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Income Tax Appellate Tribunal, DELHI BENCH “H” NEW DELHI
Before: SHRI NARENDRA KUMAR BILLAIYA & SHRI KUL BHARAT
per the Revenue itself the total jewellery valuing at Rs. 6,27,00,968/- was found out of which jewellery worth Rs. 5,26,26,452/- was seized. Out of total jewellery worth Rs. 6,27,00,968/- the AO found purchases of jewellery worth Rs. 3,92,151/- as unexplained. He contended that the authorities below ought to have give benefit of CBDT Instruction No. 1916.
On the other hand, learned DR opposed the submissions and supported the orders of the authorities below.
We have heard rival contentions and perused the material available on record. We find that the learned CIT(A) has sustained the addition by observing as under:
“7. During the course of search jewellery worth Rs.6,27,00,968/- were found, out of nich jewellery worth Rs.5,26,26,425/- was seized from the search premise and locker. During the course of assessment proceedings, the Assessing Officer asked the appellant explain the jewellery. After considering the explanation of the appellant, the Assessing Officer did not find the explanation in respect of jewellery worth Rs. 3,92,151/- as acceptable and therefore made an addition of Rs. 3,92,151/- u/s 69A of the Act. The amount of addition included pure gold coin and ginni.
During the course of appellate proceedings, the appellant could not offer any plausible explanation in respect of the jewellery found and added to the total income of the appellant. The appellant stated that the jewellery is explained however, if the Assessing Officer was not satisfied, in that case he should have given the benefit of instruction no.1916 of the CBDT. The 17 gold ginnies. Further, weight of ginnies and gold coin added is only 138.90 gms. It was further stated that the appellant was able to reconcile jewellery worth Rs.6.27 Crores, Therefore, the Assessing Officer should have allowed the remaining jewellery after invoking instruction no. 1916 of the CBDT.
The reply of the appellant is examined. As per instruction no. 1916, there is exemption to some extent from seizure in respect of jewellery found. The instruction does not lay down that unexplained jewellery to the extent of 500 gms in the case of a married lady is automatically explained or there is no need to explain the jewellery to the extent of 500 gms. Further, gold coin and ginnies are not jewellery. The instruction no.1916 is applicable for jewellery/ornaments. Ginnies and gold coins do not take the character of jewellery or ornament. Therefore, on this ground also the explanation of the appellant is not acceptable, 10. In this case, it is an admitted fact that jewellery/gold to the extent of Rs.3,92,151/- could not be explained by the appellant. The Assessing Officer after considering the explanation of the appellant did not make an addition to the extent of more than Rs.6.27 Crores. No infirmity is found in the action of the Assessing Officer in making addition of Rs. 3,92,151/-. Therefore, the addition made by the Assessing Officer is sustained.”
6.1 From the assessment order it is clear that the AO made addition on account of non-explanation of source of acquisition/purchase of jewellery items worth Rs. 3,92,151/- and the learned CIT(A) in the appellate order states about gold coins and 17 gold ginnies. The learned CIT(A) was of the view that gold coins and ginnies are not jewellery, which is contrary to the finding of the AO, who in unequivocal terms states that the source of acquisition/purchase of jewellery worth Rs. 3,92,151/- was without any documentary evidence. Learned CIT(A) failed to take note of the fact that assessee is having high social status and duly declared
6.27 crores. Looking to the peculiarity of facts of the present case where there is no finding by AO that addition was made on account of the fact that items do not partake the character of jewellery, we direct the AO to delete the impugned addition. Grounds of appeal are allowed.
In the result, assessee’s appeal stands allowed.
Order pronounced in open court on 27th September, 2023.