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Facts
During a search and seizure operation, jewellery was found. The assessee provided explanations for some jewellery, but the AO found that the opening balance of 358.87 gms of gold jewellery as of 31.03.2006, valued at Rs. 15,48,446/- as on 14.01.2022, had an unprovided source. The CIT(A) confirmed this addition.
Held
The Tribunal found that while the assessee had partially discharged the onus of explaining the source of the gold, there was an element of failure to explain some of it. Therefore, a lump-sum addition of a portion of the gold jewellery, valued at the prevalent rate, was deemed just and proper.
Key Issues
Whether the assessee provided sufficient evidence for the source of the opening balance of gold jewellery, and if not, what is the appropriate addition for unexplained income.
Sections Cited
132, 69B, 115BBE
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Income Tax Appellate Tribunal, DELHI ‘A’ BENCH,
Before: SHRI SATBEER SINGH GODARA, & SHRI NAVEEN CHANDRA
assessee are directed against the order of the ld. CIT(A)-26, New Delhi dated 27.02.2025 pertaining to A.Y 2022-23.
Since common issues are involved in these two appeals, they were heard together and are disposed of by this common order for the sake of convenience and brevity, though the quantum may differ. For the sake of our convenience, we are adjudicating on the facts of are mutatis mutandis same.
The grounds raised by the assessee read as under:
That the order of learned Commissioner of Income Tax (Appeals) is bad in law as well as on the facts and in the circumstances of the case.
2. That the learned Commissioner of Income Tax (Appeals) has erred in dismissing the contention of the appellant that proper opportunity of being heard was not provided by the Id. AO.
3. That the learned Commissioner of Income Tax (Appeals) has erred in upholding that the assessee has not been able to provide the documentary proof acquiring of gold jewellery weighing 358.87 gms (shown as the opening balance as on 01.04.2006) and valuing Page 2 of 7 &2167 /DEL/2025 Saket & Abhishek Bansal Vs JCIT [A.Y 2022-23] the same at Rs. 15,48,446/- as per the rates prevalent on 14.01.2022 (Rs. 4314.78 per gm).
4. That the learned Commissioner of Income Tax (Appeals), has erred in upholding the value of gold jewellery including 22 carat gold coins weighing 358.87 gms. at rates prevalent on 14.01.2022 and not at rates prior to 2006.
5. That the learned Commissioner of Income Tax (Appeals), has erred in ignoring the contention of the assessee that the alleged unexplained jewellery was part of the jewellery shown at the purchase value of Rs. 58,83,327/- in the asset liability statement of the return filed for AY 2020-21 the details of which were provided to him in the copy of ledger account of jewellery.
6. That the learned Commissioner of Income Tax (Appeals), has erred in upholding the finding of the Id. AO that the source of 358.87 gms of jewellery remains unexplained.
7. That the learned Commissioner of Income Tax (Appeals), has erred in upholding the addition of Rs. 15,48,446/- made by the Id. AO on account of it being unexplained income by applying the provisions of section 69B of the Act on the basis of presumptions and surmises.
That the learned Commissioner of Income Tax (Appeals), has erred in upholding the invocation of the provisions of section 115BBE of the Act.”
Brief facts of the case are that original return in this case was filed on 29.07.2022 declaring income of Rs. 1,57,76,550/-. A search and Page 3 of 7 &2167 /DEL/2025 Saket & Abhishek Bansal Vs JCIT [A.Y 2022-23] seizure operation u/s 132 of the Income-tax Act, 1961 [the Act, for short] was conducted on 17.11.2021 and on subsequent dates on different business and residential premises of Pacific Group of Cases.
The case of the assessee was also covered during the course of search & seizure operation in this case. In the course of search proceedings at Locker No. 1132, Alaknanda Vaults Pvt. Ltd, East of Kailash, jewellery amounting to Rs. 1,72,07,965/- and bullion amounting to Rs. 34,52,843/- was found from the same premises but not seized.
The assessee explained the source of the aforesaid jewellery amounting to Rs.1,72,07,965/- and bullion amounting to Rs.34,52,843/- . The AO found that the opening balance of gold jewellery, including 22 carat gold coins as on 31.03.2006, was 358.87 grams, the value of which, as on 14.01.2022, comes out to be Rs. 15,48,446/-. As the assessee could not provide the source of this jewellery/bullion, the AO treated the jewellery amounting to Rs. 15,48,446/- as unexplained money u/s 69B of the Act and added back to the income during the year under consideration. The CIT(A) confirmed the addition made by the AO.
Aggrieved assessee is before us.
We have heard the rival submissions and have carefully perused the materials on record. In the instant case, we find that the assessee has attempted to prove the entire source of opening balance of Gold of Page 4 of 7 &2167 /DEL/2025 Saket & Abhishek Bansal Vs JCIT [A.Y 2022-23] 358.87 gms as being proved from the books of account itself as it reflects as opening balance in the accounts as on 01.04.2006. Although the assessee, prima facie, appears to have discharged its onus of explaining source of gold of 358.87 gms, it’s contentions to prove the source, hardly deserves to be accepted in entirety especially when the AO found that the assessee has not furnished any evidence to corroborate the fact that the jewellery was pertaining to period prior to 2006. There was no wealth tax return which could show the said gold jewellery. On the other hand, the Revenue’s endeavour to disbelieve the assessee’s contention that the gold jewellery pertained to period prior to 2006, cannot be fully justified. In this factual matrix, there is some element of failure to explain some of the gold jewellery, cannot be ruled out. Be that as it may, it is deemed appropriate, in larger interest of justice, that a lump- sum addition of 233.87 gms of gold jewellery only, valued at prevalent rate of Rs 4314.78 per gram as on 14.01.2022, would be just and proper with a rider that the same shall not be treated as a precedent, so as to cover all loopholes. To the extent as above, the decision of the CIT(A) is sustained. The ground of appeal no 1 to 7 is partly allowed.
Page 5 of 7 &2167 /DEL/2025 Saket & Abhishek Bansal Vs JCIT [A.Y 2022-23] 2166/DEL/2025, respectfully following the same, we allow the benefit of 61.36 gms of gold and direct the AO to bring to tax only 100 gms of gold jewellery only, valued at prevalent rate of Rs 4314.78 per gram as on 14.01.2022. To the extent as above, the decision of the CIT(A) is sustained. The ground 1 to 8 is decided accordingly.
In the result, appeals of assessee in and 2167/DEL/2025 are partly allowed.
Order pronounced in open court on 26.08.2025.