2018 (10) TMI 1289 - AT - Income Tax

Unaccounted investment in silver articles weighing 1812 grams - benefit of the CBDT Circular No. 1916 dated 11.5.1994 - Jewelry revived under India tradition - Held that - One cannot ignore the fact that in the Indian families there is a culture of giving silver ornaments and utensils on auspicious and marriage occasions. Restricting the limit of 500 gm/250 gm/100 gm only to the gold jewellery ornaments will not serve the true purpose of the CBDT instructions and it has to be applied hamnoninerly in the light of the Indian culture and traditions. The impugned silver jewellery weighing 1812 gms valuing at ₹ 75,278/-should not have been added to the income of the assessee and the benefit of the CBDT Circular No. 1916 dated 11.5.1994 should also be spread so as to cover the silver articles weighing 1812 gms. We therefore set aside the orders of both the lower authorities and delete the addition of ₹ 75,278/- for the alleged unaccounted investment in silver articles and allow the grounds raised by the assessee. - decided in favour of assessee.

Summary

Issues involved:
Appeal against addition made for unaccounted investment in silver jewellery during search operation.

Analysis:
The appeal pertains to the Assessment Year 2015-16 and challenges the addition of ?75,278 towards unexplained investment in silver jewellery. The search and seizure operations were conducted under section 132(1) of the Income Tax Act, leading to a consolidated assessment order for the block of assessments from AY 2009-10 to 2015-16. The only addition for AY 2015-16 was for unexplained investments in jewellery, including gold ornaments and silver articles. The assessee contested this addition before the Ld. CIT(A), where the claim for gold jewellery was allowed based on CBDT instructions, but the addition for silver jewellery was upheld. The main contention was whether the addition of ?75,278 for silver articles weighing 1812 grams was justified. The CBDT instruction No.1916 dated 11.5.1994 provided guidelines on not seizing jewellery found during searches up to specified quantities based on marital status and gender. The Tribunal observed that the CBDT instructions did not limit the exemption to gold jewellery only, recognizing the cultural significance of silver ornaments in Indian families. Therefore, the Tribunal concluded that the addition for silver jewellery should not have been made, applying the CBDT circular to cover silver articles as well. Consequently, the Tribunal set aside the orders of the lower authorities and deleted the addition of ?75,278, allowing the grounds raised by the assessee. The appeal of the assessee was allowed based on this analysis.