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TMI Blog2021 (10) TMI 277X X X X Extracts X X X X X X X X Extracts X X X X ..... lenge by the assessee. Jewellery received in form of gift from Sh. Ajay Maheshwari there is an apparent mistake in form of considering the wrong figure which has occurred in the findings of the ld CIT(A) in para 6.4 of the order when the same is read along with his specific findings at para 6.2 of his order and the figure of ₹ 44,36,092/- should have actually been taken instead of ₹ 54,76,382/. We accordingly agree with the contention of the ld AR that where the explanation of the assessee has been duly accepted by the ld. CIT(A) addition to the extent should be deleted in totality instead of restricting it to 75% and the whole of the jewellery so received as gift from Shri Ajay Maheshwari be treated as explained jewellery. Where the valuation report has been accepted by the ld CIT(A) which not just contains the total value rather it contains the valuation in respect of individual items of gold and diamond jewellery, the details of gold and diamond jewellery were very much on record along with disclosure thereof in the tax return filed for A.Y 2005-06. Therefore, having accepted the valuation report and factum of possession of substantial jewellery and the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the assessee, being the key person of the family, in his statement recorded u/s 132(4) of the I.T. Act, 1961 during the course of search proceedings offered ₹ 1,50,00,000/- to tax on account of undisclosed investment in jewellery, whereas in the ROI filled for the relevant period, this surrendered amount was not shown by the assessee in his return of income. As the assessee has not shown it in his ROI, as per the Assessing officer, it has to be taxed individually in hands of the respective persons. The Assessing officer also noted that the assessee has furnished an affidavit stating that to avoid the multiple proceedings, he shall not make technical ground/plea that proposed unexplained jewellery in the hands of his wife can't be made in his hands. Therefore, considering the affidavit filed by the assessee, the Assessing officer considered entire jewellery found in possession of the assessee and his wife in the hands of the assessee for tax purposes and the assessee was asked to explain the reasons for not complying with the surrender so made during the course of search and source of acquisition of above jewellery. In response, the assessee submitted that after surrende ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roverted the deposition should be accepted correct. Reliance is also placed on the following decisions (i) Mehta Parikh Co. v. CIT [1956] 30 1TR 181 (SC) (ii) Dilip Kumar Ray v. CIT [1974] 94 ITR 1 (Born.); (iii) Malwa Knitting Works v. CIT [1977] 107 ITR 379 (MP) and (iv) Sri Krishna v. CIT [1983] 142 ITR 618/13 Taxman 309 (All.). 5.2 In view of the above the jewellery received from Ajay Maheshwari considered as unexplained by the AO is not tenable. The addition of ₹ 8,95,890 + ₹ 1,44,400 is directed to be deleted. Jewellary claimed to have been received from (Late Sh. Ramswaroop Maheshwari- Father of Appellant) 6. The balance jewellary was attributable to the jewellary belonging to father of appellant, Late Shri Ramswaroop Maheshwari. The appellant contended that there was sufficient jewellary in the hands of father and the same was reflected in the last return of income filed. The Ld. A/R also contended that the inquiry with respect to valuation report conducted by the AO are not proper as the notice issued u/s 133(6) of the Act was in respect of Sh. Vijay Maheshwari and NOT Late Sh. Ramswaroop Maheshwari. In this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the AO. In this return Late Sh. Ramswaroop Maheshwari has disclosed jewellery etc. under the heading which reads as under:- Gold and diamond jewellery silver utensils since 1952 amounting to ₹ 2,32,080/- . In simple terms this value of jewellary disclosed in the I.T return translates to substantial amount of gold etc since the value of gold was ₹ 76 per 10 gms. However other than this balance sheet entry, there is no other detail which is filed with the return no other detail like break up of gold /or diamond which were possessed by ramswaroop maheshwari on 31.3.2005. However the fact of substantial jewellary cannot be denied especially as it is evident from the return of income filed with the department much before the date of search. 6.4 Considering the above, I am of the view that 75% of ₹ 54,76,382/- may be treated as explained. This explained jewellery also includes the following portion of jewellery treated as unexplained by the AO. 1) Jewellery purchased in cash of 226.16 gms the evidence of which are filed in the form of cash drawls and bank statement. Total amount ₹ 2,25,000/-. 2) Jewellery purchased by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lery recorded in the his books of accounts which was submitted before the AO and the ld CIT(A) and it is thus an undisputed fact that the detail break up of jewellery is very much available on record and was properly recorded in the books of accounts which was produced before both the lower authorities and there is no adverse inference recorded by ld CIT(A) and inspite of that, the additions have been confirmed. 7. It was further submitted that Late Shri Ramswaroop Maheshwari was having sufficient means of possessing the above gold and diamond jewellery. A copy of his last ITR for A.Y 2005-06 and balance Sheet was furnished to the AO and is placed on record. As per Balance Sheet, the capital account of late Shri Ram Swaroop Maheshwari was of ₹ 93.21 Lacs and God Diamond Jewellery Silver Utensils since 1952 was ₹ 2,32,080/- at cost and applying gold price prevailing in 1952 of ₹ 76.81 per Tolla, it comes near about 3 kg. It was accordingly submitted that break up of gold /or diamond jewellery which were possessed by late Shri Ramswaroop Maheshwari as on 31.3.2005 is very much available on record in terms of valuation report as well as financial statements ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f jewellery, he has filed an affidavit before the DDIT Investigation stating that the assessee along with his family members have purchased jewellery from time to time, certain jewellery has been inherited from his parents and also received from his brother and wife and accordingly submitted that surrender of jewellery was subject to verification of various bills and other documents and accordingly, the surrender so made was retracted and not acted upon while filing the return of income. Thereafter, the assessee was asked to explain the source of acquisition and possession of jewellery and in response, the assessee furnished the source of acquisition of jewellery in three parts i.e. jewellery purchased by cheque payment, jewellery received in gift from Shri Ajay Kumar Maheshwari and jewellery received from Late Shri Ramswaroop Maheshwari, father of the assessee as well as in his own possession. The reply of the assessee was considered by the Assessing officer and the jewellery equivalent to purchases made by cheque payment was found genuine as source of acquisition and out of total jewellery of ₹ 95,46,282/-, jewellery of ₹ 40,69,900/- was considered as explained and re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A), in subsequent part of his order where he has discussed the matter in context of jewellery received from Late Shri Ramswaroop Maheswari in para 6 onwards, while summarizing his findings in para 6.4 has taken the whole of the figure of jewellery amounting to ₹ 54,76,382/- treated as unexplained including the jewellery received from Sh. Ajay Maheshwari amounting to ₹ 10,40,290/- and has directed to treat 75% of the whole of jewellery of ₹ 54,76,382/- as explained and remaining 25% has been treated as unexplained. We therefore find that there is an apparent mistake in form of considering the wrong figure which has occurred in the findings of the ld CIT(A) in para 6.4 of the order when the same is read along with his specific findings at para 6.2 of his order and the figure of ₹ 44,36,092/- should have actually been taken instead of ₹ 54,76,382/. We accordingly agree with the contention of the ld AR that where the explanation of the assessee has been duly accepted by the ld. CIT(A) in para 6.2 of his order, the addition to the extent of ₹ 10,40,290/- should be deleted in totality instead of restricting it to 75% and the whole of the jewellery so r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in assessee s own books of accounts which were submitted for verification and no adverse inference has been drawn by either of the authorities. In our view, where the valuation report has been accepted by the ld CIT(A) which not just contains the total value rather it contains the valuation in respect of individual items of gold and diamond jewellery, the details of gold and diamond jewellery were very much on record along with disclosure thereof in the tax return filed for A.Y 2005-06. Therefore, having accepted the valuation report and factum of possession of substantial jewellery and the fact that necessary details of individual jewellery items are available on record, the action of the ld CIT(A) in treating only 75% of jewellery as explained and remaining 25% as unexplained doesn t have a rational basis with the material available on record and as to how the ld CIT(A) has arrived at the figure of 75% has also not been spelt out in the order so passed by him and the said action of ld CIT(A) of restricting the explained jewellery to 75% and treating the remaining 25% as unexplained therefore cannot be upheld. 13. In light of aforesaid discussion and in the entirety of facts ..... X X X X Extracts X X X X X X X X Extracts X X X X
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