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TMI Blog2019 (11) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... as well as CIT(A) overlooked the practical aspect that the jewellery is with relatives / valuer. Hence, Ground No. 1 of the assessee s appeal is allowed. Addition u/s 69A on account of alleged unexplained investment in jewellery - HELD THAT:- It is pertinent to note that the diamond jewellery is always studded with gold and it is not a case of revenue that separate diamonds were found during the search operation. Merely because the jewellery is studded with the diamond of 47.18 carat in the instant case, the same cannot be added in the hands of the assessee when such jewellery formed part of the gross weight of the jewellery found from the premises of the assessee. The assessee made full disclosure and has submitted the details of the jewellery which were accepted by both the authorities and was never questioned. Thus, this addition does not sustained. Hence, Ground No. 2 of the assessee is allowed. - I.T.A. No. 2349/DEL/2019 (A.Y. 2015-16) A/w Stay Application No. 636/DEL/2019 - - - Dated:- 30-10-2019 - Shri N. K. Billaiya, Accountant Member And Ms Suchitra Kamble, Judicial Member For the Appellant : Sh. Ved Jain, Adv. And Sh. Himanshu Aggarwal, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A of the Act. The Assessing Officer observed that the assessee filed return of income u/s 139(4) of the Act on 20th January, 2016 declaring total income of ₹ 23,26,080/-. During the course of the search operation on 16.12.2014 at the residential premises of the assessee and her husband, jewellery (Gold, Diamond, Silver) amounting to ₹ 18,74,303/- was found in possession of the assessee and her husband. Further, during the operation of the locker no. DD-22, maintained with Oriental Bank of Commerce, Noida in the name of the assessee and her husband, jewellery amounting to ₹ 35,96,263/- was found. Hence, total jewellery found from the possession of the assessee and her husband was ₹ 54,70,566/-. However, on verification, the Assessing Officer found that as per the Wealth Tax Return of the assessee for the Assessment Year 2013-14, the assessee declared jewellery amounting to ₹ 1,93,05,359/-. The Assessing Officer further observed that the husband of the assessee had not filed any Wealth Tax Return. However, the total jewellery in their possession was found to be ₹ 43,17,442/- only. The assessee and her husband in their respective statements, recorde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e search at the premises of the assessee and her husband, diamond jewellery amounting to ₹ 3,19,250/- was found from the residential premises whereas diamond jewellery amounting to ₹ 6,67,700/- was found from the locker of the assessee and her husband, which was seized during the search as the same was not declared in their last filed Wealth Tax Returns. Husband of the assessee had never filed the Wealth Tax Return and stated that the explanation with regard to the jewellery / articles found during search can be given by his wife only as it belongs to her. The assessee has taken a stand that since the jewellery was found short than declared in the Wealth Tax Return, as such, the same cannot be treated as undeclared jewellery. The Assessing Officer observed that the diamond jewellery found from the residence and from locker of the assessee and her husband never disclosed this aspect in their Wealth Tax Return. Hence, the Assessing Officer held that the diamond jewellery found in their possession during the search operation on 16.12.2014 and during operation of locker on 30.01.2015, the same has been acquired by the assessee and her husband from undisclos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery declared in the wealth tax returns. The assessee in response to the same submitted reply dated 08.12.2017. The Ld. AR submitted that she lives in a joint family and has not parted with or sold any of the jewellery and submitted the details of the jewellery. The Ld. AR further submitted that the affidavit to this effect that she has not sold or parted of with any jewellery was also placed before the Assessing Officer. The details of the jewellery of whole family was also submitted before the Assessing Officer. The Ld. AR pointed out that the Assessing Officer has accepted the fact at para 7 into (IB) at page 6 of the assessment order that the jewellery items found during the search are same are as what declared in wealth tax returns. Thereafter, the Assessing Officer at page 7 para 7 (a)(i) of the assessment order calculated long term capital gains on the presumption and without any material on record that the balance jewellery of 6267.3 grams have been sold for which capital gain has not been offered and imposed tax thereon. On appeal before the CIT(A), the CIT(A) confirmed the addition made by the Assessing Officer despite there being no material with the Assessing Officer tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0.624/-. Thus, the value of ₹ 2,14,860/- and the rate of indexation for FY 1997-98 i.e. 305, adopted by the Assessing Officer is arbitrary and cannot be adopted. The CIT(A) observed that the affidavit filed by the assessee is self-serving document and the facts stated therein cannot be accepted as evidence. It is the settled principle of law that the decision must rest not on suspicion but on legal testimony. The Ld. AR relied upon the decision of Mehta Parikh Co. vs. CIT reported in 30 ITR 181 (SC). Thus, the Ld. AR submitted that it is well established by the assessee during the assessment proceedings that the assessee has not sold any part of the jewellery and accordingly the allegations made by the Assessing Officer and the CIT(A) are merely on the basis of surmises and are without any cogent evidence. The Ld. AR prayed that the additions be deleted. 6. The Ld. DR submitted that the fact remains that jewellery was short as regards the details filed in the Wealth Tax Returns. The Ld. DR further relied upon the Assessment Order and the order of the CIT(A). 7. We have heard both the parties and perused all the relevant material available o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted the details of the jewellery. The Assessing Officer and the CIT(A) accepted the details submitted by the assessee. Thus, in the absence of any tangible material on record the additions made cannot be sustained. The Ld. AR further relied upon the decision of the Hon ble Delhi ITAT in the case of Shri Raj Kumar Kalrania v. DCIT in ITA 1397/Del/2015 order dated 30.05.2018. The Ld. AR further submitted that the diamonds are precious stones and are part of the jewellery. The assessee seeks support from the definition of jewellery under Wealth tax Act. Further, reliance is placed on the decision of the Delhi ITAT in the case of Kumkum Kanodia vs. DCIT in ITA no. 5260/Del/2014 . Ld. AR submitted that merely because the jewellery is studded with the diamond of 47.18 carat in the instant case, the same cannot be added in the hands of the assessee when such jewellery formed part of the gross weight of the jewellery found from the premises of the assessee. On the basis of above facts and circumstance of the case, the assessee has not purchased any diamond jewellery and accordingly the allegations made by the Assessing Officer and the CIT(A), the Ld. AR prayed that the sa ..... 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