GHANSHYAM PRASAD GUPTA,MUZAFFARPUR vs. ACIT, CENTRAL CIRCLE, MUZAFFARPUR

ITA 152/PAT/2019Status: DisposedITAT Patna09 December 2025AY 2013-144 pages
AI SummaryAllowed

What did the Tribunal hold?

On the issue of diamond jewellery valuation, the Tribunal found merit in the assessee's contention. It noted that the assessee's revised valuation was ₹19,11,349, and if this was considered, the total jewellery valuation would be ₹1,20,79,572. Since the assessee had already offered income of ₹21,25,00,000, no addition was called for. The Tribunal accordingly directed the AO to delete the addition, allowing ground no. 2. Regarding the cash found, the Tribunal found merit in the assessee's argument that the cash of ₹3,50,000 belonged to the Ghanshyam Prasad Gupta (HUF). Despite the HUF not filing a return because its income was not taxable, the Tribunal acknowledged that the HUF derived rental income and income from lichi sale from its land. Therefore, the Tribunal set aside the CIT(A)'s order on this issue and directed the AO to delete the addition, allowing ground no. 3. The Tribunal expressly left undecided the general ground no. 1.

What were the facts?

The assessee, Shri Ghanshyam Prasad Gupta, proprietor of M/s Gobardhan Ram Ramashish Prasad & Sons, engaged in the jewellery business, is in appeal against the order of the CIT(A)-3, Patna, dated 20.03.2019, for Assessment Year 2013-14. A search action under Section 132 of the Income Tax Act was conducted on 28.06.2012, covering the assessee's premises as part of a group search. During the search, physical inventory of stock-in-trade revealed discrepancies in gold, silver, and diamond jewellery. The Assessing Officer (AO) made additions totaling ₹11,07,340. The CIT(A) partly confirmed an addition of ₹2,41,392 concerning diamond jewellery valuation and an addition of ₹3,50,000 concerning cash found.

What were the issues?

1. Whether the Tribunal had to decide on the correctness of the addition of ₹2,41,392, partly confirmed by the CIT(A) on account of discrepancies in the valuation of diamond jewellery, and if so, what was the correct valuation? The assessee contended that the initial valuation was incorrect and provided a revised valuation of ₹19,11,349, arguing that if this valuation was considered, no addition was warranted as income of ₹21,25,00,000 had already been offered. The revenue's contentions are not explicitly recorded beyond the AO's initial addition and the CIT(A)'s confirmation. 2. Whether the Tribunal had to decide on the correctness of the addition of ₹3,50,000, partly confirmed by the CIT(A), on account of cash found during the search? The assessee argued that the cash belonged to Ghanshyam Prasad Gupta (HUF), which derived rental income and income from the sale of lichi, and therefore, the cash was justified. The revenue, as reflected in the CIT(A)'s order, did not accept this claim solely because the HUF was not assessed to tax. The revenue's specific arguments before the Tribunal are not detailed.

Which sections of the Income-tax Act were involved?

Section 132

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “PATNA” BENCH, PATNA

Before: SHRI DUVVURU RL REDDY, VP & SHRI RAJESH KUMAR, AM

For Appellant: Shri A.K. Rastogi
For Respondent: Shri Ashwani Kr. Singal, DR
Hearing: 27.11.2025Pronounced: 09.12.2025

Per Rajesh Kumar, AM:

This is an appeal preferred by the assessee against the order of the Commissioner of Income-tax (Appeals)-3, Patna(hereinafter referred to as the “Ld. CIT(A)”] dated 20.03.2019 for the AY 2013-14. 2. | Theissue raised in ground no.1 is general in nature and need no specific

adjudication.

3.

| The issue raised in ground no.2 is part confirmation of addition to the extent of %2,41,392/- by the learned CIT (A) as against the addition made by the learned AO of 711,07,340/-

Se

e|2 Ghanshyam Prasad Gupta; A.Y. 2013-14

3.1.

The facts in brief are that a search action u/s 132 of the Act w

The order continues below.

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