2018 (11) TMI 1246 - AT - Income Tax

Unexplained jewellery - CIT-A upholding the addition to the extent of 10% of jewelry seized as unexplained - Held that - On identical facts and circumstances in the similar search and in case of another two female members of the same family the identical additions made by the revenue has been deleted by the coordinate benches in the above stated orders submitted by the learned authorized representative. In view of this, the issue is squarely covered in favour of the assessee and respectfully following the decision of the coordinate benches as stated before, where the learned departmental representative could not find any difference in the facts and circumstances, we allow ground number one of the appeal in favour of the assessee. Addition as cash in hand found at the residence of the assessee in view of the explanation given and other evidences submitted - Held that - Except explaining, the cash left by husband of the appellant no other evidences were submitted before the lower authorities. It was also not known whether the husband of the assessee was in possession of the above sum in cash at the time of his death or not. We also appreciate that lower authorities have already granted benefit of ₹ 1 lakh to the assessee even in absence of any evidence. However it cannot be denied that looking to the financial status of the assessee and the total amount of jewelry found at the residence of the assessee and the size of the business carried out by the family and also the size of rental income earned by the assessee being a lady member, Gift of ₹ 4.10 Lkahs received on her birthday from non relatives offered in her return of income and accepted by AO, the sum of ₹ 1 Lakh treated as explained out of the total sum received of ₹ 2.25 lakhs by the assessee from her husband seems quite low. Contrarily the acceptance of full sum as explained in absence of any evidence is not possible. Therefore, refereeing to facts stated above, further reduction in the addition is granted of ₹ 50,000/- on account of addition in the hands of the assessee on account of cash received from deceased husband of the assessee. Hence, we direct the LD AO to restrict the addition only to the extent of ₹ 1 Lakhs instead of ₹ 1.50 lakhs - Decided partly in favour of assessee.

Summary

Issues:
1. Unexplained jewelry valuation and cash in hand addition for Assessment Year 2011-12.

Analysis:
1. Unexplained Jewelry Valuation:
- The assessee and revenue appealed against the order of the CIT(A) regarding unexplained jewelry and cash in hand additions.
- The jewelry valuation was disputed, with the assessee arguing that the jewelry value was explained in wealth tax returns and should be credited based on family members. The AO added the jewelry value under section 69A.
- The CIT(A) confirmed the addition of 10% of the jewelry value and deleted the rest, citing similar cases where additions were deleted for other female family members.
- The Tribunal found in favor of the assessee, noting that similar additions for other family members were deleted by coordinate benches. The Tribunal allowed the appeal, stating the issue was covered in favor of the assessee based on past decisions.

2. Cash in Hand Addition:
- Cash was found during a search at the assessee's residence, with the explanation provided related to inheritance, rental income, and gifts.
- The AO accepted part of the explanation but added a portion of the cash as unexplained. The CIT(A) upheld the addition of ?1.5 lakhs out of ?4.10 lakhs.
- The Tribunal considered the financial status of the assessee and the evidence presented. It found that the amount left by the deceased husband was not fully explained but granted a reduction in the addition to ?1 lakh instead of ?1.5 lakhs.
- The Tribunal partially allowed the appeal, reducing the cash in hand addition to ?1 lakh instead of ?1.5 lakhs, considering the circumstances and financial status of the assessee.

In conclusion, the Tribunal partly allowed the assessee's appeal regarding unexplained jewelry valuation and cash in hand addition for the Assessment Year 2011-12, based on past decisions and the evidence presented during the proceedings.