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TMI Blog2020 (2) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... re that application for seeking the revaluation of seized jewellery was not only moved by the assessee but also by the alleged owner i.e. Shri Chandra Prakash Soni. Even otherwise, it is the legitimate and legal right of the assessee or Shri Chandra Prakash Soni to get the revaluation of the jewellery in their presence and no prejudice shall be caused to the Department because said seized jewellery is still in the possession of the Department from the date of seizure whereas in this case the specific points/grounds raised by the assessee are not adjudicated upon. Hence, the rights of the assessee had been prejudiced. Therefore, keeping in view the interest of natural justice for seeking revaluation of the seized jewellery, we allow this ground of the assessee and direct the Department to get the seized jewellery revalued by the Registered Valuer of the Department and also to get the valuation report while keeping in view all the points raised by the assessee as mentioned above. Hence, this issue is restored back to the file of the AO for afresh adjudication as directed above. Thus Ground No. 1 of the assessee is allowed for Statistical purposes. X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal order passed by ld. CIT(A)-III Jaipur was served upon an old aged father of appellant (Shri Ram Swaroop Guputa) vide registered post on 18-03-2019 at jhis residential stage at Agra Road, Jaipur. That due to old he could not understand the intricacies of case and could not communicate same to appellant (Kamal Mohan Gupta) and who is residing at Flat No. 701, SDC Euro Exotica, Shri Kushal Nagar, Sanganer, Jaipur. That after check by counsel from the office ld. CIT(A), Jaipur about non-delivery of order, it came to know that appeal order has already been sent at given address and only then for the first time it has come to know that order has been passed and sent to address of appellant. The immediate appellant searched the sealed envelop with his father and immediately contact to his counsel. 2. That the order has been delivered on 18-03-2019 and thereafter limitation period of 60 days which expires on 17- 05-2019 and thereafter appeal is filed before Hon'ble ITAT on 7-06-2019, thus there is delay of 21 days in filing of appeal before Hon'ble ITAT, Jaipur Bench. 3. That such delay of 21 days is unintentional and due to non-communication by old aged father of appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice. In response assessee vide its reply dated 24/06/2015 submitted that the assessee has filed return of income on 20/10/2014 with acknowledgment No. 182201014010459. Notice u/s. 143(2) was issued on 01.09.2015. Subsequently, the AO passed the assessment order. 3.2 Aggrieved by the order of the AO, the assessee preferred the appeal before the ld. CIT(A) and the ld. CIT(A) after considering the case of both the parties dismissed the appeal of the assessee and upheld the order of the AO. 3.3 Aggrieved by the order of the ld. CIT(A), the assessee has preferred the present appeal before us on the grounds mentioned hereinabove. 3.4 The Ground No. 1 raised by the assessee relates to challenging the order of the ld. CIT(A) in not allowing the revaluation of gold jewellery sized by ADIT team, Kolkatta. 3.5 The ld.AR , appearing on behalf of the assessee submitted before us that as per facts of the case, the assessee was carrying with him gold ornaments which were seized by ADIT team, Kolkatta. The said jewllery belonged to Shri Chandra Prakash Soni and the assessee was only the broker who was carrying the sample of the jewellery for display and seeking the orders. It was submitted by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him before departmental officers under acute mental pressure and without understanding the correct valuation amount." Meaning thereby the valuation report was signed without understanding the contents of the same. Thus action of Ld. AO that appellant has accepted the valuation is improper and without ascertaining the factual circumstances under which he was compelled to accept the valuation and assessment based on that valuation report is improper and unjustified in the facts & circumstances of the case. That appellant has submitted application for revaluation of seized jewellery to Hon'ble Pr. Commissioner-Ill, Jaipur on dt.19.1.2016 and to Hon'ble Pr. CCIT, Jaipur on dt.23.2.2016, dt. 29.1.2016 and without getting outcome of those application the Ld. AO has passed the asstt. order which is absolutely illegal and unjustified in the facts & circumstances of the case and may please be held as illegal. That after completion of seizure proceedings of entire record was transferred by the ADI wing, Kolkatta to the office of .1 CI T, Cirlce-7, Jaipur and Ld. AO was the officer who was incharge and having proper jurisdiction over the appellant and therefore all such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per cts. Whereas the prevailing market rate of polki is in between of ₹ 1500/- to ₹ 1700/- per carat (maximum) in open market of Jaipur which can very well be ascertained and taken from Jewellers of Jaipur. The following are the prevailing rates of semi precious stones in open market at Jaipur:- (a) Polki = ₹ 1500 - 1700 per carat (b) Pearl & Beads = ₹ 20-70 per carat Whereas the valuer has taken the minimum rate of ₹ 3,000/- per carat and on higher side the rate has been taken at ₹ 10,000/- per carat which is on too higher side and shows that entire valuation is done wrongly. The copy of following purchase bills of Polki (cut & polished diamonds) were also submitted to Ld. AO as below:- Name of Party & Address Bill No. Date Rate/Carat Amount (i) M/s Bahubali Diamonds Pvt. Ltd. 3 06.07.2013 500000/- 1600/- (ii) -Do- 8 22.10.2013 300000/- 1500/- (iii) M/s Sankalp Dim Exports 112 28.08. 2013 300000/- 1200/- (iv) M/s Naman Gems, Surat 117 01. 11 . 2013 300000/- 1500/- (v) M/s Kedia E.,,ports Pvt. Ltd., Jaipur 50 04.11.2013 472800/- 1500/- (vi) M/s Bahubali Diamonds Pvt Ltd Sur 01 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereas it contains not more than 20% of total weight, thus 4850% of gold weight is excessively taken by valuing the studded jewellery. As an exemplary calculation in such studded jewellery the composition of jewellery is given as under:- Typical composition Of studded jewellery Composition taken by valuer (without basis) Gold weight 17-18% 68% Other alloyes 5.6% 0% Semi precious stones 18-20% 32% WAX, CHAPDI, DORI etc. 60-65% 0% Thus valuation as taken by valuer is without any basis and is totally misconceived. It is further to note that entire valuation process was completed by him within a period 2 hours (at maximum), whereas to ascertain correct value of such type of studded jewellery more than one day is required so as to arrive the correct purity and value thereof Thus it is crystal clear just to co-operate the search team the entire valuation was done and appellant was also put under huge pressure to adopt such valuation. That appellant has submitted his Affidavit stating therein about not properly undertaking valuation of jewellery before Ld. AO and that has remain controverter. On the other side, the valuer while doing valuation has computed p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case. That in broad sense gross weight of seized jewellery is of 3120.55 Gms. and of its 20% gold is computed then it becomes to 624.11 gins. of gold content and of which value is not more than 18 Lacs (approx.) and not 71 Lacs. Thus by not providing opportunity for getting same revalued is absolutely improper action on part of the Ld. AO and assessment based on that value is also illegal and against the principle of natural justice. That while passing the: assessment order no where the finding or contrary evidence have been brought on record neither by the investigation agency nor by the Ld. AO about status of Kamal Mohan Gupta. That nowhere in the assessment order the status of Kamal Mohan Gupta is denied as broker of M/s. Gold Theme Jewels Prop. Chandra Prakash Soni and more so when statements of both the persons are simultaneously were recorded and in which one person was at Kolkatta and at same time one person was at Jaipur and answers of both persons are in same line and which is corroboratively matched as is appearing from the statements of both the persons. That Ld. AO has erred in contending that appellant has not challenged the valuation of jewellery earlier whereas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich shows that the valuation taken by the valuer is correct and the objection raised by the appellant is without any basis and baseless. This argument taken by the appellant is after thought therefore there is no issue for again revaluation of seized jewellery. Hence I reject the claim of the appellant for revaluation of seized jewellery so I am the view that the Authorised valuer rightly valued the seized jewellery. Therefore these grounds are not allowed.'' After having gone through the order passed by the ld. CIT(A) and after hearing both the ld. counsels at length, we found that during the course of appellate proceedings, the ld. CIT(A) had sought the remand report from the AO in respect of the grounds raised by the assessee on the ground of revaluation of jewellery in question. The said remand report was given to the assessee and assessee also had filed his rejoinder which is reproduced below. ''The copy of the remand report given to the A/R of the appellant for rejoinder which is as under - "That the appellant has filed the application u/rule 46A of I.T. Rules with the request to ascertain actual/correct value of seized jewellery by getting the same revalued as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s breach of principle of natural justice. That Ld. AO during remand proceedings has not make any independent inquiry in the jewellery market about gold content in studded jewellery whereas the appellant has submit report of the independent jeweller of the market during the assessment proceedings (M/s S.J. Gems & Jewels) and there is no finding in remand is given. Thus Ld. AO has not discharged his duty by ignoring all these factual material aspects into consideration before issuance of remand report and thus it is humbly requested that this remand report which is improper in the facts & circumstances of the case may not please be taken into consideration while deciding the appeal and case may please be heard and decided on merits of case. You are humbly requested to kindly acknowledge written submissions and appeal may evaluation of seized jewellery may please be allowed so as to record and due justice may please be made available to the passed by Ld. AO may please be deleted & oblige." From the totality of the facts and circumstances of the case, we found that the assessee has taken a specific stand from the very beginning that the goods which were being carried by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2914/- to ₹ 10,000/- per cts. i.e. in item no. 1 of valuation report, quantity of polka is written as 30.00 gms. and value is taken for ₹ 1,80,000/-, thus rate of polka is taken for ₹ 6,000/- per cts. and correspondingly at sr. no. 3 = quantity of polka is taken at 18,000 cts and value is taken for ₹ 1,80,000/-. Thus value is taken for ₹ 10,000/- per cts. whereas the prevailing market rate of polki is in between of ₹ 1500/- to ₹ 1700/- per carat (maximum) in open market of Jaipur which can very well be ascertained and taken from Jewellers of Jaipur. According to the ld.AR, the following are the prevailing rates of semi precious stones in open market at Jaipur:- (c) Polki = ₹ 1500 - 1700 per carat (d) Pearl & Beads = ₹ 20-70 per carat However, the valuer has taken the minimum rate of ₹ 3,000/- per carat and on higher side the rate has been taken at ₹ 10,000/- per carat which is on too higher side and shows that entire valuation is done wrongly. The copy of following purchase bills of Polki (cut & polished diamonds) were also submitted to AO as below:- Name of Party & Address Bill No. Date Rate/Carat Amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g studded jewellery, the quantity of gold is measured about 68% in total weight by valuer which is absolutely wrong and without any basis and based on his whims & fancies and without any basis. While manufacturing of such type of studded jewellery, WAX CHAPDI is used there so that it may hold semi precious stones i.e. pearls, polka etc. While valuing above studded jewellery the percentage of gold is taken about 68% of total weight, whereas it contains not more than 20% of total weight, thus 4850% of gold weight is excessively taken by valuing the studded jewellery. An exemplary calculation in such studded jewellery the composition of jewellery is given as under:- Typical composition of studded jewellery valuer Composition taken by(without basis) Gold weight 17-18% 68% Other alloyes 5.6% 0% Semi precious stones 18-20% 32% WAX, CHAPDI, DORI etc. 60-65% 0% The ld.AR of the assessee further submitted that thus valuation as taken by valuer is without any basis and is totally misconceived. It was further submitted that even during the course of remand proceedings the AO had focused on the source of funds used for this seized jewellery and ignored the ground of rev ..... 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