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TMI Blog2015 (8) TMI 883X X X X Extracts X X X X X X X X Extracts X X X X ..... . An expert opinion cannot be discarded without giving any room. Thus, the order of A.O. is bad in law.Merely saying that the assessee has not explained, when the A.O. stated otherwise, cannot be countenanced. The shortage or excess holding of gold and jewellery, under the facts of this case, has to be arrived at on an overall basis. Report of the Departmental Valuation Officer should be the basis of determining the value of unexplained jewellery. Thus, this ground of assessee is allowed and addition toward unexplained jewellery is deleted. - Decided in favour of assessee. Unexplained cash - Held that:- The A.O. and Ld. CIT(A) do not state that which evidence is sought by them and what was not furnished by the assessee. Withdrawal from bank accounts is very much evidenced by bank pass book and statement. In view of above discussion, though we are not accepting the general argument made by assessee based on turnover of the group and taxes paid, status of family etc., we delete the addition solely on the basis that the extract of copies of books of accounts, remained uncontroverted by the Department. This addition is deleted - Decided in favour of assessee. Unexplained gifts - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.03.2011 along with detailed questionnaire were issued. 3. The A.O. completed the assessment u/s 143(3) of the Act determining the total income of assessee at ₹ 48,33,370/- inter alia making following additions: i) Unexplained jewellery Rs.31,79,480/- ii) Unexplained cash Rs.03,75,000/- iii) Unexplained gifts Rs.05,21,000/- 4. Aggrieved, the assessee carried the matter in appeal before Ld. CIT(A). The first appellate authority granted part relief to the assessee. Further aggrieved, the assessee is in appeal before us on the following grounds: i) The worthy CIT has erred in disallowing unexplained jewellery worth ₹ 24,67,018/- ii) The worthy CIT has erred in making disallowance of unexplained cash amounting to ₹ 3,75,000/-. 5. The revenue filed cross appeal on the following grounds: On the facts and in the circumstances of the case the Ld. CIT(A) has erred in:- i) The order of the CIT(A) is not correct in law and facts. ii) On the facts and circumsta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Unexplained Jewellery 2263.240gms 255.850 gms Net weight of unexplained jewellery by taking the same %age as adopted by the assessee. 2025.147 gms On perusal of the above table it has been noticed that the assessee has reduced 10.52% from the gross weight to arrive at net weight of the jewellery. The method adopted by the assessee to arrive net weight appears to be correct as this is practically used by the jewelers at the time of taking old jewellery from the customers. Departmental valuer valued total 31 items of jewellery found from locker No. 458 and 15 items from locker No. 49 out of which 15 items of jewellery from locker No. 458 were remained unexplained by the assessee. The items which were not explained are mentioned at 51. No. 2,10, 11, 15, 16, 20, 21, 22, 23, 24, 26, 28, 29, 30 31 in the list of valuation report from the locker No. 458. The assessee had herself admitted in her statement recorded on 30.3.2010 that the above mentioned jewellery may be considered as unexplained. The gross weight of the u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r submitted that the assessee has never admitted to have any unexplained jewellery during the search proceedings. In support of this contention, he referred to questions No.3 4 and answers thereto given in the statement recorded from the assessee on 30.03.2010. He further argued that the first appellate authority has committed an error in changing the basis of addition. While the A.O. has recorded the finding that the assessee has explained the jewellery and net weight of 5144.600 gms, the Ld. CIT(A) brought a new concept of item-wise tally of jewellery and made the addition. This addition was also not based on the departmental valuation report. 8. Regarding the issue of addition on account of unexplained cash, he submitted that the assessee belongs to the Sudhir Group of companies which has turnover of ₹ 1,000 crores and there are seven members of the assessee s family who pay substantial amount of tax. In addition, he submitted that there are HUF of over 10 small private limited companies and all of them have certain cash balances which are kept with the Director or proprietor. He further submitted that the total cash withdrawal was ₹ 1,13,19,000/- and in fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee has gross weight of 7949.550 gms and net weight was 5400.450 gms. The A.O. held that the assessee has explained jewellery having gross weight 5686.310 gms and net weight 5144.600 gms. This leaves us with unexplained jewellery of net weight of 255.850 gms and gross weight of 2263.240 gms. The difference in net weight is reported by the departmental valuer. Instead of accounting the net weight jewellery as arrived by Departmental Valuer, the A.O. deducted 10.52% from the gross weight of jewellery i.e. 2263.2450 gms, which is gross weight of unexplained jewellery arrived at par the departmental valuer and arrived at a net weight of 2025.147 gms. of jewellery. Such estimation cannot be the basis of addition. When DVO has given a report specifying the gross and net weight of jewellery found, then applying a rough and ready formulae without an scientific basis to arrive at net weight, is only surmises and conjectures. Such a calculation cannot be the basis of addition. An expert opinion cannot be discarded without giving any room. Thus, the order of A.O. is bad in law. 13. We have also examined the statement of assessee recorded at the time of search. There is no admissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut finding defect in these books of accounts and without specifically stating as to why the cash flow statement cannot be accepted, an addition on general presumption made by the and assumption cannot be sustained. 16. Ld. D.R. vehemently submitted that evidence has not been given by the assessee. The A.O. and Ld. CIT(A) do not state that which evidence is sought by them and what was not furnished by the assessee. Withdrawal from bank accounts is very much evidenced by bank pass book and statement. In view of above discussion, though we are not accepting the general argument made by assessee based on turnover of the group and taxes paid, status of family etc., we delete the addition solely on the basis that the extract of copies of books of accounts, remained uncontroverted by the Department. This addition is deleted. 17. We now come to the revenue s appeal in I.T.A.No. 6436/Del/2012. Ground No. 1 is general in nature. Ground No.2 is on the relief given by the first appellate authority of the addition made on account of unexplained jewellery. In view of our discussion in the assessee s appeal above, this ground has to be dismissed. 18. Ground No.3 is regarding deletion of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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