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TMI Blog2013 (1) TMI 895X X X X Extracts X X X X X X X X Extracts X X X X ..... e addition of ₹ 1,31,44,804/- 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 tota ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted 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 these facts and circumstances, it will not be justified to sustain the addition regarding the cash found, so made by the AO and accordingly the addition is hereby deleted.'' Hence, this appeal by the Department. 3.3 At the time of hearing, the ld. DR relied on the order of the AO and on the other hand, the ld. AR supported the order of the ld. CIT(A). 3.4 Considering the reasonings given by the ld. CIT(A) and in the absence of any contrary facts brought on record by the ld. DR , we uphold his order and reject the Ground No. 1 of the appeal taken by the Department. 4.1 As mentioned hereinabove, the G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 considered reasonable by the undersigned while deleting he addition made on account of inadequate house hold withdrawal. However, the total house hold withdrawals for period relevant to assessment year 2006-07 and assessment year 2007-08 are just ₹ 5.07 lacs and ₹ 5.37 lacs respectively. In the earlier years, the withdrawals are even lower. Accordingly argument of A.R. cannot be accepted fully that all these items have been purchased out of house hold withdrawals. Some of the items can be considered to have been purchased in last two years out of the withdrawals which are comparatively higher. In absence of exa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(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 ₹ 20,99,820/- were found. Thus the gold, silver jewellery/items and stones aggregating to ₹ 1,31,44,804/- were found during the course of search. The AO stated that there is no mention of any gold and/ or silver jewellery and/or utensils in the balance sheet of the assessee / statement of affairs furnished to the Department. The assessee has also not filed his own return of wealth in the past. During the course of assessment proceedings, the assessee relying on CBDT instruction no. 1916 dated 11-05-1994 stated that 500 gms of gold jewellery in the case of married lady, 150 gms gold jewellery in the case of unmarried la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 Sharma, 146 Taxman 376 (Raj.) and submitted that it was held that the assessee and his family members were entitled to get further exemption of gold jewellery after giving the benefit of CBDT instruction dated 11-05-1994. Reliance was placed on the decision of Hon'ble Gujarat High Court in the case of CIT vs. Ratan Lal Vyaparilal Jain, 45 DTR 290 that CBDT circular no. 1916 dated 11-5-1994 which lays down guidelines for seizure of jewellery and ornaments in the course of search takes into the quantity of jewellery which would generally be held by the family members of an assessee, unless anything contrary is shown, it can be safely presumed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 rejecting these documentary evidences. Thirdly, the A.O. has rejected the jewellery bought by Smt. Harleen Thakkar vide three bills furnished before the A.O. only on the ground that the appellant could not furnish details in respect of payment made for such purchases. However, on perusal of the photo copies of the bills also furnished before the undersigned at P.B. page 70 to 74 that in two bills, one bill no.425 dated 22.11.08 for ₹ 13,35,200/- and another bill no. 437 dated 3.12.2008, the cheque no. are already mentioned below the bill. Moreover, the A.R. has also furnished the copy of bank account of Smt. Harleen Thakkar evidencing debiting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en 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 prejudice to all the various arguments about explanation of the jewellery, in any case, appellant has offered additional income of ₹ 1,16,31,103/- on account of unexplained investment in jewellery, household expenditure etc. in A.Y. 2009-10 to purchase piece of mind and avoid prolonged litigation. It is seen by the undersigned that peak unaccounted money required has been disclosed by the appellant in various years i.e. A.Y. 2006-07, A.Y. 200809 and A.Y. 2009-10 by drawing fund flow statement. In A.Y. 2009-10, ₹ 1 Crore has been shown as additional income as misc. provisionsutilized for jewellery, household expenditure etc. After includi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. CIT(A) has rightly stated that balance unexplained jewellery weighing 1356.81 gms comes to ₹ 20,43,220/. However, the assessee has offered the additional income of ₹ 1,16,31,103/- (unexplained investment) on account of unexplained jewellery, house hold expenditure etc. in assessment year 2009-10. In assessment year 2009-10, ₹ 1.00 crore has been shown as additional income as misc. provisions, utilized for jewellery, house hold expenses etc. The ld. CIT(A) has rightly held that considering the facts, it will be unjustified to make addition of ₹ 20,43,220/- when the assessee has already surrendered / offered ₹ 1.00 crore inter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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