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2016 (1) TMI 1070 - AT - Income TaxAddition on account of unexplained jewellery out of the jewellery found at the time of search - CIT(A) deleted the addition - Held that - Gold jewellery found to the extent of limit mentioned in the circular is treated as explained and this can be clearly applied on the assessee s case, wherein no specific deduction of gold jewellery possessed by family members and grand children was given by the Assessing Officer from the total gold jewellery found at the time of search and seizure operation and differential gold jewellery of 1924.22 gr. is the gold jewellery possessed by the female members and minor children of the assessee s joint family and this quantity of 1924.22 gr. is well within the total limit of jewellery at 2100 gr. as per the CBDT instruction no.1916 dated 11.05.1994. Therefore by respectfully following the decision of Hon ble Jurisdictional High Court in case of CIT vs. Ratanlal Vyaparilal Jain (2010 (7) TMI 769 - Gujarat High Court) and in view of our discussions made above, we find no infirmity in the order of the CIT(A) so as to warrant interference and accordingly, the grounds taken by the Revenue are rejected. - Decided against revenue
Issues Involved:
1. Deletion of addition of Rs. 14,32,922 made on account of unexplained jewellery found during the search. 2. Applicability of CBDT Instruction No. 1916 dated 11.05.1994. 3. Relevance of case laws cited by CIT(A) and Assessing Officer. Issue-wise Detailed Analysis: 1. Deletion of Addition of Rs. 14,32,922 Made on Account of Unexplained Jewellery: The Revenue contested the deletion of an addition of Rs. 14,32,922 made by the Assessing Officer for unexplained jewellery found during a search. The jewellery found included 5607.90 grams of gold and 101.18 carats of diamonds. The Assessing Officer accepted the explanation for 3683.68 grams of gold and 117.63 carats of diamonds but considered 1924.22 grams of gold as unexplained. The CIT(A) deleted the addition, leading to the Revenue's appeal. 2. Applicability of CBDT Instruction No. 1916 Dated 11.05.1994: The CBDT Instruction No. 1916 provides guidelines for the seizure of jewellery during searches, suggesting that a certain quantity of jewellery should not be seized due to its sentimental value. The instruction allows for 500 grams for a married woman, 250 grams for an unmarried woman, and 100 grams for a child. The Revenue argued that this instruction is only for seizure purposes and not for treating jewellery as explained during assessments. However, the assessee's family, comprising nine members, argued that the jewellery within these limits should be considered explained. 3. Relevance of Case Laws Cited by CIT(A) and Assessing Officer: The CIT(A) relied on the case laws of "ITO Vs Manilal S Dave" and "CIT Vs Rameshchandra R Patel," which the Revenue argued were distinguishable from the present case. The Revenue cited other case laws, including "Nem Chand Daga v. Assistant Commissioner of Income-tax" and "Smt. Dhanvidya A. Dalai v. Commissioner of Income-tax," to support their stance that the CBDT instructions do not automatically explain the jewellery for tax purposes. The Tribunal referred to the jurisdictional High Court's decision in "CIT vs. Ratanlal Vyaparilal Jain," which held that the CBDT circular recognizes the customary possession of jewellery in Hindu families and can be used to explain the source of jewellery. Conclusion: The Tribunal concluded that the jewellery within the limits specified in the CBDT Instruction No. 1916 should be treated as explained, following the jurisdictional High Court's decision. The jewellery possessed by the assessee's family members was within these limits, and the CIT(A) was justified in deleting the addition. Therefore, the Tribunal found no infirmity in the CIT(A)'s order and dismissed the Revenue's appeal. Judgment: The appeal of the Revenue is dismissed. The order of the CIT(A) is upheld, and the addition of Rs. 14,32,922 on account of unexplained jewellery is deleted. The decision was pronounced in open court on 5.11.2015.
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