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Judgment
The present appeals have been filed by the assessee and the Revenue against the orders of ld. CIT(A)-27, New Delhi dated 14.03.2022.
In ITA No. 983/Del/2022, following grounds have been raised by the assessee:
“1. That the Ld. AO grossly erred in law and in facts of the case and the Ld. CIT(A) grossly erred in upholding the addition of Rs. 10,00,000/- on account of cash found during the course of search action despite the fact that the said cash pertained to group entity in which the appellant was director.
That the Ld. AO grossly erred in law and in facts of the case and the Ld. CIT(A) grossly erred in upholding the addition of Rs. 31,49,751/- made on the presumption that the silver and diamond jewellery found during the course of search action was unexplained.”
In ITA No. 1335/Del/2022, following grounds have been raised by the Revenue:
“1. The Ld. CIT(A) has erred on facts and in law in restricting the addition of Rs. 10,90,710/- to Rs.10,00,000/- on account of unexplained cash u/s 69A of the Act without considering the fact that the assessee had not submitted any documentary evidence to substantiate the claim that part of the cash seized from the residential premise of the assessee belongs to the family members of the assessee.
The Ld. CIT(A) has erred on facts and in law in restricting the addition of Rs.1,53,79,122/- to Rs.31,49,751/- made on account of unexplained jewellery u/s 69A of the Act without considering the fact that the seized jewellery is different from the jewellery declared by the assessee in VDIS Scheme-1997/wealth tax return.
The Ld. CIT(A) has erred on facts and in law while giving benefit of 1450 gms of jewellery relying upon CBDT instruction No.1916 ignoring the fact that the assessee was assessed to wealth tax and had declared unaccounted jewellery under VDIS, 1997, as well as from inheritance.
(a) The Order of the Ld. Commissioner of Income Tax (Appeals) is erroneous and not tenable in law and on facts.”
In ITA No. 984/Del/2022, following grounds have been raised by the assessee:
“1. That the ld. AO grossly erred in law and in facts of the case in making additions and the ld. CIT(A) grossly erred in upholding the addition of Rs.3,91,825/- made on the presumption that the silver jewellery found during the course of search action was unexplained.”
In ITA No. 1334/Del/2022, following grounds have been raised by the Revenue:
“1. The Ld. CIT(A) has erred on facts and in law in deleting the addition of Rs.69,05,000/- made on account of unexplained expenditure u/s 69C of the Act without considering the fact that the source of it remains unexplained on the part of the assessee.
The Ld. CIT(A) has erred on facts and in law in restricting the addition of Rs.74,16,397/- to Rs.3,91,825/- made on account of unexplained jewellery u/s 69A of the Act without considering the fact that the seized jewellery is different from the jewellery declared by the assessee in VDIS Scheme-1997/wealth tax returns.
The Ld. CIT(A) has erred on facts and in law while giving benefit of 1800 gms of jewellery relying upon CBDT instruction No.1916 ignoring the fact that the assessee was assessed to wealth tax and had declared unaccounted jewellery under VDIS, 1997, as well as from inheritance.
The Ld. CIT(A) has erred on facts and in law in deleting the addition of Rs.2,20,000/- made on account of unexplained cash u/s 69A of the Act without considering the fact that the assessee had not submitted any documentary evidence to substantiate the claim that part of the cash seized from the residential premise of the assessee belongs to the family members of the assessee.”
In ITA No. 985/Del/2022, following grounds have been raised by the assessee:
“1. That the ld. AO grossly erred in law and in facts of the case and the ld. CIT(A) grossly erred in upholding the addition of Rs.4,50,000/- on account of cash found during the course of search action despite the fact that the said cash pertained to group entities controlled by him.”
Mahabir Singh Mittal
ITA No. 984/Del/2022 : A.Y. 2018-19 (Assessee Appeal)
Silver Jewellery - Rs.3,91,825/-
ITA No. 1334/Del/2022 : A.Y. 2018-19 (Revenue Appeal)
Addition u/s 69C – Rs.69,05,000/-
Addition u/s 69A – Rs.70,24,570/-
Addition u/s 69A – Rs.2,20,000/-
The issue involved in the appeal of the assessee and the revenue are interlinked.
A search and seizure action u/s 132 of the Income Tax Act, 1961 was conducted on the residential premises of the assessee on 19.12.2017 and the assessment u/s 153A has been completed on 26.12.2019.
After considering the entire submissions, the Assessing Officer made addition on the basis of cash account of Rs.69,05,000/- u/s 69C, Rs.74,16,397/- on account of unexplained money found in the form of jewellery u/s 69A, Rs.2,20,000/- on account of cash found at the premises during the course of search.
Aggrieved, the assessee filed appeal before the ld. CIT(A). The ld. CIT(A) confirmed the addition of Rs.3,91,825/- on account of silver jewellery and deleted the remaining additions made by the Assessing Officer. Hence, these appeals from both the sides.
Addition u/s 69A – Rs.2,20,000/-:
Before the ld. CIT(A), the assessee explained that out of the cash found of Rs.2,20,000/- an amount of Rs.85,500/- pertain to Smt. Kailash Mittal, wife of the assessee and Rs.70,200/- pertain to Smt. Anshika Mittal, daughter-in-law and Rs.64,300/- belongs to the other daughter-in-law Smt. Preeti Mittal who were staying with them at the time of search. It was submitted that the assessee has been married for 41 years and the daughter-in-laws are regular tax payers and there have been sufficient cash withdrawals to prove the amount and the cash found be treated as the petty cash available with the ladies of the house. The ld. CIT(A) deleted the addition holding that these amounts can be reasonably held to be available in the hands of each married woman. Having gone through the quantum of the cash available with each individual, we hold that the decision of the ld. CIT(A) is logical and hence we decline to interfere with the order of the ld. CIT(A) on this issue.
Addition u/s 69C – Rs.69,05,000/-:
The AO made addition of Rs.69,05,000/- based on the material found and seized during the search operation. The description of the document is as under:
CASH
DATE
Expenses
Received
Payment
31/03/2016
Sunlit Mittal H.U.F
cash
Receipt
cash
25,000
08/04/2015
Smt. AanshikaMittal
cash
Payment
384020
35,00,000
16/07/2015
Smt. Aanshika Mittal
cash
Payment
384028
750,000.00
14/12/2015
Smt. Aanshika Mittal
cash
Payment
384036
45,000.00
09/04/2015
Smt. Kailash Mittal
cash
Payment
464528
30,000.00
09/04/2015
Smt.KamleshMittal
cash
Payment
632621
40,000.00
15/12/2015
Smt. Kamlesh Mittal
cash
Payment
632629
40,000.00
04/03/2016
Smt. Kamlesh Mittal
cash
Payment
632633
100,000.00
23/04/2015
Smt. Neha Mittal
cash
Payment
909542
35,000.00
15/12/2015
Smt. Neha Mittal
cash
Payment
847141
40,000.00
09/04/2015
Smt. Preeti Mittal
cash
Payment
521950
40,000.00
15/12/2015
Smt. Preeti Mittal
cash
Payment
521964
40,000.00
09/04/2015
Smt. Saroj Mittal
cash
Payment
383980
35,000.00
14/12/2015
Smt. Saroj Mittal
cash
Payment
383993
45,000.00
04/03/2016
Smt. Sonika Mittal
Cash
Payment
384000
200,000.00
09/04/2015
Smt. Sonika Mittal
Cash
Payment
955518
40,000.00
14-12-2015
Smt. Shika Mittal
cash
Payment
632575
45,000.00
09-04-2015
Smt. Shika Mittal
cash
Payment
004880
35,000,00
15-12-2015
Smt. Shashi Mittal
cash
Payment
004900
40,000.00
15-04-2015
Smt. Shashi Mittal
cash
Payment
1479262
7,00,000.00
14-07-2015
Smt. Shashi Mittal
cash
Payment
479273
10,00,000.00
06-08-2015
Smt. Shashi Mittal
cash
Payment
479275
4,00,000.00
10-12-2015
Smt. Shashi Mittal
cash
Payment
479285
35,000.00
04-03-2016
Smt. Shashi Mittal
cash
Payment
251345
3,00,000.00
23-04-2015
Sh. Krishan Kumar Mittal
cash
Payment
004840
35,000.00
14-12-2015
Sh. Krishan Kumar Mittal
Sash
Payment
992526
45,000.00
04/03/Z016
Sh. Krishan Kumar Mittal
cash
Payment
992535
4,00,000.00
14-05-2015
Sh. Mahabir Singh Mittal
cash
Payment
901609
30,000.00
11-12-2015
Sh. Mahabir Singh Mittal
cash
Payment
635959
40,000.00
04-03-2016
Sh. Mahabir Singh Mittal
cash
Payment
315131
3,00,000.00
16-04-2015
Sh. Surender Kumar Mittal
cask
Payment
327678
40,000.00
15-12-2015
Sh. Surender Kumar Mittal
cask
Payment
536010
50,000.00
04-03-2016
Sh. Surender Kumar Mittal
cash
Payment
636021
3,00,000.00
08-04-2015
Sh. Ashutosh Mittal
cash
Payment
474445>
35,000,00
11-12-2015
Sh. Ashutosh Mittal
cash
Payment
0f9596
40,000.00
25/04/20IS
Sh. Ritesh Mittal
cash
Payment
635113
35,000.00
11-12-2015
Sh. Ritesh Mittal
cash
Payment
635148
45,000.00
25-04-2015
Sh. Puneet Mittal
cash
Payment
184320
30,000.00
10-12-2015
Sh. Puneet Mittal
cash
Payment
874124
45,000.00
08-04-2015
Sh. Devesh Mittal
cash
Payment
464492
40,000.00
14-12-2015
Sh. Devesh Mittal
cash
Payment
479214
45,000.00
13-04-2015
Sh. Sumit Mittal
cash
Payment
479151
30,000.00
10-12-2015
Sh. Sumit Mittal
cash
Payment
479168
40,000.00
23-04-2015
Sh. Yashu Mittal
cash
Payment
631272
40,000.00
10-12-2015
Sh. Yashu Mittal
cash
Payment
150412
40,000.00
24-06-2015
Kwaiity Tech-Mech (p) ltd.
cash
Contra
1
5,00,000.00
08-07-2015
Parmanand Overseas limited
cash
Contra
Cash
40,000,00
23-09-2015
Parmanand Overseas Limited
Cash
Contra
Cash
1,50,000.00
06-04-2015
Icon Realty Private Limited
cash
Receipt
Cash
15000.00
29-04-2015
Icon Realty Private Limited
cash
Payment
175815
4,00,000.00
2,30,000.00
66,75,000.00
The ld. CIT(A) has diligently examined the sources of the cash and found that the amounts reflected in the seized document were infact withdrawn from the disclosed bank accounts on various dates. The ld. CIT(A) held that all these transactions have been made thorugh banking channel, there were no cash deposits in the bank statements and also the AO has wrongly arrived at the figure of Rs.69,05,000/- by taking the amounts of deposits as well as withdrawals. For the sake brevity, the said details of the withdrawals juxtaposing the details of cash expenses found on the seized material are mentioned below:
CASH
Remarks
DATE
Expenses
Received
Payment
31/03/2016
Sunlit Mittal H.U.F
cash
Receipt
cash
25,000
Depositedinthea/cNumber61027201250
maintainedwithStateBankofBikaner&Jaipur(SBBJ]at Lawrence Road, Delhi Branch..
08/04/2015
Smt. Aanshika Mittal
cash
Payment
384020
35,00,000
Withdrawal from a/c Number 61005003467
maintained with SBB] at Lawrence Road, Delhi Branch..
16/07/2015
Smt. Aanshika Mittal
cash
Payment
384028
750,000.00
14/12/2015
Smt. Aanshika Mittal
cash
Payment
384036
45,000.00
09/04/2015
Smt.KailashMittal
cash
Payment
464528
30,000.00
Withdrawal from a/c Number 51025618088
maintained with SBB] at Lawrence Road, Delhi Branch..
09/04/2015
Smt. Kamlesh Mittal
cash
Payment
632621
40,000.00
Withdrawal from a/c Number 51025615677
maintained with SBB]at Lawrence Road, Delhi Branch..
15/12/2015
Smt. Kamlesh Mittal
cash
Payment
632629
40,000.00
04/03/2016
Smt. Kamlesh Mittal
cash
Payment
632633
100,000.00
23/04/2015
Smt. Mittal Neha
cash
Payment
909542
35,000.00
Withdrawal from a/c Number ;51025656432
maintained with SBB]at Lawrence Road, Delhi Branch..
15/12/2015
Smt. Mittal Neha
cash
Payment
847141
40,000.00
09/04/2015
Smt. Mittal Preeti
cash
Payment
521950
40,000.00
Withdrawal from a/c Number 51025665866
maintained with SBB] at Lawrence Road, Delhi Branch..
15/12/2015
Smt. Mittal Preeti
cash
Payment
521964
40,000.00
09/04/2015
Smt. Mittal Saroj
cash
Payment
383980
35,000.00
Withdrawalfrom,a/cNumber51025626190
maintained with SBB] at Lawrence Road, Delhi Branch..
14/12/2015
Smt. Mittal Saroj
cash
Payment
383993
45,000.00
04/03/2016
Smt.SonikaMittal
Cash
Payment
384000
200,000.00
Withdrawal from a/c Number 51025661736
maintained with SBB]at Lawrence Road, Delhi Branch..
09/04/2015
Smt.Sonika Mittal
Cash
Payment
955518
40,000.00
14-12-2015
Smt.Shika Mittal
cash
Payment
632575
45,000.00
Withdrawal from a/c Number 51025658134
maintained with SBB]at Lawrence Road, Delhi Branch..
09-04-2015
Smt.ShikaMittal
cash
Payment
004880
35,000,00
15-12-2015
Smt.ShashiMittal
cash
Payment
004900
40,000.00
Withdrawal from a/c Number 51025617889
maintained with SBB] at Lawrence Road, Delhi Branch..
15-04-2015
Smt.Shashi Mittal
cash
Payment
1479262
7,00,000.00
14-07-2015
Smt.Shashi Mittal
cash
Payment
479273
10,00,000.00
06-08-2015
Smt.Shashi Mittal
cash
Payment
479275
4,00,000.00
10-12-2015
Smt.Shashi Mittal
cash
Payment
479285
35,000.00
04-03-2016
Smt.Shashi Mittal
cash
Payment
251345
3,00,000.00
23-04-2015
Sh.Krishan Kumar Mittal
cash
Payment
004840
35,000.00
Withdrawal from a/c Number 51025608477
maintained with SBB]at Lawrence Road, Delhi Branch..
14-12-2015
Sh.Krishan Kumar Mittal
Sash
Payment
992526
45,000.00
04/03/Z016
Sh.Krishan Kumar Mittal
cash
Payment
992535
4,00,000.00
14-05-2015
Sh.Mahabir Singh Mittal
cash
Payment
901609
30,000.00
Withdrawal from a/c Number 51025608466
maintained with SBB] at Lawrence Road, Delhi Branch.
11-12-2015
Sh.Mahabir Singh Mittal
cash
Payment
635959
40,000.00
04-03-2016
Sh.Mahabir Singh Mittal
cash
Payment
315131
3,00,000.00
16-04-2015
Sh.Surender Kumar Mittal
cask
Payment
327678
40,000.00
Withdrawal from a/c Number 51025616921
maintained with SBB]at Lawrence Road, Delhi Branch..
15-12-2015
Sh.Surender Kumar Mittal
cask
Payment
536010
50,000.00
04-03-2016
Sh.Surender Kumar Mittal
cash
Payment
636021
3,00,000.00
08-04-2015
Sh.Ashutosh Mittal
cash
Payment
474445>
35,000,00
Withdrawal from a/c Number
51025645090 maintained with SBB]at Lawrence Road, Delhi Branch..
11-12-2015
Sh.Ashutosh Mittal
cash
Payment
0f9596
40,000.00
25/04/20IS
Sh.Ritesh Mittal
cash
Payment
635113
35,000.00
Withdrawal from a/c Number
51025619354 maintained with SBB]at Lawrence Road, Delhi Branch..
11-12-2015
Sh.Ritesh Mittal
cash
Payment
635148
45,000.00
25-04-2015
Sh.Puneet Mittal
cash
Payment
184320
30,000.00
Withdrawal from a/c Number 51025619376
maintained with SBB]at Lawrence Road, Delhi Branch..
10-12-2015
Sh.Puneet Mittal
cash
Payment
874124
45,000.00
08-04-2015
Sh.Devesh Mittal
cash
Payment
464492
40,000.00
Withdrawal from a/c Number 51025619423
maintained with SBB]at Lawrence Road; Delhi Branch.
14-12-2015
Sh.Devesh Mittal
cash
Payment
479214
45,000.00
13-04-2015
Sh.Sumit Mittal
cash
Payment
479151
30,000.00
Withdrawal from a/c Number 51025619434
maintained with SBB]at Lawrence Road, Delhi Branch..
10-12-2015
Sh.Sumit Mittal
cash
Payment
479168
40,000.00
23-04-2015
Sh.Yashu Mittal
cash
Payment
631272
40,000.00
Withdrawal from a/c Number 61122106288
maintained with SBB]at Lawrence Road, Delhi Branch..
10-12-2015
Sh.Yashu Mittal
cash
Payment
150412
40,000.00
24-06-2015
KwaiityTech-Mech(p)ltd.
cash
Contra
1
5,00,000.00
Withdrawal from a/c Number 4711352526
maintained with Kotak Mahindra Bank, Model Town, Delhi
08-07-2015
Parmanand Overseas limited
cash
Contra
Cash
40,000,00
Deposited in a/c Number 61154082676
maintained with SBI at At Lawrence Road, Delhi Branch.
23-09-2015
Parmanand Overseas Limited
Cash
Contra
Cash
1,50,000.00
06-04-2015
Icon Realty Private Limited
cash
Receipt
Cash
15000.00
Deposited in a/c Number 909020033366355
maintained with Axis Bank
29-04-2015
Icon Realty Private Limited
cash
Payment
175815
4,00,000.00
Withdrawal from a/c Number 909020033366355
maintained with Axis Bank
2,30,000.00
66,75,000.00
Since, the cash amounts mentioned in the seized material have been proved to be from the withdrawals from the bank account and the amounts have been duly reflected in the regular disclosed accounts, we decline to interfere with the order of the ld. CIT(A) on this issue.
Addition u/s 69A – Rs.74,16,397/- (Rs.70,24,570 + Rs. Rs.3,91,825):
The issue of jewellery found and seized and the additions made in the various family members has to be examined comprehensively to arrive at a correct decision.
The pertinent facts are as under:
· The total jewellery found at the premises of the assessee, family members and lockers was of Rs.5,53,12,062/-
· The total jewellery declared in the Wealth Tax Return was 2316 gms of 22 kts. gold.
· The jewellery declared as per the VDIS was 1771 gms of 18 kts. gold, 4105 gms of 22 kts. gold, 1484 gms of 23 kts. gold, 1124 gms of 24 kts. gold and diamonds of 454 kts.
· The assessee has also furnished copies of the invoices for purchase of jewellery post VDIS declaration which consists of 4222 gms of 14 kts. gold, 1977 gms of 18 kts. gold, 3159 gms of 22 kts. gold, 100 gms of 24 kts. gold, diamonds of 1388 kts. and silver jewellery of 65 kg.
· The aggregate jewellery available with the family is as under:
S.
No
Source
GoldinKarat
Diamond
Silver
14
18
22
23
24
inKarat
inKG
1
Wealth Taxreturns
2,316.010
2
VD1S1997
Declarations
1,771.820
4,105.950
1,484.70o
1,124.230
454.820
3
Purchases
4,222.629
1,977.307
3,151.230
100.000
1,388.740
65.773
Total
4,222.629
3,749.127
9,573.190
1,484.700
1,224.230
1,843.560
65.773
The details of the jewellery available with the family after converted into linear 22 kts. gold is as under:
Particulars
Goldin Karat
Diamond
Silver
14
18
22
23
24
In Karat
In KG
Total items available
4,222.63
3,749.13
9,573.19
1,484.70
1,224.23
1,843.56
65.77
Equivalent
weightin 22Kts.
2,687.13
3,067.47
9,573.19
1,552.19
1,335.52
NA
NA
Total
18,215.495
1,843.56
65.77
The details of the jewellery found during the course of search is as under:
Source
Goldin Karat
Diamond
Silver
14
18
22
24
In Karat
In KG
Total Items
441.056
5,903.706
4,589.85
175.00
1,119.80
103.713
Equivalent weight in 22Kts.
280.67
4,830.31
4,589.85
190.91
NA
NA
Total
9,891.739
1,119.80
103,713
The ld. CIT(A) after going through the entire details and taking into consideration, the total jewellery as per VDIS, as inherited, as purchased, as per Wealth Tax came to a conclusion that the jewellery found at the premises is less than the jewellery disclosed by the assessee and hence held that no addition is called for. On going through the undisputed facts on record of availability of the jewellery with the assessee, we concur with the decision of the ld. CIT(A). However, the ld. CIT(A) has confirmed addition of Rs.3,91,825/- on account of silvery jewellery. The assessee has submitted the details of purchase of silver which has been a part of the documents filed before the ld. CIT(A) while proving the purchase of gold ornaments subsequent to the declaration under VDIS. The ld. CIT(A) had examined the purchase of silver and came to a logical conclusion that the silver of Rs.3,91,825/- could not be reconciled. In the absence of any contrary evidences submitted before us to reconcile the silver articles, we decline to interfere with the order of the ld. CIT(A).
In the result, the appeals of the revenue as well as the assessee are dismissed.
Surender Singh Mittal
ITA No. 985/Del/2022 : A.Y. 2018-19
Cash – Rs.4,50,000/-:
During the course of search and seizure operation an amount of Rs.8,85,000/- were found out of which Rs.4,50,000/-was seized. The assessee was asked to explain the source of such cash. The Assessing Officer held that the assessee has not furnished any satisfactory explanation explaining the source of the cash, hence the entire amount of Rs.8,85,000/- found was added to the total income of the assessee as per provisions of Section 69A r.w.s. 115BBE of the Income Tax Act, 1961 being unexplained money.
Before the ld. CIT(A), the assessee explained that out of the cash found, Rs. 3,03,932/- pertained to M/s Kwality Techmech Private Limited, Rs. 1,08,512/- pertained to M/s Parmanand Overseas Limited and balance Rs. 4,95,500/-pertained to family members of the appellant. It was also explained that the said cash had accumulated with them over a period of time and the source of said cash was withdrawals from bank accounts and petty savings.
The ld. CIT(A) held that the assessee could not explain the source of cash amounting to Rs.4,50,000/- during his statement recorded in the search and seizure operation. It was held that the cash was seized by the Department in the absence of any source explained by the assessee. The ld. CIT(A) held that the claim of the assessee that part cash belongs to M/s Kwality Techmech Private Limited and to M/s Parmanand Overseas Limited cannot be accepted as at the time of search, the assessee could not complete the cash book of these two companies up to the date of search and the explanation of the assessee was not even substantiated properly during the assessment proceedings. Further, it is also not established that the cash found and seized during the search from the residence of the assessee was the same cash as belonging to M/s KwalityTechmech Private Limited and to M/s Parmanand Overseas Limited. In view of these facts, it cannot be said with certainty that this cash seized is same cash as represented by cash in hand of M/s Kwality Techmech Private Limited and to M/s Parmanand Overseas Limited, if any, on the date of search. However, considering the status of the family, it also cannot be said that total cash found is unexplained. Therefore, addition made by the AO of Rs.8,85,800/- is hereby restricted to Rs.4,50,000 (amount seized during search operation) by the ld. CIT(A).
We find that the ld. CIT(A) had no qualms while accepting the fact that the family could have a cash of Rs.4,35,000/-. The ld. CIT(A) disputed that the amount of Rs. 3,03,932/- pertain to M/s Kwality Techmech Private Limited, Rs. 1,08,512/-pertain to M/s Parmanand Overseas Limited. The sole reason of confirming the addition by the ld. CIT(A) was that the assessee could not explain the sources at the time of search and the same has been seized. We find that the cash book of M/s Kwality Techmech Private Limited and M/s Parmanand Overseas Limited and the accounts of these concerns have been accepted during the assessment u/s 153A of these concerns and hence, we hold that no addition can be called for as the cash has been duly reflected in these two concerns.
In the result, the appeal of the assessee is allowed.
Ashutosh Mittal
ITA No. 983/Del/2022 : A.Y. 2018-19 (Assessee Appeal)
Cash - Rs.10,00,000/-
Jewellery – Rs.31,49,751/- (Interlinked with the ground no. 2 of the revenue appeal)
During the course of search and seizure operation an amount of Rs.10,91,710/- has been found and the same has been brought to tax by the Assessing Officer.
During the course of hearing before the ld. CIT(A), an amount of Rs.91,710/- found to be acceptable as belonging to mother and wife of the assessee. The ld. CIT(A) confirmed the remaining amount Rs.10,00,000/- found at the time of search.
Before us, the assessee submitted that in respect of balance of Rs.10,00,000/-, it was explained that the said cash pertained to M/s Paramanand and Sons Food Products Pvt. Ltd. in which the assessee is a Director and the said cash was kept with him for safe custody but the AO didn’t adjudicate the submissions of the assessee and held the same as unexplained money and assessed the same as his income u/s 69A r.w.s. 115BBE of the Act. The ld. DR submitted that it cannot be accepted that the cash pertaining to the company was kept at the residence of the assessee and there was no evidence to adduce the same.
We find that the ld. CIT(A) disputed that the amount of Rs. 10,00,000/- pertain to M/s Parmanand and Sons Food Products Pvt. Ltd. The sole reason of confirming the addition by the ld. CIT(A) was that the assessee could not explain the sources at the time of search and the same has been seized. We find that the cash book of M/s Parmanand and Sons Food Products Pvt. Ltd. and the accounts of this concern has been accepted during the assessment u/s 153A. We have gone through the cash book at page no. 401 to 413 of the paper book the results of which have been accepted by the revenue. Hence, we hold that no addition can be called for as the cash has been duly reflected in the books of M/s Parmanand and Sons Food Products Pvt. Ltd.
In the result, the appeal of the assessee is allowed.
Ashutosh Mittal
ITA No. 1335/Del/2022 : A.Y. 2018-19 (Revenue Appeal)
Addition u/s 69A – Rs.90,710 –
Addition u/s 69A – Rs. 1,22,29,370/-
Addition u/s 69A – Rs.90,710/-:
Adjudicated in ITA No. 983/Del/2022. The decision of the ld. CIT(A) in deleting the addition is affirmed.
Addition u/s 69A – Rs.1,53,79,122/- (Rs. 1,22,29,370 + Rs.31,49,751):
With regard to the gold jewellery as taken up in ground no. 2 of the appeal of the revenue, the adjudication in the case of Sh. Mahabir Singh Mittal in ITA No. 1334/Del/2022 applies mutatis mutandis. In the result, the appeal of the revenue is dismissed.
With regard to Rs.31,49,751/- confirmed by the ld. CIT(A) out of the total jewellery found of Rs.1,53,79,122/- after according relief of Rs.1,22,29,370/-, we find that the dispute pertains to the difference in the carrotage of diamonds. The total diamonds found during the search was 329 kts. and the total carrotage as per the VDIS, inheritance and Wealth Tax Return was Rs.219 kts. The ld. CIT(A) determined excess of 108 carats and valued Rs.25,239/- per carat.
Before us, the ld. AR submitted that the gold jewellery declared was of 4589 gms. as against the jewellery found during the search of 3375 gms. The ld. AR submitted that the diamond of 108 kts. is embedded within the gold jewellery and hence the same shall make a part of the diamond jewellery found during the search of 328 kts. It was argued that the embedded diamonds in the jewellery has been ignored by the revenue authorities while assessing the total diamonds in carrets. The ld. DR submitted that the assessee has been given all the available benefits as per the records and hence, no further benefit can be accorded.
We have gone through the facts of the case and the judgments of various Courts on this issue.
The assessee stated that the income for all the years had fallen into the highest tax bracket which shows that the assessee has been earning substantial Income clearly establishing the status. It has time and again been held that due credit of the same has to be allowed by the assessing officer looking and appreciating the status, customs, and traditions relating to the family. Reliance is being placed upon following decisions:
Ashok Chaddha vs. ITO, 14 taxmann.com 57 (Delhi)
Vibhu Aggarwal vs. DCIT, 93 taxmann.com 275 (Delhi - Trib.)
Tara Devi Goenka vs. CIT 122 ITR 14 (Cal)
Ms. Pooja Shree Chouksey Vs. ACIT in ITA No. 572/lnd/2018
CIT Vs. Kailash Chand Sharma 198 CTR 201 (Raj) Suneela Soni Vs. DCIT in ITA No. 5259/DEL/2017
DCIT Vs. Shri Haroon Mohd. Unni in ITA No.463/M/2012
Susan Suresh Chandra Tilwa Vs. DCIT in ITA No.270/RJT/2015
DCIT, CC-8(3), Mumbai Vs. Shri Manekchand Kothari ITA No. 194/Mum/2018
The Hon’ble Delhi High Court in the case of Ashok Chaddha vs. Income-tax Officer 14 taxmann.com 57 (Delhi) held that collecting jewellery of 906.900 gms by a woman in a married life of 25 years in form of stree dhan or on other occasions is not abnormal. The operative part of the judgment is reproduced below:
“3. Learned Counsel for the respondent on the other hand relied upon the reasoning given by the authorities below. After considering the aforesaid submissions we are of the view that addition made is totally arbitrary and is not founded on any cogent basis or evidence. We have to keep in mind that the assessee was married for more than 25-30 years. The jewellery in question is not very substantial. The learned counsel for the appellant/assessee is correct in her submission that it is a normal custom for woman to receive jewellery in the form of "stree dhan" or on other occasions such as birth of a child etc. Collecting jewellery of 906.900 grams by a woman in a married life of 25-30 years is not abnormal. Furthermore, there was no valid and/or proper yardstick adopted by the Assessing Officer to treat only 400 grams as "reasonable allowance" and treat the other as "unexplained". Matter would have been different if the quantum and value of the jewellery found was substantial.
We are, therefore, of the opinion that the findings of the Tribunal are totally perverse and far from the realities of life. In the peculiar facts of this case we answer the question in favour of the assessee and against the revenue thereby deleting the aforesaid addition of Rs. 3,87,364."
The Hon’ble Delhi High Court in the case of Suneela Soni Vs. DCIT in ITA No. 5259/DEL/2017 held as follows:
“6.1 After perusing the aforesaid decision of the Hon’ble Delhi High Court, I am of the considered view that facts and circumstances of the present case are similar to the aforesaid decision of the Hon’ble Delhi High Court and hence, the issue in dispute is squarely covered by the aforesaid decision.
6.2 Keeping in view of the aforesaid facts and circumstances of the case as well as the status of the family and on the anvil of the judgement of the High Court of Delhi in the case of Ash ok Chadha vs. ITO reported in 14 taxmann.com 57 (Delhi.)/202 Taxman 395, the explanation given by the assessee’s counsel is accepted. Accordingly the orders of the authorities below are cancelled and addition made by the AO and confirmed by the Ld. CIT(A) amounting to Rs. 10,65,312/- on account of purported unexplained Jewellery claimed by the assessee is deleted.
In the result, Assessee’s appeal is allowed.”
The Co-ordinate Bench of ITAT Delhi in the case of Vibhu Aggarwal vs. DCIT 93 taxmann.com 275 (Delhi - Trib.) held that where Assessing Officer under section 69A made addition on account of jewellery found in search of assessee, since assessee belonged to a wealthy family and jewellery was received on occasions from relatives, excess jewellery was very much reasonable and, thus, no addition under section 69A was called for. The operative part of the judgment is reproduced below:
“2. The brief facts of the case are that a search & seizure operation under section 132 of the IT Act was conducted at the business premises of M/s Best Group and as well as in the residential premise of the Directors on 28.03.2011, in consequence to which the case of the assessee was taken up for scrutiny. The AO has completed the assessment by making an addition of 30,73,373 on account of unexplained investment in jewellery and addition of Rs. 1.87,082/-on account of unexplained investment in property. The total jewellery found during the course of search was 2531.5 gms, out of which the AO has given assessee the benefit of 950 gms, as per the CBDT Instruction No. 1916 dated 11.4.1994 on account of wife and two children of the assessee. The Ld. CIT(A) in appeal has further allowed the benefit of 600 gms. Of jewellery on account of mother and father of the assessee, holding that the same was allowable to the assessee as per the CBDT Instruction No. 1916, but however, sustained the balance addition made by the AO, vide order dated 22.12.2014 treating the balance jewellery weighting 1050 gms of gold as unexplained.
6.3 Keeping in view of the aforesaid facts and circumstances of the case as well as the status of the family and on the anvil of the judgement of the High Court of Delhi in the case of Ashok Chaddha (Supra) & of Sushila Devi (supra) and the IT AT Delhi decision in the case of Suneela Soni (supra), the explanation given by the assessee's counsel is accepted. Accordingly the orders of the authorities below are cancelled and addition made by the AO and partly confirmed by the Ld. CIT(A) on account of balance jewellery weighting 1050 gms of gold as unexplained is hereby deleted.”
Hence, keeping in view the facts and circumstances of the instant case and also the jewellery found is more than the jewellery declared, the proposition that the diamonds are stands embedded in the gold jewellery, the various judgments cited above, we direct that the addition made on this account may be deleted.
In the result, the appeal of the assessee is allowed and that of the Revenue is dismissed.
In the result,
· The appeals of the assessee in ITA Nos. 983 & 985/Del/2022 are allowed.
· The appeal of the assessee in ITA No. 984/Del/2022 is partly allowed.
· The appeals of the Revenue in ITA No. 1334 & 1335/Del/2022 are dismissed.