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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Before: SRI MAHAVIR SINGH
आयकर अपीलीय अधिकरण “SMC” न्यायपीठ म ुंबई में। IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI श्री महावीर स ुंह, न्याययक दस्य के मक्ष । BEFORE SRI MAHAVIR SINGH, JUDICIAL MEMBER Aayakr ApIla saM./ (inaQa-arNa baYa- / Assessment Year 2014-15) Sharukh Patel The Asst. Commissioner of 1001 B, Beach Classic, JP Income Tax, Central Circle- Road, Seven Bunglows, 1(2), room No. 906, Old Vs. Versova, Andheri (west) CGO Building Annexe, Mumbai-400061 Pratisyha Bhavan, MK Road, Mumbai-400 020 .. (p`%yaqaaI- / Respondent) (ApIlaaqaI- / Appellant) स्थायी लेखा सं./PAN No. AABPP8676Q अपीलाथी की ओर से / Appellant by : Shri Vijay Baheti, AR प्रत्यथी की ओर से / Respondent by : Shri Dr. Pramod Nikalji, DR सुनवाई की तारीख / Date of hearing: 13.08.2019 घोषणा की तारीख / Date of pronouncement : 21.08.2019 AadoSa / O R D E R महावीर स ुंह, न्याययक दस्य/ PER MAHAVIR SINGH, JM:
This appeal of the assessee is arising out of the order of Commissioner of Income Tax (Appeals)-47, Mumbai [in short CIT(A)], in Appeal No CIT(A)-47/539/2016-17 vide order dated 01.06.2018. The Assessment was framed by the Asst. Commissioner of Income Tax, Central Circle-1(2) Mumbai (in short ‘ACIT/ AO’) for the A.Y. 2014-15 vide order dated 25.03.2016 under section 143(3) of the Income Tax Act, 1961 (hereinafter ‘the Act’).
2 2. The only issue in this appeal of assessee is against the order of CIT(A) confirming the addition made by AO on account of unexplained jewellery found during the course of search. For this assessee has raised the following 2 grounds: - “1. The learned Hon. CIT(A) erred in confirming addition of ₹ 9,94,000/- as unexplained jewellery without considering the fact that it was inherited from the parents and acquired over the years by Appellant.
2. Without prejudice to above, the learned CIT(A) erred in confirming the addition of ₹ 2,90,000/- without considering the invoices produced during the course of assessment proceedings for purchase of 2 Gold Bar of 50 gms. each bought in the year 2008, for ₹ 66,013/- and ₹ 68,164/- listed in inventory/ valuation report and valued at ₹ 2,90,000/- by the Valuer.”
Briefly stated facts are that a search action under section 132 of the Act was conducted on the business and residential premises of Hiranandani Group of cases on 11.03.2014 by the DDIT investigation Unit 4(3), Mumbai. During the course of search, the Senior relationship manager marketing i.e. the assessee Shri Sharukh Patel was also covered consequent to search. Apart from other valuables i.e. cash of ₹ 3420, gold jewellery, gold Bar (Bullion) and diamond jewellery was found as under: - Sr. No. Particulars Value 1. Gold Jewellery 7,06,500/- 2. Gold Bar (Bullion) 3,85,700/- 3. Diamond Jewellery 8,81,450/- 4. The investigation Wing have released the gold jewellery valuing at ₹ 7,06,500/- and AO has also not made any addition qua this jewellery.
3 The disputed items remain gold bar (Bullion) amounting to ₹ 3,85,700/- and diamond jewellery valuing at ₹ 8,81,450/-. The assessee before the AO as well as before investigation Wing during the statement recorded contended that the gold and diamond jewellery comprising of ₹ 18 cts gold is having less than 600 grams and hence, in view of CBDT Circular No. 1916 dated 11.05.1994, the jewellery i.e. Gold Bars (Bullion) and diamond jewellery should not be added. The assessee replied this during the course of search on 28.03.2014 and that relevant question No. 5 and answer read as under: - “Q.5 As stated hereinabove earlier, you and your wife is not assessed to wealth tax. During the course of present proceedings following jewellery has bene found. In terms of instructions issued by CBDT, following direction have been issued while dealing with jewellery found at the time of search proceedings.
Whether the assessee assessed to wealth tax, the jewellery to the extent of declared in the wealth tax should be released.
In respect of assessee not filing wealth tax return, gold jewellery having 500 gms in the case of married owmen and 100 gms in case of men could be released at the discretion of authorized officer.
In your case, following jewellery items have been found Sr. No. Particulars Value 1. Gold Jewellery 7,06,500/ 2. Gold Bar (Bullion) 3,85,700/- 3. Diamond Jewellery 8,81,450/- 4 In your case, in absence of wealth tax return, the bullion and diamond jewellery is liable to be seized. Please offer your comments.
Ans. Sir, I say that I am not assessed to wealth tax as such second proviso with regard to seizure and release of jewellery shall apply in respect of my case. My wife and I is eligible for credit to the extent of 600 gms gold jewellery. I respectfully pray that the first item of gold jewellery having gross wt 293.100 gms having corresponding value of 7,06,500/- may not be seized. I further invite your kind attention to the fact that the diamond jewellery comprised of 18 cts gold having gross wt 139.700 gms, having corresponding value of ₹ 2,73,100/-. Since, I am eligible for non seizure of jewellery to the extent of 600 gms, I may kindly be granted a credit for deemed release for the value of ₹ 7,06,500/- plus 2,73,100/- (being value of gold jewellery included in diamond jewellery). For the balance amount of ₹ 9,94,000/-, I am tendering a pay order drawn on central Bank of India, Mumbai. This pay order may kindly be accepted in lieu of value of jewellery liable to be seized. I further request that this amount may be kept under section 132B of the IT Act 1961.”
The AO treated the jewellery to the extent of ₹ 556.80 gms. as explained in term of CBDT Circular No. 1916 dated 11.05.1994, but added the jewellery containing gold Bars (Bullion) i.e. 2 Gold Bars having 50 gms. each valued as on the date of search at ₹ 3,85,700/- and 5 diamond jewellery valued as on the date of search as ₹ 8,81,450/-. The CIT(A) also confirmed the action of the AO.
Aggrieved, assessee came in appeal before Tribunal.
I have heard the rival contentions and gone through the facts and circumstances of the case. I noted that the assessee Investigating Wing during search, before AO during assessment proceedings and even before CIT(A) contending that this gold Bars are purchased on 06.05.2008 i.e. 1st 50 grm Bar of 24 Carat vide invoice No. 0412000154 of ICICI bank and another bar was purchased on 16.08.2008 vide invoice No. 0412000192 again from ICICI Bank. It means that the gold Bar (Bullion) was purchased in the FY 2008-09 relevant to AY 2009-10 and not in the relevant assessment year under consideration. Hence, this addition on account of Gold Bar (Bullion) cannot be added at all because these gold bars belong to AY 2009-10 in which year it was purchased. Hence, the addition in respect of Gold Bar (Bullion) is deleted.