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2020 (1) TMI 982 - AT - Income TaxAddition u/s 69A - unexplained Jewellery - unaccounted Cash - HELD THAT - In the present case it is noticed that the A.O. accepted the Jewellery shown by the HUF of the assessee i.e; Rakesh Bansal HUF but did not accept the Jewellery shown in the Wealth Tax Returns of another persons belonging to the family of the assessee. In our opinion when the facts were similar, the contrary stand taken by the A.O. was not justified when the assessee was having sufficient quantity of the gold disclosed in the Wealth Tax Returns and SBI Gold Bond Deposit Scheme as well as Gold Bonds 1998 then there was no reason to make impugned addition particularly when total gold available with the assessee as shown in the Wealth Tax Return and obtained on maturity of Gold Bond Scheme was weighing 5208 gms which was more than the gold / Jewellery weighing 4019.45 found during the course of search. Additions towards unaccounted Cash - Held that - the Assessee was a Director of M/s Sarvesh Spinners Pvt., Ltd. so the cash belonging to that concern may also be held by the assessee. In the instant case, the assessee was taking a consistent stand before the A.O. as well as the Ld. CIT(A) that he was holding position of Director in the Company namely M/s Sarvesh Spinners Pvt. Ltd. and nothing is brought on record to substantiate that the said contention of the assessee was not true, therefore this explanation of the assessee that cash amounting to ₹ 2,27,282/- was retained by him in capacity of the Director of M/s Sarvesh Spinners Pvt. Ltd. cannot be doubted particularly when this fact was verifiable from the record of Registrar of Companies. We therefore considering the totality of the facts are of the view that the impugned addition on account of cash found, made by the A.O. and sustained by the CIT(A) was not justified. Accordingly the same is deleted. - Decided in favour of assessee.
Issues Involved:
1. Condonation of delay in filing the appeal. 2. Addition of ?59,59,890/- on account of alleged unexplained Jewellery under Section 69A of the Income Tax Act, 1961. 3. Addition of ?5,29,320/- on account of alleged unaccounted cash found during the course of search under Section 69A of the Income Tax Act, 1961. Detailed Analysis: 1. Condonation of Delay in Filing the Appeal: The Assessee filed an appeal against the order of the CIT(A)-2, Gurgaon, with a delay of 258 days. The delay was attributed to a bona fide mistake where the appeal was initially filed in the office of the CIT(DR) ITAT, Chandigarh, instead of the ITAT, Chandigarh Bench. The Assessee provided evidence of the initial filing and subsequent rectification. The Tribunal found that there was a reasonable cause for the delay and condoned it, admitting the appeal. 2. Addition of ?59,59,890/- on Account of Alleged Unexplained Jewellery: A search and seizure operation revealed Jewellery with a gross weight of 4019.45 gms, valued at ?1,10,83,129/-. The Assessee explained that the Jewellery was acquired from Gold Bonds and SBI Gold Bond Deposit Scheme and declared in Wealth Tax Returns. The AO did not accept the explanation, citing discrepancies in the serial numbers of gold bars and the belated filing of Wealth Tax Returns. The AO allowed credit for 2100 gms (900 gms for HUF and 1200 gms for the wife as Istridhan) and made an addition for the remaining 1919.45 gms. The Tribunal observed that the AO accepted the Jewellery shown by the HUF but not by other family members, despite similar circumstances. The Tribunal noted that the Wealth Tax Returns, though belated, were accepted in scrutiny assessments. The Tribunal also considered the explanation regarding the mismatch of serial numbers and the total gold declared, which was more than the gold found. Consequently, the Tribunal deleted the addition, concluding that the source of Jewellery was satisfactorily explained. 3. Addition of ?5,29,320/- on Account of Alleged Unaccounted Cash: During the search, cash amounting to ?24,78,045/- was found, of which ?24,00,000/- was seized. The Assessee claimed the cash belonged to M/s City Filling Station, M/s Barnala Filling Station, and M/s Sarvesh Spinners Pvt. Ltd. The AO accepted the cash balance of ?19,48,725/- for M/s Barnala Filling Station but not for the other concerns, resulting in an addition of ?5,29,320/-. The Tribunal noted that the Assessee was a Director in M/s Sarvesh Spinners Pvt. Ltd. and a Manager in M/s City Filling Station, as evidenced by records from the Registrar of Companies and the bank. The Tribunal found that the cash balances of these concerns were adequately explained and verifiable. Therefore, the Tribunal concluded that the AO and CIT(A) were not justified in making the addition and deleted it. Conclusion: The Tribunal allowed the appeal, condoning the delay in filing and deleting the additions of ?59,59,890/- for unexplained Jewellery and ?5,29,320/- for unaccounted cash. The Tribunal's decision was based on the satisfactory explanation and documentary evidence provided by the Assessee.
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