MOHANLAL HARIDAS PURWAT,PUNE vs. DCIT, CC- 8(3), MUMBAI

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ITA 4995/MUM/2018Status: DisposedITAT Mumbai15 July 2020AY 2013-144 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the Assessing Officer erred in including the value of silver in the valuation of gold, making the addition unsustainable. It also found that the relief granted for jewellery under the CBDT circular was insufficient.

What were the facts?

During a search operation, gold and silver jewellery were detected at the assessee's premises. The Assessing Officer made an addition on account of unexplained gold jewellery, which was sustained by the CIT(A).

What were the issues?

Whether the addition on account of unexplained gold jewellery was justified, considering the incorrect valuation by including silver, and whether the relief under CBDT circular was correctly applied.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI

For Appellant: Ms Seema M. Lonkar-Ld. AR, Shri Chaitanya Anjaria-Ld. DR
For Respondent: Shri Chaitanya Anjaria-Ld. DR

1 Mohanlal Haridas Purwat Assessment Year-2013-14 आयकर अपीलीय अिधकरण “एक-सद" मामला” "ायपीठ मुंबई म"। IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI शमीम याहया, लेखा सद" Shamim Yahya, Accountant Member आयकरअपील सं./ (िनधा"रण वष" / Assessment Year:2013-14) Shri Mohanlal Haridas Purwat Dy. Commissioner of Income Tax Giridhar Nagar, Flat No.15 Central Circle-8(3) बनाम/ 676A, 6th Floor, Aayakar Bhavan Building No.D-16, Warje, Vs. Pune-411 058. Maharshi Karve Road Mumbai-400 020. "थायीलेखासं./जीआइआरसं./PAN/GIR No. AAZPP 3394 H (अपीलाथ"/Appellant) : (""थ" / Respondent) अपीलाथ"कीओरसे/ Appellant by : Ms Seema M. Lonkar-Ld. AR ""थ"कीओरसे/Respondent by : Shri Chaitanya Anjaria-Ld. DR सुनवाईकीतारीख/ : 19/02/2020 Date of Hearing घोषणाकीतारीख / : 15/07/2020 Date of Pronouncement आदेश / O R D E R Shamim Yahya (Accountant Member):-

1. 1. This appeal by the assessee is directed against order of learned CIT appeal dated 06/06/2018 and pertains to assessment year 2013-14.

2. The issue raised is that learned CIT appeals erred in sustaining the disallowance of rupees 562,400 on account of unexplained gold jewellery.

2 Mohanlal Haridas Purwat Assessment Year-2013-14

3.

Brief facts of the case are that pursuant to search operations at the assessee’s premises certain jewellery were detected by the Department, as per the contention of Ld. Counsel of the assessee .

Items Net Weight Rs. Gold Jewellery 831.74 24,21,206 Silver 7433.65 4,62,095

4.

After considering the explanation and evidences submitted by the assessee the Assessing Officer made an addition of Rs.562,400 made on account of unexplained gold . This was sustained by the appeals.

5.

Against the above order assessee has filed appeals before us. The ld. Counsel of the assessee contended that as against the jewellery as found in search the Assessing Officer has erred in making the addition by taking the value of gold found on search at Rs.28,83,301, which is actually the combined figure of gold and silver. Hence the assessee contended that addition of Rs.462,095 is unjustified.

6.

Upon careful consideration we find that the submissions of the assessee are cogent. The Assessing Officer has started by considering the valuation of gold at the quantity of 831.74 at Rs.28,83,301 and has finally 3 Mohanlal Haridas Purwat Assessment Year-2013-14 added a sum of Rs.562,400 as unexplained gold. However, it is the fact that actually the valuation of gold seized was Rs.24,21,206. In the valuation the silver found was Rupees 462 095, hence the inclusion of silver valued at Rupees 462 095 into gold ornaments and consequent addition to this extent is not sustainable.

7.

Accordingly we direct the addition of Rupees 462,095 as not justified, and the same is directed to be deleted.

8.

Another aspect of assessee’s grievance is that the Assessing Officer, despite mentioning and considering the CBDT Circular in this regard has not provided the necessary relief for the jewellery described by the CBDT Circular No.1916 dated11/05/1994. As per the assessee’s contention assessee should have been granted relief of 600 gms on his and his wife’s belongings. As against this, he Assessing Officer has granted relief of only 500 gms. We find that this claim of the assessee is also correct and we direct the Assessing Officer to grant the assessee the required relief as per the said CBDT Circular. In the result, appeal filed by the assessee stands partly allowed.

Order pronounced on 15/07/2020 under Rule 34(4) of ITAT Rule. (Shamim Yahya) लेखा सद" / Accountant Member

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