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TMI Blog2025 (2) TMI 815X X X X Extracts X X X X X X X X Extracts X X X X ..... ticles are considered as belonging to the family as a whole, there does not remain any unexplained gold jewellery. When the jewellery was found from the bedroom and locker of Nidhi Data, the addition made by Ld. CIT(A) in the hands of assessee is otherwise unjustified. We also found that in respect of the jewellery found from the room & locker of Nidhi Data, assessee has furnished the evidences as to the source of same but without controverting the evidences and the affidavits filed it was not correct to consider any part of gold jewellery found from the bedroom and locker of Nidhi Data as unexplained. Hence the addition of Rs. 27,15,544/- (9,81,744 + 17,33,800) confirmed by the Ld. CIT(A) is deleted. Silver utensils/ ornaments - We note that from the bedroom and the common room, 12,322.80 gms (3188.800 + 9134) of silver article was found from Nidhi Data. It comprises of 8000 gms owned by Nidhi Data, 1170 gms owned by assessee and 3152.80 gms belonging to the children. Out of it, 8000 gms is considered as explained by AO leaving the remaining silver items at 4322.800 gms but addition has been made for 29,960.05 gms. Thus the addition made is prima facie incorrect. Otherwise also, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... figures mentioned in the assessment order are not reconcilable and even the learned AR was not able to reconcile and explain the source of the figures mentioned in the assessment order in this regard. The source of figures (2038.87 grams, 317.80 grams, 1550 grams) (mentioned on page 18 of the assessment order), how and where these were claimed by the appellant is not explained". These findings are incorrect on two counts, firstly by 317.80 grams, and 1550.00 grams are not in addition to 2038.87 grams, whereas are part of 2038.87 grams and secondly the source of 1867.80 grams (317.80+1550.0) are already explained in the table in the assessment order on page no. 18. (2.8) total jewellery found 3861.800 grams, jewellery explained 3500.455 grams, unexplained jewellery 361.345 grams (3861.345- 3500.455) (page 24 of assessment order), balance unexplained jewellery 171.07 grams of Ritika (supported by purchase bills) and 190.275 grams of Nidhi out of 1088.53 grams (duly supported by valuation report) (2.9) placing reliance upon the statement submitted during the course of search proceedings, which is simply an indicative and estimated statement and (2.10) giving various contradi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was issued to the assessee requiring the assessee to furnish details as per questionnaire enclosed therewith. Further, notices under section 142(1) were issued from time to time and the matter was discussed with the Authorized Representative of the assessee. In compliance to the notices served upon the assessee, the assessee furnished the relevant details which were examined and placed on record. During the assessment proceedings, the assessee was asked to explain and furnish documentary evidences regarding Unexplained Cash, Unexplained Jewellery found and seized during the course of search. The submission made by the assessee was examined in detail along with the details furnished. After examination of the submission and details placed on record, the AO completed the assessment at a total income of Rs. 52,04,899/- under section 143(3) of the IT Act, 1961, as under :- 1. Returned Income Rs. 19,26,220/- 2. Unaccounted cash Rs. 11,76,400/- Undisclosed jewellery Rs. 21,02,279/- Total assessed income Rs. 52,04,899/- 3. Aggrieved by the order of the Assessing Officer, the assessee challenged the action of the AO by preferring an appeal before the ld. CIT (App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- and pin money of Rs. 25,200/-. However, he did not accept the explanation of the remaining cash of Rs. 4,28,830/- claimed to be out of amount withdrawn from M/s Vijay Industries on 05.04.2014- Rs. 72,000/-, on 02.07.2014- Rs. 2,00,000/- and on 20.04.2015- Rs. 2,00,000/- for the reason that no explanation was given as to why cash was withdrawn when assessee has already withdrawn cash of Rs. 72,000/- on 05.04.2014 and the entire household expenses are incurred by Sh. BabuLal Data by referring to various decisions on preponderance of probabilities and in the absence of nexus between the cash withdrawn and the cash found. Thus the limited issue in this ground is whether the cash of Rs. 4,28,830/- considered as unexplained by Ld. CIT(A) is to be allowed set off against cash withdrawal of Rs. 4,72,000/- between 05.04.2014 to 20.04.2015 or not. It is submitted that there is no law prohibiting an assessee to keep cash in hand. It is not disputed that assessee has made withdrawal of Rs. 4,72,000/- between 05.04.2014 to 20.04.2015 from M/s Vijay Industries, Khairthal. No document is found in search that the amount so withdrawn has been utilized elsewhere particularly when the expenditur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h in hand and increase cash in hand, in case of both the assessees were given before the authorities below, which has been incorporated above in para 3 and 3.1 No discrepancy or any inquiry has been done by Assessing Officer to disapprove the cash disclosed in the books of account and balance sheet. The sole reason for disbelieving the assessee's explanation is that, firstly, no prudent person after withdrawing the cash will keep at home; and secondly, if there was an OD account having negative balance on which interest is being charged, then there was no need to keep such huge cash in hand at home. Such reasoning dehors any contrary material on record that the cash disclosed in the books of accounts has been invested somewhere else, then on mere surmise assessee's explanation cannot be discarded. If assessees have genuine sources of income which are received through banking channels, out of which cash has been withdrawn and have been disclosed in the income tax return and in the balance sheet as cash-in-hand, then I am unable to apprehend how the provision of section 69A is applicable. Because the section can only be invoked where in any financial year the assessee is found to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arla 121 TTJ 366 (Delhi) also held that merely because there was a time gap between withdrawal of cash and cash deposits explanation of the assessee could not be rejected and addition on account of cash deposit could not be made particularly when there was no finding recorded by the assessing officer or the Commissioner that apart from depositing this cash into bank as explained by the assessee, there was any other purposes it is used by the assessee of these amounts. In view of above facts, the ground number 1 of the appeal of the assessee is allowed and orders of lower authorities are reversed." DCIT Vs. Veena Awasthi(2018) ITA No.215/LKW/2016order dt.30.11.2018 (Lucknow) (Trib.) The Hon'ble ITAT at Para 8 of its order held as under:- "8. We have perused the case record and heard the rival contentions. We find that addition has been made by the Assessing Officer, as is evident from his order, on the ground that he has come to the conclusion that cash deposits were from some other source of income which is not disclosed to the Revenue. Assessing Officer nowhere in his order has brought out any material on record to show that assessee is having any additional source of income o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7) incorrectly mentioned the fact on page no. 85 in second last para of the appellate order that "as the figures mentioned in the assessment order are not reconcilable and even the learned AR was not able to reconcile and explain the source of the figures mentioned in the assessment order in this regard. The source of figures (2038.87 grams, 317.80 grams, 1550 grams) (mentioned on page 18 of the assessment order), how and where these were claimed by the appellant is not explained". These findings are incorrect on two counts, firstly by 317.80 grams, and 1550.00 grams are not in addition to 2038.87 grams, whereas are part of 2038.87 grams and secondly the source of 1867.80 grams (317.80+1550.0) are already explained in the table in the assessment order on page no. 18. (2.8) total jewellery found 3861.800 grams, jewellery explained 3500.455 grams, unexplained jewellery 361.345 grams (3861.345-3500.455) (page 24 of assessment order), balance unexplained jewellery 171.07 grams of Ritika (supported by purchase bills) and 190.275 grams of Nidhi out of 1088.53 grams (duly supported by valuation report) (2.9) placing reliance upon the statement submitted during the course of search pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... various persons was found (Annexure 8.3) according to which total of gold jewellery is 5383.13 gms and total of silver article is 20.406 kg. Sh. Ajay Data in his statement u/s 132(4) dt. 14.10.2015 and reply to Q. No.38 (Annexure 19)stated that whatever gold jewellery & silver item was found in search at residence and at locker is verifiable from such indicative statement of jewellery. In course of assessment proceedings assessee furnished the person wise list of gold jewellery held by different members of the family aggregating to 7186.208 gms(Annexure 8.14). This is also supported by affidavit of various family members/ wealth tax returns, etc(Annexure 8.15 to Annexure 8.27). This fact is also accepted by the AO at Para 9.5, Pg15 of the order where he admitted that such sheet of jewellery furnished by the assessee during search action while recording the statement has an evidentiary value to some extent and the same cannot be held as an afterthought but at the same time he further observed that such sheet does not put evidential value to a document itself until and unless it is supported with documentary evidences. Thereafter in respect of jewellery found at the residence and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of assessee.However, the Ld. CIT(A) vide order dt. 19.08.2019 (Annexure 21)has accepted that the jewellery found at Alwar and Jaipur needs to be considered together and the CBDT circular squarely applies. This finding of CIT(A) is upheld by the Hon'ble ITAT in ITA No.1232/JP/2019 dt. 05.05.2022 (Annexure 22)and thus the addition of Rs. 25,34,587/-made on account of unexplained jewellery in case of BabuLal Data was deleted. Hence when in case of BabuLal Data considering the entire jewellery found from the residence and bank locker at Alwar& Jaipur, the jewellery found was considered as explained, the addition confirmed by Ld. CIT(A) considering the jewellery found from the room and the locker of assessee as belonging to him only is unjustified. It is submitted that Smt.Mohini Devi in her statement dt. 05.11.2015 in Q.No.1 stated that her residence is at Alwar and Jaipur. Further in reply to Q.No.2 & 3 which was with reference to the jewellery found in locker at Alwarshe stated that the same belongs to her, her husband and HUF. However, no question was asked to her as to the jewellery found at residence. In the statement of Deepak Data dt. 15.10.2015, in reply to Q.No.24 where he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 909.800 gms, i.e. 2264.300 gms(wrongly taken by CIT(A) at 2304.300 gms) in the hands of assessee. From the same he considered 1304.825 gms (907.425+200+99.400+98) as explained and thus considered 999.475 gms (2304.300-1304.825) as unexplained. This calculation made by CIT(A) is incorrect in as much as the total gold jewellery found from the room and locker of Nidhi Data 2264.300 gms (1354.500+909.800) and from this if the explained jewellery considered by CIT(A) at 1304.825 gms is reduced, the remaining unexplained gold jewellery even as per CIT(A) would be 959.475 gms. It is submitted that in case of BabuLal Data the jewellery found both from locker and residence at Alwar and Jaipur was considered together. In case of assessee the AO considered the jewellery of assessee's family and family of his brother Deepak Data together. However Ld. CIT(A) has considered it individually. If such is the case and the jewellery found at Jaipur from bedroom of Nidhi Data and from her locker is to be considered as unexplained, the addition can be made only in case of Nidhi Data and not in case of assessee in as much as no material is brought on record that assessee acquired such jewellery from h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsidered the same as reasonable by holding that in view of CBDT Instruction No. 1916 dt. 11th May, 1994, the excess jewellery found in the case of assessee, his parents, his wife, their children and the HUF was very nominal and was very much reasonable keeping in mind the riches and high status and more customary practices. In the present case also, considering the family background of the assessee, 2264.30gms of jewellery found from the family of assessee is reasonable particularly when no evidence was found in search to suggest that assessee made any unexplained investment in jewellery. So far as silver utensils/ornaments is considered, the AO out of 37960.05 gms (correct 37960.800 gms) found from locker and residence at Jaipur considered only 8000gms as explained and made addition of remaining silver of 29960.05 gms valued at Rs. 11,20,505/- as unexplained. The assessee at Pg 61-63 of the order of CIT(A) furnished his explanation but the Ld. CIT(A) without giving any finding confirmed the addition. It may be noted that from the bedroom and the common room 12322.80 gms(3188.800+9134)of silver ornaments was found from Nidhi Data, w/o assessee. This comprises of 8000 gms owned by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 kg was found from the residence and bank locker at Jaipur. The assessee has claimed that he is a member of joint family along with the family of his father Sh. Babu Lal Data and family of his brother Sh. Deepak Data and it is not uncommon that jewellery & silver articles of one person is kept with other person at Jaipur or Alwar. The fact is jewellery found at Alwar and Jaipur to be considered together has been accepted by Hon'ble ITAT in ITA No.1232/JP/2019 dt. 05.05.2022. Once the jewellery and silver articles are considered as belonging to the family as a whole, there does not remain any unexplained gold jewellery. 6.2 We also note that the Ld. CIT(A) has considered only the jewellery found from the room of Nidhi Data at 1354.500 gms (wrongly taken by the CIT(A) at 1394.500 gms) and from her locker at 909.800 gms, i.e. 2264.300 gms in the hands of assessee. Out of it he considered 1304.825 gms as explained and thus considered the remaining old jewellery of 959.475 gms (wrongly taken by the CIT(A) at 999.475 gms) as unexplained. Thus when the jewellery was found from the bedroom and locker of Nidhi Data, the addition made by Ld. CIT(A) in the hands of assessee is otherwise unj ..... X X X X Extracts X X X X X X X X Extracts X X X X
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