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Facts
A search operation under section 132 of the Income Tax Act revealed two lockers, one of which (Locker No. 482) was jointly held by the assessee and her non-resident daughter. The Assessing Officer made an addition for unexplained jewelry, which the CIT(A) partially upheld by sustaining an addition of Rs. 3,72,209/- for 85.704 gms of jewelry, after granting relief for 1400 gms based on CBDT Circular No. 1916. The assessee's daughter explicitly claimed ownership of the contents of Locker No. 482.
Held
The Tribunal found that Locker No. 482 was jointly held by the assessee and her non-resident daughter, who resides in the USA and had explicitly claimed ownership of the locker's contents via a letter. Considering it reasonable for a non-resident daughter to keep jewelry with her mother and noting the lack of further inquiry by the lower authorities, the Tribunal applied the Principle of Probability. It concluded that the daughter's ownership of the jewelry could not be ruled out and directed the deletion of the addition of Rs. 3,72,209/-.
Key Issues
Whether the addition for unexplained jewelry found in a jointly held locker was justified when the non-resident co-owner daughter claimed sole ownership of the contents.
Sections Cited
Section 69, Section 115BBE, Section 132
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Income Tax Appellate Tribunal, DELHI ‘E’ BENCH,
Before: SHRI N.K. BILLAIYA, & SHRI KUL BHARAT
PER N.K. BILLAIYA, ACCOUNTANT MEMBER:-
This appeal by the assessee is preferred against the order of the ld. CIT(A) – 27, New Delhi dated 11.01.2023 pertaining to A.Y 2019-20.
The sum and substance of the grievance of the assessee is that the ld. CIT(A) erred in confirming the addition of Rs. 3,72,209/- made u/s 69 r.w.s 115BBE of the Income-tax Act, 1961 [the Act, for short].
Briefly stated, the facts of the case are that a search and seizure operation u/s 132 of the Act was conducted by the Investigation Wing on 12.07.2018 in Rohit Tiwari Group of cases. Two lockers, namely Locker No. 724 and Locker No. 482 of New Delhi Vaults Limited were also covered u/s 132 of the Act.
The contents of the Lockers were as under:
5, While framing the assessment, the Assessing Officer accepted the possession of jewelry as per the CBDT Circular No. 1916 dated 11.05.1994 in respect of the appellant and her husband at 600 gms and made addition of the balance 885.704 gms valued at Rs. 28,14,072/-
The assessee agitated the matter before the ld. CIT(A) and the ld. CIT(A) further gave relief drawing support from the same CBDT Circular in respect of daughter of the assessee, her husband and two children. Relief of 1400 gms was granted by the ld. CIT(A) and addition of Rs. Rs. 3,72,209/- of 85.704 gms was sustained.
Before us, the ld. counsel for the assessee vehemently stated that locker No. 482 was in the joint name with daughter Ms. Samita Tiwari and her daughter has categorically accepted that the contents in Locker 482 belonged to her and her only.
The ld. counsel for the assessee drew our attention to the letter written by the daughter which is exhibited at pages 17 to 19 of the order of the ld. CIT(A).
Per contra, the ld. DR stated that the ld. CIT(A) has already given relief of 1400 gms considering the CBDT Circular in the hands of the daughter and her husband and children.
We have given thoughtful consideration to the orders of the authorities below. The undisputed fact is that Locker No. 482 was jointly held by the assessee and her daughter. It is also not in dispute that the daughter Ms. Samita Tiwari is a non–resident and lives in the United States of America. It is quite reasonable and logical for a married daughter to keep her jewelry with her mother, more so when she is living abroad. The letter written by the daughter also makes it abundantly clear that the items in Locker No. 482 belonged to the daughter of the assessee.
We find that no enquiry whatsoever has been done thereafter, neither by the Assessing Officer nor by the ld. CIT(A). Therefore, accepting the Principle of Probability, ownership of jewellery by the daughter cannot be ruled out.
We, accordingly, direct the Assessing Officer to delete the addition of Rs. 3,72,209/- sustained by the ld. CIT(A).
In the result, the appeal of the assessee in is allowed.
The order is pronounced in the open court on 15.02.2024.