MS NEETI RASTOGI,LUCKNOW vs. ACIT, MEERUT

The only ground raised by the assessee in partly confirming the addition out of Rs. 10 lacs made by the AO on estimated basis on account of jewellery found during the course of search.

Brief facts are that a search and seizure action under section 132 was conducted on 09.07.2008 at various premises of assessee in which assessee and her husband, Shri Paresh Rastogi was also covered. During search at the residence, jewellery aggregating to Rs. 14,97,838/- was found belonging to Shri Paresh Rastogi and Smt. Neeti Rastogi which was not seized. Ld. Assessing Officer on estimated basis has treated jewellery to the extent of Rs. 10,00,000/- as unexplained in his opinion and added the same under section 69A of the Act. Ld. CIT (A) has given part relief by stating that jewellery to the extent of 500 gms per married lady should not be treated as unexplained in view of the circular No. 1916 dated 1994.

We have heard both the parties and also perused the relevant finding given in the impugned orders. One of the issue which was raised before the authorities below was that the jewellery found belonged to the assessee, her husband and two unmarried daughters who are staying together and all these jewelleries have been gifted over the period of time at her marriage and on birth of her both the daughters and on various festivals and occasions for more than two decades. It was also explained that, if as per the circular, 500 gms for the assessee, 100 gms for her husband and 250 gms for her two unmarried daughters are to be considered in light of CBDT circular 1916 2 (supra), then the value of said jewellery works out to Rs.11,31,900/. Thus, if benefit of this circular is being given, then no addition is called for.

We find that this proposition stands approved by various judgments of Hon’ble Rajasthan High Court, Hon’ble Gujarat High Court and various decisions of the Tribunal wherein it has been held that the quantity of gold jewellery found and to the extent it is covered by CBDT circular for family member same should not be treated as unexplained in view of the customary practice in India. The few of the judgments on this point are as under: 1. CIT vs. Satya Narain Patni in Income Tax Appeal No. 196/2010 dtd. 07.04.2014 of Hon’ble Rajasthan HC 2. CIT vs. Ratanlal Vyaparilal Jain in Income Tax Appeal No. 661 of 2009 dtd. 19.07.2010 of Hon’ble Gujarat HC 3. DCIT vs. Shri Mehul Johnson in dtd. 19.05.2012 of Mumbai ITAT 6. In view of the aforesaid judgments, the unexplained jewellery added by the Assessing Officer stands deleted.

In the result appeal of the assessee is allowed.