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Late Shri Ashok J. Thakkar (Through Legal Heir Smt. Smita Ashok Thakkar Versus Asst. Commissioner of Income-tax Central Circle 39, Mumbai

2017 (9) TMI 956 - ITAT MUMBAI

Unexplained jewellery - source of the impugned addition for jewellery - Held that:- Assessee’s plea that the jewellery did not belong to the assessee but belong to the married daughter is not sustainable in light of the fact that in search the assessee’s wife Smt. Smita Thakkar in her statement dated 28.09.2011 in response to Q.4 wherein she was asked to explain the source of jewellery found in Locker No. 321, she has confirmed the jewellery found in locker no. 321 consists of Gold & Diamond jew .....

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never stated that assessee cannot give any explanation as the jewellery did not belong to him or that the onus was not upon the assessee to explain the same. When the assessee’s explanation has not been accepted, for being devoid of cogency, assessee is raising ground that the jewellery did not belong to the assessee, rather it belonged to his daughter. As find that the submission is not at all sustainable. CIT(A) in the case of assessee’s daughter has clearly held that the said addition on acco .....

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ORDER This appeal by the assessee is directed against order of learned CIT(A) dated 21.07.2016 and pertains to assessment year 2012-2013. 2. The grounds of appeal read as under:- 1. On the facts and under the circumstances of the case and in law, the learned Commissioner (Appeals) erred in confirming the addition of ₹ 10,02,226/- on account of unexplained jewellery, which did not belong to the Appellant. 2. On the facts and under the circumstances of the case and in law, the learned CIT(A) .....

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addition. 4. The Appellant craved leave to add to, alter and/or modify any of the above grounds of appeal. 3. Brief facts of the case are that the assessment in this case was framed pursuant to the search action on Thakkar group. The impugned addition for the jewellery found was made by the Assessing Officer by elaborately bringing out the jewellery found and the assessee s explanation there upon. The Assessing Officer duly gave credit for the jewellery properly explained and made addition for a .....

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e, jeweler found, the assessee filed explanation gram-wise and the finding thereof are as under: i) 982.000 grams- the assessee has provided bills, valuation report and bank statements as proof. The same has been considered and found to be in order. ii) 567.200 grams- The assessee explained this jewellery was received as gift by Smt. Darshita. However, the assessee's explanation is not acceptable as the assessee failed to provide any documentary evidence in this regard. The claim of gift is .....

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e s acceptable and found to be in order, iv) 126.55 grams- The assessee submitted that the jeweller/ pertain to Shh Jehil Thakkar and submitted the valuation report. The submission and explanation is found to be acceptable. v) 349.00 grams- In this context the assessee explained the source stating that Shri Ashok Thakkar has withdrawn cash from fhe bank accounf and purchased such amounts. However, the same is not acceptable due to the fact that the assessee has not provided any documentary evide .....

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assessee has submitted that the jewellery was purchased out of cash gifts received by Smt. Darshita. The same is also not acceptable in view of the fact that the assessee could not substantiate the claim with documentary evidence in the form of bills/vouchers. The claim of the gift is made now after a gap of two years of search. ix) 222.77 grams- The assessee has failed to provide any explanation for the same jewellery. From the above, it is clear that the assessee failed to provide any n for j .....

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e of jewellery. The assessee never tried to this fact in any of the earlier submissions. Now after almost two and half years offer ye search proceedings were completed, the assessee is trying to explain the same without any basis or supporting evidence. Even, then the contention of the assessee that cash withdrawals during the marriage of their daughter Smt. Darshita Thakkar were only meant to purchase jewellery and not for any other expenses related to marriage is without any basis. Therefore, .....

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ms is considered as unexplained investments in the hands of Smt. Smita Thakkar, and this fact is evident from the Panchanama and valuation reports in the Departmental Valuers during the search proceedings on 10/08/2011 and is dealt with separately in the order of Smt. Smita Thakkar. With reference to quantification of addition is concerned, considering the fact that the valuers while valuing the jewellery have taken the rate per gram at ₹ 2,375/- which fact has been accepted by the assesse .....

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hat the jewellery did not belong to assessee s married daughter has already been upheld by the concerned CIT(A) making the assessment for the daughter. 6. The order of the learned CIT(A) in this regard may be gainfully referred as under:- 7.4.1 I have considered the submissions of the appellant and perused the materials available on record. The appellant has requested to delete the impugned addition of ₹ 10,02,226/-, being unexplained investment in jewellery. The appellant's main conte .....

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nvestments in jewellery should not have been made in the hands of the appellant. The contentions of the appellant have been considered carefully. From the perusal of assessment order that the Ld. AO has computed the total jewellery found at 3251.480 gms. and held that out of same jewellery weighing 1558.2 grams [567.200 + 349.00 + 72.99 + 166.300 + 180.00) were unexplained. It is also observed that the total of 567.200 + 349,00 + 72.99 + 166.300 + 180.00 works out to be 1 335.49 grams whereas th .....

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aid lotal unexplained jewellery at 1558.2 grams the Ld. AO has considered 421.99 grams of jewellery as unexplained in the hands of appellant and balance of 1136.21 grams of unexplained jewellery was considered in the hands of appellant's wife Smt. Smita A Thakkar. 7.4.2 From the perusal of assessment order it is observed that the appellant vide his statement dated 28.09.2011, while explaining the source of investments made in jewellery found during the search at residence in response to Q.7 .....

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ewellery allowed out of the jewellery found in the locker no. 321, the balance jewellery was seized as per annexure J dated 28.09.201 1 and on being asked to comment the appellant has stated that he has no comments to offer. 7.4.3 Similarly the appellant's wife Smt. Smita Thakkar in her statement dated 28.09.2011 in response to Q.4 wherein she was asked to explain the source of jewellery found in Locker No. 321, she has confirmed the jewellery found in locker no. 321 consists of Gold & D .....

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r dated 06.08.2013. In response to the same the Ld. AR of the appellant Shri Dilip J Thakkar, CA and his L/H Smt. Smita Thakkar submitted the reconciliation of the total jewellery found and seized during the course of search proceedings. After considering such reconciliation and explanations of the appellant's AR and L/H the Ld. AO has held that in respect of jewellery weighing 349.00 grams it was explained that the source in investments of same were from the cash withdrawals made from the b .....

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idered total jewellery weighing 421.99 grams (349.00 grams + 72.99 grams) valued at ₹ 10,02,226/- as unexplained in the hands of the appellant. The said amount was also added on protective basis in the hands of appellant's wife Smt. Smita A Thakkar. 7.4.5 From the facts discussed above, it is evident that during the course of assessment proceedings, for the above referred jewellery weighing 421.99 grams the appellant had explained the sources of same as cash withdrawals made by him and .....

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rce of above referred jewellery treated as unexplained investments in his hands through these withdrawals, at another point the appellant submits that the jewellery under considerations belonged to his daughter Smt. Darshita J Talim. These two explanations are contradictory to each other. 7.4.6 During the course of assessment proceedings, the appellant has submitted the appellate order in the case of his wife Smt. Smita A Thakkar for A.Y. 2012-13. From perusal of the said order dated 31.03.2016 .....

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urchases of the jewellery as withdrawal from his own bank account and also bank account of his HUF, this jewellery can only be considered in his hands, even though it had been found from the residence's mises where assessee also lived. Therefore, I am of the view that this jewellery has rightly been considered in the hands of Shri Ashok Thakkar, where substantive addition has been made. Accordingly, the protective addition of ₹ 10,02,226/- made in the hands of the assessee becomes infr .....

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hing 421.99 grams in the hands of appellant. 7.4.8 From perusal of above referred decision of the Ld. CIT[A}- 52, Mumbai in the appellant's wife Srnt. Smita A Thakkar it is also observed that her claim that part of jewellery was purchased out of withdrawals has been rejected after holding as under. Though the cash withdrawals from these bank accounts are verifiable, however, no supporting bills or vouchers for purchase of jewellery have been submitted by the assessee in this regard. No doubt .....

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he withdrawals made in cash, but no supporting evidence in the form of bills and vouchers have been submitted. The facts and circumstances on this issue are similar as that adjudicated by the Ld. CIT(A)-52, Mumbai in the case of Smt. Smita A Thakkar and hence respectfully following the above referred decision of the Ld. QT(A)-52, no benefit of such withdrawals can be given as c aimed by the appellant. 7.4.9 In view of the facts and circumstances of the case discussed above, I am of the considere .....

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the jewellery did not belong to the assessee. That the jewellery was found from the bank account in the name of assessee s married daughter. That assessment made in the case of the married daughter cannot lead to confirmation of addition in the present case in assessee s hands. 9. I find that assessee s plea that the jewellery did not belong to the assessee but belong to the married daughter is not sustainable in light of the fact that in search the assessee s wife Smt. Smita Thakkar in her sta .....

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