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TMI Blog2024 (6) TMI 721X X X X Extracts X X X X X X X X Extracts X X X X ..... o the assessee and gold ornaments declared in the HUF also claimed as deduction from the total gold ornaments / valuable found and the balance amount of Rs. 38,02,030/- is offered for tax by the assessee and in respect of silver items / valuation the weight of the found items comes to 26,983/- out of which 17,400/- declared in wealth tax return and balance amount of Rs. 3,01,865/- considered as income and offered for total value for which we do not find any infirmity in the working provided by the assessee as the value and quantity was not disputed and only the grams were disputed which we found to be in order and we are of the considered view that considering these factual aspect of the matter there is no need to sustained the addition merely on the reasons that the assessee has at the time of recording of statement u/s.132(4) admitted lumpsum sum as unexplained investment which we do not found correct and the working which is based on the evidence and guidelines of the CBDT cannot be ignored and therefore, we direct the ld. AO to delete the addition of Rs. 28,96,104/- made in the assessment order. In terms of the discussion so recorded the ground no. 1 raised by the assessee is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der of the Learned Commissioner of Income Tax (Appeals)-2, Udaipur dated 23.05.2023 [here in after "ld.CIT(A)"] for assessment year 2017-18, which in turn arise from the order dated 10.12.2018 passed under section 143(3) of the Income Tax Act (here in after "Act") by theACIT, Central Circle-1, Udaipur. 2. In this appeal, the assessee has raised following grounds: - "1. That on the fact of circumstances of the case as were as in the law Assistant Commissioner of Income Tax, Central Circle, Udaipur vide order dated 10.12.2018 passed u/s 143(3) of the Income Tax Act, under the titled unexplained investment in jewellery by invoking provision of section 69 of the Income Tax Act, vide Para no. 4 onwards page no. (3) to (29) made an addition of Rs. 28,96,104/- on the ground that appellant during the course of recording statement surrendered a sum of Rs. 70,00,000/- whereas in the return of income appellant offer for taxation sum of Rs. 41,03,896/-, as such remaining amount of Rs. 28,96,104/- represent unexplained investment u/s 69A of the Income Tax Act, and accordingly addition were made. The addition so made duly been confirmed by the Commissioner of Income Tax, (Appeal- 2), Udaipur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee has filed return of income electronically on 29.07.2017 at total income of Rs. 73,24,310/- and agriculture income of Rs. 15,040/-. The returned income u/s. 153A also comprises additional income of Rs. 41.03.896/- on account of unexplained investment in jewellery and Rs. 18,99,000/- on account of unexplained investment in construction of house on the basis of seized material. The case was selected for scrutiny assessment and notice U/s 143(2) of the Income Tax Act was issued on 16.07.2018 which was duly served upon the assessee Subsequently, during the course of assessment proceedings, notices u/s. 142(1) of the Act were also issued to the assessee on requiring him to produce/explain/furnish various information as specified therein and placed on record. 3.1 During the course of the search, total jewellery valued at Rs. 1,11,64,994/- was found at the residence. When the assessee was confronted during statement recorded on oath u/s 132(4) of the Act, he was unable to explain the source of the jewellery. Thus, jewellery valued at Rs. 62,67,319 was seized. The assessee has admitted the jewellery valued at Rs. 70,00,000/- as unexplained money u/s 69A of the Act for the year F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... balance of M/s. Sarvodaya Agrotech India Limited as claimed by the assessee, out of total cash of Rs. 5,41,400/-, cash of Rs. 2,41,400/- may be treated as explained. The remaining cash of Rs. 3,00,000/-, which was seized, is treated as unexplained money and the same is brought to tax in the hands of assessee u/s. 69A of the Income Tax. Act. 4. Aggrieved from the above order of the Assessing Officer, assessee preferred an appeal before the ld. CIT(A). Apropos to the grounds of the appeal so raised by the assessee, the relevant finding of the ld. CIT(A) is reiterated here in below:- "6.3 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:- In this case, gold and silver worth Rs. 1,11,64,998/- was found during the search. The appellant admitted during the course of search that out of this valuables worth Rs. 70,00,000/- are acquired out of its his unaccounted sources of Income. The appellant only offered Rs. 41,03,896/- for taxation in the return of income out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant stated that the surrender of Rs. 70.00 Lakhs during the course of recording under section 132(4) of the Income Tax Act cannot be a basis to made addition to that extent ignoring the fact of the record. Simply picking-up the surrender amount from the statement to make addition is not tenable in the eye of law on the contrary there is Plethora of decision in favour of the assessee. The appellant stated that whatever the gold and ornament jewellery disclosed in the return of income is required to be accepted I found that the AO has primarily relied upon the fact that the jewellery was found during search. The onus was on the appellant to show that the valuable items of gold and silver were acquired out of explained sources. The appellant failed to discharge the onus and therefore made surrender. Even during assessment except making averments, no sources were explained by the appellant. The jewellery declared in the wealth tax return was also less than the jewellery which was already considered as explained. The jewellery belonging to various family members is already considered by the AO in accordance with the CBDT circular. There is no evidence furnished by the appellant th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidered by the AO. Therefore, the AO has already complied with the contents of the judgement. Bombay Bench case of Nawaz Singhania dated 22.12.2017 (168 ITD 478) As held in this decision, the CBDT Circular is already considered by the AO. Other facts are different from the case of the appellant. In the case of the appellant, the appellant has accepted the fact that the investment in unexplained jewellery is made out of undisclosed sources. Therefore, the AO has already complied with the contents of the judgement. Delhi Bench dated 09.03.2018 Ritu Bajaj 63 ITR 594 (Delhi) As held in this decision, the CBDT Circular is already considered by the AO. Other facts are different from the case of the appellant. In the case of the appellant, the appellant has accepted the fact that the investment in unexplained jewellery is made out of undisclosed sources. Therefore, the AO has already complied with the contents of the judgement. ITAT Indore Bench in case of Alankar Jewellers dated 1.09.2021 The facts of that case decided by the ITAT, Indore were entirely different. The case was of a jewellery trader and the excess jewellery was found which was not recorded in the books of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Mrs. Chandrawati Bai, Mrs. Lalita devi & M/s Surajmal Agarwal HUF 99- 102 10. Copy of Wealth Tax Assessment of Smt. Chandrawati Bai W/o Shri Suraj Mal ji Assessment year 1991-92, in the wealth tax return shown silver and gold ornament. 98 11. Wealth Tax computation of Smt. Chandrawati Bail for assessment year 1992-93 102 12. Wealth Tax Assessment of Smt. Lalita Devi for assessment year 1992-93 shown gold ornament and silver. 103-106 13. Computation of Wealth Tax Ram Sahary Surajmal HUF, Chhotisadari for the assessment year 1992-93 showing silver 15 Kg. and Gold ornament 700 Gram 107-109 14. Will of Smt. Chandra Wati bai W/o Shri Suraj Mal Ji Agarwal executed on 05.01.1995 110-112 15. Photo copy of the decision of Income Tax Tribunal Allahabad Bench Allahabad Appeal No. 573/Alld/2014 assessment year 2010-11 dated 05.01.2023 total pages 1 to 31 & Jaipur bench Shree Ram Balji. 113-143 & 114-158 16. Written submission on the point of retraction of statement of Gold ornament and jewellery 159-163 17. Power of Attorney in favour of G.K. Gargieya ITP 164 5.1 The ld. AR of the assessee in respect of the ground No. 1 raised by the assessee submitted that though t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even if that assurance is considered the cash to the extent of Rs. 2,50,000/- should not be considered as unexplained and required to be deleted. 6. Per contra, the ld. DR representing the Revenue heavily relied upon the finding recorded in the orders of the Assessing Officer and ld. CIT(A). The ld. DR vehemently argued that the assessee based upon the various fact and information placed before him by search partyvoluntarily surrendered a sum of Rs. 70,00,000/- and therefore, making a retraction thereafter is not correct and therefore, the finding of the lower authorities should be sustained. As regards the cash addition of Rs. 2,00,000/-, the ld. DR submitted that the same is not recorded and whatever relief for which the assessee is eligible has already been granted to the assessee by the lower authorities. Thus, she supported the orders of the ld. AO and ld. CIT(A). 7. We have heard the rival contentions, perused the material placed on record.The bench noted that in this appeal the assessee has raised two issues one is in relation to the addition on account of Gold and Silver Jewellery and another in respect of the cash found. The brief fact related to the disputed is that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been considered carefully and found not acceptable by the ld. AO and thus, cash so found during search remained unexplained and considered as income of the assessee as unexplained money and the same is brought to tax in the hands of assessee u/s. 69A of the Income Tax. Act. On both the issue the assessee has challenged the finding of the assessing officer before the ld. CIT(A) but the assessee did not succeeded. As regards the addition of jewellery the ld. CIT(A) noted the jewellery was found in search. The onus on the assessee to show that the items of gold and silver were acquired out of the explained sources. The jewellery declared in the wealth tax return was less then the jewellery found the ld. AO has given the credit of jewellery as per CBDT guidelines and therefore the ld. CIT(A) hold that the addition made by the ld. AO is valid and therefore, the addition of Rs. 28,96,104 was sustained. As regards the cash of Rs. 5,41,400/- the assessee claimed that a sum of Rs. 2,41,400/- was belonging to Agrotech India Limited which was treated as explained and out of balance 4 lac the ld. CIT(A) has considering the size and stature of family considering Rs. 2 lac out of savings and su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the value and quantity was not disputed and only the grams were disputed which we found to be in order and we are of the considered view that considering these factual aspect of the matter there is no need to sustained the addition merely on the reasons that the assessee has at the time of recording of statement u/s. 132(4) admitted lumpsum sum as unexplained investment which we do not found correct and the working which is based on the evidence and guidelines of the CBDT cannot be ignored and therefore, we direct the ld. AO to delete the addition of Rs. 28,96,104/- made in the assessment order. In terms of the discussion so recorded the ground no. 1 raised by the assessee is allowed. 9. As regards the ground no. 2 which is related to the addition of Rs. 2,00,000/- sustained by the ld. CIT(A) out of the total cash of Rs. 5,41,000/- found from the premises searched. The bench noted at the time of search the assessee was confronted about the source of cash found for an amount of Rs. 5,41,000/-. Wherein the assessee while answering the question no. 35 submitted that Rs. 1,50,000/- belong to M/s. Sarvodaya Agrotech India Limited. The ld. AO considering the submission of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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