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TMI Blog2012 (8) TMI 357X X X X Extracts X X X X X X X X Extracts X X X X ..... rmises - in favour of assessee. Addition on account of investment in jewellery - Held that:- The assessee had made disclosure of Rs.2.76 crore for the block period from 1998-99 to 2004-05 out of which Rs.3.78 lakh disclosure was pertained on account of jewellery found. The remaining jewellery was as per the Board Circular as well as jewellery reflected in books of accounts. Therefore, this ground of appeal of the revenue is dismissed. Addition of Rs.7 lakhs unaccounted cash - Held that:- The assessee admitted the unaccounted cash Rs.7 lakh u/s 132(4) and claimed that this is part of disclosure of Rs.10426230/-, therefore, A.O. is directed to verify the total disclosure made by the assessee - If contention of the assessee is found correct, the credit may be given to the assessee and no double addition is to be made in the hands of the assessee - the matter is set aside to the A.O. - ITA Nos.79, 993, 868 & 994 of 2007 - - - Dated:- 15-6-2012 - Shri G.C. Gupta, and Shri T. R. Meena, JJ. Assessee by: Shree S.N. Soparkar with Shri R.M. Upadhyay, A. Rs. Revenue by: Shree D.P. Gupta, CIT-DR ORDER PER : T.R. MEENA, ACCOUNTANT MEMBER These two appeals of the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lete the addition of Rs.10,73,550/- made by the Assessing Officer on account of investment in jewellery. (ii) The CIT(A) has erred in law and on facts in directing to delete the addition of Rs.1,83,57,195/- made by the Assessing Officer on account of cash loan paid against the security of cheques. (iii) The CIT(A) has erred in law and on facts in directing to delete the addition of Rs.51,54,777/- made by the Assessing Officer on account interest accrued on such cash loans paid against security cheques. 6. I.T.A. No.868/Ahd/2007 (A.Y. 2004-05) Effective grounds of appeal are as under: (Assessment Year 2004-05) (i) Learned ACIT has erred in law and on facts to add an amount of Rs.7,00,000/- cash treated as unaccounted. Learned CIT(A) has also erred in confirming the addition without appreciating the fact that this is the amount withdrawn from bank accounts which are reflected in books of accounts. (ii) Learned ACIT has erred in law and on facts to add an amount of Rs.1,06,000/- investment in valuable as against Rs.95,000/- shown by the appellant and which is also covered up by amount disclosed by the appellant. (iii) Learned ACIT has erred in law and on facts to add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Y. 2003-04 D 13193873 0 13193873 D-1 10045304 10045304 0 F 1208698 0 1208698 CQ 9507347 698328 8809019 CQ-2 2435616 0 2435616 Total 43736368 11268632 32467736 Accordingly the sum of Rs.1,12,68,632/- is brought to tax in A.Y. 2003-04 and Rs.3,24,67,736/- in A.Y. 2004-05 as investment out of undisclosed sources given as cash loans against the security or cheques. 8. Being aggrieved with the order of the AO, the assessee filed appeal before the ld. CIT(A)-II, Ahmedabad who has thoroughly discussed this issue from page No.4 to 18 and addition reduced to Rs.23,22,262/-. The findings are as under:- I have carefully considered the assessment order and the above submissions. It is noticed that the search party found various cheques from the appellant s premises. It is also noticed that the appellant is in the business of cheque discounting. The appellant has in the course of recording of statement pointed out that no loan was advanced against the cheque of Jitendra Bhogilal Shah Group. This was very first statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CQ 16,99,576 12,49,395 (4,50,181) CQ-1 73,45,530 65,44,530 (8,01,000) CQ-2 24,35,616 24,35,118 (498) Cha. MM Builders 5,00,000 5,00,000 0 Total-B 3,65,15,181 3,51,92,919 13,22,262 III Discrepancies Annexure Nature of Discrepancies D Correct total of this annexure is 1,32,09,864/- There is totaling error on pg. no.3,9 and 11 prepare by search party, D-1 Correct total of this annexure is 1,00,45,304/- There is totaling error on pg.no.1 prepare by search party F No Discrepancy CQ Correct total of this annexure is 12,49,395/- There is totaling error on of sr. no.33 to 57 prepare by search party. CQ-1 Correct amount of this annexure is 65,44,530/- There is an error in writing of figure at sr. no.78 80 by search party. CQ-2 Correct amount of this annexure is 24,35,118/- There is an error in this annexure by search party. Rs.13,22,262 Total discrepancies Total:C IV Explanation for all cheques:- Amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the assessee filed first appeal before CIT (A)-II, Ahmedabad, who had passed order on 22.12.2006 in para no. 4.2 the CIT(A) reduced the quantum addition from Rs. 1,12,68,832/- to Rs. 23,22,262/-. In para no.5 of CIT(A) order, he directed to the A.O. to calculate interest on Rs. 23,22,262/- and allowed the appeal partially. 13. Now Revenue is before us on this issue, the Revenue as well as assessee filed detailed reply on this issue which is being considered in ground no. 3 for A.Y. 04-05 in subsequent paras. Coming to the assessee s C.O. No.79/Ahd/2007 for A.Y.03- 04. 14. The ground nos. 1 to 4 of C.O. are revolving around the grounds of appeal of revenue in ground nos.1 2 for which detailed finding has been given in disposing of revenue s appeal in preceding paras. Therefore, no separate findings are being given for disposing of this cross objection. Now, we take up Revenue s appeal in I.T.A. No.994/Ahd/2007 For AY- 2004-05) 15. The first ground of appeal of the revenue is against addition of Rs.10,73,550/- on account of investment in jewellery. The A.O. observed that during the course of search total jewellery 3920.66 gms. Valued Rs.2077476/- were found bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d: Particulars Grams Value-Rs. Jewellery found 3920.66 17,96,826/- Less: Jewellery to be considered as Explained as per Board Circular 1850.00 9,65,400/- Balance 2070.66 8,31,426/- Less: Jewellery purchased reflected in accounts 870.27 4,52,542/- Difference considered in disclosure 1200.39 3,78,884 In view of the above position the addition made is not justified and is deleted. 17. Aggrieved by the order of ld. CIT(A), revenue is in appeal before us. At the time of hearing the ld. D.R. vehemently supported the order of the A.O. and the ld. Counsel for the assessee, on the other hand, relied on the order of ld. CIT(A) and reiterated the same submission made before the lower authority and reliance was placed on the Board Circular on jewellery. 18. After hearing both the parties and perusing the records, the assessee had made disclosure of Rs.2.76 crore for the block period from 1998-99 to 2004-05 out of which Rs.3.78 lakh disclosure was pertained on account of jewellery found. The remaining jewellery was as per the Board Circular as well as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and business premises of the assessee. During this search operation assessee made a disclosure of Rs.2.76 crores for the block period from 1998-99 to 2004-05 out of which an amount of Rs.1.41 crores pertained to Asst. Year 2004-05 which is not in dispute. This disclosure made by the assessee has alsobeen accepted by the Revenue and the taxes due have been paid by the assessee. The fact that against the disclosure of Rs.1.41 crores made for Asst. Year 2004-05 the assessee has shown recovery of Rs.51.81 lacs during the year under appeal in respect of the business cheques found during the search and against which loans were admitted to have been advanced to various parties by the assessee has also been accepted by the AO. The only dispute before us that assessee has not shown any interest income against the aforesaid loans while the AO has charged @18% on these loans and added the same to the total income of the assessee as notional interest income. The case of the Revenue that advances to the tune of Rs.1.41 crores were lying with assessee s clients and interest must have been charged on those advances was, however, not substantiated by any evidence brought on record. If the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on seized material about charging of interest and no evidence had been gathered by the A.O. from the loanee. In absence of any conclusive evidence, the addition cannot be sustained. The A.O. made addition on conjuncture and surmises. Therefore, Revenue s appeals in A.Y. 03-04 04-05 on this issue, are dismissed. Now we take up assessee s appeal ITA No. 868/Ahd/2007 for A.Y.2004-05. 24. The first ground of the assessee was addition of Rs.7 lakhs unaccounted cash. The A.O. observed that during the course of search total cash of Rs.19,71,700/- was found out of this Rs.1650000/- was seized. The assessee admitted u/s 132(4) of the I.T. Act that Rs.7 lakhs was unaccounted. Accordingly, the A.O. made addition of Rs.7 lakhs in the income of the assessee. 25. Being aggrieved by the order of the A.O., the assessee filed first appeal before the CIT(A)-II, Ahmedabad who confirmed the addition. The CIT(A) observed as under:- I have considered the assessment order and the above submissions. Although the appellant has claimed that cash found represents cash balance as per cash book of different entities and that the cash balance is representing the withdrawls made form bank account ..... X X X X Extracts X X X X X X X X Extracts X X X X
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