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2023 (11) TMI 1215 - AT - Income TaxAddition u/s 69A - jewellery found in the locker - seizure of jewellery in course of operations u/s 132 - appellant submits that the aforesaid jewellery was gifted to her on various occasions such as marriage, birth of children, etc.; such gifts are very common in Indian culture and society - whether the allowance of jewellery should be strictly restricted to 500 gms only as per the CBDT Circular or not? - HELD THAT - The Hon ble Delhi High Court in the case of Ashok Chaddha 2011 (7) TMI 142 - DELHI HIGH COURT held that collecting jewellery of 906.900 gms by a woman in a married life of 25 years in form of stree dhan or on other occasions is not abnormal. As decided in ITAT Delhi in the case of Vibhu Aggarwal 2018 (5) TMI 586 - ITAT DELHI held that where Assessing Officer under section 69A made addition on account of jewellery found in search of assessee, since assessee belonged to a wealthy family and jewellery was received on occasions from relatives, excess jewellery was very much reasonable and, thus, no addition under section 69A was called for. Thus in view the facts and circumstances of the instant case and also the jewellery found, the total income declared and in view of the various judgments cited above, we direct that the addition made on this account be deleted. Decided in favour of assessee.
Issues Involved:
1. Addition of Rs. 9,66,000/- under section 69A of the Income Tax Act on account of unexplained jewellery. Judgment Summary: Issue 1: Addition of Rs. 9,66,000/- under section 69A of the Income Tax Act on account of unexplained jewellery. The present appeal was filed by the assessee against the order of Ld. CIT(A)-4, Kanpur dated 27.02.2023. A search and seizure operation under section 132 of the Income Tax Act was conducted on 27.11.2020 in the premises of M/s. Shiv Shakti Constructions Group, including the appellant's premises. The assessee filed a return of income on 28.12.2021 declaring income of Rs. 3,90,510/-. The A.O. completed the assessment by making an addition of Rs. 9,66,000/- under section 69A of the IT Act on account of unexplained jewellery found during the search operation. The appellant contended that the jewellery was gifted on various occasions such as marriage and birth of children, which is common in Indian culture. The jewellery found was 3061 grams in total, and the allowable limit as per CBDT Instruction No. 1916 was 1300 grams. The A.O. allowed 1300 grams and treated the remaining jewellery as unexplained, making an addition of Rs. 9,66,000/- in the hands of the appellant. The appellant argued that the A.O. erred in taking the gross weight instead of the net weight to calculate the credit allowed as per the CBDT Instruction and contended that the A.O. should have given credit based on the CBDT Instruction to the appellant, not her husband. The Tribunal observed that the total jewellery found was 715 grams, and the Revenue Authorities allowed 500 grams as per the circular, treating the remaining 215 grams as undisclosed income. The Tribunal noted that the assessee had been earning substantial income over the years, establishing the status of the family. The Tribunal referred to several precedents, including Ashok Chaddha vs. ITO, where it was held that collecting jewellery over a married life of 25-30 years is not abnormal and should not be treated as unexplained. Based on the facts, circumstances, and various judgments cited, the Tribunal directed that the addition of Rs. 9,66,000/- be deleted. In the result, the appeal of the assessee was allowed. Order Pronounced in the Open Court on 13/11/2023.
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