TMI Blog2013 (8) TMI 936X X X X Extracts X X X X X X X X Extracts X X X X ..... ned jewellery found at the time of search - Held that:- The search party did not ask any further question in this regard and no further detail was required from him. The Assessing Officer also did not make any enquiry after he received the explanation of the assessee claiming that 240 gms jewellery belongs to his brother in law Shri Mukti Lal Agarwal. The explanation filed by the assessee, however, has been rejected by the Assessing Officer without making any further enquiry or requiring the appellant to adduce further evidence. The explanation so given has not been found false. Therefore, the claim of 240 gms jewellery explained by the assessee as belonging to Shri Mukti Lal Agarwal cannot be rejected on surmises and conjectures. We, therefore, direct deletion of addition on this account. As regards the claim of jewellery belonging to his son Shri Praful Mittal Assessing Officer rejected this claim by saying that the said paper is a dumb document and without any date and in the absence of any bill for purchase of jewellery claim was not allowed. On the peculiar facts of surrender of income by Shri Praful Mittal and entries showing purchase of jewellery in the seized documents t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 240.000 2. Shri Praful Mittal 258.430 3. Lal Chand Mittal Family 300.000 Total 798.430 3. On the facts and in the circumstances of the case and in law the learned CIT(A) erred in not allowing the benefit of telescoping, recycling and rotation of funds. 2. In ground no. 1 raised in appeal, briefly the facts are that a search under section 132 of the IT Act was conducted on assessee group on 27.08.2008. The appellant is engaged in the business of distributorship of prepaid mobile sim cards and returned an income of ₹ 2,50,110/- in pursuant to notice under section 153A of the Act. The Assessing Officer recorded findings and held that during the course of search, statement of assessee was recorded under section 132(4) of the Act on 28.8.2008. In the statement, the assessee offered to tax income of ₹ 30,00,000/- in his individual capacity earned from medical business. The assessee reconfirmed the above surrender in his statement dated 5.9.2008. The income, however, was not r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is of statement of the assessee and the set off of ₹ 10,84,697/- has already been given by the Assessing Officer and thereafter the remaining amount of ₹ 19,15,303/- has been added during the year. He, therefore, found no merit in the argument advanced by the assessee and thus confirmed the addition of ₹ 19,15,303/-. 4. Assessee s counsel Shri Goyal in his written submissions as well as orally contends that in the statement of the assessee dated 27.8.2008/28.8.2008 recorded at C-1, Mittal Chambers, C-Scheme, Jaipur and statement recorded at B-19, Sardar Patel Marg, Chomu House, Jaipur, there were no any positive question on the basis of corroborative evidence or material showing undisclosed income or investment made by the assessee. No any document was found to show that the assessee was engaged in undeclared pharmaceutical business. Neither such show-room or shop was found nor any stock of medicines was found showing existence of undeclared medical business of the assessee in his individual capacity. No any bank account, purchase and sale bills were found to show the existence of such business. Furthermore, the assessee did not have drug licence, therefore, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... distinguishing the case laws relied upon by the authorities below in their respective orders. 5. On the other hand, the Ld. D/R contends that the addition can be made on the basis of statement recorded under section 132(4) of the Act. The appellant had made an admission of income earned outside books from unaccounted pharmaceutical business and such income stated to have been earned to the tune of ₹ 30,00,000/- and thereafter admitted of making the surrender of his income of ₹ 30,00,000/-. The assessee is a educated person. The assessee has not made retraction well in time. The Pune Bench of the Tribunal in case of Hotel Kiran, 82 ITD 453 (Pune) has discussed elaborately the circumstances under which a valid retraction can be made. This retraction, however, does not meet such circumstances. The Assessing Officer at internal pages 5 to 7 of the assessment order has made elaborate discussion. The Assessing Officer has already given set off of ₹ 10,84,697/- against the income surrendered by the assessee in preceding years. Since the retraction is not valid and statement recorded under section 132(4) has evidential value, the authorities below have acted judicious ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ussion on the evidentiary value of the affidavit. The relevant passage from the aforesaid judgment at page 791 of the report is reproduced as under :- The most important points on which the Tribunal relied, is that mentioned at No. 2, viz., that, according to the Tribunal, the assessee had not satisfactorily established that the shares had to be sold as the purchaser of the Jaswant Sugar Mills was not willing to purchase that mill unless the shares in the Straw Board Mills Ltd. held by the family were also transferred to him at the same time. On this point, the only material available on the record is the affidavit which was filed by the assessee before the Income-tax Officer. The assessee in his affidavit, had definitely stated that the purchaser wanted to purchase both the going concerns, the Jaswant Sugar Mills and the Straw Board Mills Ltd., together and one of his conditions of purchase was that all the shares of Lala Jaswant Rai, his sons and other relatives had to be transferred to the purchaser. The Income-tax Appellate Tribunal rejected this affidavit of the assessee on the mere ground that there was no documentary evidence in corroboration in the form of any correspo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by Ld. CIT (A) on account of unexplained jewellery found at the time of search. 8. The brief facts of the case are that as a result of action under section 132 of the Act the search party found jewellery weighing 4491 grams from the possession of various family members of the assessee and lockers in the names of family members of the assessee. The assessee explained that jewellery belongs to various family members which includes the jewellery of 300 gms belonging to his two brothers, namely, Shri Lal Chand Mittal and Shri Madan Lal Mittal and jewellery of 240 grams belongs to his brother in law Shri Mukti Lal Agarwal who resides at Gram Ghatwada via Chomu. The assessing authority rejected the explanation given by the assessee on the ground that the assessee has not filed evidence in support of this claim and he treated the jewellery weighing 968.43 gms as unexplained and made the addition of ₹ 10,21,135/-. 9. The Ld. CIT (A) accepted the jewellery of 170 gms claimed by assessee as belonging to Smt. Ritu Mittal, daughter-in-law of the assessee residing at the same premises as explained by giving the benefit of CBDT Instruction No. 1916 and allowed relief of ₹ 1,96 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emises of assessee at B-19, Chomu House, Jaipur was inventorized as per annexure-J. Explanation with regard to the same was filed vide letter dated 13.04.2010. Besides stating jewellery belonging to various family members as per the explanation, eewellery weighing 258.430 was claimed covered in the additional income of ₹ 27,15,292/- offered to tax in the hands of Shri Praful Mittal, the assessee. It is pertinent to mentioned here that on query it was explained vide letter filed on 11.08.2010 that the jweellery was purchased out of unaccounted income offered to tax of ₹ 27,15,292/-. It was further claimed that purchase of jewellery evidenced by transaction recorded on page 20 of annexure A-2 seized from B-19, Chomum House, Jaipur. The assessee contended that on page 20 of annexure A-2 seized from B-19, Chomu House, Jaipur narrates details of purchase of jewellery of ₹ 3,41,875/-. The contention of the assessee is not acceptable on account of the fact that the said paper is a dumb documents without any date and entries difficult to understand, cannot be treated as a bill for purchase of jewellery. Therefore, no credit of jewelllery purchased on the basis of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the basis of peak withdrawal recorded in the seized documents. The appellant relied on a decision of Jaipur Bench of the Tribunal in the case of V.K. Rana in ITSSA No. 10/JP/2001 dated 27.11.2002 and decision in the case of Indrajit Arora in ITSSA No. 32/JP/2003 dated 9.8.2004 stating that in these cases the telescoping benefit of firm s income was given against the undisclosed investment in jewellery/cash in the hands of the partner. 12. On the other hand, the Ld. D/R contends that the assessee has not spelt out the details of jewellery claimed in search statement belonging to Shri Mukti lal Agarwal. The assessee has not filed any evidence in support of this claim that 240 gms jewellery belongs to Shri Mukti Lal Agarwal, 258.43 gms jewellery purchased by Shri Praful Mittal from his unaccounted income and 300 gms jewellery belongs to Shri Lal Chand Mittal and Shri Madan Lal Mittal. Further, the assessee has not stated this fact in the statement u/s 132(4) of the Act that the jewellery belonging to Shri Lal Chand and Shri Madan Lal Mittal was lying at his residence. It, therefore, has been contended that the ground raised in appeal needs to be rejected. 13. We have heard th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 300 gms belonging to Shri Lal Chand Mittal and Shri Madan Lal Mittal, admittedly both these persons were also searched along with the appellant and were assessed by the same Assessing Officer who completed the assessment in the case of this appellant before us. While completing the assessment of Shri Lal Chand Mittal and Shri Madan Lal Mittal, both these persons had claimed and also tendered explanation that jewellery weighing 150 gms each belonging to them was lying at the residence of Shri Radheyshyam Mittal. The Assessing Officer while completing the assessment did not make any adverse comment on such explanation and accepted the statement as made by these two persons. He did not embark any enquiry from the appellant on this issue after the appellant had explained that jewellery weighing 150 gms each belong to such two persons, namely, Shri Lal Chand Mittal and Shri Madan Lal Mittal nor he was required to produce both these persons for cross examination or verification of facts stated by the appellant. If the claim made by these two persons for their jewellery having been left in the house of Shri Radheyshyam Mittal who was residing next door was to be taken as wrong claim, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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