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TMI Blog2020 (4) TMI 578X X X X Extracts X X X X X X X X Extracts X X X X ..... cash in the bank account maintained by assessee and onus was on assessee to satisfactorily explain sources of cash deposit in his bank account which in the instant case, the assessee failed to satisfactorily explain and Section 68 is clearly applicable. Vide CBDT instruction number 1916 dated 11.05.1994 which stipulates that in case of male member , 100 grams of gold jewellery could be treated as held explained , we give benefit of the aforesaid CBDT instruction to the assessee in terms of aforesaid CBDT instruction, while rest of the sale of jewellery as claimed by assessee could not be accepted and the sale consideration of 282.92 grams of gold jewellery as claimed by assessee is to be held as unexplained as income from undisclosed sources in the hands of assessee which is to brought to tax in the hands of assessee. Assessee will be required to pay tax on capital gain arising from sale of said 100 gm of gold jewellery as per provisions of the 1961 Act. AO is directed to bring capital gains on sale of 100 gm of jewellery to tax in the hands of assessee in accordance with law, while rest of sale consideration is to be brought to tax as unexplained income. The assessee is directed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and hence the same ought to be set aside in limine. 5. The Learned Commissioner ought to have appreciated that there is no requirement on part of the appellant to file any wealth tax return and this being the case, non-filing of the same cannot be held against the appellant to negate the substantial contention of the appellant that the cash deposits are made from the proceeds of sale of gold. 6. The Learned Commissioner ought to have known that when the CBDT itself allows 500 grams of gold to be held without any records, then the sale proceeds of the said quantity is also exempt from any records and this being the case, it would be a travesty of the law to bring into the ambit of taxation an amount which is outside the scope of law. 7. The Learned Commissioner has failed to note the decision of the Hon'ble ITAT in CIT v Bhaichand 141 !TR 67, where in it has been held that the Bank Pass Book is not books of accounts as contemplated in Section 68 of the Act. 8. The Learned Commissioner is wrong in his finding that in as much as capital gains tax is not paid on the sale of gold, the same is to be added back as income from other sources in the absence of any enabling provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f ₹ 9,49,200/- be treated as unexplained income of the assessee. The Ld.CIT(A) upheld additions as were made by the AO to the tune of ₹ 9,49,200/- by dismissing appeal filed by the assessee , vide appellate order dated 25.04.2019 passed by learned CIT(A), by holding as under: "7.3 CIT(A)'s decision 7.3.1 AO stated in the assessment order that there was AIR information regarding cash deposits of ₹ 32,52,142/- in the savings bank account with ICICI Bank of the appellant. During the assessment proceedings, AO has examined the sources of cash deposits and added ₹ 9,49,200/- as income from other sources as unexplained cash credit. The relevant portion or the assessment order is also reproduced above. As can be seen from para 7.2 above, during the appellate proceedings, initially a remand report was called for and the AO had also submitted the remand report. Subsequently, a supplementary remand report was also sought which was also submitted thereafter, The contents of the letter seeking remand report as well as the remand report received from the AO are reproduced in para 7.2 above. 7.3.2 Further, during the appellate proceedings on 23/04/2019 as per this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 2,66,000/-." As can be seen from the above written submission, the appellant himself has accepted the addition of ₹ 2,66,000/- out of the total addition of ₹ 9,49,200/-. iii) As per the supplementary remand report dated 09/04/2018, AO has stated that from the verification made in respect of sale of jewellery, there was lot of variance between appellant's claim and the information from the alleged purchasers (i.e. amount paid, weight of gold purchased etc.). Further, AO has categorically stated that the alleged purchasers could not produce any evidence for payment of cash towards purchases except furnishing confirmation letters. iv) AO has also pointed out that certain parties have categorically denied transactions and the appellant himself admitted the same. Therefore, AO concluded that it is clearly established that the source for cash deposits are not from sale of jewellery as claimed by the appellant and these are income from other sources. Moreover, AO has also stated that entire addition is made as unexplained cash credit, and therefore, there is no question of capital gains for the case under consideration. v) The appellant has categori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made, the appellant had admitted the said income of ₹ 2,66,000/-. x)The appellant has never ever filed wealth tax return and also does not have the purchase bills for the alleged jewelleries sold during the year. On perusal of documents on record, it is seen that the appellant has sold jewelleries to the extent of 382.93 gm. In this regard, the CBDT's Instruction No.1916 dated 11/05/94 is relevant which is reproduced hereunder: "Instances of seizure of jewellery of small quantity in the course of operation under section 132 have come to the notice of the Board. The question of a common approach to situation where search parties come across items of jewellery has been examined by the Board and following guidelines are issued for strict compliance: i) In the case of a wealth-tax assessee, gold jewellery and ornaments found in excess of the gross weight declared in the wealth-tax return only need to be seized. ii) In the case of a person not assessed to wealth-tax gold jewellery land ornaments to the extent of 500 gms per married lady 250 gms per unmarried lady and 100 gms per male member of the family need not be seized...." As can be seen from the above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extent of ₹ 2,66,000/-. In view of these facts, it is held that the AO has rightly added ₹ 9,49,200/- as unexplained cash credit. Therefore, this ground of appeal is dismissed." 5. Aggrieved by an aforesaid appellate order passed by learned CIT(A), the assessee filed second appeal with tribunal. The learned counsel for the assessee contended that there is a gap of six years in recording of statements by the AO of the buyers of jewellerry, during remand report proceedings conducted at behest of directions of learned CIT(A) and hence, satisfactory explanation could not be provided. The learned counsel for the assessee explained that assessee is salaried employee with ICICI Bank and there is no requirement for assessee to maintain books of accounts. The Ld.DR, on the other hand, submitted that detailed enquires were made by Revenue and assessee could not satisfactorily explain sources of cash deposits. The learned DR would argue that assessee himself admitted that ₹ 2.66 lakhs should be added to the income of the assessee as he could not explain the sale of jewellery to that extent. It was submitted by learned DR that enquiries made with several parties to whom a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led with Revenue for this year or for earlier assessment years and the said gold jewellery of 382.93 grams were never disclosed by assessee to the Department. The assessee also could not produce purchase bills for purchase of the jewellery to the tune of 382.93 gms. The sale of the jewellery as claimed by assessee to have been made during the year under consideration was not to registered gold jewelers but were all claimed to be made to private individuals. The sale consideration for the entire sale of jewellery as claimed by assessee was in cash and none of the party paid sale consideration through banking channel. Thus, in our considered view keeping in view totality of circumstances on the touch stone of preponderance of probabilities, the entire transaction for sale of gold jewellery is an afterthought and a sham transaction which is claimed by assessee as he was cornered by Revenue. Thus, we hold that assessee could not satisfactorily explain transactions for sale of gold jewellery. The amounts were deposited in cash in the bank account maintained by assessee and onus was on assessee to satisfactorily explain sources of cash deposit in his bank account which in the instant ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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