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TMI Blog2016 (11) TMI 1035X X X X Extracts X X X X X X X X Extracts X X X X ..... essee and his family members in the current year as well as during the last seven years - Decided in favour of assessee Addition on account of unexplained investment in gold ornaments and diamond jewellery - Held that:- law does not permit to make entire addition on account of difference found in the jewellery recovered and the jewellery disclosed in wealth-tax returns/ books of account, in the hands of the assessee only. Under these circumstances, we find it appropriate to send this issue back to the file of the Assessing Officer with the direction that the Assessing Officer is permitted to make addition only with respect to the jewellery found from the assessee that too only for the amount which remains unexplained. The assessee is free to submit requisite details and documentary evidences to explain the source of the jewellery found from his possession. The assessee is also free to submit before the Assessing Officer, copies of judgments and Central Board of Direct Taxes circular which have been relied on before us to explain the jewellery found from its possession - I. T. A. Nos. 3296 and 3650/Mum/2009 - - - Dated:- 5-8-2016 - Amit Shukla (Judicial Member) And Ashwani Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9] 227 CTR 388 (All). 2. During the course of hearing, arguments were made by Shri S. C. Gupta, authorised representatives (AR) on behalf of the assessee and by Shri G. M. Doss, Departmental representative (Commissioner of Income- tax-Departmental representative) on behalf of the Revenue. 3. The additional ground was not pressed during the course of hearing and, therefore, the same is dismissed. 4. Ground No. 1 : This ground deals with the addition made on account of cash found at the time of search which has been treated as unaccounted cash and, therefore, added as unexplained income of the assessee. 4.1. Brief background is that a search and seizure operation was carried out at the residence of the assessee under section 132 of the Act. During the course of search, cash amounting to ₹ 6,36,900 was found, out of which ₹ 5,51,000 was seized. The assessee was asked to explain the source of cash found at ₹ 6,36,900. It was explained before the Assessing Officer that source of cash found at the time of search was out of withdrawals made at different times during the period of several years from the bank accounts of the family members. The assessee also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artmental representative submitted that though the assessee had sufficient withdrawals during the past few year but details of household expenses and other expenses which have been met out of the withdrawals have not been furnished and since the assessee had offered that this amount as undisclosed income, therefore, addition was rightly made by the lower authorities and should be upheld. 4.6. We have gone through the entire facts and circumstances of the case. It is noted that primary evidences relied upon by the Revenue for making this addition is the statement of the assessee recorded at the time of search, and relevant part of the same reads as under : Question. During the course of search under section 132 today at your residence cash of ₹ 6,36,900 were found and out of that ₹ 5,51,000 is seized. Please explain the source of this cash ? Answer. The cash which is found today during the search is in fact accumulated in my house through day-to-day withdrawals from banks and other means. But the cash is not accounted for in my books as my books is not maintained for this purpose. This cash cannot be explained in books. The seized cash of ₹ 5,51,000 is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat many other family members were also filing their Income-tax returns as well as wealth-tax returns separately. Thus, it appears that the entire cash has been wrongly shown as seized from personal possession of the assessee and, thus, the entire cash has been wrongly added in the hands of the assessee only. 4.9. Further, it is noted that the assessee has been claiming right from the stage of the Assessing Officer that the assessee is having sufficient amount of cash withdrawals since last many years. The point worth noting here is that this fact was stated by the assessee in his statement also at the time of search. The learned Assessing Officer has chosen to rely only upon that part of statement which suited him and ignored the remaining one. It is well accepted position of law that in the Income-tax proceedings the theory of approbation and reprobation is not applicable. The Revenue authorities are not expected to blow hot and cold together. The Assessing Officer appears to have followed the rule of head I win tail you lose , whereas the Revenue authorities are expected to work in fair and trans parent manner. Before making any addition, it is expected from the Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut of 5266.490 grams of gold jewellery, 3485 grams was either ancestral or purchased sometime prior to 1970, 3485 grams of gold jewellery was shown in the valuation report prepared for filing wealth-tax returns in respect of the members of the assessee's family, about 350 grams of gold jewellery was purchased sometime around 1997 at the time of wedding of the assessee's daughter, about 500 grams were purchased in the year 2000 at the time of the wedding of the assessee's son and the balance of about 931.49 grams were purchased sometime in the year 2002. It was submitted that all the jewellery was purchased out of cash withdrawals from the bank. The assessee claimed that his two unmarried sisters were staying with him and one married sister was also residing at his house, jewellery of all the sisters were placed in the assessee's house. It was also contended that jewellery of the assessee's daughter gifted to her by her grandfather was also placed at the assessee's residence. The Assessing Officer held that the assessee did not submit any documentary evidence in support of his contentions and only copies of the valuation report of jewellery and computation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mily members. But the entire addition has been wrongly made in the hands of the assessee. The learned counsel submitted that substantial part of the jewellery has been disclosed by the family members in their respective wealth-tax returns since last many years and, subsequently, there has been addition in the number of family members and the same jewellery has been added on account of fresh purchases made from the disclosed sources. 5.3. Per contra, the learned Departmental representative relied upon the orders of the lower authorities. 5.4. We have gone through the orders of the lower authorities. We have first of all considered the primary objection of the assessee. It is noted that jewellery has been found from the separate and personal possession of eight family members and has been recorded accordingly in the panchnama as well as valuation report prepared by the Departmental Valuer at the time of search. Further, all the family members are major and separately assessed and separate Income-tax and wealth-tax return are filed by the family members. No allegation has been made and no evidences have been brought on record by the Assessing Officer to show that investment was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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