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Income Tax Appellate Tribunal, DELHI BENCH “SMC”, NEW DELHI
Before: SHRI R. K. PANDA
O R D E R PER R. K. PANDA, AM : This appeal filed by the assessee is directed against the order dated 28.02.2017 of CIT(A)- 25, Delhi relating to assessment year 2014-15. 2. Facts of the case, in brief, are that the assessee is an individual. A search and seizure operation u/s 132 was carried out on 07.08.2013 in the case of Amrapali Group of cases which, inter-alia, includes the assessee. During the course of search operation, jewellery amounting to Rs.8,93,760/- was found from the assessee at the Locker No.520, Bank of India, Patparganj, New Delhi.
Since the assessee could not explain the source of investment in the jewellery, the Assessing Officer made addition of Rs.8,93,760/- to the total income of the assessee as his undisclosed investment in jewellery.
3. Before the ld. CIT(A), the assessee submitted that the Gold Jewellery of 313.600 grams (Net Weight) was found at Locker No.520, Bank of India, Patparganj, Delhi. This jewellery was valued at the rate applicable at the time of search. However, the said jewellery was received by the assessee at the time of his marriage on 20.01.2007. It was further submitted that the assessee got married in the year 2007 and at that time the Gold rate was about Rs.11,000/- per 10 grams. Thus, the assessee and his wife got the jewellery of Rs.3,44,960/- which is very reasonable. The CBDT Circular No.19 of 2016 was brought to the notice of the ld. CIT(A). Various decisions were also brought to the notice of the ld. CIT(A) for the proposition that the jewellery received by the assessee at the time of marriage cannot be assessed as undisclosed investment.
However, the ld. CIT(A) was also not satisfied with the explanation given by the assessee and upheld the addition made by the Assessing Officer on the ground that no Wealth Tax Return was filed by the assessee in the past to substantiate the owning of such jewellery. Further, the assessee during the course of assessment proceedings also could not file any supporting documentary evidence i.e. purchase bills, etc.. No justification of source about the jewellery could be given during the appellate proceedings. Despite sufficient opportunity given during the appellate proceedings, the assessee evaded the appeal proceedings. He accordingly upheld the addition made by the Assessing Officer.
Aggrieved with such order of the ld. CIT(A), the assessee is in appeal before the Tribunal with the following grounds :-
“1. It is contended that determination and inclusion in income of Rs.8,93,760/- on account of Unexplained investment in Jewellery is wrong, perverse, not based on evidence, opposed to evidences on records, based on surmises and conjecture.
That upon the facts and circumstances of the case, the Ld. Assessing Officer is not justified to compute the total income at Rs.17,05,610/- against income of Rs.8,11,850/- shown in the return which is arbitrary, illegal, and bad in law and based on the surmises and conjecture totally disregarding the facts of the case.
Your appellant craves leaves to add, alter, amend, forgot if any of the grounds of appeal at the time of hearing, if required.”
6. I have considered the rival arguments made by both the sides and perused the orders of the authorities below. It is an admitted fact that during the course of search, jewellery (Net Weight) 313.600 grams was found at Locker no.520, Bank of India, Patparganj, Delhi. Since the assessee could not explain the source of such jewellery, the Assessing Officer made the addition of Rs.8,93,760/- as undisclosed investment in jewellery. It is the submission of the ld. counsel for the assessee that he and his wife have received the above jewellery at the time of marriage. It is also his submission that since the above gold jewellery is less than 500 grams, therefore, in view of the CBDT Circular No.19 of 2016 and various decisions, no addition should be made. I find some force in the above argument of the ld. counsel for the assessee. The Hon’ble Bombay High Court in the case of Mrs. Komal Wazir vs. DCIT reported in 120 DTR 353 has held that in the normal course of human conduct, on occasions such as marriage the parents and parents-in-law of a bride do normally gift jewellery to the bride. It is not possible to expect the bride to ask for evidence of bills/invoices to support the purchase of the jewellery. It was accordingly held that invocation of section 69 in these facts is completely unwarranted. The Hon’ble Rajasthan High Court in the case of CIT vs. Satya Narain Patni reported in 366 ITR 325 has held that where jewellery found in possession of assessee’s family was personal wearing of ladies and same was within permissible limit stipulated by CBDT Circular, no addition was to be made.
Since in the instant case, admittedly the jewellery found in the Locker was only 313.600 grams which is much less than 500 grams as per CBDT Circular No.19 of 2016, therefore, in my view, the ld. CIT(A) should not have insisted for Wealth Tax Return or bills and vouchers to explain the source of such investment in jewellery and should have deleted the addition made by the Assessing Officer. Although the above circular is for non-seizure of gold jewellery etc. however, various Courts and the Co-ordinate Benches of the Tribunal are taking a liberal view on the basis of this circular and are allowing credit for such gold/jewellery as explained. In this view of the matter, I set- aside the order of the ld. CIT(A) and direct the Assessing Officer to delete the addition. The grounds raised by the assessee are accordingly allowed.
In the result, the appeal filed by the assessee is allowed.
Order pronounced in the open Court at the time of hearing itself i.e. on this 20th day of November, 2017.