Dev Kishan Joshi Vs DCIT (ITAT Mumbai)
Mumbai ITAT Deletes ₹36.36 Lakh Protective Addition for Seized Gold Jewellery: Mere Physical Possession Cannot Establish Ownership
The Mumbai ITAT deleted a protective addition of ₹36,35,934 under section 69A relating to gold jewellery found in the assessee’s physical possession. The jewellery formed part of 6,020.46 grams seized by GRP, Ratlam; 18 items weighing 1,568.370 grams gross were attributed to the assessee.
The assessee consistently denied ownership and explained that he was merely accompanying another person for marketing the jewellery and earning commission. Significantly, the Director of M/s B. Nishant Jewels Pvt. Ltd. claimed that the jewellery belonged to the company, and the AO had already made a substantive addition under section 69A in the company’s hands. The addition in the assessee’s hands was expressly made only on a protective basis.
The Tribunal held that although physical possession is relevant under section 69A, it cannot be considered in isolation. The Department’s own evidence and its decision to substantively assess the identical jewellery in the company’s hands had to be considered.
Importantly, the ITAT rejected the CIT(A)’s view that the protective addition should continue until the substantive addition attained finality. It observed that a protective assessment is only a contingent safeguard during genuine uncertainty; it cannot become an independent and perpetual charge merely because proceedings against the substantive assessee remain pending. There must be some positive material showing that the person protectively assessed was actually or beneficially the owner.
The Tribunal also held that the assessee’s failure to prosecute the CIT(A) appeal could justify an ex parte order, but non-compliance itself cannot constitute evidence of ownership or convert a protective addition into a substantive one.
Finding no independent positive material establishing that the assessee was the actual or beneficial owner, the ITAT directed deletion of the entire ₹36.36 lakh addition under section 69A and allowed the appeal.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
