TMI Blog2013 (1) TMI 895X X X X Extracts X X X X X X X X Extracts X X X X ..... ,44,804/- made by the AO on account of unexplained investment in jewellery. 4. The appellant craves the right to amend alter or add to any of the grounds of appeal given above. 2.1 The assessee has filed the Cross objection disputing the order of the ld. CIT(A) in sustaining the addition of ₹ 3.00 lacs out of addition of ₹ 5.00 lacs made by the AO on account of unexplained investment in furniture and fixture installed at house of the assessee. 2.1.1 It is relevant to state that the ground of C.O. of the assessee is related to Ground No. 2 of the appeal field by the Department. 2.2 The relevant facts are that there was search and seizure action u/s 132 of the Act and /or survey action u/s 133A of the Act on the members of Unique Group on 28-012009 and the assessee is one of the member of the said group. During the course of search and seizure, cash, jewellery, stock in trade, valuables, documents books of accounts and / or loose papers were found and / or seized from the premises of the Members of the Unique Group. The assessee filed the return of income for the previous year 2008-09 relevant to assessment year 2009-10 declaring a total income of ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of ₹ 4,70,015/- to his income on account of undisclosed income. 3.2 The ld. CIT(A) considered the submissions of the assessee and relevant statement recorded u/s 132(4) of the Act and deleted the addition vide para 3.3 of his order by observing as under. 3.3 I have considered the submission of ld. AR and have perused material on record. The AO has merely added the cash found in spite of the furnishing of the details regarding sufficient cash balances with the various concerns before the AO totaling to r 67.21 lacs, as per the chart given in the written submission of the A.R., also submitted before me, AO was of the view, that as during the course of search, the appellant did not say anything related to the fact that cash of the firm/ concerns was lying in the house, accordingly, argument of A.R, is not acceptable and therefore, AO made the addition. It is seen that AO has not adversely commented about the cash balances of the various concerns. Moreover such cash was also not found at the various business concerns of the appellant. It is not uncommon that part of the cash of business concerns is brought to the residence by the businessman in general. In view of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficient amount of withdrawal to meet out such expenses. It was also contended that the assessee also offered additional income of ₹ 1,16,31,103/- on account of unexplained investment in jewellery, house hold expenditure etc. to purchase peace of mind and to avoid prolonged litigation and due tax on the same has already been paid by the assessee. Therefore, the AO was not justified in making a separate addition of ₹ 5.00 lacs. 4.4 The ld. CIT(A) considered the above submissions of the assessee vide para 4.3 of his order and sustained the addition to ₹ 3.00 lacs by giving relief of ₹ 2.00 lacs after observing as under:- 4.3 I have considered the submission of ld. AR and have perused the material on record. The A.R, has taken general argument that the items have been purchased at different different point of time by the appellant and his family members from the amount withdrawn for house hold purposes. On the perusal of chart of house hold withdrawals furnished by the A.R. it is seen that though the withdrawal in period relevant to assessment year 2008-09 and assessment year 2009-10 are ₹ 10.95 lacs and ₹ 14.37 lacs which has been conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 crores towards undisclosed investment inter alia in furniture(s) and fixture(s). After considering the other additions made, we are of the considered view that electronics items and/or fixtures found at the premises of the assessee could be said to have been procured from the said undisclosed income declared and/ or withdrawal made in the preceding assessment years. Since assessee could not furnish details as to when those items were purchased and valued thereof, we are of the considered view that it will be fair and reasonable to sustain the addition to ₹ 50,000/- as against ₹ 3.00 lacs sustained by the ld. CIT(A). Hence, Ground No. 2 of the appeal taken by the Department is rejected and C.O. of the assessee is allowed in part. 5.1 In respect of Ground No. 3 of the appeal of the Department, the relevant facts are that during the course of search gold jewellery having gross weight of 8723.60 gms and value of ₹ 1,10,37,139/- was found at various premises including lockers of the assessee as well as members of his family. Besides above, silver jewellery items having gross weight of 523 gms valuing of ₹ 7,845/- and 184 carat of stones having value of ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at there is no official record or evidence of the possession or the ownership of the jewellery by the assessee. Therefore, the AO stated that claim of the assessee that jewellery found in his possession from his premises / location as explained is rejected and made addition of ₹ 1,31,44,804/- to the income of the assessee on account of unexplained jewellery. Being aggrieved, the assessee filed appeal before the first appellate authority. 5.3 On behalf of the assessee, it was contended that most of the jewellery was either acquired by the assessee and his family members at the time of their marriages and other social functions and the same was either disclosed in the Wealth Tax Return or declared in VDIS 1997. It was contended that during the course of assessment proceedings, the details regarding the total jewellery found during the course of search at the residence and in the bank lockers of the assessee and his family members was submitted by the assessee. The AO has not appreciated the statement made; and made the addition of entire jewellery found during the course of search. On behalf of the assessee, the ld. AR placed reliance in the case of CIT vs. Kailash Chand Sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the plea that language of the valuer and as mentioned by the notary is same, which casts suspicion about the said documents. From the perusal of the gift declaration, it is noticed by the undersigned that the parents and grandmother of Mrs. Harleen Kaur have stated that jewellery items mentioned therein were given on the occasion of the weeding of Smt. Harleen Kaur with Sh. Ravinder Singh. This document has been attested by the Notary Public. The valuer report is just a supporting of this document and merely because language/descriptions of the item in both is same, it cannot make these documents invalid. On the contrary if description of the jewellery items in both documents would have been different, these documents would have been possibly rejected. In any case, the gift document is not written by the notary. It has been put on record by grandmother, father, mother and brother of Smt. Harleen Kaur. It is quite usual that at the time of weeding parents and grandparents and other family members give/gift jewellery to the bride. Above documents are just documentation of such gifting of jewellery to Smt. Harleen Kaur at the time of her marriage. A.O. was not justified in just rejec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... over further credit of normal and gradual acquisition of the jewellery which has been mentioned in instruction no.1916 dated 11.5.94 for the purpose of seizure but has been held to be applicable for considering explained jewellery as per the decision of Raj. High Court in the case of CIT vs. Kailash Chand Sharma 146 Taxman 376 and further supported by decision in the case of CIT vs. Ratan Lal Vyapari Lal 45 DTR 290 (Guj), has also to be given in respect of members for which there is no documentary evidence. The average rate of gold jewelry including value of stone comes to ₹ 15,059/- per 10 gm (Rs.1,31,36,959/- divided by 8723.60 gms). Even without quantifying such credit, the value of unexplained jewellery weighing 1356.81 gms comes to ₹ 20,43,220/-. 5.4 In ground no.5, the AR. has mentioned that A.O. has grossly erred in ignoring the fact that the assessee has already offered a sum of ₹ 1 Crore towards the investment made in the jewellery and other household items out of his undisclosed income declared through fund flow statement, more particularly when the A.O. has accepted the additional income declared by the assessee. The A.R. has argued that without prej ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee as well as members of his family. We also observe that the assessee stated that jewellery to the extent of 7371.450 gms and silver jewellery to the extent of 10943.00 gms and stones to the extent of 282.282 have been disclosed in the hands of various members of family either by way of Wealth Tax Return, receipt of jewellery by gift deed, purchase of jewellery or disclosure under VDIS in the year 1997, the details of which are mentioned hereinabove in tabulated form which has been reproduced in para 5.1 The AO did not accept the said contention of the assessee merely on the ground that said jewellery has not been shown in assessee's hands. It is not the case of the Department that entire jewellery was found from the possession of the assessee. The jewellery have been found at various placed and bank lockers from the possession of the assessee as well as from his family members. Therefore, the action of the AO to make addition of the entire jewellery in the hands of the assessee merely because no gold jewellery, utensils mentioned in the balance sheet of the assessee or statement of affairs furnished by the assessee to the Department is not justified. Further, the ld. C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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