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Income Tax Appellate Tribunal, DELHI “E” BENCH: NEW DELHI
Before: SHRI SATBEER SINGH GODARA & SHRI MANISH AGARWAL
Year : 2018-19] Shri Vivek Gupta vs ACIT/DCIT C-5/2A, Opp. C. C. Colony Central Circle Rana Pratap Bagh, North Delhi Karnal Delhi-110007 PAN-AAPPG4029A APPELLANT RESPONDENT Appellant by Shri Ved Jain, Adv. & Ms. Uma Upadhyay, CA Respondent by Ms. Amisha S.Gupt, CIT DR Date of Hearing 04.12.2025 Date of Pronouncement 04.12.2025 ORDER
PER MANISH AGARWAL, AM :
The present appeal is filed by assessee against the order dated 29.07.2025 by Ld. Commissioner of Income Tax (A)-3, Gurgaon [“Ld.CIT(A)”] in Appeal No.10453/2019-20 passed u/s 250 of the Income Tax Act, 1961 [“the Act”] arising out of assessment order dated 29.12.2019 passed u/s 143(3) r.w.s. 153B(1)(b) of the Act pertaining to Assessment Year 2018-19.
Brief facts of the case are that a search and seizure operation u/s 132 were carried out at the business premises of M/s. Oswal Group of cases, Karnal and residential premises of its members on 22.01.2018. The case of the assessee was also covered u/s 132 of the Act. Assessee filed his return of income on 28.07.2018 declaring total income of INR 13,36,300/-. Thereafter, statutory notice u/s 143(2) of the Act was issued on 23.04.2019 followed by notices u/s 142(1) of the Act alongwith questionnaire issued from time to time. In response to above, assessee filed replies. Thereafter, the AO passed the assessment order u/s 143(3) r.w.s. 153B(1)(b) of the Act dated 29.12.2019 assessing total income of the assessee at INR 81,59,730/-.
Against the said order, assessee filed an appeal before Ld. CIT(A), who vide order dated 29.07.2025, dismissed the appeal of the assessee.
Aggrieved by the order of Ld. CIT(A), assessee is in appeal before the Tribunal by taking following grounds of appeal:-
1. “On the basis of facts and circumstances of the case, order passed by the learned Commissioner of Income Tax (Appeals) ("CIT(A)"), is bad both in the eye of law and on facts.
2. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law in confirming the assessment order u/s 143(3) passed by the AO despite the fact that same is null and void as the same has been passed in violation of CBDT Circular No. 18/2019 requiring mandatory DIN in the body of the assessment order.
3. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in rejecting the contention of the assessee that the assessment order passed under section 143(3) is illegal and bad in law as the same has been passed without having valid jurisdiction upon the assessee.
4. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in rejecting the contention of the assessee that the additions made by the AO are bad in law in the absence of any incriminating material belonging to the assessee being found during the course of the search. 5. (i) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law, confirming the action of the AO despite the fact that the order has been passed by the AO without obtaining valid prior approval under section 153D of the Income Tax Act. (ii) That the purported approval is illegal, mechanical in nature and has been given without application of mind. 6. (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. 1,67,220/- made by the AO on account of cash found during the course of search treating the same as undisclosed income under section 69A r.w.s. 115BBE of the Income Tax Act, 1961. (ii) That the abovesaid addition has been confirmed ignoring the submissions and explanations given by the assessee explaining the source of cash found during the search. 7. (i) On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law in confirming the addition of Rs. 66,56,208/- made by the AO on account of jewellery found from the residence and locker treating the same as unexplained investment under section 69 read with section 115BBE of the Act. (ii) That the abovesaid addition has been confirmed without giving the benefit of CBDT Instruction No. 1996 dated 11.05.1994 to the assessee. (iii) That the above said addition has been confirmed rejecting the detailed submissions and explanation along with the evidences brought on record in this regard.
The appellant craves leave to add, amend or alter any of the grounds of appeal.”
The assessee has not pressed Grounds of appeal Nos. 1 to 5, hence, Grounds of appeal Nos. 1 to 5 are dismissed.
Ground of appeal No.6 raised by the assessee is with respect to the addition of INR 1,67,220/- made towards cash found during the course of search.
7. Before us, Ld.AR for the assessee submits that assessee was employed with M/s. Oswal Pumps Ltd. and declared income under the head “Salary” and “other sources”. With respect to the source of cash found, during the course of search, it was explained that INR 1,20,000/- was the imprest received from M/s. Oswal Pumps Ltd. for official travelling and other incidental business expenses of the company. In support of this, ld. AR drew our attention to the reply filed before the AO dated 05.11.2019 which is available at page 25 of the Paper Book. It is further stated that during the course of survey at M/s. Oswal Pumps Ltd., shortage of cash of INR 1,37,303/- was found short as INR 1,20,000/- was with the assessee as imprest. Regarding the remaining cash of INR 47,220/-, ld. AR submits that it is personal saving of the assessee out of the drawings made for household expenses. It is thus, prayed that the addition made towards cash as unexplained money be deleted.
8. On the other hand, Ld. CIT DR for the Revenue vehemently supported the orders of the lower authorities and submits that assessee has failed to explain the source of cash found during the search and the explanation now tendered is an afterthought. Therefore, the cash found during the course of search is unexplained money of the assessee and requested for the confirmation of the addition made.
9. Heard the contentions of both parties and perused the material available on record. The assessee during the course of assessment proceedings before AO explained the source of cash as partly received as imprest from his employer towards official travelling and other business expenses and remaining cash was claimed as the personal savings. The assessee has also filed confirmation in support of the imprest received from the employer which is available in the paper book. The availability of cash of INR 47,220/- out of past savings cannot be ruled out. Thus, looking to the entirety of the facts we find that assessee has been able to explain the source of cash found during the course of search and accordingly, the addition made of INR 1,67,220/- is hereby, deleted.
Ground of appeal No.7 raised by the assessee against the addition of INR 66,56,208/- made on account of jewellery found during the course of search by treating the same as unexplained u/s 69 of the Act and further invoked the provision of section 115BBE of the Act for charging higher rate of tax.
11. Before us, Ld. AR for the assessee submits that total jewellery having gross weight of 1393.698 Grams were found [437.234 Grams at residence and 956.464 Grams in the locker]. Besides this, bullion in gold coins having total gross weight of 250 Grams were also found in locker. The approved valuer valued the said jewellery and bullion at INR 66,56,208. Ld.AR submits that AO has made the addition of the entire jewellery found during the course of search without giving any credit of CBDT Instruction No.1916 dated 11.05.1994. Ld. AR further submits that assessee’s mother Smt. Prem Lata Gupta had declared 2900 Grams gold and 5250.00 Grams silver jewellery in her Wealth Tax Return filed for AY 1996-97 and credits for the same was not given. Besides this, assessee claimed that he had received cash gift of INR 30 Lakhs from his father, Shri Padam Sain Gupta for purchase of jewellery out of his additional income declared in the petition filed before the Hon’ble Settlement Commission therefore, the source of acquisition of entire jewellery found during the search at the residence and in the locker stood explained and thus, no addition is required to be made on this score. Ld. AR, therefore, prayed for the deletion of the additions made towards alleged unexplained jewellery.
12. On the other hand, Ld. CIT DR for the Revenue submits that assessee has failed to substantiate the source of the acquisition of the jewellery and therefore, requested for the confirmation of the additions made.
Heard the contentions of both parties and perused the material available on record. In the instant case, total jewellery found was 1643.698 Grams out of which 250 Grams were bullion and gold coins. The assessee claimed that he is living with his wife and two unmarried sons and as per CBDT Instruction No.1916 dated 11.05.1994, 800 Grams of jewellery should be held as explained.
After considering the said claim and the judgments of various Hon’ble High Courts including the Co-ordinate Benches of the Tribunal, we are of the considered view that since the assessee is not filing any Wealth Tax Return therefore, the benefit of CBDT Instruction No.1916 dated 11.05.1994, can be given to the assessee and accordingly, the AO is directed to allow the credit of 800 Grams of jewellery in terms of CBDT instruction No. 1916 dt. 11.05.1994.
With respect to the remaining jewellery, claim of the assessee of allowing credit of Wealth Tax return of his mother and further, credit of cash gift INR 30 Lakhs given by his father, cannot be allowed as the Wealth Tax Return was filed by his mother in AY 1996-97 and no evidence was filed that the said jewellery was kept by the assessee more particularly when assessee has failed to established that he was living jointly with his parents. Regarding cash gift of INR 30 Lakhs from father, it is observed that father of the assessee had made disclosure of additional income in the settlement petition filed. It was the claim of the assessee that out of such additional income offered, INR 30 Lakhs was given to the assessee for purchase of jewellery however, this claim is not verifiable form the settlement petition filed and nowhere in the petition the additional income was claimed to be applied in acquisition of jewellery by the assessee. Therefore, this claim of the assessee could not be accepted at this stage.
In view of above facts and considering the entire circumstances of the case, we allow the credit as CBDT Instruction of 800 Grams jewellery and addition towards the remaining jewellery of 843.698 Grams is hereby, upheld. The AO is also directed to re-compute the amount of addition in this regard. Accordingly, Ground of appeal No.7 raised by the assessee is partly allowed.
In the result, the appeal of the assessee is partly allowed. Order pronounced in the open Court on 04.12.2025.