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TMI Blog2012 (10) TMI 782X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) has erred in deleting the additions of Rs.1,89,983/- and Rs.14,24,426/- which were added by the A.O on account of value of unexplained jewellery found in the lockers at the time of search. 3. The brief facts of the case are that a Search & Seizure operation was carried out at the residential premises of the assessee on 09.12.2005. During the course of search, it reveals that assessee was having two bank lockers bearing Nos.-477 & 501 with Allahabad Bank, Anand Lok, New Delhi. Locker no. 501 was in the joint name of assessee with her husband, Dr. S.P.Agarwal. Locker no. 477 was in the joint name of the assessee with her son Sh. Bipin Agarwal. On inspection of the locker, jewellery having 986.650 grams valued at 7,45,658/- was found i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... determining his taxable income or not. 6. On the other hand, Ld. Counsel for the assessee submitted that the complete details of the jewellery found and how it has been allocated to various family members were submitted by the assessee. In the statement recorded at the time of search, it was contended that jewellery lying in the locker belongs to various family members. The assessee also relied upon the circular issued by the Board bearing No. 1916 dated 11.05.1994. He pointed out that this circular was issued by the Board guiding its officials not to effect seizure at the time of search of the jewellery found at the time of search, if it was claimed that it belongs to a married lady than upto the 500 grams of jewellery found, should not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... garwal and his wife Smt. Ritu Agarwal, Sh. Charchit Agarwal and his wife Smt. Kanika Agarwal (both sons and daughters-in-law) and three children of both the sons. Ld. A.O did not accept any contention of the assessee. He only gave credit of 500 grams jewellery as per Board's circular and the value of the balance jewellery at Rs.19,71,100/- has been added to her income. On appeal, Ld. CIT(A) has accepted the contentions of the assessee and deleted the addition. 8. Ld. DR has reiterated his contention, as were raised qua, the jewellery found in locker no-501. He pointed out that there is no evidence on the record to suggest that the family members were having source of taxable income for acquiring this jewellery. The circular issued by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... without supporting any evidence. Faced with this situation, tribunal adopting a pragmatic approach considered that if jewellery to the extent mentioned in the circular is found without any evidence substantiating the source than to that extent, the jewellery should be treated as "explained". The observation of the Hon'ble Gujarat High Court in this connection is worth to read :- "As can be seen from the impugned order of the Tribunal, the Tribunal has referred to the Central Board of Direct Taxes Circular No. 1916 and observed that in an earlier decision of the Tribunal, the Tribunal has accepted the applicability of the circular and has held that having regard to the circular and size of the family, the ornaments to the extent specified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ything to the contrary, it can safely be presumed that the source to the extent of the jewellery stated in the circular stands explained. Thus, the approach adopted by the Tribunal in considering the extent of jewellery specified under the said circular to be a reasonable quantity, cannot be faulted with. In the circumstances, it is not possible to state that the Tribunal has committed any legal error so as to give rise to a question of law." 10. In the light of above discussion, let us consider the facts of the present case. In the first locker total jewellery was found 986.650 grams. Dr. S.P. Agarwal has paid a tax of Rs.5,64,675/- on account of "unexplained investment" in the jewellery found in the locker. At the time of search, the jew ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sp; 3@150=450 Total 2150 Value of jewellery surrendered by assessee- 738.570 grams is Rs. 5,64,674/-. The total jewellery treated to be "explained" one is 2888 grams (roughly 2900 grams). 12. In view of the above working, the assessee at the most can claim jewellery to the extent of 2900 grams as "explained" as per the circular. The value of the rest of the jewellery is to be treated as "unexplained". Ld. First Appellate Authority has erred in deleting the total value of jewellery. The order of Ld. CIT(A) is modified to the above extent. Ld. A.O is directed to add the value of 234 grams @ Rs. 755 per gram in the total income of the assessee. Thus, the total addition required to be made by the Ld. Assessing Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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