TaxTMI 
TaxTMI 
TaxTMI 
2021 (10) TMI 277
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....he Act. 3. Briefly stated, the facts of the case are that a search and seizure action u/s 132 of the Act and/or survey action u/s 133A was carried out on the members of Bajrang Group and the assessee is one of the members of the said group. During the course of search at the residential premises of the assessee, jewellery amounting to Rs. 2,34,32,323/- pertaining to various family members was found and individual inventory was prepared for each of the family members wherein the inventory pertaining to the assessee and his wife were also inventorised and was valued at Rs. 95,46,282/-. The Assessing officer noted that the assessee, being the key person of the family, in his statement recorded u/s 132(4) of the I.T. Act, 1961 during the course of search proceedings offered Rs. 1,50,00,000/- to tax on account of undisclosed investment in jewellery, whereas in the ROI filled for the relevant period, this surrendered amount was not shown by the assessee in his return of income. As the assessee has not shown it in his ROI, as per the Assessing officer, it has to be taxed individually in hands of the respective persons. The Assessing officer also noted that the assessee has furnished an a....
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....it in this regard filed by the Ld. A/R before the AO has not been controverted. Since Shri Ajay Maheshwari is close relative of the appellant and has creditworthiness there is no reason for the AO to dismiss the claim. At this juncture the evidentiary value of affidavit cannot be denied unless the affidavit is proved wrong/defective. It is also mandatory for the AO to summon the person giving affidavit for cross examination as is held in the decision of Hon'ble Supreme Court in the case of Mehta Parikh & Co. thus; it is settled law that when the contents of affidavits are not controverted the deposition should be accepted correct. Reliance is also placed on the following decisions (i) Mehta Parikh & Co. v. CIT [1956] 30 1TR 181 (SC) (ii) Dilip Kumar Ray v. CIT [1974] 94 ITR 1 (Born.); (iii) Malwa Knitting Works v. CIT [1977] 107 ITR 379 (MP) and (iv) Sri Krishna v. CIT [1983] 142 ITR 618/13 Taxman 309 (All.). 5.2 In view of the above the jewellery received from Ajay Maheshwari & considered as unexplained by the AO is not tenable. The addition of Rs. 8,95,890 + Rs. 1,44,400 is directed to be deleted. Jewellary claimed to have been received from (Late Sh. Ramswaroop M....
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.... valuation report not having signature done are at best can be termed as technical objection. 6.3 Coming to the claim of evidence of jewellary in possession of Late Sh. Ramswaroop Maheshwari, the Ld. A/R submitted that the jewellary belong to Late Sh. Ramswaroop Maheshwari who was filing his return of income and substantial jewellary was shown in the return for the AY 2005-06 which was filed by the Legal Heir, Sh. Vijay Maheshwari. Copy of this return is available from page 34 to 46 of APB which was filed before the AO. In this return Late Sh. Ramswaroop Maheshwari has disclosed jewellery etc. under the heading which reads as under:- "Gold and diamond jewellery & silver utensils since 1952" amounting to Rs. 2,32,080/-". In simple terms this value of jewellary disclosed in the I.T return translates to substantial amount of gold etc since the value of gold was Rs. 76 per 10 gms. However other than this balance sheet entry, there is no other detail which is filed with the return no other detail like break up of gold &/or diamond which were possessed by ramswaroop maheshwari on 31.3.2005. However the fact of substantial jewellary cannot be denied especially as it is evident from ....
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....s obtained by Late Shri Ramswaroop Maheshwari from the registered valuer and handed over to the assessee along with jewellery and the same was submitted before the Assessing officer as well as before the ld CIT(A) and there was no adverse inference recorded by the ld CIT(A) on the verification of valuation report and inspite of that, the addition has been confirmed. It was further submitted that the assessee was having these jewellery recorded in the his books of accounts which was submitted before the AO and the ld CIT(A) and it is thus an undisputed fact that the detail break up of jewellery is very much available on record and was properly recorded in the books of accounts which was produced before both the lower authorities and there is no adverse inference recorded by ld CIT(A) and inspite of that, the additions have been confirmed. 7. It was further submitted that Late Shri Ramswaroop Maheshwari was having sufficient means of possessing the above gold and diamond jewellery. A copy of his last ITR for A.Y 2005-06 and balance Sheet was furnished to the AO and is placed on record. As per Balance Sheet, the capital account of late Shri Ram Swaroop Maheshwari was of Rs. 93.21 Lac....
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.... valuation report and the addition so confirmed by the ld CIT(A) be upheld. 9. In his rejoinder, the ld AR submitted that during the course of assessment proceedings, the assessee was asked to explain the reasons as to why the surrender so made in respect of jewellery was not complied with while filing the return of income and in response, it was submitted by the assessee that after surrender of jewellery, he has filed an affidavit before the DDIT Investigation stating that the assessee along with his family members have purchased jewellery from time to time, certain jewellery has been inherited from his parents and also received from his brother and wife and accordingly submitted that surrender of jewellery was subject to verification of various bills and other documents and accordingly, the surrender so made was retracted and not acted upon while filing the return of income. Thereafter, the assessee was asked to explain the source of acquisition and possession of jewellery and in response, the assessee furnished the source of acquisition of jewellery in three parts i.e. jewellery purchased by cheque payment, jewellery received in gift from Shri Ajay Kumar Maheshwari and jeweller....
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....ri and considered as unexplained by the AO is not tenable and the addition of Rs. 8,95,890/- and Rs. 1,44,000/- has been directed to be deleted." There is thus a clear and specific finding of the ld CIT(A) in respect of jewellery received from Sh. Ajay Maheshwari and the addition totaling to Rs. 10,40,290/- has been directed to be deleted. However, the ld CIT(A), in subsequent part of his order where he has discussed the matter in context of jewellery received from Late Shri Ramswaroop Maheswari in para 6 onwards, while summarizing his findings in para 6.4 has taken the whole of the figure of jewellery amounting to Rs. 54,76,382/- treated as unexplained including the jewellery received from Sh. Ajay Maheshwari amounting to Rs. 10,40,290/- and has directed to treat 75% of the whole of jewellery of Rs. 54,76,382/- as explained and remaining 25% has been treated as unexplained. We therefore find that there is an apparent mistake in form of considering the wrong figure which has occurred in the findings of the ld CIT(A) in para 6.4 of the order when the same is read along with his specific findings at para 6.2 of his order and the figure of Rs. 44,36,092/- should have actually been tak....
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....ncome so filed on behalf of Late Shri Ramswaroop Maheshwari for A.Y 2005-06. In this regard, the ld AR has submitted that the valuation report of the registered valuer shows detail break up of individual gold and diamond jewellery which were possessed by Late Ramswaroop Maheshwari and the details of jewellery have also been recorded in assessee's own books of accounts which were submitted for verification and no adverse inference has been drawn by either of the authorities. In our view, where the valuation report has been accepted by the ld CIT(A) which not just contains the total value rather it contains the valuation in respect of individual items of gold and diamond jewellery, the details of gold and diamond jewellery were very much on record along with disclosure thereof in the tax return filed for A.Y 2005-06. Therefore, having accepted the valuation report and factum of possession of substantial jewellery and the fact that necessary details of individual jewellery items are available on record, the action of the ld CIT(A) in treating only 75% of jewellery as explained and remaining 25% as unexplained doesn't have a rational basis with the material available on record and as t....