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TMI Blog2014 (2) TMI 1327X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee deserves to be deleted. For the benefit of CBDT instruction No. 1916 for the jewellery found in the locker belonging to the deceased wife of the assessee Smt. Saroj Lashkary and in possession of male members i.e. Shri Shyam Sunder Lashkary and this assessee it is noticed that in the answer to the question No. 26, the assessee categorically stated that the jewellery also include the jewellery of his deceased wife Smt. Saroj Lashkary, therefore, the benefit of 500 gms gold jewellery was to be given on account of jewellery belonging to deceased wife of the assessee, particularly when it was found from the locker which was in her name. Therefore, the jewellery weighing 500 gms should have been treated as explained. CIT(A) was not justified in denying the benefit to the male members for 100 gms gold jewellery each i.e. to Shri Shyam Sunder Lashkary, father of the assessee and the assessee himself, particularly when the similar benefit was allowed in identical circumstances to other members of the family, therefore in reference to instruction No. 1916 of the CBDT, the benefit of 200 gms gold jewellery is also directed to be given as per the ratio laid down in the case of CIT Vs K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llery and silver articles found during the course of search u/s 69B of the I.T. Act, 1961 (hereinafter referred as the Act). 4. Facts of the case in brief are that a search was conducted on 06/08/2008 on the Lashkary group to which the assessee belongs. The assessee filed the requisite return of income on 30/9/2009 declaring an income of ₹ 8,14,210/-. The Assessing Officer observed that in the statement recorded u/s 132(4) of the Act, the assessee surrendered Rs. ₹ 21 lacs on account of undisclosed jewellery. However, the surrender of ₹ 21 lacs was done in the hands of the firm M/s Pawan Enterprises. He further observed that while filing the return of income u/s 153A of the Act in spite of the fact that the said jewellery was found and seized from the residential premises and the locker in SBI in the name of the assessee. The Assessing Officer asked the assessee to show cause as to why the undisclosed investment in the hands of the firm should not be disallowed as the disclosure was in express contravention of Section 69B of the Act and 132(4A) of the Act. The assessee submitted that the firm was compendious name for partners and had no legal entity like company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee and other members of Lashkary group which reads as under:- Ann. No. Particulars Net Weight of Metal (in Gms) Weight of Stones in Cts Total Value Metal + Stone Annexure-1 (Gold Jewellery) B-304, Janta Colony, Jaipur 4782.730 89.65 4086685.00 Annexure-JS (Gold Jewellery) Locker No. 109, SBI Sanganeri Gate, Jaipur 1453.00 0.00 1200178.00 Total Gold 6235.73 89.65 5286863.00 It was further stated that the above jewellery was found from the possession of different family members which mainly consists of the family of Shri Shyam Sunder Lashkary (father of the assessee), family of Shri Pawan Lashkary (assessee) and family of Shri Murari Lal Lashkary. The detail of the jewellery furnished was as under:- S. No Name Found Declared as undisclosed income in the hands of Firm M/s Pawan Enterprises Claimed as explained jewellery Weight (Gms) Value Weight (Gms) Value Weight (Gms) Value 1 Shri Shyam Sunder Lashkary and Smt. Parwati Devi Lashkary 2493.03 2057668 1019.50 856464 1473.53 1201204 2 Shri Pawan Lashkary, Smt. Hemant Lashkary, Late Smt. Saroj Lashkary, Arun Lashkary and Arjun Lashkary 2248.40 1906811 953.00 787178 1295.40 1119633 3 Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hemant Lashkari Married Lady 509.70 413185 Receive on the occasion of marriage etc. 8. Shri Murari Lal Lashkari Male 100.00 86700 Receive on the occasion of marriage etc. 9. Smt. Neelam Lashkari Married Lady 500.00 419422 Receive on the occasion of marriage etc. 10. Shri Durgesh Lashkari Male 100.00 90000 Receive on various occasion 11. Kumari Komal Lashkari Unmarried lady 248.60 211704 Receive on various occasion Total 2868.83 2457447 It was stated that as per circulars even in the normal course, the credit for jewellery required to be given as under :- Married lady 4 = 500 x 4 = 2000 Unmarried lady 4 = 250 x 1 = 250 Male = 100 x 6 = 600 2850.00 Grams It was stated that the benefit of CBDT circular as regards to reasonable holding of jewellery up to 500 gms per married lady etc. was denied without appreciating the fact that a person, who is declaring huge income in the regular return could reasonably hold the jewellery up to the limit prescribed by the CBDT and there was no basis to presume that the alleged unexplained jewellery was purchased by the assessee himself just a day before the search. It was contended that the gift of Shri Arun Lash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee wherein he stated that the jewellery found by the search party so included the jewellery belonging to his deceased wife Smt. Saroj Lashkary. As regards to the explanation of the gold jewelery, the assessee stated as under:- (i) The Ld. Assessing Officer has not given the benefit of the purchases of jewellery of ₹ 295495/- shown in Balance Sheet for the year ended on 31/03/2000. The weight of jewellery is 111.83 grams. The value as on the date of search comes to ₹ 3,59,440/- (on the basis of valuation of gold at the average rate taken by the valuer + original value of diamonds studded in the jewellery). (ii) The benefit of CBDT instruction No. 1916 has not been given. As per this circular the assessee is entitled for benefit of 2850 grams jewellery which deserves to be considered as explained in view of the above said instruction. (iii) Had the benefit of the purchases of ₹ 295495/- recorded in the Balance Sheet as on 31/03/200 of Shri Shyam Sunder Lashkary and the benefit of CBDT instruction No. 1916 was given, the unexplained jewellery remains of weighing 1999.53 grams of ₹ 1512175/- against which the surrender of ₹ 21,00,000/- ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... welers. The Ld. CIT(A) observed that the noting over the bills shows that the payment of this bill was through cheque No. 378627 dated 19/11/1999 from SBI. He, therefore, allowed the benefit of jewellery to the extent of 111.83 gms. As regards to the benefit of the CBDT instruction No. 1916 for the jewellery weighing 2850 gms held by the various members of the assessee's family, the Ld. CIT(A) observed that the assessee was claiming the benefit of this instruction for himself, his father and his late wife also. He further observed that the assessee and his father Shri Shyam Sunder Lashkari claimed separate deduction of 970.33 gms and 415.87 gms on account of jewellery purchased by them and since the benefit was already claimed on the basis of evidence available, therefore, further benefit of 100 gms each would not be given to the assessee and his father Shri Shyam Sunder Lashkary. As regards to the benefit of 500 gms jewellery for the deceased wife of the assessee, the Ld. CIT(A) was of the view that the benefit of jewellery could not be given to the deceased person. He, therefore, allowed the benefit of 2150 gms jewellery considering the instruction No. 1916 issued by the CBDT as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of ₹ 22,99,753/- on account of unexplained gold jewellery was sustained. Now both the parties are in appeal. 7. The department is aggrieved for the deletion of the addition of ₹ 25,11,684/- while the assessee is in appeal against sustenance of addition of ₹ 22,99,753/-. 8. Learned counsel for the assessee reiterated the submissions made before the authorities below and further submitted that the search on 06/08/2008 was conducted on all the family members and business premises of the assessee and each and every thing was explained. However, the Assessing Officer made arbitrary addition and the Ld. CIT(A) was also not justified while rejecting the benefit of the jewellery amounting to ₹ 21 lacs declared by the individual partners in the hands of the firm. He further submitted that the benefit of 100 gms each gold jewellery held by the assessee and his father Shri Shyam Sunder Lashkary in accordance with circular of the CBDT was not allowed and that the jewellery found in the locker belonging to the deceased wife of the assessee was also not considered and no benefit was given in accordance with the instruction No. 1916 of the CBDT. It was stated that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found short in the firm was utilized for purchasing the jewellery. In the instant case nothing is brought on record to substantiate that the amount disclosed by the partners of the firm was utilized elsewhere. Therefore, the benefit of the said surrender was to be given for acquiring the jewellery weighing 2518.20 gms, accordingly the addition to the extent of ₹ 21 lacs made in the hands of the assessee deserves to be deleted. We order accordingly. 11. The another point of the controversy relates to the benefit of CBDT instruction No. 1916 for the jewellery found in the locker belonging to the deceased wife of the assessee Smt. Saroj Lashkary and in possession of male members i.e. Shri Shyam Sunder Lashkary and this assessee. It is noticed that in the answer to the question No. 26, the assessee categorically stated that the jewellery also include the jewellery of his deceased wife Smt. Saroj Lashkary, therefore, the benefit of 500 gms gold jewellery was to be given on account of jewellery belonging to deceased wife of the assessee, particularly when it was found from the locker which was in her name. Therefore, the jewellery weighing 500 gms should have been treated as expl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal also accepted the explanation submitted by the assessee, which primarily relates to the facts of the case that two ladies were assessed for wealth-tax and declaration of the wealth is only in respect of such jewellery which was in their possession which they acquired on certain ceremonies, occasion of marriage of the brother by the wife of the assessee. Looking to the status of the family, the Tribunal found explanation to be plausible for the income in the hands of the family. These jewellery have not been treated to be invested as undisclosed income of the assessee, therefore, it may not be the income received in the hands of the assessee. In the circumstances of the case, notwithstanding one of the reasons is not sustainable, the finding is not required to be disturbed." 12. As regards to the silver articles is concerned, in our opinion, the Ld. CIT(A) was fully justified in deleting the addition by holding that it was customary to receive silver utensils and articles in the marriage and other auspicious occasions, therefore, considering the family status of the assessee, the silver articles found by the searched party was not unreasonable. We do not see any infirmity in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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