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TMI Blog2019 (12) TMI 1186X X X X Extracts X X X X X X X X Extracts X X X X ..... r the assessee, nor Shri Mahendra Kumar Jain have accepted that loose papers do belong to them. The assessee bluntly denied and stated that these loose papers did not belong to the assessee. The computer system found during the course of survey belonged to Hira Panna Jewellers, but not belonged to the assessee. As per section 292C of the Act, the loose sheets, books of accounts found during the course of search /survey are presumed to be belonging to the assessee, where the search or survey is conducted. In the instant case, survey was conducted in the business premises of Hira Panna Jewellers. Therefore, as per the presumption u/s 292C, loose sheets pertained to the Hira Panna Jewellers, but not to the assessee. Unless it is established that the loose sheets pertained to the assessee, the AO is not permitted to tax the contents or unexplained money or expenditure recorded in the loose sheets in the hands of the assessee. In the instant case, there was no material placed on record to show that the loose sheets were belonging to the assessee, therefore, the addition made by the AO in the hands of the assessee on account of unexplained money or expenditure is unsustainable. Acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al No.230, 231 and 271/2017-18/CIT(A)-3/VSP/2019-20 dated 14.07.2019 for the Assessment Year (A.Y.) 2014-15. For the sake of convenience, these appeals are clubbed, heard together and a common order is being passed as under. I.T.A. No.585/Viz/2019, A.Y.2014-15 3. In this case, search and seizure operation u/s 132 of the Income Tax Act, 1961 (in short Act ) was carried out in the business premises of the assessee, M/s Hira Panna Jewellers on 24.11.2015. The assessee was the proprietor of the said business concern, (M/s Hira Panna Jewellers) upto 31.10.2014. Thereafter, the proprietary concern was converted into the status of partnership firm from 01.11.2014, consisting of 3 partners viz. Sri Suresh Kumar Jain, Sri Mahendra Kumar Jain and Sri Rajendra Jain. The assessee filed the return of income on 28.11.2014 admitting total income of ₹ 1,87,83,950/-. Subsequently, a notice u/s 153A of the Act was issued to the assessee calling for the return of income for the A.Y.2014-15, in response to which the assessee filed his return of income on 24.02.2017 admitting total income of ₹ 1,87,83,950/-. The Assessing Officer (AO) completed the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee in the regular returns of income. The audit report in Form 10CCB was filed manually. The assessee has made the genuine claim for deduction u/s 80IA, therefore, argued that the addition made by the AO is not permissible, hence requested to delete the addition. 9. On the other hand, the Ld.DR supported the orders of the lower authorities and requested to uphold the order of the Ld.CIT(A). 10. We have heard both the parties and perused the material placed on record. Though the assessee has raised this issue in ground No.2 assailing the additions made by the AO as outside the scope of assessment u/s 143(3) u/s 153A of the Act, the Ld.CIT(A) did not adjudicate the issue. In this case, there is no dispute that the assessee has filed the return of income on 28.11.2014 and the time limit for issue of notice u/s 143(2) was expired on 30.09.2015. As per the settled law, the AO is not permitted to make the addition u/s 153A in the completed assessments without the support of incriminating material. In the instant case, there was no incriminating material found and the assessee has filed the return of income claiming deduction u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppliers/manufacturers come to their shop for verification of their e-mails and downloading of the information they receive from their principals. However, though the details therein relate the same line of business, but undoubtedly, said information is not related him. 9.1. It is pertinent to mention that data impounded as mentioned in sub paras 1.2 1.3 of para 5 supra are relates to the financial year 2013-14 2014-15 when M/s Hira Panna Jewellers was a proprietorship business of assessee. The same business with same trade name was converted into partnership firm as going concern with all assets and liabilities on 1.11.2014 and assessee was one of the partners during the F.Y. 2014-15. During the course of survey proceedings in the premises of M/s Hira Panna Jewellers on 24.11.2015, a soft copy of the data found in the business premises of firm was copied and impounded as A/HPJ/02/Vsp. On perusal of the data, certain excel sheets were found in it, which were printed and serially numbered from 1 to 18. The same was provided to Managing partner Sri Mahendra Kumar Jain to explain its contents vide summons u/s 131(1A) dated 25.02.2016. He stated that the papers fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the sheets belonging to the period March 2014 and before, the rate per unit is divided by 100, whereas for the sheets pertaining to April 2014, the actual values are written e.g. as per sheet no. 3 (pertaining to 12.04.2014), the cost per unit of R is 375 and E is 290, whereas as per sheet no. 10, (pertaining to 15.03.2014), the cost per unit of R is 3.75 and E is 2.9. Thus while calculating the total values for the sheets pertaining to March 2014 and before, a multiplying factor of 100 is to be considered for arriving at the cost and making charges. However, with respect to the weight of the metal or the other stones, the actual weight is only mentioned and no multiplying factor is necessary. 9.4. On further perusal of this sheet no.3, it can be observed, that the total making cost is calculated by adding the cost of the material and the making charge. Thus, in this case, the total cost amounts to 4000+1395+180+1237.50+14602 = 21414.50 which is mentioned against the head CASH , Further, below it is mentioned OLD CASH and a value of 2785771.25 is mentioned. The TOTAL CASH is similarly arrived upon by adding the two values above at 2807185.75. Belo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l the sheets impounded above, it can be observed that not a single sheet has any details of any payments actually made under the head, PAID CASH . Therefore, it becomes clear that the entire amount reflecting as BAL. CASH on the last date of the year is payable by the assessee. The last date for the F.Y. 2013-14, available is Page No. 11 corresponding to 20.03.2014. Therefore, the BAL. CASH as appearing on the sheet dated 20.03.2014 (Page No. 11) is the total unexplained expenditure Incurred by the assessee. Similarly, the value against the head BAL. METAL , reflects the total metal given by the assessee to the goldsmith for making of gold jewellery. Since, such metal is not reflecting anywhere in the books of accounts of the assessee, therefore it is unaccounted and is to be treated as unexplained money u/s 69A of the I.T. Act, 1961. Thus to arrive at the total unexplained expenditure for the F.Y. 2013-14, it is taken the value against BAL CASH as appearing on Page No. 11 which is 23322.02 and multiply it with the factor of 100. Thus, total unexplained expenditure for the AY 2014-15 is ₹ 23,32,202/- in addition to the returned income. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant are rejected. 13. Against the order of the Ld.CIT(A), the assessee is in appeal before this Tribunal. During the appeal hearing, the Ld.AR submitted that the assessee has retired from the partnership firm and he is no more a partner of Hira Panna Jewellers and the computer system does not belong to the assessee. Survey was conducted in Hira Panna Jewellers and the Managing Partner available at the time of survey has categorically told that the loose sheets found during the course of search do not belong to the firm or Shri Suresh Kumar Jain. Since, the material was not found in the assessee s premises, the burden is on the Income Tax department to establish that the loose sheets found at the premises of Hira Panna Jewellers belonged to the assessee. As per the presumption u/s 292C of the Act, the books of accounts, loose sheets, documents found in the search / survey premises presumed to be belonging to the assessee who was under search / survey, unless it is established that the same belongs to the third party. In the instant case, neither the assessee nor Shri Mahendra Kumar Jain, Managing Partner of Hira Panna Jewellers have accepted that the materia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the A.Y. 2014-15 belonging to the assessee Shri Suresh Kumar Jain and worked out the unexplained expenditure incurred. Accordingly, made the addition of ₹ 23,32,202/- to the returned income. Similarly, as per page No.11 of the loose sheet, the AO found mention of 4414.760 gms of gold which was valued at the rate of ₹ 2919.90 per gram and the aggregate amount worked out was ₹ 1,28,90,658/-, was also brought to tax as unexplained money in the hands of the assessee. 16. Loose sheets were extracted from the computer of Hira panna Jewellers pertaining to the period of April 2014 from 01.04.2014, though it was mentioned as JKS, neither the assessee, nor Shri Mahendra Kumar Jain have accepted that loose papers do belong to them. The assessee bluntly denied and stated that these loose papers did not belong to the assessee. The computer system found during the course of survey belonged to Hira Panna Jewellers, but not belonged to the assessee. As per section 292C of the Act, the loose sheets, books of accounts found during the course of search /survey are presumed to be belonging to the assessee, where the search or survey is conducte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not find any infirmity in the order of the Ld.CIT(A) and the same is upheld. Appeal of the assessee is dismissed on this ground. I.T.A. No.587/Viz/2019, A.Y. 2016-17 22. Ground No.1 and 3 are general in nature which does not require specific adjudication. 23. Ground No.2 is related to the partly sustaining the addition of ₹ 8,45,793/- in respect of unexplained jewellery. During the course of survey conducted in the residence of the assessee on 24.11.2015, the AO found gold ornaments with gross weight of 792.50 gms, net weight of 695.00 gms of value of which was estimated at ₹ 16,30,900/-. Silver articles weighing 1210 gms, net weight 1070 gms valued at ₹ 36,594/- were also found. The AO made the value of entire gold jewellery and silver articles as an addition since none of the family members filed the wealth tax returns or disclosed the same in the return of income. 24. Against the order of the AO, the assessee went on appeal before the CIT(A) and the Ld.CIT(A) allowed 50% of jewellery as explained keeping in view the Board Circular and confirmed the balance addition as discussed in para 5.2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellery in terms of guidelines laid down in the Instruction. During the course of hearing, the Ld.AR submitted before us that the assessee is a business man and received the gifts or inherited the jewellery from their parents at the time of marriage and subsequent to the marriage on various occasions. Similarly, unmarried female also received the gifts over the period of years on various occasions. Therefore, submitted that gold jewellery to the extent of limits specified in Board Circular required to be treated as explained and no addition is called for. The assessee s family consists of wife of the assessee, daughter and two male members including the assessee, therefore, as per the guidelines issued in Instruction No. 1916, 950 gms of gold jewellery required to be allowed as credit and no addition is called for. In this regard, we extract relevant part of the order of this Tribunal in the case of Chekuri Venkata Ranga Raju (supra) which reads as under : 9. It is the contention of the assessee that as per board's instruction no.1916, the assessee will be entitled for credit of 500gms. In respect of married lady and 250 gms. For unmarried lad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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