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Issues involved: Appeal against addition of income u/s 10,78,670/-, clarification of actual addition u/s 4,18,300/-, application of CBDT Circular for jewellery ownership, assessment of unexplained investment in jewellery.
Clarification of actual addition: The appeal was against the addition of &8377; 10,78,670/-, but it was clarified that the actual addition was &8377; 4,18,300/-. The assessee's appeal was considered against this revised amount. Application of CBDT Circular: The case involved a search where jewellery was found in a locker. The assessee claimed the jewellery was received during her marriage in 1979. The AO gave credit for 500 grams and made an addition of &8377; 4,18,300/-. The CIT(A) upheld this addition, stating that specific ownership was established and the CBDT Circular benefit did not apply to all family members. The assessee argued for the application of the Circular, claiming ownership by her, her husband, and daughters. Assessment of unexplained investment: The AO and CIT(A) partially relied on the assessee's statement regarding the jewellery's acquisition during her marriage. The Tribunal held that without corroborative evidence, the statement could not be fully relied upon. Referring to a High Court decision, it was established that the CBDT Circular guidelines should be followed in assessment proceedings. The Tribunal directed the AO to allow credit for 1100 grams of gold ornaments and consider the husband's declaration of &8377; 80,000, making an addition only for the unexplained portion. In conclusion, the Tribunal partly allowed the assessee's appeal, directing the AO to consider the CBDT Circular guidelines and the husband's declaration in assessing the unexplained jewellery portion.
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