Sudha Aggarwal Vs DCIT (ITAT Chandigarh)
Enhancing the quantity of gold by the weight of stones and diamonds is not logical. It was neither valued nor any Expert Valuer’s report was available on record. Addition unsustainable.
Facts-
A search & seizure operation u/s 132(1) was carried out on the business and residential premises of M/s S.K. Jewellers Group of Cases which included the assessee who is shown to be the proprietor of M/s S.K. Jewellers. The subject matter of dispute pertains to the jewellery found at the residence of the assessee. AO held that considering the Indian customs and traditions, jewellery to the extent of 800 grams was being allowed. The remaining was held to be unexplained and the addition of Rs.11,84,000 was made u/s 69A of the Income Tax Act.
Being aggrieved, the assessee preferred an appeal before CIT(A). CIT(A) uphold the addition. Being aggrieved, the assessee preferred appeal before Tribunal.
Conclusion-
Held that there was no logic in enhancing the quantity of gold by the weight of stones and diamonds. It was seen that there were no loose stones/diamonds found during the search but jewellery studded with stones/diamonds, which were neither valued nor any Expert Valuer’s report was available on record. Such an action cannot be supported. We have seen that even if it is considered even then alongwith the gold reflected in the books of accounts of the assessee and the explanation on record that credit for the jewellery held by late father and mother-in-law is also considered. Therefore, the additions cannot be sustained.
FULL TEXT OF THE ORDER OF ITAT CHANDIGARH
The present appeal has been filed by the assessee wherein the correctness of the order dated 30.07.2021 of CIT(A)-3, Gurgaon is assailed on the following grounds :
“1. That learned CIT A has erred on facts and in law in confirming the addition of Rs. 11,84,000/- u/s 69A on account of unexplained jewellery.
2. That learned CITA has erred in law and facts in confirming the action of AO by not allowing the benefit of gold jewellery inherited from mother in law and father in law of assesse and also joint holder of locker.
3. That learned CITA has erred in law and facts in confirming the action of AO by not allowing the credit of gold jewellery of 538.33gms as per books of accounts of Sanjay Aggarwal prop. M/s S.K. Jewellers.
4. That the learned CIT A has erred in law and facts in confirming the action of AO by assessing the amount of jewellery as income u/s 115BBE.
5. Appellant craves leave to add, alter, amend or to substitute the above grounds of appeal either before or at the time of hearing of case.”
2. Before addressing the arguments advanced on behalf of the assessee which are more or less reiteration of facts as argued before the AO as well as the CIT(A), it is appropriate to address the facts on record. A search & seizure operation u/s 132(1) of the Income Tax Act, 1961 was carried out on 21.03.2017 on the business and residential premises of M/s S.K. Jewellers Group of Cases which included the assessee who is shown to be the proprietor of M/s S.K. Jewellers. The subject matter of dispute pertains to the jewellery found at the residence of the assessee i.e. 16, Cecil Hotel, Opposite GPO, Ambala Cantt. and bank locker No. 9 in Bank of India, Ambala Cantt. The break-up of the jewellery is tabulated by the AO in para 4 as under :
