TaxTMI 
TaxTMI 
2025 (12) TMI 287
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....n 06-09-2018 of which assessee is one of the members. " Appellant prays that such observation of ld.AO is contrary to the facts and deserves to be ignored and excluded. 2. On the facts and in the circumstances of the case and in law, ld. CIT(A) has grossly erred in confirming the action of ld. AO in making addition of Rs. 1,56,15,565/- on account of cash found during the course of search (from business and residential premises of the assessee) u/s 69A of the Income Tax Act, 1961 arbitrarily. 2.1 That, ld. CIT(A) further erred in confirming the action of ld. AO in making addition of Rs. 1,56,15,565/- u/s 69A by brushing aside the submission made and facts on record that the cash found basically represented additional income of assessee from Finance brokerage (i.e. income from routine business income) as admitted by assessee in statements recorded u/s 132(4) itself. 2.2 On the facts and in the circumstances of the case and in law, ld. CIT(A) has grossly erred in confirming the action of ld. AO in invoking the provisions of section 115BBE in respect of Cash found during the course of search by making addition u/s 69A. Appellant prays that cash found during t....
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....he circumstances of the case and in law, ld. CIT(A) has erred in confirming the action of ld. AO in making addition in the hands of assessee without even allowing the opportunity of cross examination of such third parties. Appellant prays that such action of ld. CIT(A) as well as ld. AO is against the principles of natural justice and consequent order deserves to be quashed. 5.2 That, ld. CIT(A) has further erred in confirming the action of ld. AO in in making addition of Rs. 1069/- in the hands of assessee on presumption that assessee has rotated the funds of M/s Uttam Chand Deshraj and by further presuming that assessee might have received commission on funds so rotated. Appellant prays that assessee was engaged in the genuine business of finance broking, income from which is duly recorded in books of accounts and addition made by ld. AO on assumptions and presumptions deserves to be deleted. 5.3 That, ld. CIT(A) has erred in confirming the action of ld. AO in computing alleged undisclosed brokerage even on the principal amount of loan given/received back by M/s Uttam Chand group. Appellant prays that it is a common practice that brokerage is always paid by borr....
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....assessee. Information and details pertaining to the case of the assessee relevant to assessment of his income were called for u/s 142(1) of the Act by means of a questionnaire and/or Order Sheet Entries wherever deemed fit. Ld. AO verified the information so furnished examined on a test-check basis and placed on record. The assessee primarily derives his income from Business and Other sources. During the course of search proceedings at 14, Keshav Nagar, Civil Lines, Jaipur cash of Rs. 33,65,565/- was found and cash of Rs. 33,00,000/- was seized. During the course of the search operation, statements of Shri Sunil Gattani were recorded. During the course of search proceeding, Shri Sunil Gattani was unable to produce any documentary evidences in support of cash found of Rs. 33,65,565/- from his residence. In his statement in reply to Q.No. 6. Shri Sunil Gattani has accepted Rs. 33,00,000/- as his undisclosed income and Rs. 65,565/- his saving. He has also surrendered Rs. 33,00,000/- for the current financial year 2018-19 as his undisclosed income. While search proceedings at business premises of assessee at 947, Mishra Bhawan, Chaura Rasta, Jaipur, cash of Rs. 1,22.50,000/- was found ....
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....9,064/- was seized during the course of search proceedings considering investment from undisclosed income. Shri Sunil Gattani has also surrendered the undisclosed income of Rs. 83,92,594/- as investment in jewellery for the current financial year i.e. 2018-19 during the course of search proceedings. During the post search investigation, Shri Sunil Gattani could not produce any documentary evidence in support of excess jewellery seized. Therefore, during the course of assessment proceedings the assessee was asked to produce source of excess jewellery found at his residential premises which the assessee could not. Therefore, ld. AO noted that since the investment was not recorded in the books of the assessee, it clearly falls under the provisions of section 69A of the Act as the assessee has not offered any explanation to the satisfaction of AO even after providing many opportunities of being heard. Therefore, an amount of Rs. 99,29,064/- was being added to the total income of the assessee u/s. 69A of the Act, being the undisclosed investment from the unknown sources for the year under consideration. Ld. AO also added a sum of Rs. 1069/- as income of commission on cash loan routed....
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....he appellant was asked to furnish the source of cash found during search of Rs. 1,56,15,565/- (Rs. 1,22.50,000/- Rs. 33.65,565/-) The appellant stated that source of the cash found was from brokerage income not offered for tax. The appellant offered additional income of Rs 1,56, 15,565/- for taxation for A.Y. 2019-20 as his business income from finance brokerage activity. The Id AO concluded that appellant himself had accepted cash found of Rs. 1,55,50,000/- as his undisclosed income and he has not furnished any proof regarding source of balance amount of Rs. 65,565/-, an amount of Rs. 1,56,15,565/- was added to the total income of the appellant. During appellate proceedings, the appellant contended that appellant was in the process of filing the petition before the Hon'ble Settlement Commission but due to announcement of the closure of the Settlement by Hon'ble Finance Minister appellant could not file petition before Settlement Commission. No additional income was offered by the appellant in the return of income filed in response to notice u/s 153A for A.Y. 2013-14 to 2018-19 or u/s 139 for A.Y. 2019-20. The appellant alleged that in the spirit to settle....
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....he source of cash found, he offered the amount of Rs. 33,00,000/- for taxation and categorically admitted that this amount of Rs. 33,00,000/- was in addition to his regular income for the year under consideration. Further, the appellant merely submitted that said cash of Rs. 33,00,000/- was his undisclosed commission income from finance brokerage and the same is not accounted. However, not a single evidence was furnished by the appellant to prove the nexus between cash found with his finance brokerage commission. Further, the appellant also could not explain the source of cash found of Rs. 1,22,00,000/- found from his business premises and offered the same for taxation as his additional undisclosed income from finance brokerage commission and also stated that he will not claim any deduction/exemption on this undisclosed income. However, the appellant simply stated that the said cash found is related to his undisclosed commission income received in cash without proving the nexus of cash found with his commission income with cogent documentary evidence. The appellant was required to prove with evidence from whom the cash was received towards his undisclosed commissi....
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....n of gold &jewellery was also made under VDIS Scheme, 1997 by Smt. Kavita Gattani, the wife of appellant. The appellant stated that gold jewellery of net weight 2366.04 grams were declared as per VDIS Scheme, 1997, Wealth Tax Return and Valuation report dated 16.06.1999 and gold jewellery of net weight 534.773 grams were purchased between 2007 to 2014 as per bills available. The appellant also claimed that after conclusion of search he reconciled the total jewellery found and as declared/purchased from time to time. On this basis the appellant claimed holding of Jewellery in his hand and in his wife hands as under: (A) Holding of Mrs. Kavita Gattani S.No. Particulars Net Weight in Grams 1. As per VDIS-97, Wealth Tax Return and valuation reports dated 16.06.1999 2366.04 2 Jewellery purchased between 2007 to 2014, as per bills available. 534.773 Total (A) 2900.813 (B) Holding of Mr. Sunil Gattani S.No. Period of Holding Assets Net Weight in Grams 1. As per Search conducted in Financial Year 1992- 93 529.99 2. Jewellery purchased between 2012 to 2017, as per bills available 528.19....
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....ani and Mrs. Kavita Gattani (A) Jewellery owned by Mrs. Kavita Gattani 3,086.22 (B) Jewellery owned by Mr. Sunil Gattani 1,238.28 Grand Total 4,324.50 In view of above, the appellant claim that gold jewellery at 4,324.50 gms (Gross Wt.) was declared which almost tally with gold jewellery found during the course of search and there is difference of only 644.85 gram which the appellant claimed to be duly explained looking into family status of the appellant and CBDT Instruction dated 11.05.1994 In view of above, the appellant contended that jewellery found deserves to be accepted Further, wirt. silver articles of 23.064 Kg found during search, the appellant claimed silver articles of 22.600 Kg were declared in VDIS 97 and silver articles were approximately same as was declared earlier, so the silver articles found was claimed as fully explained. The appellant submitted that statements were recorded in charged atmosphere and VDIS 1997 being 21 years old scheme, appellant could not recollect such facts spontaneously. I have gone through the facts of the case, observations of Id. AO and submission filed by the appella....
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.... course of the appellate proceedings pending before me, the appellant has relied on jewellery declared on account of VDIS declaration by Smt. Kavita Gattani and jewellery purchased. Now this situation has to be seen in a holistic position. For the total jewellery found of 3956.540 gms and silver articles of 23.064 Kg. the appellant is giving explanation of 2366.04 gms (Gross wt. 2539.61 gms) on account of VDIS and the appellant forgot to mention the same in his statements due to charged atmosphere during search. So, I find that this explanation of the appellant for the unexplained jewellery is too far stretched and cannot be accepted. Further, though the appellant furnished the valuation report date 16.06.1999 however, no such jewellery declared in this valuation report was found during search it can clearly be inferred that she was not holding this jewellery anymore. I find that nowhere during the proceedings there is a mention of any evidence with respect to the above claim to have been found during the search proceedings. If the documents were lying with the appellant and so was the position w.r.t. the jewellery found, the appellant would have immediately broug....
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....ring search and post search investigations, Shri Ajay Jain had also clarified the involvement of Shri Sunil Gattani in such activities. The Id. AO noted that appellant had rotated a total amount of Rs. 97,320/- during the year under consideration. The Id. AO computed commission for these transactions i.e. 10 paise/per hundred Rupees which worked out to Rs. 1069/- Accordingly, the same was added to the total income of the appellant. During appellate proceedings, the appellate has contested addition of income u/s 69 of the Income Tax Act. The appellant further contended that he was engaged in the genuine business of finance broking, income from which is duly recorded in books of accounts and addition has been made by Id. AO on the basis of documents found in search in the case of Oswal Soap Group. The appellant denied the same The appellant inter alia contended that Id. AO had computed alleged undisclosed brokerage even on the principal amount of loan given as well as received back. The appellant also contended that it is a common practice that brokerage is always paid by borrower as a percentage of interest paid and not on the principal amount of loan. I h....
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....appellant is dismissed." 5. Feeling dissatisfied with the above order of the ld. CIT(A) the assessee preferred the present appeal before this tribunal on the ground as reiterated herein para 2 above. In support of the various grounds raised by the assessee, ld. AR of the assessee, has filed the following written submissions: Brief facts of the case are that assessee in an individual, deriving remuneration and profit from partnership firm M/s P N & Company (engaged in the business of finance on brokerage basis), wherein he is acting as a partner. Beside this, assessee also has interest income under the head income from other sources. During the year under consideration a search & seizure action was carried u/s 132 of the Act on 06.09.2018 at the premises of assessee. On the same date, search was conducted in the case of 'Oswal Soap Group' of which, M/s Uttamchand Deshraj and Ajay Jain were the key persons. During the course of search at M/s Uttamchand Deshraj, certain cash books/excel sheets were stated to have been found, containing details of rotation of his undisclosed cash. Since, name of broker mentioned in such cash books is "Gattani Ji" it was presumed by ....
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....l No.7.1, assessee has challenged the validity of assessment order for non issuance of notice u/s 143(2), whereas, In ground of appeal No.7.2, assessee has challenged the validity of assessment order due to approval granted u/s 153D by ld. JCIT being mechanical in nature and without application of mind. Brief facts pertaining to this ground of appeal is that though window on portal shows some tab of 143(2), (no notice is ever issued) however there is no attachment available for download under the "notices" tab, under "notice u/s 143(2)",. It is thus clear that notice u/s 143(2) was not issued prior to completion of assessment. At this juncture, provisions of section 143(2) are reproduced for the sake of ready reference: Assessment. 143 ....... (2) Where a return has been furnished under section 139, or in response to a notice under sub-section (1) of section 142, the Assessing Officer or the prescribed income-tax authority, as the case may be, if, considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not under-paid the tax in any manner, shall serve on the....
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.... for purchase of agricultural land was treated as unexplained investment - Assessee challenged assessment order on ground that no notice under section 143(2) was issued to assessee before passing assessment order - Tribunal set aside assessment order on ground that issue of notice under section 143(2) in reassessment proceedings, prior to finalizing re- assessment order, cannot be condoned by referring to Section 292BB and was fatal to order of re assessment -Whether Tribunal was correct in its approach - Held, yes [Paras 5 and 6] [In favour of assessee] [2025] 175 taxmann.com 910 (Punjab & Haryana) (APB 136 - 143) Aggarwal Engineering Co. v. Assistant Commissioner of Income Tax Section 143(2) of the Income-tax Act, 1961 - Assessment - Issue of notice (Validity of assessment order) - Assessee filed its return of income on 21-10-1997 - Assessing Officer passed an assessment order on 27-8-1999 under section 143(3) making addition to the assessee's income - Assessee raised a plea that since no notice under section 143(2) was served upon it within a period of 12 months from end of month in which return was furnished and, thus, entire proceedings were liab....
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....e - Prior approval necessary for assessment (Approval) - Assessment year 2015-16 - Whether grant of approval under section 153D cannot be merely a ritualistic formality or rubber stamping by authority, rather it must reflect an appropriate application of mind - Held, yes - During search and seizure operation conducted upon assessee, Assessing Officer passed an order under section 127 leading to centralization of case of assessee followed by issuance of notice under section 153A -Pursuant to same, Assessing Officer passed a scrutiny assessment order under section 153A read with section 143(3) making certain additions - Whether since order of approval under section 153D for relevant assessment year was granted by Addl. Commissioner for 43 cases on a single day without perusing draft assessment orders at all and without an independent application of mind, impugned assessment order was rightly declared to be illegal by Tribunal - Held, yes [Paras 15 and 17] [In favour of assessee] [2025] 178 taxmann.com 360 (Delhi - Trib.) (TM) Dheeraj Chaudhary v. Assistant Commissioner of Income-tax Section 153D, read with section 153A, of the Income-tax Act, 1961 - Search and seizu....
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....e is one of the members of Oswal Soap Group. To begin with, kind attention of your goodself is invited to Para 1 of Assessment order at Page 1, wherein it is stated that assessee belongs to 'Oswal Soap Group'. Relevant para is reproduced as under for ready reference- "1 A search and seizure action u/s 132 of the Income Tax Act, 1961 ("the Act") was carried out by the Income Tax Department on the members of the Oswal Soap Group on 06-09-2018 of which assessee is one of the members". From perusal of above, it is evident that assessment proceedings have been completed on incorrect appreciation of facts that assessee is one of the member of the 'Oswal Soap group'. However, assessee has no relation with any of the members of the group. It is a matter of fact that an independent search was conducted at assessee's residential/business premises and the same was not connected with Oswal Soap Group in any manner. Thereafter, ld. CIT(A) as well as ld. AO on the basis of statements of some third parties recorded during the course of search conducted on them confirmed that assessee belong to Oswal Group. It is thus submitted that observations of ld....
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..... These facts were duly explained by assessee in statements recorded u/s 132(4) dt. 6.9.2018, which reads as under: प्रश्न :- 8. श्रीमान जी आज आपके उपरोक्त परिसर पर आयकर अधिनियम की धारा 133A के तहत सर्वे (Survey) की कार्यवाही की गई, जिसके दौरान कुल नगदी रूपये लगभग एक करोड़ बाईस लाख पचास हजार (1,22,50,000/-) पाए गये जिनका स्त्रोत &#....
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....325;ार्य करता हॅ उसमें कभी कभार कमीशन के अतिरिक्त नगदी भी ले लेता हूँ। साथ इस बारे में मैं कहना चाहूँगा कि दलाली में कमीशन भी नगद में ही मिलता है। उसी नगदी को मैं मेरे इस परिसर- IInd Floor 947, मिश्रा भवन, चौड़ा रास्ता, जयपुर मे....
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....40; करते हुए कर दे दूंगा। श्रीमान जी इस बारे में मैं कहना चाहूँगा कि इस अघोषित आय रूपये एक करोड़ बाईस लाख पचास हजार (1,22,50,000/-) पर किसी प्रकार का Deduction/ Exemption Claim नही करूँगा। प्रश्न :- 9. श्रीमान जी प्रश्न संख्या 8 के जवाब में आपने बतायì....
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....11;सके कोई Books भी Maintain नहीं करता हूँ। केवल याददास्त के आधार पर याद रखता हूँ इसलिए इन पार्टियों के नाम पते मुझे याद नहीं हैं एवं मैं अभी इनके नाम पते उपलब्ध नहीं करा सकता। श्रीमान जी मुझे एक लाख रूपये पर 100 रुपये कमीशन प्&....
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....#2375; कि नकद राशि कुल रूपये 33,65,565/- किससे संबंधित है एवं इसका स्त्रोत क्या हैं? उत्तर :- 6. श्रीमान मेरे निवास स्थान 14, केशव नगर, सिविल लाईन्स, जयपुर के प्रथम तल स्थित मेरे शयन कक्ष से जो नकद राशि रूपये 33,65,565/- पाई गई है वह मुझसे ही ....
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....366;ने के लिए चवनबद्ध हॅ। मैं यहॉ पर पुनः श्रीमान से निवेदन करना चाहता हूँ मेरी यह अघोषित आय रूपये 33 लाख मेरी चालू वितीय वर्ष 2018-2019 की नियमित आय के अलावा है जिस पर मैं नियमानुसार कर चुका दूंगा। प्रश्न :- 7. कृपया बतायें ....
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....352;ा समर्पित चालू वित वर्ष 2018-2019 की अघोषित आय रूपये 33 लाख पर नियमानुसार बनने वाले आयकर का समायोजन इस जब्त राशि में से कर लिया जाय। मैं यहॉँ श्रीमान से यह भी कहना चाहता हूँ कि मेरी चालू वितीय वर्ष की अघोषित आय रूपये 33 ल....
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.... being the personal savings of the assessee and his family members was not seized. Further, the source of the above cash of Rs. 1,55,50,000/- was stated as from the brokerage income not offered for tax. However, ld.AO added entire cash found, including cash not seized, i.e. Rs. 65,565/- and also invoked provisions of section 115BBE in respect of cash seized though the source thereof was duly explained by assessee in statements recorded itself. In this regard, as stated above, it is reiterated that during the course of search, in statements of assessee recorded u/s 132(4) dated 06.09.2018 and 07.09.2018 (reproduced above), assessee very categorically stated that cash found was out of his undisclosed income earned from business activity of finance brokerage and surrendered entire amount of cash found and seized, as his undisclosed income of current year, i.e. F.Y. 2018-19 and agreed to pay taxes on the same and no further interrogation was made by authorized officer in respect of such response of the assessee while recording the statements of the assessee. However, such income was not declared while filing Return of Income in circumstances mentioned above. However during the....
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....statements recorded us 132(4)], without bringing any evidence to the contrary. In this regard, it is submitted that for the deeming provisions of section 69 of the Income Tax Act, 1961 to come into play, there has to be a clear finding as to either the assessee has not furnished any explanation about the nature and source of the investments or the explanation so offered is not found satisfactory. Therefore, the foundational requirement before invoking the deeming provisions of section 68 to 69D is that if the assessee furnishes the explanation regarding nature and source of such investment, reasonability of the explanation so offered by the assessee has to be seen, keeping into account the facts and circumstances of the relevant case and Ld AO has to bring on record as to our explanation given by assessee is not satisfactory. Relevant few case laws on the issue are as under. Hon'ble Rajasthan High Court in the case of PCIT vs Bajrang Traders in D.B. ITA No. 258/2017 affirmed the view taken by Hon'ble ITAT. Relevant findings of Hon'ble ITAT are as under: 2.10. We have heard the rival contentions and perused the material available on record. During the c....
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.... assessee. The decision of the Co-ordinate Bench in case of Shri Ramnarayan Birla (supra) supports the case of the assessee in this regard. Therefore, the investment in the excess stock has to be brought to tax under the head "business income" and not under the head income from other sources". In the result, ground No. 1 of the assessee is allowed." Hon'ble Jodhpur bench of ITAT in the case of Shri Lovish Singhal vs ITO i4n 143/Jodh/2018 has held as under: Surrender of income during survey - to be treated as Business income or taxable u/s 69 - AO made the additions u/s 69 while calculating the tax rate as per provisions of Section 115BBE - Held that :- As per decision in the case of Bajrang Traders [2017 RAJASTHAN HIGH COURT] as observed that the Hon'ble High Court in respect of excess stock found during the course of survey and surrender made thereof was found to be taxable under the head 'business and profession'. Similarly in respect of excess cash found out of sale of goods in which the assessee was dealing was also found to be taxable as business income. Applying the proposition of law laid down in the judicial pronouncements as discu....
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.... since during survey proceedings, assessee was confronted not only with discrepancies found but also with nature and source thereof and it had emerged that source of income of assessee was from its business operations, income surrendered by assessee during survey could not be brought to tax under deeming provisions of section 69A and 69B and same had been rightly offered to tax by assessee under head of business income - Held, yes [Paras 29 and 30] [In favour of assessee] Hon'ble Chandigarh bench of ITAT in the case of Shri Krishan Kumar v. Deputy Commissioner of Income-tax [2024] 162 taxmann.com 518 (Chandigarh - Trib.) in decision dated 04.01.2024 under identical circumstances has held as under: Section 28(i), read with sections 69A,69and 115BBE, of the Income-tax Act, 1961 - Business income - Chargeable as (Amount disclosed at survey) - Assessment year 2019-20 - During course of survey under section 133A, assessee surrendered excess stock and excess cash found stating that same was to be taxed as business income - Assessing Officer, however, treated said surrendered amount as unexplained investment under sections 69A and 69B and charged same to tax as per p....
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....9 challenge the action of the lower authorities in applying the provisions of section 115BBE and thereby charging tax at the rate of 60%. The main thrust of the arguments of the Ld. AR has been that all the additions made or sustained relate only to the business income of the Assessee and that nowhere in the assessment order has it been alleged that some other source of income had been detected which gave rise to additional income. It is seen that during the course of assessment proceedings, the various explanations submitted by the Assessee have duly mentioned that the surrendered income was derived from the business. A perusal of the assessment order would also show that nowhere in the body of the assessment order, the AO has even contradicted this explanation of the Assessee. The AO has not brought on record any iota of evidence to demonstrate that the Assessee had any other source of income except income from business and, therefore, it is our considered view that deeming such income under the provisions of sections 68 or 69 would not hold good. In our view, in such a situation, the AO could not have legally and validly resorted to taxing the income of the Assessee at the rate ....
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....ily held that cash found does not pertains to undisclosed commission income which is offered for taxation by assessee. It is also relevant to state that once the assessee explained the source of the cash and same is source is already taxed by the ld. AO than without bring any corroborative evidence on record and again making addition of Rs. 1,56,15,565/- u/s 69A on account cash found during search would tantamount to double addition of Income, which is against the principle of natural justice. In view of above, it is submitted that additional income surrendered by assessee during search has been rightly offered under the head "Business Income" and action of ld.AO in taxing additional income u/s 69A and invoking the provisions of section 115BBE is not in accordance with law. Grounds of Appeal No. 3 to 3.2: In these grounds of appeal, assessee has challenged the action of ld. CIT(A) in confirming the addition of Rs. 99,29,064/- u/s 69 of the Income Tax Act made by ld. AO on account of jewellery found during the course of search. Brief facts pertaining to the grounds of appeal are that during the course of search at assessee's premises, certain ....
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....#2340;्र गवाहों की उपस्थित में मूल्यांकन कराया गया हैं। विभागीय मूल्यांकन कर्ता द्वारा सोने के आभूषण आदि का कुल मूल्यांकन शुद्ध वजन (Net Weight) 3956.540 ग्राम मूल्य- 1,54,56,694/- रूपये एवं चादी के बर्तन, सिक्के, इत्यादि का कुल वजन 23064 ग्राम &....
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....#2340;नों के स्त्रोत के रूप में मुझे यह कहना है कि कुछ चांदी के बर्तन मुझे पुश्तैनी रूप से मिले थे एवं कुछ हमें विभिन्न समारोह एवं अवसरों पर मेरे रिश्तेदारों एवं मिलनेवालों से उपहार स्वरूप प्राप्त हुआ है। चॉदी क....
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....1;वारा Annexure-AS के Exhibit-1 के पृष्ठ संख्या 40 से 44 के रूप में सूचीबद्ध कर जब्त किया गया है। कुछ सोने की ज्वैलरी के आभूषण आदि मैंने मेरी पत्नी की आय से खरीदे है जिनके साक्ष्य के रूप में खरीद के बिल की कॉपियाँ आपको प्रस्तुत कर रहा....
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....2;ी से नहीं हो रहा है अतः इस संबंध में आपकों किसी प्रकार की छुट नही दी जा रही है। आप द्वारा स्वयं की नियमित आय से खरीदी गई ज्वैलरी के संबंध में जो Bills प्रस्तुत किये गये हैं उनके अनुसार आपको लगभग 875.00 ग्राम की छुट देने कí....
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....िसके संबंध में प्रमाणिक दस्तावेजी साक्ष्य मैं विभाग में बाद में प्रस्तुत कर दूंगा। From perusal of above, it is evident that search officials queried that since itemised jewellery found did not match with the jewellery mentioned in the Valuation report dated 16.06.1999 (jewellery as on 31.03.1998), jewellery except weighing 875 gms., which was purchased by assessee was proposed to be seized. In response to the same, it was clarified by assessee that some of the jewellery being very old, was exchanged/ melted and remanufactured, however departmental authorities without considering the submission, obtained surrender from his assessee w.r.t. balance jewellery. Your goodself would appreciate that assessee had duly explained source of jewellery as well as reason for diffe....
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....e seized material. Details of which are tabulated in Annexure A and Annexure Band same are reproduced as under for ready reference :- Shri Sunil Kumar Gattani S. No Name Bill No. Gross Weight APB Seized Paper Exhibit Page No. 1 Nemi Chand Bamalwa & Sons 631 59.98 74 1 57 2 45 28.62 75 1 48 3 2051 137.65 76 1 46 4 2053 71.69 77 1 51 5 2054 74.90 78 1 45 6 414 77.40 79 1 55 7 1199 25.48 80 1 56 5 Surana Jewellers of Jaipur 464 171.06 82 1 54 646.78 Smt. Kavita Gattani (Assessee's wife) S. No Name Bill No. Gross Weight APB Seized Paper Exhibit Page No. 1 Nemi Chand Bamalwa & Sons 166 20.14 71 1 47 2 172 109.85 72 1 49 3 605 32.50 73 1 50 4 495 38.48 83 1 53 5 Surana Jewellers of Jaipur 101 345.64 81 1 52 546.61 It is further submitted that, Bil....
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....chart total jewellery as found and declared is in parity. The reconciliation of the jewellery is as under: (A) Holding of Mrs. Kavita Gattani S.No. Particulars Gross Weight in Grams APB 1. As per VDIS-97, Wealth Tax Return and valuation reports dated 16.06.1999 2,539.61 67-70 2. Jewellery purchased between 2007 to 2014, as per bills available. (Bills wise Sheet marked as Annexure A) 546.61 71-83 Total (A) 3,086.22 (B) Holding of Mr. Sunil Gattani S.No. Period of Holding Assets Gross Weight in Grams Remark 1. As per Search conducted in Financial Year 1992-93 591.50 71-83 (APB) 2. Jewellery purchased between 2012 to 2017, as per bills available (Bills wise Sheet marked as Annexure B) 646.78 36-39 (WS) Total (B) 1,238.28 Total Jewellery owned by Mr. Sunil Gattani and Mrs. Kavita Gattani (A) Jewellery owned by Mrs. Kavita Gattani 3,086.22 (B) Jewellery owned by Mr. Sunil Gattani 1,238.28 Grand Total 4,324.50 Thus, the gold jewellery declared at 4,324.50 gms (Gross Wt.). almost tally with gold je....
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....ded that two ladies had been wealth tax assessees up to assessment year 1985-86 only and had declared the jewellery and ornaments up to that time in their wealth tax return and later on they received some gold ornaments on occasion of marriage of brother of wife of assessee and some were partly acquired out of both ladies were assessed to wealth tax much prior to block period and they were not assessed to wealth tax at time of search and in view of status of assessee and his family members and in view of CBDT instruction No. 1916 dated 11.05.1994, deleted the addition - Whether Tribunal was justified - Held, Yes." Further reliance is placed on the following decision: Vibhu Aggarwal vs. Deputy Commissioner of Income-tax, CC-06, New Delhi [2018] 93 taxmann.com 275 (Delhi - Trib.)/[2018] 170 ITD 580 (Delhi - Trib.)[04- 05-2018] Section 69A of the Income-tax Act, 1961 - Unexplained moneys (Jewellery) - Assessment year 2011-12 - During search at assessee's residential premises, Jewellery of 2531.5 gms. was found - Assessing Officer had given assessee benefit of 950 gms. on account of wife and two children and balance was added as unexplained investment und....
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....ry stated in the circular stands explained - Hence, Tribunal committed no legal error in treating the extent of jewellery specified in the said circular to be a reasonable quantity and in deleting addition on that basis. Thus after claiming deduction on account of the jewellery purchases through proper invoices and the benefit of the CBDT instructions as stated above, the jewellery found at various places deserves to be accepted. Silver Articles During the course of search total silver articles of 23.064 Kgs. valued at Rs. 7,27,845/- was found. As against this Smt. Kavita Gattani, wife of the assessee has declared silver articles of 22.600 Kg. in VDIS 97. Copy of valuation report and certificate is at APB 45-47. Since the silver articles found are approximately same as were declared earlier, the silver articles found is fully explained. It is further submitted that statements were recorded in charged atmosphere and VDIS 1997 being 21 years old scheme, assessee could not recollect such facts spontaneously, however fact remains that due taxes were paid by assessee in respect of jewellery declared in VDIS. Declaration under VDIS is part of record of....
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....f the description of jewellery items is essential to claim credit against the declarations made in Wealth-tax returns/VDIS. In our considered opinion, this view point has no legal legs to stand on. So long as the total gold jewellery in weight found at the time of search matches with the earlier declarations made by the assessee in his Wealth-tax returns and VDIS, there can be no question of making any addition simply on the ground that the description of items in the list declared under Wealth-tax returns/VDIS is different from those actually found. If such is a position, then an inference has to be drawn that the items initially declared in Wealth-tax returns/VDIS were converted into the items of jewellery found at the time of search. A contrary stand can be taken only if the authorities demonstrate that the jewellery items given in the Wealth-tax returns/VDIS were over and above the items of gold jewellery disputed. We are confronted with a situation in which total jewellery found at the time of search as per the panchnamas tallies with the gold jewellery declarations by the assessee and his family members in Wealth-tax returns/VDIS, save and except the additional income offered....
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....T Instruction dated 11- 5-1994 provides that no seizure should be made in the search for the jewellery held by the ladies at 500 gms, girls at 250 gms and males at 100 gms each. Though the Instruction speaks of not seizing the same, the extended meaning of the same shows the intention that the jewellery is to be treated as explained one and is not to be treated as unexplained for the purpose of Income-tax Act. This instruction came to be considered by several Benches all over India in which it has been held that it would be relevant for the purposes of making addition as well. The Hon'ble Rajasthan High Court in the case CIT v. Kailash Chand Sharma 147 Taxman 376 has upheld this view. When this instruction is applied to the facts of the case, we observe that the possession of gold jewellery of 38,748.28 gms, which is far less than declared jewellery of 46,634.842 gms it cannot be held to be unexplained. 8.12 Further, in so far as the allegation of mismatch of description of jewellery, we are of the view that it is well-known fact that Indian ladies keep changing design of jewellery from time to time. Further, the said fact was also stated by the assessee's wife dur....
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....een made by ld.AO on presumption that assessee has rotated the funds of M/s Uttam Chand Deshraj and by further presuming that assessee might have received commission on funds so rotated. In this regard, at the outset it is submitted that ld.AO has made addition on account of brokerage income u/s 69, whereas title of section 69 reads "Unexplained Investments". From perusal of section 69, it is evident that the provisions of this section are applicable when assessee makes certain investments which are not recorded in the books of accounts, if any maintained by assessee for any source of income, and the assessee does not offer any explanation about the nature and source of investment or explanation offered by him is not found to be satisfactory. Since, in the instant case, there is no allegation regarding any investment made by assessee in the immediately preceding Assessment Year, provisions of section 69 are not applicable and have been wrongly invoked by Id.AO. It is further submitted that assessee was engaged in the genuine business of finance broking, income from which is duly recorded in books of accounts. In fact, whatever documents were found during search in....
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....nst the assessee. Once nothing has been proved against the assessee with aid of any direct material especially when various rounds of investigations have been carried out then nothing can be implicated against assessee." It is further submitted that ld. CIT(A) confirm the addition made by ld.AO solely on presumption basis that unaccounted cash of Shri Ajay Jain has been routed thorough assessee, without bringing any corroborative evidence on record and solely relying on the statement of Shri Ajay Jain. In this regard it is firstly submitted that assessee only admitted a fact that he has been engaged in the business of genuine finance brokerage and earned brokerage on fund rotated through him and same being duly recorded in the books of accounts. However, it does not mean that assessee has rotated the unaccounted funds of Shri Ajay Jain as alleged by the ld. CIT(A). It is further submitted that addition has been made in the hands of assessee solely on the basis of documents found and seized during the course of search at Shri Uttam Chand Jain and statement of Shri Ajay Jain, than since the assessee had no connection with the said person, an opportunity to cross exa....
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....-examination. Therefore, it was not for the Adjudicating Authority to presuppose as to what could be the subject matter of the cross-examination and make the remarks as mentioned above." Hon'ble Apex Court in the case of CIT vs Odeon Builders Pvt. Ltd. in Civil Appeal No. 9604-9605 of 2018 has held as under: S. 68/69 Bogus Purchases: Disallowance cannot be made solely on third party information without subjecting it to further scrutiny. The assessee has prima facie discharged the initial burden of substantiating the purchases through various documentation including purchase bills, transportation bills, confirmed copy of accounts and the fact of payment through cheques, & VAT Registration of the sellers & their Income Tax Return. The AO has also not provided a copy of the statements to the assessee, thus denying it opportunity of cross examination. In view of above, it is submitted that addition of Rs. 1,069/- as confirmed by ld. CIT(A) solely on presumption basis and deserves to be deleted. 6. In addition to the above written submission, the ld. AR appearing on behalf of the assessee also submitted that ; In continuation to our earlier sub....
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....sions drawn by ld.AO, approval is granted. In other words, power of making assessment is vested independently with assessing officer and role of superior authority commences only after completion of assessment and preparation of draft assessment order. In other words, intervention of superior authority during assessment proceedings itself vitiates the order as it offends the principle of independent quasi-judicial decision- making. In this regard further reliance is placed on the following judicial pronouncements- Commissioner of Income-tax, Shimla vs. Greenworld Corporation [2009] 181 Taxman 111 (SC)/[2009] 314 ITR 81 (SC)/[2009] 224 CTR 113 (SC)[06-05-2009] Section 124, read with section 119, of the Income-tax Act, 1961 - Assessing Officer - Jurisdiction of - Whether when a statute provides for different hierarchies providing for forums in relation to passing of an order as also appellate or original order, by no stretch of imagination a higher authority can interfere with independence which is basic feature of any statutory scheme involving adjudicatory process - Held, yes - Whether though while making order of assessment Assessing Officer shall be bou....
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....2024] Section 68, read with section 147, of the Income-tax Act, 1961 - Cash credit (Reassessment) - Assessment years 1988-89 to 1992-93 - Assessee was a director of a company - Search and seizure operations were carried out by CBI at residential premises of one JKJ, who was an employee of said company - During such search operation, certain documents were found apart from Indian currency of certain amount and foreign currency - Photocopies of seized documents were handed over by CBI to Income Tax Department for enquiries and investigation - Subsequently, remaining seized documents were handed over by CBI to DIT (Inv.) which was in response to warrant of authorisation issued by DIT (Inv.) under section 132A - On basis of such documents, Assessing Officer issued notice under section 148 to assessee - Accordingly, reassessment order was passed making addition under section 68 - It was noted that Assessing Officer was taking instructions on each and every hearing and dictates was clearly given to him - Even questionnaire was prepared on instruction of his superiors and same was even sent to Delhi for confirmation - In a letter addressed by Assessing Officer to DDIT(Inv.), Asse....
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....tory notice as required the order cannot be passed against the assessee. To support this view he relied upon the decision of the Apex Court in the case of Hotel Blue Mooon (Supra) and Rajasthan High Court in the case of Kamla Devi Sharma(Supra). As regards the approval accorded as per provision of section 153D of the Act it was granted mechanically and was thereby the consequential order does not survive. To drive home to this contention he relied upon the decision of the Apex Court in the case of Serajudding and Co. (Supra) and other decision cited in the written submission. 9. Per contra, the Id. DR drawn our attention to AO 's report which has been read and relied upon. The same is extracted herein below for the sake brevity of the facts: As regards the contention of the assessee ld. DR also placed on record the screen shot werein the status of the delievery of the notice shows as delivered and therefore, rebutted to the contention of the ld. AR of the assessee. On being confronted to the ld. DR about the contention that email screen shot does not shows that there was an attachment of the notice or not and on that she relied upon the screen shot submitted as above. ....
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....as not tried to delivery the same again this shows that the email sent to the alleged notice has no attachment to the notice and therefore, in the absence of this fact being not counter by the ld. DR we accept the contention of the ld. DR that in this case statutory notice as required u/s. 143(2) was not issued and communicated to the assessee. Merely the ld. AO kept it in file does not believed that the same was served to the assessee and therefore, we are of the considered view that in this case the statutory notice as required was not served. Thus on this issue assessee relied on the decision of the Apex Court in the case of ACIT Vs. Hotel Blue Moon [ 188 Taxman 113 (SC) ]. The court on this issue held as follows ; 16. The case of the revenue is that the expression 'so far as may be apply' indicates that it is not expected to follow the provisions of section 142, sub- sections (2) and (3) of section 143 strictly for the purpose of block assessments. We do not agree with the submissions of the learned counsel for the revenue, since we do not see any reason to restrict the scope and meaning of the expression 'so far as may be apply'. In our view, where the....
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.... assessment year independently. That view was also consistently followed by the various benches of the ITAT for which reference was made to the decision of ITAT Delhi Benches in Harish Bajaj vs. DCIT, ITA No. 2218 to 2223/Del/2023 and Wave Industries Pvt. Ltd. vs. DCIT ITA 5241/Del/2015, ITAT Pune in Santosh Subhashappa Mukta vs. DCIT, ITA 18,19 & 20/PUN/2021, where assessments framed on the basis of mechanical approvals u/s 153D were held to be invalid and quashed. Since the facts of the case on hand and the facts of the case laws as cited herein above being similar on being consistent with the legal precedent of the case laws of the Hon'ble Supreme Court, the Hon'ble High Courts, and consistently applied by the coordinate benches of the Tribunal, we hold that the approval granted u/s 153D in the present case was accorded in a mechanical and consolidated manner, without due application of mind and without separate consideration of each assessment year. Such approval being invalid, the consequential assessment orders framed for Assessment Years 2019-20 cannot be sustained in law and is therefore quashed. In the result ground no. 7.2 raised by the assessee is allowed. ....
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....d 13.04.2021. The approval is not only mechanical one, it was accorded after discussion with the A.O. time to time during the assessment proceedings and verification & examination of material available on record, seized materials, appraisal report etc. Report/comments submitted for kind perusal & necessary action. Yours faithfully, (R. k/ Singhal) Encl. - As above Deputy Commissioner of Income-tax, Central Circle-2, Jaipur Document 2 STRA~Assessment & A A Welcome BAKESH KUMAR SINGHAL, ACIT CEN CIE, JAIPUR , AO LIod FROS Send Email JAIPUR DORT CUNG ININCOME TAX GOVIN 05/11 /2000 11 00 12 AM 1 . Fort Duse SUNIL KUMAR GATTANL Please find attached the Notice u's 143(2) for PAN:ACSP32461K and AY 2018-20. Please guide your PAN in al lure ourrespondences. Note --- Document 3 à¤à¤¾à¤°à¤¤ सरकार/ Government of India कारà¥à¤¯à¤¾à¤²à¤¯/Office of the संयà¥à¤•à¥à¤¤ आयकर आयà¥à¤•à¥à¤¤, केनà¥à¤¦à¥à¤°à¥€à¤¯ खणà¥à¤¡ Joint Commissioner of Incom....