TaxTMI 
TaxTMI 
TaxTMI 
2025 (6) TMI 131
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....d. CIT(A) is illegal, ab initio void inasmuch as the approval given by Id. JCIT u/s 153D is not in accordance with provisions of law. The assessment order is liable to be quashed in absence of valid approval u/s 153D. Ground No.3: The appellant reserves the right to amend, modify or add any of the ground/s of appeal." 2. Succinctly stated, the assessee was subjected to search and seizure proceedings u/s 132 of the Act on 17.09.2014. Notice u/s 142(1) of the Act was issued to the assessee for the year under consideration, i.e AY 2015-16 on 22.05.2015. In compliance, the assessee filed her return of income declaring an income of Rs. 4,05,760/-. Thereafter, the case of the assessee was selected for scrutiny assessment u/s 143(2) of the Act. 3. During the course of the assessment proceedings, it was observed by the A.O. that gold jewellery/ornaments and bullion was found lying in the Locker no. 49 with Dena Bank, Branch: Rajnandgaon which was jointly held by Smt. Asha Daga (assessee) and Shri. Vishal Daga (son of the assessee), viz. (i) gold jewelry/ornaments (wt. 1037.700 grams); and (ii). bullion (wt. 329 grams), as under: Place where items found Items Found Seized Locker No....
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....is office on 11/08/2016 has explained the bullion found from the locker along with the self declaration. The explanation submitted by the assessee relating to bullion found has been carefully considered. However there is no merit in her explanation and therefore the same is not acceptable for the following reasons:- 1. Assessee could not produce any bills and vouchers in support of her claim of conversion of her old jewelleries into bullion. 2. Assessee has never filed wealth tax return for any of the A.Y. under consideration. As the assessee has failed to explain the sources of possession of gold bullion satisfactorily, therefore the entire amount of bullion found of 329 gms. amounting to Rs. 8,98,170/- is added to the total income of the assessee. During the course of search proceedings the assessee has explained the sources of gold jewelleries found of 1037.700 grms. The entire jewelleries found from the locker and her residence. The explanation submitted by the assessee has been carefully considered. However there is no merit in her explanation and therefore the same is not acceptable for the following reasons:- 1 The assessee could not produce any purchase bills of....
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....sion of children's marriage. The appellant with the same mindset had converted old gold available with her into bullion. As regards bills and voucher, it is stated that because of passage of long time, the appellant does not possess evidence in respect of conversion of old gold into bullion. It is submitted that the appellant in such reply had explained the source of entire 1495.06 grams of jewellery found the locker and her residence which was inventoried vide annexure JF/1 dt. 17.09.2014 and JS/1 dt. 29.09.2014. Moreover, the appellant provided breakup of jewellery belonging to each member of her family. Such breakup of jewellery has also been reproduced on page 11 of the assessment order:- The details of jewellery found from locker no. 49 & from the residence of appellant are as follows:- Name of owner Quantity (net) (gms) Location Inventory Satyanarayan Daga 56.42 Bedroom of appellant & Satyanarayan Daga Annexure JF/1 dt. 17.09.2024 Asha Daga 371.03 Bedroom of appellant & Satyanarayan Dag & Locker No. 49 (Dena Bank) Annexure JF/1 dt. 17.09.2014 & 29.09.014 Rupali Daga 76.16 Bedroom of Vishal Daga & Shweta Daga Annexure JF/2 dt. 17.09.2014 Vishal Daga 33.....
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.... of Sagar) Unmarried male 100 grams Rupali Daga (daughter of appellant Unmarried female 250 grams Sagar Daga Married male 100 grams Smt. Swati Daga (Appellant's daughter in law) Married female 500 grms Total 2250 grams As against the above explained gold of 2250 grams, total quantity of gold ornaments found during search at all places was 1247.90 grams(net) which was much within the limits prescribed CBDT. The fact that different jewellery items found during search belonged to different persons is also evident from the fact that various jewelleries were found at different place. As regards bills and vouchers, it is stated that because of passage of long time, the appellant and her family members do not possess evidence in respect of such jewellery. It is further stated that in day to day human life, it is quite impossible that every individual would keep the purchase bills intact for a long period under expectation that some income tax officer will ask for the bills. Similarly, on auspicious occasions when ornaments are gifted, no one would ask for preparation of gift deed etc. which has to be used as evidence. Therefore, on this account also no adverse i....
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....s that have been pressed into service by the Ld. AR to drive home his respective contentions. 8. Controversy involved in the present appeal hinges around two issues, viz. (i). that as to whether or not the approval granted by the Jt. CIT (Central), Raipur u/s 153D of the Act is in accordance with the provisions of law?; and (ii). that as to whether or not the lower authorities are right in law and facts of the case in treating the gold jewellery/ornaments (Wt. 437.700 grams) and bullion (Wt. 329 grams) as an unexplained investment in the hands of the assessee? 9. Apropos the Ld. AR's contention that the assessment framed by the A.O vide his order passed u/s. 143(3) of the Act, dated 30.09.2016 was illegal and void ab- initio for the reason that the Jt. CIT had failed to give his approval u/s.153D of the Act in accordance with the provision of law, we are unable to persuade ourselves to concur with the same. On a perusal of the record, we find that the Jt. CIT, Range- Central, Raipur vide his letter dated 22.09.2016 marked as F. No.Jt.CIT(C)/RPR/153D/2016-17/144 had, inter alia, granted his approval qua the draft assessment order passed by the A.O u/s. 153A and 143(3) of the Act i....
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....mind was there while granting the approval. The Hon'ble High Court had further observed that the language used in the letter granting the approval revealed the subjective satisfaction that was arrived at based on the documents that were produced before the Jt. CIT. It was further observed, that on a perusal of the language of the approval letter, it cannot be presumed that there was no application of mind as the approval need not be a detailed assessment order. The Hon'ble High Court after pressing into service Section 114 of the Evidence Act had observed that in case where the official act had been done in accordance with official procedure, then it would lead to presumption that due diligence was followed. 11. As the facts involved in the present case remains the same as were there before the Hon'ble High Court in the case of Hitesh Golecha Vs. ACIT, Central Circle-1, Raipur (supra), wherein the Hon'ble High Court had looked into the similarly worded approval granted by the Jt. CIT, Range-Central, Raipur and had rejected the assessee's claim that the said approval was granted without application of mind by the latter, therefore, we respectfully follow the same. 12. Accordingly,....
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....to bullion nor had filed any wealth tax return in the course of proceedings to substantiate the veracity of her said claim, therefore, in absence of any explanation forthcoming regarding the source of acquisition of bullion (Wt. 329 grams) it was rightly held as her unexplained investment u/s 69 of the Act. 15. As the assessee had neither before lower authorities nor before us placed on record any material/documentary evidence which would substantiate her claim that it was her old jewellery that was got converted into bullion (Wt. 329 grams), therefore, we are of the view, that treating the value of the same of Rs. 8,89,170/- as the assessee's unexplained investment u/s 69 of the Act does not suffer from any infirmity. We, thus, approve that addition to the aforesaid extent made by the AO, which, thereafter, had rightly been upheld by the CIT(A). 16. Apropos, the addition regarding the source of balance gold jewellery (Wt. 437.700 grams) (supra), we are unable to fully persuade ourselves to subscribe to the view taken by the lower authorities. Before proceeding any further, we may herein observe that the CBDT vide its instruction No. 1916 dated 11.05.1994 had, inter alia, held th....
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....y to the extent of 500 gms, could be possessed by an ordinary family. The intention behind such circular was, therefore, very clear. As the unexplained jewellery found during the course of search was much less than 500 gms., we have no hesitation in holding that the addition on account of unexplained investment in jewellery is not justified and the same is deleted." 17. We shall in the backdrop of the aforesaid CBDT instructions No.1916 (supra) read along with the aforesaid judicial pronouncements look into the view taken by the lower authorities which had held that the gold jewellery/ornaments (Wt. 437.700 grams) found lying in the locker no. 49 (supra) as the assessee's unexplained investment u/s 69 of the Act. 18. As is discernible from the orders of the lower authorities, we find that 1495.06 grams (net weight) of gold jewellery/ornaments were found from the locker no. 49 (supra) and residence of the assessee, Annexure JF/1, dated 17.09.2014. On a careful perusal of the list/inventory of gold jewellery/ornaments found from the residence of the assessee and her family members it transpires that the same comprises of, viz. (i). bedroom of Shri Satyanaryan Daga (assessee's husba....
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..../ornaments with them to explain that found in the aforesaid locker. 21. As observed by us hereinabove, 178.450 grams of gold jewellery/ornaments, Annexure JF/Page No. 01, dated 17.09.2014 (APB-Page 46) were found during the course of the search proceedings from the bedroom of Shri Satyanaryan Daga (assessee's husband) and Smt. Asha Daga (i.e assessee). Accordingly, the assessee and her spouse could safely be held to be in possession of 421.55 grams of gold jewellery/ornaments [i.e 600 grams (minus) 178.450 grams] acquired from their explained sources. Also, as noticed by us herein above, 109.774 grams of gold jewellery/ornaments, Annexure JF/Page No. 02, dated 17.09.2014 (APB-Page 47) were found during the course of the search proceedings from the bedroom of Shri. Vishal Daga (assessee's son) and Smt. Shweta Daga (wife of Sh. Vishal Daga). Accordingly, Shri. Vishal Daga (supra) and his spouse could safely be held to be in possession of 490.226 grams [i.e 600 grams (minus) 109.774 grams] of gold jewellery/ornaments acquired from their explained sources. As such, gold jewellery/ornaments aggregating to 911.776 grams [i.e 421.55 grams (+) 490.226 grams] as per the CBDT Instruction No....