2013 (1) TMI 895 - AT - Income Tax

Summary

Issues Involved:
1. Deletion of addition on account of unexplained cash found during the search.
2. Deletion of addition on account of unexplained investment in furniture.
3. Deletion of addition on account of unexplained investment in jewellery.

Summary:

Issue 1: Deletion of Addition on Account of Unexplained Cash

During the search, cash amounting to Rs. 1,48,530/- was found at the assessee's premises and Rs. 3,21,485/- at his second residence. The assessee claimed the cash was from savings and related to concerns where he was a member or partner, providing balance sheets as evidence. The AO added Rs. 4,70,015/- as undisclosed income. The ld. CIT(A) deleted the addition, noting the AO did not dispute the cash balances of various concerns and it was common for businessmen to keep business cash at home. The Tribunal upheld the ld. CIT(A)'s decision, rejecting the Department's appeal.

Issue 2: Deletion of Addition on Account of Unexplained Investment in Furniture

During the search, several furniture and fixtures were found at the assessee's house. The AO added Rs. 5.00 lacs to the income due to the lack of source details for these items. The ld. CIT(A) reduced the addition to Rs. 3.00 lacs, considering household withdrawals and the absence of exact purchase prices. The Tribunal further reduced the addition to Rs. 50,000/-, noting sufficient withdrawals in preceding years and the assessee's disclosure of Rs. 1.16 crores towards unexplained investments. The Department's appeal was rejected, and the assessee's cross-objection was allowed in part.

Issue 3: Deletion of Addition on Account of Unexplained Investment in Jewellery

Gold jewellery (8723.60 gms), silver jewellery (523 gms), and stones (184 carats) valued at Rs. 1,31,44,804/- were found during the search. The AO added this amount as unexplained jewellery, rejecting the assessee's explanations and supporting documents. The ld. CIT(A) deleted the addition, accepting the assessee's evidence of wealth tax returns, gift deeds, and VDIS declarations. The Tribunal upheld the ld. CIT(A)'s decision, noting the jewellery was found with family members and the assessee had already offered Rs. 1.16 crores as additional income for unexplained investments, avoiding double taxation. The Department's appeal was dismissed.

Conclusion:

The appeal of the Department was dismissed, and the cross-objection of the assessee was allowed in part. The order was pronounced in the open Court on 23-01-2013.