SONIKA SINGHAL, NEW DELHI,NEW DELHI vs. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-27, NEW DELHI, NEW DELHI

PER YOGESH KUMAR, U.S. JM: The present appeal is filed by the Revenue against the order of

Ld. Commissioner of Income Tax (Appeals)-25, (‘Ld. CIT(A)’ for short),

New Delhi dated 28/07/2025 for the Assessment Year 2020-21.

as under:-

“2. A search and seizure proceeding under section 132 of the Act was carried out on the Alankit Group, Sh. Alok K Agarwal, his son Ankit Agarwal and some of the close associates and key employees of Sh. Alok K Agarwal on 18.10.2019. A warrant was executed in the names of Sh. Alok Kumar Agarwal, Sh.Ankit Agarwal, M/s Alankit Limited and M/s Alankit Assignments Limited for Locker No.232, Bank of Maharashtra, Kohat Enclave, Delhi whereas the joint owner of the said locker are Ms. Sonika Singhal and her mother in law Mrs. Vinod Gupta. During the locker operation gold and diamond articles including silver items valued at Rs. 36,59,837/- was found. 2.1 Further, search and seizure operation was carried out at the premise of Sh. Mahavir Prasad Gupta, 295, Kohat Enclave, Pitampura, New Delhi and jewellery worth of Rs. 66,26,203/- was found. During the course of statement

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recorded during search proceedings Sh. Amit Singhal husband of Smt. Sonika Singhal was recorded on oath on 18.10.2019, he stated that the jewellery found belongs to him, his parents and wife Smt. Sonika Singhal. Accordingly, as per panchnama drawn in the name of Sh. M.P. Gupta jewellery worth of Rs. 31,20,581/- belongs to Smt. Sonika Singhal and her husband Sh. Amit Singhal.”

the Income Tax Act, 1961 ('Act' for short) on 13/03/2024 by making

an addition of Rs. 67,80,418/- under Section 69A of the Income Tax

Act, 1961 ('Act' for short). Aggrieved by the assessment order dated

13/03/2024, Assessee preferred an Appeal before the Ld. CIT(A). The

Ld. CIT(A) vide order dated 28/07/2025, dismissed the appeal. As

against the order of the Ld. CIT(A), Assessee preferred the present

Appeal.

submitted that the Assessee provided a detailed explanation regarding

the source and ownership of the jewellery found during the search

which has not been appreciated by the Lower Authorities. Further,

submitted that the jewellery seized during the search belongs to family

members of the Assessee which has been properly explained by the

Assessee with documentary evidences. The Ld. Counsel has also

relied on the CBDT Instruction No. 1916 dated 11/05/1994and

further submitted that the Assessee had purchased 257.780 grams

gold jewelery and also produced the invoices in support of the same

3 ITA No. 5083/Del/2025 Sonika Singhal Vs. DCIT

which is reproduced in the paper book pages 256 to 258. The Ld.

Counsel has relied on plethora of judicial precedents inthe written

submission filed before the Ld. CIT(A), which were again reiterated

before us. Thus, the Ld. Assessee's Representative sought for allowing

the Ground No. 12 of the Assessee.

submitted that the authorities below have duly considered the CBDT

Circulars and after giving the benefit of the CBDT Circular, the

addition has been made which has been rightly confirmed by the Ld.

CIT(A), thus, by relying on the orders of the Lower Authorities, sought

for dismissal of the Ground No. 12 of the Assessee.

available on record. During the search and seizure operation

conducted on 08/10/2019, the jewellery worth Rs. 67,80,418/- were

found which collectively belongs to the Assessee, Sh. Amit Singhal and

Smt. Vinod Gupta. The assessment has been framed against the

Assessee by making an addition of Rs. 67,80,418/- u/s 69A of the Act.

In order to prove the source and ownership of the jewellery found

during the search the Assessee contended that jewellery seized during

the search, belongs to family members of the Assessee and the same is

from disclosed source. It is the case of the Assessee that, there are six

family members who can held maximum 1,550.00 grams of

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jewelleryas per CBDT Instruction No. 1916 dated 11/05/1994 dated

111/05/1994. The Assessee has also given the working Chart which

reproduced as under:-

S. No. Name Relationship Jewelry in Gms.

1 Mahabir Prasad Gupta Head of the 100.000 Aged 77 Years Family

2 Mrs. Vinod Gupta-Aged Wife Mahabir of 500.000 73 Years Prasad Gupta

3 Amit Singhal- Aged Son (passed away) 100.000 500.000 4 Sonika Singhal Aged 46 Wife of Amit Singhal Years 250.000 5 Kevina Singhal- Grand Daughter Aged 22 Years 100.000 6 Grand son Timinesh Singhal- Aged 17 Years 1550.000 Total

per the Assessee which is well within the guidelines of the CBDT vide

Instruction No. 1916 dated 11/05/1994. The said instructions reads

as under:

“In the case of a wealth-tax assessee, gold jewellery and and ornaments found in excess of the gross weight declared in the wealth-tax return only need to be seized.

ii. In the case of a person not assessed to wealth-tax, gold jewellery and ornaments to the extent of 500 gms. per married lady, 250 gms per unmarried lady and 100 gms. per male member of the family, need not be seized.”

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jewellery and to substantiate the said claim, the Assessee produced

copy of invoices at 256 to 258 of the Paper Book, which has been

produced before the Lower Authorities as well.

6397/Del/2012 vide order dated 16/05/2014 held as under: -

“4. We have considered the arguments of both sides and perused the material placed before us. We find that the issue of applicability of the Instruction No. 1916 dated 11.5.1994 to the assessment proceedings was considered by the Hon’ble Gujarat High Court in the case of CIT vs. RatanlalVyaparilal Jain (339 ITR 351). In this case the ITAT has allowed the rebate to the assessee as per the aforesaid CBDT’s Instructions. The Revenue aggrieved with the decision of the ITAT, has filed the appeal before the Hon’ble Gujarat High Court which held “The Tribunal found that the jewellery held by the assessee and his family members was well within the limit laid down the CBDT circular and accordingly, deleted the whole addition on the ground that the jewellery held by each of the family members was below the limits specified in the said circular. Though it is true that the CBDT Instruction No. 1916, dt. 11th may, 1996 lays down guidelines for seizure of jewellery and ornaments. In the course of search, the same takes into account the quantity of jewellery which would generally be held by family members of an assessee belonging to an ordinary Hindu household. The approach adopted by the Tribunal in following the said circular and giving benefit to the assessee, even for explaining the source in respect of the jewellery being held by the family is in consonance with the general practice in Hindu families whereby jewellery is gifted by the relatives and friends at the time of social functions, viz., marriages, birthdays, marriage anniversary and other festivals. These gifts are customary and customs prevailing in a society cannot be ignored. Thus although the circular had been issued for the purpose of non-seizure of jewellery during the course of search, the basis for the same recognizes customs prevailing in Hindu society. In the circumstances, unless the Revenue shows anything 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

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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.” We find that the aforesaid decision of the Hon’ble Gujarat High Court would be squarely applicable to the case under appeal before us. No contrary decision is brought to our notice. We, therefore, respectfully follow the above decision of the Hon’ble Gujarat High Court and direct the AO to allow the rebate of 950 gms. of jewellery as against the 700 gms. of jewellery directed by the CIT(A).”

Commissioner of Income Tax, Alwar Vs. Satya Narain Patni reported in

(2014) 46 Taxmann.com 440 Rajasthan held as under:-

“It is true that the circular of the CBDT, referred to supra dt. 11/05/1994 only refers to the jewellery to the extent of 500 gms per married lady, 250 gms per unmarried lady and 100 gms per male member of the family, need not be seized and it does not speak about the questioning of the said jewellery from the person who has been found with possession of the said jewellery. However, the Board, looking to the Indian customs and traditions, has fairly expressed that jewellery to the said extent will not be seized and once the Board is also of the express opinion that the said jewellery cannot be seized, it should normally mean that any jewellery, found in possesion of a married lady to the extent of 500 gms, 250 gms per unmarried lady and 100 gms per male member of the family will also not be questioned about its source and acquisation. We can take notice of the fact that at the time of wedding, the daughter/daughter-in-law receives gold ornaments jewellery and other goods not only from parental side but in-laws side as well at the time of 'Vidai' (farewell) or/and at the time when the daughter-in-law enters the house of her husband. We can also take notice of the fact that thereafter also, she continues to receive some small items by various other close friends and relatives of both the sides as well as on the auspicious occasion of birth of a child whether male or female and the CBDT, looking to such cutoms prevailing throughout India, in one way or the another, came out with this Circular and we accordingly are of the firm opinion that it should also mean that to the extent of the aforesaid jewellery, found in possession of the varoius persons, even source cannot be questioned. It is certainly 'Stridhan' of the

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woman and normally no question at least to the said extent can be made. However, if the authorized officers or/and the Assessing Officers, find jewellery beyond the said weight, then certainly they can question the source of acquisation of the jewellery and also in appropriate cases, if no proper explanation has been offered, can treat the jewellery beyond the said limit as unexplained investment of the person with whom the said jewellery has been found.”

customs and practice of the community to which the Assessee family

belongs to and also considering the CBDT Instruction (supra) and by

relying on the above-mentioned judicial precedents, we find no

justification to uphold the order of the Ld. CIT(A) in sustaining

addition made by the A.O. Accordingly, the addition of Rs.

67,80,418/- made u/s 69A of the Act by the A.O. which has been

confirmed by the Ld. CIT(A) is hereby deleted by allowing Ground No.

12 of the Assessee.

other grounds require no adjudication.

Order pronounced in the Open Court on this 19th Day of May, 2026 Sd/- Sd/- (AMITABH SHUKLA) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 19/05/2026 R. Naheed *

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