2021 (9) TMI 1335 - AT - Income Tax

Unexplained jewellery - search seizure operation u/s 132(1) - HELD THAT - We find that Sh. S. C. Mittal father-in-law of the assessee staying under the same roof as the head of the joint family has disclosed an amount equal to the unaccounted jewellery seized belonging to the entire family as an undisclosed income. The vary purpose of centralization o f the cases of the family members is to have a comprehensive understanding and determination of undisclosed income. In the instant case since the undisclosed income determined tallies with the undisclosed income declared in the return no separate addition in the hands of the assessee is called for - Appeal of the assessee is allowed.

Summary

Issues:
Appeal against order of CIT(A) confirming addition of undisclosed investment in jewellery.

Analysis:
The appellant contested the addition of Rs. 41,48,174 as undisclosed investment in jewellery, arguing that a portion of the jewellery was not seized during the search and the rest belonged to the father-in-law, who had declared it as undisclosed income. The ITAT considered the details of jewellery found from various family members, totaling Rs. 2,05,55,951. Out of this, jewellery worth Rs. 77,52,900 was not seized, and Rs. 1,28,03,000 was seized by the department. The father-in-law had disclosed an amount as undisclosed speculative profit, which was used to purchase jewellery. The tribunal noted that the undisclosed income declared by the father-in-law covered the unaccounted jewellery seized from the entire family. Therefore, no separate addition in the hands of the appellant was warranted.

The tribunal emphasized that centralizing the cases of family members was crucial for a comprehensive determination of undisclosed income. As the undisclosed income determined matched the income declared in the return, the tribunal concluded that no separate addition should be made in the appellant's case. Consequently, the appeal of the assessee was allowed, and the addition of Rs. 41,48,174 as undisclosed investment in jewellery was deleted.