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TMI Blog2016 (4) TMI 1093X X X X Extracts X X X X X X X X Extracts X X X X ..... barred by limitation, contrary to facts & law and based upon recording of incorrect facts and finding, without giving adequate opportunity of hearing, in violation of principles of natural justice and the same deserves to be quashed. 3. That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in framing the impugned assessment order is contrary to law and facts, viod ab initio, beyond jurisdiction and the same is not sustainable on various legal and factual grounds. 4. Without prejudice to the above grounds, no addition could have been made in the present appeal because no incriminating material has been found as a result of search. 5. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not reversing the action of Ld. AO in charging interest 234B of the Income Tax Act, 1961. 6. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other." 3. The grounds raised in the departmental appeal read as under: "1. On the facts and in the circumstances of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... back is 466.08 cts. Similarly in respect of the items seized the diamond weight is 625.32 cts. Thus, the diamond weight in respect of total jewellery found is 1091.40 cts. It is further submitted that the various assessee's to whom this jewellery found relate are regularly filing their wealth tax return where in the jewellery is duly disclosed. The assessees used to get the valuation of jewellery done once in 5 years and show the valuation of jewellery in wealth tax returns by adding estimated appreciation in the value of jewellery by applying the gold rate increase to the entire value of jewellery disclosed in the immediately preceding year and further adding the jewellery acquired during the respective years. The last valuation was done as on 31.03.2006. The value of jewellery as on 31.03.2010 (i.e. A.Y. 2010-11) as per wealth tax returns filed by various members of the family is as under: (i) Sh. Rajiv Kumar Rs. 1,71,23,672.00 (ii) Smt. Sunita Gupta Rs. 5,33,58,446.00 Total Rs. 7,04,82,118.00 A copy of acknowledgment receipts and statement of computation of net wealth in respect of above assessees for A.Y. 2009-10 & A.Y. 2010-11 is enclose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thus seized. It is respectfully submitted that the impugned addition is unjustified as the total jewellery with the assessee and her husband was explained and accounted for as noted in the reply of the assessee as reproduced in Para 4 of the assessment order. Your Good self would kindly see that the total jewellery as on 31-03-2010 as per wealth tax return of the assessee (Refer PB 19-21) and her husband (Refer PB 31-34) were to the tune of Rs. 7,04,82,118/- (Rs.5,33,58,446/- + Rs. 1,71,23,672/-) (Refer PB 21, 34) which are far more than the jewellery of Rs. 6,05,33,471/- (Refer PB 15) found at the time of search. Moreover, jewellery worth Rs. 53,28,760/- was acquired from 01-04- 2010 till the date of search. Therefore total jewellery which was appearing in the wealth tax return is far more than the jewellery found and thus, there was no justification for holding any jewellery as unexplained and therefore, it is prayed that addition made may please be deleted. Adverse Observations of Ld. AO are met as under:- 1. Ld. AO has mentioned that since at the time of search, jewellery worth Rs. 3,34,98,409/-was seized hence it was unexplained. In reply, it is submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, the items are not tallying. I have considered entire facts and circumstances of the case. As weight of the gold and diamond in Jewelleries found during the search and seizure operation is less than declared in wealth tax, the- findings of the Assessing officer that these unmatched ornament items are new jewellery and, therefore, unexplained investment cannot be approved. However, the appellant and Ld. AR's only explanation for mismatch of Jewellery items are that there are remark or change of Jewellery items. Therefore, for such change of jewellery items or remake, the appellant must have spent money for such alteration. Normal fresh making charges for ornament is in the range of 8-10% of value of seized jewellery as unaccounted investment in jewellery. As total value of seized jewellery is Rs. 3,34,98,409.00/-, 10% of the value comes to Rs. 33,49,840/- When source of remaking charge was asked from the Ld. AR. he contended that the same is from household withdrawal. However no quantification or evidence of household withdrawal was submitted during appellate proceedings. Before the Assessing Officer and before the undersigned only argument was that the discrepanci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it is noticed that the jewellery valuing Rs. 6,05,33,471/- was found during the course of search, out of the said jewellery, the department seized the jewellery valuing Rs. 3,34,98,409/- weighting 3825.166 gms and the remaining jewellery weighting 5124.612 gms valued at Rs. 2,70,35,062/- had been given back on the spot to the assessee and her husband Sh. Rajiv Kumar in whose name the valuation report was made. In the instant case, the assessee and her husband were regularly filing their wealth tax returns where in the jewellery declared was worth Rs. 7,04,82,118/-. The assessee also declared the acquisition of jewellery since 01.04.2010 till date of search i.e. upto 21.01.2011 amounting to Rs. 53,28,760/-. The said jewellery has been accepted by the department, therefore, the total value of the jewellery declared by the assessee till the date of search came to Rs. 7,58,10,878/- (Rs.7,04,82,118 + Rs. 53,28,760) which was more than the total value of jewellery found during the course of search & seizure operation. Therefore, the addition made by the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X
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