TaxTMI 
TaxTMI 
2022 (12) TMI 551
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....rming the action of the Assessing Officer for assumption of jurisdiction u/s. 153A for the year under consideration, as there was no Panchnama drawn in the case of the assessee. 2. That even in the remand report of the Assessing Officer, it could not prove that there was search warrant in the case of the assessee and, therefore, the proceedings as initiated u/s. 153A, are void-ab-initio. 3. That the Ld. CIT(A)-5, Ludhiana has failed to appreciate the decision of the Hon'ble Mumbai Bench in the case of Regency Mahavir Property in ITA No. 682 & 683/Mum/2016 wherein, on similar facts & circumstances, the proceedings u/s. 153A have been quashed. 4. Notwithstanding the above said grounds of appeal, the Ld. CIT(A)-5, Ludhiana has erred in confirming the addition of Rs. 1,94,655/- on account of purchase of jewellery, which is against the factual facts & circumstances of the case and further, the said jewellery was not found from the locker of the assessee and, as such, the addition is otherwise not sustainable. 5. That the appellant craves leave to add or to amend any of the grounds of appeal before the appeal is finally heard or disposed-off. 3.....
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.... is no search warrant in the name of the assessee and as such, the notice issued under section 153A is bad in law. In support, reliance was placed on the decision of Coordinate Mumbai Benches in the case of Regency Mahavir Properties Vs. ACIT reported in [2018] 89 taxmann.com 444 and the decision of Indore Benches in the case of "Rajat Tradecom Pvt. Ltd. Vs. DCIT reported in 120 ITD 48. 5.3. It was further submitted that this issue was also raised before the Ld. CIT(A) and even remand report was called from the AO and in the said report, a very vague reply has been given by the AO that the warrant of authorization was issued for M/s. Saakshat in which the assessee was not a partner and in paragraph 3 of the report, it has wrongly been mentioned that the assessee is a partner in this firm. It was submitted that the assessee was partner only in two assessment years i.e 2014-15 & 2015-16 respectively. Further the AO has relied upon warrant of authorization, which was never shown to the assessee and even no Panchnama has been drawn in the name of the assessee. It was submitted that the Ld. CIT(A) has wrongly mentioned that no return was filed by the assessee in response to the notic....
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....and on the same argument, the Ld. CIT(A) should have deleted the addition in the hands of the assessee. It was accordingly submitted that even on merits, the addition deserves to be deleted. 6. Per contra, the Ld. DR relied on the findings of the lower authorities and submitted warrant of authorization under section 132(1) during the course of hearing and it was submitted that the search has been duly initiated in case of the assessee and the assessment has been rightly completed u/s. 153A r/w 143(2) of the Act. In support, reliance was placed on the decision of Hon'ble Delhi High Court in the case of M/s. Mdlr Resorts Pvt. Ltd. Vs. CIT & Ors [2013] 40 taxmann.com 365. Further, our reference was drawn to the findings of the Ld. CIT(A) which read as under: "The facts of the case, basis of addition made by the AO and the arguments of the AR during the course of appellate proceedings have been considered. The AR has submitted that the addition has been made on the basis of two bills for purchase of gold, one in the name of the assessee and other in the name of Smt. Swarna Rani, mother-in-law of the assessee. The AR has argued that the bills was not found in the possess....
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.... hands and addition, if any, was required to be made in the case of Sh. Roop Sachdeva. Under the facts & circumstances of the case, the addition of Rs. 1,52,390/- made by the AO is not found sustainable and therefore, deleted. To sum-up, the addition to the extent of Rs. 1,94,655/- is confirmed and the appellant gets relief of the balance amount of Rs. 1,52,390/-. The AO is further directed to take necessary action in the matter, for bringing to tax the other investment in the hands of Sh. Roop Sachdeva. This may be considered as direction u/s. 150 of the Income Tax Act, 1961." 7. We have heard the rival contentions and pursued the material available on record. The ld. CIT(A) has returned a finding that the bill amounting to Rs. 1,52,390/- have been found & seized from the locker no. 144, in the name of Sh. Roop Sachdeva and cognizance of the same should have been taken in his hands and addition, if any, was required to be made in the case of Sh. Roop Sachdeva and the addition of Rs. 1,52,390/- made by the AO was not found sustainable and was directed to be deleted. It is also an admitted fact that the bill amounting to Rs. 194,655/- has also been found & seized from the same lo....
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....Panchnama have been enclosed in the 'paper book' which clearly demonstrates the contention of the assessee both in respect of the jewellery from the residence and from the locker of Sh. Roop Sachdeva. Notwithstanding the above said facts, it was submitted that reliance is placed on the decision of Coordinate Delhi Benches in the case of Vibhu Aggarwal VS DCIT [2018] 93 taxmann.com 275 that the receipt of the jewellery on account of various ceremonies could be considered reasonable because gifting of jewellery is customary. 11. Per contra, the Ld. DR has relied on the findings of the lower authorities and our reference was drawn to the findings of the Ld. CIT(A) which read as under: "The facts of the case, basis of addition made by the AO and the arguments of the AR during the course of appellate proceedings have been considered. The AR has submitted that there was search on the premises of Sh. Krishan lal Sachdeva, on 04.10.2007 and jewellery weighing 2010 grams was found, out of which 165 grams jewellery was seized which was released later on. It is further mentioned that net weight of the jewellery found from the locker and residence in the name of Sh. Roop Sa....
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....imit prescribed in CBDT instruction No. 1916 dated 11.05.1994. The AO was therefore right to add the same to the income of the assessee since the assessee failed to explain the acquisition of the jewellery found. Even during the appellate proceedings, the AR has not been able to substantiate the source of acquisition of the jewellery found during the course of search. Under the facts and the circumstances of the case, the addition made by the AO u/s. 69 to be taxed at the rates prescribed u/s. 115BBE, is found sustainable and hence upheld. " 12. We have heard the rival contentions and pursued the material available on record. During the course of assessment proceedings, the assessee was issued a show-cause and contents thereof read as under: "During the course of search of your locker no. 144 with Bank of India, Ludhiana, gold/diamond jewellery and silver items were found. After engaging Govt. approved valuer, these items were evaluated at Rs. 17,33,200/-. You are hereby required to explain the source of same, you are further show caused as to why the same should not be added back as unexplained." 13. Thereafter, the AO has gone ahead and has made an addition of Rs. ....
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.... 3. That the submission of the assessee and the judgments have relied upon have not been considered properly by the Ld. CIT(A)-5, Ludhiana. 4. That the Appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off. 17. In this regard, the relevant facts and findings of the Ld. CIT(A) which are under challenge before us read as under: "4.2 Grounds of Appeal Nos. 2, 3 & 6 pertain to addition of Rs. 6,38,400/- on account of jewellery found during the course of search and taxing the same under Section 115BBE. The AO has mentioned that the case pertains to M/s. Roop Square Group of Companies where search and seizure operation u/s. 132 was conducted on 01.11.2017. During the search of locker bearing no. 587 with HDFC Bank, jewellery worth Rs. 26.80 lacs was found, besides jewellery worth of Rs. 23.40 lacs was found at the residence. The assessee was show-caused why the jewellery found should not be treated as unexplained. In Reply, the assessee stated that the jewellery worth Rs. 23.40 lacs found at the residence belongs to the assessee and her family members which was purchased by them from time to time. It was al....