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2020 (4) TMI 578 - AT - Income TaxAddition u/s 68 - Addition of capital gain earned on sale of jewellery in return of income filed with Revenue - assessee is a salaried employee with ICICI Bank - Case of the assessee was selected for framing scrutiny assessment under CASS - HELD THAT:- Assessee could not produce purchase bills for purchase of the jewellery to the tune of 382.93 gms - sale of the jewellery as claimed by assessee to have been made during the year under consideration was not to registered gold jewelers but were all claimed to be made to private individuals. The sale consideration for the entire sale of jewellery as claimed by assessee was in cash and none of the party paid sale consideration through banking channel - the entire transaction for sale of gold jewellery is an afterthought and a sham transaction which is claimed by assessee as he was cornered by Revenue. Assessee could not satisfactorily explain transactions for sale of gold jewellery. The amounts were deposited in cash in the bank account maintained by assessee and onus was on assessee to satisfactorily explain sources of cash deposit in his bank account which in the instant case, the assessee failed to satisfactorily explain and Section 68 is clearly applicable. Vide CBDT instruction number 1916 dated 11.05.1994 which stipulates that in case of male member , 100 grams of gold jewellery could be treated as held explained , we give benefit of the aforesaid CBDT instruction to the assessee in terms of aforesaid CBDT instruction, while rest of the sale of jewellery as claimed by assessee could not be accepted and the sale consideration of 282.92 grams of gold jewellery as claimed by assessee is to be held as unexplained as income from undisclosed sources in the hands of assessee which is to brought to tax in the hands of assessee. Assessee will be required to pay tax on capital gain arising from sale of said 100 gm of gold jewellery as per provisions of the 1961 Act. AO is directed to bring capital gains on sale of 100 gm of jewellery to tax in the hands of assessee in accordance with law, while rest of sale consideration is to be brought to tax as unexplained income. The assessee is directed to file before AO computation for working of capital gains on sale of 100 gms of gold jewellery , for verification by the AO. The matter is remanded to AO to that effect. AO shall provide proper and adequate opportunity of being heard to the assessee. - Decided partly in favour of assessee.
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