ACIT, CENBTRAL CIRCLE-1, NEW DELHI vs. KAMLESH GUPTA, NEW DELHI

PER SAKTIJIT DEY, JM: This is a bunch of 13 appeals relating to the same assessee.

While, there are cross appeals for assessment years 2009-10,

2011-12, 2012-13, 2013-14, 2014-15 and 2015-16, the appeal

filed for assessment year 2010-11 is by the assessee. However, all

theses appears arise out of separate orders of learned

Commissioner of Income Tax (Appeals)-23, New Delhi. Since, the 2 | P a g e

issues involved in all these appeals are more or less identical,

they have been clubbed together and disposed of in a

consolidated order, for the sake of convenience.

ITA No.952/Del/2018 (Revenue’s Appeal for AY: 2009-10)

For the assessment year under dispute, the assessee filed his

return of income on 31.07.2009 declaring total income of

Rs.44,85,870/-. A search and seizure operation under section

132 of the Income-tax Act, 1961 (for short ‘the Act’) was

conducted in case of the assessee and other related persons on

03.12.2014. In pursuance to such search and seizure operation

proceedings under section 153A of the Act was initiated against

the assessee. In response to the notice issued under section 153A of the Act, the assessee requested the Assessing Officer to treat

the return of income originally filed under section 139 of the Act

as return of income filed in pursuance to notice under section

153A of the Act. From the information available on record, the

Assessing Officer noticed that to ascertain investment made by

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the assessee in a company, namely, M/s. Waberten Ltd.

incorporated in British Virgin Islands (BVI), FT and TR reference

was sent to the competent authorities of BVI by Investigation

Wing. From the information and copies of relevant documents

received from the competent authorities of BVI, it was found that

M/s. Waberton Ltd. was incorporated in BVI on 13th July, 2006. Another company, viz., M/s. Execorp Pvt. Ltd., provided Director

Services to M/s. Waberton Ltd. at the request of the assessee,

pursuant to Nominee Service Agreement, dated 22nd September,

2006. It was further noticed, M/s. Sharecorp Ltd. held one share

in the company as nominee of the assessee pursuant to the

Nominee Service Agreement. These facts were revealed from the

documents sent by BVI Authorities which included letter sent by

M/s. ShareCorp Ltd. to the assessee and the Nominee Service

Agreement. It was further revealed that Nominee Service Agreement was signed by the assessee as the principal and letter

from M/s. ShareCorp Ltd. also acknowledged the assessee as the

Principal. Thus, from the aforesaid facts and information received

from BVI Authorities, the Assessing Officer formed an opinion

that the assessee is real Director, owner and shareholder of M/s.

Waberton Ltd. The assessee, however, contested the claim of the 4 | P a g e

department by submitting that he is not the real owner of the company but the real owner is one Sh. Deepak Kashinath Bhagat, who has executed a power of attorney in favour of the assessee. The Assessing Officer, however, was not convinced with the submissions of the assessee. He also alleged that the onus is

entirely on the assessee to establish that he is not the owner of the M/s. Waberton Ltd. Further, he alleged that despite being given several opportunities during post search inquiry as well as in course of assessment proceeding, the assessee failed to produce any document, including the power of attorney stated to have been given by Sh. Deepak Kashinath Bhagat to establish that he is not the real owner of M/s. Waberton Ltd. 4. On the contrary, the Assessing Officer observed, the documents in possession of the department established beyond doubt that the assessee is the owner of M/s. Waberton Ltd. He further observed that the BVI based company M/s. Waberton Ltd. had net assets worth of US$ 5,511,466 in 2011 and US$ 5,515,457 in 2010, which translates to around Rs.24.83 crores in 2011 and 24.34 crores in 2010, as per exchange rate prevailing on the relevant dates available in website www.exchangerats.org.uk. In the aforesaid premises, the 5 | P a g e

Assessing Officer called upon the assessee to prove that he is not

the beneficial owner of the BVI based company. Further, from the

information received from BVI Authorities, it was found that M/s.

Waberton Ltd. had opened one bank account with Deutche Bank

AG of Singapore and another account with UBS AG of Singapore.

On analyzing the bank statements of these two bank accounts provided by the BVI Authorities, it was found that M/s. Waberton

Ltd. had invested in bonds and equities and several transactions

had taken place through the bank accounts. Based on theses

information, the Assessing Officer issued a show-cause notice to

the assessee to explain, why the amount of Rs.24.83 crores, being

unaccounted investment of the year, should not be added to the

income of the assessee. Further, the Assessing Officer called upon

the assessee to furnish details regarding initial investments

supposed to have been made by the assessee in acquiring M/s. Waberton Ltd. and the profits earned by the said company since

its inception in financial year 2006-07 to financial year 2014-15

in the form of duly certified/audited balance sheet, profit and loss

account, auditor report, Income Tax Return etc.

Officer, the assessee again totally denied the allegation that he is 6 | P a g e

the owner of M/s. Waberton Ltd. In reply to the questionnaire

issued by the Assessing Officer, the assessee submitted point-

wise reply as under:

izi) Account No. 8046971 with Deutsche Bank AG of Singapore. ii) Account No. 158864 with (AS AG of Singapore. The bank accounts were opened and operated by the directors of the Company under their own signatures.” 6. As regards the net assets and investments of M/s. Waberton

Ltd., the assessee submitted that the investments were sourced

out of initial corpus received from Sh. Deepak Kashinath Bhagat,

an USA resident and the investments in financial securities were 7 | P a g e

made by M/s. Waberton Ltd. from these funds. Further, in

response to the query of the Assessing Officer to furnish complete

details regarding source of deposits in foreign bank account and

other income like, interest income, gain on investment etc., the

assessee submitted that M/s. Waberton Ltd. is a separate legal

entity and the assessee has nothing to do with the bank statements and the portfolio of the said company in his individual

capacity. Further, the assessee submitted, since M/s. Waberton

Ltd. is a foreign company under the provisions of section 2(23)A of

the Act incorporated outside the territorial jurisdiction, provision

of section 4 of the Act would not apply to the said company. The

assessee further submitted, the control and management of

affairs of the company M/s. Waberton Ltd. is wholly outside

India. Therefore, as per section 6 of the Act, it does not have a

residence in India. Hence, no part of its income is accruing or arising directly or indirectly through any business connection in

India, or through any property in India or through any asset or

source in India or through the transfer of capital asset situated in

India. Thus, the provisions of section 9 of the Act regarding

income deemed to accrue or arise in Indian will not apply. In

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support of his contention, the assessee relied upon a number of

judicial precedents.

submissions of the assessee and concluded that the investments

and assets of M/s Waberton Ltd. are undisclosed investment of

the assessee. On perusing the portfolio statement and bank statements of M/s. Waberton Ltd., the Assessing Officer noticed

that as on 01.04.2008, there was opening balance of

Rs.21,42,60,898/-. Thus, the Assessing Officer held that the said

opening balance represents the undisclosed investment of the

assessee in the form of securities, term deposits, bank balance.

Accordingly, he added the amount of Rs.21,42,60,898/- to the

income of the assessee by treating it as undisclosed investments

under section 69 of the Act. Further, the Assessing Officer found

that in course of search and seizure operation, it was discovered that the bank account in the name of M/s. German Homeopathic

Distributors Pvt. Ltd., a sister concern of the assessee,

maintained in Bank of India, was not reflected in the books of

account. He found that in case of M/s. German Homeopathic

Distributors Pvt. Ltd., GP rate of 18.23% was applied on total

undisclosed sale of Rs.12,29,52,447/- relating to assessment 9 | P a g e

years 2009-10 to 2015-16 and accordingly additions were made

in the respective assessment years. He observed, in the appellate

order passed in the case of M/s. German Homeopathic

Distributors Pvt. Ltd. for assessment years 2009-10, learned

Commissioner (Appeals) has directed to make additions at the

hands of the assessee in different assessment years as under:

Net sales of Additions Asstt. Local Discount G.P. directed to be Year local rate medicines made by worthy medicines sales CIT(A) in the after hands of Sh. reducing Kamlesh discount Gupta vide his _4 = 2 - 3 (1) ( 2 ) ___(5) _ (6) (3) 20,40,883 2009-10 9.11% 21,95,180 1,54,297 1,85,924 2010-11 88,97,660 3,89,412 85,08,248 9.11% 7,75,101 2011-12 1,41,72,765 9,48,797 1,32,23,968 9.11% 12,04,703 2012-13 2,26,86,064 20,00,481 2,06,85,583 9.11% 18,84,457 2013-14 2,83,98,538 45,11,593 2,38,86,945 9.11% 21,76,101 2014-15 3,55,66,486 41,05,141 3,14,61,345 9.11% 28,66,129 2015-16 1,10,35,754 3,37,708 1,06,98,046 9.11% 9,74,592 Total 12,29,52,447 1,24,47,429 11,05,05,018 9.11% 1,00,67,007

the Assessing Officer added an amount of Rs.1,85,924/- to

assessee’s income on account of profit from undisclosed sales

appearing in the bank account of M/s. German Homeopathic

Distributors Pvt. Ltd. Against the assessment order so passed, the

assessee preferred an appeal before learned first appellate

authority on various grounds.

detailed submissions reiterating the stand taken before the 10 | P a g e

Assessing Officer. Most of the grounds raised by the assessee

were dismissed by learned first appellate authority. He also

rejected assessee’s claim that M/s. German Homeopathic

Distributors Pvt. Ltd. is a separate legal entity and the assessee is

not the beneficial owner of the investment and assets of M/s.

Waberton Ltd. 10. However, as regards the merits of the addition of

Rs.21,42,60,898/- made under section 69of the Act, learned

Commissioner (Appeals) observed that as per Assessing Officer’s

own admission, this amount represents opening balance as on

01.04.2008. Referring to the provisions of section 69 of the Act,

learned Commissioner (Appeals) observed, the investments

covered under section 69 are necessarily required to be made in

the financial year immediately preceding the assessment year.

Thus, he held that since, the investments under consideration are shown as closing balance as on 31.03.2008 and opening balance

as on 01.04.2008, these were not made in financial year 2008-09.

Thus, he held that the provisions of section 69 of the Act would

not be applicable. Accordingly, he deleted the addition of

Rs.21,42,60,898/- while observing that the Assessing Officer is

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free to consider the taxability of the same in the appropriate

assessment year.

materials on record. As rightly observed by learned Commissioner

(Appeals), under section 69 of the Act any investment made in the

financial year immediately preceding the assessment year, for which, the assessment is being made, if remains unexplained, the

Assessing Officer can add the amount as unexplained investment.

As per the admitted factual position, the amount added under

section 69 of the Act by the Assessing Officer represents the

opening balance of investment as on 01.04.2008, i.e., the first day

of the financial year preceding the assessment year under

dispute. Thus, it is patent and obvious, the investments were not

made in the financial year relevant to the assessment year under

dispute. That being the case, addition under section 69 of the Act could not have been made. Therefore, we do not find any

infirmity in the decision of learned Commissioner (Appeals).

Ground raised is dismissed.

ITA No. 626/Del/2018 (Assessee’s Appeal for AY: 2009-10) 12 | P a g e

13 | P a g e

11.That the learned Commissioner of Income Tax (Appeals) has erred in sustaining the action of Assessing Officer in considering the income earned by M/s Waberton Ltd. in the hands of the appellant on the ground that appellant had not disclosed to the RBI or the Income Tax authorities of being the owner of sole single share of M/s Waberton Ltd. and thus concluding that the theory of a company being regarded as a separate legal entity fails bringing in picture the theory of lif ting of corporate veil without appreciating that corporate veil had not been lifted by the Income tax authorities nor any procedure for lifting the corporate veil was followed.

6, all other grounds are not on merits of the addition made, but

on peripheral and ancillary issues. In ground no. 6, which is on

merits, the assessee has raised the issue that the addition could

not have been made in absence of any incriminating material

seized in course of search and seizure operation. While deciding

the issue on merits, learned Commissioner (Appeals) has deleted

the addition made under section 69 of the Act on a different

reasoning. While deciding Revenue’s appeal in ITA

No.952/Del/2018 challenging such decision of learned

4 14 | P a g e

Commissioner (Appeals), we have upheld the decision of learned

Commissioner (Appeals) by dismissing the appeal. Since, the

deletion of addition has already been upheld, though, for a

different reason, the grounds raised have become academic, at

least in this appeal. Inasmuch as, in course of hearing, no

argument has been made by the parties. Hence, these grounds do

not require adjudication.

following additional grounds:

“That the ld. AO has failed in his duty u/s 157 of the Income Tax Act, 1961 is not notifying to the assessee by an order in writing, the determined loss of Rs.2,43,23,659/- from trading of bonds and securities mentioned in para 8.1 of the assessment order.” 16. As could be seen from the ground raised, assessee’s

grievance is, the Assessing Officer, having determined loss from

trading of bonds and securities, should have acted in accordance

with section 157 of the Act and notified the assessee by order in

writing the amount of loss computed by him for the purpose of

carry forward and set off. In our view, this ground is also of

academic nature, hence, do not require adjudication.

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ITA No.627/Del/2018 (Assessee’s Appeal for AY: 2010-11) 18. The effective grounds raised by the assessee are as under:

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on merits of the addition made of Rs.89,20,290/-

filed his return of income on 27.07.2010 declaring total income

of Rs.47,57,130/-. As discussed earlier, with reference to FT &

TR reference sent to the competent authorities of BVI by

Investigation Wing, information was received indicating that the

assessee is a shareholder of M/s. Waberton Ltd. Following the

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approach adopted in assessment year 2009-10, the Assessing

Officer held that the assessee is a beneficial owner of M/s.

Waberton Ltd. and the investments in portfolio securities and

foreign bank accounts are sourced form assessee’s investment.

Based on certain information furnished by the assessee in

pursuance to the query raised, the Assessing Officer estimated the income on trading of securities, dividend income and

interest income at Rs.89,20,290/-, which is approximately

equivalent to 4.7% of the return on average investment.

Accordingly, he added back the amount of Rs.89,20,290/- to the

income of the assessee. The assessee contested the aforesaid

addition before learned Commissioner (Appeals). After

considering the submissions of the assessee in the context of

facts and materials on record, learned Commissioner (Appeals)

did not find any merit in them. Accordingly, he sustained the addition.

addition made is not based on any incriminating material found

as a result of search and seizure operation conducted under

section 132 of the Act. Therefore, he submitted, in absence of

18 | P a g e

any incriminating material, the addition cannot be made. In

support of such contention, learned counsel relied upon the

following decisions:

the observations of learned Commissioner (Appeals).

materials on record. A careful reading of the respective orders of Departmental Authorities make it clear that the disputed addition

was purely based on information received from foreign jurisdiction

in pursuance to FT and TR reference made by the Investigation

Wing of the Department. In fact, there is nothing on record to

suggest that the disputed addition is based on any incriminating

material found as a result of search. Even, learned Departmental

Representative fairly submitted before us that the addition is

based on the information received from foreign jurisdiction in

pursuance to FT and TR reference. That being the case, as per the ratio laid down by the Hon’ble jurisdictional High Court in the

decision cited before us by the learned counsel for the assessee,

in case of unabated assessments no addition can be made in a 19 | P a g e

proceeding under section 153A of the Act in absence of any

incriminating material found as a result of search and seizure

operation. In view of the aforesaid ratio laid down by the Hon’ble

Jurisdictional High Court, we delete the addition of

Rs.89,20,290/- This ground is allowed.

ITA No.628/Del/2018 (Assessee’s Appeal for AY: 2011-12) And ITA No.953/Del/2018 (Revenue’s Appeal for AY: 2011-12) 26. As discussed earlier, based on information received from

competent authorities of BVI, the Assessing Officer made addition

in respect of profit and loss from sale of security shares investments in different assessment years relating to M/s

Waberton Ltd. by treating the assessee as a beneficial owner. In

the impugned assessment year, the Assessing Officer added an

amount of Rs.93,46,303/-. The assessee contested the aforesaid

addition before learned Commissioner (Appeals). After considering

the submissions of the assessee in the context of facts and

materials on record, learned Commissioner (Appeals) found that 20 | P a g e

purely on suspicion, the Assessing Officer has concluded that

there is return of 4.7% per annum on trading of securities,

dividend income etc. He observed, when the Assessing Officer is

making a particular allegation, the onus is entirely on him to

prove that the assessee has received return on investments

outside books. Referring to a chart furnished by the assessee in course of assessment proceeding, learned Commissioner (Appeals)

observed that in the year under consideration, the income which

can be assessed on account of trading of securities, dividend and

interest income is to the tune of Rs.39,29,412/-. Thus, he

directed the Assessing Officer to delete the balance addition of

Rs.54,16,891/-.

materials on record. While deciding identical issue in assessee’s

appeal in ITA No.627/Del/2018, we have held that the addition having been made without any incriminating material found as a

result of search and seizure, is unsustainable. Facts being

identical, the decision taken therein will apply mutatis and

mutandis to this appeal also. Accordingly addition is deleted.

21 | P a g e

Rs.1,40,410/-, being 50% share in profit earned by M/s. Adelmar

Pharma Gmbh, a German company.

Assessing Officer found that during search and seizure operation

conducted in case of the, assessee it came to the notice of the department that the assessee has remitted 15,000 EURO for

equity investment in M/s. Adelmar Pharma Gmbh. It was further

found that as per notarized shareholders’ agreement dated

02.11.2010, the assessee gifted 50% shareholding in M/s.

Adelmar Pharma Gmbh to his son. It was further found that the

assessee and his son are the only shareholders of the company,

each holding 50% of the shares. He further, found that the

assessee is a signatory in the bank account opened in the name

of the company in Germany. Though, the Assessing Officer alleged that the assessee did not furnish bank statement of M/s.

Adelmar Pharma Gmbh, however, he accepted that the assessee

furnished copies of balance-sheets/profit and loss accounts of the

company. From the balance-sheet and profit and loss account,

the Assessing Officer noticed that the company has shown profit

in different assessment years and the profit shown in assessment 22 | P a g e

years 2011-12 is Rs.2,80,820/-. Noticing this, the Assessing

Officer called upon the assessee to explain, why 50% of the profit

earned should not be treated as income of the assessee. Though,

the assessee objected to the proposed addition, however, rejecting

the explanation of the assessee, the Assessing Officer added 50%

of the profit amounting to Rs.1,40,410/- at the hands of the assessee. Learned Commissioner (Appeals) confirmed the

addition.

materials on record. As could be seen from the assessment order,

the Assessing Officer has treated 50% of the profit earned by M/s.

Adelmar Pharma Gmbh, a company incorporated in Germany as

the income of the assessee. From the submissions made by the

assessee and materials placed on record, it is noticed that M/s.

Adelmar Pharma Gmbh is assessed to corporate tax, trade tax as well as Income Tax in Germany since its inception and is paying

taxes in Germany under the provisions of German Law in respect

of its income. A no dues certificate issued by German Tax

Authorities was also furnished before learned Commissioner

(Appeals). The fact that the company has not issued any dividend

to the shareholders is not disputed by the Revenue. Therefore, the 23 | P a g e

company being a separate legal entity, the income earned by the

company is taxable at its hands. In fact, the materials on record

show that the company has discharged its tax liability in

Germany. Therefore, the income of the company cannot be taxed

at the hands of the assessee.

grounds having rendered academic, are not required to be

adjudicated.

raised is against partial relief granted by learned Commissioner

(Appeals) on account of return on investment made in M/s.

Waberton Ltd. While deciding identical issue in assessee’s appeal

in ITA No. 628/Del/2018, we have deleted the addition sustained by learned Commissioner (Appeals). The same principle applies in

this case also. Accordingly, grounds raised are dismissed.

ITA No.629/Del/2018 (Assessee’s Appeal for AY: 2012-13) And ITA No.954/Del/2018 (Revenue’s Appeal for AY: 2012-13) 24 | P a g e

and the Revenue are identical to grounds raised in ITA No.

628/Del/2018 & 953/Del/2018. While, deciding these appeals in

the earlier part of the order, we have deleted the addition

sustained by learned Commissioner (Appeals), since, such addition was not based on any incriminating material found as a

result of search. Following our decision therein, we delete the

addition. The only other issue on merits raised by the assessee in

ground nos. 13 and 14 relates to addition of an amount of

Rs.2,68,688/- being 50% share in the profit earned by M/s.

Adelmar Pharma Gmbh. While deciding identical issue in

assessee’s appeal being ITA No.628/Del/2018 in ground nos. 13

& 14, the addition has been deleted. The decision taken therein

will apply mutatis mutandis to these appeals as well. Accordingly,

these grounds are allowed. The other grounds raised by the assessee having become academic do not require adjudication.

Revenue’s appeal is dismissed.

ITA No.630/Del/2018 (Assessee’s Appeal for AY: 2013-14) And ITA No.955/Del/2018 25 | P a g e

(Assessee’s Appeal for AY: 2013-14

ground nos. 11 and 12, relates to the addition of Rs.1,92,852/-

being 50% share in profit earned by M/s. Adelmar Pharma Gmbh.

While deciding identical issue in assessee’s appeal in ITA No.

628/Del/2018 in the earlier part of the order, we have deleted the addition for the reasons discussed therein. The decision so taken

will apply mutatis mutandis to these grounds as well.

Accordingly, addition is deleted. These two grounds are allowed.

All other grounds raised by the assessee, having become

academic, do not require adjudication.

Rs.1,02,45,502/- made on account of return on investment made

by M/s. Waberton Ltd. While deciding identical issue in other

appeals filed by the assessee and the Revenue hereinbefore we have deleted such addition. Facts being identical, our decision

therein will apply mutatis mutandis. Accordingly, ground raised

by the department is dismissed.

Revenue’s appeal is dismissed.

ITA No.631/Del/2018 26 | P a g e

(Assessee’s Appeal for AY: 2014-15) And ITA No. 956/Del/2018 (Revenue’s Appeal for AY: 2014-15) 40. One of the issues on merits raised by the assessee

corresponding to only issue raised in Revenue’s appeal relates to

addition made/deleted on return of investments made by M/s.

Waberton Ltd. While deciding identical issue in the appeals filed

by the assessee and Revenue in preceding assessment years, we

have deleted the addition on the reasoning that the additions were not based on any incriminating material found as a result of

search. The decision taken therein will apply mutatis mutandis to

these appeals as well. Accordingly, the additions sustained by

learned Commissioner (Appeals) is deleted. Ground no. 11 raised

by the assessee is allowed, whereas, Revenue’s ground is

dismissed.

addition of Rs.1,92,852/- being 50% share in profit of M/s.

Adelmar Pharma Gmbh. While deciding identical issue in appeal

filed by the assessee we have held that the addition is not sustainable. Following our decision therein, we delete the

27 | P a g e

addition. This ground is allowed. All other grounds raised by the

assessee having become academic do not required adjudication.

Revenue’s appeal is dismissed.

ITA No.632/Del/2018 (Assessee’s Appeal for AY: 2015-16) And ITA No.957/Del/2018 (Revenue’s Appeal for AY: 2015-16) 43. The first issue arising for consideration in Revenue’s appeal relates to deletion of addition of Rs.1,12,31,211/- made on

account of return on investments made by M/s. Waberton Ltd.

Admittedly, this is the year of search, hence, regular assessment

was made under section 143(3) of the Act. Therefore, the

Assessing Officer is not restricted in making additions based only

on incriminating material found as a result of search. As could be

seen from the facts on record, the Assessing Officer made the

addition by estimating the return at 4.7% on the market value on

investments as on 01.04.2014. While deciding the issue, learned Commissioner (Appeals) deleted the addition as it was made

purely on estimate basis.

materials on record, we find, learned first appellate authority has 28 | P a g e

given a categorical factual finding that the estimate of return on

investment at 4.7% per annum is purely the imagination of the

Assessing Officer disregarding the evidences furnished by the

assessee. As could be seen from the observations of learned

Commissioner (Appeals), the bank statements and portfolio

statements received from BVI Authorities do not in any manner demonstrate that M/s. Waberton Ltd. had actually earned any

income on the investments in this assessment year. The aforesaid

factual finding of learned Commissioner (Appeals) could not be

controverted by the Revenue. That being the factual position

emerging on record, we do not find any reason to interfere with

the decision of learned Commissioner (Appeals). Accordingly, we

uphold the deletion of addition of Rs.1,12,31,211/-

appeals relates to additions sustained by learned Commissioner (Appeals) in respect of unexplained jewellery.

jewelleries were found in the premises of the assessee. In the

block assessment proceeding in case of assessee’s daughter, Smt.

Anjalee Agarwal, the addition of Rs.12,39,166/- was made in

assessment year 2015-16 on account of unexplained investment 29 | P a g e

in jewellery weighing 500.646 gms. As observed by the Assessing

Officer, while deciding the appeal in case of Smt. Anjalee Agarwal,

the First Appellate Authority directed the Assessing Officer to

consider the issue of balance jewellery weighing 208 gms. at the

hands of the assessee. Based on such direction of learned

Commissioner (Appeals), the Assessing Officer treated the value of unexplained jewellery weighing 208 gms. amounting to

Rs.5,04,030/- as unexplained investment in jewellery by the

assessee, added back to the income of the assessee. Similarly, in

case of assessee’s son, Sh. Kahan Gupta, learned Commissioner

(Appeals) directed the Assessing Officer to consider the issue of

jewellery, wherein, 113.134 gms. amounting to Rs.36,87,110/-

was added at the hands of the assessee. Accordingly, the

Assessing Officer added back the amount of Rs.36,87,110/- to the

income of the assessee. While deciding the issue in appeal, learned Commissioner (Appeals), on verifying the facts and

materials on record, found that the assessee had enough cash

available with him from his homeopathy medicine distribution

business conducted through German Homeopathy Distributors

Pvt. Ltd., hence, had enough cash available for acquiring the

jewellery. Thus, he held that source of investment in jewellery 30 | P a g e

stood explained. Accordingly, he deleted the addition of Rs.4,04,034/- and Rs.36,87,810/-. 47. Having considered rival submissions, we find that before learned Commissioner (Appeals), the assessee had explained that he had sufficient cash availability with him to invest in

jewelleries. On verifying the facts on record, learned Commissioner (Appeals) had found that from the homeopathy medicine distribution business, the assessee had cash transaction of a substantial amount of more than Rs.10 crores, which was available with the assessee for investing in jewellery. Further, he has recorded a factual finding that weight of gold jewellery disclosed in Wealth Tax Return is more than the weight of jewellery found and seized during the search and seizure operation. The aforesaid factual finding of learned Commissioner (Appeals) could not be controverted by Revenue. In view of the aforesaid, we do not find any reason to interfere with the decision of learned Commissioner (Appeals) on the issue. Accordingly, ground raised by the Revenue is dismissed. 48. The only other surviving issue on merits arising in assessee’s appeal relates to addition of Rs.1,69,920/- being 50% share in profit earned in M/s. Adelmar Pharma Gmbh. While 31 | P a g e

deciding identical issue in appeals filed by the assessee in the

earlier part of the order, we have deleted the addition. The

decision taken therein by us will apply mutatis and mutandis to

this appeal as well. Accordingly, the addition made is deleted. All

other grounds raised by the assessee, being of academic nature,

do not require adjudication.

assessee’s appeals are partly allowed.

Order pronounced in the open court on 23rd January, 2023

Sd/- Sd/- (G.S. PANNU) (SAKTIJIT DEY) PRESIDENT JUDICIAL MEMBER Dated: 23rd January, 2023. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi 32 | P a g e