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P. Rama Devi Versus Dy. Commissioner of Incometax, Circle – 1 (1) , Hyderabad.

2017 (1) TMI 508 - ITAT HYDERABAD

Unexplained gold jewellery and silver articles - all found during the course of search - Held that:- Merely because the assessee places before the A.O. and CIT(A) a bank account copy, indicating the payment to Maharaj Shree Rajendra Jewellers, it would not indicate that it was only towards purchase of gold jewellery. There may be some other transaction with the said jeweller other than purchase of jewellery; At any rate it is for the assessee to prove that the jewellery of a specified descriptio .....

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ed in the Axis Bank account copy. It is to be seen as to what was the rate prevailing on that date and whether the amount paid is sufficient to cover 340 grams of jewellery of specified karatage. Unless the description is available or given by the assessee to the A.O. it may be difficult, even for the A.O, to cross-verify the same. - In the interest of substantial justice, the assessee has to furnish all the details before the A.O. to prove its point. - We hereby give one more opportunit .....

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e is directed against the order of CIT(A) - 11, Hyderabad, dated 18/01/2016 for AY 2011-12. 2. Briefly the facts of the case are that the assessee herein is an individual deriving income from running Educational Institutions. For the assessment year 2011-12, she filed the return of income on 22.5.2013 admitting an income of ₹ 1,43,50,040/-. The Assessing officer completed the assessment u/s 143(3) r.w.s. 153A on a total income of ₹ 1,52,67,615/-. While doing so, the Assessing Officer .....

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Madras and the payment was made through cheque. The assessee submitted that such amount was not considered at the time of search while recording the deposition from the assessee. Therefore, the assessee pleaded that the amount of ₹ 9,16,575/- (mentioned as ₹ 9,17,575/- by the Assessing Officer) be reduced from the amount of ₹ 25 lakhs. However, the Assessing Officer did not accept the explanation and added ₹ 9,17,575/- to the income admitted. He accordingly, determined t .....

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y from Maharajasree Rajendra Jewellers, Chennai. In support of his contention, the Ld.AR also furnished a copy of Bank a/c statement for the period 1-4-2011 to 4- 2-2012. 5. After considering the submissions of the assessee, the CIT(A) observed that the admission of undisclosed income in the form of unexplained investment in jewellery amounting to ₹ 25 Iakhs was in A.Y. 2011-12 relating to financial year ending 31.3.2011, and not A.Y. 2012-13 relevant to financial year ended 31.3.2012. Thi .....

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the purchase from out of her accounted sources, the assessee contends that this of item of jewellery cannot be seen as an unaccounted investment. He observed that the difference between the amount originally disclosed and amount now offered in the return of income, therefore, should not be seen as an unfounded and opportunistic retraction because this reduction is on account of an erroneous assumption of fact, which is now corrected. On a careful consideration of the matter, however, it is seen .....

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011. 5.1 The CIT(A) observed that the ld. AR of the assessee seeks to contend that the purchase of ₹ 9,16,575/- made during May, 2011 should have been excluded from the aggregate value of jewellery found (Rs.44,21,500/-) having regard to purchase details now available. It has to be noticed in this context that what is being put forward as proof of purchase is an entry in the bank account showing a payment against the transaction details recorded as "Maharaj Sree Rajendra Jewellers&quo .....

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n is essential because the determination of undisclosed investment in jewellery is found on an analysis of items found during the search. 5.2 In view of the above observations, the CIT(A) held that the above referred cheque payment therefore, neither supports an exclusion of the impugned amount from the admitted undisclosed investment of ₹ 25 lakhs for A.Y. 2011-12, nor from ₹ 44,21,500/- which in any case is only an aggregate value of jewellery found, inclusive of accounted items. H .....

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ed gold jewellery of the value of ₹ 9,17,575/- before the date of search and paid sale consideration through cheque. 7. The ld. AR submitted that the gold jewellery found during the search to the extent of ₹ 44.22 lakhs. Out of the said jewellery, the assessee had agreed to disclose ₹ 25 lakhs as additional investment in the jewellery. Later, it was found that the assessee had purchased gold worth ₹ 9,17,575/- from the Jeweller for which the payment was made through chequ .....

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bank statement and book entry without submitting any copy of bills to support the claim. He further submitted that the date of payment is 07/05/2011, which fell in the AY 2012-13 whereas the issue is relating to AY 2011-12. He submitted that this is nothing but retraction of declaration made during the search. 9. We have carefully considered the rival contentions and perused the record. At the outset, it may be noticed that the assessee is engaged in the business of imparting education through c .....

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spect. A statement was recorded from the assessee under section 132(4) of the Act on 19.09.2011 i.e., after more than one month, reckoned from the date of search. The assessee could not fully explain the source for the investment in gold and, therefore, agreed to offer a sum of ₹ 25 lakhs towards unexplained investment for the A.Y. 2011-2012. However while filing the return of income, in response to the notice under section 153A of the Act, the assessee admitted an amount of ₹ 15,83, .....

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s to which jewellery of which measure, in which manner and at which shop it was purchased on a specified date. If the jewellery is purchased on 16.05.2011 (just 03 months prior to search) it cannot be said that assessee could have forgotten that she has purchased such jewellery. Even if there is any pressure in the mind of the assessee on the date of search, when the statement was recorded after one and half month i.e., on 19.09.2011, the assessee could have informed the A.O. about the factum of .....

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anama - with the jewellery which is said to have been purchased in the month of May, 2011. Neither before the A.O. nor before the Commissioner the assessee chose to give the description. 9.3 Even before us the assessee merely refers to bank statement indicating that a sum of ₹ 9,16,575 was encashed by Maharaj Shree Rajendra Jewellers. Neither the assessee could furnish the bill nor could furnish the detailed address of Maharaj Shree Rajendra Jewellers. Atleast by the time the return was fi .....

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