Unexplained cash and jewellery must consider family context; mere suspicion cannot justify income additions without substantive proof.

ORDER

PER DR. S. SEETHALAKSHMI, J.M.

This is an appeal filed by the assessee against the order of ld. CIT (Appeals), Jaipur-4, dated 20.08.2024 passed under section 250 of the I.T. Act, 1961, for the assessment year 2016-17. The assessee has raised the following grounds of appeal :

1. That Ld. CIT(A) has erred on facts & in law in confirming the addition of 428830.00 on account of cash found during the course of search as unexplained cash, which is just on presumption, assumption and surmises of learned Commissioner of Income Tax-(Appeals), and against the material and evidences submitted during the course of assessment proceedings as well as appellate proceedings, therefore the same deserves to be deleted.

2. That Ld. CIT(A) has erred on facts & in law in confirming the addition of 2102279.00 as undisclosed jewellery u/s 69A of the Income Tax Act, 1961, by

(2.1) not considering the sources of jewellery found during the course of search proceedings and its explanation submitted during the course of assessment proceedings as well as appellate proceedings

(2.2) ignoring the affidavits, valuation reports of Mehta Jewels dated 31.07.2002, declaration under VDIS 1997 gift deeds and gift declaration

(2.3) not controverting the factum of joint family living of the assessee, which stands accepted by the Assessing Officer,

(2.4) rejecting the mandate of CBDT instructions number 1916 for all the family members

(2.5) not accepting the 1088.53 gm. of gold jewellery owned by Smt. Nidhi Data, assessees’s wife, prior to her marriage

(2.6) incorrectly mentioning the fact on page number 83 of the appellate order, which are just on his presumption, assumption and surmises, without any material and record

(2.7) incorrectly mentioned the fact on page no. 85 in second last para of the appellate order that “as the figures mentioned in the assessment order are not reconcilable and even the learned AR was not able to reconcile and explain the source of the figures mentioned in the assessment order in this regard. The source of figures (2038.87 grams, 317.80 grams, 1550 grams) (mentioned on page 18 of the assessment order), how and where these were claimed by the appellant is not explained”. These findings are incorrect on two counts, firstly by 317.80 grams, and 1550.00 grams are not in addition to 2038.87 grams, whereas are part of 2038.87 grams and secondly the source of 1867.80 grams (317.80+1550.0) are already explained in the table in the assessment order on page no. 18.

(2.8) total jewellery found 3861.800 grams, jewellery explained 3500.455 grams, unexplained jewellery 361.345 grams (3861.345- 3500.455) (page 24 of assessment order), balance unexplained jewellery 171.07 grams of Ritika (supported by purchase bills) and 190.275 grams of Nidhi out of 1088.53 grams (duly supported by valuation report)

(2.9) placing reliance upon the statement submitted during the course of search proceedings, which is simply an indicative and estimated statement and

(2.10) giving various contradictory finding in the appellate order.

3. That Ld. CIT(A) has erred on facts & in law in enhancing the income of assessee by Rupees 1733800.00 (638.13 gm.) by

(3.1) making a contradictory finding in the enhancement notice in the form of “there is no dispute regarding how much jewellery is owned by which member”

(3.2) incorrectly mentioning that “Appellant has not made any claim or submission that any more part of the jewellery was owned by Smt. Nidhi Data”

(3.3) not considering the reply of the assessee filed in response to enhancement notice

(3.4) not accepting the 1088.53 gm. of gold jewellery owned by Smt. Nidhi Data, assessees’s wife, prior to her marriage, which is duly supported by affidavit of her fath