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2022 (7) TMI 686 - AT - Income TaxAssessment u/s 153A - during the course of search at the premises of the assessee gold jewellery weighing 5543grams (net.wt.) and 175.30 carat diamond jewellery were found which was valued by the Registered Valuer - HELD THAT:- Quantity in weight of gold jewellery found on the date of search and the quantity of gold jewellery declared in the Wealth Tax Return on the valuation date should have been first considered. Thereafter, whatever withdrawals available to the assessee for purchase of such diamond/gold jewellery on the basis of the market value should have been considered and only the balance amount should have been added or if according to the AO the source stands explained, then no addition should have been made. However, in the instant case neither the AO nor the CIT (A) have done this exercise, nor even the assessee has done this exercise and the addition has been made on the basis of lumpsum market value which in our opinion is a flawed exercise. In view of the above discussion, we deem it proper to restore the issue to the file of the AO with a direction to do this exercise of quantifying the weight of diamond and gold jewellery on the date of search and that has been declared in the Wealth Tax Return prior to the date of search. If the assessee in the wealth tax return has not quantified the weight of such diamond/gold jewellery and consolidated value has been given, then the same, in our opinion has to be brought down to the quantity of diamond and gold jewellery by adopting the market value as on the date of valuation. Thereafter due credit should be given for new purchases as per availability of cash. AO shall decide the issue as per fact and law after giving due opportunity of being heard to the assessee. The grounds raised by the assessee on this issue are accordingly allowed for statistical purposes.
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