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TMI Blog2021 (1) TMI 619X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case, the Ld. CIT(A) has erred in law as well as facts in deleting the addition of Rs. 12,53,36,332/- made by AO on account of unexplained investment from undisclosed sources. 4. That the grounds of appeal are without prejudice to each other. 5. That the appellant craves leave to add, amend, alter or forgo any ground(s) of appeal before or at the time of hearing of the appeal. 2.1 The grounds raised by the assessee in appeal No. 4484/Del/2017 are reproduced as under: 1. That on the facts and circumstances of the case and in law, the order passed by CIT(A)-29, New Delhi [hereinafter referred to as CIT(A)], is bad in law. 2. That on the facts and circumstances of the case and in law, the CIT(A) was not justified in partly upholding the action of the AO by sustaining addition of Rs. 5,76,580/- on account of unexplained jewellery found from the premises R-4 during search action out of total jewellery aggregating Rs. 1,48,92,281/-. 3. That the appellant craves leave to add, alter, amend, modify any of the grounds of appeal at the time of hearing of earlier. 3. Briefly stated facts of the case are that, the assessee on individual filed return of income for the year und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ghter-in-law, which was valued by the Departmental Valuer as under: Ginni Devi : Rs. 1,48,92,281/- Jyoti Goel : Rs. 1,38,54,216/- 5.1 The assessee explained before the Assessing Officer that jewelry aggregating to Rs. 1,68,93,253/- and Rs. 1,29,13,500/- and Rs. 87,352/- was issued for approval in the name of Praveen Gupta and Jyoti Goel from the showroom of Shree Raj Mahal Jewellers Ltd. i.e. a family concern. The assessee filed copy of approval notes issued by the said concern. The assessee submitted that soft copy of those approvals notes were seized during the course of the search by the Income Tax Department. Further, the assessee explained that certain items of the jewellery were received at the time of the marriage and other occasions from friends and relatives. The assessee also contested that valuation of the jewellery had been made on the higher side. The Learned Assessing Officer rejected the claim of the assessee that jewellery found from her room was acquired on approval from the family concern. First ground of the rejection was that keeping jewellery on approval for a period of five months (May, 2013 to October, 2013), cannot be held as normal. Second, ground of r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he fact that appellant could not substantiate the source of above jewellery. 7.4 The plea of the appellant that the jewellery received during marriage etc. has not been substantiated by providing any evidence or any bank statement or any valuation report or wealth tax return by appellant in past. Therefore, no evidence is brought on record by appellant in this regard and accordingly not palatable. 7.5 The appellant has also argued that valuation has been done on the higher side by authorized valuer during the search. However, no further details in this regard has been provided by appellant to show that there has been inflated valuation of jewellery found during the search. It is also observed that during search or post search proceedings no such issue has been raised or substantiated to show that jewellery has been priced higher by the approved valuer. Since the jewellery has been found, not duly accounted for in the hands of appellant, therefore value has to be taken as per the existing rate, at the time of search. Further, the appellant has provided chart indicating the value of jewellery where the total value of jewellery on the date of issue has been found more than what ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed submission of the assessee, where in the group concerns have accepted sale of jewellery out of books of account. Therefore, it needs to be ascertained whether the jewellery in dispute is included in the jewellery sold out of books of account. From the facts recorded by the lower authorities, it is not clear whether the jewellery stated to be issued on approval, was forming part of the stock of M/s Raj Mahal Jewellers Private Limited as on the date of the search. In absence of such a finding of the fact, the jewellery found from room of the assessee cannot be treated as explained merely by presenting approval notes. In the facts and circumstances of the case, we feel appropriate to set aside the finding of the Learned CIT(A) and restore the matter back to the file of the Assessing Officer for verifying source of acquisition of the jewellery with following directions: 1. To verify whether the approval notes form part of the seized record. 2. To verify whether the challans of jewellery issued and presented by the assessee before the AO also forms part of the seized record. 3. If the approval notes and challans form part of the seized record, then to verify and reconcile the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant and the same is for earning commission on accommodation entry, which is totally on conjecture and surmises and without any basis. 11.1 Therefore, looking to the facts and circumstances of the case, It is seen that nothing has been brought on record by the AO, nor any enquiries made from the persons to whom the funds have been given and from where it is received, the AO has not established his case on merits that it is a commission earned on the accommodation entry beyond doubt and thus addition has been made only on conjecture and hence deserves to be deleted. Accordingly, this ground of appeal is allowed. Appellant gets a relief of Rs. 6,22,637/- " 6.2 Before us, the learned DR relied on the order of the Assessing Officer, whereas learned Counsel of the assessee relied on the order of the Learned CIT(A). 6.3 We have heard rival submission of the parties on the issue in dispute. On perusal of the order of the Assessing Officer, we find that addition has made on the presumption that assessee was engaged in providing accommodation entries, but no evidence has been brought on record by the Assessing Officer to substantiate that the assessee was engaged in providing accomm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s Shri Raj Mahal Jewellers Ltd. amounting to Rs. 9,53,36,332/-, it is done through cheque from Bank account of appellant, in Karnataka Bank Ltd. for the year under consideration, and the source of this fund was transfer from M/s Riddhi Siddhi Gold to the appellant's said account in Karnataka Bank Ltd. on various dates. Apart from transactions through Karnataka Bank Ltd., Rs. 3,00,00,000/- has been invested on 28.03.2014 by appellant through transfer from her account maintained in Fedral Bank and the funds have been received from M/s Riddhi Siddhi Gold. Accordingly, the appellant has explained this investment, duly supported the nature and source of investment in the shares in M/s Ginni Industries Ltd. and Shri Raj Mahal Jewellers Ltd. for the year under consideration. 9.2 The AO has made this addition without considering the details of bank account by the appellant. However, in view of the above discussions and looking to the facts and circumstances of this case and in law, the source has been treated to be duly explained and therefore addition made on account of unexplained investment from undisclosed sources deserves to be deleted. Accordingly, this ground of appeal is al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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