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Income Tax Appellate Tribunal, DELHI BENCH: ‘D’: NEW DELHI
Before: SHRI G.D. AGRAWAL & SHRI CHANDRA MOHAN GARG
PER CHANDRA MOHAN GARG, JUDICIAL MEMBER
This appeal filed by the assessee is directed against the order of the CIT(A)-XXXII, New Delhi, dated 26/09/2013 for AY 2011-12.
The assessee has raised the following ground of appeal:
“1. On the facts and circumstances of the case, the order passed by the Learned Commissioner of Income Tax (Appeals)[CIT(A)] is bad both in the eye of law and on facts.
2(i) On the facts and circumstances of the case, learned CIT(A) has erred both on facts and in law in confirming the addition of Rs.39,37,010/- made by the AO as un-explained jewellery found during the course of the search.
(ii) That the abovesaid addition has been confirmed by ignoring the fact that this jewellery was neither found from assessee’s residence nor from his locker but was found from the locker of Mrs. Santosh Jain and Mr. Vinod Jain and Mrs. Santosh Jain, during the course of the search in her statement has confirmed that this jewellery belongs to herself and her family members residing with her.
(iii) On the facts and circumstances of the case, learned CIT(A) has erred both on facts and in law in not appreciating the evidences and the explanation given by the assessee in right perspective.
3. On the facts and circumstances of the case, learned CIT(A) has erred both on facts and in law in rejecting the contention of the appellant that assessment framed by the AO is beyond the scope of the provisions of Section 153A of the Act.”
We have heard the rival submissions and have perused the assessment order, the impugned order of the CIT(A) and the paper book of the assessee spread over 37 pages and written arguments/synopsis of the assessee. The ld. AR firstly drew our attention towards the assessment order paras 4 and 5 and 2
AO noted the contention of the assessee that out of total jewellery found during the course of search and seizure operation, jewellery amounting to Rs. 39,37,010/- remained unexplained. The ld. AR vehemently contended that these observations of the AO are factually incorrect as is evident from the statement of the mother of the assessee Smt. Santosh Jain, available at pages 28 to 33 of the assessee’s paper book [APB], it was stated that the jewellery found in the house and lockers belonged to the persons mentioned in answer to question No. 3 wherein the names of the assessee, his wife and children have not been mentioned. The ld. AR also pointed out that jewellery amounting to Rs. 19,47,300/- was found in the locker No 297, Dena Bank, Paschim Vihar, New Delhi in the name of Smt.
Santosh Jain and Shri Vinod Jain, which is evident from the valuation report placed at pages 24 and 25 of the APB. The ld. AR further pointed out that jewellery worth Rs. 19,87,710/- was found in the locker No. 286 which was in the name of Smt.
Santosh Jain, which is also evident from the valuation report at pages 24 and 25 of the APB. The ld. AR strongly contended that in response to question No. 3, Smt. Santosh Jain categorically stated that the jewellery found in the lockers belonged to persons mentioned in Annexure to question No. 3, i.e. total seven person but the assessee, his wife and children’s names were not mentioned therein. The ld. AR further contended that the assessee has given explanation vide letter dated 4.2.2013 [APB pages 18 & 19] and this explanation was limited to the jewellery found at the residence of the assessee and in the locker belonging to him regarding jewellery of Rs. 51,27,006/- and remaining jewellery found in the two locker of Smt. Santosh and Shri Vinod Jain and Shri Vipul Jain was belonging to them and not the assessee. The ld. AR lastly submitted that the CIT(A) upheld the addition by placing reliance on the incorrect facts.
Therefore, the order of the authorities below may be set aside and the AO may be directed to delete the addition.
Per contra, the ld. DR placed his reliance on the order of the AO as well as the CIT(A) and submitted that in the absence of any proper explanation, the AO was right in treating the entire seize jewellery as belonging to the assessee and quite justified in making the impugned addition.
On careful consideration of the above rival submissions, from the documents placed on record by the assessee, in his paper book, we note that at the time of search, jewellery amounting to Rs. 19,87,710/- was found in the locker No. 286 and jewellery amounting to Rs. 19,47,300/- was found in the locker
No. 297. Both the lockers were in Dena Bank, Pachim Vihar in the name of Smt Santosh Jain and Shri Vinod Jain, father of the assessee, which is evident from the valuation report available at pages 24 to 27 of the APB. Further, from the statement of Smt.
Santosh Jain, recorded during the course of search and seizure operation [APB pages 28 to 33], we note that she categorically stated that she is residing at B-1/118, Paschim Vihar and replying to question No. 3, she stated that other family members residing with her are Smt. Sheila Jain, Shri V.K. Jai, Shri Vipul Jain, Smt.
Anu Kiran, Ms. Shubhi Jain, Master Daksh and self. Replying to question No. 6, Smt. Santosh Jain stated that the jewellery found in the house as well as the lockers belonged to the persons mentioned in Annexure to Question No. 3 as stated above, which consisted of ancestral jewellery as well as the jewellery received in auspicious occasions like marriage, birth of children during the last 50 years. She further stated that the jewellery had been received in marriages and other auspicious occasions from both sides of family i.e. parents and in-laws. From the relevant operative part of the first appellate order at pages 5 to 7, we note that the CIT(A) observed that from the copies of valuation report filed by the assessee, in the course of appellate proceedings, that the valuer has made two separate records of valuation in respect of jewellery found from the two lockers,
286 and 297, apart from the valuation of jewellery found from the residential premises which was separately valued.
From this operative para, we note that the CIT(A) recorded incorrect finding that Smt. Santosh Jain could not satisfactorily explain the possession of the said jewellery and the source of acquisition thereof as answer to question No. 3 and 6 clearly explain that the jewellery found in the house and locker belonged to persons mentioned in answer to question No. 3 wherein names of other family members have been noted and the names of the assessee and his wife and children have not been named. Therefore, we have no hesitation in holding that the CIT(A) confirmed unjustified addition by observing incorrect findings and thus the orders of the authorities below cannot be held as sustainable and we, therefore, set aside the same. In view of the above noted factual findings, we are inclined to hold that the assessee satisfactorily explained the possession and source of jewellery amounting to Rs. 39,37,010/-. Accordingly, we hold that the addition made by the AO in the hands of the assessee and upheld by the CIT(A) cannot be held as sustainable.
Thus we demolish the same. Accordingly, Ground Nos. 1, 2 and 3 of the assessee are allowed.
In the result, the appeal of the assessee stands allowed.
The order is pronounced in the open court on 05.09.2016.