TMI Blog2021 (1) TMI 1079X X X X Extracts X X X X X X X X Extracts X X X X ..... on that there is no reason to take a different view in the hands of the assessee. Since this fact requires verification, we restore this issue to the file of the AO for the limited purpose of examining the view taken by the AO in the hands of M/s B B Jewellers and Finance Ltd. If the AO of the above said company has accepted the stock register, then we direct that the present addition should be deleted. Addition relating to 2668.390 grams of jewellery found during the course of search - assessee explained that they belong to his wife Smt. Teena Bethala and they were purchased in 2004 - HELD THAT:- In the instant case, the jewelleries have been found during the course of search. Hence it cannot be considered as a case of accommodation entry, as presumed by the AO. In any case, as rightly pointed out by Ld A.R, the AO has entertained this presumption only on surmises and conjectures. The evidence furnished by the assessee proves the factum of purchase of jewellery. Absence of description of jewelleries, in our view, cannot be ground to suspect the nature of transaction, since the bill could have been prepared on the basis of understanding of the parties and further other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. The facts relating to the above said issues are discussed in brief. The revenue carried out search and seizure operations u/s 132 of the Act in the hands of the assessee on 08-12-2013. During the course of search, the gold ornaments weighing 7442.30 grams was found, which included bullion of 1500 grams. After considering the explanations given by the assessee, the AO assessed value of following jewellery/bullion as unexplained investment in the hands of the assessee:- Value of bullion (1500 grms x ₹ 2872/- per gram) - ₹ 43,08,000 Value of Ornaments (2668.390 gms x ₹ 2620/gm) - ₹ 69,91,181 Value of jewellery not seized(2308 gms x₹ 2620/gm)- ₹ 60,46,960 Total Value ₹ 1,73,46,141 4. The Ld CIT(A) confirmed the addition of ₹ 43,08,000/- and ₹ 69,91,181/- relating to first two items stated above. With regard to the third item, the Ld CIT(A) granted relief of ₹ 22,27,000/-,being the value of 850 grams. In this regard, the Ld CIT(A) has given credit of 500 gram ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B Jewellers and Finance Ltd has duly disclosed the above said 1500 grams in its stock register as seizure made by the income tax department. The Ld A.R invited our attention to the copy of financial statements of M/s B B Jewellers and Finance Ltd for the year ending 31-02-2013 placed at 47 99 of the paper, more particularly page 57 of the paper book, wherein it has been reported that the Closing stock of Gold Bullion includes 1500 grams held with the Income tax department. The Ld A.R submitted that the accounts of the above said company has been audited and the stock details has been accepted by VAT authorities also. Accordingly, he submitted that there is no reason to reject the explanations of the assessee that the gold bullion does not belong to him. Accordingly, the Ld A.R submitted that the AO was not justified in assessing the 1500 grams of gold bullion, since it does not belong to the assessee. 7. The Ld D.R, on the contrary, reiterated the opinion expressed by the AO by adverting our attention to the relevant pages of the assessment order. 8. We heard rival contentions on this issue and perused the record. We noticed that the assessee has disowned the gold bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any enquiry to find out the veracity of alleged modifications made in the stock register. Accordingly, we are of the view that the AO was not justified in making this addition and the Ld CIT(A) was also not justified in confirming the same. 11. If the stock register of M/s B B Jewellers and Finance Ltd has been accepted in its assessment by the concerned assessing officer and further, in the absence of any other credible material to support the view of the AO, we are of the opinion that there is no reason to take a different view in the hands of the assessee. However, since this fact requires verification, we restore this issue to the file of the AO for the limited purpose of examining the view taken by the AO in the hands of M/s B B Jewellers and Finance Ltd. If the AO of the above said company has accepted the stock register, then we direct that the present addition should be deleted. Accordingly, the order passed by Ld CIT(A) on this issue stands set aside. 12. The next issue relates to the addition of ₹ 69,91,181/- relating to 2668.390 grams of jewellery found during the course of search. With regard to these jewelleries, the assessee explained that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... VAT of ₹ 51,350/- has been collected. There is no finding that this bill was a bogus bill and the same has not been accounted for by M/s B B Jewellers Finance (P) Ltd. The facts are that (a) the sales bill issued by the above said concern has not been proved to be bogus (b) both the seller and buyer have accepted the transactions. (c) the transaction is evidenced by the availability of jewellery It is a known fact that in the case of bogus bills or accommodation entries, there will not be any actual transfer of goods/money. However, in the instant case, the jewelleries have been found during the course of search. Hence it cannot be considered as a case of accommodation entry, as presumed by the AO. In any case, as rightly pointed out by Ld A.R, the AO has entertained this presumption only on surmises and conjectures. The evidence furnished by the assessee proves the factum of purchase of jewellery. Absence of description of jewelleries, in our view, cannot be ground to suspect the nature of transaction, since the bill could have been prepared on the basis of understanding of the parties and further other factors support the genuineness of the transactions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arents of the assessee, his brother and brother s wife are assessed to income tax. Their PAN details were given to the AO during the course of assessment proceedings. The letter furnished to the AO is placed at pages 39 to 46 of the paper book. At page 43, the assessee has stated that he has filed wealth tax computation and at page 44 the PAN details of all family members are given. The Ld A.R submitted that the assessee s family is carrying on jewellery business and the AO should not have presumed that the family members could not have possessed any jewellery. In any case, the limits of jewellery prescribed in the CBDT instruction is the minimum amount of jewellery that should be left unseized and it does not mean that the entire jewellery found during the course of search should be considered as unexplained. He submitted that the AO should have made reasonable estimate of jewellery that should be belonging to each of the family members, by considering the status of the family of the assessee, if he is not accepting the explanations of the assessee. 20. On the contrary, the Ld D.R supported the order passed by Ld CIT(A). 21. We heard the parties on this issue and perused the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , looking to such cutoms prevailing throughout India, in one way or the another, came out with this Circular and we accordingly are of the firm opinion that it should also mean that to the extent of the aforesaid jewellery, found in possession of the various persons, even source cannot be questioned. It is certainly Stridhan of the woman and normally no question at least to the said extent can be made. However, if the authorized officers or/and the Assessing Officers, find jewellery beyond the said weight, then certainly they can question the source of acquisition of the jewellery and also in appropriate cases, if no proper explanation has been offered, can treat the jewellery beyond the said limit as unexplained investment of the person with whom the said jewellery has been found. Accordingly, we are of the view that the Ld CIT(A) should have given credit for all the family members (including parents and brother s family) as per the CBDT instructions. Accordingly, we direct the AO to give credit for the parents and family members of assessee s brother also. In case, any jewellery still remains, the AO may consider giving further credit on the basis of family status of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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