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Facts
A search action was conducted, leading to the seizure of jewellery belonging to the assessee, which the AO added as unexplained investment of Rs. 25,05,836/- under Section 69B. The CIT(A) dismissed the assessee's appeal ex-parte, upholding the AO's addition, citing a lack of documentary evidence despite opportunities. The assessee appealed to the ITAT, arguing that the jewellery belonged to his wife and that he was denied a reasonable opportunity before the CIT(A).
Held
The Tribunal found that the assessee was indeed denied a reasonable opportunity to submit evidence before the CIT(A). Consequently, the ITAT set aside the CIT(A)'s order and remitted the matter back to the CIT(A), directing that the assessee be given a proper chance to present new evidence and grounds. The Tribunal explicitly refrained from commenting on the merits of the case to ensure fairness in the fresh proceedings.
Key Issues
Whether the CIT(A) erred in dismissing the appeal ex-parte without providing a reasonable opportunity for the assessee to present evidence; and the justification for the addition of unexplained jewellery under Section 69B.
Sections Cited
Section 250, Section 143(3), Section 132(1), Section 69B, Section 115BBE, Section 271AAB
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “A”, MUMBAI
Before: SHRI PRASHANT MAHARSHI & SHRI ANIKESH BANERJEE
Instant appeal of the assessee is filed against the order of the Commissioner of Income-tax (Appeals)-50, Mumbai[for brevity, ‘Ld.CIT(A)’] passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’), for Assessment Year 2018-19 to date of order 30.11.2023.The impugned order was emanated from the order of the Deputy Commissioner of Income-tax, Central Circle-8,Mumbai (in short, ‘the A.O.’) passed under section 143(3) of the Act, date of order28/12/2019.
“1.01 The Learned Commissioner of Income Tax (Appeals) has failed to appreciate the fact that the Appellant has asked for an adjournment as the necessary documents were to be gathered from multiple sources and required some time to compile the documents before submission to the learned CIT(A). The Learned CIT(A), without considering the application of the Appellant for adjournment, passed the Appeal Order dismissing the appeal of the Appellant.
2.01 The learned CIT(A) has erred in confirming the addition of Rs. 25,05,8367- made by the learned AO without considering the facts that during the course of Search Proceedings, the Authorized Officials were satisfied with the explanation given by the Appellant and his spouse and had not seized any jewellery during the course of the Search Proceedings.
3.01 The learned CIT(A) has erred in confirming the addition of Rs. 25,05,836 as unexplained investment u/s 69B read with section 115BBE of the Act without considering the facts that some of the jewellery belonged to one of the group companies of the Appellant and also bills / Valuation Report for the same were produced before the Authorized Officials during the course of Search Proceedings as well as during the assessment proceedings before the Learned Assessing Officer.
4.01 The Appellant craves to consider each of the above Grounds of Appeal without prejudice to each other and craves leave to add, alter, delete, amend and / or modify all or any of the above grounds of Appeal at the time or before the date of hearing.”
3. The brief facts of the case are that a search action U/s 132(1) of the Act was conducted in the premises of M/s Aurum Ventures Pvt Ltd and M/s Aurum Platz Pvt Ltd on dated 22/03/2018. During the course of search the appellant’s wife in her statement recorded had stated that a locker has been held by them. Subsequently, the locker was operated; jewellery belonging to the assessee was found and seized. The explanation of the assessee was filed, but finally, the 3 Avinash Alok Jajodia excess jewellery was found worth of Rs.15,73,000/- related to diamond jewellery and balance worth of Rs.9,32,836/-, the normal jewellery which works out total amount of Rs.25,05,836/- which is remained unexplained under section 69B of the Act. The Ld.AO added back the total amount of Rs.25,05,836/- with the total income of the assessee under section 69B of the Act. The aggrieved assessee filed an appeal before the Ld.CIT(A). The Ld.CIT(A), after considering the submission of the assesse, dismissed the appeal of the assessee. Being aggrieved on the appeal order, the assessee filed an appeal before us.
4. The Ld.AR argued vehemently and first placed that the jewellery belongs to the assessee’s wife but wrongly it is added back in the hands of the husband. So, the entire addition is wrong and arbitrary. Further, he placed that the Ld.CIT(A) has not allowed the reasonable opportunity to consider the assessee’splea and passed the impugned appeal order exparte. The assessee has not got the reasonable opportunity before the Ld.CIT(A) for submission of his evidence.
5. The Ld.DR argued and placed that the issue was duly discussed by Ld.CIT(A) in the appeal order. The relevant part of the appeal order is reproduced as below:- “11. During the appeal proceedings in spite of giving adequate opportunities the appellant has not furnished any submission /explanation or any documentary evidence to substantial grounds of appeal raised. The only explanation given by the appellant before the AO regarding gold jewellery was that the jewellery items are very old and has been received as gift on the occasion of birth of two sons from grandmother of appellant and grandmother of appellant's wife. This is very general explanation submitted before the AO without any concrete evidence. However, the AO has considered the appellant's submission and has given relief to the appellant as per the CBDT's Instruction 4 Avinash Alok Jajodia No.1994 dated 11.05.1994. 800 gms. jewellery (500 gms of Mrs. Sonali Jajodia + 100 gms Avinash Jajodia + 200 gms for two sons) is considered as personal jewelry covered by CBDT's Instruction. Thus, the AO has already considered the appellant submission. Regarding, the remaining jewllery of 324.40 gms, the appellant has not furnished any documentary evidence to explain the source of acquisition of the same. 11.1 It is also strange that the source of entire jewellery is explained as a gift and no jewellery has been purchased by the appellant. In spite of giving several opportunities during the appeal proceedings the appellant has not furnished any documentary evidence/ explanation to explain the source of this gold jewellery. Regarding the source of diamond jewellery, except stating that some items of diamond jewellery pertain to M/s. Swan Investment and Trading Pvt Ltd, no documentary evidence has been furnished either before the AO or before me during the appeal proceedings.
During appellate proceedings also, in spite of giving adequate opportunities as discussed in the above mentionedpara's the appellant has not furnished any documentary evidence in support of grounds of appeal
raised. No document whatsoever has been submitted during the appeal proceedings in support of the appellant’s contention. The appellant has not brought on record any contrary evidence/documents to disapprove the findings on the Assessing Officer.
13. I have considered the assessment order, Grounds of appeals raised and details available on record. On the basis of facts mentioned in the assessment order and particularly in absence of any documents submitted by the appellant to substantiate his case, I am constrained to concur with the AO's findings of fact and decisions. Hence, the addition made by the Assessing Officer in the assessment order is upheld. Accordingly, the appeal filed by the appellant is hereby dismissed ex- party. W*^