TMI Blog1998 (4) TMI 159X X X X Extracts X X X X X X X X Extracts X X X X ..... ormed that since the notice was received only on30th Oct., 1996, and even full one day was not available for necessary preparation and completion of details, therefore, 15 days time was sought. And in another letter it was informed that the statement of Smt. Meera Goyal and S.C. Goyal reported on29th Nov., 1995may be furnished to the assessee. However, the statements of these persons were not supplied to the assessee. The AO on the basis of seized material and statement of assessee observed that during the course of search jewellery worth Rs. 16,79,130 were found at the residence of the assessee; jewellery worth Rs. 2,23,830 was found from locker No. 64 with Bank of India and jewellery worth Rs. 31,195 was found from locker No. 542 with South Delhi Vault, totalling jewellery worth Rs. 19,34,155, out of which jewellery worth Rs. 9,45,011 was seized from the residence and jewellery worth Rs. 2,12,680 was seized from locker No. 64. The assessee was given opportunity to explain the same. However, she could explain the jewellery valuing Rs. 8,54,633 as per valuation report dt.15th Nov., 1992, belonging to various members of S.C. Goyal, HUF, the details of which are given at pp. 32 and 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd at the time of search and seizure from the residence, lockers is fully explained. It is pointed out that the AO himself treated the jewellery found from the residence standing in the name of various members of HUF as explained. However, he committed mistake in taking the value of such jewellery on the date of search at Rs. 8,54,633. As per the AO the value of total jewellery found from residence and lockers was Rs. 19,34,155. He accepted the jewellery standing in the names of various members of the HUF as explained worth Rs. 8,54,633 only. However it is pointed that the value of this jewellery standing in the names of various members was Rs. 8,54,633 as on 31st March, 1992, whereas the value as on the date of search comes to Rs. 15,12,379, as per the valuation report. Instead of taking value of jewellery in respect of such items, which were explained and impounded as on29th Nov., 1995, he has taken the value on31st March, 1992. It is not in dispute that the items of jewellery found and explained by the assessee are same. With regard to the balance diamond jewellery it was explained that Goyal Gases Ltd. paid a sum of Rs. 10 lacs by cheque No. 764065 dt. 8th Oct., 1992 towards pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Co. vs. CIT (1984) 43 CTR (Pat) 125 : (1985) 154 ITR 591 (Pat), Shankarbhai Khodabhai vs. Asstt. CIT (1996) 59 ITD 364 (Ahd), Amar Natvarlal Shah vs. Asstt. CIT (1997) 60 ITD 560 (Ahd), Hindustan Ferodo Ltd. vs. Collector of Central Excise,Bombay(1997) (89) ELT 16 (SC) for the proposition that where no enquiry has been made by the AO the matter cannot be sent back for further investigation. Reliance was also placed on Sarogi Credit Corporation vs. CIT (1976) 103 ITR 34 (Pat). 6. As against this the learned Departmental Representative submitted that the assessee came out with an explanation that diamond was purchased by Goyal Gases Ltd. from Sajjan Kumar Co. of Bombay. It was stated that a sum of Rs. 10 lacs was paid by cheque by Goyal Gases Ltd., out of which a sum of Rs. 2,88,510 was received back and the balance of Rs. 7,11,490 remained outstanding. The assessee produced two bills from Sajjan Kumar Co. mentioned above. These bills were debited by Goyal Gases Ltd. in the accounts only on31st March, 1996. No reasons for the delayed entries of the bills were furnished by the assessee and no confirmation was obtained and furnished from Sajjan Kumar Co. with regard to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wamy Iyengar Anr. vs. CIT (1960) 40 ITR 377 (Mad), M.R.M. Periannan Chettiar vs. CIT (1960) 39 ITR 159 (Mad) and Sitalpur Sugar Works Ltd. vs. CIT (1963) 49 ITR 160 (SC) for the proposition that where the AO has not drawn any inference, the Tribunal cannot draw an adverse inference against the assessee. Reference was also made to Chaturvedi Pithisaria, 4th Edn., p. 3510 and it is pointed out that the reliance on Suniti Dayal vs. CIT, referred in Direct Tax Manual at p. 9.201 is in favour of the assessee. 8. We have considered the rival submissions and have gone through the relevant material available on record. During the course of search and seizure operation jewellery worth Rs. 16,79,130 were found from the residence and jewellery worth Rs. 2,23,830 was found from locker No. 64 and jewellery worth Rs. 31,195 was found from locker withSouth Delhivault. The case of assessee was that the jewellery found at the time of the search belongs to S.C. Goyal, HUF and as per the latest valuation report available, the value of such jewellery as on 15th Nov., 1992, on the valuation dt.31st March, 1993was Rs. 8,54,633. In support of this contention reconciliation statement of jewellery wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 10 lacs by cheque dt. 8th Oct., 1992, No. 764065 towards purchase of loose diamond to Sajjan Kumar Co., out of which Rs. 2,88,510 was received back on 31st March, 1993. The balance amount of Rs. 7,11,490 remained outstanding as on31st March, 1996. In support of this contention assessee had produced two bills from Sajjan Kumar Co. dt.3rd March, 1993and15th March, 1993for Rs. 3,64,730 each, which were found debited in the books of Goyal Gases Ltd. on31st March, 1996. The objection of the Department is that these bills were debited much after even the date of search and accounts of Sajjan Kumar Co. had been squared up on31st March, 1996only. No reason for delayed entries of bills were furnished by the assessee and no confirmations were obtained from Sajjan Kumar Co. and why advance of Rs. 10 lacs for the purchase of diamond was given. Further, in the bills the total carat as per paper-book pp. 49-50, comes to 73.34 ct., whereas the diamond jewellery found contained weight 34.28 ct. Therefore, there is a difference in the weight of these items. Further these bills were of cut diamond and no evidence has been given for conversion of diamond into jewellery. The case of assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e recorded at the time of search on29th Nov., 1995and that of the statement of S.C. Goyal. However, the same were not provided to the assessee before making such addition. This also shows bent up mind of the AO that he was in a hurry to complete the assessment. The AO has pointed out that the purchase bills of Sajjan Kumar Co. show the description of cut diamond and the weight is given as 73.34 ct., whereas in the search diamond jewellery was found with a weight of 34.28 ct. The difference in the carat and the nature of the articles found is quite different. So far as this contention is concerned, it will be clear from the bills produced by the assessee that no doubt these bills pertain to purchase of cut diamond. However, if we read these bills along with the plea of the assessee that after these diamonds were purchased, the making charges were paid by her husband, S.C. Goyal, which clarifies that after purchase of the cut diamond, it was converted into jewellery. No efforts were made by the AO to examine Sajjan Kumar Co. or no efforts were made to put this question to S.C. Goyal, whose statement was recorded by the AO. Therefore, if the AO had failed to make investigation, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against the assessee when this jewellery has been owned by the company Goyal Gases Ltd. The assessee has produced bills showing purchase of diamond and also stated that these diamonds were converted into jewellery by paying making charges by her husband. The bills were produced to prove this contention. The assessee also produced copy of accounts to show how the assets have been depicted and in what manner the company has shown. The burden which lay upon the assessee stands discharged. If the bills were entered later on, it will not lead to the conclusion that the diamond jewellery found belongs to the assessee unless there is material to show and establish the same. Presumption cannot be drawn against the assessee. 13. In the case of Amar Natvarlal Shah vs. Asstt. CIT, it was found at the time of search that the books of accounts of the firm were not written up-to-date and even cash balances were not struck. This exercise was done subsequently by the assessee. The question arose whether the books of accounts can be believable. The Tribunal has taken the view that the mere fact that cash was found at various places at house could not be a ground for rejecting the explanation, par ..... X X X X Extracts X X X X X X X X Extracts X X X X
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