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Smt Parul Kapil Jain Versus Income Tax Officer COD 3 (2) , Thane

2016 (12) TMI 348 - ITAT MUMBAI

Addition u/s 68 - unexplained possession of jewelry and cash - Held that:- Once the assessee has produced prima facie relevant material and documentary evidences of the entries in the balance sheet, then the onus shifts upon the AO for carrying out some kind of inquiry or verification of the evidences filed and explanation furnished. In the context of Indian social customs, the gifting of cash and jewellery from parents, grandparents, relatives, near and dear ones cannot be ruled out. - The .....

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and assumptions which has been confirmed by the ld. CIT(A). IThus the lower authorities have failed to carry out any inquiry or verifications to justify the various additions made u/s 68 of the Act. Accordingly, we reverse the order of ld. CIT(A) and direct the AO to delete all the additions. - Decided in favour of assessee - I.T.A. No.6710/Mum/2012 - Dated:- 5-12-2016 - SHRI AMIT SHUKLA, JM AND SHRI RAJESH KUMAR, AM For The Assessee : Dr.P Daniel For The Revenue : Shri R K Shah ORDER PER RAJES .....

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utiny and statutory notices under section 143(2) and 142(1) of the Income Tax Act, 1961 were issued and served upon the assessee. During the course of assessment proceedings, the assessee was required to furnish bank statement and other supporting documents. After examining the said bank statement and other records produced by the assessee including balance sheet, the AO noted that the assessee has deposited a sum of ₹ 3,99,000/- on various dates in cash beside depositing two cheques of &# .....

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nterest of ₹ 17,900/- all aggregating to ₹ 27,36,000/-. The AO required the assessee to prove the source of credits in the bank statement which was responded by the assessee by filing an affidavit dated 16.9.2010 of grandparents wherein it has been affirmed that the assessee is the granddaughter of Shri Devilal Mehta who gifted her 45 carat diamonds studded jewellery and 150 gms gold on 18.3.1984 at the time of her birth and similar declaration was made by Shri Devilal Mehta on behal .....

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from her grandparents to the extent of 19.14 carats were sold for ₹ 18,97,010/- and the sale proceeds were received by way of two account payee cheques deposited in the bank account of the assessee. Regarding the cost of indexation claimed for calculating the long term capital loss, the assessee had submitted five valuation reports dated 17.12.2010 from the approved valuers before the AO. A statement of the assessee was also recorded during the course of assessment proceedings wherein in r .....

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received the jewellery from her grandparents and but the assessee was not knowing the exact details of jewellery given by her grandparents. 3. The AO did not find the contentions and submissions of the assessee as convincing and accordingly added the same to the total income of the assessee being sham transactions. The AO also observed that it was not possible that the lady was possessing the jewellery and allowed her husband to sell the jewellery without knowing the details of jewellery possess .....

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f gift received at the time of every birthday Rs.3,99,000/- Amount remained opening capital T Rs.19,06,350/- Similarly, the addition of ₹ 18,97,010/- was made without allowing any cost of acquisition of the jewellery by holding that the assessee s grandfather has not mentioned the details of gift ,date and cost of acquisition and thus the AO treated the entire sale proceeds, as income of the assessee. The AO also added a sum of ₹ 17,929/- on account of interest received by the assess .....

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77; 36,930/-. 4. Aggrieved by the order of AO, the assessee preferred first appeal before the ld.CIT(A) who vide para 4.3 of the appellate order dismissed the plea of the assessee by observing and holding as under: 4.3 In view of the above facts and circumstances, it is clearly established that - (i) the existence of the jewellery has not been proved by the appellant with documentary evidences. (ii) The existence of the jewellery claimed to have been gifted by the grandparents with them, has not .....

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/s. 68 of the Act. Consequently, the source of investment made as Kisna Investment is also unexplained to this extent. Thus, the addition of ₹ 8,97,010/- made on this account is confirmed and appellant fails on Ground Nos.1,3 and 4 Aggrieved by the order of ld.CIT(A), the assessee is in appeal before us. 5. Before us, the ld. AR vehemently contended that the ld. CIT(A) has erred in facts and on law by confirming the order of the AO without verifying the various documents and materials prod .....

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same were sold or from the grandfather of the assessee whose affidavit affirming the gifts were filed before AO. He had proceeded to pass the assessment order on conjecture and surmises that the assessee has not received any jewellery or precious metals from her grandparents. Similarly, the AO has not even applied his mind to the facts that the jewllery sold was gifted by her grandfather and added the entire amount of sale proceeds citing the reasons that no date and cost of acquisition were men .....

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e cash deposits out of the SHAGUN received was also disbelieved by the AO and was added to the total income of the assessee. The AO made the addition of ₹ 18,97,010/- being sale proceeds of jewellery; ₹ 3,99,000/- being cash deposits in the bank; and an amount of ₹ 19,06,350/- as difference in the opening balance as capital shown in the balance sheet which was calculated by reducing ₹ 3,99,000/- cash deposits made into the banks; ₹ 4,30,650/- cost of the jewellery s .....

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thorities below and referred to the various observations given in the impugned order and submitted that the statement of the assessee itself shows that she was not aware of the details of jewellery and hence the presumption of make belief theory cannot be ruled out. 7. We have carefully considered the rival submissions and perused the relevant material placed before us and the orders of authorities below. We find that the assessee got married on 21.2.2007 and as per the material on record, the a .....

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of the gift received at the time of marriage from her family members, relatives and other near and dear one as shoguns. This has been stated and confirmed by her at time of recording her statement during the course of assessment proceedings. Similarly, we find that the assessee has received two cheques of ₹ 9,89,010/- deposited on 16.2.2008 and ₹ 9,08,000/- deposited on 29.2.2008 and the same were deposited in the account No.0266101118158 maintained with Canara Bank, Kopri Colony Th .....

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