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2015 (7) TMI 1052 - ITAT MUMBAI

2015 (7) TMI 1052 - ITAT MUMBAI - TMI - Unexplained investments in relation to jewellery found during the course of search action - Held that:- if the difference in weight is ignored the description of the items of the jewellery almost tallied with that of the items already declared by the assessee. Moreover the overall weight of jewellery already declared by the assessee in her books of accounts is more than that of the jewellery found during the course of search action. In view of the above st .....

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, Judicial Member: Out of the above titled three appeals, two are cross appeals i.e. one by the assessee Neela P. Doshi and the other by the revenue against the order of the Commissioner of Income Tax (appeals) [(hereinafter referred to as the CIT(A)] dated 07.03. 2012. The third appeal has been preferred by different but related assessee against the order of the CIT(A) of the even date. Since the facts and issues involved therein are identical in nature, hence the same are taken together for di .....

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as carried out in the case of Acme Group Companies and related persons. The assessee was also covered in the said search action. The assessee is a partner in various firms engaged in business of builder and developer. During the course of the search operation, total jewellery valued at ₹ 17330641/- was found from the premises of the assessee, out of which jewellery valued at ₹ 36,93,026/- was seized. During the course of the assessment proceedings, the AO asked the assessee to show c .....

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ained. The AO however did not agree with the explanation offered by the assessee. He observed that out of the total jewellery found, the jewellery valuing ₹ 21,58,524/- had remained unexplained. He accordingly added the said amount into the income of the assessee u/s 69A of the Act. Aggrieved by the addition made by the AO, the assessee preferred appeal before the Ld. CIT(A). 5. The assessee submitted before the Ld. CIT(A) that the jewellery found during the search action belonged to the m .....

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shi) (Aunty of spouse) The assessee also furnished the following evidences to explain the source of acquisition of the jewellery in question: a) Jewellary valuation Report dt.1.11.1995 of Suresh C Kapoor, Government Approved Value (during search action in 1995) b) Jewellary valuation Report dt.23.4.2004 as on 3 1.3.2004 of Shrenik R Shah (Jewellary Report obtained for Wealth Tax Purpose) b) Jewellary Valuation Report dt.3.4.2000 as on 31.3.2000 in case of Priti Rajesh Doshi (Maiden name Priti Vi .....

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explained that some of the jewellery was received as gift from relatives on social and religious occasions like marriage, birthday anniversary etc. It was also explained that some of the jewellery was remade out of the old jewellery. The assessee further submitted that the total weight of jewellery found matched with the jewellery accounted by the Doshi family. The assessee further submitted that in case of some jewellery, the description did not match either due to absence of full description .....

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it was correct that the overall weight of the gold jewellery declared by the assessee and his family in the books of accounts was in excess of gold jewellery found during the course of search action, however, the department had to match each and every item found with the items declared in the valuation reports of the Approved Valuers as furnished by the assessee and that the onus was on the assessee to prove the source of acquisition of each and every item of jewellery. He therefore called upon .....

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sessee in the approved valuer s report with that of the report made during search action, observed that most of the items mentioned in chart No.I mathed with the description given in the valuation report of the approved valuer, except items No.24 & 25 being gold ginni and gold coin respectively, which the assessee claimed to have been received as gift. The Ld. CIT(A), therefore directed the AO to delete the addition in respect of the remaining items mentioned in chart No. I, except the above .....

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ccordingly. The Ld. CIT(A), after tallying the each of the items with that of valuation report of the approved valuer, found that though number of pieces of diamonds in respect of diamond jewellery were matching in almost all the items; however, there was difference in the estimate of carat weight. He therefore held that the description did not exactly match in respect of diamond jewellery. He, accordingly, confirmed the addition made by the AO in respect of diamond jewellery. Aggrieved by the o .....

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at it matched with item at serial no. 9 of the valuer s report wherein the description has been mentioned as Double String Black Beads Mangalsutra with Pendant wherein the total number of diamonds is also mentioned as 59. However, the carat weight mentioned by the Departmental Valuer is 0.88, whereas, in the assessee s valuation report, it has been mentioned as 118. However, the gold gross weight mentioned by the Departmental Valuer is 21.850 whereas in the valuation report produced by the asses .....

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eight of diamonds. The Ld. A.R. of the assessee has invited our attention in respect of other items also where the gross gold weight of the items matches with that of the description mentioned in the valuation reports submitted by the assessee and even number of pieces of diamonds in the jewellery also matched. However, there was difference in estimation of carat weight. 10. We find that it is not a case where the items mentioned in the valuation reports submitted by the assessee did not match a .....

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inor difference in carat weight value, especially when the same was not exactly weighed by the Departmental Valuer could not be the sole criteria to hold that the description of jewellery did not match. The Ld. A.R. of the assessee has further invited our attention to page No1 of the paper book which is the summary of the gold jewellery. He has explained that the total gold jewellery shown by the assessee and his family members in the books was of 9919.790 gms. whereas the jewellery found and va .....

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wellery matched with that of the valuation report. 11. The Ld. A.R. has further invited our attention to the decision of the Jodhpur Bench of the Tribunal in the case of DCIT vs. Arjun Dass Kalwani 101 ITD 337 wherein the Tribunal has held that simply because the assessee could not lead evidence for conversion or remaking of the jewellery, possession of which was otherwise accepted, it could not be said that holding of gold jewellery to that extent was unexplained, especially when evidence was a .....

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al fact that ladies get jewellery converted as per latest design and for which even the concerned man in the family is being not informed. In these circumstances merely because of conversion of such jewellery, cannot be made basis for making addition, when the jewellery disclosed by the assessee either in his own hand or in the hands of their family members prior to the date of search is equal to or more than the jewellery found during the course of search. In the case of Rakesh J. Parikh v. DCI .....

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al in ITA No.777/M/1998 and ITA No.5127/M/1995 & others decided vide common order dated 21.06.13, the Tribunal under somewhat similar circumstances has observed that normal presumption is that during the course of the search, the entire jewellery found at residence, in Bank lockers, other premises and also on person is duly inventorised. If the weight of the jewellery found at the time of search is more than the weight declared in Wealth Tax returns, the difference has to be taken to be unex .....

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at the ornaments found should not be in excess in quantity as compared to the ornaments declared in the Wealth Tax returns. Our attention has also been invited to the decision of the Hon ble Allahabad High Court in the case of Commissioner of Wealth Tax vs. B.M. Kanodia (HUF) wherein the Hon ble High Court in para 5 of the order has observed that where the government valuer adopted the weight of the diamond by estimating without separating the diamond from the metal, the reports of valuers could .....

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d facts and in the light of the proposition of law laid down vide judicial pronouncements on this issue as discussed above, it cannot be said in this case that the jewellery found during the search action was unexplained. The additions thus in this case are not warranted and the same are ordered to be deleted. Revenue s Appeal i.e. ITA No.3984/M/2012: 13. The Revenue, in this appeal, has agitated the action of the Ld. CIT(A) in deleting certain additions in relation to the items of jewellery whi .....

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