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TMI Blog2023 (1) TMI 763X X X X Extracts X X X X X X X X Extracts X X X X ..... also claimed that they have purchased part of jewellery for many years. No doubt, the appellant could not furnish necessary bills, but fact remains that when the appellant claims that jewellery was purchased for many years, the AO cannot insist bills for purchase of jewellery. Further, the family members claimed that they did not file wealth tax returns because taxable wealth in their hands for all these assessment years is below taxable limit. Merely for the reason that there is no wealth tax returns filed by the family members no adverse inference could be drawn against the assessee. Appellant had admitted a sum of Rs. 35 lakhs towards unexplained jewellery. CIT(A) after considering relevant facts has rightly deleted addition towards unexplained jewellery and thus, we are inclined to uphold the findings of the Ld. CIT(A) and reject the ground taken by the revenue. Unexplained expenditure u/s. 69C - AO made addition towards jotting found in loose sheet as unexplained expenditure on the ground that the assessee could not prove the source for repayment of loan - HELD THAT:- First of all addition cannot be made on the basis of jottings in loose sheet, unless other corroborat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 1,11,88,324/- made by the AO u/s 69A of the IT Act, 1961, towards unexplained investment in gold and diamond jewellery in the assessment order passed u/s 143(3) of the IT Act, 1961 for AY 2013-14 in the assessee's case. 2.1 The Id. CIT(A) is not justified in allowing relief to the assessee on the ground that the AO has not proved that the money for investing in jewellery had flown from the assessee, when the said jewellery was found in the possession of the assessee, during the course of search action u/s 132 of the IT Act and no evidence, whatsoever was produced by the assessee to explain the sources of the acquisition and ownership of such inspite of ample of opportunity given to him by the AO. 2.2 Having held that if at all any assessment is to be made in respect of investment in jewellery, it should be in the hands of assessee's wife, daughter and daughter in law only, the ld.CIT(A) ought to have appreciated that the assessee could not furnish the details and evidence for acquisition of jewellery by the said family members and as such the Id. CIT(A) ought to have confirmed the assessment order passed u/s 143(3) of the IT Act, 1961 for AY 2013-14 in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd flower market at Rs.68 lakh and Rs.55 lakh instead of Rs.90 lakh and Rs.143 lakhs respectively and that if this is considered there will be an excess cash vailability to the tune of Rs.77,44,000/-, the ld.CIT(A) ought to have appreciated that sale consideration adopted by the AO were taken from the amounts admitted by the assessee, for the purpose of working out capital gains in his letter dated 24.03.2015 submitted during the course of assessment proceedings for A.Y 2013-14. 4.2 Having allowed relief to the assessee on the basis of the claim of the assessee that if the higher consideration for the sale of Maniyamkaliappa street and flower market properties is considered then there could be excess funds availability, the Id. CIT(A) ought to have specified the documents furnished by the assessee before him and since these documents were not available to the AO at the time of assessment proceedings, the ld.CIT(A) ought to have given an opportunity to the AO to verify the said documents as envisaged in Rule 46A of the IT Rules 1962. 5. For these grounds and any other ground including amendment of grounds that may be raised during the course of the appeal proceedings, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has explained that 1163.800 gms of jewellery and 22.70 carat of Diamonds belongs to his wife and also explained that she had received part of jewellery during her marriage in 1979 and also purchased remaining part of jewellery from past several years. The appellant had also explained 1045.450 gms of gold jewellery and 31.27 carat of Diamonds belongs to his daughter Smt. S. Muthulakshmi, who is working as a Scientific Officer in UK, and for remaining jewellery, the appellant had agreed to offer additional income of Rs. 35 lakhs and also declared a sum of Rs. 25 lakhs in the return of income and paid relevant tax and for balance amount of Rs. 10 lakhs, the AO had made addition during assessment proceeding and the appellant had accepted. The AO had made addition towards jewellery on the ground that, the assessee could not file necessary evidences including bills for purchase of jewellery and also wealth tax returns of family members to prove that jewellery belongs to them. 5. The Ld. DR, submitted that the Ld. CIT(A) has erred in deleting addition towards jewellery found during the course of search u/s. 69A of the Act, without appreciating fact that the assessee could not prove t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the family members, then if at all the family members could not explain source for purchase of jewellery, the AO can make addition only in the hands of the family members, but not in the hands of the appellant. Further, when the family members explained the mode and method of acquiring jewellery, the AO cannot disbelieve the statement of the assessee merely for the reason that the assessee could not furnish necessary evidence, because it is customary in Indian society, during marriages ladies will get substantial amount of jewellery from their parents as marriage gift. Further, the family members had also claimed that they have purchased part of jewellery for many years. No doubt, the appellant could not furnish necessary bills, but fact remains that when the appellant claims that jewellery was purchased for many years, the AO cannot insist bills for purchase of jewellery. Further, the family members claimed that they did not file wealth tax returns because taxable wealth in their hands for all these assessment years is below taxable limit. Therefore, merely for the reason that there is no wealth tax returns filed by the family members no adverse inference could be drawn against t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lable on record and gone through orders of the authorities below. The AO has made addition towards unexplained expenditure on the basis of jotting of loose sheet found during the course of search. According to the Assessing Officer, jottings contained in loose sheets represent repayment of loan to Shri. Shanmugasundaram of Mysore, for which the assessee could not explain source of income. It was the explanation of the assessee before the AO that, he received loan from his friend for purchase of land, which did not materialized and thus, the same has been repaid. If you consider the loan received from his friend as source, then the question of making addition towards repayment of said loan does not arise. We find that the AO has denied the explanation of the assessee with regard to the acceptance of loan from his friend Shri. Shanmugasundaram, whereas he has made addition towards repayment of very same loan on the ground that the appellant could not explain source for repayment. In our considered view, first of all addition cannot be made on the basis of jottings in loose sheet, unless other corroborative evidence to prove that whatever recorded in loose sheet are correct. Secondly, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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