TaxTMI 
TaxTMI 
2026 (8) TMI 1101
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....set, there is a delay of 657 days in filing the present appeal before the Tribunal. The assessee has filed an application seeking condonation of the delay supported by an affidavit explaining the circumstances in which the appeal could not be filed within the prescribed period. It has been stated that after dismissal of the first appeal, the assessee, acting upon the legal advice then received, was pursuing various remedies arising out of the very same seizure proceedings, including proceedings relating to quashing of the criminal proceedings, release of the seized jewellery and proceedings which eventually travelled before the Hon'ble Supreme Court. It was thereafter, upon obtaining fresh legal advice, that the assessee was advised to independently challenge the appellate order before this Tribunal. We have considered the explanation in the light of the attendant circumstances. The material placed before us does not indicate that the assessee had deliberately abandoned his statutory remedy or that the delay was occasioned by any mala fide or dilatory design. Rather, the assessee was pursuing remedies connected with the same seizure and the same jewellery during the intervening per....
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....of the jewellery. When specifically confronted with the statement of Shri Mahesh Roy that the jewellery belonged to M/s B. Nishant Jewels Pvt. Ltd., the assessee stated that he was personally unaware of its precise ownership. He further explained that he was a small-time worker earning a meagre income by way of commission on booking of orders and categorically denied ownership of the seized jewellery. He candidly admitted, however, that he did not possess documentary evidence by which he could independently establish that the jewellery did not belong to him. 5. The Assessing Officer proceeded on the premise that since the jewellery was found in the physical possession of the assessee, the initial burden lay upon him to establish its source and ownership. The assessee was once again required through order-sheet entry dated 08.11.2019 to explain why the jewellery valued at Rs.36,35,934/- should not be treated as unexplained. In reply dated 11.11.2019, the assessee reiterated that he had been travelling with Shri Mahesh Jagbandhu Roy to Delhi when they were intercepted at Ratlam and that the gold ornaments did not belong to him. A further notice under section 142(1) dated 15.11.201....
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....held that since the jewellery had been found in the possession of the assessee and the assessee had failed to substantiate its source and ownership by documentary evidence, the protective addition could not be disturbed until the substantive addition in the hands of M/s B. Nishant Jewels Pvt. Ltd. attained finality. The addition of Rs.36,35,934/- was accordingly confirmed. 8. We have considered the orders of the authorities below and the entire material available on record. The issue requiring adjudication is whether, in the peculiar factual setting obtaining here, the protective addition of Rs.36,35,934/- under section 69A can legitimately continue in the hands of the assessee merely because the jewellery was physically found in his possession, notwithstanding that the Revenue itself has made the substantive addition in respect of the very same jewellery in the hands of M/s B. Nishant Jewels Pvt. Ltd. There can be no dispute that physical possession of money, bullion, jewellery or other valuable article is a relevant circumstance for the purpose of section 69A and that where such asset is found in the possession of a person, the explanation regarding its nature, source and owne....
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....e, on the material before him, to bring the value of the very same jewellery to tax substantively in the hands of M/s B. Nishant Jewels Pvt. Ltd., the corresponding addition in the assessee's hands was retained merely as a protective measure. For sustaining such protective addition at the appellate stage, there must at least be some material capable of establishing that the substantive assessment in the hands of the company was misplaced and that the assessee himself was the actual or beneficial owner of the jewellery. No such independent material has been referred to either by the Assessing Officer or by the learned CIT(A). Their case against the assessee rests essentially upon physical possession and his inability to produce documentary proof of ownership in another person, whereas the Revenue's own record simultaneously contains the claim of ownership by the Director of the company and a substantive assessment of the identical asset in the company's hands. 11. We are, therefore, unable to concur with the reasoning of the learned CIT(A) that the protective addition must necessarily remain alive until the substantive addition in the hands of M/s B. Nishant Jewels Pvt. Ltd. atta....