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2017 (7) TMI 419 - ITAT CHENNAI

2017 (7) TMI 419 - ITAT CHENNAI - Tmi - Search u/s.132 - gold jewellery weighing 21456.550 grams seized - assessee asserts that it had received as gold deposits from its family members/ relative - Held that:- When the relatives/family members had come forward to file affidavit in support of deposit of gold jewellery and which were in turn supported by VDIS/Wealth Tax returns filed, prior to the date of search, it could never be considered as an after thought. In the circumstances, we are of the .....

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dsmith, whose affidavits were also filed. We are of the opinion that the correctness of claim of the assessee with regard to 1042 grams claimed to be received from the goldsmiths, requires fresh verification. Similarly, claim of the assessee that after excluding stones and converting the jewellery to 91.6% purity actual weight would only be 18302.790 grams also requires fresh look by the ld. Assessing Officer. The ld. Assessing Officer has to verify affidavits of the goldsmiths/ business associa .....

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tion afresh in accordance with law. Appeal of the assessee is allowed for statistical purposes. - I.T.A. No. 2718/Mds/2016 - Dated:- 11-1-2017 - SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER, AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER For The Appellant : Shri. A.S. Sriraman, Advocate For The Respondent : Shri. A.V. Sreekanth, IRS, JCIT. ORDER PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER: In this appeal filed by the assessee, it assails an addition of ₹ 4,15,65,882/- arising out of undisclosed gold j .....

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y same income. 3. During the course of search, gold jewellery weighing 21456.550 grams was seized by the Department. As per ld. Assessing Officer assessee had submitted evidence for 4437 grams out of these and the balance of 16619.550 grams was accepted as undisclosed income in a statement recorded at the time of search. However, in return of income filed assessee had disclosed only 924.78 grams. As per assessee the balance represented gold jewellery deposited by family members and persons who w .....

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a Bai 450 15 Gouthamchand Surana 388 16 N. Jegadesh 250 17 R.I. Deva 176 18 G. Sampathkumar 170 19 Anupdas HUF 166 20 Mr. V. Ramprakash 165 21 Mr. R. Somasundaram 115 Total 16544 However, ld. Assessing Officer was of the opinion that affidavits and documents in support of the gold jewellery claimed by the assessee as belonging to its family members and parties related to its business, were prepared after search, only as an after thought. As per ld. Assessing Officer, Wealth Tax returns of the fa .....

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p Kumar 1749 N. Amarchand 350 Smt. Anjana Bai 1000 M/s. Amarchand HUF 438 Total 4437 The ld. Assessing Officer it seems relied on the statement given by the assessee during the course of search wherein it was mentioned by the assessee that there were deposits of gold ornaments weighing 4437 grams from his relatives. Apart from 4437 grams which ld. Assessing Officer accepted as received from assessee s relatives, he also accepted claim of the assessee with regard to stock of 834 grams in the busi .....

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rgument of the assessee was that explanation offered for substantiating the source of acquisition of gold jewellery with supporting evidence was rejected without any cogent reasons. As per assessee gold jewellery found at the time of search was of 80% purity and therefore net weight when converted to 91.6% purity was only 18,302.79 grams. As per assessee, ld. Assessing Officer while accepting 5,271.00 grams of gold jewellery as explained, failed to consider affidavits, Wealth Tax Returns and VDI .....

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d from very same family members which were reflected in respective VDIS declaration/Wealth Tax returns. Thus, as per assessee a part of the source was accepted whereas other part was rejected. As per assessee this was not a logical approach. Assessee in its submission before ld. Commissioner of Income Tax (Appeals) categorized the gold jewellery deposits received from its family members and others and explained the difference in gold jewellery as under:- Undisclosed investment - 21,456.550 gms N .....

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f the assessee was of the opinion that in the statement recorded at the time of search, assessee had answered question No.7 as under:- Q. No.7. During the course of search in this premises, gold jewelry weighing gross weight of 21456.550 grams were found. Kindly tell me how this jewelry had been acquired. Ans. Sir, in the statement recorded u/s.131 during the day, I have stated that I have purchased 400 grams of primary gold from MNC Bullion Limited, apart from this, the following persons deposi .....

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old belongs to me and not belong to anybody else. Thus 16619.550 grams does not include anybody else jewelery except myself. According to him, assessee could bring-in evidence at the time of search, only for 4437 grams. Conclusion of the ld. Commissioner of Income Tax (Appeals) was that the stereo- type affidavits all of which were dated 28.11.2013 filed by the assessee in support of deposits of gold jewellery in excess of what was mentioned above, was only an after thought and a story cooked up .....

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ssessing Officer. 6. Now before us, the ld. Authorised Representative strongly assailing the orders of the lower authorities submitted that jewellery weighing of 15502 grams received from relatives/family member and 1042 grams received from its business associates who were gold smiths were supported by respective affidavits. As per the ld. Authorised Representative these were ignored and rejected without any reasons. Contention as per ld. Authorised Representative was that out of the gold deposi .....

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the course of search when strong evidence to the contrary was produced by the assessee. According to him, addition was fastened on assessee even without considering the purity factor. Neither the affidavits were verified nor the contentions of the assessee were properly considered by the lower authorities. Thus, according to him, the addition made had no legs to stand. Reliance was placed by the ld. Authorised Representative on the judgment of Hon ble Apex Court in the case of Mehta Parikh and .....

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me of search and having done so it was manufacturing new stories and documents to wriggle out of the liability to pay tax on the undisclosed investments. Thus, according to him, addition was rightly done by the ld. Assessing Officer and sustained by the ld. Commissioner of Income Tax (Appeals). 8. We have considered the rival contentions and perused the orders of the authorities below. Jewellery found at the time of search was 21456.550 grams. One of the claim of the assessee was that such jewel .....

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grams. Reason for accepting 4437 grams is presumably based on a reply given to question No.7 recorded from the assessee at the time of search which has been reproduced by us at para 5 above. Contention of the assessee however was that it had actually received more than what was mentioned in the statement and this was supported by affidavits received from respective relatives. Details of the claim of gold deposits from relatives and the extent to which it was accepted and extent to which it was s .....

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AACHA2068N 750 438 750 8 M/s. Dilip & Sons HUF AADHD6701N 850 1184 9 Smt. Bhagwanti Jain AEYPJ4322A 2416 1505 912 10 Praful Kumar AITPP1771G 660 660 11 Shruti ARYPS3028H 730 730 12 Manisha AHVPM1252G 680 680 13 M/s. Goutham chand & Sons AALHS6983B 1060 1060 14 Gourthamchand Surana ADVPG4975E 388 388 15 Smt. Lalita Bai ACUPK7889H 455 1130 15502 4437 5382 11184 No doubt statement given u/s.132(4) of the Act can be used as an evidence against the person making such statement in any proceedi .....

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and such assertion is supported by affidavits and corroborative evidences likes VIDS declaration of the giver/ creditor and copies of Wealth Tax returns of the giver/creditors, in our opinion it was incorrect to brush it aside. Lower authorities simply went by a presumption that the claim was an after thought. Gold deposits agreements stipulates a return on investments to the credit and therefore this cannot be deemed gratuitous transactions. 9. Even otherwise, when the relatives/family members .....

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