JAI PRAKASH GOYAL,MANDI GOBINDGARH vs. ACIT, PATIALA

Per Sanjay Garg, Judicial Member:

The present appeal has been preferred by the assessee against the order of the Commissioner of Income Tax (Appeals), [hereinafter referred to as CIT(A)]-5, Ludhiana dated 15.09.2016.

ITA No.1287/Chd/2016- Jai Parkash Goyal, Mandi Gobindgrh 2

possession of jewellery & Silver were as per the customs & status of the assessee and his family.

operation was carried out at the premises of the assessee on 14.7.2011.

During the course of search, the silver utensils valued at Rs. 10.07 lacs

and Gold and Diamond jewellery worth Rs. 33.59 lacs were found.

During the assessment proceedings, the assessee claimed that the

aforesaid jewellery and silver were collectively belonged to the

assessee, his wife and children. However, the Assessing officer

considered the jewellery and silver in the hands of the assessee for the

purpose of making the assessment. The assessee himself had

surrendered Rs. 10 lacs on account of the aforesaid jewellery and silver

found during search.

Assessing officer that he should be given benefit of jewellery which in

normal circumstances is supposed to be in possession of a married lady,

male members and unmarried girl in a family, collected / accumulated

on account of various occasions / gifts and also from the day to day

savings. The Ld. Counsel also relied in this respect on the CBDT

Circular No.1916, dated 11/5/1994 wherein it has been directed that the

gold jewellery upto 500 gms from a married lady, jewellery of 100 gms

ITA No.1287/Chd/2016- Jai Parkash Goyal, Mandi Gobindgrh 3

from male member and gold jewellery of 250 gms from unmarried girl

should not be seized. The above Circular has been issued by the CBDT

taking into consideration the practice of purchasing as well as gifting

of the gold ornaments and jewellery in the society on certain occasions

like birthday /marriage etc. The Ld. Counsel for the assessee, therefore,

has submitted that the total quantum of gold jewellery of the family i.e

if taken together of the assessee, his wife, his son and unmarried

daughter as per CBDT Circular would come to 950 gms worth Rs.

23,94,000/-. He, therefore, submitted to the Assessing officer that out

of the total jewellery (gold & diamond) found which was valued at Rs.

43,67,303/- by the Assessing officer, the benefit of value of the

jewellery as per the CBDT Circular, which in the case of the assessee

was calculated at Rs. 23,94,000/- should be given to the assessee. The

Ld. Assessing officer, however, rejected the above contention of the

assessee on the ground that the total gold jewellery found in the

premises of the assessee was 710.030 gms valuing at Rs. 16,89,603/-.

He rejected the contention of assessee to give benefit of CBDT Circular

towards the value of the Diamond jewellery. He observed that as per

CBDT Circular, the benefit of gold jewellery can be given to the

assessee in respect of actual quantity of jewellery found or up to the

extent of limit prescribed in CBDT Circular, whichever is less. That

benefit cannot be extended in respect of gold jewellery more than that

was actually found from the premises of the assessee. He, therefore,

after deducting the amount already surrendered by the assessee at Rs.

10 lacs, made addition of Rs. 14,07,000/- into the income of the

assessee.

ITA No.1287/Chd/2016- Jai Parkash Goyal, Mandi Gobindgrh 4

CIT(A).

as were made before the lower authorities. The Ld. Counsel has

submitted that family of the assessee was an influential and rich family

and the aforesaid gold & diamond jewellery as well as silver found

from the premises of the assessee were not abnormally high, looking

into the family status of the assessee. The Ld. Counsel has also relied

on the copy of the Will of the mother of the assessee whereby she has

bequeath of 2500 silver coins to the assessee.

lower authorities. She has further submitted that the assessee could not

show from reliable evidence that the diamond and gold jeweller found

from the premises of the assessee had accumulated over the years and

further that no purchase vouchers or any evidence of gift has been

furnished. She has further submitted that even the assessee did not file

its wealth tax returns which showed that the assessee was not in

possession of the aforesaid jewellery in the past.

the issue that the CBDT has issued certain guidelines for the income

tax authorities directing not to seize the gold jewellery upto 500 gms

from a married lady, up to 100 gms from a male member and upto 250

gms from an unmarried girl, as up to the said extent, as it is considered

to be possessed by the family members of taking into consideration the

prevalent culture and customs in the society. Applying the same

ITA No.1287/Chd/2016- Jai Parkash Goyal, Mandi Gobindgrh 5

analogy, the various Benches of the Tribunal as well as the higher

Courts have held that the addition up to the extent of quantum of

jewellery which as per the CBDT Circular is directed not to be seized,

should not be made into the income of the assessee as up to that extent

it has been considered to be possessed by the assessee in normal

circumstances. It has also been held that it is open to the assessee or

the Department to show any distinguishing circumstances whereby the

evidence can be lead to prove that in the set of circumstances, the

jewellery more than or less than the prescribed limit can be held to be

possessed by an assessee.

total gold jewellery found during the course of search i.e. 710.030

gms was less than the prescribed limit by the CBDT when considered in

the hands of the family members of the assessee which comes to total

of 950 gms as discussed above. The Assessing officer, therefore, has

given the benefit of 710.020 gms to the assessee. However, we find

force in the contention of the Ld. Counsel for the assessee that now a

days, due to the changing trend / customs, the trend of purchasing

diamond jewellery has been increased. Presently, not only the purchase

and gifts of gold jewellery is part of the customs but it also includes

diamond jewellery. In view of this, we find force in the submissions of

the Ld. Counsel that the assessee has not been given any benefit of

possession of diamond jewellery by the Assessing officer. Though, no

limit has been prescribed by the CBDT in case of diamond jewellery,

however, the fact that cannot lose sight of, is that in the normal

circumstances, a family having sufficient source of income, in normal

ITA No.1287/Chd/2016- Jai Parkash Goyal, Mandi Gobindgrh 6

circumstances, might possess the Diamond jewellery also. In view of

this, in the case in hand, the family of the assessee can also be

supposed to have possessed some diamond jewellery also. The Ld.

Counsel for the assessee has made very reasonable submission that

atleast the assessee should be given benefit up to the value of gold

jewellery which in normal circumstances is considered to be not

abnormal i.e upto the prescribed limit which in the case of family

comes out to 950 gms, which has been valued at Rs. 23,94,000/-.

the jewellery is concerned. Keeping in view the aforesaid

circumstances, we direct the Assessing officer to give the additional

benefit to the assessee on account of diamond jewellery equal to the

value of gold jewellery over and above the quantity of the gold

jewellery found at the premises of the assessee upto the prescribed

limit fixed by the CBDT i.e. 950 gms minus (-) 730.030 gms which

comes to 240 gms.

concerned, the Assessing officer has already given benefit of Rs. 3

lacs, which in normal circumstances he has considered to be in

possession of the assessee. The Ld. Counsel for the assessee as

discussed above, however, has relied upon the unregistered Will of the

mother of the assessee wherein 2500 silver coins have been bequeath

to the assessee. In our view, looking at the Indian culture of the

Society, it was not uncommon among the elders to preserve gold and

silver coins. Though, the assessee has relied upon the Will of his

ITA No.1287/Chd/2016- Jai Parkash Goyal, Mandi Gobindgrh 7

mother to say that he has got 2500 silver coins from her mother by way

of Will, however, neither the assessee has proved the said Will by way

of plausible evidence before the Assessing officer nor the Assessing

officer has deliberated upon regarding the authenticity of the Will.

Considering the overall facts and circumstances and without going into

the validity of the Will, at this stage, in our view, it will be proper to

give the assessee benefit of another two lacs towards silver coins and

utensils. In view of this, addition made by the Assessing officer is

restricted to the extent of Rs. 14,73,330/- after giving the benefit of

jewellery as discussed above. Out of the said amount, the assessee has

already surrendered Rs. 10 lacs. In view of this, addition of Rs.

4,73,330/- is confirmed. No other point or argument on any issue has

been addressed.

The appeal of the assessee is therefore, treated as partly allowed.

Order pronounced in the Open Court.

Sd/- Sd/- (ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated : 28.03.2018 Rkk

Copy to: 1. The Appellant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR