2020 (2) TMI 108 - AT - Income Tax

Revaluation of gold jewellery sized by ADIT team, Kolkatta - as per assessee no valuation of the seized jewellery carried out in the presence of assessee who is, Owner of the seized jewellery - HELD THAT - We are of the view that admittedly no valuation of the seized jewellery was carried out in the presence of Shri Chandra Prakash Soni who according to the assessee is, Owner of the seized jewellery and the ld. CIT(A) has not dealt with the specific grounds raised by the assessee for seeking the revaluation of the seized jewellery which is contained in the order of the ld. CIT(A). AO had also not made any independent inquiry in the jewellery market about the gold contents of studded jewellery during the remand proceedings whereas the assessee has submitted the report of independent jewelers of the market during the assessment proceeding. The assessee had also submitted three applications for seeking the revaluation of seized jewellery. It is important to mention here that application for seeking the revaluation of seized jewellery was not only moved by the assessee but also by the alleged owner i.e. Shri Chandra Prakash Soni. Even otherwise, it is the legitimate and legal right of the assessee or Shri Chandra Prakash Soni to get the revaluation of the jewellery in their presence and no prejudice shall be caused to the Department because said seized jewellery is still in the possession of the Department from the date of seizure whereas in this case the specific points/grounds raised by the assessee are not adjudicated upon. Hence, the rights of the assessee had been prejudiced. Therefore, keeping in view the interest of natural justice for seeking revaluation of the seized jewellery, we allow this ground of the assessee and direct the Department to get the seized jewellery revalued by the Registered Valuer of the Department and also to get the valuation report while keeping in view all the points raised by the assessee as mentioned above. Hence, this issue is restored back to the file of the AO for afresh adjudication as directed above. Thus Ground No. 1 of the assessee is allowed for Statistical purposes.

Summary

Issues Involved:
1. Revaluation of seized jewellery.
2. Treatment of seized jewellery as unaccounted for.
3. Double addition of declared stock value of seized jewellery.

Detailed Analysis:

1. Revaluation of Seized Jewellery:
The assessee challenged the valuation of jewellery seized by the ADIT team in Kolkata, arguing that the valuation was excessively high and conducted in the absence of the jewellery's owner. The jewellery, allegedly belonging to Shri Chandra Prakash Soni, was carried by the assessee as a broker. The valuation report by the Department's valuer was contested on grounds that it did not account for the wax content (60-70% of the total weight) and other non-gold materials. The assessee filed multiple applications for revaluation, asserting that the initial valuation was conducted under duress and without proper understanding. The CIT(A) rejected the revaluation request, citing the delay in raising the issue and the initial acceptance of the valuation by the assessee. However, the Tribunal found merit in the assessee's argument, noting the lack of valuation in the presence of the jewellery's owner and the detailed grounds raised for revaluation. The Tribunal directed the Department to conduct a revaluation by a Registered Valuer, considering all points raised by the assessee.

2. Treatment of Seized Jewellery as Unaccounted For:
The assessee argued that the seized jewellery was properly accounted for in the books of Mr. Chandra Prakash Soni and that the Department had accepted this in Mr. Soni's assessment order. The jewellery was treated as unaccounted for in the hands of the assessee, despite documentary evidence showing it was part of Mr. Soni's declared stock. The Tribunal did not provide a separate ruling on this issue, as it was interconnected with the revaluation matter and deferred pending the outcome of the revaluation.

3. Double Addition of Declared Stock Value of Seized Jewellery:
The assessee contended that the declared stock value of the seized jewellery was added twice—once in Mr. Soni's hands on a protective basis and again in the assessee's hands as unaccounted stock. The Tribunal deferred adjudication on this issue as well, given its connection to the revaluation and the need for a fresh assessment based on the new valuation.

Conclusion:
The Tribunal allowed the appeal for statistical purposes, directing the AO to conduct a fresh adjudication after revaluing the seized jewellery by a Registered Valuer, addressing all specific points raised by the assessee. The interconnected issues of treatment of seized jewellery and double addition were not adjudicated separately, pending the revaluation outcome. The decision emphasized the principles of natural justice, equity, and fair play, ensuring the assessee's right to a fair valuation process.