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Income Tax Appellate Tribunal, DELHI ‘SMC’ BENCH,
Before: SHRI B.P. JAIN
IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘SMC’ BENCH, NEW DELHI BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER [A.Y. 2008-09] Shri Ashok Kumar Jain Vs. The Income-tax Officer House No. 108, Sector 16, Ward – 1(1), Faridabad Faridabad PAN : AALPJ 6110 F [Assessee] [Respondent] Date of Hearing : 29.11.2017 Date of Pronouncement : 14.12.2017 Assessee by : Shri Vivek Bansal, Adv Shri Sanjay Kumar, Adv Revenue by : Shri Atiq Ahmed Sr. DR ORDER This appeal of the assessee arises from the order of the ld. CIT(A), Faridabad vide order dated 03.06.2015 for A.Y. 2008-09.
The assessee has raised the following sole ground of appeal:
“1. On the facts and in the circumstances of the case as well as in law the ld. CIT(A) was not justified in upholding the addition of Rs. 5,30,000/- made by the Assessing Officer u/s 69C of the Act on account of unexplained jewellery.”
Briefly stated, the facts of the case are that the Assessing Officer made addition of Rs. 6,20,000/- u/s 69C of the Income-tax Act, 1961 [hereinafter referred to as 'the Act' for short] on account of expenditure made by the assessee on gold and diamond Jewellery for the marriage of his daughter. The assessee has claimed to have spent Rs.6,20,000/- on account of gold and jewelry including diamond jewelry in the expenditure which has been explained to be given out of old jewellery lying with the assessee. No proof has been given that the assessee was having the old jewelry that has been given, whether in same or modified form. The explanation of the assessee is contrary to the general practice and customs. No documentary evidence has been furnished for payment for repair of old jewellery or for renovation charges had been given. Thus, the explanation of the assessee is neither substantiated by the evidences or is acceptable on the grounds of normal conduct or circumstantial evidences. In view of the fact that the assessee has failed to furnish any evidence to support his claim of source of expenditure in the above said cases and fact that even the normal conduct of a common man of prudence would be contrary to the explanations offered by the assessee, the expenditure to the extent of Rs.6,20,000/- was treated as unexplained expenditure liable to tax u/s 69C of the Act a income from undisclosed sources.
The ld. CIT(A) allowed relief of Rs. 90,000/- against the bill of purchase from P.P. Jewellers and retained the addition of Rs. 5,30,000/-.
I have heard the rival arguments made by both the sides, perused the orders of the A.O and the ld. CIT(A) and the paper book filed on behalf of the assessee. I have also considered the various decisions relied upon by both the sides. The ld. counsel for the assessee brought to our notice the decision of the Hon'ble High Court of Rajasthan in the case of CIT Vs. Satya Narain Patni reported in 46 Taxmann.com 440 [Raj] wherein it has been held that jewellery upto 500 gms of a married lady will not be questioned about its source and acquisition. The decision of the Hon'ble High Court of Rajasthan is based on the interpretation of Instruction No. 1916 dated 11.05.1994 issued by the CBDT which reads as under:
“Instances of seizure of jewellery of small quantity in course of operations under Section 132 have come to the notice of the Board. The question of a common approach to situations where search parties come across items of jewellery, has been examined by the Board and following guidelines are issued for strict compliance.
(i) In the case of a wealth-tax assessee, gold jewellery and ornaments found in excess of the gross weight declared in the wealth-tax return only need 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.
(iii) The authorized officer may, having regard to the status of the family, and the custom and practices of the community to which the family belongs and other circumstances of the case, decide to exclude a larger quantity of jewellery and ornaments from seizure. This should be reported to the Director of Income tax/Commissioner authorizing the search at the time of furnishing the search report.
(iv) In all cases, a detailed inventory of the jewellery and ornaments found must be prepared to be used for assessment purposes.
These guidelines may please be brought to the notice of the officers in your region.”
The Circular prima facie speaks that the jewellery to the extent of 500 gms per married lady need not be seized by the department which had been interpreted by the Hon'ble High Court in the said case which reads as under:
“12. 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 possession 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 acquisition. 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 customs 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 various persons, even source cannot be questioned. It is certainly 'Stridhan' of the 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 acquisition of the jewellery and also in appropriate cases, if no proper explanation has been offered, can treat the jewellery limit as unexplained investment of the person with whom the said jewellery has been found”.
From the decision of the Hon'ble High Court of Rajasthan in the case of Satya Narain patni [supra] it is evident that jewellery to the extent of 500 gms given during the marriage of a daughter cannot be questioned by the department. In such facts and circumstances of the case, the Assessing Officer is not justified in making the addition and ld. CIT(A) in confirming the same. Accordingly, the same is directed to be deleted. Thus, the sole ground raised by the assessee is allowed.
In the result, the appeal of the assessee in is allowed. The order is pronounced in the open court on 14.12.2017.