SMT. SUJATA PYNE,KOLKATA vs. ACIT, CENTRAL CIRCLE 4(1),, KOLKATA

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘D’ BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBERAND SHRI PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER I.T.A. Nos.934/KOL/2026 Assessment Year: (2023-24) Smt. Sujata Pyne, ACIT, SN – 11 Lake Towers, 87, Southern Vs. Central Circle – 4(1), Avenue, Kolkata – 700029, West Kolkata Bengal [PAN: AIPPP1660C] (Appellant) .. (Respondent) I.T.A. Nos.935/KOL/2026 Assessment Year: (2023-24) Smt. Shruti Pyne, ACIT, S.N. 11 Lake Towers, 87, Southern Vs. Central Circle – 4(1), Avenue, Kolkata – 700029, West Kolkata Bengal [PAN: ANXPP7199P] (Appellant) .. (Respondent) Appellant by : Shri Soumitra Choudhary & Pranabesh Sarkar, Advocate(s) Respondent by: Shri Dheeraj, Sr. DR Date of Hearing 07.10.2026 Date of Pronouncement 07.10.2026

O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER:

These appeals preferred by the assessee are against the orders of learned Commissioner of Income Tax (Appeals)-27, Kolkata (hereinafter

ITA Nos.934&935/Kol/2026/A.Y.2023-24 Smt. Sujata Pyne vs. ACIT referred to as the “ld. CIT(A)”], dated 08.01.2026 for the same Assessment Years (AY) 2023-24.

ITA No. 934/KOL/2026: 2. The assessee has raised revised grounds of appeal:

“1. For that on the facts of the case, the Ld. CIT(A) was wrong in enhancing 1800gms of bullions which was already added in the hands of Shruti Pyne, daughter-in-law of the assessee. 2. For that on the facts of the case, the Ld. CIT(A) has also confirmed the said addition of 1800 gms amounting to Rs. 1,47,48,248/-, which is bad in law and should be deleted. 3. For that on the facts of the case, the Ld. CIT(A) in the case of the assessee has rather accepted this stock of 1800 gms is of Benud Behari Dutt as per the balance sheet as on 31.03.2023, therefore no addition should be added in the name of the assessee 300 gms originally and 1800 gms enhanced by the Ld. CIT(A). 4. For that the appellant reserves the right to adduce any further ground or grounds, if necessary, at or before the hearing of the appeal. 3. The facts in brief are that the assessee filed the return of income on 30.10.2023, declaring total income of ₹29,31,310/-. A search and seizure action u/s 132(1) of the Act was conducted on 15.02.2023, and subsequent dates. The case of the assessee was selected for compulsory scrutiny and accordingly, the notice u/s 143(2) and 142(1) along with questionnaire were issued. The assessee complied with the said questionnaire by furnishing all the details and documents ad called for by the ld. Assessing Officer. That in the assessment order the AO has asked for queries regarding excess jewellery found at the time of search in the assessee's residential premises. The assessee has filed reply to the AO on 13/01/2025, 17/02/2025, 24/02/2025 and 03/03/2025 which are considered by the AO. Finally, the assessment was

ITA Nos.934&935/Kol/2026/A.Y.2023-24 Smt. Sujata Pyne vs. ACIT framed by the ld. AO by making addition of Rs.20,93,853/- on account of unexplained buillion, Jewellery, and other valuable articles and added to the income of the assessee in the assessment framed/s 143(1) dated 15.03.2025 thereby assessing the income at Rs.50,25,163/-.

ITA Nos.934&935/Kol/2026/A.Y.2023-24 Smt. Sujata Pyne vs. ACIT “6.2.9. In addition to the above, no details or documents in respect of the source of such bullions weighing 300 gms viz, relevant bills, invoices, mode of payment, year of purchase, place of purchase was ever produced by the appellant both in the asst, proceedings and appellate proceedings. Further, otherwise, bullions are never subjected to Exhibition as it lacks designed to any jewellery for attracting the buyers, which is the main cause for exhibition. Hence, the contention that the said bullions were taken from M/s BBD for exhibition and try for including the same in the stock of M/s BBD is not tenable. Hence, the said bullions of 300 gms (As the balance of 1,800 gms., out of 2,100 gms has been added in the hands of Mrs. Shruti Pyne u/s 69A of the Act for the subjected AY) is liable to be treated as unexplained money in the hands of the assessee for the subject AY within the meaning of section 69A of the Act. In FY 2022-23, the rate of bullion as calculated by the departmental valuer during the said search & seizure operation and as mentioned in the asst. order at page no.6 was Rs.57,800/- per 10 gms as on 15.02.2023. Hence, the valuation of unaccounted bullions comes to Rs.17,34,000/-, which is subjected to be added to the total income of the appellant u/s 69A of the Act. Hence, the addition of Rs.17,34,000/-is confirmed and Rs.3,59,853/- is deleted. Hence, these grounds of appeal raised by the assessee are partly allowed.” 5. We have heard the rival contentions and perused materials on records. After taking into account all the facts on records , we are of the opinion that the whole enhancement is completely unjustified and the CIT(A) has only deleted Rs.3,59,853/ out of total addition of Rs.20,93,853/- and has not considered the written submission filed before the CIT Appeal from page 131- 149, wherein the assessee has categorically distinguished that in the assessment proceedings the Appellant has categorically clarified the difference of Rs.20,93,853/- between the departmental valuation and the recorded value stemmed solely from a variation in methodology wherein the departmental valuer has included higher rate of making charges and other subjective valuation elements. This reconciliation was filed before the A.O. as well as the CIT Appeal which is at page 124 of the paper book. The ld. CIT(A) without any justification has deleted Rs.3,59,853/- out of total addition of Rs.20,93,853/-which is without any basis.

ITA Nos.934&935/Kol/2026/A.Y.2023-24 Smt. Sujata Pyne vs. ACIT 6. We have heard the rival contentions and perused the materials on records. We note that a search and seizure operation u/s 132(1) of the Act was conducted on 15.02.2023 and continuing dates in the case of Calcutta Sea Food Group. As part of the same search proceedings, the appellant being mother of one of the directors, Shri Indranath Pyne of Calcutta Sea Foods Pvt. Ltd. was also covered under the said action. The statements were recorded u/s 132(4) of the Act. During the search operation, jewellery and bullions weighing to 10138.32 gms were found and valued by the Income Tax Valuer at Rs.6,31,58,312/-. Out of the total jewellery and bullions found, 9086.470 gms of jewellery and bullions valued at Rs.5,01,02,925.38/- were seized by the Income Tax department which includes personal jewellery of Sujata Pyne, jewellery of the family member of Sujata Pyne and jewellery stock of M/s Benud Behari Dutt. On July 1, 2022, Smt. Sujata Pyne, in her capacity as the decision-making partner of M/s Benud Behari Dutt, lawfully assumed possession of 2,100 grams of gold bullion from the firm's stock. This action was stated to be undertaken due to circumstances arising from the serious medical condition of Smt. Sumita Sen, the mother of Smt. Sujata Pyne. We note that Smt. Sujata Pyne was holds primary managerial and fiduciary responsibilities within the firm, she exercised her authority to secure and safeguard the said bullion under her direct and exclusive custody to ensure the continued integrity and operation of the business. It submitted that due to her inability to 11CD, Lake Tower, Southern Avenue, Kolkata 700029, she decided to keep some jewellery in her possession and control. This process was executed through designated intermediaries, namely her son and the co- partner of the firm, Mr. Avishek Dutt. Mr. Avishek Dutt, in his official capacity as a partner of M/s Benud Behari Dutt, was authorized to retrieve the necessary quantities of gold bullion from the stock under the explicit directives

ITA Nos.934&935/Kol/2026/A.Y.2023-24 Smt. Sujata Pyne vs. ACIT of Smt. Sujata Pyne. The bullion, upon retrieval, was duly transported to the business premises and subsequently allocated to designated artisans for the purpose of jewellery manufacturing, strictly adhering to established business protocols. It is further affirmed that throughout this period, the custody, handling, and transfer of the said 2,100 grams of gold bullion were conducted in full compliance with the fiduciary obligations and regulatory framework governing the firm's operations. There was no misappropriation or unauthorized disposal, or any act contrary to the interests of M/s Benud Behari Dutt. All transactions involving the bullion were duly accounted for and executed solely in furtherance of legitimate business activities. Out of the total 2,100 grams of jewellery, a quantified portion of 300 grams was placed in a secured locker exclusively under the control, possession, and custodianship of Smt. Sujata Pyne. The remaining 1,800 grams of jewellery were meticulously and securely deposited in the designated locker of Smt. Shruti Pyne, daughter in law of Smt. Sujata Pyne. Furthermore, the legal and factual aspects concerning the said 1,800 grams of gold bullion were formally addressed and substantiated by way of a deposition made by Smt. Shruti Pyne before the competent authorities of the Investigation Wing in the course of the post- search investigation which was never denied by Smt. Sujata Pyne. Said deposition constitutes an official and legally binding statement on record, made under due process of law, thereby subjecting the matter to legal scrutiny, evidentiary examination, and statutory assessment within the applicable legal framework governing such financial, custodial, and fiduciary transactions. Further the exhibition titled "Sonar Sansar" was initially scheduled to be held from January 27th to January 30th, 2023, at Netaji Indoor Stadium. However, due to unforeseen and unavoidable circumstances beyond the control of the organizers, the exhibition was ultimately cancelled.

ITA Nos.934&935/Kol/2026/A.Y.2023-24 Smt. Sujata Pyne vs. ACIT This cancellation was formally communicated to M/s Benud Behari Dutt through an official letter dated 16.01.2023. The cancellation of the exhibition, in conjunction with the unexpected deterioration of the assessee's mother's health, led to the temporary retention of jewellery under process for final inspection at the assessee's residential premises weighing approximately 3051.760 gms, rather than its immediate return to the shop. This was not an act of negligence or mismanagement but rather an operational necessity dictated by unforeseen personal circumstances. Further, as the principal and managing partner, the assessee was well within her legal, contractual, and managerial authority to retain possession of such assets in the normal course of business. There is no statutory, that bars the managing partner from keeping jewellery under her custody for the purpose of final control and final review, an integral part of the firm's standard operating procedures, which checking, verification, and approval. The jewellery of 3051.760 gms and bullions of 2100 gms were valued by M/s Benud Behari Dutt at Rs.1,47,02,251/- (excluding making charges) which is reflected in the audited financials of M/s Benud Behari Dutt for the A.Y. 2023-24, the same jewellery and bullions were valued by the Income Tax Valuer at Rs.3,04,49,204.48/- (Rs.2,00,45,204.48/- in the hands of Sujata Pyne and Rs.1,04,04,000/- in the hands of Shruti Pyne) which is inclusive of making charges. The AO during the assessment accepted all the submissions made by the assessee but made an addition of the valuation difference of Rs.20,93,853/- of the in the hands of the assessee where the AO made a calculation mistake. The value of the stock of M/s Benud Behari Dutt seized in the hands of Sujata Pyne as per the departmental valuer stands at Rs.2,00,45,204.48/- but the AO while making the assessment order take it at Rs.1,94,96,104/- and made the addition of Rs.20,93,853/- (Rs.1,94,96,104 - Rs.1,74,02,251).Similarly, the AO made the

ITA Nos.934&935/Kol/2026/A.Y.2023-24 Smt. Sujata Pyne vs. ACIT addition of Rs.1,47,48,248/- valued by the Income Tax Valuer at the time of Search operation of total 2551.600 gms bullions found in the hands of Shruti Pyne, which includes 1800 gms bullions of M/s Benud Behari Dutt which were kept in the custody of Shruti Pyne by her mother-in-law since they were lived in the same premises and 751.600 gms of bullions gifted by her parents who lived in Saudi Arabia from 1994 to 2018.

ITA No. 935/KOL/2026: 8. The assessee has raised revised grounds of appeal which is as under:

“1. For that on the facts of the case, the Ld. CIT(A) has enhanced the addition of 1800 gms amounting to Rs. 1,47,48,248/- which he is indirectly accepting as Benud Behari Dutt's stock as claimed by the assessee as per the assessee's valuation report as well as the balance sheet of benud Behari Dutt where the 2100 gms shown as the stock lying with Sujata Pyne, therefore whole addition of Rs. 1,47,48,248/- should be deleted. 2. For that on the facts of the case, the Ld. CIT(A) himself admitted and enhanced 1800 gms of her mother-in-law, therefore the same stock of the bullions cannot be added in both hands and should be deleted. 3. For that the appellant reserves the right to adduce any further ground or grounds, if necessary, at or before the hearing of the appeal.”

ITA Nos.934&935/Kol/2026/A.Y.2023-24 Smt. Sujata Pyne vs. ACIT 9. The facts in brief are that the assessee filed the return of income on 30.10.2023, declaring total income of Rs.35,16,270/-. A search and seizure action u/s 132(1) of the Act was conducted on 15.02.2023, and subsequent dates. The assessee was also covered under the said search operation. During the assessment proceedings, the AO has raised a query regarding Rs.1,47,48,248/-. The assessee has explained that the 1800 grams jewellery belonged to the partnership firm M/s. Binod Bihari Dutt (BBD) where her mother-in-law is a partner in the firm and it was kept in her custody in the house and the balance 750.600 grams were received by her from her parents who stayed in Saudi Arabia from the year 1994 till 2018. And an affidavit to this extent along with certain bills were filed before the AO at the time of assessment which are in page 10-13 of the paper book. The AO issued show cause notice to the assessee and after taking into account the reply of the assessee to the show cause notice issued by the ld. AO treated then jewellery as unexplained investment by rejecting the submission of the assessee before the ld. AO that the bullion, jewellery, and other valuable articles were belonging to the firm M/s Benod Behari Dut worth Rs.1,94,96,104 and that was kept for exhibition purpose. The ld. AO noted that she nowhere mentioned in her statement u/s 132(4) of the Act at the time of search nor disclosed in the post search investigation and consequently, the ld. AO rejected the contention of the assessee and treated the same as income of the assessee. The ld. AO finally made the addition of Rs.1,47,48,248/- on account of unexplained bullion, jewellery and other valuable articles in the assessment framed u/s 143(3) of the Act dated 15.03.2025 assessing the total income at Rs.1,82,64,518/-. 10. The assessee filed appeal before ld. CIT(A) on 11/04/2025 and the CIT(A)-27 Kolkata passed the order on 08/01/2026. The assessee has filed

ITA Nos.934&935/Kol/2026/A.Y.2023-24 Smt. Sujata Pyne vs. ACIT written submissions along with supporting documents which are from page 102-122. The assessee has also submitted the audited balance sheet of BBD (partnership firm) at page number 54-63. That at page number 61 column 12, inventories (stock in trade) are shown at Rs.5,12,48,298/-which includes stock in trade with partner Smt. Sujata Pyne 1,74,02,251/-, the mother-in-law of the assessee. The assessee has also submitted certificate given by chartered accountant at page number 53 of the paper book wherein the auditor has certified that stock value of gold items for ₹1,74,02,251/-, held by the partner as on 14/02/2023. That, the assess has filed affidavit of Mr. Abhishek Dutta who is the other partner of the firm BBD at page number 51 and 52.

ITA Nos.934&935/Kol/2026/A.Y.2023-24 Smt. Sujata Pyne vs. ACIT source of jewellery is fully explained. Accordingly, we set aside the order of ld. CIT(A) on this issue and direct the AO to delete the addition.

The order is pronounced on 07/10/2026.

Sd/- Sd/- (Pradip Kumar Choubey) (Rajesh Kumar) JUDICIAL MEMBER ACCOUNTANT MEMBER Kolkata, Dated: 07/10/2026 SAMANTA आदेश �ȧ ĤǓ�ͧ �ͪ �\ Ē ȯͪ��/Copy of the Order forwarded to: 1. \ �Ȣ�ȡ�ȸ/ The Appellant 2. Ĥ×��ȸ/ The Respondent. 3. Ȳ�Ȳͬ��आयकर] �ǕÈ�/ Concerned CIT 4. आयकर] �ǕÈ�(अपील) / The CIT(A) 5. ��ȡ�Ȣ�ĤǓ�Ǔ�ͬ �, आयकर\ �Ȣ�ȣ�\ͬ ����,/ DR, ITAT, Kolkata 6. �ȡ�[ फाईल/ Guard file.

BY ORDER, // TRUE COPY // Deputy Registrar, ITAT, Kolkata