DEPUTY COMMISSIONER OF INCOME TAX, CHENNAI V. RANGASWAMY BHASKARAN, KODUNGAIYUR

ITA 1353/CHNY/2024

AI Insights

The case revolves around an appeal by the Revenue against the order of the CIT(A) which had deleted the addition of Rs.2,29,42,000 as unexplained cash found in the residential premises of Mr. Rangaswamy Bhaskaran during a search operation under section 132 of the Income Tax Act. The assessee contended that the cash was from his partnership firm, M/s Jaya Foundation, and was kept at home for safekeeping. The Assessing Officer (AO) had initially added this sum as unexplained cash, relying on the statement made by the assessee during the search, where he failed to explain the source of the cash. However, the CIT(A) accepted the assessee's explanation supported by the firm's financial statements and other documents, leading to the deletion of the addition. The Tribunal, after considering the arguments and evidence, upheld the CIT(A)'s decision.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 106954 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2024
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 12-09-2024
• Assessment Year: 2018-2019
• Appeal Filed On: 06-05-2024
• Other Referred Cases: Pullengole Rubber Produce Co. Ltd. v. State of Kerala (91 ITR 18), Shankarbhai Khodabhai Bhoi Vs ACIT (59 ITD 364), Mangilal Agarwal Vs ACIT (300 ITR 372)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NILAY BARAN SOM
• Assessee Lawyers: D.ANAND; THEM IT CANNOT BE EV; THEM IT CANNOT BE EV; THEM IT CANNOT BE EVIDENCE OF
• Keywords: Additional evidence; Unexplained investment; Income from undisclosed sources
• Section: 13; 69A

Judgement Text

"आयकर अपीलीय अिधकरण, ‘ए’ \u0001यायपीठ, चे\tई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH: CHENNAI \u0001ी एबी टी. वक , \u000bाियक सद\u0011 एवं एवं एवं एवं \u0001ी जगदीश, लेखा सद\f क े सम\u0015 BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI JAGADISH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.1353/Chny/2024 िनधा\u000eरणवष\u000e/Assessment Year: 2018-19 The DCIT, Central Circle-2(4), Chennai. v. Mr. Rangaswamy Bhaskaran, Old No.25, New No.1 & 2 Meenambal Salai, Kannadasan Nagar, Kodungaiyur, Chennai-600 118. [PAN: AEPPB 7393 J] (अपीलाथ\u0016/Appellant) (\u0017\u0018यथ\u0016/Respondent) Department by : Mr.Nilay Baran Som, CIT Assessee by : Mr.D. Anand, Advocate सुनवाईक\u001cतारीख/Date of Hearing : 12.09.2024 घोषणाक\u001cतारीख /Date of Pronouncement : 08.11.2024 आदेश / O R D E R PER ABY T. VARKEY, JM: This is an appeal preferred by the Revenue against the order of the Learned Commissioner of Income Tax (Appeals)-19, Chennai (hereinafter in short ‘the Ld.CIT(A)’) dated 07.03.2024 for the Assessment Year (hereinafter in short ‘AY’) 2017-18. 2. Ground No. 1 is general in nature and therefore does not call for any specific adjudication. 3. Ground No. 2 raised by the Revenue is against the Ld. CIT(A)’s action of deleting the addition of Rs.2,29,42,000/ relation to the cash found in the residential premises of the assessee during the course of search. u/s 132 of the Act was conducted upon the assessee at his residential premises on 11.11.2017 and he was foun the tune of Rs.2,29,42,000/ source of cash found from his premises and therefore the Investigating authorities seized the same. In the course of assessment, the AO enquired about the source of cash found in the search, to which the assessee explained that, the cash belonged to his partnership firm, M/s Jaya Foundation in which he and his wife were partners. The assessee submitted that, the cash balance of the firm was being held by th partners at their residence for safe financial statements of the firm along with the ITR, cash ledgers and bank statements to show that, the firm had sufficient cash date of search and therefore according was explained. The AO however held that the assessee has not filed any evidence by way of proof for the cash seized. The AO primarily relied upon the statement recorded at the time of search wherein the assessee was unable to explain the source of cash and accordingly added the impugned sum by way of unexplained cash in the hands of the assessee. ITA No.1353/Chny/20 Mr. Rangaswamy Bhaskaran :: 2 :: Ground No. 2 raised by the Revenue is against the Ld. CIT(A)’s action of deleting the addition of Rs.2,29,42,000/- made by the AO in relation to the cash found in the residential premises of the assessee during the course of search. Brief facts as noted are that, a search action u/s 132 of the Act was conducted upon the assessee at his residential premises on 11.11.2017 and he was found to be in possession of cash to the tune of Rs.2,29,42,000/-. The assessee was unable to explain the source of cash found from his premises and therefore the Investigating authorities seized the same. In the course of assessment, the AO source of cash found in the search, to which the assessee explained that, the cash belonged to his partnership firm, M/s Jaya Foundation in which he and his wife were partners. The assessee submitted that, the cash balance of the firm was being held by th partners at their residence for safe-keeping. The assessee furnished financial statements of the firm along with the ITR, cash ledgers and bank statements to show that, the firm had sufficient cash-in-hand as on the date of search and therefore according to the assessee, the cash found was explained. The AO however held that the assessee has not filed any evidence by way of proof for the cash seized. The AO primarily relied upon the statement recorded at the time of search wherein the assessee to explain the source of cash and accordingly added the impugned sum by way of unexplained cash in the hands of the assessee. /Chny/2024 (AY 2018-19) Mr. Rangaswamy Bhaskaran Ground No. 2 raised by the Revenue is against the Ld. CIT(A)’s made by the AO in relation to the cash found in the residential premises of the assessee Brief facts as noted are that, a search action u/s 132 of the Act was conducted upon the assessee at his residential d to be in possession of cash to . The assessee was unable to explain the source of cash found from his premises and therefore the Investigating authorities seized the same. In the course of assessment, the AO source of cash found in the search, to which the assessee explained that, the cash belonged to his partnership firm, M/s Jaya Foundation in which he and his wife were partners. The assessee submitted that, the cash balance of the firm was being held by the keeping. The assessee furnished financial statements of the firm along with the ITR, cash ledgers and bank hand as on the to the assessee, the cash found was explained. The AO however held that the assessee has not filed any evidence by way of proof for the cash seized. The AO primarily relied upon the statement recorded at the time of search wherein the assessee to explain the source of cash and accordingly added the impugned sum by way of unexplained cash in the hands of the assessee. Aggrieved by the order of the AO, the assessee preferred an appeal before the Ld. CIT(A) who deleted the same. The Revenue is now appeal before us. 4. Heard both the parties. The case of the Revenue before us primarily hinges on the statement of the assessee recorded at the time of search The Ld. CIT, DR submitted that, the assessee was unable to explain the source of cash in his statement recorded u/s 132(4) at the time of search, and therefore the AO had rightly treated the impugned sum as unexplained income of the assessee. The Ld. CIT, DR has contended that, the explanation offered by the assessee in the course of assessment explaining the source of cash to be the cash balance as available on that date in his partnership firm, M/s Jaya Foundation, was an after which ought to be rejected. Before adverting to the facts, it is noted that, the settled position of law on thi made by a person u/s 132(4) of the Act is relevant evidenc proceedings of the Act, but which led him to make such a statement which raises 'reasonable doubt' that the admission was admission was based on wrong assumption of facts (and able to show/prove that assertion) then it would be unsafe to solely relying on the statement ITA No.1353/Chny/20 Mr. Rangaswamy Bhaskaran :: 3 :: Aggrieved by the order of the AO, the assessee preferred an appeal before the Ld. CIT(A) who deleted the same. The Revenue is now Heard both the parties. The case of the Revenue before us primarily statement of the assessee recorded at the time of search The Ld. CIT, DR submitted that, the assessee was unable to explain the statement recorded u/s 132(4) at the time of search, and therefore the AO had rightly treated the impugned sum as unexplained income of the assessee. The Ld. CIT, DR has contended that, the explanation offered by the assessee in the course of assessment xplaining the source of cash to be the cash balance as available on that date in his partnership firm, M/s Jaya Foundation, was an after which ought to be rejected. Before adverting to the facts, it is noted that, he settled position of law on this aspect is that, an admission legally made by a person u/s 132(4) of the Act is relevant evidenc proceedings of the Act, but if that person later explain the circumstances which led him to make such a statement which raises 'reasonable doubt' the admission was given under confusion or inducement, or the admission was based on wrong assumption of facts (and able to show/prove that assertion) then it would be unsafe to make addition/s by statement without independent corroboration. /Chny/2024 (AY 2018-19) Mr. Rangaswamy Bhaskaran Aggrieved by the order of the AO, the assessee preferred an appeal before the Ld. CIT(A) who deleted the same. The Revenue is now in Heard both the parties. The case of the Revenue before us primarily statement of the assessee recorded at the time of search. The Ld. CIT, DR submitted that, the assessee was unable to explain the statement recorded u/s 132(4) at the time of search, and therefore the AO had rightly treated the impugned sum as unexplained income of the assessee. The Ld. CIT, DR has contended that, the explanation offered by the assessee in the course of assessment xplaining the source of cash to be the cash balance as available on that date in his partnership firm, M/s Jaya Foundation, was an after-thought which ought to be rejected. Before adverting to the facts, it is noted that, admission legally made by a person u/s 132(4) of the Act is relevant evidence in any if that person later explain the circumstances which led him to make such a statement which raises 'reasonable doubt' inducement, or the admission was based on wrong assumption of facts (and able to make addition/s by without independent corroboration. In this context, we gainfully refer to the decision of case of Pullengole Rubber Produce Co. Ltd. v. State of Kerala (91 ITR 18) wherein it was explained extremely important piece of evidence but it cannot be said that it is conclusive. It was held that, it is open to the assessee who made the admission to show that it is incorrect. subsequently by many here for the sake of brevity. for our consideration is that whether the impugned additio been made de- hors the aforesaid statement of the assessee wherein the assessee was unable to explain the source of cash. 5. The facts as noted from the material placed before us is that, the assessee was found in possession of cash of Rs.2.29 crores at his residential premises. Before the AO however, the assessee had explained that, the cash found on him belonged to partnership firm, M/s Jaya Foundation in which he and his wife were partners and therefore submitted that the source of cash stood explained. Having perused the documents placed on record, it is noted that the partnership firm, Jaya Foundation is a regular income financials & income-tax return filed for AY 2016 to the date of search), it is noted that the firm had reported cash balance ITA No.1353/Chny/20 Mr. Rangaswamy Bhaskaran :: 4 :: we gainfully refer to the decision of the Hon'ble Apex Court in the Pullengole Rubber Produce Co. Ltd. v. State of Kerala (91 wherein it was explained that, although an admission is an tremely important piece of evidence but it cannot be said that it is conclusive. It was held that, it is open to the assessee who made the admission to show that it is incorrect. The judgment has been followed subsequently by many judicial forums pan India which are not discussed here for the sake of brevity. Thus, the situation that emerges before us for our consideration is that whether the impugned additio the aforesaid statement of the assessee wherein the ble to explain the source of cash. The facts as noted from the material placed before us is that, the assessee was found in possession of cash of Rs.2.29 crores at his residential premises. Before the AO however, the assessee had explained sh found on him belonged to partnership firm, M/s Jaya Foundation in which he and his wife were partners and therefore submitted that the source of cash stood explained. Having perused the documents placed on record, it is noted that the partnership firm, Jaya Foundation is a regular income-tax assessee and from its audited tax return filed for AY 2016-17 on 23.03.2017 (prior to the date of search), it is noted that the firm had reported cash balance /Chny/2024 (AY 2018-19) Mr. Rangaswamy Bhaskaran the Hon'ble Apex Court in the Pullengole Rubber Produce Co. Ltd. v. State of Kerala (91 although an admission is an tremely important piece of evidence but it cannot be said that it is conclusive. It was held that, it is open to the assessee who made the The judgment has been followed which are not discussed Thus, the situation that emerges before us for our consideration is that whether the impugned addition could have the aforesaid statement of the assessee wherein the The facts as noted from the material placed before us is that, the assessee was found in possession of cash of Rs.2.29 crores at his residential premises. Before the AO however, the assessee had explained sh found on him belonged to partnership firm, M/s Jaya Foundation in which he and his wife were partners and therefore submitted that the source of cash stood explained. Having perused the documents placed on record, it is noted that the partnership firm, M/s tax assessee and from its audited 17 on 23.03.2017 (prior to the date of search), it is noted that the firm had reported cash balance of Rs.1,71,25,000/-. The income statements of the firm for AY 2017 Rs.2,44,19,668/- as on 31.03.2017. The Revenue was unable to bring on record any material to show that the books of accounts of the firm, M/s Jaya Foundation for AY 2017 cash balance had been disputed and, in that view of the matter, it is observed that, the firm had sufficient cash balance at the beginning of FY 2017-18 i.e. the year of search to justify the cas at the time of search. The assessee is noted to have explained before the lower authorities that the said cash balance was being maintained to undertake construction of club house at Puzhal and until then, the cash was being kept by the partners at their own premises for safe Having regard to these contemporaneous material placed on record before us, we find the explanation given by the assessee regarding the source of cash to be plausible. We thus find ourselves in agreemen the findings recorded by the Ld. CIT(A) holding that, the cash found at the residence of the assessee stood sufficiently explained as the cash balance of the partnership firm lying with the partners and therefore the same cannot be treated as unexpl relevant findings taken note of by us is as follows: “7.4.2.4 The Appellant during the course of Appellate proceedings has re-iterated the same submission which was made earlier before the AO during the course of assessme ITA No.1353/Chny/20 Mr. Rangaswamy Bhaskaran :: 5 :: . The income-tax return and audited financial statements of the firm for AY 2017-18 is noted to reflect cash balance of as on 31.03.2017. The Revenue was unable to bring on record any material to show that the books of accounts of the firm, M/s ndation for AY 2017-18 had been rejected or that the closing cash balance had been disputed and, in that view of the matter, it is observed that, the firm had sufficient cash balance at the beginning of FY 18 i.e. the year of search to justify the cash found on the assessee at the time of search. The assessee is noted to have explained before the lower authorities that the said cash balance was being maintained to undertake construction of club house at Puzhal and until then, the cash the partners at their own premises for safe Having regard to these contemporaneous material placed on record before us, we find the explanation given by the assessee regarding the source of cash to be plausible. We thus find ourselves in agreemen the findings recorded by the Ld. CIT(A) holding that, the cash found at the residence of the assessee stood sufficiently explained as the cash balance of the partnership firm lying with the partners and therefore the same cannot be treated as unexplained income of the assessee. The relevant findings taken note of by us is as follows:- The Appellant during the course of Appellate proceedings has iterated the same submission which was made earlier before the AO during the course of assessment proceedings. As per the submission of /Chny/2024 (AY 2018-19) Mr. Rangaswamy Bhaskaran ax return and audited financial 18 is noted to reflect cash balance of as on 31.03.2017. The Revenue was unable to bring on record any material to show that the books of accounts of the firm, M/s 18 had been rejected or that the closing cash balance had been disputed and, in that view of the matter, it is observed that, the firm had sufficient cash balance at the beginning of FY h found on the assessee at the time of search. The assessee is noted to have explained before the lower authorities that the said cash balance was being maintained to undertake construction of club house at Puzhal and until then, the cash the partners at their own premises for safe-keeping. Having regard to these contemporaneous material placed on record before us, we find the explanation given by the assessee regarding the source of cash to be plausible. We thus find ourselves in agreement with the findings recorded by the Ld. CIT(A) holding that, the cash found at the residence of the assessee stood sufficiently explained as the cash balance of the partnership firm lying with the partners and therefore the ained income of the assessee. The The Appellant during the course of Appellate proceedings has iterated the same submission which was made earlier before the AO nt proceedings. As per the submission of the Appellant, the cash found during the course of search is nothing but the withdrawals from the firm M/s. Jaya Foundations, a partnership firm, wherein the Appellant along with his wife are the prime partners. The firm M/s. Jaya Foundations is engaged in the real submission of the Appellant is that a 2017-18, a huge sum of money was available in the hands of the firm so it was mutually decided by the partne construction of a Club House in Puzhal. While the project was to begin, the Appellant brought the cash to his own premises to merely safeguard the same. To corroborate the same, the Appellant highlighted that the opening cash balance of Jaya Foundations as on 31.03.2017 stood at Rs. 2,25,25,500/- as against the closing balance of which stood at only Rs. 1,73,500/- as on 31.03.2018 and claimed that the physical cash found during the course of search is the cash pertaining to t Foundations , which has been kept for safe custody at the residence of the Appellant. 7.4.2.5 The Appellantmade available the copies of the return of income e-filed in the case of AAKFJ4043L for the of the return of income e (which is much before the date of search) it is seen that the cash balance available as on 31.03.2016 is Rs. 2,64,19,668/ – Rs. 1,71,25,500/ 2017-18the cash bala Rs.2,44,19,668/- balance. Thereafter on perusal of the return of income 2018-19, it is seen that the cash balance stands at Rs. 1,73,500/ 31.03.2018. The undersigned is of the considered view that unless a clear finding is made in respect of the cash balance reported by M/s. Jaya Foundation wherein th can be no reason to treat the subsequent withdrawal from such firm as unexplained. In view of this the undersigned is not inclined to accept the presumption of the AO that the cash found at the residence of the Appellant cannot partake the character of unaccounted income to the Appellant. Accordingly, all the grounds raised by the Appellant upon this issue are hereby treated as allowed and the AO is hereby directed to delete the addition of Rs. 2,29,42000/ 69A of the Act for the AY 2018 6. For the above reasons, we see no reason to interfere with the above findings of the Ld. CIT(A) deleting the impugned addition. Accordingly Ground No. 2 stands dismissed. ITA No.1353/Chny/20 Mr. Rangaswamy Bhaskaran :: 6 :: the Appellant, the cash found during the course of search is nothing but the withdrawals from the firm M/s. Jaya Foundations, a partnership firm, wherein the Appellant along with his wife are the prime partners. The firm M/s. Jaya Foundations is engaged in the real-estate business. The submission of the Appellant is that at the beginning of the financial year 18, a huge sum of money was available in the hands of the firm so it was mutually decided by the partners to make an investment in the construction of a Club House in Puzhal. While the project was to begin, the Appellant brought the cash to his own premises to merely safeguard the same. To corroborate the same, the Appellant highlighted that the h balance of Jaya Foundations as on 31.03.2017 stood at Rs. as against the closing balance of which stood at only Rs. as on 31.03.2018 and claimed that the physical cash found during the course of search is the cash pertaining to the firm M/s. Jaya Foundations , which has been kept for safe custody at the residence of The Appellantmade available the copies of the return of filed in the case of M/s. Jaya Foundations holding the for the AY(s) 2016-17, 2017-18 and 2018-19.Upon perusal of the return of income e-filed for the AY 2016-17 on 23.03.2017 (which is much before the date of search) it is seen that the cash balance available as on 31.03.2016 is Rs. 2,64,19,668/- ( cash in hand s. 1,71,25,500/- and cash at bank- Rs. 92,94,168/-) . For the AY 18the cash balance available as on 31.03.2017 - thus, it is found that the Firm is having sufficient cash balance. Thereafter on perusal of the return of income e-filed for the AY 19, it is seen that the cash balance stands at Rs. 1,73,500/ 31.03.2018. The undersigned is of the considered view that unless a clear finding is made in respect of the cash balance reported by M/s. Jaya Foundation wherein the Appellant and his wife are partners, there can be no reason to treat the subsequent withdrawal from such firm as unexplained. In view of this the undersigned is not inclined to accept the presumption of the AO that the cash found at the residence of the Appellant cannot partake the character of unaccounted income to the Appellant. Accordingly, all the grounds raised by the Appellant upon this issue are hereby treated as allowed and the AO is hereby directed to delete the addition of Rs. 2,29,42000/- made as unexplained cash u/s 69A of the Act for the AY 2018-19.” For the above reasons, we see no reason to interfere with the above findings of the Ld. CIT(A) deleting the impugned addition. Accordingly Ground No. 2 stands dismissed. /Chny/2024 (AY 2018-19) Mr. Rangaswamy Bhaskaran the Appellant, the cash found during the course of search is nothing but the withdrawals from the firm M/s. Jaya Foundations, a partnership firm, wherein the Appellant along with his wife are the prime partners. The estate business. The t the beginning of the financial year 18, a huge sum of money was available in the hands of the firm so rs to make an investment in the construction of a Club House in Puzhal. While the project was to begin, the Appellant brought the cash to his own premises to merely safeguard the same. To corroborate the same, the Appellant highlighted that the h balance of Jaya Foundations as on 31.03.2017 stood at Rs. as against the closing balance of which stood at only Rs. as on 31.03.2018 and claimed that the physical cash found he firm M/s. Jaya Foundations , which has been kept for safe custody at the residence of The Appellantmade available the copies of the return of M/s. Jaya Foundations holding the PAN- 19.Upon perusal 17 on 23.03.2017 (which is much before the date of search) it is seen that the cash ( cash in hand ) . For the AY nce available as on 31.03.2017 is thus, it is found that the Firm is having sufficient cash filed for the AY 19, it is seen that the cash balance stands at Rs. 1,73,500/- as on 31.03.2018. The undersigned is of the considered view that unless a clear finding is made in respect of the cash balance reported by M/s. e Appellant and his wife are partners, there can be no reason to treat the subsequent withdrawal from such firm as unexplained. In view of this the undersigned is not inclined to accept the presumption of the AO that the cash found at the residence of the Appellant cannot partake the character of unaccounted income to the Appellant. Accordingly, all the grounds raised by the Appellant upon this issue are hereby treated as allowed and the AO is hereby directed to as unexplained cash u/s For the above reasons, we see no reason to interfere with the above findings of the Ld. CIT(A) deleting the impugned addition. Accordingly 7. Ground No. 3 rais on account of unexplained jewellery of Rs.1,98,79,000/ noted are that, during the course of search, weighing 5919.100 gms inventorised vide ANN/R.S.T/R.B/J/F in Sl. No. 1 to 60 Officer had required the assessee to explain the source of jewellery, to which the assessee in his statement given u/s 132(4) of the Act, is noted to have categorically stated that th belonged to him & his wife, and that the balance thirty (30) items belonged to his brother present at the home at the time of search. In the course of assessment, the AO required the assessee to explain the source of such jewellery. The AO however did not agree with the explanation put forth by the assessee and added the impugned sum by way of unexplained jewellery u/s 69A of the Act. 8. Being aggrieved by the above action of t preferred an appeal before the Ld. CIT(A) and filed additional evidences including affidavits from the three sisters who were present at his residence at the time of search. The Ld. CIT(A) is noted to have called for a remand report. The AO in his report dated 19.12.2023 preliminarily objected to the admission of additional evidences and on merits observed ITA No.1353/Chny/20 Mr. Rangaswamy Bhaskaran :: 7 :: Ground No. 3 raised by the Revenue is against the addition made on account of unexplained jewellery of Rs.1,98,79,000/- noted are that, during the course of search, gold and diamond jewellery weighing 5919.100 gms worth Rs.1,91,24,796/- was found which was vide ANN/R.S.T/R.B/J/F in Sl. No. 1 to 60. The Investigating Officer had required the assessee to explain the source of jewellery, to which the assessee in his statement given u/s 132(4) of the Act, is noted to have categorically stated that thirty one (31) items of jewellery belonged to him & his wife, and that the balance thirty (30) items belonged to his brother-in–law and his three sisters, all of whom were present at the home at the time of search. In the course of assessment, ed the assessee to explain the source of such jewellery. The AO however did not agree with the explanation put forth by the assessee and added the impugned sum by way of unexplained jewellery u/s 69A of Being aggrieved by the above action of the AO, the assessee preferred an appeal before the Ld. CIT(A) and filed additional evidences including affidavits from the three sisters who were present at his residence at the time of search. The Ld. CIT(A) is noted to have called for e AO in his report dated 19.12.2023 preliminarily objected to the admission of additional evidences and on merits observed /Chny/2024 (AY 2018-19) Mr. Rangaswamy Bhaskaran ed by the Revenue is against the addition made -. The facts as gold and diamond jewellery was found which was . The Investigating Officer had required the assessee to explain the source of jewellery, to which the assessee in his statement given u/s 132(4) of the Act, is noted (31) items of jewellery belonged to him & his wife, and that the balance thirty (30) items , all of whom were present at the home at the time of search. In the course of assessment, ed the assessee to explain the source of such jewellery. The AO however did not agree with the explanation put forth by the assessee and added the impugned sum by way of unexplained jewellery u/s 69A of he AO, the assessee preferred an appeal before the Ld. CIT(A) and filed additional evidences including affidavits from the three sisters who were present at his residence at the time of search. The Ld. CIT(A) is noted to have called for e AO in his report dated 19.12.2023 preliminarily objected to the admission of additional evidences and on merits observed that the assessee was not able to conclusively establish the ownership of jewellery and source of investment. After considering the s evidences placed on record by the assessee in light of the findings of the AO in his remand report, the Ld. CIT(A) deleted the impugned addition. Aggrieved by the order of Ld. CIT(A), the Revenue is now in appeal before us. 9. We have heard both the parties and perused the material placed before us. It is observed that, the assessee was found to be in possession of gross weight of 5919 gms of gold jewellery which comprised of sixty (60) items. The assessee in his statement recorded u/s 132(4 is noted to have identified thirty and his wife and the balance items was stated to be belonging to his other family members viz., sisters who were visiting him at the time of search to attend a marriage in of thirty one (31) items of jewellery belonging to him and his wife, the assessee had explained that such gold jewellery weighed 2779 gms, out of which 243 gms were disclosed by the assessee in his wealth returns, and the balance 2536 gms had been acquired by his wife, for which he furnished her financials, ITR and wealth tax returns. These details are noted to have been sent on remand by the Ld. CIT(A) to the AO, who simply rejected the same by observ ITA No.1353/Chny/20 Mr. Rangaswamy Bhaskaran :: 8 :: that the assessee was not able to conclusively establish the ownership of jewellery and source of investment. After considering the submissions and evidences placed on record by the assessee in light of the findings of the AO in his remand report, the Ld. CIT(A) deleted the impugned addition. Aggrieved by the order of Ld. CIT(A), the Revenue is now in appeal before both the parties and perused the material placed before us. It is observed that, the assessee was found to be in possession of gross weight of 5919 gms of gold jewellery which comprised of sixty (60) items. The assessee in his statement recorded u/s 132(4 is noted to have identified thirty-one (31) items which belonged to him and his wife and the balance items was stated to be belonging to his other family members viz., sisters who were visiting him at the time of search the family. In respect of the source and ownership (31) items of jewellery belonging to him and his wife, the assessee had explained that such gold jewellery weighed 2779 gms, out of which 243 gms were disclosed by the assessee in his wealth returns, and the balance 2536 gms had been acquired by his wife, for which he furnished her financials, ITR and wealth tax returns. These details are noted to have been sent on remand by the Ld. CIT(A) to the AO, who simply rejected the same by observing both in assessment and /Chny/2024 (AY 2018-19) Mr. Rangaswamy Bhaskaran that the assessee was not able to conclusively establish the ownership of ubmissions and evidences placed on record by the assessee in light of the findings of the AO in his remand report, the Ld. CIT(A) deleted the impugned addition. Aggrieved by the order of Ld. CIT(A), the Revenue is now in appeal before both the parties and perused the material placed before us. It is observed that, the assessee was found to be in possession of gross weight of 5919 gms of gold jewellery which comprised of sixty (60) items. The assessee in his statement recorded u/s 132(4) of the Act one (31) items which belonged to him and his wife and the balance items was stated to be belonging to his other family members viz., sisters who were visiting him at the time of search the family. In respect of the source and ownership (31) items of jewellery belonging to him and his wife, the assessee had explained that such gold jewellery weighed 2779 gms, out of which 243 gms were disclosed by the assessee in his wealth-tax returns, and the balance 2536 gms had been acquired by his wife, for which he furnished her financials, ITR and wealth tax returns. These details are noted to have been sent on remand by the Ld. CIT(A) to the ing both in assessment and remand proceedings that, the assessee was not able to conclusively establish the ownership and source of the jewellery. We agree with the Ld. CIT(A) that, apart from making a sweeping remark, the AO did not point out any specific defect in the details furnished by the assessee or what other document or proof was required to substantiate the ownership of such thirty-one (31) items of jewellery. From the material placed before us, it is noted that out of the 2779 gms of gold jewelle to be belonging to the assessee and his wife, 243 gms of gold jewellery was disclosed by the assessee in his wealth ownership to that extent stood sufficiently substantiated. With regard to 2536 gms [2779 – 243] of wife had acquired the said gold items out of the long term capital gain of Rs.2.27 crores disclosed in the income investment in gold jewellery was also reflected in the bala that year. Having regard to these foregoing facts, we are in agreement with the Ld. CIT(A) that the assessee had sufficiently established the source of acquisition of jewellery to the extent of 2779 gms. 10. Coming to the balance jewellery w is noted to have explained that, jewellery weighing 1187 gms, 995 gms and 958 gms belonged to his three sisters respectively viz., Mrs. M Chitra, Mrs. D Chitra and Mrs. Meenakshi respectively. The assessee in his ITA No.1353/Chny/20 Mr. Rangaswamy Bhaskaran :: 9 :: remand proceedings that, the assessee was not able to conclusively establish the ownership and source of the jewellery. We agree with the Ld. CIT(A) that, apart from making a sweeping remark, the AO did not defect in the details furnished by the assessee or what other document or proof was required to substantiate the ownership one (31) items of jewellery. From the material placed before us, it is noted that out of the 2779 gms of gold jewelle to be belonging to the assessee and his wife, 243 gms of gold jewellery was disclosed by the assessee in his wealth-tax returns and therefore the ownership to that extent stood sufficiently substantiated. With regard to 243] of gold jewellery, it is noted that, the assessee’s wife had acquired the said gold items out of the long term capital gain of Rs.2.27 crores disclosed in the income-tax return for AY 2017 investment in gold jewellery was also reflected in the bala that year. Having regard to these foregoing facts, we are in agreement with the Ld. CIT(A) that the assessee had sufficiently established the source of acquisition of jewellery to the extent of 2779 gms. Coming to the balance jewellery weighing 3140 gms, the assessee is noted to have explained that, jewellery weighing 1187 gms, 995 gms and 958 gms belonged to his three sisters respectively viz., Mrs. M Chitra, Mrs. D Chitra and Mrs. Meenakshi respectively. The assessee in his /Chny/2024 (AY 2018-19) Mr. Rangaswamy Bhaskaran remand proceedings that, the assessee was not able to conclusively establish the ownership and source of the jewellery. We agree with the Ld. CIT(A) that, apart from making a sweeping remark, the AO did not defect in the details furnished by the assessee or what other document or proof was required to substantiate the ownership one (31) items of jewellery. From the material placed before us, it is noted that out of the 2779 gms of gold jewellery claimed to be belonging to the assessee and his wife, 243 gms of gold jewellery tax returns and therefore the ownership to that extent stood sufficiently substantiated. With regard to gold jewellery, it is noted that, the assessee’s wife had acquired the said gold items out of the long term capital gain of tax return for AY 2017-18 and the investment in gold jewellery was also reflected in the balance-sheet for that year. Having regard to these foregoing facts, we are in agreement with the Ld. CIT(A) that the assessee had sufficiently established the source of acquisition of jewellery to the extent of 2779 gms. eighing 3140 gms, the assessee is noted to have explained that, jewellery weighing 1187 gms, 995 gms and 958 gms belonged to his three sisters respectively viz., Mrs. M Chitra, Mrs. D Chitra and Mrs. Meenakshi respectively. The assessee in his statement recorded u/s 132(4) of the Act is noted to have clarified this fact by stating that the balance thirty (30) items which were weighing 3140 gms belonged to these other family members. CIT, DR had urged that, the presumption u/s 132(4A) of t the assessee was the owner of the jewellery found in his possession and the onus was on the assessee to rebut the same with cogent proof and evidence. According to him, the assessee had failed to do so in respect of the 3140 gms of gold jew recorded u/s 132(4) of the Act, the AO had rightly added the impugned jewellery of 3140 gms as assessee’s unaccounted investment. Upon going through the material placed before us and the findings of Ld. CI noted that, the assessee had demonstrated with evidences that, her sisters were visiting him to attend a marriage in the family and understandably they were carrying jewellery with them for attending the marriage functions. It is also not in di brother-in-law were present at his residence at the time of search. Furthermore, these family members are also noted to have furnished their PAN details along with sworn affidavits affirming the ownership of these jewellery items. Hence, on overall consideration of facts and circumstances, we find that the assessee had discharged its initial onus of rebutting the presumption that the balance jewellery items did not belong to the assessee but these other family members. ITA No.1353/Chny/20 Mr. Rangaswamy Bhaskaran :: 10 :: corded u/s 132(4) of the Act is noted to have clarified this fact by stating that the balance thirty (30) items which were weighing 3140 gms belonged to these other family members. Before us, the Ld. CIT, DR had urged that, the presumption u/s 132(4A) of the Act was that the assessee was the owner of the jewellery found in his possession and the onus was on the assessee to rebut the same with cogent proof and evidence. According to him, the assessee had failed to do so in respect of the 3140 gms of gold jewellery and therefore irrespective of his statement recorded u/s 132(4) of the Act, the AO had rightly added the impugned jewellery of 3140 gms as assessee’s unaccounted investment. Upon going through the material placed before us and the findings of Ld. CI noted that, the assessee had demonstrated with evidences that, her sisters were visiting him to attend a marriage in the family and understandably they were carrying jewellery with them for attending the marriage functions. It is also not in dispute that the assessee’s sisters and law were present at his residence at the time of search. Furthermore, these family members are also noted to have furnished their PAN details along with sworn affidavits affirming the ownership of these llery items. Hence, on overall consideration of facts and circumstances, we find that the assessee had discharged its initial onus of rebutting the presumption that the balance jewellery items did not belong to the assessee but these other family members. The AO is noted to have /Chny/2024 (AY 2018-19) Mr. Rangaswamy Bhaskaran corded u/s 132(4) of the Act is noted to have clarified this fact by stating that the balance thirty (30) items which were weighing Before us, the Ld. he Act was that the assessee was the owner of the jewellery found in his possession and the onus was on the assessee to rebut the same with cogent proof and evidence. According to him, the assessee had failed to do so in respect of ellery and therefore irrespective of his statement recorded u/s 132(4) of the Act, the AO had rightly added the impugned jewellery of 3140 gms as assessee’s unaccounted investment. Upon going through the material placed before us and the findings of Ld. CIT(A), it is noted that, the assessee had demonstrated with evidences that, her sisters were visiting him to attend a marriage in the family and understandably they were carrying jewellery with them for attending the spute that the assessee’s sisters and law were present at his residence at the time of search. Furthermore, these family members are also noted to have furnished their PAN details along with sworn affidavits affirming the ownership of these llery items. Hence, on overall consideration of facts and circumstances, we find that the assessee had discharged its initial onus of rebutting the presumption that the balance jewellery items did not belong The AO is noted to have rejected the foregoing explanation and evidences material on record. It is now well settled law that if no effort is made to controvert the contents of the true. According to us therefore, the Ld. CIT(A) had rightly held that, the AO had erred in adding these jewellery items as unaccounted investment in the hands of the assessee. In this regard, we gainfully refer to the decision of the coordinate Bench of this Tribunal at case of Shankarbhai Khodabhai Bhoi Vs ACIT (59 ITD 364) instant case, the assessee was found in possession of gold jewellery which he claimed belonged to his sister assessee’s father-in-law confirmed affidavits before the ITO. The ITO however rejected the same and added the jewellery as unexplained investment of the assessee. On appeal the Tribunal accepted the evidentiary value of the affidavits submitted by the assessee’s father-in-law admitting the ownership of jewellery found from the possession of the assessee, which was not controverted by the ITO, and deleted the addition made by way of unexplained investment in jewellery. The relevant findings taken note of by “8. As regards the gold ornaments weighing 362.700 grams valued at Rs. 58,031 the assessee explained that the same belonged to his mother- in-law and his two sisters Sevantiben who were accompanying him to h day. Shri Ratilal P. Chanawala, father submitted before the Assessing Officer that the gold ornaments belonged to his wife and his two daughters ITA No.1353/Chny/20 Mr. Rangaswamy Bhaskaran :: 11 :: rejected the foregoing explanation and evidences without placing any material on record. It is now well settled law that if no effort is made to contents of the affidavit, the same has to be accepted as g to us therefore, the Ld. CIT(A) had rightly held that, the AO had erred in adding these jewellery items as unaccounted investment in the hands of the assessee. In this regard, we gainfully refer to the decision of the coordinate Bench of this Tribunal at Ahmedabad in the Shankarbhai Khodabhai Bhoi Vs ACIT (59 ITD 364) instant case, the assessee was found in possession of gold jewellery which he claimed belonged to his sister-in-law and mother law confirmed the same and furnished their sworn affidavits before the ITO. The ITO however rejected the same and added the jewellery as unexplained investment of the assessee. On appeal the Tribunal accepted the evidentiary value of the affidavits submitted by the law admitting the ownership of jewellery found from the possession of the assessee, which was not controverted by the ITO, and deleted the addition made by way of unexplained investment in jewellery. The relevant findings taken note of by us is as follows: 8. As regards the gold ornaments weighing 362.700 grams valued at Rs. 58,031 the assessee explained that the same belonged to his law and his two sisters-in-law, viz. , Kanchanben and Sevantiben who were accompanying him to his residence on the fateful day. Shri Ratilal P. Chanawala, father-in-law of the assessee also submitted before the Assessing Officer that the gold ornaments belonged to his wife and his two daughters-in-law. The sworn affidavits /Chny/2024 (AY 2018-19) Mr. Rangaswamy Bhaskaran without placing any material on record. It is now well settled law that if no effort is made to affidavit, the same has to be accepted as g to us therefore, the Ld. CIT(A) had rightly held that, the AO had erred in adding these jewellery items as unaccounted investment in the hands of the assessee. In this regard, we gainfully refer to the Ahmedabad in the Shankarbhai Khodabhai Bhoi Vs ACIT (59 ITD 364). In the instant case, the assessee was found in possession of gold jewellery law and mother-in-law. The the same and furnished their sworn affidavits before the ITO. The ITO however rejected the same and added the jewellery as unexplained investment of the assessee. On appeal the Tribunal accepted the evidentiary value of the affidavits submitted by the law admitting the ownership of jewellery found from the possession of the assessee, which was not controverted by the ITO, and deleted the addition made by way of unexplained investment in us is as follows:- 8. As regards the gold ornaments weighing 362.700 grams valued at Rs. 58,031 the assessee explained that the same belonged to his law, viz. , Kanchanben and is residence on the fateful law of the assessee also submitted before the Assessing Officer that the gold ornaments law. The sworn affidavits of these three ladies were rejected the explanation furnished by the assessee and his father without placing any material on record. It is now well no effort is made to controvert the contents of the affidavit , the has to be accepted as true Mehta Parikh & Co. v.CIT [1956] 30 ITR 181 (SC). There is nothing unusual that the three ladies who belonged to a respectable family of a political and social worker who had been a Municipal Councillor since 1950, were in po weighing 362.700 grams, i.e. , about 30 tolas valued at Rs. 58,03 1, i.e. , 10 tolas each lady. We accordingly delete the addition. 11. We also rely on the decision of Hon’ble Rajasthan High Court in the case of Mangilal Agarwal on similar facts and circumstances as involved in the present case before us. In the decided case also, the assessee was subjected to search action and found to be in possession of gold, which he explained belonged three persons, who had handed over the same to the assessee for making new ornaments. These three persons also furnished their sworn affidavits affirming the ownership of the gold. The AO however found the source of acquisition of the gold by these thr therefore added the value of gold as unexplained investment of the assessee. On appeal the Hon’ble High Court held that, t condition of invoking section 69A for the purpose of making additions of the value of jewellery, which the assessee is found to be the not recorded in the books of account, as income from undisclosed sources. The condition precedent for invoking that the assessee is found to be the ITA No.1353/Chny/20 Mr. Rangaswamy Bhaskaran :: 12 :: of these three ladies were also furnished before the ITO. The ITO rejected the explanation furnished by the assessee and his father without placing any material on record. It is now well-settled law that if no effort is made to controvert the contents of the affidavit , the has to be accepted as true Mehta Parikh & Co. v.CIT [1956] 30 ITR 181 (SC). There is nothing unusual that the three ladies who belonged to a respectable family of a political and social worker who had been a Municipal Councillor since 1950, were in possession of gold ornaments weighing 362.700 grams, i.e. , about 30 tolas valued at Rs. 58,03 1, i.e. , 10 tolas each lady. We accordingly delete the addition.” We also rely on the decision of Hon’ble Rajasthan High Court in the Mangilal Agarwal Vs ACIT (300 ITR 372) which was rendered on similar facts and circumstances as involved in the present case before us. In the decided case also, the assessee was subjected to search action and found to be in possession of gold, which he explained belonged three persons, who had handed over the same to the assessee for making new ornaments. These three persons also furnished their sworn affidavits affirming the ownership of the gold. The AO however found the source of acquisition of the gold by these three persons to be not fully verifiable and therefore added the value of gold as unexplained investment of the assessee. On appeal the Hon’ble High Court held that, t condition of invoking section 69A for the purpose of making additions of e of jewellery, bullion, or other valuable articles or money which the assessee is found to be the owner of any of these articles' not recorded in the books of account, as income from undisclosed condition precedent for invoking section 69A is the finding that the assessee is found to be the owner of any bullion, jewellery or /Chny/2024 (AY 2018-19) Mr. Rangaswamy Bhaskaran also furnished before the ITO. The ITO rejected the explanation furnished by the assessee and his father-in-law settled law that if no effort is made to controvert the contents of the affidavit , the same has to be accepted as true Mehta Parikh & Co. v.CIT [1956] 30 ITR 181 (SC). There is nothing unusual that the three ladies who belonged to a respectable family of a political and social worker who had been a ssession of gold ornaments weighing 362.700 grams, i.e. , about 30 tolas valued at Rs. 58,03 1, i.e. We also rely on the decision of Hon’ble Rajasthan High Court in the which was rendered on similar facts and circumstances as involved in the present case before us. In the decided case also, the assessee was subjected to search action and found to be in possession of gold, which he explained belonged to three persons, who had handed over the same to the assessee for making new ornaments. These three persons also furnished their sworn affidavits affirming the ownership of the gold. The AO however found the source of ee persons to be not fully verifiable and therefore added the value of gold as unexplained investment of the assessee. On appeal the Hon’ble High Court held that, the primary condition of invoking section 69A for the purpose of making additions of bullion, or other valuable articles or money 'of of any of these articles' and not recorded in the books of account, as income from undisclosed section 69A is the finding bullion, jewellery or other valuable articles. ownership has been raised statutorily in against the assessee, merely on the basis of the assessee's possession. burden lies on the revenue to establish the ownership of the assessee before raising any presumption against him. noted that, the three persons had confirmed their ownership in their affidavits and therefore the assessee cannot be treated as the owner merely because persons who claimed to be failed to explain source of their acq the addition u/s 69A of the Act. Useful reference in the present context may be made to the following observations of the Hon’ble High Court : “8. The primary condition of invoking section 69A for the purpose of making additions of the value of jewellery, bullion, or other valuable articles or money 'of which the assessee is found to be the owner of any of these articles' and not recorded in the books of account, as income from undisclosed sources. Apparently, the co invoking section 69A is the finding that the assessee is found to be the owner of any bullion, jewellery or other valuable articles. No presumption of ownership has been raised statutorily in favour of revenue and against the assessee section 69A merely on the basis of assessee's possession. On his disclaimer that such articles found in his possession do not belong to him, the burden lies on the revenue to establish the ownership of the assessee before raising any presumption against him. 9. So far as the finding that the money and valuable articles are owned by the assessee is concerned, the burden is squarely on the revenue because it is only on reaching such finding the opinion that can be given about the source of its acquisition. It is only on establishment of ownership of such articles either on admission of the assessee or ITA No.1353/Chny/20 Mr. Rangaswamy Bhaskaran :: 13 :: other valuable articles. The Court observed that, no presumption of ownership has been raised statutorily in favour of the revenue and against the assessee, nor is there any warrant to invoke section 69A basis of the assessee's possession. The Court held that, burden lies on the revenue to establish the ownership of the assessee presumption against him. On the given facts, noted that, the three persons had confirmed their ownership in their affidavits and therefore the assessee cannot be treated as the owner merely because persons who claimed to be owner of gold in question had failed to explain source of their acquisition. The Court accordingly deleted the addition u/s 69A of the Act. Useful reference in the present context may be made to the following observations of the Hon’ble High Court : 8. The primary condition of invoking section 69A for the purpose of ing additions of the value of jewellery, bullion, or other valuable articles or money 'of which the assessee is found to be the owner of any of these articles' and not recorded in the books of account, as income from undisclosed sources. Apparently, the condition precedent for invoking section 69A is the finding that the assessee is found to be the owner of any bullion, jewellery or other valuable articles. No presumption of ownership has been raised statutorily in favour of revenue and against the assessee, nor there is any warrant to invoke section 69A merely on the basis of assessee's possession. On his disclaimer that such articles found in his possession do not belong to him, the burden lies on the revenue to establish the ownership of the re raising any presumption against him. 9. So far as the finding that the money and valuable articles are owned by the assessee is concerned, the burden is squarely on the revenue because it is only on reaching such finding the opinion that can be given out the source of its acquisition. It is only on establishment of ownership of such articles either on admission of the assessee or /Chny/2024 (AY 2018-19) Mr. Rangaswamy Bhaskaran o presumption of favour of the revenue and nor is there any warrant to invoke section 69A The Court held that, the burden lies on the revenue to establish the ownership of the assessee On the given facts, the Court noted that, the three persons had confirmed their ownership in their affidavits and therefore the assessee cannot be treated as the owner gold in question had . The Court accordingly deleted the addition u/s 69A of the Act. Useful reference in the present context may be made to the following observations of the Hon’ble High Court :- 8. The primary condition of invoking section 69A for the purpose of ing additions of the value of jewellery, bullion, or other valuable articles or money 'of which the assessee is found to be the owner of any of these articles' and not recorded in the books of account, as income ndition precedent for invoking section 69A is the finding that the assessee is found to be the owner of any bullion, jewellery or other valuable articles. No presumption of ownership has been raised statutorily in favour of , nor there is any warrant to invoke section 69A merely on the basis of assessee's possession. On his disclaimer that such articles found in his possession do not belong to him, the burden lies on the revenue to establish the ownership of the 9. So far as the finding that the money and valuable articles are owned by the assessee is concerned, the burden is squarely on the revenue because it is only on reaching such finding the opinion that can be given out the source of its acquisition. It is only on establishment of ownership of such articles either on admission of the assessee or otherwise if assessee fails to explain satisfactorily the source of acquisition of such valuables that section 69A can be in additions into the total income of the assessee value of such articles as income from undisclosed sources for the assessment year relevant to previous year during which the assessee is found to be owner of such valuable articles. Therefore assessee in valuables found in possession of the assessee rests on the revenue and not with the assessee. What amount of evidence to establish ownership would depend on facts and circum case. In the present case, the Assessing Officer has started with the presumption of ownership merely on the basis that the assessee was found in possession of the aforesaid primary gold and gold ornaments by customs authority apprehending the possession of the assess breach of provisions of Gold Control Act. However, with clear finding reached by the CEGAT, which was though not binding but was relevant material to go into consideration, the assessee has displaced the presump-tion about ownership arising from mere primary gold and gold ornaments on 14 ultimate burden rested with the Assessing Officer to reach a finding about the ownership of such valuables vesting in the assessee with some material having nexus with the fin have noticed above that the finding reached in respect of all the three persons from whom the assessee claimed to have received the aforesaid valuables and on the basis of receipt he was claiming to be the owners the only finding reached by the Assessing Officer is that the said three persons have failed to prove their ownership because their explanation about source of acquisition of such gold ornaments by them was found to be suspect. The fact that Shri Bhopal Singh, Om Prakash Shri Gauri Shanker Singhal have failed to prove their ownership of the gold or, there were some discrepan them cannot lead to any inference that because the persons who claimed to have delivered or claims to b question have failed to explain the source of their acquisition that the assessee can be presumed to be the owner of such primary gold and gold ornaments, to displace the finding reached by the CEGAT that the gold ornaments and p whom he alleged to have received and do not belong to the assessee. 10. The logic that because the gold ornaments are not proved by three persons as belonging to them though it was admitted by each one of them that the attributed gold ornaments and primary gold derived from such ornaments belong to them respectively it belongs to the assessee suffers from legal lacuna. The finding cannot be considered to be a finding of fact which binds the appellate Court. T authorities stand vitiated not only by a wrong view of burden in ITA No.1353/Chny/20 Mr. Rangaswamy Bhaskaran :: 14 :: otherwise if assessee fails to explain satisfactorily the source of acquisition of such valuables that section 69A can be invoked for making additions into the total income of the assessee value of such articles as income from undisclosed sources for the assessment year relevant to previous year during which the assessee is found to be owner of such valuable articles. Therefore, the burden of proving ownership of the assessee in valuables found in possession of the assessee rests on the revenue and not with the assessee. What amount of evidence to establish ownership would depend on facts and circum- stances of each present case, the Assessing Officer has started with the presumption of ownership merely on the basis that the assessee was found in possession of the aforesaid primary gold and gold ornaments by customs authority apprehending the possession of the assess breach of provisions of Gold Control Act. However, with clear finding reached by the CEGAT, which was though not binding but was relevant material to go into consideration, the assessee has displaced the tion about ownership arising from mere possession of the primary gold and gold ornaments on 14-10-1987. Therefore, the ultimate burden rested with the Assessing Officer to reach a finding about the ownership of such valuables vesting in the assessee with some material having nexus with the finding of such ownership. We have noticed above that the finding reached in respect of all the three persons from whom the assessee claimed to have received the aforesaid valuables and on the basis of receipt he was claiming to be the owners reached by the Assessing Officer is that the said three persons have failed to prove their ownership because their explanation about source of acquisition of such gold ornaments by them was found to be suspect. The fact that Shri Bhopal Singh, Om Prakash Shri Gauri Shanker Singhal have failed to prove their ownership of the gold or, there were some discrepan-cies in the explanation furnished by them cannot lead to any inference that because the persons who claimed to have delivered or claims to be the owner of the gold in question have failed to explain the source of their acquisition that the assessee can be presumed to be the owner of such primary gold and gold ornaments, to displace the finding reached by the CEGAT that the gold ornaments and primary gold did belong to the three persons from whom he alleged to have received and do not belong to the assessee. 10. The logic that because the gold ornaments are not proved by three persons as belonging to them though it was admitted by each one of em that the attributed gold ornaments and primary gold derived from such ornaments belong to them respectively it belongs to the assessee suffers from legal lacuna. The finding cannot be considered to be a finding of fact which binds the appellate Court. The findings of tax authorities stand vitiated not only by a wrong view of burden in /Chny/2024 (AY 2018-19) Mr. Rangaswamy Bhaskaran otherwise if assessee fails to explain satisfactorily the source of voked for making additions into the total income of the assessee value of such articles as income from undisclosed sources for the assessment year relevant to previous year during which the assessee is found to be owner of such , the burden of proving ownership of the assessee in valuables found in possession of the assessee rests on the revenue and not with the assessee. What amount of evidence to stances of each present case, the Assessing Officer has started with the presumption of ownership merely on the basis that the assessee was found in possession of the aforesaid primary gold and gold ornaments by customs authority apprehending the possession of the assessee in breach of provisions of Gold Control Act. However, with clear finding reached by the CEGAT, which was though not binding but was relevant material to go into consideration, the assessee has displaced the possession of the 1987. Therefore, the ultimate burden rested with the Assessing Officer to reach a finding about the ownership of such valuables vesting in the assessee with ding of such ownership. We have noticed above that the finding reached in respect of all the three persons from whom the assessee claimed to have received the aforesaid valuables and on the basis of receipt he was claiming to be the owners reached by the Assessing Officer is that the said three persons have failed to prove their ownership because their explanation about source of acquisition of such gold ornaments by them was found to be suspect. The fact that Shri Bhopal Singh, Om Prakash Gupta and Shri Gauri Shanker Singhal have failed to prove their ownership of the cies in the explanation furnished by them cannot lead to any inference that because the persons who e the owner of the gold in question have failed to explain the source of their acquisition that the assessee can be presumed to be the owner of such primary gold and gold ornaments, to displace the finding reached by the CEGAT that the rimary gold did belong to the three persons from whom he alleged to have received and do not belong to the assessee. 10. The logic that because the gold ornaments are not proved by three persons as belonging to them though it was admitted by each one of em that the attributed gold ornaments and primary gold derived from such ornaments belong to them respectively it belongs to the assessee suffers from legal lacuna. The finding cannot be considered to be a he findings of tax authorities stand vitiated not only by a wrong view of burden in appreciating the evidence but having no nexus between the finding about the failure of Serve Shree Bhopal Singh, Om Prakash Gupta and Gauri Shanker Singhal to prove the own which they admit to have delivered to the respective goldsmiths through the assessee, MangilalAgarwal, for the purpose of making new ornaments as a piece of evidence to establish the ownership of the assessee. It is this failur subsequently affirmation of that finding without considering the vital aspect of the applicability of section 69A, it remains a finding with no material on the basis of which any finding could be reached that the assessee was owner of the primary gold and the gold ornaments found in his possession by the customs authority, which the assessee claimed to have received in the manner stated above, namely, from Shri Bhopal Singh, Om Prakash Gupta and Shri Gauri Shanker the gold ornaments and delivered to him for the purpose of making new ornaments and the primary gold found in possession of assessee was released from confiscation only on a clear finding that such primary gold belong to the abovenamed admitted their ownership in income persons' exist-ence is not in doubt. Their affidavits have been brought on record. The fact that because the ornaments were brought by these three persons, the assessee has described them as owners of the gold cannot be held against the assessee to hold him to prove the ownership. If these persons had not stated correctly about the ownership of the gold ornaments brought to assessee by them it cannot be ev the ownership of the assessee over the primary gold and gold ornaments found in his possession on 4 persons to the assessee. There is nothing to rebut the statements of said three persons brought different weight of assessee for remaking the new ornaments. Thus, the finding recorded by the IT authorities remains a finding on a wrong view of the burden of proof, by erroneous reading of the requirement of section 69A for the purpose of making addit ornaments in the hands of assessee in whose possession the same were found and by recording finding about the ownership of the assessee without any material but merely presuming him to be owner because Shri Bhopal Singh, Om Prakash Gupta and Shri Gauri Shankar Singhal have failed to prove their ownership, notwithstanding they are admitting that they brought the said gold to the assessee for making new ornaments, against which statement there is no evidence. Suc claim ownership of such ornaments also. 11. It may also be noticed here that section 69A cannot be invoked merely on the basis that a person is found in possession of any valuable article but it is only on his being further found to be the owner ITA No.1353/Chny/20 Mr. Rangaswamy Bhaskaran :: 15 :: appreciating the evidence but having no nexus between the finding about the failure of Serve Shree Bhopal Singh, Om Prakash Gupta and Gauri Shanker Singhal to prove the ownership of the gold ornaments which they admit to have delivered to the respective goldsmiths through the assessee, MangilalAgarwal, for the purpose of making new ornaments as a piece of evidence to establish the ownership of the assessee. It is this failure on the part of the Assessing Officer and subsequently affirmation of that finding without considering the vital aspect of the applicability of section 69A, it remains a finding with no material on the basis of which any finding could be reached that the assessee was owner of the primary gold and the gold ornaments found in his possession by the customs authority, which the assessee claimed to have received in the manner stated above, namely, from Shri Bhopal Singh, Om Prakash Gupta and Shri Gauri Shanker Singhal who brought the gold ornaments and delivered to him for the purpose of making new ornaments and the primary gold found in possession of assessee was released from confiscation only on a clear finding that such primary gold belong to the abovenamed three persons. The said persons had admitted their ownership in income-tax proceedings also. The three ence is not in doubt. Their affidavits have been brought on record. The fact that because the ornaments were brought by these s, the assessee has described them as owners of the gold cannot be held against the assessee to hold him to prove the ownership. If these persons had not stated correctly about the ownership of the gold ornaments brought to assessee by them it cannot be ev the ownership of the assessee over the primary gold and gold ornaments found in his possession on 4-10-1987 brought by said three persons to the assessee. There is nothing to rebut the statements of said three persons brought different weight of gold ornaments to the assessee for remaking the new ornaments. Thus, the finding recorded by the IT authorities remains a finding on a wrong view of the burden of proof, by erroneous reading of the requirement of section 69A for the purpose of making additions of the value of the primary gold and gold ornaments in the hands of assessee in whose possession the same were found and by recording finding about the ownership of the assessee without any material but merely presuming him to be owner because opal Singh, Om Prakash Gupta and Shri Gauri Shankar Singhal have failed to prove their ownership, notwithstanding they are admitting that they brought the said gold to the assessee for making new ornaments, against which statement there is no evidence. Suc claim ownership of such ornaments also. 11. It may also be noticed here that section 69A cannot be invoked merely on the basis that a person is found in possession of any valuable article but it is only on his being further found to be the owner /Chny/2024 (AY 2018-19) Mr. Rangaswamy Bhaskaran appreciating the evidence but having no nexus between the finding about the failure of Serve Shree Bhopal Singh, Om Prakash Gupta and ership of the gold ornaments which they admit to have delivered to the respective goldsmiths through the assessee, MangilalAgarwal, for the purpose of making new ornaments as a piece of evidence to establish the ownership of the e on the part of the Assessing Officer and subsequently affirmation of that finding without considering the vital aspect of the applicability of section 69A, it remains a finding with no material on the basis of which any finding could be reached that the assessee was owner of the primary gold and the gold ornaments found in his possession by the customs authority, which the assessee claimed to have received in the manner stated above, namely, from Shri Bhopal Singhal who brought the gold ornaments and delivered to him for the purpose of making new ornaments and the primary gold found in possession of assessee was released from confiscation only on a clear finding that such primary gold three persons. The said persons had tax proceedings also. The three ence is not in doubt. Their affidavits have been brought on record. The fact that because the ornaments were brought by these s, the assessee has described them as owners of the gold cannot be held against the assessee to hold him to prove the ownership. If these persons had not stated correctly about the ownership of the gold ornaments brought to assessee by them it cannot be evidence of the ownership of the assessee over the primary gold and gold 1987 brought by said three persons to the assessee. There is nothing to rebut the statements of gold ornaments to the assessee for remaking the new ornaments. Thus, the finding recorded by the IT authorities remains a finding on a wrong view of the burden of proof, by erroneous reading of the requirement of section 69A for the ions of the value of the primary gold and gold ornaments in the hands of assessee in whose possession the same were found and by recording finding about the ownership of the assessee without any material but merely presuming him to be owner because opal Singh, Om Prakash Gupta and Shri Gauri Shankar Singhal have failed to prove their ownership, notwithstanding they are admitting that they brought the said gold to the assessee for making new ornaments, against which statement there is no evidence. Such persons 11. It may also be noticed here that section 69A cannot be invoked merely on the basis that a person is found in possession of any valuable article but it is only on his being further found to be the owner of such money, bullion, jewellery, or other valuable articles that section 69A can be invoked for raising presumption. This basic link is missing through the proceedings resulting the Tribunal affirming the orders of the CIT(A) and the Assessing Officer ca …….. 15. To wit in the present case, the real question before the authority below was whether the primary gold and the gold ornaments found in possession of the assessee on 14 The assessee has explaine gold and the gold ornaments came in his possession when the search of the customs took place at his residence and the same were seized. In support of said explanation, he has produced said three persons, who had brought the ornaments to him and have furnished their affidavits admitting such fact. 16. We have noticed above that the finding in each case has been recorded about those persons who had delivered the ornaments to the assessee, that they have failed to p ornaments and on that basis, the assessing authority has jumped to the conclusion that the said ornaments were belonging to the assessee and those findings have been affirmed by the CIT(A) and the Tribunal. 17. By the parity of Rawatmull's case (supra), it can well be said that merely because the explanation furnished by Shri Bhopal Singh, Om Prakash Gupta and Shri Gauri Shanker Singhal about the purpose for which the gold ornaments were delivered for making new ornaments were the ornaments belonging to their family was found to be not acceptable could not have provided any nexus between the facts and conclusion reached by drawing inference therefrom that the primary gold and gold ornaments belonged to the assessee. 18. As a result, in view of the aforesaid discussion, this appeal must succeed. Accordingly, this appeal is allowed. 12. In light of the above therefore, we uphold the Ld. CIT( deleting the addition made on account of unexplained jewellery and dismiss this ground of the Revenue. ITA No.1353/Chny/20 Mr. Rangaswamy Bhaskaran :: 16 :: money, bullion, jewellery, or other valuable articles that section 69A can be invoked for raising presumption. This basic link is missing through the proceedings resulting the Tribunal affirming the orders of the CIT(A) and the Assessing Officer cannot be sustained. 15. To wit in the present case, the real question before the authority below was whether the primary gold and the gold ornaments found in possession of the assessee on 14-10-1987 were owned by the assessee. The assessee has explained the transactions through which the primary gold and the gold ornaments came in his possession when the search of the customs took place at his residence and the same were seized. In support of said explanation, he has produced said three persons, who brought the ornaments to him and have furnished their affidavits admitting such fact. 16. We have noticed above that the finding in each case has been recorded about those persons who had delivered the ornaments to the assessee, that they have failed to prove their ownership to the ornaments and on that basis, the assessing authority has jumped to the conclusion that the said ornaments were belonging to the assessee and those findings have been affirmed by the CIT(A) and the Tribunal. 17. By the parity of reasonings which prevailed in Daulatram Rawatmull's case (supra), it can well be said that merely because the explanation furnished by Shri Bhopal Singh, Om Prakash Gupta and Shri Gauri Shanker Singhal about the purpose for which the gold ornaments livered for making new ornaments were the ornaments belonging to their family was found to be not acceptable could not have provided any nexus between the facts and conclusion reached by drawing inference therefrom that the primary gold and gold ornaments belonged to the assessee. 18. As a result, in view of the aforesaid discussion, this appeal must succeed. Accordingly, this appeal is allowed.” In light of the above therefore, we uphold the Ld. CIT( deleting the addition made on account of unexplained jewellery and dismiss this ground of the Revenue. /Chny/2024 (AY 2018-19) Mr. Rangaswamy Bhaskaran money, bullion, jewellery, or other valuable articles that section 69A can be invoked for raising presumption. This basic link is missing through the proceedings resulting the Tribunal affirming the orders of the CIT(A) 15. To wit in the present case, the real question before the authority below was whether the primary gold and the gold ornaments found in 1987 were owned by the assessee. d the transactions through which the primary gold and the gold ornaments came in his possession when the search of the customs took place at his residence and the same were seized. In support of said explanation, he has produced said three persons, who brought the ornaments to him and have furnished their affidavits 16. We have noticed above that the finding in each case has been recorded about those persons who had delivered the ornaments to the rove their ownership to the ornaments and on that basis, the assessing authority has jumped to the conclusion that the said ornaments were belonging to the assessee and those findings have been affirmed by the CIT(A) and the Tribunal. reasonings which prevailed in Daulatram Rawatmull's case (supra), it can well be said that merely because the explanation furnished by Shri Bhopal Singh, Om Prakash Gupta and Shri Gauri Shanker Singhal about the purpose for which the gold ornaments livered for making new ornaments were the ornaments belonging to their family was found to be not acceptable could not have provided any nexus between the facts and conclusion reached by drawing inference therefrom that the primary gold and gold ornaments 18. As a result, in view of the aforesaid discussion, this appeal must In light of the above therefore, we uphold the Ld. CIT(A)’s action deleting the addition made on account of unexplained jewellery and In the result, appeal filed by the Order pronounced on the Sd/- (जगदीश) (JAGADISH) लेखा सद\f/ACCOUNTANT MEMBER चे\u0003ई/Chennai, \u0005दनांक/Dated: 08th November TLN, Sr.PS आदेश क\r \u000eितिलिप अ\u0014ेिषत/Copy to 1. अपीलाथ\u0010/Appellant 2. \u0011\u0012थ\u0010/Respondent 3. आयकरआयु\u0018/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय\u0011ितिनिध/DR 5. गाड फाईल/GF ITA No.1353/Chny/20 Mr. Rangaswamy Bhaskaran :: 17 :: In the result, appeal filed by the Revenue is dismissed. Order pronounced on the 08th day of November, 2024 Sd/ /ACCOUNTANT MEMBER (एबी टी. (ABY T. VARKEY \u0001याियक सद\bय/JUDICIAL MEMBER November, 2024. Copy to: , Chennai / Madurai / Salem / Coimbatore. /Chny/2024 (AY 2018-19) Mr. Rangaswamy Bhaskaran Revenue is dismissed. 24, in Chennai. Sd/- . वक ) ABY T. VARKEY) /JUDICIAL MEMBER , Chennai / Madurai / Salem / Coimbatore. "