TaxTMI 
TaxTMI 
2025 (2) TMI 815
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....losed jewellery u/s 69A of the Income Tax Act, 1961, by (2.1) not considering the sources of jewellery found during the course of search proceedings and its explanation submitted during the course of assessment proceedings as well as appellate proceedings (2.2) ignoring the affidavits, valuation reports of Mehta Jewels dated 31.07.2002, declaration under VDIS 1997 gift deeds and gift declaration (2.3) not controverting the factum of joint family living of the assessee, which stands accepted by the Assessing Officer, (2.4) rejecting the mandate of CBDT instructions number 1916 for all the family members (2.5) not accepting the 1088.53 gm. of gold jewellery owned by Smt. Nidhi Data, assessees's wife, prior to her marriage (2.6) incorrectly mentioning the fact on page number 83 of the appellate order, which are just on his presumption, assumption and surmises, without any material and record (2.7) incorrectly mentioned the fact on page no. 85 in second last para of the appellate order that "as the figures mentioned in the assessment order are not reconcilable and even the learned AR was not able to reconcile and explain th....
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....rief facts of the case are that a search and seizure action under section 132 of the Income Tax Act, 1961 was carried out by the Income Tax Department on the members/concerns of Data Group, Alwar on 14.10.2015 of which the assessee is one of the members. During the course of search, stock-in-trade, documents, books of account and/or loose papers were found and seized from the premises of the members of the Data Group of which one such member happens to be the assessee. Consequently, notice under section 153A of the IT Act was issued and served upon the assessee on 04.07.2016 requiring him to file a true and correct return of income. In response, the assessee filed his return under section 139 on 24.03.2017 declaring income of Rs. 19,26,220/-. The case was selected for manual scrutiny, being search case, as per prevalent CBDT guidelines. The assessee derives income from salary, business income and other sources. The assessment proceedings were initiated by issuing notice under section 143(2) of the IT Act on 11.08.2017 and duly served upon the assessee on 18.08.2017. Notice under section 142(1) dated 31.08.2018 was issued to the assessee requiring the assessee to furnish details ....
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....see. In course of assessment proceedings assessee explained that the total cash found from the residence & locker at Jaipur and residence at Alwar is Rs. 20,28,775/- out of which Rs. 19,75,00/- was seized. The explanation in respect of the cash found was provided which is reproduced at Pg 3-5 of the assessment order. The AO accepted that Rs. 1,71,010/- found in case of Babu Lal Data is to be considered in his case. However he did not accept the explanation with reference to the cash of Rs. 4,20,410/- found from the room of Deepak Data and Rs. 7,56,030/- found from the room of assessee and thus made addition of Rs. 11,76,400/- u/s 69A of the Act. The Ld. CIT(A) at Pg 30 held that cash of Rs. 4,20,410/- was found from the room of Deepak Data and therefore the same cannot be considered in the hands of assessee and thus deleted the addition of the same in the hands of assessee. Out of the cash of Rs. 7,56,030/- found from the room of assessee, the Ld. CIT(A) at Pg 31-32 deleted the addition of Rs. 3,27,200/- (3,02,000+25,200) as belonging to Smt. Nidhi Data, wife of assessee being amount received by her on her birthday on 07.10.2015of Rs. 3,02,000/- and pin money of R....
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....T(A) observed that despite having sufficient cash in hand, the assessee withdraw the amount. It is correct that the assessee has withdrawn higher amounts than the immediate preceding years but that cannot be sole reason for making addition purely on the basis of suspicion. Further, I failed to understand the reasoning of the AO that the amount was withdrawn to justify the cash deposits during demonetization period i.e., between 9th Nov., 2016 to 30th Dec., 2016. It is also seen that the cash was withdrawn much prior to such event. So far observation regarding sharp increase in payable expenses is concerned, there is no finding by the AO that such expenses are bogus. Therefore, in my considered view, the addition has been made purely on the basis of suspicion. Such action of authorities below cannot be affirmed. I, therefore, direct the AO to delete the impugned addition. Thus, ground raised by the assessee in this appeal is allowed." Nand Kumar Taneja & Anr. Vs. ITO (2019) 55 CCH 0705 (Del.) (Trib.) The relevant para 6 & 7 of this decision is reproduced as under:- "6. Apart from that, the details of; opening cash, cash withdrawal, cash deposited, cash exp....
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....5 f. Standard Chartered Bank: Statement of account. g. Bank: Book of Kotak Mahindra Bank. h. Bank Book of Standard Chartered Bank. i. Copy of all medical treatment documents. 7. All these documents have neither been rebutted nor there is any finding that cash-in-hand disclosed in the balance sheet was beyond the scope of their income or are not substantiated from the bank account. Simply because after the period of demonetization, that is, 08.11.2016, certain amount of cash has been deposited in the bank account, it does not mean that the cash- in-hand as on 31.3.2015 and 31.03.2016, duly shown in the balance sheet and disclosed to the department in the respective income tax return filed much earlier, is unexplained. Accordingly, in view of the above reasoning, addition made by the AO and sustained by the Ld. CIT (A) is directed to be deleted." Neeta Breja Vs. ITO ITA No. 524/Del/2017 order dt.25.11.2019(Del.) (Trib.) The Hon'ble ITAT at Para 12 of its order held as under:- "12. In the present case also the learned assessing officer or the learned CIT A did not show that above cash was not available in the hand....
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....ord and is supported by adequate reasoning and, therefore, we do not want to interfere with the order of ld. CIT(A) and accordingly we uphold the findings of the ld. CIT(A) sustaining relief granted to the assessee." In view of above, addition of Rs. 4,28,830/- confirmed by Ld. CIT(A) be deleted. Ground No.2 That Ld. CIT(A) has erred on facts & in law in confirming the addition of 2102279.00 as undisclosed jewellery u/s 69A of the Income Tax Act, 1961, by (2.1) not considering the sources of jewellery found during the course of search proceedings and its explanation submitted during the course of assessment proceedings as well as appellate proceedings (2.2) ignoring the affidavits, valuation reports of Mehta Jewels dated 31.07.2002, declaration under VDIS 1997 gift deeds and gift declaration (2.3) not controverting the factum of joint family living of the assessee, which stands accepted by the Assessing Officer, (2.4) rejecting the mandate of CBDT instructions number 1916 for all the family members (2.5) not accepting the 1088.53 gm. of gold jewellery owned by Smt. Nidhi Data, assessees's wife, prior to her marriage ....
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....y in the hands of the assessee, the total jewellery explained (3500.455 gms) (as per assessment order) and unexplained (999.475 gms) (as per CIT- A order), totalling 4499.930 gms, will exceed the total jewellery found (3861.800 gm) from the premises, (as per assessment order), which cannot happen in any case or in other words, the addition cannot be made more than the jewellery found at the time of search. AO Pg 9-24 CIT(A) Pg 41-88 (relevant finding at Pg 80-82 & Pg 83-88) Facts:- During the course of search gold jewellery weighing 7181.730 gms and silver articles weighing 43.916kgs(Annexure 15) was found from the residence/ bank locker of assessee & his family members at Jaipur and Alwar as under:- Particulars Gold Jewellery (in gms) Silver Articles (in kgs) From residence and bank locker at Alwar - Locker No.1314 of PNB, Alwar 3146.330 173.60 2.97 2.99 Total 3319.930 5.96 From residence and bank locker at Jaipur - Room of Nidhi Data, w/o Ajay 1354.500 3.19 - Room of Ritika Data, w/o Deepak 1506.000 91.500 2.04 - - Room ....
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....f gold jewellery has been missed out in the assessment order. Accordingly Ld. CIT(A) issued the enhancement notice. The assessee furnished the submission on the enhancement notice but the Ld. CIT(A) without considering the same held that the explanation given by the assessee was not found satisfactory and thus the addition on account of gold jewellery is further enhanced in respect of 638.13 gms valued at Rs. 17,33,800/- over and above the addition made in the assessment order.In respect of silver articles no finding was given and thus addition made by the AO is confirmed. Submission:- It is submitted that the family of assessee is a joint family comprising of the family of assessee, family of his father Sh. BabuLal Data and family of his brother Sh. Deepak Data. The family has residence at Alwar and also at Jaipur. Sh. BabuLal Data usually resides at Alwar whereas the assessee and his brother along with their family normally reside at Jaipur. However, at Jaipur there is separate bedroom of Mohini Data wherealso gold jewellery was found. Therefore, it is not uncommon that the jewellery of the wife of assessee and his brother is kept at the residence/ locker at Alw....
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....articles which is not disclosed. The AO in the assessment order observed that from the room of Nidhi and Ajay Data 1354.500 gms and from locker of Nidhi Data 909.80 gms, totaling to 2264.30 gms of gold jewellery was found but in the jewellery sheet which is part of the statement of Ajay Data only 907.425 gms was shown and therefore he considered the gold jewellery to that extent as explained in case of Nidhi Data. Thereafter he considered gold jewellery of Ritika Data and Deepak Data found from her room at 1506 gms but since in the jewellery sheet made part of the statement of Ajay Data 2038.87 gms was noted, this much gold jewellery was considered as explained in her case after excluding gold jewellery of 171.07 gms in her hand as unexplained. The AO also considered the gold jewellery as claimed in case of Ajay Data, Deepak Data and the minor children's to that extent claimed as explained and thus arrived at gold jewellery explained to the extent of 3500.45 gms out of the total gold jewellery of 3770.30 gms found from the residence and from locker at Jaipur but in doing so it is ignored that 91.500 gms of gold jewellery was found from the room of Mohini Devi which cannot ....
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.... supported by the report of jewellery valuation dt.31.07.2002 and the documents regarding the VDIS dt. 06.01.1998 was filed (Annexure 8.22). According to this affidavit of Tarun Jain, 1088.853 gms of gold jewellery which she was holding was handed over to her at the time of her marriage which she has taken away with her. Further Sh. Tarun Jain in his declaration dt. 30.12.2017 has stated that he gifted 633.15 gms on 16.08.2002, from his HUF 25.925 gms gold jewellery was gifted on 16.08.2002(Annexure 8.23) and Smt. Manjari Jain, mother gifted 248.35 gms gold jewellery on 16.08.2002 (Annexure 8.24). Thus in all Nidhi Data received gold jewellery of 1996.278 gms (1088.853 + 633.15 + 25.925 + 248.35) whereas the lower authorities without controverting the affidavits and the evidences filed have only considered 907.425 gms (633.15+25.925+248.35) as explained in the hands of Nidhi Data. Thus considering the totality of fact, the entire gold jewellery of 2264.300 gms found from the bedroom and locker of Nidhi Data is fully explained. It is also submitted that considering the status of assessee, the jewellery found can't be presumed to be excessive/ unreasonable. In this connectio....
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....njustified and the same be deleted." 5. On the other hand, the ld. D/R has relied upon the order of the ld. CIT (A). He has also not controverted the submission and contention raised by the assessee and has merely supported the order of the ld. CIT (A). Ground No. 1 : 6. We have considered the rival submissions as well as the relevant material on record. We note that the only issue in this ground is whether the Ld. CIT(A) is justified in not allowing set off of cash considered unexplained by him against the cash withdrawal of Rs. 4,72,000/- made from M/s Vijay Industries between 05.04.2014 to 20.04.2015. We note that no document is found in search to come to a conclusion that the amount withdrawn by the assessee from M/s Vijay Industries has been utilized elsewhere. There is no law which prohibits an assessee to keep cash in hand and therefore only because assessee has not given explanation as to why the cash was withdrawn, when he has withdrawn the cash earlier also cannot be a ground to reject the explanation of assessee. In various cases referred above, it has been held that where no evidence is brought on record that cash withdrawal has been utilized elsewhere, such ca....