9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (8) TMI 330 - AT - Income TaxUnexplained jewellery u/s 69A - purchase or gold and silver jewellery - HELD THAT - In respect of 266.138 grams of gold jewellery purchased during the financial year relevant to A.Y 2012-13 amounting to ₹ 782,233/-, the assessee has come forward with an explanation that these purchases have been made on the occasion of marriage of his son, Shaurav Pareek and source of such purchases has been stated to be cash payment of ₹ 4,92,233/- and remaining through cheque. And we find that the source of cash payment has been reasonably explained by way of cash withdrawals by the assessee from his bank accounts around the same time when the marriage of his son was solemnized. Thus to the extent of ₹ 782,233 worth of gold jewellery, the same is taken as explained by the assessee by way of purchase bills and withdrawals/payment from his bank account. Regarding the remaining jewellery worth ₹ 136,631/-, we find that no sufficient explanation is available on record in terms of source of cash payment towards purchase of such jewellery. The disclosure of gold jewellery in the balance sheet as on 31.03.2016 is demonstrate of purchases made during the financial year 2015-16 relevant to A.Y 2016-17 in absence of anything on record that such purchases were made in the earlier period and thus doesn t come to the aid of the assessee in terms of explanation of possession of the jewellery during the financial year relevant to impugned assessment year. Therefore, the addition to the extent of ₹ 136,631/- towards unexplained gold jewellery is hereby confirmed. Regarding silver articles, AO has recorded a finding that assessee has furnished no explanation and the ld CIT(A) has recorded a finding that the assessee has failed to explain the source of acquisition of silver articles. Before us, it has been contended for the first time that the silver articles weighing 3844.50 grams are supported by purchase bills seized during the course of search. As we have held mere purchase bills are not sufficient to explain the source of purchase of silver items where such purchases are made in cash and in absence of any explanation on record in terms of availability of cash in the hands of the assessee at the relevant point of time of purchase, such purchases cannot be treated as explained by the assessee. In the result, the addition made by the AO is hereby confirmed. Addition on account of undisclosed receipt u/s 68 - seized document has been found from the residential premises of the assessee and during the course of assessment proceedings, the assessee has contended that the said document pertains to his son, shri Shaurav Pareek which was however not accepted and addition was made in the hands of the assessee - HELD THAT - Post completion of the impugned assessment proceedings, basis the aforesaid submissions of the assessee that these and other documents seized from his premises are related to his son, shri Shaurav Pareek, proceedings in the hands of shri Shaurav Pareek were initiated u/s 153C of the Act and in terms of notice u/s 142(1) referring to seized document under consideration the AO has stated that since the said documents pertains to shri Shaurav Pareek, he was called upon to furnish his explanation and submissions before the AO. In response, shri Shaurav Pareek submitted that the said document pertains to him and given his explanation regarding the entries found in the said document. There is thus a clear finding by both the Revenue and the admission by shri Shaurav Pareek that the said documents pertains to him and in such a scenario, the contention of the assessee has to be accepted that the said document pertains to his son and we therefore find that the addition, if any, where required as per law needs to be made in the hands of shri Shaurav Pareek and there is no basis for making addition based on such seized documents in the hands of the assessee. In the result, the addition so made is directed to be deleted and the ground of appeal is allowed.
Issues Involved:
1. Addition of ?12,85,536/- on account of unexplained jewellery under Section 69A of the Income Tax Act, 1961. 2. Addition of ?7,33,400/- on account of undisclosed receipt under Section 68 of the Income Tax Act, 1961. 3. Initiation of penalty proceedings under Section 271AAB(1)(c) of the Income Tax Act, 1961. Issue-Wise Detailed Analysis: 1. Addition of ?12,85,536/- on account of unexplained jewellery under Section 69A of the Income Tax Act, 1961: The assessee filed a return of income declaring ?15,23,040/-. During a search on 14.10.2015, gold jewellery weighing 1640.32 grams valued at ?42,16,575/- and silver articles weighing 10994 grams valued at ?3,64,672/- were found. The assessee claimed that 1300 grams of gold jewellery were reasonable possession as per CBDT Instruction No.1916 dt. 11.05.1994 and provided purchase bills for additional jewellery. The AO considered 1300 grams as explained and treated the remaining 340.32 grams valued at ?9,18,864/- as unexplained, adding it to the income. The AO also treated the entire silver as unexplained. The CIT(A) upheld the AO's findings. The ITAT referred to the case of Sh. Ram Prakash Mahawar vs. DCIT, where it was held that the CBDT Instruction No. 1916 does not cover jewellery explained by purchase bills. The ITAT found that the assessee and family members had purchased 708.226 grams of gold jewellery between 2008-2015, supported by bills. However, most purchases were in cash, and the source of cash was not satisfactorily explained. The ITAT accepted the explanation for 266.138 grams purchased during the marriage of the assessee’s son, worth ?782,233/-, but not for the remaining ?136,631/-. The ITAT confirmed the addition of ?136,631/- towards unexplained gold jewellery. Regarding silver, the ITAT found that the assessee failed to explain the source of acquisition for 10994 grams. Thus, the addition of ?3,64,672/- was confirmed. 2. Addition of ?7,33,400/- on account of undisclosed receipt under Section 68 of the Income Tax Act, 1961: During the search, a paper showing receipt of ?25,000/- against trading margin and ?8,400/- as interest on ?7,00,000/- from "Chintu" was found. The AO added ?7,33,400/- to the income, rejecting the assessee's claim that the paper belonged to his son, Sh. Shaurav Pareek. The CIT(A) upheld this addition. The ITAT noted that during the assessment of Sh. Shaurav Pareek, he admitted that the paper belonged to him and explained the entries. The AO for Sh. Shaurav Pareek did not draw any adverse inference based on this paper. The ITAT concluded that the document pertained to Sh. Shaurav Pareek and not the assessee. Therefore, the addition in the assessee's hands was deleted. 3. Initiation of penalty proceedings under Section 271AAB(1)(c) of the Income Tax Act, 1961: The issue of penalty proceedings was not explicitly detailed in the judgment. However, given the partial relief granted to the assessee, the initiation of penalty proceedings under Section 271AAB(1)(c) would be reconsidered in light of the revised findings. Conclusion: The appeal was partly allowed. The addition of ?136,631/- towards unexplained gold jewellery and ?3,64,672/- towards unexplained silver was confirmed. The addition of ?7,33,400/- on account of undisclosed receipt was deleted. The issue of penalty proceedings under Section 271AAB(1)(c) would be reconsidered based on the revised findings.
|
