2021 (1) TMI 740 - AT - Income Tax

Challenging the assessment framed by the AO u/s 143(3) - AO had obtained prior approval of JCIT u/s 153D of the Act which is contrary to the provisions of the Act - HELD THAT - We find that CIT(A) while deciding the ground has noted the fact that he had called for the assessment records and after its examination, he has noted that AO had sought consolidated approval of Addl.CIT for A.Y. 2007- 08 to 2012-13 pertaining to proceedings u/s 153A of the Act. He has thereafter noted that the draft order for AY 2013-14 was also clubbed with the consolidated proposal which appeared to be a bonafide mistake. He has further given a finding that no directions were issued by Addl.CIT to the AO to complete the assessment order for 2013-14 in any particular manner. Before us, no material has been placed by the assessee to demonstrate that the findings of CIT(A) is incorrect or there is any fallacy in the findings of CIT(A). In such circumstances, we do not find any merit in the present ground raised by the assessee. Thus Ground Nos. 1 and 2 are dismissed. Unexplained cash found at the time of search - AO had made the addition of cash found from the locker as being unexplained - HELD THAT - We do not find any justifiable reason by CIT(A) for disregarding the submission of assessee of the amount being out of Stridhan more so when the assessee has been maintaining cash book and has stated to withdrawn more ₹ 20,00,000/- from the bank account and substantial addition has been deleted by accepting the explanation of the assessee - we find merit in the submission of the Learned AR. CIT(A) was not justified in upholding the addition of ₹ 60,000/-. We therefore direct its deletion. As far as the relief of ₹ 5,33,000/- which has been granted by CIT(A) and against which Revenue is before us, Revenue has not pointed to any fallacy in the findings of CIT(A). Unexplained jewellery - assessee had acquired jewellery weighing approximately 7090 gms between 08.05.2003 (date of previous search) and 16.01.2013 (date of the present search) - CIT-A deleted addition - HELD THAT - CIT(A) while deleting the addition has given a finding that assessee had given the breakup of purchase of jewellery made during AY 2004-05 to 2012-13 duly supported by bank statements showing the details of such purchases and that the payment for bulk of the purchases have been made by cheque. He has further noted that the aforesaid details were available before the AO but the AO for mysterious reasons has not examined the same. He has also given a finding that assessee has also provided the capital accounts which are duly supported by purchases and which also support the year wise purchase as claimed by the assessee. He has further given a finding that the difference in quantity between the weight of jewellery as per the statement of acquisition (8678.323 gms) and the actual quantity of jewellery found at the time of search (9373.3 gms) was 694.977 gms valued at ₹ 21,68,485/- for A.Y. 2013.14 and against which Smt Kanchan Bhalla and Smt Divya Bhalla had made additional disclosure of ₹ 35,79,530/- and ₹ 39,64,299/- respectively on account of unexplained jewellery thus covering the shortfall. Before us, no fallacy in the findings of CIT(A) has been pointed out by Revenue. - Revenue appeal dismissed.

Summary

Issues Involved:
1. Validity of assessment framed by the AO under Section 143(3).
2. Addition of ?60,000/- upheld by CIT(A) as unexplained cash.
3. Deletion of addition of ?5,33,000/- by CIT(A) as unexplained cash.
4. Deletion of addition of ?1,59,98,173/- by CIT(A) as unexplained jewellery.

Issue-wise Analysis:

1. Validity of Assessment Framed by the AO Under Section 143(3):
The assessee contended that the assessment under Section 143(3) was invalid as the AO sought approval from JCIT, which is mandated for assessments under Section 153A. The CIT(A) found that the AO sought consolidated approval for multiple years, including AY 2013-14, which appeared to be a bona fide mistake. No directions were issued by Addl.CIT to complete the assessment in a particular manner. The Tribunal found no merit in the assessee's contention and upheld the validity of the assessment framed by the AO under Section 143(3).

2. Addition of ?60,000/- Upheld by CIT(A) as Unexplained Cash:
During the search, cash amounting to ?6,61,200/- was found at the assessee's residence and ?5,93,000/- in a locker. The AO did not accept the source of cash as bank withdrawals due to the lack of an operational log book. The CIT(A) upheld an addition of ?60,000/- as unexplained cash, representing the assessee's Stridhan. The Tribunal found merit in the assessee's submission that the amount represented pin money, customary for ladies, and directed its deletion, finding no justifiable reason for CIT(A) to disregard the explanation.

3. Deletion of Addition of ?5,33,000/- by CIT(A) as Unexplained Cash:
The CIT(A) deleted the addition of ?5,33,000/- found in the locker, accepting the assessee's explanation of cash withdrawals from the bank. The Revenue could not point out any fallacy in CIT(A)'s findings. The Tribunal upheld the deletion, finding no reason to interfere with CIT(A)'s order.

4. Deletion of Addition of ?1,59,98,173/- by CIT(A) as Unexplained Jewellery:
During the search, jewellery weighing 9373.300 gms valued at ?3,94,80,175/- was found. The AO added half the value in the assessee's hands, considering it unexplained. The CIT(A) deleted the addition, noting that the bulk of jewellery purchases were made by cheque and supported by bank statements. The difference in jewellery weight was covered by additional disclosures made by Smt. Kanchan Bhalla and Smt. Divya Bhalla. The Tribunal found no fallacy in CIT(A)'s findings and upheld the deletion of the addition.

Conclusion:
The appeal of the assessee was partly allowed, and the appeal of the Revenue was dismissed. The Tribunal upheld the validity of the assessment under Section 143(3), directed the deletion of the ?60,000/- addition as unexplained cash, upheld the deletion of ?5,33,000/- as unexplained cash, and upheld the deletion of ?1,59,98,173/- as unexplained jewellery.