & precious stones are varying from one to another very mu....
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.... at maximum WAX therein and which is containing in these jewellery about 60% to 70% of weight. The studded jewellery is manufactured with filling of WAX therein only then such semi p, ecious stones arc affixed therein. As a manufacturing process of the same, the gold leaf is prepared and then thick WAX is put therein and on upside the stones are studded therein. Thus it contains not more than 19-20% of pure gold (999purity). While valuing the same the valuer has taken the entire weight as pure gold (999purity) without considering the quantity for WZX & CH4PDI therein. Thus in other words the value of WAX fillea in jewellery is valued at rate of pure . The rate of WAX is about Rs. 1.50 per gms which is easily available in local market aipur and can also be got ascertained by you at your end, whereas the rate of pure gold taken for valuation is of Rs. 2,935/- per gms. Thus there is difference of Rs. 2933.50 per gram or 29,33,500/- per kilo gram. That jewellery is containing DORI so that it becomes wearable. Dori is made of cotton thread foiled with GOTA. The weight of DORI is about 10% to 15% of total weight. The valuer has counted weight of these DORI in t....
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.... therein. That the owner of goods (Mr. C-1;andra Prakash Soni) has disclosed the value of such goods in his audited books of account as on 31.3.2014 (as seized jewellery) for Rs. 26, 72,808/-, whereas the valuation of these goods have been taken by valuer for Rs. 77,81,035/-, thus there is a difference of Rs. 51,08,227/-. That appellant has submitted certificate from M/s. S.J. Gems & Jewels, 2456, Tatehra Ka Tiba, Dhobi Ghat Ka Rasta, Purani Basti, Jaipur who has certified that gold red jewellery generally being contains of following ingriendents:- (a) Gold-pure = 15%-20% (b) WAX/Chapdi = 65%-70% (c) Dori, Sarafa etc. = 5%40% Above certificate was submitted to Ld. AO before passing of assessment and Ld. AO has erred in not putting any reliance to same and no contrary evidence have been brought on record for not accepting the same. That Ld. AO has erred in not appreciating the statements of Mr. Chandra Prakash Soni recorded on same date of search proceedings of appellant i.e. on 30.10.2013 wherein relevant question no. 8 which is reproduced as below:- Q.No.8:- Please explain the item wise details of sample given on dt.3.....
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....mproper in the facts & circumstances of the case. When the basic substratum of seizure is challenged in Writ Petition then there does not remain any reason to challenge valuation in that Writ Petition. That the proceedings u/s. 143(3) are independent proceedings and in which Assessing Officer should apply his mind afresh so as to make a proper and justified assessment of the income and which is lacking in the present case and thus impugned assessment order is absolutely illegal and may please be deleted.'' 3.6 On the other hand, ld. DR relied on the order passed by the ld. CIT(A). 3.7 We have ld. counsel for both the parties, perused the materials placed on record and also perused the orders passed by the lower authorities. Before we decide the merits of this ground, it is necessary to evaluate the order passed by the ld. CIT(A) while disposing off this ground. The ld. CIT(A) had adjudcated this ground in para 4.2 of his order which is reproduced as under:- ''4.2 I have carefully consider the material before me I find that the jewellery was seized from the assessee by the Investigation Wing, Income Tax Department at Airport, Koikata on 30.10.2013 which was v....
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....nity is allowed by Ld. AO in remand proceedings also and has not allowed to get revalue the seize jewellery which is absolutely illegal and without providing any opportunity of being heard and thus remand report as sent by Ld. AO may please be declared as non-est and no cognizance on such remand report may please be drawn. That the Ld. AG has not taken into consideration following facts while preparing remand report which are essential and inevitable for deciding the case: - That applications which have been submitted to Pr. CCIT, CIT on dt. 19.1.2016, 23.2.2016, 29.1.2016 before passing of assessment has remain unanswered and now in second innings of factual findings offacts these facts have again being ignored by the Ld. AO. That basic object of rule 46A is to bring those facts on record which are essential for deciding of the case and which could not brought on record during the assessment proceedings. And while issuing the remand report he has ignored all those aspects which were ignored by his predecessor which is absolutely illegal and unjustified in the facts & circumstances of the case. That the Ld. AO has not based his remand report on those poin....
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....ued by the Registered Valuer and the assessee himself had accepted by recording his statement about the valuation of the jewellery before the Investigation Wing. It was further held that the assessee was silent for almost 2 ½ years and at a very later stage raised the objection of revaluation of jewellery which is without any basis and it is an afterthought. However, it was submitted by the ld.AR of the assessee that the assessee was under acute mental pressure and is not so literate and the assessee was compelled to accept the valuation of the jewellery. The assessee was suddenly caught by the team of Departmental Officers at Kolkatta and thus there is no acceptance by free will of the assessee. In this respect, the assessee had also filed an affidavit dated 18- 01-2016 wherein it was categorically submitted during the assessment proceeding that Valuation Report dated 30-10-2013 was got signed by him under acute mental pressure and the same is not correct valuation of jewellery. It was submitted by the ld.AR that the assessee was not even told about the contents of the said Valuation Report and therefore, the assessee had submitted the applications for revaluation of seized....
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....to 1600 per carat which were studded in those jewellery which were caught and wrongly seized by I.T. Department, whereas the valuer has taken up the rate of such polka (cut & polished diamonds) varying from Rs. 6000/- to Rs. 10000/- per carat. Thus it is very much unclear that from where the above rates have been taken. The ld.AR submitted that it is very much proved that valuation of jewellery was made under pressure and looking to the actuality of material used therein. As the assessee is dealer in such Studded Jewellery and understands the very basic of these gold jewellery. These studded Jewellery are containing at maximum WAX therein and which is containing in these jewellery about 60% to 70% of weight. The studded jewellery is manufactured with filling of WAX therein only then such semi precious stones arc affixed therein. As a manufacturing process of the same, the gold leaf is prepared and then thick WAX is put therein and on upside the stones are studded therein. Thus it contains not more than 19-20% of pure gold (999purity). While valuing the same the valuer has taken the entire weight as pure gold (999purity) without considering the quantity for WZX & CHAPDI therein. ....
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.... it a total of Rs. 7781035/- (already shown Rs. 2672808/- + addition on protective basis of Rs. 5108227/-). If it would have been intention to treat entire seized jewellery at Rs. 7781035/- as undisclosed then Rs. 7781035/- would have been added on protective basis in hands of Chandra Prakash Soni and not difference value of Rs. 2672808/-.Keeping in view the facts and circumstances of the case narrated above, we are of the view that admittedly no valuation of the seized jewellery was carried out in the presence of Shri Chandra Prakash Soni who according to the assessee is, Owner of the seized jewellery and the ld. CIT(A) has not dealt with the specific grounds raised by the assessee for seeking the revaluation of the seized jewellery which is contained in para 4.1 of the order of the ld. CIT(A). The AO had also not made any independent inquiry in the jewellery market about the gold contents of studded jewellery during the remand proceedings whereas the assessee has submitted the report of independent jewelers of the market during the assessment proceeding. The assessee had also submitted three applications, the copy of which is placed at pages 145 to 157 of the paper book, for seek....