TaxTMI 
TaxTMI 
2022 (9) TMI 1078
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....re not warranted for addition though the assessee could not explain the source of acquisition thereof. (ii) On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in allowing relief on account of jewellery items worth Rs.84,53,902/- by not appreciating the fact that the reason for non-seizure of jewellery items to the extent of a prescribed limit cannot be the reason for non-considering the same for the assessment purpose also in view of the fact that the same may be acquired from undisclosed sources which had escaped taxation. (iii) On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in allowing relief on account of jewellery items worth Rs.84,53,902/- by not appreciating the fact that the assessee or his family members have never filed their wealth-tax returns, which could indicate their ownership of such jewellery items. (iv) On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in allowing relief on account of cash found at the assessee's residential premises during the search action to the extent of Rs.4,93,824/- by not appreciating the....
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....tion u/s 132 of the Income Tax Act, 1961 at my residence some jewellery items were found. The valuation of these jewellery items was done by departmental registered valuer DJNESH L SALVI in the presence of two independent witnesses, I agree with the valuation report of the valuer. During the course of search at HOME, as per the Valuation report, the total Gold jewellery of 329.800 gms valued at Rs.9,42,097/-and Diamond jewellery of 14.000 gms (5.71 cts) valued at Rs.18,55,690/- were found. In the LOCKER, as per the Valuation report, the total Gold jewellery of 1446.000 grns valued at Rs.41,17,711/- and Diamond jewellery of 325.900 gms (53.60 cts) valued at Rs.17,84,054/-were found. Q,27 Please state that who is the owner of the jewellery items found at your residence? Also state, whether you and your family members file Wealth Tax Return? What is the source of the jewellery items found at your residence? Sir, the jewellery mentioned above belongs to my wife and my mother. My mother had kept few of her jewellery items with me as she considered them to be more safe here. If you will see it closely, it is ail my ancestral jewellery. Most of it was gifted to us during....
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....ot give any proper explanation. However, in response to the show cause notice, assessee stated that cash belongs to him which was out of withdrawal from his savings bank accounts and is also duly reflected in his books of Accounts. He also submitted the consolidated balance sheet for the year ending on 31st March 31, 2016, wherein cash in hand amounting to Rs. 12,99,564/- has been shown. However, Ld. AO rejected the said explanation after observing as under:- 4.4 The reply of the assessee is considered but the same is found to be not acceptable as the assessee's own statement and reply filed during the assessment proceeding are contradictory in so far as the assessee, during the search action, had stated that the sources of this cash is basically withdraw from the company and the same is taken from the company which was meant to be adjusted against his coming month's salary, on the other hand, during the assessment proceedings the assessee submitted that the cash in hand amounting to Rs. 12,99,564/- on year ended 31 March, 2016 and the difference refers to the amount that has been spent out for business as well as personal use between the date of Balance Sheet and ....
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....224/-." Similarly, item No.6 being 1-Goid Gems Chain valued at Rs.1,25,426/- does not match with the valuation report in the case of any of the family members. Therefore, the appellant's claim of the abovementioned two Jewellery items cannot be accepted. Therefore, the addition u/s.69A in respect of unexplained investment in jewellery to the extent of Rs. 1.20.224/- and Rs,1,25,426/- which comes to Rs.2,45,650/- is upheld and the appellant gets part relief of Rs. 84,53,902/- in respect of addition u/s.69A of the Act,. This ground of appeal is Partly Allowed, 8. Regarding addition of Rs. 5,04,000/- on account of alleged unexplained cash, Ld. CIT(A) has given part relief after verifying the withdrawal of regular bank account and balance sheet, which are as under:- Now, the appellant has submitted that the cash of Rs. 5,04,000/- was from the withdrawal made from his regular bank account and also the cash belonging to family members which was accumulated over the period of time. The appellant has submitted a copy of bank account in his name bearing Account No. 11050124088 held with Nariman Point Branch, HDFC Bank. The appellant has submitted a summary of withdrawal from....
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.... as submitted by the assessee has not been examined by the AO and Ld. CIT(A), nor asked for the remand report from the AO on the valuation report. Thus, this matter should be remanded back to the AO to examine and reconcile the valuation report submitted by the assessee. On the issue of unaccounted cash, he strongly relied on the order of AO. 11. On the other hand, Ld. Counsel for the assessee submitted that the valuation report was filed before the AO, which is evident from the assessee's explanation as incorporated in para 3.5 of the assessment order. Thus, there is no question of remanding the matter to verify the valuation report to the AO. Regarding the benefit of CBDT circular No. 1916 (supra), he said that there are plethoras of judgments of jewellery taken into account the quantity of jewellery to the family members. Therefore, to that extent, it can be safely presumed that jewelleries stated in the circular stands explained and he relied on the following judgments listed as below:- 2 15.2.1999 240 ITR 727 (Kar) Smt. Pati Devi vs. ITO 3 25.10.2013 41 taxmann.com 295 (All) CIT vs. Ghanshyam Das Johri 4 19.7.2010 339 ITR 351(Guj) CIT vs. Ratanlal....
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....from the valuation report of the Govt. Approved Valuer. It was after taking into account the said reports, he has given part relief. Thus, the jewellery which was found on the possession of his wife and mother were old jewelleries and ancestral inheritance and also gifted 2-3 decades ago. Apart from that, even if we go by the CBDT Instruction no. 1916 which has been subject matter of interpretation by various courts in the case of Smt. Pati Devi Vs. ITO (240) ITR 727 (Kar), CIT vs. Ghanshyam Das Johri (41 taxmann.com 295) (All) and CIT vs. Ratanlal vs. Yaparilal Jain 339 ITR 351 (Guj) and others and several other decisions of the Coordinate Bench, the courts have held that CBDT instruction should be taken as guiding factor for presuming assessee to the extent of limit prescribed for the family members should be treated as explained looking to the Indian customs and traditions where jewelleries were given to the ladies at the time of marriage and other occasions. Thus, when the various Hon'ble High Courts have held this proposition in favour of the assessee, we find that the ratio laid down has more pursusive value. In so far as the judgment of Hon'ble Madras High Court is concerned....