DCIT Vs Jagathrakshakan Srinisha (ITAT Chennai)
CIT(A)’s Jewellery Reconciliation Upheld—Unexplained Investment u/s 69 Deleted Except ₹72.45 Lakh Treated as Business Income; Section 115BBE & 270A Penalty Also Cancelled
In this case, Revenue challenged the detailed & fact-based relief granted by CIT(A) in respect of additions made during search proceedings, where AO had treated jewellery valued at ₹14.60 crore as unexplained investment in the hands of Assessee, Ms. Jagathrakshakan Srinisha. The jewellery had been found not in her premises but in the premises of her parents & of one Mr. Selvakumar; nevertheless, AO presumed ownership & made a sweeping addition u/s 69.
CIT(A), after a meticulous reconciliation of the jewellery seized & by examining panchanamas, family members’ assessments, valuation reports & past disclosures, concluded that substantial portions belonged to other family members—₹5.92 crore belonged to her parents & ₹1 crore to her brother & sister-in-law—whose assessments had already taken those assets into account. CIT(A) further accepted the Assessee’s explanation that 1,875 grams of jewellery valued at ₹52.50 lakh represented VDIS-declared assets, noting that exact item-wise identity need not match after decades of remodelling. In addition, gifts aggregating 8,663.30 grams from Assessee’s mother to her daughters were accepted as genuine & already supported by the mother’s assessment records, leaving no basis for taxing them again. CIT(A) also telescoped ₹4 crore out of Assessee’s total drawings of ₹4.52 crore over earlier assessment years, reasonably accepting that these withdrawals explained the source of investment in jewellery & that AO had not shown that any of the jewellery had actually been purchased in the year of search. Only an amount of ₹72.45 lakh was sustained, not as unexplained investment, but only as unaccounted business income.
