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2018 (5) TMI 586 - AT - Income TaxUnexplained jewellery - Addition on account of gold and silver ornaments/ articles over and above permitted by CBDT s Instruction No. 1916 - search & seizure operation - Held that - The excess jewellery found in the case of assessee, his parents, his wife, their children and the HUF was very nominal, and was very much reasonable, keeping in mind the riches and high status and more customary practices. The assessee s explanation is justified and reasonable. Her contention that the gold jewellery was acquired through gifts made by relatives and other family members over a long period of time, is in keeping with prevailing customs and habits. The obdurate refusal of the respondents to release the jewellery constitutes deprivation of property without lawful authority and is contrary to article 300A of the Constitution of India. The petition has to succeed; a direction is issued to the income tax authority to release the jewellery. See Ashok Chadha vs. ITO 2011 (7) TMI 142 - DELHI HIGH COURT and Suneela Soni Versus DCIT 2018 (3) TMI 1038 - ITAT DELHI - Decided in favour of assessee
Issues Involved:
1. Addition on account of unexplained investment in jewellery. 2. Addition on account of unexplained investment in property. Issue-wise Detailed Analysis: 1. Addition on account of unexplained investment in jewellery: The primary issue in this case revolves around the addition made by the Assessing Officer (AO) on account of unexplained investment in jewellery. During a search and seizure operation under Section 132 of the IT Act at the business and residential premises associated with the assessee, jewellery weighing 2531.5 grams was found. The AO allowed a benefit of 950 grams of jewellery as per CBDT Instruction No. 1916, attributing it to the assessee's wife and two children. However, the AO treated the remaining jewellery as unexplained and made an addition of ?30,73,373. The Commissioner of Income Tax (Appeals) [CIT(A)] further allowed an additional benefit of 600 grams for the jewellery belonging to the assessee's mother and father, but sustained the addition for the balance jewellery weighing 1050 grams. The assessee appealed against this decision, arguing that the jewellery was gifted by parents, grandparents, and other relatives on various occasions, including marriage, birth of children, and anniversaries. The assessee also referenced CBDT Instruction No. 1916, which allows for a larger quantity of jewellery to be accepted based on the family's status and customary practices. The Tribunal considered the arguments and referenced several case laws, including the Delhi High Court's decision in the case of Ashok Chadha vs. ITO, where the court accepted 906.60 grams of jewellery for a married lady without documentary evidence, recognizing it as "streedhan" and accumulated over years. The Tribunal found the facts of the present case similar to those in the cited judgments and concluded that the excess jewellery found was nominal and reasonable, given the family's status and customs. Consequently, the Tribunal accepted the assessee's explanation and deleted the addition made by the AO and partly confirmed by the CIT(A). 2. Addition on account of unexplained investment in property: The AO also made an addition of ?1,87,082 on account of unexplained investment in property. However, the Tribunal's order primarily focuses on the jewellery issue, and there is no detailed discussion or separate analysis provided for the addition related to the property investment in the judgment text provided. Conclusion: Based on the detailed analysis and references to relevant case laws, the Tribunal allowed the assessee's appeal, deleting the addition made on account of unexplained investment in jewellery. The judgment underscores the importance of considering the family's status, customs, and practices when assessing the reasonableness of jewellery possession. The Tribunal's decision aligns with the principles laid out in previous high court judgments, emphasizing a realistic and customary approach to such assessments.
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