MAHENDRA KUMAR JAIN,VISAKHAPATNAM vs. THE ASSISANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1, VISAKHAPATNAM

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ITA 570/VIZ/2019Status: DisposedITAT Visakhapatnam22 November 2019AY 2016-20174 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal allowed the appeal regarding the jewellery addition, finding that the assessee's holdings were within the limits prescribed by CBDT Instruction No. 1916, considering the family members. However, the addition for unexplained cash was dismissed as the assessee failed to substantiate its source.

What were the facts?

During a search, the assessee was found in possession of gold jewellery valued at Rs. 17,60,804/-. The Assessing Officer made an addition for unexplained jewellery, which was partly sustained by the CIT(A). Additionally, cash of Rs. 1.17 lakhs was found without a satisfactory explanation.

What were the issues?

Whether the addition for unexplained jewellery is justified when the assessee's holdings are within the prescribed limits for family members, and whether the addition for unexplained cash is valid without a substantiated source.

Which sections of the Income-tax Act were involved?

Section 69A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM

Before: SHRI V. DURGA RAO, HON’BLE & SHRI D.S. SUNDER SINGH, HON’BLE

For Appellant: Shri G.V.N. Hari – Advocate
For Respondent: Shri T.S.N. Murthy – Sr.DR, Smt. Suman Malik – Sr.DR
Hearing: 18/11/2019

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO, HON’BLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH, HON’BLE ACCOUNTANT MEMBER S.A.No. 107/VIZ/2019 And ITA No. 570/VIZ/2019 (Asst. Year : 2016-17) Mahendra Kumar Jain, vs. ACIT, Central Circle-1, MVR Complex, Dwarakanagar, Visakhapatnam. Opp. APSRTC Commercial Complex, Visakhapatnam. PAN No. ABEPJ 9098 E (Appellant) (Respondent)

Assessee by : Shri G.V.N. Hari – Advocate. Department By : Shri T.S.N. Murthy – Sr.DR Smt. Suman Malik – Sr.DR Date of hearing : 18/11/2019. Date of pronouncement : 22/11/2019. O R D E R PER V. DURGA RAO, JUDICIAL MEMBER

By filing this stay application, assessee seeks early hearing of the appeal. The assessee also filed this appeal against the order of Commissioner of Income Tax (Appeals)-3, Visakhapatnam, dated 14/07/2019 for the A.Y. 2016-17. 2. Ground Nos. 1 & 5 are general in nature, no adjudication is required, therefore same are dismissed. Ground No.4 is

2 ITA No. 570/VIZ/2019 S.A.No.107/VIZ/2019 (Mahendra Kumar Jain) consequential in nature, no separate adjudication is required, therefore same is dismissed. The only grounds for adjudication before us are ground Nos.2 & 3, which are as follows:- 2. The ld. CIT(A) is not justified in partly sustaining to the extent of Rs. 8,80,402/- addition made by the Assessing Officer Rs. 2,72,045/- towards unexplained jewellery and silver articles. 3. The ld. CIT(A) is not justified in partly sustaining to the extent of Rs. 1,17,000/- Rs. 36,153/- addition made by the Assessing Officer towards unexplained cash.

3.

Ground No.2 relates to unexplained jewellery and silver articles. During the course of search, it was found that appellant was in possession of 616.23 grams of gold, which is valued by the Registered valuer at Rs. 17,60,804/-, therefore, the Assessing Officer has made the entire addition in the hands of the assessee u/sec. 69A of the Act on the ground of unexplained money. 4. On appeal, the ld. CIT(A) has given relief to the extent of 50% and the remaining 50% has been confirmed. 5. Aggrieved by the order of the ld. CIT(A), the assessee is in appeal before this Tribunal. 6. Before us, ld. counsel for the assessee has submitted that assessee is having wife and son. According to the assessee, wife should be given 500 grams, son should be given 100 grams, and assessee should be given 100 grams, totalling to 700 grams. As

3 ITA No. 570/VIZ/2019 S.A.No.107/VIZ/2019 (Mahendra Kumar Jain) the assessee is not having more than the gold ornaments as provided in CBDT Instruction No. 1916, dated 11.05.1994, the addition cannot be survived. 7. Ld.DR strongly supported the orders of the authorities below. 8. We have heard both the sides and perused the material available on record. We find that as per CBDT Instruction No. 1916, dated 11.05.1994 and taking into consideration of the strength of the family, weightage should be given to the assessee. In this case total jewellery of 616.23 grams was seized and weightage as per family members comes to 700 grams, therefore, addition cannot survive. Thus, this ground of appeal raised by the assessee is allowed. 9. Ground No.3 relates to the addition to the extent of Rs. 1.17 lakhs towards unexplained cash. During the course of search, a cash amounting to Rs. 1.17 lakhs was found. No satisfactory explanation is offered before the Assessing Officer and before the ld. CIT(A). Even before the ITAT, the assessee is not able to substantiate the source of cash found during the course of search. Therefore, we find no reason to interfere with the order passed by the ld. CIT(A). Thus, this ground of appeal raised by the assessee is dismissed.

4 ITA No. 570/VIZ/2019 S.A.No.107/VIZ/2019 (Mahendra Kumar Jain) 10 So far as Stay Application filed by the assessee is concerned, as we have disposed of the assessee’s appeal (supra), the stay application filed by the assessee has become infructuous and is dismissed accordingly. 11. In the result, appeal filed by the assessee is partly allowed and the S.A. is dismissed. Order Pronounced in open Court on this 22nd day of Nov., 2019.

Sd/- sd/- (D.S. SUNDER SINGH) (V. DURGA RAO) Accountant Member Judicial Member Dated: 22nd November, 2019. vr/- Copy to: 1. The Assessee – Mahendra Kumar Jain, MVR Complex, Dwarakanagar, Opp. APSRTC Commercial Complex, Visakhapatnam. 2. The Revenue – ACIT, Central Circle-1, Visakhapatnam. 3. The Pr.CIT (Central), Visakhapatnam. 4. The CIT(A)-3, Visakhapatnam. 5. The D.R., Visakhapatnam. 6. Guard file. By order

(VUKKEM RAMBABU) Sr. Private Secretary, ITAT, Visakhapatnam.

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