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Facts
During a search and seizure operation under section 132, jewellery weighing 2493 gms. and valued at Rs.69,16,000/- was found. The Assessing Officer, applying CBDT Instruction No. 1916, allowed 1300 gms. for family members but made an addition of Rs.18,82,412/- for the remaining jewellery, which was upheld by the CIT(A). The assessee contended that a portion of the jewellery belonged to her widowed mother-in-law and divorced sister-in-law, who resided with them, and that affidavits supporting this claim were provided.
Held
The Tribunal held that the benefit of CBDT Instruction No. 1916 should be extended to the jewellery claimed to belong to the assessee's mother-in-law and sister-in-law. Since the affidavits and evidences provided by the assessee regarding the ownership and possession of this jewellery were not countered by the revenue authorities, the addition made by the lower authorities for this portion was deemed unsustainable in law.
Key Issues
Whether the addition made for excess jewellery found during a search operation, claimed to belong to other residing family members and supported by affidavits, is sustainable in law under CBDT Instruction No. 1916.
Sections Cited
Section 132 of the Income Tax Act, 1961, CBDT Instruction No. 1916
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Income Tax Appellate Tribunal, DELHI BENCH ‘E’, NEW DELHI
Before: Dr. B. R. R. Kumar,
ORDER Per Dr. B. R. R. Kumar, Accountant Member:
The present appeals have been filed by the assessees against the order of ld. CIT(A)-27, New Delhi dated 14.12.2022.
Since, the issues involved in both the appeals are similar, they were heard together and being adjudicated by a common order. In , following grounds have been raised by the assessee:
“1. That the ld. CIT(A) has grossly erred both in law and fact in ignoring and rejecting the explanations and 2 & 293/Del/2023 Monika & Narender Sachdeva submissions made by the appellant while upholding the addition of Rs.18,82,412/- made on account of jewellery found over and above permitted by CBDT’s Instruction No. 1916 which is highly, unjustified, uncalled for and bad in law.
2. That the ld. CIT(A) has grossly erred in rejecting the contention that the gold jewellery was acquired through gifts made by relatives and other family members over a long period of time, is as per prevailing customs and habits.
3. That the ld. CIT(A) has grossly erred in rejecting the submissions of the appellant that jewellery found in the locker pertain to her mother and sister which submission was supported by evidences including their affidavit and hence the addition sustained of Rs.18,82,412/- is unsustainable in law.”
Heard the arguments of both the parties and perused the material available on record.
Brief facts of the case are that a search & seizure operation u/s 132 of the Income Tax Act, 1961 was conducted upon the assessee on 11.10.2017 alongwith different business and residential premises of M/s Laxmi Remote group of cases. This group is mainly engaged in manufacturing of remote controls, setup boxes, battery etc. The assessee filed return of income on 31.12.2018 declaring total income at Rs.3,16,450/-. During the search, jewellery weighing 2493 gms. valued at Rs.69,16,000/- and stone valued at Rs.38,80,590/-. As per the Instruction of the CBDT No. 1916, the Assessing Officer allowed 1300 gms. in the name of the family members namely, Sh. Narender Kumar Sachdeva (100 gms.), wife, Mrs. Monika Sachdeva (500 gms.), son, Sh. Pranay Sachdeva (100 gms.), son, Sh. Kunal Sachdeva (100 gms.) and mother, Smt. Shanti Sachdeva (100 gms.) and brought the remaining amount to tax.
3 & 293/Del/2023 Monika & Narender Sachdeva 5. Before the Assessing Officer as well as the ld. CIT(A), it was submitted that the widowed mother-in-law Smt. Krishna Behal and the divorced sister-in-law Ms. Shivani Behal were staying with them and the jewellery pertaining to them was kept with the assessee along with the jewellery of her sister Ms. Shilpa Behal. Evidences pertaining to existence of jewellery as valued and mentioned in the valuation report have been submitted at page no. 23 to 33 of the paper book. Further, affidavits of Smt. Krishna Behal, Smt. Shivani Behal and Ms. Shilpa Behal have been filed before the revenue authorities which have not been countered by the revenue authorities on any aspect of the contents of the assessee. Hence, we hold that benefit of the Instruction of the CBDT No. 1916 be extended in allowing the jewellery pertaining to Smt. Krishna Behal, Smt. Shivani Behal and Ms. Shilpa Behal whose jewellery has been in the possession of the assessee.