2011 (7) TMI 218 - HC - Income Tax

Block assessment - Search and seizure - Addition - With regard to the stock of jewellery the appellant sought to explain that 244 grams of gold belonged to his business and 283.28 grams of gold belonged to his customers who had given either for repair or for making of new jewellery - It is noted that in his statement recorded on oath the assessee had not stated any jewellery belonging to his wife or his sister-in-law to be lying in the shop - Tribunal noted that there were certain affidavits where jewellery was given in the month of February 2002 - Held that jewellery was given for repairs and was lying with the appellant for a period of more than six months to four years. He rightly recorded that no customers would give gold jewellery for repair or polish for such a long time Regarding addition of Rs. 1, 60, 000 - There was no documentary evidence much less any books of accounts to substantiate the plea of the appellant that Rs. 1, 60, 000/- was the amount out of sale proceeds and was kept in the house for all this period Regarding addition of Rs. 1, 50, 000 - Moreover no such contention was made by the appellant in his statement recorded on oath after the search. We do not find any perversity in this finding of the authorities below - Appeal is dismissed

Summary

Issues:
1. Challenge to order of Income Tax Appellate Tribunal for block assessment period.
2. Additions made by Assessing Officer - jewellery, property purchase consideration, unexplained cash.
3. Explanation provided by appellant for additions.
4. Decisions of CIT(A) and Tribunal on each addition.
5. Findings on stock of jewellery and unexplained income.
6. Discrepancies in explanations provided by appellant.
7. Verification of facts related to unexplained cash addition.
8. Final decision and dismissal of the appeal.

Analysis:

1. The appellant challenged the order of the Income Tax Appellate Tribunal for the block assessment period from 01.04.1995 to 04.03.2002.

2. The Assessing Officer made additions concerning jewellery, property purchase consideration, and unexplained cash. The appellant provided detailed explanations for each of these additions.

3. Regarding the jewellery addition, the appellant explained the ownership of gold ornaments and jewellery received for repair. The CIT(A) and Tribunal had differing decisions on the valuation and acceptance of these explanations.

4. The property purchase consideration addition was explained by the appellant, but the Assessing Officer, CIT(A), and Tribunal had varying conclusions on the legitimacy of the explanations provided.

5. The unexplained cash addition was attributed to a third party by the appellant, but this explanation was not accepted by the authorities, leading to a consistent decision by all three levels against the appellant.

6. Discrepancies were noted in the explanations provided by the appellant, especially regarding the ownership and source of funds related to the additions made by the Assessing Officer.

7. The verification of facts related to the unexplained cash addition revealed inconsistencies in the appellant's claims, leading to a unanimous decision by all authorities against the appellant.

8. Ultimately, the appeal was dismissed based on the findings of fact recorded by the Assessing Officer, CIT(A), and Tribunal, highlighting the lack of documentary evidence and credibility in the appellant's explanations. No legal questions were found to arise from the case, resulting in the dismissal of the appeal.