TMI Blog2016 (11) TMI 1631X X X X Extracts X X X X X X X X Extracts X X X X ..... the explained sources, and in the absence of wealth tax returns, we are unable to accept the source of jewellery was from explained sources/VDIS. The assessee cannot take an advantage of VDIS disclosure for explaining the source of investment in jewellery by evading wealth tax. We are of the considered opinion that the explanation of investment out of VDIS and Stridhan, gifts is nothing but an afterthought. Even if the assessee acquires the gold from VDIS, and gifts she is bound to declare in wealth tax returns and pay wealth tax failing which it remains unaccounted. Therefore, we hold that this is clear case of penalty under section 271(1)(c) of act. The facts of the assessee s case are squarely covered by Hon ble Supreme Court judg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zed as per Annexure-Ann/PMS/Gold/S-1 dated 18.08.2011. The value of the gold was valued at ₹ 47,37,496/-. 3. The Assessing Officer issued notice under section 153(C) of the Act and the assessee filed the return of income declaring the total Income of ₹ 24,90,170/-. The assessee has not included the value of gold jewellery found at the time of search in the return of income. The Assessing Officer issued notice under section 142(1) on 25.02.2013 directing the assessee to explain as to why the jewellery was found and seized should not be treated as unaccounted investment? In response to the notice issued, the assessee filed revised memo of income for total income of ₹ 75,11,844/- including the value of gold and jewe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue, Mr. Shiva Srinivas, the Ld.DR argued that there was a search and seizure action carried out in the assessee s residential premises and found gold jewellery worth ₹ 47,37,496/-. Though, there was no evidence and proof for purchase of jewellery from the accounted sources, the assessee has neither declared the value of jewellery u/s.132(4) nor in the return of income filed in response to the notice u/s.153(c) of the Act. The assessee has admitted uncounted investment in jewellery only during the course of assessment proceedings after issue of notice u/s.142(1). Since, there was no explanation whatsoever to explain the sources for acquiring the jewellery. But for search action and subsequent assessment proceedings, the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rejoinder, the Ld.DR submitted that the assessee has not declared the jewellery valuing about ₹ 47.37 lakhs in the Wealth Tax returns. In fact, it is found that no Wealth Tax returns are filed by assessee, even though the gold jewellery attracts Wealth Tax. The gold jewellery found during the course of search was over and above the exemption of Wealth Tax. Therefore, the Ld.DR contended that the assessee cannot take two contrary stands for Wealth Tax purpose and for the purpose of Income Tax. Therefore, he contended that this is a clear case of penalty u/s.271(1)(c) of Income tax act. 7. We have considered the rival submissions and perused material placed on record. Search u/s 132 was conducted in the residential premise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and nothing is carried forward for subsequent year. The assessee is from the educated and from affluent family, assisted by the legal counsels and aware of the wealth tax provisions. In the absence of any evidence for purchase of jewellery from the explained sources, and in the absence of wealth tax returns, we are unable to accept the A.Rs argument that the source of jewellery was from explained sources/VDIS. The assessee cannot take an advantage of VDIS disclosure for explaining the source of investment in jewellery by evading wealth tax. Therefore, we are of the considered opinion that the explanation of investment out of VDIS and Stridhan, gifts is nothing but an afterthought. Even if the assessee acquires the gold from VDIS, and gifts ..... X X X X Extracts X X X X X X X X Extracts X X X X
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