2024 (4) TMI 192 - AT - Income Tax

Unexplained money u/s 69A - cash and jewellery seized by the department in search u/s 132 in the premises of partnership firm of the assessee as well as on assessee - basis of seizure was the statement of the accountant - HELD THAT - Only submission that could be adduced by Ld. AR was that the income should be spread over the period during which it was earned. However, in the absence of any acceptable working shown to us, these submissions could not be accepted. The assessee has failed to even substantiate the fact that the income was earned over several years. Therefore, the orders of lower authorities, to that extent, find our concurrence. The cross-objection filed by the assessee stand dismissed. Addition of Jewellery - Arguments of Ld. Sr. DR that the CBDT instructions would apply only for seizure of the jewellery and not for source of the same could not be accepted. It has consistently been expressed by various High Courts that the quantities of jewellery as specified in the said circular could be considered as reasonable quantities considering the customs prevailing in Hindu Society. The source to that extent could not be questioned. It is also pertinent to note that the assessee, in sworn statement u/s 132(4), has attributed the jewellery as belonging to his wife, his brother's daughter, his wife's sister and his mother-in-law. It was also stated that his wife had brought 800 grams of jewellery as Streedhan during wedding. The same has not been questioned by Ld. AO and as such this fact remains uncontroverted. This fact alone would support the adjudication of Ld. CIT(A) that the impugned addition could not be sustained. Therefore, we concur with the same and dismiss the appeal of the revenue.

Summary

Issues Involved:
1. Deletion of addition as unexplained investment towards the value of jewellery.
2. Sustaining the addition as unexplained income u/s 69A of the IT Act.

Summary:

1. Deletion of Addition as Unexplained Investment Towards the Value of Jewellery:
The revenue contested the CIT(A)'s decision to delete the addition of Rs. 78,23,239/- made as unexplained investment towards the value of jewellery found during the search. The CIT(A) relied on the assessee's explanation that the income and resources from AYs 2014-15 to 2020-21 were sufficient to justify the investment in jewellery. The CIT(A) also considered various judicial decisions and the CBDT Instruction No. 1916, which acknowledges the customs in Hindu Society regarding the possession of jewellery. The Tribunal upheld the CIT(A)'s decision, noting that the revenue did not provide contrary evidence, and the assessee's explanation remained uncontroverted.

2. Sustaining the Addition as Unexplained Income u/s 69A of the IT Act:
The assessee challenged the CIT(A)'s decision to sustain the addition of Rs. 33,48,921/- as unexplained income u/s 69A. The cash was found during a search at the business premises of M/s Sri Ram Studios and was attributed to the assessee based on the accountant's statement. The Tribunal found that the assessee failed to substantiate the source of the cash and did not provide acceptable working to spread the income over several years. Therefore, the Tribunal concurred with the lower authorities and dismissed the cross-objection filed by the assessee.

Conclusion:
The Tribunal dismissed the appeal of the revenue regarding the addition of jewellery and upheld the CIT(A)'s decision. The Tribunal also dismissed the cross-objection filed by the assessee concerning the addition of cash as unexplained income u/s 69A. The order was pronounced on 3rd April 2024.