While hearing the case between Ritu Bajaj and Assistant Commissioner of Income Tax, Delhi bench of Income Tax Appellate Tribunal (ITAT), while following a circular issued by the Central Board of Direct Taxes (CBDT), held that a family can possess up to 1450 gms gold jewellery.
The assessee in the instant case, the department conducted search proceedings in the business premises of the assessee, Mr.Ritu Bajaj under section 132 of the Income-tax Act 1961. As part of that, a search was also conducted in the residence of the Assessee.
During the course of search at the residence of the Assessee, gold jewellery of which some was fitted with Diamonds, was found from the possession of the assessee which was valued at Rs.4,43,491 and another gold jewellery weighing 723.100 gms was found in the bank locker of the Assessee on further search. As a result of the search total jewellery valued at Rs.25,16,327 was found from the possession of the assessee. During the assessment period, the Assessing Officer (AO) has noticed that the Assessee has failed to disclose the source of the said jewellery. Therefore, he made an addition of Rs.24,09,327 to the income of the Assessee under section 69A of the Income Tax Act 1961.
On appeal, the CIT(A) confirmed the addition made by the AO to the extent of Rs.13,47,827. Thereafter the Assessee carried the matter before the Tribunal.
After considering the facts and circumstances, the Tribunal bench comprising of Accountant Member B.P. Jain observed that “assessee’s family consists of 5 members as described in the reply. The quantity of jewellery found in the possession of the assessee and his family members is 847 gms whereas as per the CBDT vide instruction 1961 a family can be held up to 1450 gms gold Jewellery in case of married ladies 500 gms and in case of unmarried lady 250 gms and in case of male member 100 gms jewellery need not be seized”.
The division bench further held that in fact the Assessee can be possessed up to 1450 gms of jewellery as per the circular. Therefore, it can be concluded that the jewellery possessed by the assessee is quite reasonable and no addition on this account can be made and the addition made by the lower authorities are not sustained in the instant case. Hence, the bench directed the authorities below to delete the addition made by them while allowing the appeal filed by the Assessee.
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