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Facts
During a search on October 5, 2017, the assessee was found to possess jewellery from their residence and a bank locker. The Assessing Officer (AO) treated this jewellery as unexplained and added its value to the assessee's income. The Commissioner of Income Tax (Appeals) confirmed the AO's action.
Held
The Tribunal noted that the CBDT Circular No. 1916 dated May 11, 1994, allows certain limits of jewellery per family member to be considered explained. The Tribunal cited various High Court rulings supporting this circular. Since the revenue did not rebut this presumption, the jewellery was treated as explained.
Key Issues
Whether the jewellery found during the search and not explained by the assessee to the AO is to be added to the total income, considering the provisions of CBDT Circular No. 1916 and subsequent High Court judgments.
Sections Cited
69A, 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH, ‘E’: NEW DELHI
Before: SHRI MAHAVIR SINGH
ORDER PER MAHAVIR SINGH, VP,
This appeal by the assessee is arising out of order of learned Commissioner of Income Tax (Appeals)-29, New Delhi [hereinafter referred to as ‘ld. CIT(A)] in appeal No.CIT(A), Delhi-29 10322/2019-20 order dated 26.03.2025. Assessment was framed by ACIT, Central Circle-25, New Delhi, under section 143(3) of the Income Tax Act, 1961(hereinafter referred to as ‘the Act’) vide his order dated 26.12.2019, for the Assessment Year 2018-19.
The only issue in this appeal is as regards to the order of the ld. CIT(A)
confirming the action of the Assessing Officer in making addition of unexplained jewellery found during the course of search under section 69A of the Act amounting to Rs.13,82,644/-.
We have heard rival contentions and gone through the facts of the case.
We noted that during the course of search on the assessee on 05.10.2017, the searched party found gold jewellery weighing 152.92 grams from the residence of the assessee at F-4/10, DLF Faridabad and weighing another jewellery of 743.524 grams from the bank locker no.7 maintained with ICICI Bank Sector-7, Faridabad. As the assessee could not explain before AO, the AO added back the jewellery found during the course of search as unexplained and added to the returned of income of the assessee amounting to Rs.13,82,644/-. Aggrieved assessee preferred appeal before the ld. CIT(A), who also confirmed the action of AO.
Aggrieved assessee is in appeal before the Tribunal.
We noted from the facts of the case that total jewellery seized was 896.444 grams i.e 152.92 grams from the residence of the assessee and 743.524 grams from bank locker of the assessee. The ld. Counsel for the assessee now before us stated that the issue stands covered in favour of the assessee for the reason that there five family members of the assessee Shri Vinod Kumar Bhatia namely Smt. Asha Bhatia the wife, mother, Prerit Bhatia the son, Mehul Page 2 of 5 Bhatia, the son, and assessee himself. The ld. Counsel for the assessee filed a complete chart of the jewellery found and explained jewellery as under:-
S. NO. Family Jewellery Jewellery Total Jewellery Member Admitted By Admitted By Jewellery Allowed Per Assessee Assessee Admitted By Family Member (Residence) (Bank Assessee In As per CBDT Locker) Statement Instruction Recorded No.1916 Dated u/s 132(4) 11.05.1994 1. Asha Bhatia 5 tolas or 16 tolas or 21 toals or 500 gms allowed (Wife) 58.32 gms 186.62 gms 244.940 gms per married lady (approx) (approx) (approx) 2. Mother - - - 500 gms allowed per married lady 3. Prerit Bhatia - 5 tolas or 5 tolas or 100 gms allowed (SON) 58.32 gms 58.32 gms per male member (approx) (approx) 4. Mehul Bhatia - 3 tolas or 3 tolas or 100 gms allowed (SON) 34.99 gms 34.99 gms per male member (approx) (approx) 5. Vinod Kumar 2 tolas or 6 tolas or 8 tolas or 100 gms allowed Bhatia 23.33 gms 69.98 gms 93.31 gms per male member (Assessee) (approx) (approx) (approx) 7 tolas or 30 tolas or 37 tolas of 1300 gms allowed 81.65 gms 349.91 gms 431.568 gms in this case as per (approx) (approx) (approx) CBDT instruction no.1916 dated 11.05.1994 but only 896.444 gms (152.92 gms residence & 743.524 gms bank locker) found during the course of search.
The ld. Counsel for the assessee stated that as per CBDT Circular no.1916 dated 11.05.1994, the jewellery to the extent of 500 grams per married lady and 100 grams per mail member is to be allowed and not to be seized. This issue has been further adjudicated by various Hon’ble High Courts including Page 3 of 5 Rajasthan High Court in the case of CIT vs Satya Narain Patni reported in 366 ITR 325 (Raj.), Hon’ble Gujarat High Court in the case of CIT vs Ratanlal Vyaparilal Jain reported in 339 ITR 351 (Guj.) and Hon’ble Karnataka High Court in the case of Patni Devi vs ITO reported in 240 ITR 727 (Kar.) that the presumption in regard to the above circular goes in favour of the assessee that it is presumed that the jewellery to the extent as mentioned in the Circular is treated as explain because the presumption has not rebutted in the present case by the Revenue. Hence, we treat this jewellery as explained and delete the addition.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 02nd February, 2026.
Sd/- Sd/- [AMITABH SHUKLA] [MAHAVIR SINGH] ACCOUNTANT MEMBER VICE PRESIDENT Dated: 04.02.2026 f{x~{tÜ f{x~{tÜ f{x~{tÜ f{x~{tÜ Copy forwarded to: 1. Appellant 2. Respondent 3. PCIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi,
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