Jigna Kundan Bhatt Vs DCIT (ITAT Mumbai)
Explained Loans & Family Jewellery Protected: ITAT Mumbai Deletes Additions u/s 68 & 69A in Search Case
Mumbai ITAT allowed the appeal of Jigna Kundan Bhatt for AY 2020-21 and deleted additions made u/s 68 (unexplained cash credits) and u/s 69A (unexplained jewellery) arising out of a search action u/s 132.
On the issue of unsecured loans of ₹20 lakh, the Tribunal held that the Assessee had fully discharged the onus u/s 68 by furnishing confirmations, PAN, ITR acknowledgements and bank statements of the lenders evidencing transactions through banking channels. The addition was sustained by the CIT(A) merely because books of account and proof of business activity of the lenders were not produced. The Tribunal held that once identity, creditworthiness & genuineness are established through primary evidence, the Assessee is not required to prove the source of source, especially when the AO failed to conduct any enquiry u/s 131 or 133(6). Reliance was placed on CIT v. Orissa Corporation (SC) and PCIT v. Ami Industries (Bom.).
On the issue of jewellery of 1699.446 grams valued at ₹57.84 lakh found during search but not seized, the Tribunal noted that the Panchanama itself recorded the jewellery as belonging to female family members of a joint family. Applying CBDT Instruction No. 1916 dated 11.05.1994, and following CIT v. Ratanlal Vyaparilal Jain (Guj.) and CIT v. Satya Narain Patni (Raj.), the Bench held that jewellery found within permissible limits for married and unmarried women cannot be treated as unexplained investment u/s 69A, in absence of contrary evidence.
The Tribunal categorically observed that mere physical possession or drawer location is not determinative of ownership in a joint family, and additions based on presumptions, ignoring contemporaneous search records and settled law, cannot be sustained.
Accordingly, both additions of ₹20 lakh u/s 68 and ₹57.84 lakh u/s 69A were deleted, and the appeal of the Assessee was allowed in full.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
