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2016 (4) TMI 249 - ITAT DELHI

2016 (4) TMI 249 - ITAT DELHI - TMI - Estimation of watches - estimation of on average cost - search and seizure operation - Held that:- In the impugned order the withdrawals of the assessee is sufficient in the previous assessment years and assessee has also purchased some of the watches over a period of time from his personal drawings and also some watches were received by him on various occasions from his friends and relatives as gift.

After going through the impugned order, we ar .....

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which is essentially estimated over earlier estimation. Thus there is no basis of estimation of 50 watches of ₹ 1,00,64,000/- in spite of the fact that he himself accepted the withdrawal made by the assessee during the block period of around ₹ 3.5 Crores which is over and above the contribution made towards the LIC Premium etc. Keeping in view of the facts and circumstances explained above, we are of the considered view that Ld. CIT(A) has rightly deleted the addition in dispute by .....

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s directed against the Order of the Ld. Commissioner of Income Tax (Appeals)-III, New Delhi dated 23.11.2011 pertaining to assessment year 2008-09 on the following grounds:- 1. On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in deleting the addition of ₹ 80,64,000/- made by the AO u/s. 69A of the Income Tax Act, 1961 on account of unexplained investment without appreciating the fact that the assessee has not discharged its onus to explain the sou .....

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come of ₹ 71,27,578/-. Assessee has surrendered ₹ 20 lacs under the sub-head miscellaneous income under the head income from other sources. A search and seizure action u/s. 132 of the I.T. Act was carried out in Kohinoor Foods Ltd. Group of Cases on 5.12.2007. The notice u/s. 143(2) dated 12.5.2009 was served upon the assessee. On 19.5.2009 Notice u/s. 143(2) dated 13.8.2009 was issued and served upon the assessee on 13.8.2009. Notice u/s. 143(2) and 142(1) alongwith questionnaire da .....

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₹ 1,00,64,000/- (50.32/25*50). The assessee was asked to explain the source of this investment vide letter dated 25.9.2009 and 16.11.2009. In response to the same assessee filed the reply dated 27.11.2009 and stated that most of the watches were purchased by the assessee over a period of time out of personal drawings. Besides, there could be some watches received by the assessee as gift on various occasions from friends and relatives. The AO after considering the reply of the assessee has .....

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000/- to the income of the assessee as unexplained investment in wrist watches. Secondly, the AO also held in the assessment order that during the course of search action a cash amounting to ₹ 6,26,000/- was found out of ₹ 5 lacs was seized. The assessee was asked to explain the source of this cash and assesssee submitted that withdrawal of ₹ 3,10,000/- on 3.7.2010 and ₹ 2 lacs on 1.11.2007. Assessee has not submitted any Written Submissions showing the cash balance of &# .....

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he assessee and deleted the additions in dispute. 4. Aggrieved with the impugned order, the Revenue is in appeal before the Tribunal. 5. At the time of hearing, Ld. DR relied upon the order passed by the AO and reiterated the contentions raised by the Revenue in the grounds of appeal. He further stated that Ld. CIT(A) has wrongly deleted the addition in dispute without appreciating the facts that assessee has not discharged his onus to explain the source of precious and branded watches. He furth .....

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isfactory and the assessment order is as per law and the impugned order may be cancelled and allow the Appeal of the Revenue. 6. On the other hand, Ld. Counsel of the Assessee relied upon the order of the Ld. CIT(A) and stated that during the course of search action precious and branded wrist watches of foreign make were found and assessee has stated that these precious and branded wrist watches the assessee has purchased from the last 40 years and some of them have been given as gift by his fri .....

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ee as well as has not invited the assesssee to join the enquiry made by him. AO has made the exparte enquiry and made the addition in dispute without confronting the same which is contrary to the principle of law and justice and therefore, the addition in dispute deserve to be cancelled. He further stated that in the Appeal filed by the assessee before the Ld. CIT(A), Ld. CIT(A) has asked the AO whether he has confronted the Inquiry Report to the assessee or not and the AO stated that this is a .....

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ng opportunity to the assessee, which is contrary to the principle of natural justice. 7. We have heard both the parties and perused the relevant records available with us, especially the orders of the revenue authorities. As stated above, that during the course of search and seizure operation some precious and branded wrist watches of foreign make were found and the AO estimated the cost of these 50 wrist watches at Rs. ₹ 1,00,64,000. We find that AO at para no. 4 at Page No. 2 & 3 of .....

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riends. Assessee has also stated that drawings of the assessee during the block period is around ₹ 3.5 crores over and above contribution made towards LIC premium and other statutory payments. But the AO has not accepted the reply of the assessee and has given the relief of ₹ 20 lacs and added ₹ 80.64 lacs to the total income of the assessee as unexplained investment in wrist watches. Secondly, he has also made the addition of ₹ 3.16 lacs on account of unexplained investm .....

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