Bina Aggarwal, New Delhi V. ACIT Central Circle-08, New Delhi

ITA 2349/DEL/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 6731 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 18-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY GOYAL
• Keywords: Unexplained investment; Search and seizure; Application of stay; Tangible material; Capital Gains
• Section: 132; 143(3); 142(1); 153A; 201; 69A; 139(1); 139(4); 20

Judgement Text

1 ITA NO. 2349/DEL/2019 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A NEW DELHI BEFORE SHRI N. K. BILLAIYA, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER I.T.A. NO. 2349/DEL/20 19 (A.Y. 2015-16) A/W STAY APPLICATION NO. 636/DEL/2019 BINA AGGARWAL 2 ND FLOOR, 19 LOCAL SHOPPING COMPLEX, NEAR PUSHPA BHAWAN, MADANGIR NEW DELHI PAN : ADBPA1417B (APPELLANT) VS . ACIT CENTRAL CIRCLE-08 NEW DELHI (RESPONDENT) ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER DATED 21.02.2019 PASSED BY CIT(A)-24, NEW DELHI FOR ASSESSMENT YEAR 2015-16. 2. THE GROUNDS OF APPEAL ARE AS UNDER: 1. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE COMMISSIONER OF INCOME TAX (APPEALS)- XXIV, NEW DELHI [THE LD. CIT(A)], HAS ERRED IN UPHOLDING THE ORDER OF THE ASSISTANT COMMISSION OF INCOME TAX, CENTRAL CIRCLE- 08, NEW DELHI (THE LD. ASSESSING OFFICER) IN UPHO LDING THE ADDITION OF RS. 1,33,61,901 MADE ON ACCOUNT OF ALLEGED LONG-TERM CA PITAL GAIN ON JEWELLERY. APPELLANT BY SH. VED JAIN, ADV. & SH. HIMANSHU AGGARWAL, C.A RESPONDENT BY SH. SANJAY GOYAL, CIT,DR DATE OF HEARING 05.09.2019 DATE OF PRONOUNCEMENT 30.10.2019 2 ITA NO. 2349/DEL/2019 2. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE COMMISSIONER OF INCOME TAX (APPEALS)- XXIV, NEW DELHI [THE LD. CIT(A)], HAS ERRED IN UPHOLDING THE ORDER OF THE ASSISTANT COMMISSION OF INCOME TAX, CENTRAL CIRCLE- 08, NEW DELHI (THE LD. ASSESSING OFFICER) IN UPHO LDING THE ADDITION OF RS. 8,59,018 MADE UNDER SECTION 69A ON ACCOUNT OF ALLEG ED UNEXPLAINED INVESTMENT IN JEWELLERY. THE APPELLANT CRAVES FOR LEAVE TO ADD, AMEND, VARY, OMIT OR SUBSTITUTE ANY OF THE AFORESAID GROUNDS OF APPEAL OR ADD ANY OF THE A FORESAID GROUND OF APPEAL(S) AT ANY TIME BEFORE OR AT THE TIME OF HEAR ING OF THE APPEAL. 3. A SEARCH AND SEIZURE OPERATION U/S 132 OF THE AC T WAS CONDUCTED IN THE CASE OF PRIYAGOLD GROUP OF CASES ON 16.12.2014 BY I NVESTIGATION WING, NEW DELHI. THE ASSESSEES CASE WAS ALSO COVERED IN SEAR CH OPERATION U/S 132 OF THE ACT. CONSEQUENT UPON SEARCH ACTION, SEARCH ASSESSME NT PROCEEDINGS WERE TAKEN UP AND STATUTORY NOTICES WERE ISSUED. SUBSEQU ENT TO THE AFORESAID SEARCH ACTION, INFORMATION WAS RECEIVED FROM INVEST IGATION WING, KOLKATA THAT A SEARCH & SEIZURE OPERATION U/S 132 OF THE ACT WAS C ONDUCTED UPON THE ASSESSEE ON 19.11.2015. IN VIEW OF THE SUBSEQUENT S EARCH ON 19.11.2015, ASSESSMENT PROCEEDINGS INITIATED IN CONSEQUENCE TO SEARCH OPERATION CONDUCTED ON THE ASSESSEE ON 16.12.2014 WERE ABATED . THE ASSESSING OFFICER THEREAFTER ISSUED NOTICE U/S 153A OF THE ACT DATED 01.06.2017 & 06.06.2017 AND IN RESPONSE THERETO, THE ASSESSEE FILED A REPL Y STATING THAT THE RETURN ORIGINALLY FILED U/S 139(1) BE TREATED AS RETURN IN RESPONSE TO THE NOTICE ISSUED U/S 153A OF THE ACT. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE FILED RETURN OF INCOME U/S 139(4) OF THE ACT ON 20 TH JANUARY, 2016 DECLARING TOTAL INCOME OF RS. 23,26,080/-. DURING THE COURSE OF THE SEARCH OPERATION ON 16.12.2014 AT THE RESIDENTIAL PREMISES OF THE ASSES SEE AND HER HUSBAND, JEWELLERY (GOLD, DIAMOND, SILVER) AMOUNTING TO RS. 18,74,303/- WAS FOUND IN POSSESSION OF THE ASSESSEE AND HER HUSBAND. FURTHER , DURING THE OPERATION OF THE LOCKER NO. DD-22, MAINTAINED WITH ORIENTAL BANK OF COMMERCE, NOIDA IN THE NAME OF THE ASSESSEE AND HER HUSBAND, JEWELLERY AMOUNTING TO RS. 35,96,263/- WAS FOUND. HENCE, TOTAL JEWELLERY FOUND FROM THE POSSESSION OF THE 3 ITA NO. 2349/DEL/2019 ASSESSEE AND HER HUSBAND WAS RS. 54,70,566/-. HOWEV ER, ON VERIFICATION, THE ASSESSING OFFICER FOUND THAT AS PER THE WEALTH TAX RETURN OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2013-14, THE ASSESSEE DECLARED JEWELLERY AMOUNTING TO RS. 1,93,05,359/-. THE ASSESSING OFFICER FURTHER O BSERVED THAT THE HUSBAND OF THE ASSESSEE HAD NOT FILED ANY WEALTH TAX RETURN. H OWEVER, THE TOTAL JEWELLERY IN THEIR POSSESSION WAS FOUND TO BE RS. 43,17,442/- ONLY. THE ASSESSEE AND HER HUSBAND IN THEIR RESPECTIVE STATEMENTS, RECORDED DU RING THE SEARCH OPERATION STATED THAT APART FROM THE JEWELLERY FOUND DURING T HE SEARCH, THE REST OF THE JEWELLERY WAS KEPT WITH THE RELATIVES OR VALUER. TH E ASSESSING OFFICER OBSERVED THAT THEY WERE NOT SURE WHERE THE VALUABLE JEWELLER Y WAS KEPT. THEY COULD NOT FURNISH THE NAME AND ADDRESS OF THE RELATIVES. THEY WERE UNABLE TO FURNISH ANY VALUERS RECEIPT OR CONFIRMATION FROM THE RELATIVES . DURING THE POST SEARCH PROCEEDINGS / ASSESSMENT PROCEEDINGS, NEITHER THE P ARTICULARS OF THE RELATIVES NOR THE CONFIRMATION FROM ANY VALUER WAS PROVIDED. AS PER THE ASSESSING OFFICER, THE ASSESSEE AND HER HUSBAND COULD NOT SUB STANTIATE THE STATEMENTS RECORDED DURING THE SEARCH ACTION BY PROVIDING DETA ILS OF CUSTODY OF THE VALUABLE JEWELLERY OR DETAILS REGARDING RELATIVES & VALUER WHERE JEWELLERY WAS KEPT. DURING THE COURSE OF THE ASSESSMENT PROCEEDIN GS, THE ASSESSING OFFICER ISSUED SHOW CAUSE NOTICE DATED 20.11.2017 MENTIONIN G THAT THE ASSESSEE DID NOT PRODUCE ANY DOCUMENT OR PRODUCED ANY PERSON IN SUPPORT OF THE FACT THAT JEWELLERY FOUND SHORT WAS AVAILABLE WITH THE ASSESS EE AND HENCE WHY THE SAME SHOULD NOT BE TREATED AS SOLD AND ACCORDINGLY CAPIT AL GAIN ON THE SALE OF THE JEWELLERY BE BROUGHT TO TAX. IN REPLY, THE ASSESSEE STATED THAT SHE HAD NOT SOLD/PARTED WITH ANY JEWELLERY TILL THE TIME OF SEA RCH AND FURNISHED THE DETAILS OF JEWELLERY. THE ASSESSEE ALSO OFFERED TO FILE AN AFFIDAVIT. THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE REPLY OF THE ASSESSEE. T HE ASSESSING OFFICER ONCE AGAIN ON 29.11.2017 CONFRONTED TO THE ASSESSEE. THE ASSESSEE REITERATED THAT THE COMPLETE JEWELLERY IS WITH THE FAMILY AND IS US ED BY THE FAMILY MEMBERS. THE ASSESSING OFFICER HELD THAT THE ASSESSEE AND HE R HUSBAND COULD NOT SUBSTANTIATE THE STATUS OF SHORT JEWELLERY AND HENC E IT WAS HELD THAT THEY HAVE SOLD THE SHORT GOLD JEWELLERY OF 6267.39 GRAMS IN T HE PREVIOUS YEAR RELEVANT TO 4 ITA NO. 2349/DEL/2019 THE ASSESSMENT YEAR UNDER CONSIDERATION. ACCORDINGL Y, THE ASSESSING OFFICER ADOPTED YEAR-1997 AS THE YEAR OF PURCHASE OF THE JE WELLERY WHERE THE ASSESSEE DECLARED THE JEWELLERY UNDER VDIS AND SALE PRICE OF THE JEWELLERY WAS ADOPTED, THE SAME WAS TAKEN BY THE ASSESSEE IN THE WEALTH TA X RETURN FOR THE ASSESSMENT YEAR 2013-14 AND COMPUTED THE LONG TERM CAPITAL GAIN AT RS. 1,33,61,901/- AND BROUGHT TO TAX IN THE HANDS OF TH E ASSESSEE. THE ASSESSING OFFICER NOTICED THAT DURING THE COURSE OF THE SEARC H AT THE PREMISES OF THE ASSESSEE AND HER HUSBAND, DIAMOND JEWELLERY AMOUNTI NG TO RS. 3,19,250/- WAS FOUND FROM THE RESIDENTIAL PREMISES WHEREAS DIA MOND JEWELLERY AMOUNTING TO RS. 6,67,700/- WAS FOUND FROM THE LOCKER OF THE ASSESSEE AND HER HUSBAND, WHICH WAS SEIZED DURING THE SEARCH AS THE SAME WAS NOT DECLARED IN THEIR LAST FILED WEALTH TAX RETURNS. HUSBAND OF THE ASSESSEE HAD NEVER FILED THE WEALTH TAX RETURN AND STATED THAT THE EXPLANATION WITH REG ARD TO THE JEWELLERY / ARTICLES FOUND DURING SEARCH CAN BE GIVEN BY HIS WI FE ONLY AS IT BELONGS TO HER. THE ASSESSEE HAS TAKEN A STAND THAT SINCE THE JEWEL LERY WAS FOUND SHORT THAN DECLARED IN THE WEALTH TAX RETURN, AS SUCH, THE SAM E CANNOT BE TREATED AS UNDECLARED JEWELLERY. THE ASSESSING OFFICER OBSERV ED THAT THE DIAMOND JEWELLERY FOUND FROM THE RESIDENCE AND FROM LOCKER OF THE ASSESSEE AND HER HUSBAND NEVER DISCLOSED THIS ASPECT IN THEIR WEALTH TAX RETURN. HENCE, THE ASSESSING OFFICER HELD THAT THE DIAMOND JEWELLERY F OUND IN THEIR POSSESSION DURING THE SEARCH OPERATION ON 16.12.2014 AND DURIN G OPERATION OF LOCKER ON 30.01.2015, THE SAME HAS BEEN ACQUIRED BY THE ASSES SEE AND HER HUSBAND FROM UNDISCLOSED INCOME AND IT IS AN UNEXPLAINED IN VESTMENT OF THE ASSESSEE AND HER HUSBAND DURING THE YEAR I.E. 2014-15 AS THE Y COULD NOT PRODUCE ANY PURCHASE BILL/VOUCHER. THE VALUE OF THE SAID DIAMON D JEWELLERY WAS TAKEN AS PER THE VALUATION DONE DURING THE SEARCH PROCEEDING S WHICH AMOUNTED TO RS. 8,59,018/-. HENCE, THE DIAMOND JEWELLERY OF RS. 8,5 9,018/- WAS ADDED TO THE INCOME OF THE ASSESSEE AS HER UNEXPLAINED INVESTMEN T U/S 69A OF THE ACT. THE ASSESSMENT WAS COMPLETED U/S 153A/ 143(3) OF THE AC T AT TOTAL INCOME OF RS. 1,65,47,000/- ON 31.12.2017 AFTER MAKING THE ADDITI ONS. 5 ITA NO. 2349/DEL/2019 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE. 5. THE LD. AR SUBMITTED THAT AS REGARDS TO GROUND N O. 1 RELATING TO ADDITIONS ON ACCOUNT OF LONG TERM CAPITAL GAIN ON S ALE OF JEWELLERY OF RS. 1,33,61,901/- DURING A.Y. 2015-16, THE ASSESSEE FI LED HER RETURN OF INCOME ON 20.01.2016 DECLARING TOTAL INCOME OF RS. 23,26,080/ -. THE ASSESSEE RECEIVED SALARY FROM M/S. SURYA FOOD & AGRO LTD AND INTEREST INCOME FROM VARIOUS PERSONAL INVESTMENTS. A SEARCH AND SEIZURE OPERATIO N U/S 132(1) OF THE ACT WAS CONDUCTED AT THE BUSINESS AND RESIDENTIAL PREMISES OF THE PRIYAGOLD GROUP OF COMPANIES, ITS DIRECTORS & FAMILY MEMBERS ON DECEMB ER 16, 2014. DURING THE SEARCH OPERATIONS THE DETAILS OF JEWELLERY FOUND IN THE POSSESSION OF THE APPLICANT/ ASSESSEE AND HER HUSBAND ARE AS UNDER : - SR. NO. PARTICULARS JEWELLERY (VALUE IN RS.) 1. RE SIDENTIAL PREMISES : B - 14, SECTOR - 14, NOIDA 18,74,303 (332.4GM) 2. BANK LOCKER NO. DD - 22, ORIENTAL BANK OF COMMERCE, SECTOR-27, NOIDA 35,96,263 (1115.03GM) THE ASSESSING OFFICER OBSERVED THAT AS PER WEALTH TAX RETURN FOR A.Y. 2013-14, THE ASSESSEE DECLARED THE AMOUNT OF JEWEL LERY AMOUNTING TO RS. 1,93,05,539/- AND THE HUSBAND OF THE ASSESSEE HAS N OT FILED ANY WEALTH TAX RETURN. THE ASSESSING OFFICER THEREAFTER ISSUED SHO W CAUSE NOTICE U/S 142(1) TO EXPLAIN THE DIFFERENCE BETWEEN THE JEWELLERY FOUND IN THE POSSESSION AND THE JEWELLERY DECLARED IN THE WEALTH TAX RETURNS. THE A SSESSEE IN RESPONSE TO THE SAME SUBMITTED REPLY DATED 08.12.2017. THE LD. AR S UBMITTED THAT SHE LIVES IN A JOINT FAMILY AND HAS NOT PARTED WITH OR SOLD A NY OF THE JEWELLERY AND SUBMITTED THE DETAILS OF THE JEWELLERY. THE LD. AR FURTHER SUBMITTED THAT THE AFFIDAVIT TO THIS EFFECT THAT SHE HAS NOT SOLD OR P ARTED OF WITH ANY JEWELLERY WAS ALSO PLACED BEFORE THE ASSESSING OFFICER. THE DETAI LS OF THE JEWELLERY OF WHOLE FAMILY WAS ALSO SUBMITTED BEFORE THE ASSESSING OFF ICER. THE LD. AR POINTED OUT 6 ITA NO. 2349/DEL/2019 THAT THE ASSESSING OFFICER HAS ACCEPTED THE FACT AT PARA 7 INTO (IB) AT PAGE 6 OF THE ASSESSMENT ORDER THAT THE JEWELLERY ITEMS FOUND DURING THE SEARCH ARE SAME ARE AS WHAT DECLARED IN WEALTH TAX RETURNS. TH EREAFTER, THE ASSESSING OFFICER AT PAGE 7 PARA 7 (A)(I) OF THE ASSESSMENT O RDER CALCULATED LONG TERM CAPITAL GAINS ON THE PRESUMPTION AND WITHOUT ANY MA TERIAL ON RECORD THAT THE BALANCE JEWELLERY OF 6267.3 GRAMS HAVE BEEN SOLD FO R WHICH CAPITAL GAIN HAS NOT BEEN OFFERED AND IMPOSED TAX THEREON. ON APPEA L BEFORE THE CIT(A), THE CIT(A) CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER DESPITE THERE BEING NO MATERIAL WITH THE ASSESSING OFFICER THAT SUCH JE WELLERY WAS SOLD BY THE ASSESSEE. THE LD. AR SUBMITTED THAT THE ADDITIONS M ADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A) IS PURELY BASED ON SURMISES ONLY AND SANS ANY MATERIAL FOUND DURING THE SEARCH THAT THE ASSES SEE HAS SOLD ANY JEWELLERY. THE ASSESSING OFFICER ADOPTED ARBITRARY APPROACH OF DETERMINING THE CAPITAL GAINS ON THE ALLEGED SALES BY CALCULATING THE LONG TERM CAPITAL IN THE FOLLOWING MANNER WITHOUT ANY DOCUMENT ON RECORD: I. THE ASSESSING OFFICER TOOK THE COST OF ACQUISI TION OF THE JEWELLERY TO BE THE AMOUNT IN VDIS VALUATION OF RS. 2,14,680/- ASSU MING THE PURCHASES WERE MADE IN FY 1997-98. II. THE ASSESSING OFFICER TOOK THE SALES CONSIDERA TION AT THE PRICE OF THE JEWELLERY TO BE THE AMOUNT DECLARED IN WEALTH TAX R ETURN FOR AY 2013-14 OF RS. 2237.46/- PER GRAM. III. THEREAFTER APPLYING THE INDEXATION FOR FY 201 3-14 AND FY 1997-98 THE ASSESSING OFFICER CALCULATED LONG TERM CAPITAL GAIN S ON ALLEGED SALES. THE LD. AR SUBMITTED THAT THE ASSESSING OFFICER HIM SELF ACCEPTED THE QUANTITY / WEIGHT OF GOLD FOR AY 2014-15. THUS, THE ABOVE AD DITIONS ARE MERELY ON SUSPICIONS ONLY. THE LD. AR FURTHER SUBMITTED THAT THE ASSESSEE AT THE TIME OF ASSESSMENT PROCEEDINGS SUBMITTED THE FOLLOWING DOCU MENTS STATING THAT SHE HAS NOT SOLD OR PARTED WITH ANY JEWELLERY: 7 ITA NO. 2349/DEL/2019 SUMMARY OF JEWELLERY OF WHOLE FAMILY AFFIDAVIT CONFIRMING THAT NO PART OF JEWELLERY IS S OLD DETAILS OF JEWELLERY OF SMT. BINA AGARWAL AND MANOJ AGARWAL COPY OF WEALTH TAX RETURN OF THE FAMILY MEMBERS :- - BINA AGARWAL FOR AY 2014-15 AND AY 2015-16 - B.P.AGARWAL FOR AY 2014-15 AND AY 2015-16 - USHA DEVI AGARWAL FOR AY 2014-15 AND AY 2015-16 - SHEKHAR AGARWAL FOR AY 2015-16 THE LD. AR FURTHER SUBMITTED THAT IT IS A SETTLED P OSITION IN LAW THAT THE ADDITIONS CANNOT BE MADE IN THE ABSENCE OF ANY MATE RIAL ON RECORD MERELY ON SURMISES AND CONJECTURES. THE LD. AR RELIED UPON TH E DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF LALCHAND BHAGAT AMBIC A RAM VS. CIT [1959] 37 ITR 288 (SC). THE LD. AR SUBMITTED THAT WITHOUT PRE JUDICE TO THE EARLIER SUBMISSIONS IT IS PRAYED THAT THE VALUE OF GOLD JEW ELLERY RELATING TO AY 1987- 1988 WAS RS. 14.10.624/-. THUS, THE VALUE OF RS. 2 ,14,860/- AND THE RATE OF INDEXATION FOR FY 1997-98 I.E. 305, ADOPTED BY THE ASSESSING OFFICER IS ARBITRARY AND CANNOT BE ADOPTED. THE CIT(A) OBSERVE D THAT THE AFFIDAVIT FILED BY THE ASSESSEE IS SELF-SERVING DOCUMENT AND THE FACT S STATED THEREIN CANNOT BE ACCEPTED AS EVIDENCE. IT IS THE SETTLED PRINCIPLE O F LAW THAT THE DECISION MUST REST NOT ON SUSPICION BUT ON LEGAL TESTIMONY. THE L D. AR RELIED UPON THE DECISION OF MEHTA PARIKH & CO. VS. CIT REPORTED IN 30 ITR 181 (SC). THUS, THE LD. AR SUBMITTED THAT IT IS WELL ESTABLISHED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS THAT THE ASSESSEE HAS NOT SO LD ANY PART OF THE JEWELLERY AND ACCORDINGLY THE ALLEGATIONS MADE BY THE ASSESSI NG OFFICER AND THE CIT(A) ARE MERELY ON THE BASIS OF SURMISES AND ARE WITHOUT ANY COGENT EVIDENCE. THE LD. AR PRAYED THAT THE ADDITIONS BE DELETED. 6. THE LD. DR SUBMITTED THAT THE FACT REMAINS THAT JEWELLERY WAS SHORT AS REGARDS THE DETAILS FILED IN THE WEALTH TAX RETURNS . THE LD. DR FURTHER RELIED UPON THE ASSESSMENT ORDER AND THE ORDER OF THE CIT( A). 8 ITA NO. 2349/DEL/2019 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL T HE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS PERTINENT TO NOTE THAT A S REGARDS GROUND NO. 1 , THE ASSESSEE HAS GIVEN THE EXPLANATION THAT THE SHORT O F THE JEWELLERY FOUND DURING THE SEARCH WAS DUE TO THE REASON THAT IN A RECENT T IME THE ASSESSEES DAUGHTER GOT MARRIED AND SOME OF THE JEWELLERY IS EITHER WIT H THE RELATIVES OR WITH THE VALUER. THESE FACTS WERE BROUGHT ON RECORD DURING T HE SEARCH AND IN THE STATEMENT OF THE ASSESSEE TAKEN DURING THE SEARCH H AS GIVEN DETAILS OF THE RELATIVES OF ASSESSEE WITH WHOM SHE HAS KEPT THE JE WELLERY. IT IS THE FACT THAT THE ASSESSEE HAS NOT FILED ANY CONFIRMATION OF THES E RELATIVES BUT IT IS ALSO PERTINENT TO NOTE THAT THE REVENUE HAS NOT ISSUED 1 33(6) NOTICE FOR OBTAINING THE REAL PICTURE OF ASSESSEES SUBMISSIONS. THERE I S NO MECHANISM UNDER THE PROVISIONS OF INCOME TAX ACT, IF THERE IS SHORT OF THE JEWELLERY DECLARED BY THE ASSESSEE THEN THE SAME SHOULD BE TREATED AS SOLD AN D THE CAPITAL GAIN IS ATTRACTED. IN THE PRESENT CASE THE ASSESSING OFFICE R AS MERELY SUSPECTED THAT THE JEWELLERY WAS SOLD, BUT HAS NOT BROUGHT ANY MAT ERIAL ON RECORD. THEREFORE THE ASSESSING OFFICER AS WELL AS CIT(A) OVERLOOKED THE PRACTICAL ASPECT THAT THE JEWELLERY IS WITH RELATIVES / VALUER. HENCE, GROUND NO. 1 OF THE ASSESSEES APPEAL IS ALLOWED. 8. AS REGARDS GROUND NO. 2 RELATING TO ADDITION ON ACCOUNT OF INVESTMENT ON JEWELLERY U/S 69A OF RS. 8,59,018/-, THE LD. AR SUB MITTED THAT THE ASSESSING OFFICER OBSERVED THAT DURING THE SEARCH OPERATION O F BANK LOCKER IN ORIENTAL BANK OF COMMERCE, DIAMOND JEWELLERY OF RS. 8,59,018 /- WAS FOUND AND THE SAME WAS NOT DECLARED IN THE WEALTH TAX RETURNS. AT THE TIME OF HEARING, THE LD. AR SUBMITTED THAT IF IT IS THE CASE OF THE REVENUE THAT THE JEWELLERY IS FOUND SHORT THEN THERE CAN BE A CASE WHERE THERE IS AN UN DISCLOSED JEWELLERY. NO LOOSE DIAMONDS WERE FOUND DURING THE SEARCH PROCEED INGS AND ALL THE JEWELLERY WAS STUDDED IN THE GOLD JEWELLERY. THUS, NO ADDITIO NS CAN BE MADE ON SUCH COUNT. THE ADDITIONS MADE ARE PURELY ON SURMISES AN D SANS ANY MATERIAL ON RECORD FOUND DURING THE SEARCH THAT THE ASSESSEE HA S MADE INVESTMENT IN THE DIAMOND JEWELLERY. THE LD. AR FURTHER SUBMITTED THA T THE ADDITIONS CANNOT BE 9 ITA NO. 2349/DEL/2019 MADE MERELY ON THE BASIS OF SUSPICION. THE LD. AR R ELIED UPON THE DECISION OF UMACHARAN SHAW & BROS. VS. CIT REPORTED IN 37 ITR 2 71 (SC). LD. AR SUBMITTED THAT THE ASSESSEE MADE FULL DISCLOSURE AN D HAS SUBMITTED THE DETAILS OF THE JEWELLERY. THE ASSESSING OFFICER AND THE CIT (A) ACCEPTED THE DETAILS SUBMITTED BY THE ASSESSEE. THUS, IN THE ABSENCE OF ANY TANGIBLE MATERIAL ON RECORD THE ADDITIONS MADE CANNOT BE SUSTAINED. THE LD. AR FURTHER RELIED UPON THE DECISION OF THE HONBLE DELHI ITAT IN THE CASE OF SHRI RAJ KUMAR KALRANIA V. DCIT IN ITA 1397/DEL/2015 ORDER DATED 30.05.2018. THE LD. AR FURTHER SUBMITTED THAT THE DIAMONDS ARE PRECIOUS STONES AND ARE PART OF THE JEWELLERY. THE ASSESSEE SEEKS SUPPORT FROM THE DEFINITION OF J EWELLERY UNDER WEALTH TAX ACT. FURTHER, RELIANCE IS PLACED ON THE DECISION OF THE DELHI ITAT IN THE CASE OF KUMKUM KANODIA VS. DCIT IN ITA NO. 5260/DEL/2014 . LD. AR SUBMITTED THAT MERELY BECAUSE THE JEWELLERY IS STUDDED WITH THE DI AMOND OF 47.18 CARAT IN THE INSTANT CASE, THE SAME CANNOT BE ADDED IN THE HANDS OF THE ASSESSEE WHEN SUCH JEWELLERY FORMED PART OF THE GROSS WEIGHT OF T HE JEWELLERY FOUND FROM THE PREMISES OF THE ASSESSEE. ON THE BASIS OF ABOVE FAC TS AND CIRCUMSTANCE OF THE CASE, THE ASSESSEE HAS NOT PURCHASED ANY DIAMOND JE WELLERY AND ACCORDINGLY THE ALLEGATIONS MADE BY THE ASSESSING OFFICER AND T HE CIT(A), THE LD. AR PRAYED THAT THE SAME SHOULD BE DELETED. 9. THE LD. DR RELIED UPON THE ASSESSMENT ORDER AND THE ORDER OF THE CIT(A). 10. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS PERTINENT TO NOTE THAT T HE DIAMOND JEWELLERY IS ALWAYS STUDDED WITH GOLD AND IT IS NOT A CASE OF REVENUE T HAT SEPARATE DIAMONDS WERE FOUND DURING THE SEARCH OPERATION. MERELY BECAUSE THE JEWELLERY IS STUDDED WITH THE DIAMOND OF 47.18 CARAT IN THE INSTANT CASE , THE SAME CANNOT BE ADDED IN THE HANDS OF THE ASSESSEE WHEN SUCH JEWELLERY FO RMED PART OF THE GROSS WEIGHT OF THE JEWELLERY FOUND FROM THE PREMISES OF THE ASSESSEE. THE ASSESSEE MADE FULL DISCLOSURE AND HAS SUBMITTED THE DETAILS OF THE JEWELLERY WHICH WERE 10 ITA NO. 2349/DEL/2019 ACCEPTED BY BOTH THE AUTHORITIES AND WAS NEVER QUES TIONED. THUS, THIS ADDITION DOES NOT SUSTAINED. HENCE, GROUND NO. 2 OF THE ASSE SSEE IS ALLOWED. 10. SINCE THE APPEAL IS DECIDED ON MERIT, THE STAY APPLICATION DOES NOT SURVIVE, HENCE DISMISSED. 11. IN RESULT APPEAL OF THE ASSESSEE IS ALLOWED AN D THE STAY APPLICATION IS DISMISSED. O RDER PRONOUNCED IN THE OPEN COURT ON 30 TH OCTOBER, 2019 . SD/- SD/- (N. K. BILLAIYA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30/10/2019 *BINITA* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 11 ITA NO. 2349/DEL/2019 DATE OF DICTATION 05.09 .2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 0 5 .0 9 .2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK