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Facts
The appellant, a goldsmith, filed an ITR for AY 2022-23. During a search on M/s. Peeyar Exporters, digital evidence showed the appellant had deposited 790g of gold as security. The appellant initially offered to disclose this as additional income but later filed ITR showing it as turnover taxable under Section 44AD. The AO added Rs. 38,39,400/- (value of the gold deposit) under Section 143(3) r.w.s. Section 144B, which was upheld by the CIT(A).
Held
The Tribunal found the appellant's stand contradictory, as they initially offered the amount as additional income but subsequently claimed it as turnover or accumulated gold without providing supporting evidence for either. Therefore, the Tribunal found no reason to interfere with the orders of the lower authorities.
Key Issues
Whether the CIT(A) was justified in sustaining the addition of Rs. 38,39,400/- made by the AO for gold deposited as security, given the appellant's contradictory stands regarding the nature of the income.
Sections Cited
132, 44AD, 143(3), 144B
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Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI INTURI RAMA RAO, AM
Assessment Year: 2022-23 Amit Kumar Pal .......... Appellant House No. 31/321/1, Vakayil Road St. Marys Chappal, Chiyyaram, Thrissur [PAN: BNHPP5857P] vs. The Income Tax Officer, WD-1(1), Thrissur .......... Respondent Assessee by: Shri Anoop V. Francis, CA Revenue by: Smt. Leena Lal, Sr. D.R. Date of Hearing: 06.11.2025 Date of Pronouncement: 20.11.2025 O R D E R This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)] dated 30.07.2025 for Assessment Year (AY) 2022-23.
Brief facts of the case are that the appellant is an individual doing job work as goldsmith. The return of income for AY 2022-23 was filed on 30.12.2022 declaring income of Rs. 6,82,690/-. The search and seizure operations u/s. 132 of the Income Tax Act, 1961 (the Act) were conducted in the business premises of M/s. Peeyar Exporters in the month of March, 2022. During the course of search and seizure operations certain digital evidences were found Amit Kumar Pal indicating that 790 grams of gold was deposited with the said company by the appellant as security deposit. When this evidence was confronted with the appellant, the appellant had offered to disclose this amount as additional income in the statement recorded from the appellant by the Investigation Wing. However, in the return of income the appellant had shown the value of the gold deposit as security deposit which was offered to tax u/s. 44AD of the Act declaring profit at 8%. Against the said return of income, the assessment was completed by the Assessment Unit, Income Tax Department (hereinafter called "the AO") vide order dated 06.03.2024 passed u/s. 143(3) r.w.s. 144B of the Act by making the entire value of security deposit of gold made with Peeyar Exporters of Rs. 38,39,400/- as additional income rejecting the contention of the appellant that it is a sale consideration.
Being aggrieved, an appeal was filed before the CIT(A) contending that the AO erred in making addition of Rs. 38,39,400/- being the value of the gold placed as deposit without appreciating the fact that the source of such gold is accumulated over a period of time, therefore, no addition is called for. However, the CIT(A) had rejected the above contention by holding that the addition was made based on the additional income disclosed by the appellant vide letter dated 09.04.2022 submitted on 22.04.2022 before the Investigation Wing of the Department and mere retraction of the statement Amit Kumar Pal subsequently without substantiating he same cannot be accepted. In support of this he placed reliance on the following judgments: - i) CIT v. MAC Public Charitable Trust [2022] 450 ITR 368 (Madras) ii) Roshan Lal Sanchiti v. PCIT [2023] 452 ITR 229 (SC) iii) Smt. Konda Sanjeeva Rani v. ACIT [2024] 169 taxmann. Com 591 (Telangana) iv) PCIT v. Avinash Kuma Setia [2017] 395 ITR 235 (Delhi) v) M/s Peeble Investment and Finance Ltd. v. ITO (2017- TIOL-238-SC-IT) vi) M/s Peeble Investment and Finance Ltd. v. ITO (2017- TIOL-188-HC-MUM-IT) vii) Bannalal Jat Constructions (P) ltd. v. ACIT [2019] 264 Taxman 5 (SC) 4. Being aggrieved, the appellant is in appeal before this Tribunal in the present appeal.
The learned counsel for the assessee contends that the appellant was doing job work for Peeyar Exports since 2013. 790 grams of gold was accumulated over a period of time. Therefore, the AO ought not have made addition merely based on the additional income offered by the appellant vide letter dated 09.04.2022. He further submits that the addition made by the AO cannot be sustained as no reasonable opportunity was granted to the appellant.
On the other hand, the learned Sr. DR opposed the above submission and submits that the order passed by the CIT(A) is well reasoned and requires no interference by this Tribunal.
Amit Kumar Pal 7. I heard the rival contentions and perused the material available on record. The issue that arises for my consideration is whether the CIT(A) was justified in sustaining the addition of Rs. 38,39,400/- being the amount disclosed by the appellant during the course of search and seizure proceedings in the case Peeyar Exporters before the Investigation Wing of the Department. This additional income represents the value of gold placed as security deposit with Peeyar Exporters for securing job work. There is no dispute on this factual aspect. When the appellant was confronted with this information contained in the digital evidences found as a result of search and seizure operations in the case of Peeyar Exporters, the appellant offered to disclose the value of this gold as additional income. However, while filing the return of income, this amount was shown as sale turnover and offered to tax u/s. 44AD of the Act under the presumptive tax regime. Without entering into the controversy whether the value of gold placed as security deposit with Peeyar Exporters was explained or not, suffice to hold that when the appellant had filed the return of income disclosing this value of gold as turnover the appellant had not adduced any evidence to show that the value of gold represents sale proceeds. The case of the appellant is that the gold placed as security deposit with Peeyar Exporters was accumulated value of gold over a period of time, then I do not see any reason as to why the appellant had disclosed it as turnover. Thus, the appellant had been adopting a contradictory stand as to the
In the result, the appeal filed by the assessee stands dismissed.
Order pronounced in the open court on 20th November, 2025.