ANJANA SRIVASTAVA,MUMBAI vs. ITO 33(1)(1), MUMBAI

The grounds of appeal

1. The Commissioner of Income Tax (Appeals) erred in confirming the order of I.T.O. to the extent of treating 50% of sale consideration of jewelry sold Rs. 10.02,725(50% of sale Rs.20,05,450/-) as income from undisclosed source as the said jewelry was not reflected in Balance Sheet of appellant. Under the facts & circumstances of the matter he ought not to have confirmed the said order of I.T.O.by treating Rs. 10,02.7257- as income from undisclosed Source.

Brief facts of the case are as under :-

Upon assessee's appeal learned CIT(A) noted that the submissions of the assessee was the same as before the assessing officer. He held that assessee's reference to CBDT circular for a married lady being allowed 500 gm of jewelry in the case of search and seizure cannot come to the rescue of the assessee. He further held that it is not acceptable that the assessee would sell the entire stridhan received at the time of marriage. He further drew adverse inference for the nondisclosure of the same in the earlier balance sheet. However he did not refer to any infirmity in the jewelry valuation report or the sale bill submitted by the assessee. However referring to the ITAT decision in the case of Shakuntala Somani Vs. ITO. He granted 50% relief to the assessee.

Against the above order assessee is in appeal before the ITAT.

We have heard the learned departmental representative. None appeared on behalf of the assessee. Upon careful consideration we find that assessee has submitted all the necessary evidence for the sale of jewelry. The duly supported valuation report and the sale bill were duly furnished. No infirmity in the same has been found. It is also not the case that assessing officer has made any enquiry and found that the submissions were false or fabricated. In these circumstances when there is no doubt about the sale of jewelry, the rejection of the source of funds for the house property on surmise and conjecture is not sustainable. No case has been made out by the authorities below that the addition is being made for the unexplained sale of jewelry. Moreover assessee is also correct in submitting that learned CIT(A) has rejected the submissions without cogent reasoning even after referring to the ITAT decision he is not fully following the ratio. In our considered opinion when assessee has given detail evidence of the sale of jewelry and no infirmity has been found in the same and the same sale proceeds were claimed to have been used for the purchase of the house property, the case of the revenue that source for the acquisition of house property is unexplained miserably fails. Accordingly we set aside the orders of authorities below and delete the addition.

In the result this appeal by the assessee stands allowed.