2017 (9) TMI 956 - AT - Income Tax

Unexplained jewellery - source of the impugned addition for jewellery - Held that - Assessee s plea that the jewellery did not belong to the assessee but belong to the married daughter is not sustainable in light of the fact that in search the assessee s wife Smt. Smita Thakkar in her statement dated 28.09.2011 in response to Q.4 wherein she was asked to explain the source of jewellery found in Locker No. 321, she has confirmed the jewellery found in locker no. 321 consists of Gold & Diamond jewellery are valued at ₹ 39,54,600 on 28.09.2011. The assessee s wife further explained that jewellery belongs to herself and her daughter-in-law and also of her family members consisting of herself and her husband the assessee. It was also explained by her that the jewellery pertains to all the family members. Further, in response to the Assessing Officer s enquiry on the source of the jewellery, assessee s Counsel has given explanation and reconciliation. In those submissions it was never stated that assessee cannot give any explanation as the jewellery did not belong to him or that the onus was not upon the assessee to explain the same. When the assessee s explanation has not been accepted, for being devoid of cogency, assessee is raising ground that the jewellery did not belong to the assessee, rather it belonged to his daughter. As find that the submission is not at all sustainable. CIT(A) in the case of assessee s daughter has clearly held that the said addition on account of jewellery was not sustainable in her hands. In this background, we find that orders of authorities below are very cogent and correct. The shifting of stand by the assessee now de hors any cogent explanation for the source of impugned jewellery found, is not at all sustainable. - Decided against assessee.

Summary

Issues Involved:

1. Addition of ?10,02,226/- on account of unexplained jewellery.
2. The jewellery found in a bank locker in the name of the appellant's married daughter.
3. Reliance on views expressed in another appellant's case by another CIT(A) without jurisdiction.

Detailed Analysis:

1. Addition of ?10,02,226/- on account of unexplained jewellery:

The Assessing Officer (AO) made an addition of ?10,02,226/- for unexplained jewellery found during a search action on the Thakkar group. The total jewellery found was 3251.480 grams, out of which the AO accepted explanations for some portions but found 1558.2 grams unexplained. The AO's detailed analysis included:

- 982.000 grams were supported by bills, valuation reports, and bank statements.
- 567.200 grams claimed as a gift by Smt. Darshita lacked documentary evidence.
- 584.70 grams were substantiated by a Wealth-Tax assessment order.
- 126.55 grams were explained with a valuation report.
- 349.00 grams and 72.99 grams were claimed to be purchased from cash withdrawals but lacked bills or vouchers.
- 166.300 grams were found on the person of the assessee with no explanation.
- 180.000 grams were claimed as cash gifts but lacked documentary evidence.
- 222.77 grams had no explanation.

The AO concluded that 421.99 grams were unexplained in the hands of the assessee, valued at ?10,02,226/-.

2. Jewellery found in a bank locker in the name of the appellant's married daughter:

The appellant contended that the jewellery did not belong to him but to his married daughter. However, the CIT(A) upheld the AO's decision, noting that the jewellery found in the locker was explained by the assessee's wife as belonging to family members, including the appellant. The CIT(A) also referenced a statement from the assessee's wife confirming the jewellery's ownership within the family.

3. Reliance on views expressed in another appellant's case by another CIT(A) without jurisdiction:

The appellant argued that the CIT(A) erred by relying on views from another appellant's case by a different CIT(A) who had no jurisdiction over the present case. However, the CIT(A) justified the addition by considering the appellant's explanations and the lack of supporting evidence for the claimed sources of the jewellery.

Conclusion:

The ITAT upheld the orders of the AO and CIT(A), finding that the explanations provided by the appellant were not cogent and that the jewellery was rightly considered unexplained in the appellant's hands. The appeal by the assessee was dismissed, confirming the addition of ?10,02,226/- for unexplained jewellery. The shifting of the appellant's stand regarding the ownership of the jewellery was not found sustainable.