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2019 (10) TMI 135 - AT - Income TaxUndisclosed investment in purchase of land - assessments year - reliance on the preliminary statement recorded during search - transaction took place in 2007-08, but documents were registered in 2010 - HELD THAT - As submitted documents is not doubted. Even in the registered sale deed dated 25.03.2010 the reference to the consideration of ₹ 5,50,000/- is mentioned which relates to the date of agreement 24.7.2007 when the seller received the sale consideration of ₹ 5,50,000/- from the assessee. All these set of documents are ascertaining the fact that the transaction of purchase took place during Financial Year 2007-08 when the consideration of ₹ 5,50,000/- was paid by the assessee with the joint owner to the seller. Though the assessee s husband has given a statement of having purchased the said land of around ₹ 10,00,000/- before 4 years but as contended by the Ld. Counsel for the assessee this was a preliminary statement which was recorded before the start of actual search therefore cannot be accepted as a statement u/s 132(4) of the Act. Even otherwise the written submissions are better evidence over the oral statements. We therefore of considered view that the alleged transaction of purchase of land during Financial Year 2007-08 for consideration of ₹ 5,50,000/- and possession was taken during Financial Year 2007-08 only. Since the assessee has already declared her investment at the said land at ₹ 3,90,000/- (being 50% of ₹ 7,80,000/-), we find no reason to sustain the addition of ₹ 2,25,000/- in the hands of the assessee. - Decided in favour of assessee Addition of Gold Jewellery 204.869 Gms, silver articles weighing 3.944 kgs and diamond jewellery - HELD THAT - As regards the addition confirmed for gold jewellery 204.869 Gms is concerned we find no inconsistency in the order of Ld. CIT(A) who had given the benefit of 950 grams of gold (500 gms per married lady, 250 grams for unmarked lady (daughter) and 100 grams for male member (husband and son). Addition for silver articles - we are of the considered view that in the Indian customs at the time of marriage along with gold jewellery silver utensils/articles are also gifted which are given with the object for use during the normal course of life and not considered in the category of gold jewellery or ornaments. The CBDT Circular No.1196 dated 11.5.1994 only refers to gold jewellery and ornaments. Therefore making the addition for such gifted articles only on the premise of the CBDT Instruction No.1916 dated 11.5.1994 which only talks about golden jewellery and ornaments is uncalled for however authorities should not been denied the claim as such silver articles were gifted at the time of her marriage which was around 15 years before the date of search. Thus looking to the family living standard are of the considered view that the silver weighing 3.944 kg and diamond jewellery valued at ₹ 27,000/- cannot be treated as un explained in the given fact that the assessee process 1154.869 grams of gold jewellery Undisclosed cash deposit - HELD THAT - The claim of the assessee that the cash was received from sale of agriculture land at Satna is verifiable from the documentary evidence placed at page 16-26 of the paper book showing the details of agriculture land situated at village Satna in the name of assessee s mother Smt. Sudha Jain. Further it is claimed that the amount was immediately transferred to Smt. Sudha Jain is also verifiable from the bank statement. Smt. Sudha Jain has used the amount for renovation of residential duplex house which is also supported by the documentary evidence placed - case the assessee s submission before the Ld. A.O and Ld. CIT(A) in order to explain the source is duly backed by documentary evidence and cannot be treated as a cooked story. Therefore since the source is duly explained, we find no justification in the action of the Ld. A.O making the addition. Undisclosed on money payment to Mr. Shardendu Mishra - assessee purchased the land on 7.6.10 measuring 4674 sq.ft plot situated at Gram Borda, Bhopal - HELD THAT - We observe that the statement given by Mr. Shardendu Mishra is supported with the fair market value of ₹ 4,78,000/- adopted by the Stamp Valuation Authority. We therefore find force in the finding of Ld. A.O and Ld. CIT(A) who has rightly made the addition of ₹ 2,00,000/- for the on money payment for purchase of land. With regard to alternate claim of the assessee that ₹ 2,00,000/- has been offered to tax in the computation of income under other income and telescoping benefit should be given for the alleged addition for on money payment. This claim was never made before the Ld. A.O nor before Ld. CIT(A). This is not a legal ground which can be taken at any stage by the assessee. During the course of appeal also no such specific ground has been taken for providing telescoping. We find no force in the contention of the Ld. Counsel for the assessee and are inclined to confirm the view taken by Ld. CIT(A). Accordingly addition of ₹ 2,00,000/- for on money payments stands confirmed. Addition for silver article weighing 2.936 Kg found from the residence,1.270 kg found from locker and weighing 2.065 kgs found from another locker - HELD THAT - In the instant case the quantity of silver articles is 6.271 Kg is likely on higher side. We therefore in the given facts and circumstances of the case and without setting a precedence for other cases and being fair to both the parties and in the interest of justice direct the revenue authorities to allow claim of 3 kg of silver articles/silver utensils to be a reasonable quantity of silver and thus delete the addition for 3 kg of silver articles.
Issues Involved
1. Addition of ?2,25,000/- for undisclosed investment in land purchase. 2. Addition for gold jewelry and silver articles. 3. Addition for undisclosed cash deposits in bank. 4. Addition for undisclosed 'on money' payment for land purchase. Issue-wise Detailed Analysis 1. Addition of ?2,25,000/- for Undisclosed Investment in Land Purchase The primary issue in this case was the addition of ?2,25,000/- sustained by the CIT(A) for undisclosed investment in the purchase of land at Khajuri Kalan. The assessee, in co-ownership with another individual, acquired agricultural land. The total disclosed cost was ?5,50,000/- with additional registration fees and stamp duty of ?2,30,000/-. However, the Sub-Registrar valued the property at ?26,24,000/-. The AO computed the investment at ?28,54,000/- and added 50% of this amount as undisclosed investment in the assessee's hands. The CIT(A) reduced this addition to ?2,25,000/-. The Tribunal found that the actual purchase took place in the Financial Year 2007-08, and the consideration was ?5,50,000/-. The Tribunal concluded that the transaction was genuine and the addition of ?2,25,000/- was not justified. Therefore, the addition was deleted. 2. Addition for Gold Jewelry and Silver Articles The second issue involved the addition for unexplained gold jewelry and silver articles found during the search. The assessee argued that the jewelry was acquired during marriage and other ceremonial occasions. The CIT(A) gave partial relief based on CBDT Circular No. 1916, which allows certain quantities of gold jewelry per family member. The Tribunal upheld the CIT(A)'s decision for gold jewelry but deleted the addition for silver articles and diamond jewelry, considering them customary gifts during marriage. For another assessee, the Tribunal allowed the benefit of 600 grams of gold jewelry for the son and daughter-in-law, thus deleting the addition for 428.947 grams of gold jewelry. 3. Addition for Undisclosed Cash Deposits in Bank The third issue was the addition of ?98,000/- for unexplained cash deposits. The assessee claimed the cash was deposited by her father and immediately transferred to her mother. The CIT(A) upheld the addition due to lack of convincing evidence. However, the Tribunal found the source of the cash deposit to be satisfactorily explained through documentary evidence showing the sale of agricultural land and subsequent use for house renovation. Therefore, the addition was deleted. 4. Addition for Undisclosed 'On Money' Payment for Land Purchase The fourth issue was the addition of ?2,00,000/- for undisclosed 'on money' payment for land purchase. The seller's statement and the fair market value adopted by the Stamp Valuation Authority supported the addition. The Tribunal upheld the addition but rejected the assessee's alternate claim for telescoping benefit, as it was not raised at earlier stages. For another assessee, the Tribunal allowed partial relief for silver articles found in the residence and lockers, considering them customary gifts but limited the allowance to 3 kg of silver articles. Conclusion The appeals were partly allowed, with the Tribunal providing relief on several counts based on documentary evidence and customary practices, while upholding certain additions where the evidence supported the revenue's claims.
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