TaxTMI 
TaxTMI 
2026 (5) TMI 1048
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....or his daughter is false. 4. The Id CIT(A) ought to have noted that Mr. Muthuswamy Jeweller in his cross examination categorically admitted the following facts. i) That the appellant did not Approach Mr. Muthuswamy for purchase of jewellery. (Vide reply to Q. No. 2 of Cross Examination). ii) That the appellant did not pay the amount to Mr. Muthuswamy for purchase of jewellery. (Vide reply to Q. No. 6) iii) That appellant's PA did not tell Mr. Muthuswamy that the appellant sent money for purchase of jewellery. (Vide reply to Q. No.8) iv) That Mr. Muthuswamy reaffirmed the fact that the appellant neither paid the amount nor received the Jewellery from him. (Vide reply to Q. No. 10) 5. The Id CIT (A) ought to have noted that the jewellery was purchased by the appellant's daughter Late Smt. Kumudini Devi at Coimbatore from Mr. Muthuswamy and that appellant and his wife both had gifted Rs. 16.46 Lakhs for jewellery for marriage, by withdrawing the amount from their Bank A/c's and in support affidavits and bank statements were filed and the authorities below dislodged the evidence to sustain additions. 6. The Id C....
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....under section 147 of the Income Tax Act, 1961 ("the Act") and issued notice under section 148 of the Act on 21.03.2001. In response, the assessee filed return of income on 30.05.2001 admitting total income of Rs. 1,02,995/-. After considering the submissions of the assessee, the Ld. AO completed the assessment under section 143(3) read with section 147 of the Act on 28.03.2002, treating the cash payment of Rs. 23,53,750/- as unexplained investment under section 69B of the Act. 4. In the first round of appeal, the Learned Commissioner of Income Tax (Appeals) ("Ld. CIT(A)") confirmed the addition of Rs. 23,53,750/- made by the Ld. AO. On further appeal, the Tribunal in ITA No. 749/Hyd/2003 dated 08.06.2004 set aside the matter to the file of the Ld. AO with a direction to examine the jeweller, provide opportunity of cross-examination to the assessee, and decide the issue afresh in accordance with law. Further, on appeal by the assessee, the Hon'ble High Court also directed the Ld. AO to examine the jeweller and provide opportunity of cross-examination, and all contentions were kept open. 5. Pursuant to the directions of the Hon'ble High Court, the Ld. AO recorded the statement ....
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....s. DCIT. 8. Per contra, the Learned Departmental Representative ("Ld. DR") relied on the orders of the lower authorities and submitted that the assessee has failed to satisfactorily explain the source of investment. It was contended that the findings of the Ld. AO as well as the Ld. CIT(A) are based on material evidence and no interference is called for. 9. We have considered the rival submissions and perused the material available on record including the case laws relied upon. On perusal of the same, we find that there is no dispute with regard to the fact that cash amounting to Rs. 23,53,750/- was paid for purchase of jewellery to the jeweller through the PA of the assessee and the jewellery was handed over by the jeweller to the PA of the assessee. In this regard we have gone through para nos.1.6 to 3.2 of the order of the Ld. Ld. AO which is to the following effect: 10. On perusal of the above, we find that the Ld. AO has reproduced the relevant statement of the jeweller recorded on 26.08.2015 and also the cross examination of the jeweller by the assessee on 28.03.2016. The Ld. AO has elaborately recorded the relevant facts of the case for making the impugned addition.....
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....ter in 2000. 1.7 In obedience to the directions of the Hon'ble High Court, commissions u/s 131 of the Act were issued to the Income tax Officer, Non-Corporate Ward-1(4), Coimbatore for examination of Sri M S Muthuswamy. A sworn statement was recorded from him on 26.08.2015 the relevant extracts from which are reproduced below: (Q 1 to Q 3 relate to introduction, educational qualification and income tax particulars of the deponent.) Q4. Please state whether you know Shri N Jayakrishna, Hyderabad and if knows, please explain how did you know him and come into contact with him? Ans. I know Shri N Jayakrishna, Hyderabad as a customer. He approached me for the purpose of purchase of jewellery and diamonds. Page 2 of 8 2 Sri N Jayakrishna, A.Y. 1996-07 Q5. Please explain whether you know Smt. Kumudini, daughter of Shri N Jayakrishna and please explain whether she met you personally in connection with the purchase of jewellery and diamonds? Ans. No. I do not know Smt. Kumudini and no such person met mo for the above purpose. Q6. Please explain the details of advances received from Stri N Jayakrishna, purpose of the advances as recorded in your books and details ....
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....rriage gifts and monies given by him and his wife from out of withdrawals from their bank account. d) It is stated that the assessee has not paid any money to Sri M S Muthuswamy nor received any jewellery from him and hence he is not responsible for the alleged payment to Sri M S Muthuswamy. e) The cash paid by the assessee's daughter to Sri M S Muthuswamy cannot be treated as unexplained income in the hands of the assessee. 1.9 Subsequently, the assessee vide his letter dated 01.03.2016 requested for an opportunity to cross-examine Sri M S Muthuswamy. Accordingly, commissions u/s 131 of the Act was issued to the Income tax Officer, Non-Corporate Ward-1(4), Coimbatore to summon Sri M S Muthuswamy for the purpose of cross examination which was arranged on 28.03.2016 at Coimbatore. 2.0 The relevant extracts from the cross examination of Sri M S Muthuswamy by the assessee before the Income tax Officer, Non-Corporate Ward-1(4), Coimbatore are reproduced below: (Q1 relates to identification particulars of Sri M S Muthuswamy.) Q2. By Shri N Jayakrishna: Did I approach you for the purchase of jewellery? particulars of Sri M S Muthuswamy.) Ans. By Shri M S Muthuswamy:....
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.... on 29.03.2016 in the original assessment proceedings. The contents of summarized below: After the cross-examination, copies of evidence filed letter dated 29.03.2016 are 2.1 enclosing the the letter dated 29.03.2016 are summarized below: i) It is not in dispute that the assessee and his wife Smt. N Padmaja Devi have withdrawn monies from their respective bank accounts for purchase of jewellery for their daughter. Details of the withdrawals have been filed earlier. The fact of the withdrawals totaling Rs. 16.46 lakhs have been confirmed in the assessee's sworn statement and affidavit. There is no contrary evidence on record to prove that the sum of Rs. 16.46 lakhs was not available to them or was utilized for any other purpose. The assessee confirms that they were not utilized for any other purpose. il) The fact of receipt of cash gifts of Rs. 10.08 lakhs was confirmed in the assessee's statement and necessary evidence in the form of confirmation letters from the donors were also filed. There is no evidence contrary to the same. ii) The aggregate funds available to late Kumudini Devi were therefore Rs.26.54 lakhs while the amounts given for purch....
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....assessment is finalized as under. 2.3 From the examination and cross-examination, it is evident that the claim made by the assessee all along that it was his daughter who made the deposits with the jeweller and purchased the articles is not correct. According to Shri M S Muthuswamy, it was the assessee's P.A. who gave him the monies when he was visiting Hyderabad on business purpose and received the jewellery at Coimbatore which was not disputed by the assessee. 2.4 The claim of the assessee that the investment of Rs.23,53,750/- was made by his daughter was not established. On the other hand the jeweller had affirmed that he did not know Smt. Kumudini and she did not approach him in this matter. This fact was not disputed in the cross examination. Document 5 2.5 The reference made by the assessee to the answers given by Sri M S Muthuswamy to Q No.s 3, 4 and 5 of the cross examination to draw support for the claim that the assessee was not involved in the transaction is not correct for the reason that Sri M S Muthuswamy was clear iri his statement that monies were paid by the P.A. of the assessee at Hyderabad and the jewellery was handed over to the P.A. in Coimbatore and ....