2019 (2) TMI 1466 - AT - Income Tax

Addition u/s 69A - unexplained income in the form of cash found from the locker of the appellant in Bank - search u/s 132 - HELD THAT - The assessee has submitted that the above amount has been generated out of his past savings. It is also not in dispute that the assessee was serving with some company for a very long time and his son is settled in United Kingdom - appellant is aged 70 years and staying with his son who meet the household expenditure. The assessee has also submitted his bank statement with ICICI bank wherein it is found that he has regularly withdrawing a sum of INR 200,000 and out of which he deposited only INR 80,000/ and therefore it is apparent that at least to the extent of sum of INR 120,000 is available in his hands on the date of search. It is not the case of the revenue that the above amount has been withdrawn from the bank of the assessee by the assessee for spending for something else. In view of this, we are of the considered opinion that the assessee should be granted the credit of at least INR 120,000/- . Accordingly AO is directed to reduce the addition from INR 170,000 to INR 50,000 only. Accordingly ground number 1 of the appeal of the assessee is partly allowed. Unexplained jewellery found from the residence and locker of the appellant - assessee submitted that the above jewellery belonging to her brother-in-law Mr Sanjay Jain and his family who kept this jewellery in her custody before moving to the United Kingdom - HELD THAT - After granting benefit of 87 g of jewellery belonging to the other relative the net jwelery remains is of 2255.81 g. Assessee submitted a chart of her family members and stated that according to the instruction number 1916 the assessee must get the benefit of 2550 g of jewellery. The claim of the assessee is also supported by the decision in case of in CIT vs Ratanlal Veparilal Jain 2010 (7) TMI 769 - GUJARAT HIGH COURT . Therefore we set aside the whole issue back to the file of the learned assessing officer with a direction to follow the decision of the honourable Gujarat High Court and grant assessee the benefit of instruction number 1916. Accordingly this ground of appeal of the assessee is partly allowed with above direction. Unexplained income in the form of cash found from the residence of the assessee under section 69 - HELD THAT - The argument of the assessee deserves to be rejected at the threshold itself because such an exemption was given to the persons who are depositing already monetised currency notes in their bank account and not for any undisclosed income. Even otherwise there is no such provision in the income tax act to grant benefit of statement made by any other government agencies from the taxable income of the assessee u/s 69A of the act. Unless the law provides specific exemption, no such deduction can be taken from the statement or policy decision taken by any other government agencies. From the explanation submitted by the assessee, it is apparent that assessee has kept his stand changing over a period of time. The assessee first gave an explanation about savings made by the family members. It was merely an explanation without any supporting evidences. Assessee has failed to explain the source of cash found during the course of search - we confirm the orders of the lower authorities in taxing the sum of INR 103800/ u/s 69A - Decided against assessee.

Summary

Issues Involved:
1. Addition of unexplained income in the form of cash found from the locker.
2. Addition of unexplained jewellery found from the residence and locker.
3. Addition of unexplained income in the form of cash found from the residence.

Issue-wise Detailed Analysis:

1. Addition of Unexplained Income in the Form of Cash Found from the Locker:

The primary issue in ITA No. 2928/Del/2017 pertains to the addition of ?1,70,000 made by the Assessing Officer (AO) under Section 69A of the Income Tax Act, 1961, which was upheld by the Commissioner of Income Tax (Appeals) [CIT(A)]. The cash was found in a locker belonging to the appellant and his wife during a search conducted on 30/09/2013. The appellant provided multiple explanations for the source of the cash, including savings from family members and proceeds from the sale of a car. However, these explanations were found to be contradictory. The appellant also submitted bank statements showing regular withdrawals. The Tribunal concluded that the appellant should be given credit for ?1,20,000 based on these withdrawals, reducing the addition to ?50,000. Thus, the appeal was partly allowed.

2. Addition of Unexplained Jewellery Found from the Residence and Locker:

In ITA No. 2929/Del/2017, the issue revolves around the addition of ?19,60,439 out of a total of ?38,49,749 made by the AO for unexplained jewellery found during the search. The jewellery was valued at ?29,63,213 from the residence and ?8,86,536 from a locker. The appellant argued that the jewellery was received as gifts during various occasions and submitted affidavits from family members to support this claim. The CIT(A) granted an allowance for 600 grams of jewellery but confirmed the balance addition. The Tribunal directed the AO to follow the Gujarat High Court's decision in CIT vs. Ratanlal Veparilal Jain and grant the benefit of CBDT Instruction No. 1916, which provides guidelines for non-seizure of jewellery. The appeal was partly allowed for statistical purposes.

Similarly, in ITA No. 2930/Del/2017, the issue was the addition of ?12,24,625 out of ?17,68,012 for unexplained jewellery found from Mrs. Shakuntala Jain. The Tribunal directed the AO to grant the benefit of CBDT Instruction No. 1916, following the Gujarat High Court's decision, and partly allowed the appeal for statistical purposes.

3. Addition of Unexplained Income in the Form of Cash Found from the Residence:

In ITA No. 2931/Del/2017, the issue pertains to the addition of ?1,03,800 made by the AO under Section 69A for unexplained cash found at the residence of Mr. Vivek Jain. The appellant claimed the cash was from gifts received on various occasions. The AO and CIT(A) found the explanation unsatisfactory. The appellant also argued that during demonetization, deposits up to ?2,50,000 were not questioned, but the Tribunal rejected this argument, stating it was not applicable to the case. The Tribunal confirmed the addition, dismissing the appeal.

Conclusion:

All four appeals were disposed of accordingly, with partial relief granted in some cases and dismissals in others. The Tribunal's decisions were pronounced in the open court on 19/02/2019.