2023 (10) TMI 1056 - AT - Income Tax

Addition u/s 69A - cash found from the joint locker of the assessee - survey action u/s 133A - HELD THAT - The assessee belongs to the upper higher strata of the society and it is very common for the assessee and her family to receive gifts in the shape of cash shaguns on various occasions such as marriages, birthdays, anniversaries, birth of a child, auspicious festivals and other such occasions. AR argued that pin money/Kitty which is very common to be received from the spouse in every family. The assessee's financial status has been substantiated in the shape of returns of income filed by her for the past six years. On going through the taxable income and the arguments of the assessee, realities of Indian society and various judicial pronouncements, we hold that no addition is warranted on the amount, Unexplained Jewellery - stree dhan - HELD THAT - We hold that CBDT's instruction no. 1916 dated 11.05.1994 and press release dated 01.12.2016 pertains to seizure of jewellery. It postulates that by going through the archetypal Indian family standard, a persons of an Income Tax payee of considerable amount could have had the prescribed amount of jewellery in the circular. It was brought into force after a series of due deliberation and its impact on taxation. It is never envisaged that the Assessing Authority should restrict the amount of eligible jewellery to the quantity mentioned in the circular. The assessee stated that the income for all the years had fallen into the highest tax bracket which shows that the assessee has been earning substantial Income clearly establishing the status. It has time and again been held that due credit of the same has to be allowed by the Assessing Officer looking and appreciating the status, customs, and traditions relating to the family. 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 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 u/s 69A. Hence, keeping in view the facts and circumstances of the instant case and also the jewellery found, the total income declared, gifts received, bills produced, and in view of the various judgments cited above, we direct that the addition made on account of jewellery be deleted. Solitaire Ring - The diamonds and the purchase thereof has been duly explained and the difference is due to valuation. The Assessing Officer has accepted the fact that the diamonds have been indeed purchased from Naulakha Jewellers. The size of the diamonds in the valuation report is exactly similar as what has been purchased by the assessee. Hence appeal of the revenue on this ground is dismissed.

Issues Involved:
1. Addition of Stridhan under Section 69B.
2. Addition of cash found in the joint locker under Section 69A.
3. Addition of alleged unofficial cash premium earned by the assessee.
4. Addition on account of unexplained jewellery.
5. Addition on account of the value of a solitaire ring.

Summary:

1. Addition of Stridhan under Section 69B:
The assessee contested the confirmation of an addition of Rs. 20,32,837/- out of Rs. 25,78,237/- made by the Assessing Officer, representing Stridhan found during a search. The assessee argued that the affidavit regarding Stridhan was not contested by the Assessing Officer and that the customs and status of the assessee were ignored. The Tribunal, considering the family income and societal customs, directed the deletion of the addition made on account of jewellery.

2. Addition of Cash Found in the Joint Locker under Section 69A:
The assessee appealed against the confirmation of an addition of Rs. 4,49,750/- as unexplained money found in a joint locker. The Tribunal noted the assessee's substantial taxable income and societal customs of receiving cash gifts ("shaguns") and pin money. It held that no addition was warranted, considering the status and financial background of the assessee.

3. Addition of Alleged Unofficial Cash Premium Earned by the Assessee:
The Revenue's appeal challenged the deletion of an addition of Rs. 17.84 Cr., representing 10% of recorded cash sales. The Tribunal upheld the deletion, noting the absence of concrete evidence linking the assessee to the alleged unofficial cash premium and the conversion of unaccounted demonetized currency.

4. Addition on Account of Unexplained Jewellery:
The Assessing Officer made an addition of Rs. 25,78,237/- for unexplained jewellery, which was partly confirmed by the CIT(A). The Tribunal, referencing various judicial pronouncements and the assessee's substantial income, directed the deletion of the addition, recognizing the societal norms and the assessee's financial status.

5. Addition on Account of the Value of a Solitaire Ring:
The Assessing Officer added Rs. 78,69,874/- for the value of a solitaire ring. The Tribunal noted that the diamonds were purchased from Naulakha Jewellers and duly explained, with the difference arising from valuation. It agreed with the CIT(A) in deleting the addition, as the purchase and valuation of the diamonds were substantiated.

Conclusion:
The Tribunal allowed the appeals of the assessee, directing the deletion of additions related to Stridhan, cash found in the locker, unexplained jewellery, and the solitaire ring's value. The Revenue's appeal regarding the alleged unofficial cash premium was dismissed. The judgment emphasized the importance of considering societal customs, financial status, and concrete evidence in tax assessments.

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