Case Law Details
N. Roja Vs ACIT (ITAT Cuttack)
We find that the AO made addition on account of unexplained investment in gold and jewellery of 2417.290 grams as found and seized during the course of search in the residential premises and the Locker No.75/4 & 145/2 of the assessee at Indian Overseas Bank, Rayagada. During the course of assessment proceedings the AO considered 1500 grams of gold jewllery and bullion to be acquired out of explained sources and made addition of remaining 917.29 grams valuing at Rs.25,26,438/- treating the same as acquired out of the unaccounted source of income and added the same to the total income of the assessee. In first appellate proceedings, the CIT(A) considering the submissions of the assessee has accepted that the source of 1650 grams gold and jewellery has been explained and confirmed the remaining gold and jewllery found and seized during the course of search. On perusal of the assessment order, it is found that the AO himself in first para at page No.5 of the assessment order has mentioned that the assessee has explained the sources with regard to acquisition of gold jewellery weighing around 682 grams. The ld. AR before vehemently submitted that even though the A.O. has accepted the fact that 682.000 grams of gold jewelry over and above that 1550.000 grams were explained but while completing the Assessment has allowed only 1500.000 grams and confirmed the addition of 917.29 grams, therefore, impugned addition made by him, needs to be deleted. Ld. AR also drew our attention to the statement of details of gold purchased by the assessee at page 36 of the paper book along with bills. On careful perusal of the same, we find that 282.58 grams gold and jewllery were in the acquisition of the assessee. It was also submitted by the ld. AR that the assessee and her husband had purchased 200.00 grams each totaling to 400 grams of gold and jewellery. From the above submissions of the assessee as well as the observations made by the AO, we are of the opinion that the AO has rightly noted that the sources of 682 grams gold and jewellery have been explained. Thus, out of 767.29 grams gold ornaments and jewellery as confirmed by the CIT(A), 682 grams have to be treated as explained. However, with regard to remaining 85.29 grams, we do not see any corroborative evidence has been filed by the assessee.
in the case of Shri Jerambhai B. Khokharia in ITA No.2613/Ahd/2009, the Ahmedabad Tribunal vide order dated 05.11.2015, has held that it is ample clear that gold jewellery found to the extent of limit mentioned in the circular is treated as explained and this can be clearly applied on the assessee’s case, wherein no specific deduction of gold jewellery possessed by family members and grand children was given by the Assessing Officer from the total gold jewellery found at the time of search and seizure operation and differential gold jewellery of 1924.22 gr. is the gold jewellery possessed by the female members and minor children of the assessee’s joint family and this quantity of 1924.22 gr. is well within the total limit of jewellery at 2100 grms. as per the CBDT instruction no.1916 dated 11.05.1994.
As per the above quoted judicial pronouncements and the facts and circumstances of the case, the assessee deserves to get benefit of the aforesaid CBDT Instruction No.1916, dated 11.05.1994, according to which 1650 grams is not to be treated as undisclosed investment.
Further the CIT(A) held that the source of 100 gms. of gold jewellery belonging to the sister-in-law of the assessee, who resides at Rayagada is also treated as explained on the strength of her affidavit and for the reasons that she does not have locker at a place where she resides. Accordingly, the CIT(A) granted relief 1650 grams of gold and jewellery to the assessee. Further, we noted that the AO has also clearly mentioned in the assessment order that 682 grams of gold and jewellery has been explained by the assessee before him. Once the revenue authorities accept the source explained by the assessee, in such case there is no further room for treating the same as undisclosed investment of the assessee. Now, the remaining 85.29 grams of gold and jewellery has not been explained by the assessee. Therefore, we confirm 85.29 grams of gold and jewellery out of 767.29 grams upheld by the CIT(A) and direct the AO to delete the addition on the exact value of 682 grams gold and jewellery. Ground Nos.3 & 4 are partly allowed.
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