What did the Tribunal hold?

The Tribunal found that the Assessing Officer had not considered the CBDT Circular No. 1916 and that there were issues with the documentation (duplicate and missing pages in the punchnama). Therefore, the matter was remitted back to the Assessing Officer for re-adjudication.

During a search operation, jewellery worth Rs. 49,77,605/- was found. The Assessing Officer added Rs. 9,88,500/-, representing 50% of unexplained jewellery, without considering the quantity or the CBDT circular regarding permissible jewellery holdings.

What were the issues?

Whether the addition of unexplained jewellery was justified without considering the permissible limits under CBDT Circular No. 1916 and proper documentation.

Sh. Ambesh Kumar Tyagi, Ghaziabad vs DCIT | ITAT Delhi 2019

Income Tax Appellate Tribunal, DELHI BENCH “A” NEW DELHI

For Appellant: Shri Dinesh Chandra

For Respondent: Shri Mithun Sethi

Hearing: 13/08/2019Pronounced: 14/08/2019

PER T.S. KAPOOR, ACCOUNTANT MEMBER:

This appeal is filed by the assessee against the order of the Ld. CIT(A)-IV, Kanpur, dated 27/01/2016.

The Ld. AR has taken a number of grounds, however, the crux of the grounds of appeal is the action of the Ld. CIT(A) by which he has dismissed the appeal filed by the assessee against the order of the assessment dated 31/03/2013. The Ld. AR submitted that during the search operations, the jewellery worth Rs.49,77,605/- was found and the Assessing Officer held jewellery worth Rs.19,77,000/- to be unexplained and therefore made the addition of Rs.9,88,500/-, being 50% share of the unexplained jewellery. The Ld. AR invited our attention to the copy of punchnama placed at paper book page 9 to 13 and our specific attention was invited to paper book page 10 and 11 and it was submitted that paper book page 11 is a duplicate page of paper book page 10 and moreover while making the addition, the Assessing Officer has not mentioned quantity of jewellery. It was submitted that in view of CBDT Circular No.1916 dated 11/05/1194, each adult lady members of the family are permitted to hold 500 grams of jewellery which has not been kept in mind by the authorities below. It was submitted that family of assessee consisted of four adult lady members and therefore if benefit of the Circular is granted, then no addition would have been warranted.

It was, therefore prayed that matter may be set-aside to the Assessing Officer for verification of these facts.

The ld. DR fairly agreed that matter needs to be set-aside to the Assessing Officer.

We have heard both the parties and have gone through the material placed on record. We find that on 18/09/2012, a search operation was conducted on the premises of the assessee. A copy of punchanama is placed from paper book page 9 to 13. Page 11 is duplicate copy of page 10. The Ld. AR had produced original copy of punchanama and in that punchanama also there is duplicate page and one page is missing. From the copy of the assessment order, we observe that jewellery worth Rs.49,77,605/- was found during the search. The assessee, during the assessment proceedings, had explained that the jewellery belongs to whole family, who were living together. However, the Assessing Officer has not given benefit of Circular No.1916 dated 11/05/1994.

Therefore, we deem it appropriate to remit the issue back to the Assessing Officer who should re-adjudicate the issue keeping in view the guidelines given by CBDT in their Circular No.1916 dated 11/05/1994. Needless to say that the assessee will be provided sufficient opportunity of being heard.

In the result, appeal filed by the assessee is allowed for statistical purposes.

Order pronounced in the open court on 14/08/2019.

SH. AMBESH KUMAR TYAGI,GHAZIABAD vs. DCIT, GHAZIABAD

What did the Tribunal hold?

What were the facts?

What were the issues?

Which sections of the Income-tax Act were involved?

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