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2018 (6) TMI 26 - AT - Income TaxUnexplained value of jewellery found during search conducted u/s 132 - addition to returned income - jewellery found within the limits prescribed by the CBDT - Held that - In view of the judgement of the Hon ble Rajasthan High Court in the case of CIT vs. Satya Narain Patni 2014 (5) TMI 1002 - RAJASTHAN HIGH COURT - the assessee has not been assessed to wealth tax and the gold jewellery found was within the permissible limits contained in the CBDT circular dated 11.05.1994, also the jewellery were not seized - thus it was held that no addition thereafter was justifiable - Decided in favor of assessee.
Issues:
Addition of unexplained value of jewellery to returned income. Analysis: The appellant filed an appeal against the CIT(A)'s order for A.Y. 2012-13, disputing the addition of ?24,43,218 as unexplained value of jewellery to the returned income. The appeal was filed belatedly, but the delay was condoned based on unintended reasons beyond the appellant's control. During a search under Section 132 of the Income Tax Act, jewellery and valuable articles were found, but no seizure was made. The appellant failed to provide a satisfactory explanation for the source of acquisition of the jewellery. The CIT(A) upheld the addition, citing lack of evidence or explanation from the appellant. The appellant argued that the jewellery found during the search was within permissible limits as per a CBDT circular, which the AO should have considered. The appellant relied on judgments of the Gujarat and Rajasthan High Courts to support their claim that jewellery within specified limits should not be treated as unexplained. The appellant contended that the case before the Madras High Court, cited by the CIT(A), involved different circumstances as it pertained to a wealth tax assessee, unlike the present case. The Tribunal noted that the jewellery found was within limits specified in the CBDT circular and not seized during the search, aligning with the Rajasthan High Court's decision. Consequently, the Tribunal set aside the CIT(A)'s order and directed the AO to recompute the income, providing relief to the appellant. In conclusion, the Tribunal allowed the appeal filed by the appellant, holding in favor of the appellant's argument regarding the treatment of the unexplained value of jewellery found during the search.
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