TMI Blog2020 (2) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee but also by the alleged owner i.e. Shri Chandra Prakash Soni. Even otherwise, it is the legitimate and legal right of the assessee or Shri Chandra Prakash Soni to get the revaluation of the jewellery in their presence and no prejudice shall be caused to the Department because said seized jewellery is still in the possession of the Department from the date of seizure whereas in this case the specific points/grounds raised by the assessee are not adjudicated upon. Hence, the rights of the assessee had been prejudiced. Therefore, keeping in view the interest of natural justice for seeking revaluation of the seized jewellery, we allow this ground of the assessee and direct the Department to get the seized jewellery revalued by the Registered Valuer of the Department and also to get the valuation report while keeping in view all the points raised by the assessee as mentioned above. Hence, this issue is restored back to the file of the AO for afresh adjudication as directed above. Thus Ground No. 1 of the assessee is allowed for Statistical purposes. - ITA No. 835/JP/2019 - - - Dated:- 23-1-2020 - Shri Sandeep Gosain, JM And Shri Vikram Singh Yadav, AM For th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. That the appeal order passed by ld. CIT(A)-III Jaipur was served upon an old aged father of appellant (Shri Ram Swaroop Guputa) vide registered post on 18-03-2019 at jhis residential stage at Agra Road, Jaipur. That due to old he could not understand the intricacies of case and could not communicate same to appellant (Kamal Mohan Gupta) and who is residing at Flat No. 701, SDC Euro Exotica, Shri Kushal Nagar, Sanganer, Jaipur. That after check by counsel from the office ld. CIT(A), Jaipur about non-delivery of order, it came to know that appeal order has already been sent at given address and only then for the first time it has come to know that order has been passed and sent to address of appellant. The immediate appellant searched the sealed envelop with his father and immediately contact to his counsel. 2. That the order has been delivered on 18-03-2019 and thereafter limitation period of 60 days which expires on 17- 05-2019 and thereafter appeal is filed before Hon'ble ITAT on 7-06-2019, thus there is delay of 21 days in filing of appeal before Hon'ble ITAT, Jaipur Bench. 3. That such delay of 21 days is unintentional and due to non-communication by old age ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thin 30 days of receipt of the said notice. In response assessee vide its reply dated 24/06/2015 submitted that the assessee has filed return of income on 20/10/2014 with acknowledgment No. 182201014010459. Notice u/s. 143(2) was issued on 01.09.2015. Subsequently, the AO passed the assessment order. 3.2 Aggrieved by the order of the AO, the assessee preferred the appeal before the ld. CIT(A) and the ld. CIT(A) after considering the case of both the parties dismissed the appeal of the assessee and upheld the order of the AO. 3.3 Aggrieved by the order of the ld. CIT(A), the assessee has preferred the present appeal before us on the grounds mentioned hereinabove. 3.4 The Ground No. 1 raised by the assessee relates to challenging the order of the ld. CIT(A) in not allowing the revaluation of gold jewellery sized by ADIT team, Kolkatta. 3.5 The ld.AR , appearing on behalf of the assessee submitted before us that as per facts of the case, the assessee was carrying with him gold ornaments which were seized by ADIT team, Kolkatta. The said jewllery belonged to Shri Chandra Prakash Soni and the assessee was only the broker who was carrying the sample of the jewell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he has said that Valuation report dt. 30.10.2013 was got signed by him before departmental officers under acute mental pressure and without understanding the correct valuation amount. Meaning thereby the valuation report was signed without understanding the contents of the same. Thus action of Ld. AO that appellant has accepted the valuation is improper and without ascertaining the factual circumstances under which he was compelled to accept the valuation and assessment based on that valuation report is improper and unjustified in the facts circumstances of the case. That appellant has submitted application for revaluation of seized jewellery to Hon'ble Pr. Commissioner-Ill, Jaipur on dt.19.1.2016 and to Hon'ble Pr. CCIT, Jaipur on dt.23.2.2016, dt. 29.1.2016 and without getting outcome of those application the Ld. AO has passed the asstt. order which is absolutely illegal and unjustified in the facts circumstances of the case and may please be held as illegal. That after completion of seizure proceedings of entire record was transferred by the ADI wing, Kolkatta to the office of .1 CI T, Cirlce-7, Jaipur and Ld. AO was the officer who was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty of polka is taken at 18,000 cts and value is taken for ₹ 1,80,000/- , thus value is taken for ₹ 10,000/- per cts. Whereas the prevailing market rate of polki is in between of ₹ 1500/- to ₹ 1700/- per carat (maximum) in open market of Jaipur which can very well be ascertained and taken from Jewellers of Jaipur. The following are the prevailing rates of semi precious stones in open market at Jaipur:- (a) Polki = ₹ 1500 - 1700 per carat (b) Pearl Beads = ₹ 20-70 per carat Whereas the valuer has taken the minimum rate of ₹ 3,000/- per carat and on higher side the rate has been taken at ₹ 10,000/- per carat which is on too higher side and shows that entire valuation is done wrongly. The copy of following purchase bills of Polki (cut polished diamonds) were also submitted to Ld. AO as below:- Name of Party Address Bill No. Date Rate/Carat Amount (i) M/s Bahubali Diamonds Pvt. Ltd. 3 06.07.2013 500000/- 1600/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and can also be got ascertained by you at your end, whereas the rate of pure gold taken for valuation is of ₹ 2,935/- per gms. Thus there is difference of ₹ 2933.50 per gram or 29,33,500/- per kilo gram. That jewellery is containing DORI so that it becomes wearable. Dori is made of cotton thread foiled with GOTA. The weight of DORI is about 10% to 15% of total weight. The valuer has counted weight of these DORI in total pure weight of gold (999 purity). That while valuing studded jewellery, the quantity of gold is measured about 68% in total weight by valuer which is absolutely wrong and without any basis and based on his whims fancies and without any basis. While manufacturing of such type of studded jewellery WAX CHAPDI is used there so that it may hold semi precious stones i.e. pearls, polka etc. While valuing above studded jewellery the percentage of gold is taken about 68% of total weight, whereas it contains not more than 20% of total weight, thus 4850% of gold weight is excessively taken by valuing the studded jewellery. As an exemplary calculation in such studded jewellery the composition of jewellery is given as under:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ti, Jaipur who has certified that gold red jewellery generally being contains of following ingriendents:- (a) Gold-pure = 15%-20% (b) WAX/Chapdi = 65%-70% (c) Dori, Sarafa etc. = 5%40% Above certificate was submitted to Ld. AO before passing of assessment and Ld. AO has erred in not putting any reliance to same and no contrary evidence have been brought on record for not accepting the same. That Ld. AO has erred in not appreciating the statements of Mr. Chandra Prakash Soni recorded on same date of search proceedings of appellant i.e. on 30.10.2013 wherein relevant question no. 8 which is reproduced as below:- Q.No.8:- Please explain the item wise details of sample given on dt.3.10.2013 and on dt.14.10.2013 to Mr. Kamal Mohan Gupta and get it matched with your books of accounts. fins- That I have given total 2050 gms. gross weight studded jewellery to Shri Kamal Mohan Gupta and it is containing about 20% Gold content therein ........... That at same time of search proceedings when the statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke a proper and justified assessment of the income and which is lacking in the present case and thus impugned assessment order is absolutely illegal and may please be deleted. 3.6 On the other hand, ld. DR relied on the order passed by the ld. CIT(A). 3.7 We have ld. counsel for both the parties, perused the materials placed on record and also perused the orders passed by the lower authorities. Before we decide the merits of this ground, it is necessary to evaluate the order passed by the ld. CIT(A) while disposing off this ground. The ld. CIT(A) had adjudcated this ground in para 4.2 of his order which is reproduced as under:- 4.2 I have carefully consider the material before me I find that the jewellery was seized from the assessee by the Investigation Wing, Income Tax Department at Airport, Koikata on 30.10.2013 which was valued by the Registered Valuer at ₹ 77,81,035/-. During the course of statement of the assessee recorded by the Investigation Wing, the assessee accepted the value of the above movable property at ₹ 77,81,035/-. During the course of search and seizure operation, the assessee failed to explain the source of investment submitting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. AG has not taken into consideration following facts while preparing remand report which are essential and inevitable for deciding the case: - That applications which have been submitted to Pr. CCIT, CIT on dt. 19.1.2016, 23.2.2016, 29.1.2016 before passing of assessment has remain unanswered and now in second innings of factual findings offacts these facts have again being ignored by the Ld. AO. That basic object of rule 46A is to bring those facts on record which are essential for deciding of the case and which could not brought on record during the assessment proceedings. And while issuing the remand report he has ignored all those aspects which were ignored by his predecessor which is absolutely illegal and unjustified in the facts circumstances of the case. That the Ld. AO has not based his remand report on those points on which the application u/rule 46A is submitted That Ld. AO is focusing in the remand report on the source of funds used for these seized jewellery rather the ground of Revaluation of seized jewellery. That no reason for not allowing the revaluation of seized jewellery is given by Ld. AO in remand proceedings. That Ld. AO has no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... afterthought. However, it was submitted by the ld.AR of the assessee that the assessee was under acute mental pressure and is not so literate and the assessee was compelled to accept the valuation of the jewellery. The assessee was suddenly caught by the team of Departmental Officers at Kolkatta and thus there is no acceptance by free will of the assessee. In this respect, the assessee had also filed an affidavit dated 18- 01-2016 wherein it was categorically submitted during the assessment proceeding that Valuation Report dated 30-10-2013 was got signed by him under acute mental pressure and the same is not correct valuation of jewellery. It was submitted by the ld.AR that the assessee was not even told about the contents of the said Valuation Report and therefore, the assessee had submitted the applications for revaluation of seized jewellery to Pr.CIT on 19-01-2016 and to Pr. CCIT, Jaipur 23-02-2016 and 29-01-2016. However, without deciding the said applications, the AO in hurriedly manner had passed the order of assessment. It was submitted that the valuation of studded jewellery seized is valued at ₹ 77,81,035/- which are manufactured from Gold (999 purity) and semi pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s Kedia E.,,ports Pvt. Ltd., Jaipur 50 04.11.2013 472800/- 1500/- (vi) M/s Bahubali Diamonds Pvt Ltd Sur 01 20.11.2013 231008/- 1600/- The purchase rates of these bills are varying from 1200 to 1600 per carat which were studded in those jewellery which were caught and wrongly seized by I.T. Department, whereas the valuer has taken up the rate of such polka (cut polished diamonds) varying from ₹ 6000/- to ₹ 10000/- per carat. Thus it is very much unclear that from where the above rates have been taken. The ld.AR submitted that it is very much proved that valuation of jewellery was made under pressure and looking to the actuality of material used therein. As the assessee is dealer in such Studded Jewellery and understands the very basic of these gold jewellery. These studded Jewellery are containing at maximum WAX therein and which is containing in these jewellery about 60% to 70% of weight. The studded jewellery is manufactured with fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n by valuer is without any basis and is totally misconceived. It was further submitted that even during the course of remand proceedings the AO had focused on the source of funds used for this seized jewellery and ignored the ground of revaluation of seized jewellery. while passing the assessment of Chandra Prakash Soni the declared value of stock as on 31.3.2014 is of ₹ 31,58,699/- which includes seized stock of ₹ 2672808/- and same is accepted by AO and no adverse finding is given in the assessment order. Meaning thereby, the AO has accepted the value of seized stock at ₹ 2672808/- and further the difference of ₹ 5108227/- is added on Protective Basis in the hands of Chandra Prakash Soni to make it a total of ₹ 7781035/- (already shown ₹ 2672808/- + addition on protective basis of ₹ 5108227/-). If it would have been intention to treat entire seized jewellery at ₹ 7781035/- as undisclosed then ₹ 7781035/- would have been added on protective basis in hands of Chandra Prakash Soni and not difference value of ₹ 2672808/-.Keeping in view the facts and circumstances of the case narrated above, we are of the view that admitte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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