BANSIDHAR JEWELLERS,RAJKOT V. ACIT, CC-1, RAJKOT, RAJKOT

ITA 147/RJT/2023

AI Insights

The case involves M/s Bansidhar Jewellers, a job worker who received gold for job-work, and the Assistant Commissioner of Income-tax, Circle-1, Rajkot. The dispute arose from a protective addition made under section 69A of the Income-tax Act, 1961, in the hands of M/s Bansidhar Jewellers, as no substantive addition was made in the hands of M/s Om Jewellers, the true owner of the gold. The Tribunal referenced a similar case, Dinesh Vithalbhai Soni (Ghaghada) vs. ACIT, where the protective addition was also deleted due to the absence of a substantive addition in the hands of the true owner.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 313977 (ITAT-RAJKOT)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2018-2019
• Other Referred Cases: Dinesh Vithalbhai Soni (Ghaghada) vs. ACIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY PUNGLIA
• Assessee Lawyers: MEHUL RANPURA
• Keywords: Unexplained investment

Judgement Text

"ITA No.147/Rjt/2023 (AY-18-19) M/s Bansidhar Jewellers 1 आयकर अपीलȣय अͬधकरण, राजकोट Ûयायपीठ, राजकोट। IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT BEFORE DR. ARJUN LAL SAINI, ACCOUNTANT MEMBERAND SHRI DINESH MOHAN SINHA, JUDICIAL MEMBER आयकर अपील सं/.ITA No.147/RJT/2023 Ǔनधा[रणवष[ / Assessment Year: (2013-14) M/s Bansidhar Jewellers 1, Shyam Arcade, Kothariya Naka, Soni Bazar, Rajkot-360 002 बनाम Vs. Assistant Commissioner of Income-tax, Circle-1, Rajkot, Aayakar Bhawan, Amruta Estate, M.G. Road, Rajkot-360 001 Öथायीलेखासं /. जीआइआरसं /. PAN/GIR No.AAMFB 6661 N (अपीलाथȸ/Appellant) .. (Ĥ×यथȸ/Respondent) Ǔनधा[ǐरती कȧ ओर से/Assessee by : Shri Mehul Ranpura, AR राजèव कȧ ओर से/Revenue by : Shri Sanjay Punglia, CIT-DR सुनवाई कȧ तारȣख /Date of Hearing : 07/05/2025 घोषणा कȧ तारȣख /Date of Pronouncement : 07/05/2025 आदेश/Order Per Dr. Arjun Lal Saini, A.M Captioned appeal filed by the assessee, pertaining to assessment year (AY) 2018-19, is directed against the order passed by the Learned Commissioner of Income Tax (Appeals)-11, Ahmedabad [in short ‘Ld.CIT(A)’], under section 250 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’), dated 15.03.2023, which in turn arises out of an assessment order passed by the Assessing Officer u/s 153C of the Act, dated 22.04.2021. 2. When this appeal was called out for hearing, Ld. Counsel for the assessee invited our attention towards the judgment of the Co-ordinate ITA No.147/Rjt/2023 (AY-18-19) M/s Bansidhar Jewellers 2 Bench of this Tribunal in the case of Dinesh Vithalbhai Soni (Ghaghada) vs. ACIT, in ITA No.201/RJT/2024, for assessment year 2018-19, dated 25.04.2025, wherein the protective addition was deleted in the hands of assessee, as the Department could not make the substantive addition in the hands of M/s Om Jewellers, Delhi ( True owner). The assessee under consideration is a job worker, who received gold for doing job-work, on the gold and addition was made in the hands of the assessee, on protective basis, as no addition was made in the hands of M/s Om Jewellers ( True owner), on substantive basis. Later on, the Department even did not make addition, in the hands of M/s Om Jewellers (true owner). Therefore, the protective addition in the hands of the assessee. was deleted. 3. On the other hand, Learned CIT-DR for the Revenue submitted that the issue is covered by the judgment of the Co-ordinate Bench of this Tribunal in the case of Dinesh Vithalbhai Soni (Ghaghada) (supra). Therefore, he stated that the Bench may take the similar view as per the judgment of the Co-ordinate Bench of this Tribunal (supra). Nonetheless, the Ld.CIT-DR for the Revenue also relied on the findings of the Assessing Officer. 4. We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee. We do not take any other view then the view so taken by this combination of this Tribunal in the ITA No.147/Rjt/2023 (AY-18-19) M/s Bansidhar Jewellers 3 case of Dinesh Vithalbhai Soni (Ghaghada) (supra), wherein the detailed findings of the Tribunal is reproduced below: “9. We have heard the both the parties and perused the materials available on record. We note that AO had made an addition of Rs.14,01,303/- u/s 69A of the Act on protective basis. The ADIT, Investigation, Rajkot had intercepted two persons namely Shri Sureshkumar Jaikishan Bhangarwa and Shri Jagdish Prasad of Bright Courier on 27.10.2017 at Rajkot Airport who were carrying Delhi weighing 460.955 gms gold to the assessee through Jet Airways. The parcels allegedly were to be delivered to the assessee containing total Fine Gold weighing 460.955 gms. The said Gold was finally seized by the ADIT, Rajkot and on not being satisfied with the supporting documents provided or produced regarding the ownership of above stated Gold during post interception interrogation/investigation. Subsequently, proceedings u/s 153C was initiated in the case of the assessee Shri Dineshbhal Vithalbhai Soni and AO has also sent the information/his satisfaction note for initiation of proceedings u/s 153C to the jurisdictional AO of the supplier M/s. Om Jewellers, Delhi. The AO in the assessment order, held that the Fine Gold received by the assessee was belonging to M/s. Om Jewellers, Delhi weighing 460.955 gms, but it was not known whether it is explained one or unexplained. Therefore, in order to protect the interest of revenue, he made addition of Rs.14,01,303/- being the value of Fine Gold weighing 460.955 grams in the hand of the appellant on protective basis as substantive assessment is to be made in the cases of M/s. Om Jewellers, Delhi. 10. The appellant has contended that the supplier M/s. Om Jewellers, Delhi is the owner of the gold and they had sent parcel to the appellant for the job-work purposes and had submitted all the details during the post-search proceedings. It is also stated that the supplier had furnished the stock register as well as his purchase bills evidencing that he had enough stock on hand from which the gold has been sent to the appellant for job-work. All these facts have already been verified by the AO during the assessment proceedings and no new evidences have been filed during the appellate proceedings before CIT(A). It is also stated that the copy of assessment order in the case of Om Jewellers is not available with the appellant and that as per knowledge of the appellant, the assessment was not reopened for the A.Y. 2018-19. However, the appellant has not submitted any evidence(s) to this claim nor could explain the fate of thegold, claimed to have been sent by M/s. Om Jewellers, Delhi for job-work purpose despite giving various opportunities. Since, the appellant has failed to prove with evidences, the onus cast upon him to prove that the gold ornaments sent to him by Om Jewellers, Delhi for job-work had been considered by the AO in that case, the action of the AO in treating the fine gold valued at Rs.14,01,303/- as unaccounted investment and adding it to the total income of the appellant U/s. 69A of the Act on protective basis was confirmed by CIT(A). 11. We note that since the substantive addition itself has not been made in the hands of M/s. Om Jewellers and substantive addition is normally made to protect the interest ITA No.147/Rjt/2023 (AY-18-19) M/s Bansidhar Jewellers 4 of Revenue. However, the Revenue itself did not take care to make the substantive addition in the hands of the true owner. Therefore, protective addition made in the assessee’s case under consideration should not be sustained. We note that assessee has furnished the following documents and evidences before the Assessing Officer. (1) Copy of self-certified stock ledger from the books of M/s. OM Jewellers. (2) Copy of issue voucher no1 from the books of M/s. Om Jewellers. (3) Page print of the e-proceedings from the Income tax login of Om jewellers Proprietor Sonu Luthra depicting that no assessment has been carried1 out for the A.Y 2018-19 in the hands of true owner. (4) Page print from the Income tax login of Om Jewellers -Proprietor Sonu Luthra depicting Nil outstanding demand. 12. Since the Ld. DR for the Revenue confirmed this fact that substantive addition has not been made in the hands of M/s. Om Jewellers, who was the true owner of the gold. The Protective addition was merely made in the hands of the assessee under consideration to protect the revenue. The AO made protective addition only in the hands of the assessee on the presumption that if substantive addition is made in the hands of M/s. Om Jewellers and till M/s. Om Jewellers accepted, its responsibility as a true owner, the protective addition may be made in the hands of the assessee and, therefore, it was imperative to protect the interest of revenue to avoid the possibility of leakage of revenue and to deal with the contingent situation till the substantive addition gets finalized. We note that since the substantive addition has not been made in the hands of the true owner, then no protective addition should be made in the hands of the assessee. The protective addition can only be made when prima facie which appears to the revenue that income has been received either by M/s. Om Jewellers or by assessee under consideration, then it would be open to the Income Tax Authorities either to tax the income in hands of M/s. Om Jewellers or in the hands of the assessee under consideration. We note that the Department did not take care to make addition in the hands of true owner, M/s. Om Jewellers and M/s. Om Jewellers has accepted this responsibility, however, the Department has failed to make the addition in the hands of M/s. Om Jewellers (true owner). Therefore, we find that the assessee cannot be made liable to pay the income-tax on protective basis as the assessee is not the true owner of the gold and for that we rely on the judgement of Hon’ble Supreme Court in the case of Lalji Haridas vs. ITO reported at (1961) 43 ITR 367 (SC). We find that the Ld. DR for the Revenue submitted before the Bench that no substantive addition has been made in the hands of M/s. Om Jewellers and this fact we have recorded after doing enquiry by the Ld. DR for the Revenue in the Income Tax Department and it has been categorically stated by the Ld. DR for the Revenue that no substantive addition was made in the hands of direct owner, M/s Om Jewellers. Therefore, we find that the Department was unable to collect the taxes from the true owner, then in that situation, the Department cannot collect the taxes from the person in whose hands the protective addition was made, just to protect the revenue till the time the substantive addition has been made in the hands of the true owner. Since the Department has failed to frame the substantive addition in the hands of the True owner, therefore assessee is not liable to accept these transactions as there is no any facts which shows that assessee under consideration is true owner of the transactions. We have examined the facts and find that assessee under ITA No.147/Rjt/2023 (AY-18-19) M/s Bansidhar Jewellers 5 consideration is not true owner of the gold. Therefore, considering these facts and circumstances, we delete the addition.” 5. Since the issue is squarely covered by the judgment of the Co- ordinate Bench of this Tribunal (supra) and Ld.CIT-DR for the Revenue is unable to controvert the finding of the Co-ordinate Bench of this Tribunal (supra). Therefore, respectfully following the binding precedent of the Co- ordinate Bench of this Tribunal in the case of Dinesh Vithalbhai Soni (Ghadhada) (supra), we allow the grounds raised by the assessee. 6. In the result, the appeal of the assessee is allowed. Order is pronounced in the open court on 07/05/2025 Sd/- Sd/- (DINESH MOHAN SINHA) (DR.ARJUNLAL SAINI) Æयाियक सदÖय/JUDICIAL MEMBER लेखा सदÖय/ACCOUNTANT MEMBER राजकोट /Rajkot िदनांक/ Date: 07/05/2025 DKP Outsourcing Sr.P.S आदेश कì ÿितिलिप अúेिषत/ Copy of the order forwarded to :  अपीलाथê/ The Appellant  ÿÂयथê/ The Respondent  आयकर आयुĉ/ CIT  आयकर आयुĉ(अपील)/ The CIT(A)  िवभागीय ÿितिनिध, आयकर अपीलीय आिधकरण, राजकोट/ DR, ITAT, RAJKOT  गाडªफाईल/ Guard File By order/आदेशसे, // True Copy // सहायक पंजीकार आयकर अपीलीय अिधकरण ,राजकोट "