Income Tax Appellate Tribunal - Jaipur
Brahm Dutt Modi, Neem Ka Thana vs Acit, Central Circle-2, Jaipur on 26 August, 2023
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IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,"B" JAIPUR
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BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM
vk;dj vihy la-@ITA. No. 393/JP/2022
fu/kZkj.k o"kZ@Assessment Years : 2020-21
Shri Brahm Dutt Modi, cuke ACIT,
Kapil Mandi, Neem Ka Thana, Vs. CC-02, Jaipur
Sikar
LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AFMPM 9872 M
vihykFkhZ@Appellant izR;FkhZ@Respondent
vk;dj vihy la-@ITA. No. 398/JP/2022
fu/kZkj.k o"kZ@Assessment Years : 2020-21
ACIT, cuke Shri Brahm Dutt Modi,
CC-02, Jaipur Vs. Kapil Mandi, Neem Ka
Thana, Sikar
LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AFMPM 9872 M
vihykFkhZ@Appellant izR;FkhZ@Respondent
fu/kZkfjrh dh vksj l@
s Assessee by : Sh. Manish Agarwal (C.A.)
jktLo dh vksj ls@ Revenue by : Sh. Shailendra Sharma (CIT)
a
lquokbZ dh rkjh[k@ Date of Hearing : 25/05/2023
mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 26/07/2023
vkns'k@ ORDER
PER: RATHOD KAMLESH JAYANTBHAI, AM These are two cross appeals filed by the assessee and revenue which are directed against the order of the ld.
Commissioner of Income Tax (Appeals)-4, Jaipur [hereinafter referred to as (ld. CIT(A)] dated 30.08.2022 for the Assessment 2 ITA Nos. 393 & 398-JP-2022/JP/2023 Brahm Dutt Modi vs. ACIT Years 2020-21, which in turn arise out of an order passed by ACIT, Central Circle-2, Jaipur passed u/s 143 (3) of the Income Tax Act, 1961 [ here in after referred to act "Act"] on 29.09.2021.
2. Since, these cross appeals relate one assessee involving the same assessment year filed by the revenue and assessee on the separate grounds raised by them in their appeal, we have heard both the cases together and passing the consolidated order as the issues involved are interconnected having the same assessment year. The grounds of appeal taken by the assessee in ITA No. 393/JP/2022 for A.Y 2020-21 are as under
1. On the facts and in the circumstances of the case and in law, ld.CIT(A) has grossly erred in upholding the addition of Rs.20,40,946/-
out of addition of Rs.66,92,695/- made by ld.AO by alleging the same as unexplained jewellery.
1.1 That the ld. CIT(A) has further erred in confirming the part addition made by ld.AO on account of jewellery found during search by disbelieving the source of acquisition of jewellery owned by the assessee and his family members and by grossly ignoring the submission made and evidences adduced, thus the resultant addition deserves to be deleted.
1.2 That the ld. CIT(A) has further erred in ignoring the fact that the jewellery so found was the 'STREEDHAN' of the ladies of the family of the assessee and was acquired by them on various occasions since past long, thus the source cannot be treated as unexplained and accordingly the addition so made u/s 69 deserves to be deleted.
3 ITA Nos. 393 & 398-JP-2022/JP/2023Brahm Dutt Modi vs. ACIT
2. That the appellant craves the right to add, delete, amend or abandon any of the grounds of appeal either before or at the time of hearing of appeal."
3. Whereas the grounds of the appeal taken by the revenue in appeal No. 398/JPR/2022 for assessment year 2020-21 reads as follows:
"1. The learned CIT Appeal has erred in law and facts in granting relief to the taxpayer.
2. The Ld. CIT(Appeal) has erred in law and on facts in holding that the excess jewellery found during search belongs to extended family members. The CIT(A) has allowed jewellery belongs to these persons as per CBDT's instruction no. 1916 dated 11.05.1994 and granted relief of Rs. 46,51,759/- on the basis of claim of the assessee. However, the claim is not supported by any documentary evidence.
3. The Ld. CIT(Appeal) has erred in law and on facts that the assessee failed to file any documentary evidence viz. cash book, bank withdrawal etc in respect of cash of Rs. 6,44,810/- found at his residence. The CIT(A) has accepted evidences of the assessee which were not produced before AO.
4. The Ld. CIT(Appeal) has erred in law and on facts in deleting the addition of Rs. 14,65,100/- and Rs. 15,31,210/- by clubbing it together and holding that the amount of Rs. 14,65,100/- is part of expenditure of Rs. 15,31,210/- recorded in another page and further deleted the addition of Rs. 15,31,210/- on the ground that the assessee has sufficient fund available for expenditure as per fund flow statement submitted before AO whereas the assessee has failed to show source of expenditure or offered any explanations for entries recorded in the papers discussed above.
5. The appellant craves leave or reserves right to amend, modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal."4 ITA Nos. 393 & 398-JP-2022/JP/2023
Brahm Dutt Modi vs. ACIT
4. The fact as culled out from the records is that a search and seizure action u/s 132 of the Income Tax Act, 1961 ("the Act") was carried out by the Income Tax Department on the members of Modi Group on 13.06.2019 of which the assessee is one of the members. The assessee is an individual aged about 69 years. The return declaring total income of Rs. 10,21,910/- was filed on 26.03.2021. Subsequently, during the course of assessment proceedings, additional income of Rs. 16,06,601/- was offered for tax which was computed as per fund flow statement and since the return of income could not be revised due to technical error in the online portal of department, therefore, same was offered through a letter filed during the assessment proceedings. Eventually assessment was completed on 29.09.2021 whereby following additions was made:
1. Addition on account of investment in jewellery Rs.66,92,695/-
2. Addition on account of cash found during search Rs. 6,44,810/-
3. Addition on account of Construction expenses Rs.15,31,210/-
4. Addition on account of Construction expenses Rs.14,65,100/-
Additional income offered during the assessment
5. Rs.16,06,601/-
proceedings as per fund flow statement Rs.1,19,40,416/-
5. Aggrieved from the order of the assessing officer, the assessee preferred an appeal before the Commissioner of income 5 ITA Nos. 393 & 398-JP-2022/JP/2023 Brahm Dutt Modi vs. ACIT tax appeals. Apropos to the grounds of appeal raised the relevant finding of the ld. CIT(A) is reiterated here in below :
"4.2 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:-
(i) In these grounds, the appellant has challenged the addition of Rs. 66,92,695/- made by the ld. AO as excess investment in jewellery found during the course of search. Facts pertaining to this ground has been incorporated in the written submissions filed by the ld. AR. In brief, gold jewellery having net weight of 5035 gms. was found out of which jewellery weighing 2246.26 gms. valuing Rs. 66,92,695/- was seized. Main argument taken before the ld. AO was that apart from jewellery of the family members, the jewellery of daughter-in-law of appellant's late brother Shri Kailash Chand Modi and of his grand-son and grand-daughter are also lying with the assessee, as it was kept for safe custody considering that the daughter-in-law was widow. Apart from it, jewellery of daughter of assessee's younger brother Shri Krishnan Kumar Modi, who is divorcee has also been kept with the assessee for safe custody. These facts were communicated to the search team during the course of search as per the statement of the appellant so recorded during the course of search. Relevant questions and answers have been reproduced by the ld. AR in the submission.
(ii) It was submitted by the ld AR that accordingly claim for 6 male members, 5 married and 5 unmarried ladies as per the CBDT instructions dated 11.05.1994 was requested to be given by the AO, however, Id. AO has just rejected the claim without mentioning any reason, without making any verification from both the ladies and moreover has just added the value of seized gold jewellery in toto as unexplained investment, without giving any reasons and any working.
In view of the above facts, the Ld AR of the appellant has requested to treat the jewellery weighing 4350 gms as explained in view of CBDT instructions. Ld. AR has further submitted that the appellant has claimed investment in jewellery worth Rs. 12,50,000/- in A.Y. 2013-14 and considered the same in the fund flow statement as the outgoing Further, if any amount remaining, then the source of the same in out of the unutilized money available as per the fund flow statement. Thus Id. AR has claimed that entire addition deserves to be deleted.
6 ITA Nos. 393 & 398-JP-2022/JP/2023Brahm Dutt Modi vs. ACIT
(iii) I have considered the facts of the case and in view of CBDT instructions No. 1916 dated 11 of May 1994, it is observed that if a person is not liable to wealth-tax, jewellery and ornaments to the extent of 500 gms for married lady, 250 gms, for unmarried lady and 100 gms. for a mule member of the family need not be seized. The instruction also extends to consider the status of the family and customs and practices of the community to which the family belongs as also other circumstances of the case for exclusion of large quantity of jewellery and ornaments from seizure. Though the circular refers only to non- seizure of jewellery, however in view of various judicial pronouncements of jurisdictional High Court and several other High Courts and Tribunals, it should also be considered as applicable while considering the explanation of the person to consider whether the jewellery etc. found are to be considered as explained or unexplained for the purpose of assessment. If as per the circular, the jewellery is not required to be seized, it would imply that to that extent the possession of jewellery is deemed to be explained by either declaring in wealth tax returns, or by usage and custom, or by the status of the family as also custom and practices of the community to which the assessee belongs. I therefore hold that the CBDT instructions needs to be applied even for considering whether the jewellery found during search should be considered as explained or unexplained for the purpose of assessment. This view is held by Hon'ble Rajasthan High court in the case of Satya Narain Patni 40 taxamnn.com 440. The head note and main portion of the judgement is as under:
Section 69A of the Income-tax Act, 1961-Unexplained money (Jewellery)-Assessment year 2005-06 Addition made by Assessing Officer on account of unexplained jewellery found during search proceeding was under challenge-In statements, family members clearly stated that these were personal wearing jewellery and some were received by ladies/daughter-in- law on/or at time of their marriage either from parental side or in laws side-Revenue could not place any material to show otherwise than that stipulated in CBDT Circulor 1916, doted 11- 5-1994 which states that if jewellery found in possession of a married lady, unmarried lady and male member of family is to extent of 500 gins, 250 gms ond 100 gms, each, officials would not question source and acquisition-Further, Assessing Officer, in first instance, did not seize soid jewellery Whether since Jewellery was found to be within tolerable limit prescribed by CBDT, no addition was justifiable Held, yes (Paras 12 to 14] [In favour of assessee) 7 ITA Nos. 393 & 398-JP-2022/JP/2023 Brahm Dutt Modi vs. ACIT Circulars and Notifications: Instruction No. 1916, doted 11-5- 1994 HELD On perusal of the circular of the Board, it is clear that in the case of wealth tax assessee, whatever gold jewellery and ornaments have been found and declared in the wealth tax return, need not be seized. However, sub-clause fii) prescribes that in case of a person not assessed to wealth tax gold jewellery and ornaments to the extent of 500 gms per married lady, 250 gms per unmarried lody and 100 gms. per male member of the family need not be seized. Sub-clause (ii) also prescribes that the authorised officer may, having regard to the status of the family, and the custom and practices of the community to which the family belongs and other circumstances of the case, decide to exclude a larger quantity of jewellery and ornaments from seizure. [Para 11] The circular of the CBOT, dated 11-5-1994 only refers to the jewellery to the extent of 500 gms. per married lady, 250 gms per unmarried lady and 100 gms, per male member of the family, need not be seized and it does not speak about the questioning of the said jewellery from the person who has been found with possession of the soid jewellery. However, the Board, looking to the Indian customs and traditions, has fairly expressed that jewellery to the said extent will not be seized and once the Board is also of the express opinion that the said jewellery cannot be seized, it should normally mean that any jewellery, found in possession of a married lady to the extent of 500 gms. 250 gms, per unmarried lady and 100 gms per male member of the family will also not be questioned about its source and acquisition. At the time of wedding, the daughter/daughter-in-law receives gold ornaments jewellery and other goods not only from parental side but in-laws side as well at the time of 'Vidal (farewell) or/and at the time when the daughter-in-law enters the house of her husband. Thereafter also, she continues to receive some small items by various other close friends and relatives of both the sides as well as on the auspicious occasion of birth of o child whether male or female and the CBDT, looking to such customs prevailing throughout India, in one way or the another, come out with this Circular and it should also. mean that to the extent of the aforesaid jewellery, found in possession of the various persons, even source cannot be questioned. It is certainly 'Stridhan' of the woman and normally no question ot least to the said extent con be mode.8 ITA Nos. 393 & 398-JP-2022/JP/2023
Brahm Dutt Modi vs. ACIT However, if the authorized officers or/and the Assessing Officers find jewellery beyond the said weight, then certainly they can question the source of acquisition of the jewellery and also in appropriate cases, if no proper explanation has been offered, can treat the jewellery beyond the said limit es unexplained investment of the person with whom the sald jewellery has been found. [Porn 12] Similar view has also been taken by Hon'ble Delhi High court in the case of Ashok Chaddha Vs. CIT 14 Taxmann.com 57 (Del) and other decisions relied upon by the Ld. AR of the appellant.
(iv) I have considered the argument taken by the ld. AR and also carefully perused the relevant portion of the assessment order. It is seen that right at the time of statement recorded during the course of search, the appellant has claimed that apart from jewellery of his family members, the jewellery belonging to Late brother's daughter-in-law who is herself widow) and his grand-son and grand-daughter as well an jewellery of appellant's younger brother's divorcee daughter was also available as same was kept for safe custody with the appellant. I see no reason to disbelieve this claim so made from the starting of the search itself and also considering that nothing adverse has been brought on record by the AO. In view of the above, I find that the benefit of CBDT Circular No. 1916 dated 11-05-1994 needs to be given in the case of the appellant, which the AO failed to give. Considering the above, jewellery weighing 4350 g. is considered as explained in view of the CBDT instructions dated 11.05.1994.
(v) As regards, the other argument of the Id. AR about jewellery worth Rs. 12,50,000/- purchased in the period relevant to A.Y. 2013-14 and included in the fund flow statement is concerned, it is stated that acquisition of jewellery in the traditional Hindu family is a part of gradual process and same is also purchased on marriage etc. in the family The CBDT instruction has been issued considering these practices in the traditional Hindu family and also considering the fact that these are the jewelleries which are normally not found recorded in the regular books of accounts. Accordingly, the argument of the ld. AR to give credit of this jewellery not recorded in regular books of accounts, separately over and above the credit given as per the CBDT instruction is not accepted. Thus considering that jewellery weighing 4350 gms. is explained out of 5035. so found, the unexplained jewellery comes to 685 gms. As the AO has taken the value of 2246.26 gms. seized jewellery at Rs. 66,92,695/- [for which addition has been made in the assessment order], the value of 685 gms. of jewellery comes to Rs. 20,40,946/-. Thereby addition to the extent of 9 ITA Nos. 393 & 398-JP-2022/JP/2023 Brahm Dutt Modi vs. ACIT Rs.20,40,946/- is confirmed and balance addition is hereby deleted. Accordingly the grounds of appeal no. 1 & 1.1 raised by the appellant are treated as partly allowed.
8.2 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:-
(i) In this ground, the appellant has challenged the addition of Rs.
16,06,601/- made by the AO. The ld. AR has submitted that amount of Rs. 16,06,601/- has already been included in the additional undisclosed income of Rs. 10.03 Crores offered by the assesse in various years. It is seen by me that the AO has added the aforesaid amount as the same was shown by the appellant himself in the fund flow statement but has not included the same in the return of income so filed. It is seen that appellant himself admitted the same and as the revised return could not be filed due to technical error in the online portal of department, the appellant offered the aforesaid income through a letter filed during the assessment proceedings. Considering these facts and in the circumstances of the case the ground so taken by the AR of appellant is rejected and addition of Rs. 16,06,601/- no made by the AO is hereby confirmed. Accordingly the Ground of Appeal No. 7 raised by the appellant is treated as dismissed.
9. The Ld. AR of the appellant did not press for Ground of Appeal No. 8, therefore, the same is dismissed.
10. Ground of Appeal No. 9 is regarding initiation of penalty proceedings u/a 271AAB1A][b) of the IT. Act, 1961.
10.1 As there is no cause of action arising out of initiation of penalty proceedings u/s 271AAB(1A)(b) of the Act, therefore there is no need of any adjudication on this issue. Accordingly, the Ground of Appeal raised by the appellant on this issue is dismissed
11. The last Ground of Appeal is that the appellant craves right to add, alter or amend any of the grounds of appeal.
11.1 The appellant has not added or altered any of the above mentioned grounds of appeal. Accordingly such mention by the 10 ITA Nos. 393 & 398-JP-2022/JP/2023 Brahm Dutt Modi vs. ACIT appellant in its ground is treated as general in nature, not needing any specific adjudication and is accordingly treated as disposed off.
12. In the result, the appeal of the appellant is partly allowed."
6. Both revenue and assessee feeling dissatisfied filed the cross appeal on the grounds as stated here in above and supported the orders of the lower authorities as favorable to their contentions.
7. The ld. AR appearing on behalf of the assessee has placed their written submission in support of his appeal and in counter the revenue's appeal and the same is reproduced here in below;
"Brief facts of the case are that assessee is an individual and aged about 69 years. Search and seizure action u/s 132 was carried out on 13.06.2019 on Modi Group at Neem Ka Thana to which assessee belongs and is the key person. Return of Income was filed on 26.03.2021 declaring total income at Rs.10,21,910/-. Thereafter during the course of assessment proceedings, additional income of Rs. 16,06,601/- was offered for tax which was computed as per the fund flow statements (APB 126) and since the return of income could not be revised due to technical error in the online portal of the department therefore, the same was offered through a letter filed during the course of assessment proceedings Thereafter details and information as sought was furnished from time to time. Eventually, assessment was completed vide order dated 29.09.2021 passed u/s 143(3) of the Income tax Act, wherein following additions were made:
1. Addition on account of investment in jewellery Rs.66,92,695/-
2. Addition on account of cash found during search Rs. 6,44,810/-
3. Addition on account of Construction expenses Rs.15,31,210/-
4. Addition on account of Construction expenses Rs.14,65,100/-
Additional income offered during the assessment proceedings as per
5. Rs.16,06,601/-
fund flow statement 11 ITA Nos. 393 & 398-JP-2022/JP/2023 Brahm Dutt Modi vs. ACIT Rs.1,19,40,416/-
Aggrieved of the additions so made, assessee preferred appeal before ld.CIT(A), who allowed part relief. Therefore, assessee has preferred appeal in respect of additions sustained whereas department has filed appeal in respect of relief granted by ld CIT (A). With this background, groundwise submission is made as under:
Assessee's ground of appeal no. 1 to 1.2 and Departmental Appeal No.2:
During the course of assessment proceedings, ld.AO has made addition of Rs.66,92,695/- on account of unexplained jewellery, out of which addition of Rs.46,51,759/- stood deleted by ld. CIT(A) and balance addition of Rs.20,40,946/- was confirmed. Aggrieved of the order so passed by ld. CIT(A), both assessee and department have raised these grounds of appeal.
Facts pertaining to the grounds of appeal are that during the course of search, total gold and silver jewellery studded with precious and semi- precious stones found and seized is tabulated as under:
Found Seized (JS & JS-1)
Permises An.x. Jeweller Unit Gross Net Value (Rs.) Gross Net Value
y (Rs.)
JF-1 Gold Gram 1,597 1,243 41,64,065 - - -
Diamond Ct. 59.84 59.84 27,69,970 - - -
Brahm Dutt Modi JF-2 Silver Gram 1,500 1,000 54,000 - - -
Neem-Ka- Thana
JF-3 Gold Gram 1,800 1,295 43,37,085 474 352.2 11,80,07
6 5
Diamond Ct. 11.55 121.5 20,26,020 - - -
5
JF-4 Silver Gram 14,62 13,97 5,39,017 - - -
0 4
J-1 Gold Gram 3,009 2,498 81,72,646 2,336 1,894 55,12,62
0
S Silver Gram 10,75 10,75 3,27,099 - - -
0 0
The summary of the total jewellery found is tabulated as under:
12 ITA Nos. 393 & 398-JP-2022/JP/2023
Brahm Dutt Modi vs. ACIT
Found Seized
Jewellery Unit Gross Net Value (Rs.) Gross Net Value(Rs.)
Gold Gram 6,405 5,035 1,66,73,796 2,810 2246.26 66,92,695
Silver Gram 26,870 25,724 9,20,116 - -
Diamond Ct. 181 181 47,95,990 - -
Total 2,23,89,902 66,92,695
As is evident from the chart above, out of the total jewellery so found which was valued at Rs. 2,23,89,902/-, jewellery worth of Rs.66,92,695/- was seized by the department. It was submitted before ld.AO and ld.CIT(A) that jewellery so found belonged to the assessee and his family members. Besides this assessee was also in possession of the jewellery belonging to the family members of his deceased brother and family of daughter of his younger brother who is divorcee and had kept their jewellery for safe custody with the assessee.
Assessee's family consisted of 5 male member, 3 married ladies and 3 unmarried ladies. Further as submitted above, family of assessee's late brother Shri Kailash Chand Modi comprises of his daughter in law, 1 grandson and 1 grand Daughter of assessee's late brother. Further, daughter of assessee's younger brother Shri Krishnan Kumar Modi, who is divorcee had also kept the jewellery with assessee for the safe custody. Accordingly total assessee family comprises of 16 members (5 Married Lady, 5 Unmarried lady and 6 Male members) and same facts was also disclosed in the statement of assessee during the course of search. It was also submitted before ld. CIT(A) that assessee offered additional income of Rs.12,50,000/- towards purchase of jewellery in A.Y. 2013-14 (duly disclosed in Fund Flow Statement APB
126). Also assessee was left with unutilized funds, remained to be not applied elsewhere, out of the additional income offered, therefore it was requested that such sum also may be allowed to be appropriated as source of jewellery found in excess of limits prescribed by CBDT. After considering the submission of assessee, ld. CIT(A) partly accepted the contention of assessee as credit of the jewellery pertaining to the divorcee daughter, widow daughter in law and one grandson and grand daughter of assessee's brothers was allowed, however, no benefit was allowed with respect to the jewellery acquired in AY 2013-14 and for which additional income was also disclosed at Rs.12,50,000/- as purchase of jewellery and also no credit of the funds remained available with the assessee out of the additional income disclosed, was given.
With this background, it is submitted that that during the course of search in the statement recorded u/s 132(4) of the assessee, he has categorically deposed the fact of availability of jewellery of other family members to the 13 ITA Nos. 393 & 398-JP-2022/JP/2023 Brahm Dutt Modi vs. ACIT authorized officer who despite of this version of the assessee and without making any enquiry from such other family members as claimed by the assessee whose jewellery was lying with him, i.e. the widow daughter in law of his deceased brother and divorcee daughter of his other brother, proceeded to seize the jewellery after allowing the benefit of CBDT instructions dt. 11.5.1994 only to the extent of the assessee and his wife and further no deduction was given even towards the family members of both the sons of the assessee. The relevant extract of the statements are reproduced as under for sake of convenience (APB 118-121) iz0 125 vkids vkoklh; ifjlj dfiy lCtheaMh ds ikl uhedkFkkuk fLFkr vkoklh; ifjlj ij lpZ dk;Zokgh ds nkSjku Physical Search fd;k x;k] ftlds rgr Gold Jewellery Gross Weight Net Weight Amount 3008.58 gms 2497.530 gms 81072, 646/-
mijksDrkuqlkj ikbZx;h] d`i;k bl ToSyhj dh [kjhn ds Bill o fuos'k ds Source Li"V djsA mÙkj Jhekuth tks ToSyjh ds lEcU/k esa dksbZ Bill esjs ikl ugh gSA eSa Li"V djrk gwW fd ;g ToSyjh esjh iRuh dk L=h/ku o mUgs le; le; ij ikfjokfjd vk;kstu ij feys migkj dk fgLlk gS] Hkh bl ToSyjh 'kkfey gSA eSa vkils Li"V djuk pkgrk gwW fd esjh cMs+ HkkbZ th dSyk'kpUnz eksnh o mudh iRuh dk nsgkUr gks x;k gS rFkk muds cM+s yM+ds dk Hkh nsgkUr gks pqdk gSA mudh cgq o ,d yM+dk o ,d yM+dh gSA mudh ToSyjh Hkh esjs ikl j[kh gqbZ gSA ,d mudh rykd'kqnk yM+dh gS] mudh ToSyjh Hkh esjs ?kj ij j[kh gqbZ FkhA iz0& 126 d`i;k crk,] vkids ikl dSyk'kpUnz eksnh dh iq=o/kq@iq=@iRuh dh ToSyjh ds Bill Voucher gS] ;k dksbZ nLrkost a gS tks ;g Proof dj lds fd dSyk'kpUnz ds iq=@iq=o/kq o iq=h dh ToSyjh vki ds ikl j[kus ds fy, nh Fkh \ mÙkj&126 fcy ugh gS] uk gh dksbZ fyf[kr nLrkosta gS] ijUrq mUgs esjs ij fo'okl gS fd pkpkth gekjh ToSyjh dks fgQktr ls j[ksx]as blh dkj.k mUgksus ;g ToSyjh mUgksus fuosnu djds esjs vkokl ij j[kh gSA iz0&127 eSua s vkils iwNk gS] fd D;k dksbZ fcy o vU; nLrkosta tks ;g lkfcr dj lds fd ?kj ij ikbZ xbZ ToSyjh es vkids cM+s HkkbZ ds cPpksa o cgq dh ToSyjh j[kh gqbZ gSAbl fLFkfr esa vkids dFku dks lR; ugh ekuk tk ldrk] d`i;k Li"Vhdj.k ns o ToSyjh Purchase ds nLrkost a o fuos'k dk Source Li"V djsa \ mÙkj&127 tks eSua s Åij ds iz'u ds mÙkj esa dgk gS oks lR; gS] ToSyjh Purchase ds dksbZ Bill esjs ikl ugh gSA iz0&128 lpZ dk;Zokgh o Physical Search es vkids vkokl ij dqy Net Jewellewry-2497-530 gms. ewY; :i;s 81]72]646@&ikbZ xbZ gS] ftlds Source dks vki Explain ugh dj ldsA D;ksa ugh vk;dj vf/kfu;e ds Circular ds fu;ekuqlkj vki Loa; o vkidh iRuh ds fgLls dh ToSyjh NksMd + j ckdh ToSyjh Seize dj yh tkos \ mÙkj&128 Jhekuth] eSua s iwoZ ds iz'u la[;k 126] 127 ds mÙkj es LkR; :I ls crk;k gS] fd bl TOkSyjh es esjs HkkbZ dSyk'kpUnz ds iq=] iq=o/kq o mudh yM+dh dh ToSyjh Hkh esjs fuokl ij j[kh gS] bl 14 ITA Nos. 393 & 398-JP-2022/JP/2023 Brahm Dutt Modi vs. ACIT dkj.k] dksbZ ToSyjh Seize ugh dh tkosA iz0&129 vkids ?kj ls feyh ToSyjh es ls fuEukuqlkj Seize dh tkrh gS& Net Weight - 2497.530 gms.
Release Jewellery- As per Sr. No. 6,11,13,18,19,26,27,29,30,31,33,38, 42 & 44 (603.53 gms.) (Value Rs.26,60,026) Total Value - 81,72,646/- (- )(minus) Value of Release Jewellery i.e.Rs. 26,60,026/-
bl rjg :i;s 55]12]620@& ¼81]72]646 & 26]60]026½dh ToSyjh Seize dh tkrh gS] D;ka vkidks ,srjkt gS \ mÙkj&129 Jhekuth esjk fuosnu gS] fd esjs cM+s HkkbZ ds cPpksa dh Jewellery dks NksM fn;k tkos o fu;ekuqlkj esjs ifjokj ds lnL;ksa dh ToSyjh Hkh NksM+k tkuk pkfg,] ;fn bu lHkh ds fgLls dh ToSyjh NksM+rs gks rks dksbZ ToSyjh Seize ugh gksuk pkfg, \ iz0&130 lpZ dk;Zokgh ds nkSjku vkids vkoklh; ifjlj ij Physical Search ds nkSjku dqy 10-750 Kg. pkWnh ikbZ xbZ] ftldh Value :i;s 3]27]099@&vkrk gS] d`i;k blds Source dks Li"V djsa \ mÙkj&130 Jhekuth tks pkWnh vkidks izkIr gqbZ gS] oks eq>s o ikfjokfjd lnL;ksa dks fofHkUu lkekftd voljksa ij fj'rsnkjksa o fe=ksa ls migkj Lo:I izkIr gqbZ gSA From perusal of above relevant extract of the statements of the assessee recorded u/s 132(4), it is clear that in the first and preliminary statements recorded during the course of search itself, assessee had very categorically stated that apart from jewellery owned by himself and his family, jewellery owned other persons i.e. by widow daughter in law of his brother & bhabhiji (both deceased) alongwith her two children (one son and one daughter) and daughter of his brother (divorcee) was also available with the assessee which was forming part of the total jewellery found. Facts so explained by assessee were never controverted by search team/nor the same were cross verified during the search proceedings by making independent enquiry from both of the individuals i.e. the daughter in law and daughter of assessee's deceased brother nor during the post search proceedings any enquiry was conducted. Your honours would appreciate that statements recorded u/s 132(4) hold a very high evidentiary value unless retracted and therefore, action of authorized officer or the Id.AO in not accepting the same without bringing on record, any material contrary to the same is not in accordance with law.
15 ITA Nos. 393 & 398-JP-2022/JP/2023Brahm Dutt Modi vs. ACIT It is therefore claimed that since assessee's family comprises of sixteen members inclusive of 6 male members, 5 married and 5 unmarried ladies (including the families of his deceased brother) and as per CBDT instructions dated 11.05.1994, the total jewellery which could be held as explained in addition to the jewellery purchased through proper invoices would be as under:
Gold Jewellery 100 x 6 = 600 [male members] 500 x 5 = 2500 [married female members] 250 x 5 = 1250 [unmarried female members] Total 4350 gms.
Such explanation of assessee was accepted by ld.CIT(A) and the addition to the extent was deleted, which looking to the facts of the case and the admission of the assessee in the statements recorded u/s 132(4) deserves to be upheld.
With regard to the addition sustained by ld. CIT(A), it is submitted that besides the credit for CBDT instruction for jewellery weighing 4350 gms., assessee while computing the additional undisclosed income through fund flow statements has claimed the application of Rs. 12,50,000/- in A.Y. 2013-14 towards the acquisition of Jewellery based on the loose paper found during the course of search and incidentally it is discussed by the ld.AO in the assessment order where the addition was made on this account and ld. CIT(A) upheld the amount over and above Rs. 12.50 lacs for which separate appeal is pending before the hon'ble bench for AY 2013-14.
It is worthy to state here that CBDT instruction provides a broad range upto which jewelry found needs to be accepted even in the absence of bills and vouchers. Here since the assessee has specifically disclosed additional income of Rs.12,50,000/- towards acquisition of jewellery which is in addition to the limits prescribed by CBDT and since additional income so declared has been accepted by ld.AO, jewellery to this extent deserves to treated as explained over and above as provided in CBDT instruction.
It is further submitted that the assessee has offered additional income of Rs. 10.01 Crores for various assessment years which is worked out through fund flow statement, (Common paper book page 126) wherein the additional income declared is treated as source and the expenses/ investments made were claimed as application out of the same and as on the date of search as per fund flow statement there remained unutilized funds of more than Rs. 51 lacs available with the assessee, for which no further application is claimed nor brought on record by the ld.AO. Since application of the said funds has not been established as 16 ITA Nos. 393 & 398-JP-2022/JP/2023 Brahm Dutt Modi vs. ACIT applied elsewhere therefore, application of the same may please be allowed as utilized for the acquisition of the jewellery still remained not covered with the explanation as given above and thus no further addition is required to be made more particularly the funds available as on the date of search has already suffered tax in various years including the assessment year under appeal. In this regard reliance is placed on the judgement of hon'ble Jaipur bench of ITAT in the case of Shri Ajit Singh in ITA No. 453/JP/2012 vide order dt.23.01.2013 under identical circumstances, credit of the additional income remained available was allowed as applied for the acquisition of jewellery. It is further submitted that it is customary in the Hindu family to receive gifts of Jewellery from parents / relatives on various occasions such as marriages and other social ceremonies. In fact, most of the jewellery found was held by female members at the time of marriage and on birth of child and occasions such as birthdays and anniversary etc. Apart from this various small items of jewellery were purchased and accumulated over the years, source of which is explained in view of the fact that, assessee himself is a renowned businessman and is regularly filing Return of Income for past many years, declaring substantial income and has enough savings.
Further reliance is placed on the following case laws:
Recently, Hon'ble JAIPUR ITAT in the case of Ram Prakash Mahawar v. Deputy Commissioner of Income-tax, Central Circle Alwar [2020] 115 taxmann.com 241 has observed that the CBDT Instruction No. 1916 allows the specific quantity as reasonable and stands explained, which, indeed does not includes the jewellery which is otherwise explained by proof of documents of acquisition as well as declared/recorded in the books of account of the Assessee. Therefore, the benefit of said Instruction would not take away the benefit of the jewellery acquired and reflected in books of account of the Assessee or otherwise declared for any other assessment year.
Hon'ble Jaipur bench of ITAT in the case of Gyanendra Singh Shekhawat vs ACIT in ITA No.49/JP/2022 (Case law compilation pages 21-30) has treated the jewellery over and above the limits specified in CBDT circular as explained by observing as under:
2.8 Therefore, looking into the totality of the facts and circumstances of the case, we are of the considered view that the AO had ignored the factual position as well as failed to verify the fact that the assessee is living with his parents and belonged to a Rajput Family where the fact of having jewellery as Streedhan by the assessee's mother and wife cannot be ignored. Thus after considering the overall factual position in this case and keeping in view of high status, family tradition, deduction on account of purity and the deduction towards Streedhan, the excess jewellery found were nominal. In this view of the matter, the addition sustained by 17 ITA Nos. 393 & 398-JP-2022/JP/2023 Brahm Dutt Modi vs. ACIT the ld. CIT(A) deserves to be deleted and the grounds raised by the assessee are allowed. We order accordingly.
3.0 In the result, the appeal of the assessee is allowed.
Hon'ble Delhi High Court in the case of Ashok Chaddha vs Income Tax Officer in ITA No. 274/2011 (Case law compilation pages 31-33) has treated the source of jewellery in excess of quantity provided in CBDT instructions by observing as under:
"3. Learned Counsel for the respondent on the other hand relied upon the reasoning given by the authorities below. After considering the aforesaid submissions we are of the view that addition made is totally arbitrary and is not founded on any cogent basis or evidence.
We have to keep in mind that the assessee was married for more than 25-30 years. The jewellery in question is not very substantial. The learned counsel for the appellant/assessee is correct in her submission that it is a normal custom for woman to receive jewellery in the form of "streedhan" or on other occasions such as birth of a child etc. Collecting jewellery of 906.900 grams by a woman in a married life of 25-30 years is not abnormal. Furthermore, there was no valid and/or proper yardstick adopted by the Assessing Officer to treat only 400 grams as "reasonable allowance" and treat the other as "unexplained". Matter would have been different if the quantum and value of the jewellery found was substantial.
4. We are, therefore, of the opinion that the findings of the Tribunal are totally perverse and far from the realities of life. In the peculiar facts of this case we answer the question in favour of the assessee and against the revenue thereby deleting the aforesaid addition of ' 3,87,364/-."
Similarly, Hon'ble Delhi ITAT, in the case of Suneela Soni Vs DCIT (ITAT Delhi) in ITA No. 5259/DEL/2017 (Case law compilation pages 34-46) as held as under:
"6.1 After perusing the aforesaid decision of the Hon'ble Delhi High Court, I am of the considered view that facts and circumstances of the present case are similar to the aforesaid decision of the Hon'ble Delhi High Court and hence, the issue in dispute is squarely covered by the aforesaid decision.
6.2 Keeping in view of the aforesaid facts and circumstances of the case as well as the status of the family and on the anvil of the judgement of the High Court of Delhi in the case of Ashok Chadha vs. ITO reported in 14 taxmann.com 57 (Delhi.)/202 Taxmann 395, the explanation given by the assessee's counsel is accepted. Accordingly the orders of the authorities below are cancelled and addition made by the AO and confirmed by the Ld. CIT(A) amounting to Rs. 10,65,312/- on account of purported unexplained jewellery claimed by the assessee is deleted."18 ITA Nos. 393 & 398-JP-2022/JP/2023
Brahm Dutt Modi vs. ACIT Hon'ble Hyderabad ITAT in the case of R. Umamaheswar, Hyderabad vs Assessee in ITA No. 227/Hyd/2014 (Case law compilation pages 47-49) has held that the gold jewellery in excess of what is specified in the instruction, found during the course of search can reasonably be treated as explained, being the "streedhan" of the Assessee's wife, having been received by her on the occasion of marriage as well as subsequent occasions over the period by observing as under:
"4. We have heard the arguments of both the sides and also perused the relevant material on record. The learned counsel for the assessee has relied on the Instruction of the CBDT No.1916 of 11.5.1994 laying down the guidelines that in the case of a person not assessed to wealth tax, gold jewellery and ornaments to extent of 500 grams for a married lady need not be seized. Although the Learned Departmental Representative has contended that the said guidelines laid down in the circular of the CBDT are applicable only for a seizure of jewellery and ornaments during the course of search, it is observed that the Tribunal in various cases has relied on the said circular to hold that the guidelines laid down by the CBDT in Circular No. 1916 are suggestive of normal quantity of gold ornaments held by any Indian family. In one such decisions rendered in the case of ACIT V/s. Ramesh chandra R. Patel (89 ITD
223), Ahmedabad Bench of ITAT has held that the CBDT Instruction No. 1916 dated 11.5.1994 impliedly suggests the quantity of jewellery that a family is supposed to hold as received at the time of marriage from parents and in laws. It was also held that though the said Instruction gives a guideline in the matter of seizure, the same can be extended to treat the quantum of jewellery as mentioned therein as explained, keeping in view the customs and practices in the Indian society. Keeping in view the decisions of the Tribunal as well as the Instruction No 1916 of the CBDT, we hold that the gold jewellery of 472 grams found during the course of search can reasonably be treated as explained, being the Streedhan of the assessee's wife, having been received by her on the occasion of marriage as well as subsequent occasions over the period.
Accordingly, we delete the addition of Rs.3 lakhs made by the Assessing Officer and sustained by the learned CIT(A) on this issue and allow this appeal of the assessee."
Hon'bleIndore bench of ITAT, in the case of Sh. DinkarLaxman Majunillar vs DCIT in ITA No. 593/Ind/2017 (Case law compilation pages 50-52) has held as under:
11. In the instant case Ld.CIT(A) following the above referred CBDT instructions allowed the claim of investment in gold jewellery weighing 242 gms but confirmed the addition for silver articles weighing 1812 gms. The above referred instructions refers only to "jewellery and ornaments" and nowhere restrict it to gold jewellery. One cannot ignore the fact that in the Indian families there is a culture of giving silver ornaments and utensils on auspicious and marriage occasions.
Restricting the limit of 500 gm/250 gm/100 gm only to the "gold jewellery 19 ITA Nos. 393 & 398-JP-2022/JP/2023 Brahm Dutt Modi vs. ACIT ornaments" will not serve the true purpose of the CBDT instructions and it has to be applied hamnoninerly in the light of the Indian culture and traditions.
12. We therefore in the given facts and circumstances of the case are of the considered view that the impugned silver jewellery weighing 1812 gms valuing at Rs.75,278/-should not have been added to the income of the assessee and the benefit of the CBDT Circular No. 1916 dated 11.5.1994 should also be spread so as to cover the silver articles weighing 1812 gms. We therefore set aside the orders of both the lower authorities and delete the addition of Rs.75,278/- for the alleged unaccounted investment in silver articles and allow the grounds raised by the assessee."
Hon'ble Delhi ITAT in case of Radha Mital and Ruchie Mital Vs. DCIT in ITA No. 2810/De1/2016 dated 09/07/2016 (Case law compilation pages 53-89) held that Jewellery found in excess of limited prescribed by the above circular as explained on the ground that jewellery belongs to the assessees having received as "streedhan" on the occasion of marriage and also received subsequently on occasions like birth of child etc in pursuant to customs/tradition of family. The Assessee belonging to `Baniya' family have been married since 35 years and 8 years. Further they were jointly residing with their mother in law Shanti Mittal who had been married for about 65 years. Apart from the above the family comprised of husband of both the assessee and son. Thus looking to the tradition of family Hon'ble Tribunal has accepted the Jewellery in excess of limit prescribed by the above circular was in view of the fact that the same being received as Streedhan during the course of Marriage and subsequent marriage.
ITAT Delhi bench 'A' in the case of Vibhu Aggarwal v. Deputy Commissioner of Income-tax, CC-06, New Delhi [2018] 93 taxmann.com 275 has held that where gifting, of jewellery possessed by each of family members was customary and jewellery was gifted to Assessee and his wife by their parents and grandparents and other relatives at time of their marriage, and also on several occasions after that, such as birth of their two children, marriage anniversaries, etc., excess jewellery found was nominal, keeping in mind high status and more customary practices and stands explained.
In the circumstances it is humbly prayed that the entire addition of Rs.66,92,695/- made by ld.AO towards the jewellery found and seized during the course of search treating the same as unexplained deserves to be deleted.
Departmental Ground of Appeal No.3:
20 ITA Nos. 393 & 398-JP-2022/JP/2023Brahm Dutt Modi vs. ACIT In this ground of appeal, department has challenged the action of ld.CIT(A) in deleting the addition of Rs.6,44,810/-, made by ld.AO on account of cash found during the course of search. Brief facts pertaining to the grounds of appeal are that during the course of search, total cash of Rs. 21,10,640/- was found at the residential premises of the assessee and also at the business premises of various group companies and firms where the assessee or his family members is director/ partner/ proprietor. Out of total cash of Rs. 21,10,640/- a sum of Rs. 11,33,910/- was found at residential premises and balance Rs. 9,76,730/- were found at various business premises. The cash balances available in the books of proprietary concern of assessee as well as various business concerns wherein assessee is acting as partner as well as director and the necessary copies of cash book various concerns was furnished before ld. AO as well as ld.CIT(A) [APB 16-24]. It was further submitted that the assessee being head of the family was keeping the cash of the group persons/ companies at his residential premises of the safe custody which was found with him as on the date of search. Since the cash as per the cash books of the companies/ firms was in parity with the cash so found, therefore ld.CIT(A) allowed the appeal of assessee on this issue by observing as under:
"ii. Before me, the ld.AR has submitted the details of cash balance available as per books in the various concerns namely Vishnu Industries, Domaco Polycam Pvt. Ltd., Swift Finvest Pvt. Ltd., Devshree Cement Ltd., apart from other concerns which totals upto Rs.52,50,780/-. On the other hand only Rs.9,76,730/- was found at the various business premises. iii. I have carefully considered the impugned order and the submissions made by the appellant. In view of the above facts, I find that there was availability of cash found at the residential premises of the appellant as is discernible from the books of the various concerns of the appellant group, as mentioned supra, Thereby, the cash of Rs. 11,33,910/- so found at the residential premises of the appellant is to be treated as explained being part of the cash related to various business concerns. Therefore, the addition of Rs.6, 44,810/- so made by the AO, is hereby deleted, accordingly the Grounds of Appeal No. 3 & 3.1 raised by the appellant are treated as allowed."
In view of above, it is submitted that cash book of various entities for the relevant period were submitted before ld.AO and ld. CIT(A) which are also furnished before the hon'ble bench (APB 16-24), which shows that cash available in books was sufficient to cover the cash in hand found and seized at residence of the assessee. It is submitted that the cash book furnished by assessee is self-explanatory and allegation of the department in the grounds of appeal that assessee could not furnish documentary evidences is totally misplaced and wrong.
21 ITA Nos. 393 & 398-JP-2022/JP/2023Brahm Dutt Modi vs. ACIT It is therefore submitted that adverse inference drawn by ld.AO on this account is not sustainable and order of ld. CIT(A) on this account deserves to be upheld.
Departmental Ground of Appeal No.4:
In this ground of appeal, department has challenged the action of ld. CIT(A) in deleting the additions of Rs.14,65,100/- and Rs.15,31,210/- made by ld.AO.
In this regard, it is submitted that addition of Rs.15,31,210/- was made on the basis of Page No. 4 and its backside of exhibit 8 Annx AS (APB 25-26) found and seized from the residence of the assessee containing the details towards construction expenses whereas addition of Rs.14,65,100/- was made by ld.AO on account of construction expenses on the basis of Page No. 7 of exhibit 13 Annx AS (APB 27) found and seized from the residence of the assessee.
Facts pertaining to these grounds of appeal are that during the course of search, certain documents were found and seized, which contained scribblings related to expenses incurred for construction of Factory premises. The ld. AO has referred page no. 4 backside of Exhibit AS-8 (APB 26) where the total payment of Rs. 45,86,700/- is mentioned under the title "Suwalal Thekedar". Beside this page No. 4 of Exhibit 8 (APB 25-26) and page No. 7 (APB 27), 8 and its backside of Exhibit AS-13 (APB 28-29) also contained the details of work done by Suwalal Thekedar and payments made to him on various dates. Page 4 of Exhibit 8 of Annexure AS (APB 25-26) contained some calculation of total amount due to contractor Suwalal Thekedar Rs.15,31,210/- out of which Rs.14,30,000/- has been shown to be paid and balance payable is shown at Rs.1,01,210/-.
Coming next, Page no. 7 of Exhibit 13 of Annexure AS (APB 27) contained some calculation of construction work done, which are fully available in page 4 of AS- 8 (APB 25-26), and a sum of Rs.14,65,100/- was calculated, out of which Rs.8,30,000/- was reduced and final payable was shown as Rs. 6,35,100/-.
In page 8 and backside of Exhibit 13 Annexure AS (APB 29) details of total payment made on various dates to Suwalal Thekedar are noted which not only include the payments noted on page 1 of AS-8 but also include the details noted on page 4 of AS-8 and page 7 of AS-13. Therefore, the page No. 8 and its backside of AS-13 contained the final account of Suwalal Thekedar which needs to be considered for making addition towards the undisclosed construction, if any. It is thus clear that two pages on the basis of which additions of Rs.15,31,210/- and Rs.14,65,100/- have been made are in respect of same construction work and sum of Rs.15,31,210/- includes Rs.14,65,100/-. Your honours would further appreciate the fact that on page 7 of AS-13 the payment of Rs.8,30,000/- is appearing datewise whereas in page 8 of AS-13 after 22 ITA Nos. 393 & 398-JP-2022/JP/2023 Brahm Dutt Modi vs. ACIT Rs. 8,30,000/- on various dates further payments made are also noted which totaled to Rs. 14,30,000/-. In this way the entries found noted in page No. 1 & 4 of AS-8 and page 7 of AS-13 are consolidated and noted in page No. 8 of AS-13. The ld. CIT(A) after appreciating the these facts and also after verifying the same has deleted the additions of Rs. 14,65,100/- by observing as under:
"(iii) I have perused the relevant pages of the seized documents given in the paper book at PB Page 17, 18 & 19 at PB 18 [AS-13/P, 7], there are three measurements totalling to 10,465 sq.ft. and after applying the rate of Rs.140/- the amount has been arrived at Rs. 14, 65,100/- out of which payment of Rs. 8,30,000/- has been mentioned leaving balance of Rs.6, 35,100/- Again on PB 17 [AS-8-P.4 back], these three measurements mentioned on PB 15 are repeated and some more measurements related to the further construction has been added increasing the total work done to 10,850 sq. ft. and same has been multiplied by Rs. 140/-
and thereby amount of Rs. 15,19,000/- has been mentioned, Further after adding some more measurements total amount of Rs.15,31,210/- has been mentioned. Thus it is quite evident that amount of Rs. 14,65,100/- so mentioned on page 7 of AS-13 so added by the ld. AO separately is already including in the amount of Rs. 15,31,210/- mentioned on page 4 back of AS-8 and further separately added by the AO. Accordingly , the addition of Rs.14,65,100/- is straight away deleted being the double addition and being including in the other addition of Rs.15,31,210/-."
It is, therefore, requested that addition of Rs.14,65,100/- has been rightly deleted by ld.CIT(A) being considered twice resulting into double addition.
So far as construction expenses of Rs.15,31,210/- is concerned, it is submitted that assessee has declared total additional undisclosed income of Rs. 10.03 crores for various assessment years based on fund flow statement where the income declared is forming part of Fund against which the expenditure / investment/ construction is claimed as Application out of such funds. For reaching to such figures a chart of date wise investment made in acquisition of fixed asset is prepared wherein all the entries of the payments made to Suwalal Thekedar in cash are duly incorporated and year-wise total of such investment is claimed as application for the respective year in fund flow statement. In this way all the entries appearing in page 8 and backside of AS-13 stood incorporated while computing additional undisclosed income and any further addition for these entries would tantamount to double addition more particularly when the said working of additional income is accepted by the ld. AO. All such entries are appearing at common paper book pages 39 to 46 (copy enclosed) which is the chart of date-wise payments made in acquisition of fixed assets.
23 ITA Nos. 393 & 398-JP-2022/JP/2023Brahm Dutt Modi vs. ACIT Ld. CIT(A) after verifying each individual entry of the said paper with the working of the additional income has deleted the addition so made and observed as under:
"(iv) The other argument taken by the ld.AR is that against this amount the payments have been made to the contractor and all the payments have been incorporated in the fund flow statement, the copy of which was given to ld. AO and also furnished in appeal proceedings before me. It was explained that, most of these payments are finding place at PB page 45 & page 46 as per the chronological dates mentioned in these papers.
(iv) I have perused these pages and found the submission of the ld.AR to be correct, It is clear that the ld. AR has considered the payments related to these construction expenses in the fund flow statement and accordingly reduced the available cash to that extent. Therefore, separate addition of other amount of Rs. 15,31,210/- so made by the ld. AO is also hereby deleted otherwise same will tantamount to double addition. Accordingly the Grounds of Appeal No. 4 & 4.1 and 5 & 5.1 raised by the appellant are treated as allowed."
Since the ld. AO has failed to appreciate the fact that the papers referred contained the duplicate entries and also ignored the fact the assessee has already included the actual amount spent in the construction as application out of the funds available out of the additional undisclosed income offered, therefore any further addition made being double addition, the ld. CIT (A) has rightly deleted addition, which deserves to be accepted.
In the circumstances it is humbly prayed that deletion of additions of Rs. 15,31,210/- and Rs. 14,65,100/- made on the basis of page 4s of AS-8 and page 7 of AS-13 made by ld. CIT(A) deserves to be upheld."
7.1. In addition to the above written submission the ld. AR of the assessee has relied upon the following evidence :
S. No. Particulars Page No. 1 Copy of statement of Sh. Brahm Dutt Modi recorded u/s 1-30A 131 of the Income Tax Act on 30.07.2019 2 Copy of statement of Sh. Brahm Dutt Modi recorded u/s 31-125 132(4) of the Income Tax Act on 13.06.2019 3 Copy of Group Fund flow statement 126 4 Copy of loan peak working of advances made from 127-132 01.04.2010 to 31.03.2020 5 Copy of show cause notice issued u/s 142(1) of the 133-175
Income Tax Act, 1961, i.e. common questionnaire issued 24 ITA Nos. 393 & 398-JP-2022/JP/2023 Brahm Dutt Modi vs. ACIT for A.Y 2010-11 to A.Y 2020-21
6. Common Reply to show cause notice for A.Y 2010-11 to 176-183 2020-21 7 Copy of common reply filed by the assessee for A.Y 184-188 2010-11 to 2022-21, showing mechanism of computing additional income disclosed alongwith Annexures S. No. Particulars Page No. 1 Copy of written submission filed before ld. CIT(A) during 1-15 appellate proceedings 2 Copy of cash book of all the entities of Modi Group. 16-24 3 Copy of page No. 4 of Backside of exhibit 8 of annexure 25-26 AS found and seized from the residence of B.D.Modi 4 Copy of page no. 7 of exhibit 13 of annexure AS found 27 and seized from the residence of B.D.Modi (Party B-1) 5 Copy of page no. 8 of exhibit 13 of annexure AS found 28-29 and seized from the residence of B. D. Modi (Party B-1) 7.2 To support the contentions so raised the ld. AR of the assesse also filed the copy of certain judgment and the same is listed here in below:
S. No. Particulars Page No. 1 Copy of Assessment order dated 22.03.2022 passed u/s 1-5 147 of Income Tax Act, 1961 in the case of Sorabh Cement Ltd. 2 Copy of order dated 23.01.2023 of Hon'ble ITAT, Jaipur 6-20
Bench in the case of DCIT vs. Shri Ajit Singh, vide ITA No. 453/JP/2012 3 Copy of order dated 27.07.2022 passed by Hon'ble 21-30 Jaipur bench of ITAT in the case of Gyanendra Singh Shekhawat vs ACIT in ITA No. 49/JP/2022 4 Copy of order dated 05.07.2011 passed by Hon'ble Delhi 31-33 High Court in the case of Ashok Chadda vs. Income Tax Officer in ITA No. 274/2011 5 Copy of order dated 16.03.2018 passed by Hon'ble Delhi 34-46 ITAT, in the case of Suneela Soni vs. DCIT (ITAT Delhi) in ITA No. 5259/Del/2017.
6 Copy of order dated 20.02.2015 passed by the Hon'ble 47-49 25 ITA Nos. 393 & 398-JP-2022/JP/2023 Brahm Dutt Modi vs. ACIT Hyderabad ITAT in the case of R. Umamaheswar, Hyderabad vs. Assessee in ITA No. 227/Hyd/2014 7 Copy of order dated 18.10.2018 passed by the Hon'ble 50-52 Indore Bench of ITAT, in the case of Sh. Dinkar Laxman Majunillar vs. DCIT in ITA No. 593/Ind/2017 8 Copy of order dated 09.07.2018 passed by Hon'ble Delhi 53-89 ITAT in the case of Radha Mital and Ruchie Mital vs. DCIT in ITA No. 2810/Del/2016
8. Per contra, the ld. DR representing the revenue so far as to the addition on account of the cash found for an amount of Rs.
6,44,810/-, addition on account of construction expenses of Rs.
15,31,210/- and Rs. 14,65,100/- supported the finding of the assessing officer. So far addition on account of jewellery for Rs.
66,92,695/- made by the ld. AO, he oppose to the finding of the ld CIT(A) in granting the relief to the assessee for an amount of Rs.
46,51,759/- stating the assessee failed substantiate the source of the said amount and the ld. CIT(A) has given the benefit to the assessee considering the extended family of the assessee which is not correct based on the findings recorded by the ld. AO and has without taking into consideration any evidence given the relief of 4350 gms to the assessee. The circular of the CBDT deals with the gross weight of the jewellery and not net weight and therefore, ld.
DR objected to the finding of the ld. CIT(A) and vehemently argued that the ground 2 of the revenue be considered in the light of these aspect of the facts. He further submitted the decision of Chennai 26 ITA Nos. 393 & 398-JP-2022/JP/2023 Brahm Dutt Modi vs. ACIT tribunal in the case of Shri A. Ramalingam and placed on record the office manual for the seizure of the jewellery.
9. We have considered the rival contentions, perused the material available on record and findings of the lower authorities recorded in their respective orders. We have also gone through the judicial precedent cited by parties to drive home to their respective contentions. The grounds of the appeal of the assessee and that of the revenue are inter linked the same is decided together and our finding on the grounds of the appeal of the assessee and revenue is recorded here in after.
Assessee's Ground of appeal No. 1 to 1.2 & Departmental ground of appeal No. 2:
9.1 These grounds relate to addition of Rs. 66,92,695/- so made by the ld. AO considering the jewellery found at the residential premises of the assessee group as unexplained, wherein addition of Rs. 46,51,759/- stood deleted by ld. CIT(A) and balance addition of Rs. 20,40,946/- was confirmed. The department is in appeal against the relief given by the ld. CIT(A) whereas the assessee is 27 ITA Nos. 393 & 398-JP-2022/JP/2023 Brahm Dutt Modi vs. ACIT in appeal against the addition sustained by the ld. CIT(A). Brief facts related to the issue are that gold jewellery weighing 5035 gm.
(net) was found at the residential premises of the assessee, out of which jewellery weighing 2246.26 gm. was seized having value as Rs. 66,92,695/-. The ld. AO has added the entire amount of seized jewellery without considering the CBDT Instruction No. 1916 dated 11.05.1994 while estimating the extent of jewellery to be treated as explained. Further the ld. AO has also not considered and not accepted the claim of the assessee about jewellery of assessee's late elder brother's daughter-in-law (who herself is widow) family and the jewellery of divorcee daughter of assessee's younger brother which was kept at the assessee's premises for the safe custody, even though these facts were stated by the assessee in his statement recorded during search itself. The ld. CIT(A), after considering the facts and the case laws cited on the issue wherein it has been held that CBDT instruction is to be considered while determining the extent of jewellery as explained or unexplained in view of the usage and customs, status of the family and practices of the community to which assessee belongs. The ld. CIT(A) has also considered and accepted the claim of assessee about jewellery of widowed daughter-in-law and divorcee daughter of 28 ITA Nos. 393 & 398-JP-2022/JP/2023 Brahm Dutt Modi vs. ACIT respective brothers of the assessee, since the claim was made rightly at the time of recording of statement during search. The relevant part of the order of the ld. CIT(A) is reproduced herein below:-
4.2 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under-
(i) In these grounds, the appellant has challenged the addition of Rs. 66,92,695/- made by the ld. AO as excess investment in jewellery found during the course of search. Facts pertaining to this ground has been incorporated in the written submissions filed by the Id. AR. In brief, gold jewellery having net weight of 5035 gms. was found out of which jewellery weighing 2246.26 gms. valuing Rs. 66,92,695/- was seized.
Main argument taken before the ld. AO was that apart from jewellery of the family members, the jewellery of daughter-in-law of appellant's late brother Shri Kailash Chand Modi and of his grand-son and grand- daughter are also lying with the assessee, as it was kept for safe custody considering that the daughter-in-law was widow. Apart from it, jewellery of daughter of assessee's younger brother Shri Krishnan Kumar Modi, who is divorcee has also been kept with the assessee for safe custody. These facts were communicated to the search team during the course of search as per the statement of the appellant so recorded during the course of search. Relevant questions and answers have been reproduced by the Id. AR in the submission."
(ii) It was submitted by the ld. AR that accordingly claim for 6 male members, 5 married and 5 unmarried ladies as per the CBDT instructions dated 11.05.1994 was requested to be given by the AO, however, ld. AO has just rejected the claim without mentioning any reason, without making any verification from both the ladies and moreover has just added the value of seized gold jewellery in toto as unexplained investment, without giving any reasons and any working. In view of the above facts, the Ld AR of the appellant has requested to treat the jewellery weighing 4350 gms. an explained in view of CBDT instructions. Ld. AR has further submitted that the appellant has claimed investment in jewellery worth Rs. 12,50,000/- in A.Y. 2013-14 and considered the same in the fund flow statement as the outgoing. Further, if any amount remaining, then the source of the same is out of the 29 ITA Nos. 393 & 398-JP-2022/JP/2023 Brahm Dutt Modi vs. ACIT unutilized money available as per the fund flow statement. Thus Id. AR has claimed that entire addition deserves to be deleted.
(iii) I have considered the facts of the case and in view of CBDT instructions No. 1916 dated 11th of May 1994, it is observed that if a person is not liable to wealth-tax, jewellery and ornaments to the extent of 500 gms for married lady, 250 gms. for unmarried lady and 100 gms. for a male member of the family need not be seized. The instruction also extends to consider the status of the family and customs and practices of the community to which the family belongs as also other circumstances of the case for exclusion of large quantity of jewellery and ornaments from seizure. Though the circular refers only to non-seizure of jewellery, however in view of various judicial pronouncements of jurisdictional High Court and several other High Courts and Tribunals, it should also be considered as applicable while considering the explanation of the person to consider whether the jewellery etc. found are to be considered as explained or unexplained for the purpose of assessment. If as per the circular, the jewellery is not required to be seized, it would imply that to that extent the possession of jewellery is deemed to be explained by either declaring in wealth tax returns, or by usage and custom, or by the status of the family as also custom and practices of the community to which the assessee belongs. I therefore hold that the CBDT instructions needs to be applied even for considering whether the jewellery found during search should be considered as explained or unexplained for the purpose of assessment. This view is held by Hon'ble Rajasthan High court in the case of Satya Narain Patni 40 taxamnn.com 440. The head note and main portion of the judgement is as under:
Section 69A of the Income-tax Act, 1961 - Unexplained money (Jewellery) - Assessment year 2005-06 - Addition made by Assessing Officer on account of unexplained jewellery found during search proceeding was under challenge - In statements, family members clearly stated that these were personal wearing jewellery and some were received by ladies/daughter-in- Jaw on/or at time of their marriage either from parental side or in-laws side-Revenue could not place any material to show otherwise than that stipulated in CBDT Circular 1916, dated 11- 5-1994 which states that if jewellery found in possession of a married lady, unmarried lady and male member of family is to extent of 500 gms.,
250. gms and 100 gms. each, officials would not question source and acquisition - Further, Assessing Officer, in first instance, did not seize said jewellery Whether since jewellery was found to be within tolerable limit prescribed by CBDT, no addition was justifiable - Held, yes [Paras
12 to 14] [in favour of assessee] Circulars and Notifications: Instruction No. 1916, dated 11-5-1994 HELD On perusal of the circular of the Board, it is clear thot in the case of wealth tax assessee, whatever gold jewellery and ornaments have been 30 ITA Nos. 393 & 398-JP-2022/JP/2023 Brahm Dutt Modi vs. ACIT found and declared in the wealth tax return, need not be seized. However, sub-clause (W) prescribes that in case of a person not assessed to wealth tax gold jewellery and ornaments to the extent of 500 gms, per married lady, 250. gms per unmarried lady and 100 gms, per male member of the family need not be seized. Sub-clause (iii) also prescribes that the authorised officer may, having regard to the status of the family, and the custom and practices of the community to which the family belongs and other circumstances of the case, decide to exclude a larger quantity of jewellery and ornaments from seizure. [Para 11] The circular of the CBDT, dated 11-5-1994 only refers to the jewellery to the extent of 500 gms. per married lady, 250 gms. per unmarried lady and 100 gms, per male member of the family, need not be seized and it does not speak about the questioning of the said jewellery from the person who has been found with possession of the said jewellery. However, the Board, looking to the Indian customs and traditions, has fairly expressed that jewellery to the said extent will not be seized and once the Board is also of the express opinion that the said jewellery cannot be seized, it should normally mean that any jewellery, found in possession of a married lady to the extent of 500 gms. 250 gms, per unmarried Jody and 100 gms per male member of the family will also not be questioned about its source and acquisition. At the time of wedding, the daughter/daughter-in-law receives gold ornaments jewellery and other goods not only from parental side but in-laws side as well at the time of 'Vidal' (farewell) or/and at the time when the daughter-in-law enters the house of her husband. Thereafter also, she continues to receive some small items by various other close friends and relatives of both the sides as well as on the auspicious occasion of birth of a child whether male or female and the CBDT, looking to such customs prevailing throughout India, in one way or the another, come out with this Circular and it should also mean that to the extent of the aforesaid jewellery, found in possession of the various persons, even source cannot be questioned. It is certainly 'Stridhan' of the woman and normally no question at least to the said extent can be mode. However, if the authorized officers or/and the Assessing Officers find jewellery beyond the said weight, then certainly they can question the source of acquisition of the Jewellery and also in appropriate cases, if no proper explanation has been offered, can treat the jewellery beyond the said limit as unexplained Investment of the person with whom the said jewellery has been found. [Para 12] Similar view has also been taken by Hon'ble Delhi High court in the case of Ashok Chaddha Vs. CIT 14 Taxmann.com 57 (Del) and other decisions relied upon by the Ld. AR of the appellant.
(iv) I have considered the argument taken by the ld. AR and also carefully perused the relevant portion of the assessment order. It is seen that right at the time of statement recorded during the course of search, the appellant has claimed that apart from jewellery of his family 31 ITA Nos. 393 & 398-JP-2022/JP/2023 Brahm Dutt Modi vs. ACIT members, the jewellery belonging to Late brother's daughter-in-law [who is herself widow and his grand-son and grand-daughter as well as jewellery of appellant's younger brother's divorcee daughter was also available as same was kept for safe custody with the appellant. I see no reason to disbelieve this claim so made from the starting of the search itself and also considering that nothing adverse has been brought on record by the AO. In view of the above, I find that the benefit of CBDT Circular No. 1916 dated 11-05-1994 needs to be given in the case of the appellant, which the AO failed to give. Considering the above, jewellery weighing 4350 gms is considered as explained in view of the CBDT instructions dated 11.05.1994.
(v) As regards, the other argument of the ld. AR about jewellery worth Rs. 12,50,000/- purchased in the period relevant to A.Y. 2013-14 and included in the fund flow statement is concerned, it is stated that acquisition of jewellery in the traditional Hindu family is a part of gradual process and same is also purchased on marriage etc. in the family. The CBDT instruction has been issued considering these practices in the traditional Hindu family and also considering the fact that these are the jewelleries which are normally not found recorded in the regular books of accounts. Accordingly, the argument of the ld. AR to give credit of this jewellery not recorded in regular books of accounts, separately over and above the credit given as per the CBDT instruction is not accepted. Thus considering that jewellery weighing 4350 gms. is explained out of 5035 gms. so found, the unexplained jewellery comes to 685 gms. As the AO has taken the value of 2246.26 gms. seized jewellery at Rs. 66,92,695/- (for which addition has been made in the assessment order), the value of 685 gms. of jewellery comes to Rs. 20,40,946/- Thereby addition to the extent of Rs. 20,40,946/- is confirmed and balance addition is hereby deleted. Accordingly the grounds of appeal no. 1 & 1.1 raised by the appellant are treated as partly allowed.
We have considered the findings of the ld. CIT(A) coupled with the contentions of the revenue as argued by the DR based on the finding of the ld. AO. The bench also noted from the various case laws cited by the ld. AR of the assessee so far as it relates to issue for consideration of Instruction No. 1916 dated 11.05.1994 in absence of Wealth Tax record of the assessee, for the purpose of 32 ITA Nos. 393 & 398-JP-2022/JP/2023 Brahm Dutt Modi vs. ACIT determining the extent of jewellery as explained or unexplained. It is seen that various High Courts including Hon'ble Rajasthan High Court has held it to be the reasonable approach. The Hon'ble Rajasthan High Court in the case of Satya Narain Patni 40 Taxmann.com 440 has held the same view, the main portion of the judgment of which has been reproduced by ld. CIT(A). Considering that daughter-in-law of the assessee's late brother and late Bhabhi is herself widow and similarly considering that daughter of assessee's other brother is divorcee, there is no reason to disbelieve the claim of their jewellery being kept at the premises of the assessee for safe custody, more so in view of the fact that this claim was not an afterthought but had been made right at the time of recording of statement during the course of search. Considering these facts and in the circumstances of the case and also considering that department has not been able to convincingly dispute the finding of the ld. CIT(A) which we find to be based on facts and also after considering the prevailing law on the issue under consideration, we see no reason to differ from the finding of the ld. CIT(A) on the aforesaid matter. The decision relied upon by the ld. DR is of the ITAT Chennai bench whereas before us the assessee has cited the case of Rajasthan High Court which is 33 ITA Nos. 393 & 398-JP-2022/JP/2023 Brahm Dutt Modi vs. ACIT binding in nature to decide the issue on hand thus, we are of the view that there is no merits in the Departmental ground and thereby the same is hereby rejected on the issue under consideration. So far as to the grounds of the assessee for the sustained addition the ld. AR has submitted that jewellery worth Rs. 12,50,000/- was purchased in the period relevant to A.Y. 2013- 14, as is evident from the loose papers found during search and this jewellery has already been offered for taxation by including the expenditure on acquiring the jewellery in the fund flow statement.
Considering these facts, ld. AR has submitted and argued that ld.
CIT(A) has not appreciated this fact correctly and requested the bench to give credit to aforesaid jewellery so purchased in period relevant to AY 2013-14, the expenditure on which has already been included in the fund flow statement. The Bench has perused the relevant record and found the claim of the ld. AR to be correct.
Considering the peculiar facts of the case of the assessee wherein purchase of jewellery in the preceding year so found noticed during search has been considered by the assessee in the relevant period while working out the total undisclosed income of the assessee of various years, we have not hesitation to accept the argument of the AR of the assessee that credit of the same amount of jewellery 34 ITA Nos. 393 & 398-JP-2022/JP/2023 Brahm Dutt Modi vs. ACIT may be given while deciding the extent of jewellery as explained.
However, another claim of the AR of the assessee for treating the balance jewellery also as explained, considering the customs and usage, is not acceptable however, another argument that sufficient funds are available as on the date of search in the fund flow statement, use of which elsewhere has not been established thus benefit of such funds could be allowed as application in balance jewellery is acceptable Based on these observation the grounds of the appeal to that extent is considered as partly allowed. In the result, this ground of the AR of the assessee is decided as above and ground of appeal of revenue is rejected.
Departmental Ground of Appeal No. 3:
9.2 In this ground of appeal, the department has challenged the action of ld. CIT(A) in deleting the addition of Rs. 6,44,810/- so made by AO on account of alleged excess cash found during search. We have considered the facts on the issue under consideration, order of both the lower authorities and also the rival arguments / submissions of both the parties. Brief facts as culled out from records related to this ground of appeal are that during search cash of Rs. 11,33,910/- was found at the residential 35 ITA Nos. 393 & 398-JP-2022/JP/2023 Brahm Dutt Modi vs. ACIT premises and Rs. 9,76,730/- was found at the various business premises of assessee group, totaling to Rs. 21,10,640/-. Cash balance available as per books of accounts of the proprietary concern and other business concerns where assessee is partner or director or having interest were furnished before the ld. AO as well as before ld. CIT(A). The ld. AO did not appreciate these facts.
However, considering the availability of cash as per books of accounts of the various firms and companies and considering that assessee being head of the family / group was keeping the cash at his residential premises for the safe custody, the cash so found at residential and business premises being fully explainable considering the cash as per books of accounts, addition so made by the AO was deleted by the ld. CIT(A). The ld. CIT DR argued that there is no formal entry of cash of the business being taken to the residence and accordingly such set off may not be given. This argument of the revenue is not plausible considering that the cash of partnership firm or private limited companies many a times is being taken at the residence of main partner / controller of the firm / concern for the purpose of safe custody of the cash. We see that this explanation of the appellant cannot be considered to be very unusual. The ld. CIT(A) has also appreciated and considered the 36 ITA Nos. 393 & 398-JP-2022/JP/2023 Brahm Dutt Modi vs. ACIT facts and circumstances of the case and deleted the addition of alleged excess cash so made by the ld. AO after giving considered finding, the relevant part from the order of the ld. CIT(A) is reproduced here in below:
"ii. Before me, the ld.AR has submitted the details of cash balance available as per books in the various concerns namely Vishnu Industries, Domaco Polycam Pvt. Ltd., Swift Finvest Pvt. Ltd., Devshree Cement Ltd., apart from other concerns which totals upto Rs.52,50,780/-. On the other hand only Rs.9,76,730/- was found at the various business premises.
iii. I have carefully considered the impugned order and the submissions made by the appellant. In view of the above facts, I find that there was availability of cash found at the residential premises of the appellant as is discernible from the books of the various concerns of the appellant group, as mentioned supra, Thereby, the cash of Rs. 11,33,910/- so found at the residential premises of the appellant is to be treated as explained being part of the cash related to various business concerns. Therefore, the addition of Rs.6, 44,810/- so made by the AO, is hereby deleted, accordingly the Grounds of Appeal No. 3 & 3.1 raised by the appellant are treated as allowed."
Considering that order of ld. CIT(A) is based on facts and records available before her and considering that finding of ld. CIT(A) is reasoned one and considering that revenue has not been able to properly controvert the finding of the ld. CIT(A), we see no reason to interfere with the finding of ld. CIT(A). The grounds related to this issue taken by department is rejected.
Ground of appeal No. 4 of department:
9.3 In this ground of appeal, the department has challenged the action of ld. CIT(A) in deleting the addition of Rs. 14,65,100/- and 37 ITA Nos. 393 & 398-JP-2022/JP/2023 Brahm Dutt Modi vs. ACIT Rs. 15,31,210/- made by ld. AO. Brief facts related to the issue are that addition of Rs. 15,31,210/- was made based on page No. 4 and its backside of Exhibit AS-8 (APB 25-26) found and seized containing details related to construction expenses and similarly addition of Rs. 14,65,100/- was made because of page No. 7 of Exhibit AS-13 (APB 27). Before the ld. CIT(A) and before us, it was submitted by ld. AR in detailed that the amount of Rs. 14,65,100/-
is already included in the amount of Rs. 15,31,210/- as on different pages stray scribblings related to construction expenses has been mentioned and these are many a times repetitive as in the instant case. Therefore addition of Rs. 14,65,100/- is required to be straight away deleted and ld. CIT(A) has rightly deleted the same.
As regards, addition of Rs. 15,31,210/-, it was submitted that it is part of the expenditure / payment made to contractor and in fact backside of page 4 of Exhibit AS-8 shows total payment details of Rs. 45,86,700/- on different dates. It was submitted that whenever payment has been made to the contractor, same has been recorded in the fund flow statement so prepared and same has been incorporated while working out undisclosed income for the different years. The ld. CIT(A) has considered the issue and given 38 ITA Nos. 393 & 398-JP-2022/JP/2023 Brahm Dutt Modi vs. ACIT its finding on both the issues and deleted the additions. The relevant finding related to addition of Rs. 14,65,100/- is as under:
"(iii) I have perused the relevant pages of the seized documents given in the paper book at PB Page 17, 18 & 19 at PB 18 [AS-13/P, 7], there are three measurements totalling to 10,465 sq.ft. and after applying the rate of Rs.140/- the amount has been arrived at Rs. 14, 65,100/- out of which payment of Rs. 8,30,000/- has been mentioned leaving balance of Rs.6, 35,100/- Again on PB 17 [AS-8-P.4 back], these three measurements mentioned on PB 15 are repeated and some more measurements related to the further construction has been added increasing the total work done to 10,850 sq. ft. and same has been multiplied by Rs. 140/- and thereby amount of Rs. 15,19,000/- has been mentioned, Further after adding some more measurements total amount of Rs.15,31,210/- has been mentioned. Thus it is quite evident that amount of Rs. 14,65,100/- so mentioned on page 7 of AS-13 so added by the ld. AO separately is already including in the amount of Rs. 15,31,210/- mentioned on page 4 back of AS-8 and further separately added by the AO. Accordingly , the addition of Rs.14,65,100/- is straight away deleted being the double addition and being including in the other addition of Rs.15,31,210/-."
Regarding addition of Rs. 15,31,210/- being construction expenses, the finding of the ld. CIT(A) is also reproduced here in below:
"(iv) The other argument taken by the ld.AR is that against this amount the payments have been made to the contractor and all the payments have been incorporated in the fund flow statement, the copy of which was given to ld. AO and also furnished in appeal proceedings before me. It was explained that, most of these payments are finding place at PB page 45 & page 46 as per the chronological dates mentioned in these papers.
(iv) I have perused these pages and found the submission of the ld.AR to be correct, It is clear that the ld. AR has considered the payments related to these construction expenses in the fund flow statement and accordingly reduced the available cash to that extent. Therefore, separate addition of other amount of Rs. 15,31,210/- so made by the ld.
AO is also hereby deleted otherwise same will tantamount to double addition. Accordingly the Grounds of Appeal No. 4 & 4.1 and 5 & 5.1 raised by the appellant are treated as allowed."
39 ITA Nos. 393 & 398-JP-2022/JP/2023Brahm Dutt Modi vs. ACIT On both the issue we note that the revenue has not been able to furnish any detail as to how the order of ld. CIT(A) suffers from any infirmity on facts and in law. Also there is no apparent defect or any infirmity on the reasoned finding recorded by him. On the other hand, Bench noticed from the records furnished before it that the finding of ld. CIT(A) is after considering the facts as well as relevant notings on the relevant seized documents and does not suffers from any defect in law as well on facts. It is also undisputed that the appellant has already considered the various payments made to the contractor in his fund flow statement so prepared.
Considering these facts and in the circumstances of the case, there is no reason to interfere with the order of ld. CIT(A) on the issue under consideration and appeal of the department on the aforesaid ground is rejected.
10. In the result, appeal of the department is dismissed and appeal of the assessee is partly allowed.
Order pronounced in the open court on 26/07/2023.
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40 ITA Nos. 393 & 398-JP-2022/JP/2023
Brahm Dutt Modi vs. ACIT
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