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TMI Blog2023 (11) TMI 1043X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned CIT(A) erred in deleting the addition made towards unaccounted cash, jewellery and unexplained investments without appreciating the facts on record. 3. The learned CIT(A) erred in deleting the addition made towards un accounted cash found and seized during the course of search without appreciating that the assessee failed to substantiate the source with evidence and the claims made were only after thought. 4. The learned CIT(A) erred in deleting the addition made u/s. 698 of the IT Act, towards un-accounted jewellery found and seized during the course of search without appreciating that the assessee failed to satisfactorily explain the source for the investment in jewellery with documentary evidence, either during the search proceedings or during the assessment proceedings. 5. The learned CIT(A) erred in deleting the addition of Rs. 2.70 crores made towards un --explained investment by the assessee and admitted by the assessee under section 132(4) of the IT Act. 6. The learned CIT(A) ought to have noted that the admission made u/s. 132(4) of the IT Act was with reference to seized records and corroborated. 7. The learned CIT(A) ought to have appreciated the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s she was travelling abroad. The assessee has also explained unexplained jewellery and argued that said jewellery belongs to his family members and was acquired over the years. The appellant had also explained the contents of seized material and entries recorded therein and argued that seized documents contains investment made to Chit Funds and purchase of property and all transactions has been recorded/included in his regular return of income filed for relevant assessment year. The Assessing Officer, however, was not convinced with the explanation furnished by the assessee and according to the Assessing Officer, the assessee could not explain source for cash found during the course of search and also failed to explain excess jewellery found during the course of search. Therefore, made additions towards cash found during the course of search amounting to Rs. 6,32,340/- and unexplained jewellery amounting to Rs. 16,93,524/-. The Assessing Officer, had also made additions towards voluntary admission of undisclosed income of Rs. 2.70 crores on the ground that averment filed by the assessee after a gap of more than one year from the date of search is an afterthought and assessee could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the course of assessment proceedings, the assessee stated that balance cash of Rs. 5 lakhs belongs to his aunt Smt. Padmavathamma, and she kept the money for safe keeping as she was travelling abroad. To support his arguments, the assessee has furnished HDFC bank statement of Smt. Padmavathamma for withdrawal of Rs. 4 lakhs three days before the date of search. 7. The ld. DR, Shri. R. Clement Ramesh Kumar, CIT, submitted that the ld. CIT(A) erred in deleting additions made by the Assessing Officer towards cash found and seized during the course of search without appreciating the fact that the assessee has failed to substantiate source for cash with evidence and the claim made by the assessee during assessment year is only an afterthought. The Ld. DR, further submitted that if at all, the claim of the assessee is correct that an amount of Rs. 5 lakhs belongs to Smt. Padmavathamma, the assessee should have stated this fact while recording statement u/s. 132(4) of the Act. Since, the assessee could not explain source at the time of search, the averment can only be considered as an afterthought. The ld. CIT(A), without appreciating relevant facts deleted additions made by the Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e are of the considered view there is no error in the reasons given by the ld. CIT(A) to delete additions made towards cash found and seized during the course of search and thus, we are inclined to uphold the findings of the ld. CIT(A) and reject grounds taken by the revenue. 10. The next issue that came up for our consideration from ground no. 4 of revenue's appeal is deletion of additions towards unexplained jewellery amounting to Rs. 16,93,524/-, as per the provisions of section 69B of the Act. During the course of search, gold ornaments worth Rs. 1,22,71,602/- was found. The assessee has declared jewellery in wealth tax returns filed for relevant assessment years amounting to Rs. 1,05,78,078/-. There is an excess jewellery to the extent of Rs. 16,93,524/-. The assessee was called upon to explain jewellery with necessary bills and source for investment. Since, the assessee could not explain excess jewellery found during the course of search, the Assessing Officer made additions u/s. 69B of the Act. 11. The ld. CIT-DR, Shri. R. Clement Ramesh Kumar, submitted that the ld. CIT(A) erred in deleting additions made towards unaccounted jewellery without appreciating fact that, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y members of the appellant including his married daughter and un-married daughter are having jewellery within the limit specified by the CBDT for the purpose of seizure during the course of search. Further, if you consider the jewellery owned by other family members, then there is no excess jewellery as quantified by the Department during the course of search. The ld. CIT(A), after considering relevant facts has rightly deleted additions made by the Assessing Officer towards unexplained investment in jewellery amounting to Rs. 16,93,524/-. Thus, we are inclined to uphold the findings of the ld. CIT(A) and reject grounds taken by the revenue. 14. The next issue that came up for our consideration from ground no. 5 to 8 of revenue's appeal is deletion of addition of Rs. 2.70 crores made towards undisclosed income on the basis of statement recorded u/s. 132(4) of the Act. During the course of search, certain loose sheets comprising promissory notes, signed cheque leaves etc., as per annexure A/BBR/HYD/D/02 was found and seized. The seized loose sheets were confronted with the assessee and a statement u/s. 132(4) of the Act was recorded. In the statement, the assessee admitted undisclo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... salary income. The Assessing Officer, has made additions towards undisclosed income only on the basis of statement recorded from the appellant u/s. 132(4) of the Act, without any reference to corroborative evidence. The ld. CIT(A), after considering relevant facts has rightly deleted additions made by the Assessing Officer and their order should be upheld. 17. We have heard both the parties, perused materials available on record and gone through orders of the authorities below. The Assessing Officer has made additions of Rs. 2.70 crores towards undisclosed income on the basis of statement recorded u/s. 132(4) of the Act. We have gone through relevant question and answers of statement recorded from the assessee and more particularly question no 21 of the statement and answer given by the assessee. In the said statement, there is no classification of any undisclosed investment in any kind of assets including Chit fund or share capital. We further noted that, the loose sheets contain certain jotting in respect of investment in chit fund and share capital of a company. The assessee has explained investment in chit fund and all payments to chit funds is through proper banking channel a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly deleted additions made by the Assessing Officer towards undisclosed income, on the basis of admission in the statement recorded u/s. 132(4) of the Act. Thus, we are inclined to uphold the findings of the ld. CIT(A) and reject grounds taken by the revenue. 18. In the result, appeal filed by the revenue is dismissed. CO No: 02/Chny/2023: 19. The assessee has raised the following grounds of appeal: "1.1 The CIT(A) failed to appreciate the fact that the A.Y. 2016-17 being the year of search, notice issued u/s. 153A of the Act is not valid and ought to have quashed the assessment. 1.2 The CIT(A) having himself taken note of the fact that there is a violation of provisions of the Income Tax Act and the instructions of the CBDT by the AO, he ought to have quashed the entire assessment proceedings as ab-initio void. 1.3 The CIT(A) having himself taken note of the fact that proceedings having been picked up for scrutiny for verification of investment and income from derivatives which was accepted ought to have quashed the assessment which travels beyond that issue. 2.1 The order of the Ld. CIT(A) is correct and in consonance with law and facts to the extent it allows the appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 43(2) of the Act, specified for verification of certain issues, but the impugned assessment year is the year of search, the relevant materials found during the course of search and statement recorded from the assessee needs to be considered to frame the assessment. Since, there are certain issues with reference to incriminating material found during the course of search, coupled with statement recorded from the assessee, the Assessing Officer has rightly completed the assessment, after considering various material found during the course of search. Therefore, it cannot be said that the assessment order passed by the Assessing Officer is null and void. 22. We have heard both the parties, perused materials available on record and gone through orders of the authorities below. It was the categorical findings of the ld. CIT(A) that, although the Assessing Officer referred to notice u/s. 153A dated 27.03.2017 in Para 3 of assessment order, but no such notice was issued to the assessee as per assessment records. It was further observed that, the Assessing Officer inadvertently mentioned in the assessment order that notice u/s. 153A of the Act was issued instead of notice u/s. 142(1) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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