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2014 (7) TMI 1315 - AT - Income TaxRevision u/s 263 - unexplained investment in jewellery u/s 69A - HELD THAT:- After going through the board’s instruction no.1916 we are of the view that though the aforesaid circular is in the context of seizure of gold jewellery but the same can also be applied while considering the unexplained investment in gold jewellery by the assessee. In the aforesaid instruction 1916 dated 11.5.1994, it is clearly mentioned that in case of married lady 500 gms. And in case of unmarried lady 250 gms can be given credit. The Hon’ble Gujarat High court in case of CIT Vs. Ratanlal Vyaparilal Jain [2010 (7) TMI 769 - GUJARAT HIGH COURT] taking note of board’s instruction no.1916 has also expressed similar view by holding that though the circular has been issued for the purpose of laying down guidelines for seizure of jewellery but it can also be considered for the purpose of explaining the source of jewellery in terms with the guidelines laid down in the said instruction. Considering the aforesaid facts and circumstances and in the light of the board’s instruction no.1916 dated 11.5.1994 and decision of Hon’ble Gujarat High Court we direct the assessing officer to work out the unexplained investment, if any, after giving credit for gold jewellery as per clause (iii) of board’s instruction no.1916 dated 11.5.1994. Accordingly, assessee’s appeal is considered to be allowed for statistical purposes. Assessment u/s 153A - Addition of unexplained cash credit - AO has only disputed the source of investment which is already reflected in the books of accounts and return filed prior to the date of search - HELD THAT:- an amount which has already been recorded in the books of accounts and disclosed in the return of income cannot be made subject matter of assessment u/s 153A of the Act, in absence of abatement of assessment proceeding. We therefore hold that the addition made of ₹ 7,30,000/- is not justified. So far as merits of the issue is concerned, undisputedly the assessee from the very beginning has explained that the amount was received as gift from his father. This fact was confirmed during the assessment proceeding through affidavit of his mother and father’s brother. The assessing officer has simply disbelieved the affidavit without verifying the veracity of the averments made therein, which in our view is not a correct approach on the part of the assessing officer. - Decided in favour of assessee. Revision u/s 263 - CIT (Central) Hyderabad u/s 263 revising the assessment orders passed u/s 143(3) r.w.s. 153A - HELD THAT:- As can be seen the assessing officer in the assessment order passed u/s 143(3) r.w.s. 153A of the Act has not made any addition in reference to any seized material but has treated the investment made in property of ₹ 7,30,000/- as unexplained credit. This amount has already been shown in the books of accounts and disclosed in the return. Therefore, when there is no assessment proceeding pending on the date of search for the impugned assessment year, the assessing officer cannot consider income which has already been recorded in the books of accounts and reflected in the return filed prior to the date of search. An amount which has already been recorded in the books of accounts and disclosed in the return of income cannot be made subject matter of assessment u/s 153A of the Act, in absence of abatement of assessment proceeding. We therefore hold that the addition made of ₹ 7,30,000/- is not justified. So far as merits of the issue is concerned, undisputedly the assessee from the very beginning has explained that the amount was received as gift from his father. This fact was confirmed during the assessment proceeding through affidavit of his mother and father’s brother. The assessing officer has simply disbelieved the affidavit without verifying the veracity of the averments made therein, which in our view is not a correct approach on the part of the assessing officer. Hence, the assessing officer having made the addition purely on presumption and surmises without making any enquiry, the same cannot be sustained. Accordingly, we direct the assessing officer to delete the same. Assessment proceeding initiated u/s 153A which were ultimately completed by the assessing officer - HELD THAT:- Assessing officer at the time of assessment proceeding has conducted enquiry specifically in respect of the loans to M/s. Sai Agro Industries. Merely because the result of such enquiry has not been mentioned in the assessment order, it will not tantamount to assessment order being erroneous and prejudicial to the interest of revenue, as it is not a case of no enquiry. Further, CIT has not brought any material on record to show that advances were not in regular course of business. Therefore, on merits also the CIT was not justified in exercising jurisdiction u/s 263 of the Act as the assessing officer has conducted enquiry and passed the order after application of mind. In the aforesaid view of the matter, we hold that the impugned order passed u/s 263 of the Act is invalid and therefore, we quash the same.
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