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2019 (11) TMI 90 - ITAT KOLKATAAddition u/s 69A - unexplained asset of the assessee - whether the lower authorities were justified in treating the gold jewellery weighing 4759.46 gms valued as unexplained asset of the assessee u/s 69A - HELD THAT:- Once the assessee had filed affidavits from the customers, the onus on proving the transactions with the parties was discharged and the burden shifted on the AO to disprove the transaction by bringing on record some tangible material to show that the averments made in the affidavit or the explanation offered by the assessee was false or factually incorrect. We however find that having received these affidavits, no manner of any further enquiry was carried out by the AO. We find that in other cases where the assessee had claimed the jewelleries belonged to jewelers or karigars, the AO had issued notices u/s 131 - in the case of jewelleries belonging to the customers, no enquiry from the customers were carried out by the AO by issuing notices u/s 131 of the Act, even though in the sworn affidavits complete address of the customers were available. Having regard to the foregoing facts and also having regard to the trade and custom practiced in the jewellery business and also having regard to the volume of assessee’s business, we are of the opinion that the assessee’s explanation with regard to jewelleries weighing 1406.27 gms belonging to seven customers should have been accepted by the AO. As regards jewelleries weighing 842.340 gms, we find no further evidences were submitted by the assessee either before the lower authorities or before us to substantiate his explanation. We therefore direct the AO to delete the addition made with reference jewellery weighing 1406.27 gms and uphold the addition of jewellery weighing 842.340 gms. We uphold the addition to the extent of 2343.34 gms (4759.460 – 548.300 – 461.550 –1406.270) out of 4759.460 gms equivalent to ₹ 65,93,763/- and accordingly assessee gets relief of ₹ 67,98,553/-. Ground No. 1 is therefore partly allowed. Income from unrecorded purchase & sale transactions - estimation of benefit of telescoping should be allowed against the addition made on account of unexplained investment u/s 69A - HELD THAT:- Since the assessee’s transactions of purchase & sale preceded the date of search when unexplained jewelleries were found, the necessary inference which one should draw is that the income which the assessee had earned from his undisclosed trading transactions in gold and jewelleries was re-invested in purchase of jewelleries which were found from his possession at the time of search. Accordingly we hold that the profit of ₹ 25,86,426/- determined with reference to the notings found in the seized documents should be telescoped against the addition of ₹ 65,93,763/- as confirmed in Para 8 above and accordingly no separate addition of ₹ 25,86,426/- shall be made. Ground No. 2 of the assessee and Ground Nos. 1 to 5 of the Revenue are therefore partly allowed.
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