2019 (7) TMI 1900 - AT - Income Tax

Addition of unexplained jewellery and unexplained cash - HELD THAT - From the perusal of the records it can be seen that the jewellery belongs to wife of the assessee and not belong to the assessee. Thus the said jewellery cannot be added in the income of the assessee. The CIT(A) was not justified in confirming this addition to the extent of 200 gms. jewellery in the hands of the assessee because the entire jewellery belong to the wife of the assessee as per the statement of the son of the assessee. Therefore Ground Nos. 1 and 2 are allowed. Unexplained cash - As the assessee and his wife are senior citizens who required medical attention at any instance and therefore the cash is required at home for emergency situations. Therefore Ground no. 3 is allowed.

Summary

Issues:
1. Addition of jewelry in the hands of the assessee.
2. Addition of unaccounted cash in the hands of the assessee.

Analysis:

Issue 1: Addition of jewelry in the hands of the assessee
The appeal was filed against the order passed by CIT(A) for Assessment Year 2013-14. The assessee was drawing income from salary and income from house property. A search conducted on 09.05.2012 revealed jewelry worth &8377; 66,31,229 from the residential premises of the assessee. During the assessment proceedings, it was stated that jewelry amounting to &8377; 10,22,435 belonged to the wife of the assessee, not the assessee himself. However, the Assessing Officer made an addition of &8377; 10,22,435 in the hands of the assessee. The CIT(A) partly allowed the appeal, but the Ld. AR argued that the entire jewelry belonged to the wife of the assessee. The ITAT Delhi held that the jewelry did not belong to the assessee but to his wife, as confirmed by the son of the assessee. Therefore, Ground Nos. 1 and 2 were allowed, and the addition of jewelry in the hands of the assessee was deemed unjustified.

Issue 2: Addition of unaccounted cash in the hands of the assessee
The Assessing Officer also made an addition of &8377; 50,000 as unaccounted cash. The Ld. AR argued that the cash was kept at home for emergency medical situations as the assessee and his wife were senior citizens. The ITAT Delhi noted the circumstances and allowed Ground No. 3, stating that the cash was required for emergency medical attention. Consequently, the appeal of the assessee was allowed, and the additions made by the Assessing Officer were deemed unjustified.

In conclusion, the ITAT Delhi ruled in favor of the assessee, allowing the appeal and rejecting the additions made by the Assessing Officer related to jewelry and unaccounted cash. The judgment highlighted the importance of correctly attributing assets to the rightful owner and considering the specific circumstances of the assessee, particularly in cases involving senior citizens requiring medical attention.