2016 (12) TMI 1573 - AT - Income Tax

Undisclosed jewellery - seizure of jewellery and ornaments in course of search - Held that - seizure of jewellery and ornaments in course of search. The issue should be restored on the file of the AO for fresh consideration as the details furnished by the assessee s during the course of hearing before us as well as the break-up of 2100 gms furnished by the assessee vide his letter dated 11.4.2012 it could not be ascertainable as to whether the ladies mentioned in the list for 2100 gms are married ladies or not. Hence, the assessee should produce details and evidences on this aspect and thereafter the AO should quantify the quantum of jewellery to be accepted per lady whether 250 gms or 500 gms and then allow benefit to the assessee accordingly. Levy of interest u/ss. 234A, 234B and 234C is mandatory and consequential in nature.

Summary

Issues involved:
1. Addition of unexplained gold and silver in the returned income.
2. Levying of interest u/ss. 234A, 234B, and 234C.

Analysis:

Issue 1: Addition of unexplained gold and silver in the returned income:
The appellant, an individual engaged in pawn broking and money lending, faced additions to the returned income due to unexplained gold and silver found during a search operation. The appellant contended that the seized items were acquired through customs and traditions of receiving gifts in a Marwadi business family. However, the assessing officer did not accept these contentions and made substantial additions to the income. The CIT (A) upheld the assessing officer's decision, citing lack of evidence supporting the appellant's claims. The tribunal noted discrepancies in adhering to guidelines for seizure of jewellery and ornaments during the search operation and assessment proceedings. Referring to previous tribunal decisions and a ruling by the jurisdictional High Court, the tribunal concluded that the issue should be reconsidered by the assessing officer to determine the quantum of jewellery to be accepted per lady based on specified guidelines.

Issue 2: Levying of interest u/ss. 234A, 234B, and 234C:
The tribunal deemed the levy of interest under sections 234A, 234B, and 234C of the Act as mandatory and consequential, dismissing the appellant's contention to delete the interest levied. The tribunal upheld the statutory nature of the interest levies, indicating that such charges are obligatory and not subject to deletion based on the appellant's arguments.

In conclusion, the tribunal partially allowed the appellant's appeal for statistical purposes, directing a fresh consideration by the assessing officer on the issue of unexplained gold and silver. The tribunal dismissed the stay petition as infructuous, maintaining the mandatory nature of interest levies under the relevant sections of the Act.