2019 (11) TMI 519 - AT - Income Tax

Addition in respect of cash found during the course of search - burden of proof - HELD THAT - It is true that the findings of the ld. CIT(A) are not only illogical but also do not find any place in the law of Income tax. It is equally true that the onus is upon the assessee to explain the possession of cash found at the time of search. In our considered opinion, the burden of proof is more when cash is found in the locker of a bank and not found deposited in the bank account. Considering the status of the appellant s family, her life style and standard of living, vis a vis returned income, we are of the considered opinion that the lower authorities have already given substantial relief in respect of cash found from the locker. Therefore, the findings of the ld. CIT(A) upholding the addition of a paltry sum of ₹ 1,02,800/- does not call for any interference. Ground No. 1 is dismissed. Addition respect of jewellery found during the course of search - HELD THAT - The undisputed fact is that the jewellery weighing 2300.45 gms was found from Locker No. 323 in Canara Bank, SDA Branch, New Delhi and jewellery weighing 464.75 gms jewellery was found from the residence of the appellant. We find that the Assessing Officer has followed Instruction No. 1916 of 1994 of CBDT in giving relief of 500 gms. per married lady in the family and has further allowed relief of 100 gms in respect of the husband of the appellant. CIT(A) further considering the status of the assessee s family, vis a vis the returned income of the appellant and her husband and after considering the fact that the appellant has been married for more than 25 years, further gave relief of 200 gms of gold jewellery in the case of mother in law of the assessee. After considering the complete status, relief has been granted and addition of ₹ 19.48 lakhs was confirmed by the CIT(A). Even before us, assessee has been constantly harping upon the status of the family of the appellant and returned income of the appellant and her husband. We are of the considered opinion that the first appellate authority has very judiciously considered all the aspects of the appellant and has given substantial relief. We are of the considered view that the status of the family would not justify unexplained possession of jewellery. Even if a family has the highest status in the society, still the family is accountable for the possession of gold/jewellery/cash in hand and cannot take the shelter behind its status without explaining the source of possession. Assessee had taken an alternative plea that the valuation as per the gms. of gold jewellery adopted by the Assessing Officer should be taken as basis for making the addition of balance unexplained jewellery. We find that this has also been discussed by the ld. CIT(A) at para 7.11 of his order on page 12 wherein the ld. CIT(A) has given a categorical finding that this plea of the appellant cannot be accepted because the entire jewellery is not gold only. It has items of diamond also. Therefore, the act of the Assessing Officer in taking the rate as per rates of valuation of gold in valuation report cannot be stated to be erroneous. We do not find any error or infirmity in this finding of the ld. CIT(A). The alternative plea is dismissed.

Summary

Issues:
1. Addition of cash found during search
2. Addition of jewellery found during search

Issue 1: Addition of Cash Found During Search

The appeal was against the addition of ?1,02,800 in cash found during a search operation. The Assessing Officer made the addition as unexplained cash despite the explanation provided by the assessee regarding the source of the cash received as gifts during ceremonial functions. The Commissioner of Income Tax (Appeals) partially accepted the explanation but confirmed the addition of ?1,02,800. The Tribunal upheld the decision, stating that the burden of proof is higher when cash is found in a bank locker. They found the lower authorities had already given substantial relief, so interference was not warranted.

Issue 2: Addition of Jewellery Found During Search

Regarding the addition of ?19,48,159 for jewellery found during the search, the Assessing Officer allowed relief based on CBDT's Instruction No. 1916 of 1994, but still made the addition. The Commissioner (Appeals) considered the family's status and income, allowing further relief but confirming the addition. The Tribunal upheld this decision, emphasizing that the family's status does not justify unexplained possession of jewellery. They dismissed the alternative plea regarding valuation, stating that the Assessing Officer's approach was not erroneous. The Tribunal concluded by dismissing the appeal, noting that the Commissioner had judiciously considered all aspects and provided substantial relief.

In summary, the Tribunal upheld the additions of cash and jewellery found during a search operation, emphasizing the burden of proof on the assessee and the need to explain the source of possession. The decisions were based on the family's status, income, and relevant legal instructions, with no interference deemed necessary in both instances.