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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 ..... (2.1) not considering the sources of jewellery found during the course of search proceedings and its explanation submitted during the course of assessment proceedings as well as appellate proceedings (2.2) ignoring the affidavits, valuation reports of Mehta Jewels dated 31.07.2002, declaration under VDIS 1997 gift deeds and gift declaration (2.3) not controverting the factum of joint family living of the assessee, which stands accepted by the Assessing Officer, (2.4) rejecting the mandate of CBDT instructions number 1916 for all the family members (2.5) not accepting the 1088.53 gm. of gold jewellery owned by Smt. Nidhi Data, assessees's wife, prior to her marriage (2.6) incorrectly mentioning the fact on page number 83 of the appellate order, which are just on his presumption, assumption and surmises, without any material and record (2.7) 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 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the members/concerns of Data Group, Alwar on 14.10.2015 of which the assessee is one of the members. During the course of search, stock-in-trade, documents, books of account and/or loose papers were found and seized from the premises of the members of the Data Group of which one such member happens to be the assessee. Consequently, notice under section 153A of the IT Act was issued and served upon the assessee on 04.07.2016 requiring him to file a true and correct return of income. In response, the assessee filed his return under section 139 on 24.03.2017 declaring income of Rs. 19,26,220/-. The case was selected for manual scrutiny, being search case, as per prevalent CBDT guidelines. The assessee derives income from salary, business income and other sources. The assessment proceedings were initiated by issuing notice under section 143(2) of the IT Act on 11.08.2017 and duly served upon the assessee on 18.08.2017. Notice under section 142(1) dated 31.08.2018 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 Authoriz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,00/- was seized. The explanation in respect of the cash found was provided which is reproduced at Pg 3-5 of the assessment order. The AO accepted that Rs. 1,71,010/- found in case of Babu Lal Data is to be considered in his case. However he did not accept the explanation with reference to the cash of Rs. 4,20,410/- found from the room of Deepak Data and Rs. 7,56,030/- found from the room of assessee and thus made addition of Rs. 11,76,400/- u/s 69A of the Act. The Ld. CIT(A) at Pg 30 held that cash of Rs. 4,20,410/- was found from the room of Deepak Data and therefore the same cannot be considered in the hands of assessee and thus deleted the addition of the same in the hands of assessee. Out of the cash of Rs. 7,56,030/- found from the room of assessee, the Ld. CIT(A) at Pg 31-32 deleted the addition of Rs. 3,27,200/- (3,02,000+25,200) as belonging to Smt. Nidhi Data, wife of assessee being amount received by her on her birthday on 07.10.2015of Rs. 3,02,000/- 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- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aking addition purely on the basis of suspicion. Further, I failed to understand the reasoning of the AO that the amount was withdrawn to justify the cash deposits during demonetization period i.e., between 9th Nov., 2016 to 30th Dec., 2016. It is also seen that the cash was withdrawn much prior to such event. So far observation regarding sharp increase in payable expenses is concerned, there is no finding by the AO that such expenses are bogus. Therefore, in my considered view, the addition has been made purely on the basis of suspicion. Such action of authorities below cannot be affirmed. I, therefore, direct the AO to delete the impugned addition. Thus, ground raised by the assessee in this appeal is allowed." Nand Kumar Taneja & Anr. Vs. ITO (2019) 55 CCH 0705 (Del.) (Trib.) The relevant para 6 & 7 of this decision is reproduced as under:- "6. Apart from that, the details of; opening cash, cash withdrawal, cash deposited, cash expenditure; closing cash 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... closed in the balance sheet was beyond the scope of their income or are not substantiated from the bank account. Simply because after the period of demonetization, that is, 08.11.2016, certain amount of cash has been deposited in the bank account, it does not mean that the cash- in-hand as on 31.3.2015 and 31.03.2016, duly shown in the balance sheet and disclosed to the department in the respective income tax return filed much earlier, is unexplained. Accordingly, in view of the above reasoning, addition made by the AO and sustained by the Ld. CIT (A) is directed to be deleted." Neeta Breja Vs. ITO ITA No. 524/Del/2017 order dt.25.11.2019(Del.) (Trib.) The Hon'ble ITAT at Para 12 of its order held as under:- "12. In the present case also the learned assessing officer or the learned CIT A did not show that above cash was not available in the hands of the assessee or have been spent on any other purposes. Further the coordinate bench in ACIT vsBaldev Raj Charla 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 m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in law in confirming the addition of 2102279.00 as undisclosed jewellery u/s 69A of the Income Tax Act, 1961, by (2.1) not considering the sources of jewellery found during the course of search proceedings and its explanation submitted during the course of assessment proceedings as well as appellate proceedings (2.2) ignoring the affidavits, valuation reports of Mehta Jewels dated 31.07.2002, declaration under VDIS 1997 gift deeds and gift declaration (2.3) not controverting the factum of joint family living of the assessee, which stands accepted by the Assessing Officer, (2.4) rejecting the mandate of CBDT instructions number 1916 for all the family members (2.5) not accepting the 1088.53 gm. of gold jewellery owned by Smt. Nidhi Data, assessees's wife, prior to her marriage (2.6) incorrectly mentioning the fact on page number 83 of the appellate order, which are just on his presumption, assumption and surmises, without any material and record (2.7) 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 exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g 83-88) Facts:- During the course of search gold jewellery weighing 7181.730 gms and silver articles weighing 43.916kgs(Annexure 15) was found from the residence/ bank locker of assessee & his family members at Jaipur and Alwar as under:- Particulars Gold Jewellery (in gms) Silver Articles (in kgs) From residence and bank locker at Alwar - Locker No.1314 of PNB, Alwar 3146.330 173.60 2.97 2.99 Total 3319.930 5.96 From residence and bank locker at Jaipur - Room of Nidhi Data, w/o Ajay 1354.500 3.19 - Room of Ritika Data, w/o Deepak 1506.000 91.500 2.04 - - Room of Mohini, w/o Babulal - Silver utensils Ritika- 11.344 - Nidhi- 9.134 32.73 Mohini- 12.254 909.800 - - Locker No.333, SBI- Nidhi Data Total 3861.800 37.96 Grand Total 7181.730 43.916 In search at Jaipur, an indicative statement showing gold & silver jewellery in the name of 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 (Ann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the family of assessee is a joint family comprising of the family of assessee, family of his father Sh. BabuLal Data and family of his brother Sh. Deepak Data. The family has residence at Alwar and also at Jaipur. Sh. BabuLal Data usually resides at Alwar whereas the assessee and his brother along with their family normally reside at Jaipur. However, at Jaipur there is separate bedroom of Mohini Data wherealso gold jewellery was found. Therefore, it is not uncommon that the jewellery of the wife of assessee and his brother is kept at the residence/ locker at Alwar or the jewellery of the wife of assessee's brother is kept in the room of the assessee. Hence, the jewellery so found at Alwar and Jaipur needs to be considered together. The AO in course of assessment proceedings in case of Sh. BabuLal Data in the assessment order dt.20.12.2017 (Annexure 20) has not accepted this contention by referring to the statement of assessee, Deepak Dataand Mohini Data, mother 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lery was considered as explained in her case after excluding gold jewellery of 171.07 gms in her hand as unexplained. The AO also considered the gold jewellery as claimed in case of Ajay Data, Deepak Data and the minor children's to that extent claimed as explained and thus arrived at gold jewellery explained to the extent of 3500.45 gms out of the total gold jewellery of 3770.30 gms found from the residence and from locker at Jaipur but in doing so it is ignored that 91.500 gms of gold jewellery was found from the room of Mohini Devi which cannot be considered in the hands of assessee and thus wrongly calculated the unexplained gold jewellery at 361.345 gms (3861.345-3500.455) as against the correct calculation of 269.845 gms (3770.30-3500-0.455). The Ld. CIT(A), however, moved one step forward and considered only the jewellery found from room of Nidhi Data at 1354.500 gms(wrongly taken by CIT(A) at 1394.500 gms at Pg 84 of the order) and from her locker at 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 (2304.300-1304.82 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1088.853 + 633.15 + 25.925 + 248.35) whereas the lower authorities without controverting the affidavits and the evidences filed have only considered 907.425 gms (633.15+25.925+248.35) as explained in the hands of Nidhi Data. Thus considering the totality of fact, the entire gold jewellery of 2264.300 gms found from the bedroom and locker of Nidhi Data is fully explained. It is also submitted that considering the status of assessee, the jewellery found can't be presumed to be excessive/ unreasonable. In this connection reliance is placed on the decision of Hon'ble Delhi High Court in case ofAshok Chaddha Vs. ITO 69 DTR 82 where gold jewellery weighing 906 gms found in search was held to be not substantial as being 'StriDhan' of the assessee's wife and accordingly addition u/s 69A was deleted. Again Hon'ble ITAT Delhi Bench in case of Vibhu Aggarwal Vs. DCIT (2018) 170 ITD 580 where jewellery of 2531.50 gms was found at the assessee's residential premises, considered 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on that the amount withdrawn by the assessee from M/s Vijay Industries has been utilized elsewhere. There is no law which prohibits an assessee to keep cash in hand and therefore only because assessee has not given explanation as to why the cash was withdrawn, when he has withdrawn the cash earlier also cannot be a ground to reject the explanation of assessee. In various cases referred above, it has been held that where no evidence is brought on record that cash withdrawal has been utilized elsewhere, such cash should be considered as available with the assessee. Considering all these facts, we direct the AO to delete the addition of Rs. 4,28,830/- made by him. Ground Nos.2 & 3 : 6.1 We have heard the rival submission and perused the material available on record. We note that in search, gold jewellery of 3319.930 gms & silver articles of 5.96 kg was found from the residence and bank locker at Alwar and gold jewellery of 3861.800 gms & silver articles of 37.96 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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