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2021 (10) TMI 266 - AT - Income TaxLegality of Search proceedings - Unexplained jewellery found from the locker - addition on account of jewellery - board circular VDIS disclosure - HELD THAT:- Legal challenges are concerned, first of all jewellery was found from the locker which is co-owned by assessee and her husband during search operations on Kesarwani Zarda Bhandar, Sahson , Allahabad, and jewellery weighing 1725.040 gms was owned up by the assessee. It is an admitted fact that the assessee has not declared this jewellery in her income-tax returns , filed prior to date of search. Further, the assessee has admittedly not filed any wealth tax return prior to the date of search - jewellery found from the locker, under these circumstances, itself is , prima-facie, incriminating material and there is no bar on revenue to use incriminating material found for framing assessment and bringing to tax total income including undisclosed income - assessee has not made any arguments before us challenging the legality of the search or assessment framed by Revenue - search took place on 27.08.2009 and the ay under consideration is ay: 2010-11 viz. the assessment year relevant to the previous year in which search took place. The assessment for year under consideration was framed u/s 143(3), and the year under consideration is the year when the search took place , and the mandate under the instant case is to assess the total income. Thus, we decide this issue against the assessee. Unexplained jewellery - Circular refers to the jewellery which should not be seized during search operations and not with the assessments to be framed. One of the relevant factor for identifying the ‘Stridhan’ of a women is her and her family (both parents and in-law) social and financial status/background, which cannot be ignored keeping in view the prevalent practices as per ‘Hindu’ customs. It is also observed that no elaborate reasons have been given by authorities below rejecting the aforesaid contentions raised by the assessee. The matter need to be restored back to the file of the AO for fresh determination and the AO is directed to pass reasoned and speaking orders. We set aside the appellate order passed by ld. CIT(A) and restore the matter back to the file of the AO for fresh determination on merits in accordance with law.We clarify that the jewellery was found from the locker owned by the assessee, and the onus/burden is on the assessee to explain satisfactorily the jewellery found from the locker. We clarify that we have not commented on the merits of the issue. Needless to say that proper and adequate opportunity of being heard shall be provided by the AO to the assessee in set aside remand proceedings. The evidences/explanations filed by assessee in her defense shall be admitted by the AO and shall be adjudicated by AO on merits in accordance with law. The appeal of the assessee is allowed for statistical purposes.
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