TMI Blog2018 (11) TMI 1252X X X X Extracts X X X X X X X X Extracts X X X X ..... s was made by the AO and confirmed by learned CIT(A). We adjudicate this ground in favour of the assessee. - I.T.A. No.7579/Mum/2014 - - - Dated:- 22-11-2018 - Shri Mahavir Singh, Judicial Member And Shri Ramit Kochar, Accountant Member For the Assessee : Shri. Yogesh A. Thar For the Revenue : Shri. S.K. Mitra (DR) ORDER PER RAMIT KOCHAR, ACCOUNTANT MEMBER: This appeal, filed by assessee, being ITA No. 7579/Mum/2014, is directed against appellate order dated 15.09.2014 passed by learned Commissioner of Income Tax (Appeals)-39, Mumbai (hereinafter called the CIT(A) ), for assessment year(AY) 2011-12, the appellate proceedings had arisen before learned CIT(A) from assessment order dated 28.03.2013 passed by learned Assessing Officer (hereinafter called the AO ) u/s 143(3) of the Income-tax Act, 1961 (hereinafter called the Act ) for AY 2011-12. 2. The grounds of appeal raised by the assessee in the memo of appeal filed with the Income-Tax Appellate Tribunal, Mumbai (hereinafter called the tribunal ) read as under:- GROUND I: Addition of ₹ 8,70,740/- on account of jewellery seized: 1. On the facts and in the circumstances of the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the annual value of the property be restricted to the extent of Municipal Rateable Value. Without prejudice to Ground III IV Ground V: 1. Even assuming (without accepting) that an ad-hoc amount on the basis of cost of investment is to be treated as annual value, then also rate of 8% adopted is excessive and unreasonable under the circumstances. 2. The Appellant, prays that the rate of 8% be appropriately reduced. Ground VI: Disallowance of a sum of ₹ 58,011 out of vehicle / telephone expenses. 1. On the facts and circumstances of the case and in law, the Learned CIT(A) erred in upholding the action of the AO of adding a sum of ₹ 58,011 being 10% of the total value of vehicle and telephone expenses claimed; 2. He failed to appreciate and ought to have held that addition is not justified in view of the fact that the entire expenses had been expended for the purpose of Business and no part of the same is personal in nature. 3. The Appellant, prays that the aforesaid addition be deleted. Without prejudice to Ground V Ground VII: 1. Even assuming (without accepting) that an ad-hoc amount has to be disallowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the tribunal, the Ld. Counsel for the assessee submitted before the Bench that these two grounds are not pressed and prayer is made by learned counsel for the assessee for dismissal of ground no. IV and V as not been pressed. The Ld. DR raised no objection to the dismissal of the ground no. IV and V raised by the assessee in memo of appeal filed with the tribunal as not been pressed. After hearing both the parties , we hereby dismiss ground no. IV and V raised by the assessee in memo of appeal filed with the tribunal as not been pressed. We order accordingly. 7. Coming to ground no. VI and VII raised by the assessee in memo of appeal filed with the tribunal, the Ld. Counsel for the assessee made the prayer that these two grounds are to be decided against the assessee keeping in view preceding year(s) appellate order passed by the tribunal in ITA no. 7577 7578/Mum/2014 AY 2009-10 and 2010-11 respectively , vide common appellate order dated 15.09.2017 keeping in view judicial discipline. The Ld. DR raised no objection for deciding these two grounds VI and VII raised by the assessee in its appeal against the assessee. After hearing both the parties and keeping in view also th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ticles weighing 2Kgs which were not of silver have been considered to be of silver and certain items which are not gold items have been considered to be gold items. As per the valuer, the valuation would thus be reduced by ₹ 3,32,600. The search party had compared each of the items found with the items as per my wealth-tax returns / as per valuation report of the Approved Valuer which valuation was done at the time of search on Mr. Ravi Jaising, my husband, on 16.11.1999. The items found which were matching with either of these have not been seized. Value of items of jewellery which have been seized is ₹ 9,10,340. I submit that the items of jewellery seized represent to a great extent items which have been remade out of old items of jewellery belonging to me. 11. The AO rejected the aforesaid contentions of the assessee as the assessee failed to produce any evidences to substantiate its contentions. The AO disbelieved the contention of the assessee that this jewellery of ₹ 9,10,340/- was remake of old items of jewellery belonging to her as the AO considered the same to be afterthought and consequently additions were made to the tune of ₹ 9,10,340/- u/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned CIT(A), the assessee has come in appeal before the tribunal. the Ld. Counsel for the assessee out rightly submitted that nothing incriminating was found during the course of search and seizure operations conducted by Revenue u/s 132 of the 1961 Act against assessee on 30.11.2010. The learned counsel for the assessee drew our attention to para number 6 of the AO order and para 5.3 of Ld. CIT(A) appellate order to contend that additions to the tune of ₹ 8,70,740/- is finally confirmed/upheld by Ld. CIT(A) on account of jewellery seized during the course of search operations on the grounds that the assessee is not able to reconcile the said jewellery with evidences . The Ld. Counsel for the assessee submitted that the assessee is consistently declaring high income in the return of income filed with the Revenue which reflects financial status of the assessee. The assessee is a fashion designer and carries on manufacturing and sale of designer garments through her proprietary concern, Azzura International. Income Tax returned for AY 2007-08 to 2011-12 along with computation of income and assessment orders passed by the AO u/s. 143(3) r.w.s 153A of the 1961 Act are placed i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... worth to the tune of ₹ 53,01,170/- out of which jewellery worth ₹ 9,10,340/- was seized. The assessee was not able to reconcile this seized jewellery with its wealth tax returns as well from valuation reports prepared at the time of earlier search on her husband on 16.11.1999 and further no corroboratory evidence were filed by the assessee to substantiate her contention that the said jewellery was disclosed jewellery from declared sources, which led to the additions being made by the AO. The assessee made a plea that these unexplained jewellery were recycled and remade from old jewellery from time to time . But, due to no evidences brought forward by the assessee corroborating and substantiating the acquisition/remake of this jewellery to the tune of ₹ 9,10,340/-, the AO made an additions of ₹ 9,10,340/- u/s 69A of the 1961 Act as an unexplained investment in seized jewellery. The learned CIT(A) gave relief to the tune of ₹ 39,600/- on account of artificial jewellery being added to the income of the assessee based on a letter dated 18.12.2010 written by departmental registered valuer while the remaining additions to the tune of ₹ 8,70,740/- on a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arch operations from her possession. The jewellery worth ₹ 44.30 lacs stood explained and dispute now remains with respect to jewellery worth ₹ 8.71 lacs only . This is explained to be recycled jewellery remade out of old jewellery over a period of time . It is of common knowledge that Indian women have special flavour for jewellery which is also evident from the fact that India is largest importer of Gold and it is also not uncommon in India among ladies to recycle old jewelleries to remake into new jewellery of latest trends and design or to exchange old jewellery with new jewellery of latest trends and design. The assessee is a fashion designer and it is quite obvious for her that she has to keep herself dressed with latest trend/design of garments/cloths as well jewellery . It is also quite obvious that every time to have latest trend and design jewellery , taxpayer cannot go on buying new jewellery which entailed fresh investments as is is very expensive to buy jewellery , and it is also not uncommon in India for tax-payers to exchange old jewellery with new jewellery and to recycle the old jewellery with new jewellery by paying making charges. The assessee is i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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