DINKAR LAXMAN MUJUMDAR,BHOPAL vs. DEPUTY COMMISSIONER OF INCOME TAX CENTRAL (1), BHOPAL, BHOPAL

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ITA 593/IND/2017Status: DisposedITAT Indore18 October 2018AY 2015-166 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the CBDT instructions regarding unseized jewellery should be interpreted harmoniously with Indian culture and traditions, and thus should extend to silver articles. Therefore, the addition of Rs. 75,278/- for silver articles was deleted.

What were the facts?

During a search operation, the assessee was found to possess silver articles weighing 1812 grams, valued at Rs. 75,278/-. The Assessing Officer made an addition for this amount as unexplained investment, which was confirmed by the CIT(A) despite allowing the claim for gold jewellery based on CBDT instructions.

What were the issues?

Whether the CBDT instructions regarding unseized jewellery apply to silver articles, and if so, whether the addition for silver articles was justified.

Which sections of the Income-tax Act were involved?

Section 132,Section 153A,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, INDORE BENCH, INDORE

Before: SHRI KUL BHARAT & SHRI MANISH BORAD

For Appellant: Shri S.S. Deshpande,C.A Date of Hearing
For Respondent: Smt. Ashima Gupta, CIT, Shri S.S. Deshpande,C.A Date of Hearing
Hearing: 16.10.2018Pronounced: 18.10.2018

PER MANISH BORAD, AM.

This appeal of Assessee pertaining to A.Y. 2015-16 is directed

against the order of Ld. Commissioner of Income Tax(Appeals)-3,

Bhopal (in short ‘CIT(A)’), dated 29.06.2017 which is arising out of

the order u/s 143(3) of the Income Tax Act 1961(hereinafter called

as the ‘Act’) framed on 30.09.2016 by DCIT (Central)-I, Bhopal.

2.

The assessee has raised following grounds of appeal;

Dinkar Laxman Mujumdar ITA No.593/Ind/2017 “That on the facts and in the circumstances of the case the Learned Commissioner of Income Tax (A) III was not justified in holding that the investment in silver jewellery amounting to Rs.75,278/- found during the course of search was out of unexplained sources”.

3.

Perusal of the above ground shows that the sole grievance of

the assessee is limited against the addition made by the Ld.

Assessing Officer towards unaccounted investment made in the

silver jewellery at Rs.75,278/- confirmed by the Ld.CIT(A) (In short

Ld.A.O).

4.

Briefly stated facts as culled out from the records are that the

assessee is an individual. Search and seizure operations were

carried out u/s 132(1) of the Income Tax Act on 12.08.2014.

Assessment u/s 153A r.w.s. 143(3) of the Act were framed for the

block of assessments from Assessment Year 2009-10 to 2015-16.

Consolidated assessment order was framed on 30.09.2016. For

Assessment Year 2015-16 only addition was made for

Rs.7,51,535/- towards unexplained investment in jewellery which

comprised of gold ornaments weighing 242 grams (net Weight)

Dinkar Laxman Mujumdar ITA No.593/Ind/2017 valuing at Rs.6,76,257/- and silver articles/utensils weighing 1812

grams(net weight) valuing at Rs.75,278/-.

5.

Aggrieved assessee preferred appeal before Ld.CIT(A) and

partly succeeded as the Ld.CIT(A) following the instructions of

Central Board of Direct Taxes (CBDT) bearing No.1916 dated

11.05.1994 allowed the claim of gold jewellery weighing 242 grams.

However addition for Rs.75,278/- on unaccounted investment in

silver articles was confirmed.

6.

Now the aggrieved assessee is in appeal before the Tribunal.

7.

The Ld. Counsel for the assessee reiterated the submission

made before the lower authorities and requested for deleting the

addition looking to the regular income of source of the assessee as

well as his standard of living.

8.

Per contra the Departmental Representative argued and

supporting the orders of lower authorities.

9.

We have heard rival contentions and perused the records

placed before us. The only issue before us is that whether Ld.CIT(A)

was justified in confirming the addition of Rs.75,278/- for the

Dinkar Laxman Mujumdar ITA No.593/Ind/2017 alleged unaccounted investment in silver articles weighing 1812

grams.

10.

We find that the Central Board of Direct Taxes issued

instruction No.1916 dated 11.5.1994 which reads as follows;

“Instruction No.1916 (F.No. 286/63/93-IT(INV.II)), dated 11.5.1994, issued by the Central Board of Direct Taxes (‘CBDT’) directs the income tax authorities, conducting a search, to not seize jewellery and ornaments found during the course of varying quantities specified in the instructions, depending upon the marital status and the gender of a person searched. The guidelines are issued to address the instances of seizure of jewellery of small quantity in the course of search operations u/s 132 that have been noticed by the CBDT. A common approach is suggested in situations where search parties come across items of jewellery for strict compliance by the authorities. The CBDT directed that 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 grms per unmarried lady and 100 gms per male member of the family, need not be seized”.

11.

In the instant case Ld.CIT(A) following the above referred CDT

instructions allowed the claim of investment in gold jewellery

weighing 242 gms but confirmed the addition for silver articles 4

Dinkar Laxman Mujumdar ITA No.593/Ind/2017 weighing 1812 gms. The above referred instructions refers only to

“jewellery and ornaments” and nowhere restrict it to gold jewellery.

One cannot ignore the fact that in the Indian families there is a

culture of giving silver ornaments and utensils on auspicious and

marriage occasions. Restricting the limit of 500 gm/250 gm/100

gm only to the “gold jewellery ornaments” will not serve the true

purpose of the CBDT instructions and it has to be applied

hamnoninerly in the light of the Indian culture and traditions.

12.

We therefore in the given facts and circumstances of the case

are of the considered view that the impugned silver jewellery

weighing 1812 gms valuing at Rs.75,278/-should not have been

added to the income of the assessee and the benefit of the CBDT

Circular No. 1916 dated 11.5.1994 should also be spread so as

to cover the silver articles weighing 1812 gms. We therefore set

aside the orders of both the lower authorities and delete the

addition of Rs.75,278/- for the alleged unaccounted investment in

silver articles and allow the grounds raised by the assessee.

Dinkar Laxman Mujumdar ITA No.593/Ind/2017

13.

In the result the appeal of the assessee stands allowed.

The order pronounced in the open Court on 18.10.2018.

Sd/- Sd/-

( KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER �दनांक /Dated : 18 October, 2018 /Dev

Copy to: The Appellant/Respondent/CIT concerned/CIT(A) concerned/ DR, ITAT, Indore/Guard file. By order Asstt.Registrar,I.T.A.T., Indore

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