TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 1051
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....T, Investigation Wing, Unit- 4(2) under Section 132 of the Act in Khemka Group of cases on 14.01.2021 which was concluded on 17.01.2021 wherein residential premises of the appellant lying and situated at C-12/19, DLF Phase-1, Gurugram as well as vaults/bank lockers maintained by the appellant were also covered and searched upon. Satisfaction under Section 153C of the Act was recorded in the case of the assessee on 27.12.2021 by the Ld. AO of the searched person and on 31.12.2021 by the jurisdictional Assessing Officer and proceeding under Section 153C, thereafter, was initiated in the case of the assessee upon prior approval from the Ld. Addl. CIT, Central Range-2, New Delhi. During the course of search of Khemka Group documents/assets/money relating to and/or pertaining to the appellant found and seized and notice therefore, under Section 153C was issued on 31.12.2021, in response thereto the assessee filed its return of income on 18.01.2022 declaring income at Rs. 6,75,980/ -. Notices, thereafter, under Section 142(1) dated 13.05.2022 and 23.05.2022 along with detailed questionnaire were issued and served upon the assessee directing furnishing of details/documents mentioned there....
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.... & 4th Floors of B-162 property 11,00,000 Total payments 6,70,12,684 3. Also, the course of the above said search operation at your residence and lockers, following cash was found and seized. Sr. No. Premises/Locker Name of the person from whose possession assets were found Item found Found value in Rs. Seized Value in Rs. 1 C-12/19, DLF, Phase-1, Gurugram Ashok Bansal Cash 44,39,000 43,00,000 4. During the assessment proceedings in explanation regarding the above cash receipts and payments, you have submitted that these cash payments were made from sale of diamonds. You have submitted that you liquidated your business assets and consolidated them and purchased certain loose diamonds to the extent of 1655.53 cts having value of Rs. 2,49,00,849/- during F.Y. 2000-01. You are further submitted that you sold these diamonds for following sale consideration. A.Y. 2017-18 AY 2018-19 AY 2019-20 Total Cash generated from sale of loose diamonds in cash 34,03,566 3,76,16,276 1,20,26,993 5,30,46,835 5. During the assessment proceedings you failed to provide following de....
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....of any satisfactory explanation regarding the disputed amount of Rs. 34,03,566/- credited in the cash flow statement of the assessee the same was found to be taxable in the hands of the assessee under Section 68 of the Act. Further that the Ld. AO was directed to recompute the total income and to issue notice of demand as the income to the tune of Rs.34,03,566/- has already been enhanced by the said order issued by the Ld. PCIT. Relevant to mention that the assessee is found to have replied elaborately on the issue itself by and under the two replies dated 08.02.2023 and 10.12.2024 appearing from pages 139 to 151 and 154 to 156 respectively in the paper book filed before us. 5. At the time of hearing of the instant appeal the Ld. Counsel appearing for the assessee Mr. Gautam Jain submitted before us that no warrant of search in the name of the assessee was ever issued. The Ld. AR raised several grounds challenging the very jurisdiction of the Ld. PCIT in exercising the revisionary power under Section 263 of the Act. The order is made without satisfying the statutory preconditions envisaged in the Act and the same is therefore, without jurisdiction and thus, deserves to be quashe....
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....e and sale of diamonds were furnished. The Ld. AO compared the sale of loose diamonds price with the price of gold. Doubting the cost of acquisition of such diamonds recomputed the long term capital gains after allowing benefit of indexation on such sale of loose diamonds at Rs.21,03,426/- on account of long term capital gains under Section 112 of the Act and addition made thereon in the hands of the assessee enhancing the income of the assessee by Rs.34,03,566/- under Section 68 of the Act. 6. Based on conjectures and surmises overlooking the evidences on record conclusion made by the Ld. PCIT that the sale on inherited loose diamonds by the appellant is neither supported by evidences nor verified by the Ld. AO holding the order passed by the Ld. PCIT under Section 153C r.w.s 143(3) of the Act erroneous and prejudicial to the interest of revenue does not and cannot arise. On the score alone the impugned revisionary order is liable to be quashed as was the main thrust of arguments made by Mr. Jain appearing for the appellant before us as the assessment order cannot be said to be an impact on lack of enquiry or lack of investigation made by the Ld. AO. 7. It is further argued ....
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.... diamonds proof whereof alleged to have been found during the course of search of locker the order impugned is liable to be quashed. 12. It appears on record that a notice dated 31.12.2021 under Section 153C was issued by the DCIT, CC-6, Delhi and served upon the assessee in response whereto the assessee duly filed his return of income on 18.01.2022 on 21.04.2022. A notice under Section 143(2) was issued by the said officer to the assessee followed by further notice dated 13.05.2022 under Section 142(1) of the Act against which the assessee duly filed its reply dated 17.05.2022. In further reply dated 27.05.2022 appearing at page 35 to 39 of the paper book filed before us, it is evident that the assessee categorically explained the source of cash along with documentary evidences for payment in cash for construction activities undertaken on various properties owned by the assessee and the family members to this effect that the cash was part of proceeds on sale of jewellery consisting of loose diamonds. 13. Thereafter, the assessee was served with the satisfaction recorded on 27.12.2021 by the Ld. AO of the searched person i.e. DCIT, CC-6 under Section 132 of the Act and furthe....
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....lts 81,90,920/- 81,90,920/- Jewellery 3. Locker No. 179, Canara Bank, Kamla Nagar, Delhi 4,01,760/- 4,01,760/- Bullion 4. C-12/19, DLF Phase-I, Gurugram 122002 44,39,000/- 43,00,000/- Cash 4. After examination of such documents (refer to above table in para 2) and documents related to seizure of jewellery, I am satisfied that the above documents and seized jewellery have a bearing on the determination of the total income of Sh. Ashok Bansal. 5. Therefore, I am satisfied that Sh. Ashok Bansal is covered under section 153C of the Act. Accordingly, notices u/s 153C of the Act for AY 2015-16 to 2020-21 and notice u/s 143(2) for AY 2021-22 are being issued." 14. It is found that during the course of assessment proceedings in respect of the sale of loose diamonds and the gain arises from it, was duly disclosed in the ITR for the AY 2017-18 and due tax was paid on the same. The Learned Assessing officer compared the sale of loose diamond price with the price of gold. Further the learned Assessing officer doubted the cost of acquisition of diamonds and recomputed the long-term capital gains after allowing benefit of indexation on ....
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....rtaken on various properties owned by you and your family member's which were admittedly supervised by you. Further, during the course of above said search, certain agreements to seli were found & seized in respect of 4 floors of property situated at B-162, Sushant Lok-III, Gurugram (owned in the name of your daughter in law and admittedly supervised & sold by you). The above said agreements to sell revealed receipt of certain cash on sale of the impugned property. Vice notice u/s 142(1) dated 13.05.2022, you were required to provide the source of the said cash along with documentary evidences as well as provide the explanation of loose papers / diaries and the agreements to sell. In response, vide your letter dated 17/05/2022, you have submitted that the said cash was part of proceeds of sale of jewellery consisting of loose diamonds. Further you have claimed that you have received a sum of Rs. 5,30,46,835/- from the sale of diamonds as per details below: Particulars AY: 2017-18 AY: 2018-19 AY: 2019-20 Total Sale Consideration 34,03,566 3,76,16,276 1,20,26,993 5,30,46,835 From the said reply, it is discernible t....
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....the fair market value of the loose diamonds shall be considered as its cost of acquisition for the purpose of computation of taxable capital gains. From the said submission, the following was observed: Financial year in which loose diamonds are sold Prices of Loose Diamonds CBDT Prescribed Gold Rates (Per grams) Cost of acquisition claimed (FY: 2000-01) Sale Price in respective FY As on 01.04.2002 For the FY in which sale is made 2016-17 15,050 40,923 419 2,895 2017-18 15,495 42,044 419 3,068 2018-19 15,546 43,447 419 3,164 From the above table, it can be seen that the per carat price of loose diamonds for FY 2016-17 rose to Rs. 40,923/-from Rs. 15,050/- in 16 years i.e. approx. 2.72 times only. As compared to this, the per gram gold price for FY 2016-17 rose by 6.91 times. Accordingly, the prices of loose diamonds rose by only 2.71 times and 2.79 times as against the price of gold which rose by 7.32 times and 7.55 times for the FY 2017-18 and FY 2018-19 respectively. Adopting the same methodology and inflation trends in gold prices, the fair market value of the loose diamonds as on 01.04.2001 should have be....
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.... of FY 2016-17 to FY 2018-19 which resulted in a cash generation of Rs. 5.30 crores, part of which was also found & seized during the course of search and marked as page 14 & 15 of Annexure A-1. 2). Further, it is on record & duly explained vide above referred letters that the cash so generated by the assessee was ultimately utilised by him towards the funding of the construction activities carried out by him in and nearby areas of Sushant Lok, Gurugram. These funds were further used to trick Mr. Udit Bansal, younger son of the assessee, to keep him motivated towards the construction activities. 3). The assessee has duly disclosed the gains arose on sale of loose diamonds in the return of income filed on 17.01.2022 and 18.01.2022 for the assessment year 2017-18, 2018-19 and 2019-20. Due tax on such sale was also paid off at the time of filing the return of income. 4). However, your goodself has raised doubts regarding the cost of acquisition of the loose diamonds by the assessee and proposed that the value of the diamonds may be calculated backward in the ratio of the gold prices on respective dates/years. 5). In this regard, this is respectfully....
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....arch and marked as page 28 to 33 of Annexure A-1, it is clearly discernible that the assessee acquired loose diamonds weighing 1655.43 carats during the financial year 2000-01 for an aggregated consideration of Rs. 2,49,00,849/ -. 10). It is a trite and settled law that where any document is found from the possession or control of a person during the search, then such documents and every part thereof is presumed to be true and correct in the absence of evidence which proves otherwise. Therefore, the sanctity and truthfulness of the documents found during the course of search in the form of the audited financial statements depicting the cost of acquisition of the loose diamonds weighing 1655.43 carats at Rs. 2,49,00,849/- cannot be denied in this case. Conclusion 11). It is believed that the assessee has produced sufficient documentary evidences, as stated supra, which corroborates the exactitude of the version of the assessee and depicts the true facts of the case. In the instant case, facts become amply clear, and it can be concluded that the assessee acquired the impugned loose diamonds which costed him Rs. 2,49,00,849. Therefore, calculation of fair ma....
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.....1981 for AY: 2016-17 and earlier assessment years the assessee had an option to adopt either the actual cost of acquisition of the capital asset or the fair market value of the capital asset as on 01.04.2001 or 01.04.1981 as the case may be and the same was further explained by the assessee in the said reply dated 27.05.2022. We note that the above facts has also been examined by us from the documents so furnished and annexing the same in the paper book and found to be correct. Taking into consideration this particular aspect of the matter when the loose diamonds weighing 1655.34 carats were acquired by the assessee in the Financial Year 2000-01 i.e. before the 01.04.2021 for Rs.2,49,00,849/- which was duly accounted for the audited financial year statements of M/s Ramkishore Marketing Corporation (erstwhile sole proprietorship of Mr. Ashok Kumar Bansal) the assessee before us for the Financial Year ended on 31.03.2021, the same is required to be considered in its proper perspective as contended by the assessee before the Ld. AO during the reassessment proceeding under Section 153C of the Act, as the assessee computed his taxable capital gains considered his actual cost of loose d....