RACHIT GUPTA,MEERUT vs. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, MEERUT, MEERUT

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI (DELHI BENCH ‘G’ NEW DELHI)

BEFORE YOGESH KUMAR U.S., JUDICIAL MEMBER AND SHRI KRINWANT SAHAY, ACCOUNTANT MEMBER

PHYSICAL HEARING ITA No. 7310/DEL/2025 (A.Y. 2022-23) Rachit Gupta, Vs ACIT, 214, Madhuban Colony, Central Circle, Baghpat Road, Meerut Meerut 250002 PAN BAAPG5201J

Appellant Respondent Assessee by ShAnil Kumar Jain, Advocate Revenue by ShMahesh Kumar, CIT DR Date of Hearing 02/02/2026 Date of Pronouncement 05/05/2026 ORDER PER KRINWANT SAHAY, AM :

The present appeal is filed by the Assessee against the order

dt. 15.09.2025 of Ld. Commissioner of Income Tax (Appeals)-3,

Noida for Assessment Year 2022-23.

2 7310/Del/2025

appeal but the relevant issuesare regarding the

confirmation of addition of Rs.3,31,197/- and

Rs.6,56,056/- on account of value of 141.07 gms of

jewellery seized at the time of survey. Further, the Ld.

CIT(A) gave relief to the Assessee accepting that only70

gms of gold jewellery belong to the sister of the Assessee

and rejected the claim of other jewellery found. In this

ground, the Ld. CIT(A) has given his findings in the

appellate order as under: -

“4.1 Grounds of Appeal Nos. 1 to 3: In these grounds, the AR has contested the addition of Rs. 6,58,056/-

3 7310/Del/2025

u/s 69 made by the AO. A search u/s 132 was carried out in the Sharda Group of cases on 08.03.2022. The premises of the assessee was also covered during the search. Assessment in this case has been completed u/s 143(3) of the Income Tax Act, 1961. During the course of assessment proceedings, the AO has stated that gold jewellery of 1341.70 gram was found during the course of search, from the assessee. During the assessment proceedings, the assessee attributed the jewellery to himself (100 grams), to his father (100 grams), to his mother (500 grams) to his wife (500 grams) and to his sister (300 grams). The AO acknowledged the ownership of jewellery amongst various family members barring the sister of the assessee by stating that she is settled in London and it is unusual to consider the jewellery of married sister as part of jewellery of the family of the assessee. The AQ accordingly allowed benefit of 1200 grams keeping in view of the CBDT Instruction No. 1916 dated 11.05.1994 and considered the balance jewellery of 141.07 grams as unexplained. The AO accordingly made addition of Rs. 6,58,056/- to the income of the assessee u/s 69 of the Income Tax Act, 1961. During the appellate proceedings, the appellant reiterated the submissions filed before the AO. The appellant stated that the sister of the assessee though living in London, used to keep valuable jewellery with relatives (parents) so that unnecessary hardship of carrying the jewellery back home time and again can be avoided. The appellant filed confirmation of sister of the assessee i.e. Nikita Gupta before the AO with respect to ownership of 300

4 7310/Del/2025

grams of Jewellery out of jewellery seized during the course of search. The appellant has also relied upon the decision of jurisdictional Bench of Ld. ITAT Delhi In the case of Kirti Singh vs. ACIT [2023] reported at 157 taxmann.com 298 wherein, the Ld. Bench while adjudicating on a similar issue has held as under: "The additions on account of unexplained jewellery being 1179.10 gms valued at Rs. 44,32,030/- is subject matter of controversy. As pointed out on behalf of the assessee,total jewellery found during the search stands at 2479.10 gms. The Assessing Officer has accepted 1300 gms as attributable to different family. However, the remaining jewellery being 1179.10 gms has been treated as unexplained on the ground that 514 gms and 250.400 gms stated to be relatable to sisters-in-law was not accepted by the Assessing Officer. Likewise, out of 914.70 gms relatable to the assessee has been accepted partly to the extent of 500 gms as explained and remaining 414.70 gms has been treated as unexplained. The assessee thus submits that the Assessing Officer has ignored the normal practices customs of Indian Society where the women, for variety of reasons, have beenkeeping their jewellery in maternal house. The sisters of husband of the assessee have kept a part of their jewellery in the custody of the assessee family which ore the Uncommon in Indian families and therefore, there was no justification to ignore the explanation offered at the threshold in the course of the assessment proceedings. The

5 7310/Del/2025

assessee also submits that the CBDT Instruction No. 1994 dated 11-5-1994 does not bar the retention of gold jewellery and ornaments above 500 per lady. The assessee has affluent status and customs and practices of the community also permits for holding greater quantity of jewellery. The Assessee and her spouse has declared substantial taxable income year after year and therefore the status of the assessee cannot be doubted and thus retention of high jewellery is plausible and a valid explanation for such keeping of gold ornaments accumulated over years and received by way of gifts from other family members and relatives at the time of their marriage and several occasions thereafter”. From the reading of the above judgment of the Ld. Jurisdictional Tribunal Bench, it is clear that the Ld. Bench has held that it is a normal practice in Indian Society that married women keep jewellery with their parents/maternal home for safe keeping. In the case of the assessee, His sister is staying in London and not in the country itself. Keeping In view of the circumstances of the case and the traditional Indian values, benefit to the extent of 70 gram of gold jewellery is allowed to the assessee in light of confirmation of the sister of the assessee towards the ownership of the jewellery seized during the course of search. Accordingly, the addition made by the AO is sustained to the extent of Rs. 3,31,197/- and the balance amount of Rs. 3,26,858/- is deleted. Accordingly, these grounds of appeal are partly allowed.”

6 7310/Del/2025

findings given by the Ld. CIT(A) is not justified keeping in

view the tradition and status of the Assessee. The Ld.

counsel further argued that the Ld. CIT(A) has accepted the

claim of only 70 grams of gold jewellery of the sister of the

Assessee despite the fact that the sister has given an

Affidavit for owning of 300 gms of gold jewellery.

the Ld. CIT(A).

Assessing Officer in the assessment order and the Ld.

CIT(A) in the appellate order. We are of this considered

view that the addition of Rs. 6,58,056/- confirmed by the

Ld. CIT(A) is on the basis of CBDT instruction No. 1916

dated 11.5.1994 after allowing 500 gms of jewellery to each

married lady in the family and 100 gms for the gents.

Since the instructions of the CBDT on this issue is very

clear, therefore, we find no reason to make any inference in

the findings given by the Assessing Officer and the addition

7 7310/Del/2025

sustained by the Ld. CIT(A) on this issue. Thus, Assessee’s

appeal on this ground is dismissed.

findings given by the Ld. CIT(A) rejecting the claim of 300

gms of gold jewellery to the sister of the Assessee who in

an affidavit has clearly stated that the said jewellery

belongs other but the Ld. CIT(A) without giving any

speaking order has allowed the benefit to the extent of 70

gms of gold jewellery to Assessee’s sister.

the authorities below. We find that it is a common practice

in joint family that even married daughters keep their

valuable with their parents particularly in a situation

they are living outside India. In this case also, Assessee’s

sister is staying in London and she had kept gold jewellery

of 300 gms with her parent. In our considered view, there

is nothing wrong and unusual in it. Therefore, the action of

the Ld. CIT(A) of restricting it to 70 gms of gold jewellery

does not make any sense. Accordingly, Assessee’s appeal

8 7310/Del/2025

on this issue is allowed. The AO is directed to given relief

of 300 gms of gold jewellery, as claimed by the Assessee’s

sister, in her confirmation towards ownership of the

jewellery seized during the search.

Order pronounced in the open court on 05th May,

2026

Sd/- Sd/- (YOGESH KUMAR U.S.) (KRINWANT SAHAY) JUDICIAL MEMBER ACCOUNTANTMEMBER RKK/R.N Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT

ASSISTANT REGISTRAR ITAT, NEW DELHI

9 7310/Del/2025