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Income Tax Appellate Tribunal, DELHI BENCH ‘F’, NEW DELHI
ORDER
Per N. K. Saini, AM:
This is an appeal by the department against the order dated 15.05.2014 of ld. CIT(A)-XXXIII, New Delhi.
Following grounds have been raised in this appeal: “1. On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in directing the AO to treat the jewellery to the extent as mentioned in Instruction No. 1916 of CBDT as explained when it was clearly established that the assessee could not substantiate the source of investment.
2. On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in not appreciating the facts that Instruction No. 1916 has been issued for mitigating the inconvenience caused 2 Renu Bansal to the family of a person searched by seizure of entire unexplained jewellery owing to social status attached with jewellery and has no relevance while making additions concerning unexplained investment during assessment proceedings.
3. On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts that non seizure of jewellery in view of Instruction No. 1916 of CBDT does not tantamount to satisfactory explanation of the source of acquisition of jewellery.
4. The order of the CIT(A) is erroneous and is not tenable on facts and in law.
5. The appellant craves leave to add, alter or amend any/ all of the grounds of appeal before or during the course of the hearing of the appeal.”
3. Facts of the case in brief are that a search and seizure operation u/s 132 of the Income Tax Act, 1961 (hereinafter referred to as the Act) was carried out on 21.01.2011 in Dharampal Satyapal Group of cases. The assessee belongs to the said group and filed the return of income on 15.02.2012 declaring an income of Rs.2,08,610/-. During the course of assessment proceedings, the AO noticed that jewellery valuing Rs.29,84,176/- was found during the course of search from the residence of the assessee and another jewellery valuing Rs.11,02,221/- was found from the locker maintained with J & K Bank, Sector-18, Noida. The explanation of the assessee with regard to the jewellery found during the course of search and seizure proceedings was as under:
3 Renu Bansal "Point No. I8 the cash found is Rs, 94,000/- is self explanatory from cash flow chart and source of jewellery found and released during the search is gift received from family members of both side (parental & in laws) at the time of marriage of the assessee and other occasion such as birth of every child etc. Source of jewellery found and seized during the search is explained in VDIS 1997 by assessee husband Sh. Kamal Bansal, Copy of receipt of acknowledgment receipt of VDIS of Kamal Bansal is enclosed with the reply of Kamal Bansal for your perusal."
The AO asked the assessee to explain the source of acquisition of jewellery and to produce the documentary evidence in support of her claim. The assessee submitted that the jewellery were gifted in marriage and on different occasion. The AO did not find merit in the submissions of the assessee and made the addition of Rs.40,86,397/-.
Being aggrieved the assessee carried the matter to the ld. CIT(A) and submitted as under: “i) Warrant at Locker was in joint have namely sh. Kamal Bansal ( Husband of assessee) and the appellant Mrs. Renu Bansal and even the inventory and valuation is in the joint name of the appellant and her husband valuing the jewellery at Rs.11,02,221/-weighing total weight 530-950 gm. Similarly, valuation report of jewellery found at the residence was in the name of Renu Bansal, however in the valuation report itself it is mentioned that the jewellery was owned jointly by the appellant and her husband Sh. Kamal Bansal. However, the Ld. Assessing Officer has not given credit for the jewellery declared in voluntary disclosure of Income scheme VDIS-1997 in the hands of her husband Sh. Kamal Bansal on the basis of merely the statement of Smt. Renu Bansal that the jewellery was received as 4 Renu Bansal gift on various occasion. She has not mentioned the VDIS declaration as source of jewellery found. Therefore, on this basis, the Ld. Assessing officer has not allowed the credit of VDIS. ii) Ld. AR has argued that the appellant belongs to an affluent Baniya family where gifts are given at the time of marriage, Child birth and other occasion. He claimed the credit as per instruction no. 1916 dt. 11.05.1994 of CBDT which has been held as explained jewellery by various judicial forum.”
The reliance was placed on the following case laws: � Harakchand N. Jain Vs ACIT (1998) 61 TTJ 223 (Mum.) � Ashok Chaddha Vs ITO (2011) 202 Taxman 395 (Del.) � VIT Vs Ratanlal Vyaparilal Jain (2011) 339 ITR 351 (Guj.) � S. K. Patel Vs ACIT in � ACIT Vs Sh. Narendra D Patel in ITA No. 5294/Mum/2010 � ACIT Vs Raj Kumari Aggarwal in ITA No. 530/Del/2010 7. It was further submitted that the assessee on the basis of VDIS claim and instruction number 1916 issued by the CBDT claimed the following jewellery as explained: S. NO. Name Relationship Share in gold as per circular (Grams) 1. Renu Bansal Assessee 500 2. Kamal Bansal Husband Explained Below in his VDIS 3. Isha Bansal Daughter 250 4. Sejal Bansal Daughter 250 5. Virnda Bansal Daughter 250 6. Tanush Bansal Son 100 Total 1350grams 8. The ld. CIT(A) after considering the submissions of the assessee directed the AO to accept the jewellery as explained as per the Instruction No. 1916 issued by CBDT for various family members and 5 Renu Bansal balance jewellery may be treated as unexplained. The relevant findings of the ld. CIT(A) were as under: “I have accepted the jewellery explained to the extent of instruction no. 1916 issued by CBDT for various family members. Therefore, the assessing officer is directed to treat the jewellery to the extent of 500 gms in case of appellant, 100 gms in case his husband being male members and 100 gms for son and 250 gms for unmarried daughters after ascertaining the fact on the size of family and fulfilling the condition that they stay together. Balance jewellery may be treated as unexplained. Accordingly, the grounds of appeal
are partly allowed.”
9. Now the department is in appeal. The ld. CIT DR reiterated the observations made by the AO and strongly supported the assessment order dated 11.03.2013.
10. In his rival submissions the ld. Counsel for the assessee reiterated the submissions made before the authorities below and strongly supported the impugned order passed by the ld. CIT(A).
11. We have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it is noticed that the ld. CIT(A) allowed the relief to the assessee to the extent of jewellery which was covered by the Instruction No. 1916 dated 11.05.1994 issued by the CBDT. On a similar issue the Hon’ble Gujarat High Court in the case of CIT Vs Ratanlal Vyaparilal Jain (2011) 339 ITR 351 held as under:
6 Renu Bansal “that the approach adopted by the Tribunal in following the CBDT Circular No. 1916, dated May 11, 1994, and giving benefit to the assesses, even for explaining the source in respect of the jewellery being held by the family was in consonance with the general prac- tice in Hindu families whereby jewellery was gifted by the relatives and friends at the time of social functions, viz., marriages, birthdays, marriage anniversary and other festivals. In the circumstances, unless the Revenue showed anything to the contrary, it could safely be presumed that the source to the extent of the jewellery stated in the circular stood explained. Thus, the approach adopted by the Tribunal in considering the extent of jewellery specified under the circular to be a reasonable quantity, could not be faulted.”
We, therefore, by keeping in view the ratio laid down by the Hon’ble Gujarat High Court in the aforesaid referred to case, do not see any valid ground to interfere with the findings of the ld. CIT(A). Accordingly, we do not see any merit in the appeal of the department.
In the result, the appeal of the department is dismissed. (Order Pronounced in the Court on 29/09/2017)