In a recent ruling in Suneela Soni vs Deputy Commissioner of Income Tax, Delhi bench of Income Tax Appellate Tribunal (ITAT) recently held that jewellery received by a lady during the span of 20 years of marriage cannot be treated as unexplained.
During the financial year, a search was conducted at the residence of the Assessee Ms Suneela Soni. During the course of the search operation, certain jewellery was found from the residence and lockers of the Assessee. Accordingly, notice under Section 142(1) of the Income Tax Act 1961 was issued to the Assessee. In response to the notice, the Assessee filed her return of income for the relevant assessment year and declared a total income at Rs. 6,04,170.
Thereafter the Assessee was asked to explain about the seized jewellery along with books of accounts and to give the source of acquisition of the same with proper evidence. Thereafter, counsel for the Assessee advocate Gautam Jain submitted that out of the total jewellery found, most parts were her streedhan given by her parents and relative at the time of her marriage and the silver utensils /coins belonged to her mother in law which was her streedhan. He also argued that streedhan in the form of jewellery received during the span of 25 years cannot be said to be unexplained investment under section 69A of the Income-tax Act 1961 by relying upon the decision of High Court in the similar issue.
However, the AO refused to accept the contention of the Assessee by referring section 132(4A) and Section 69 of the Act and accordingly considered the amount of Rs. 10,65,312 as deemed income and added the same to the total income of the Assessee by holding that the Assessee has failed to discharge her onus of satisfactorily explaining the source of acquisition of gold jewellery and silver utensils.
On appeal, the CIT(A) also rejected the submissions of the Assessee by referring the CBDT circular and also upheld the addition made by the AO. Thereafter the Assessee carried the matter before the Tribunal on further appeal.
After considering the rival submissions of both the parties, the Tribunal bench comprising of Judicial Member H.S.Sidhu observed that “AO has made the addition of Rs. 10,65,312.00 on account of purported unexplained jewellery claimed by the assessee without appreciating the fact that the jewellery found during the course of search and seizure operations was from the locker held by the father in law and husband of the assessee and hence the addition in the hands of the assessee is uncalled for”.
The division bench further observed that that streedhan in the form of jewellery received during the span of 25 years cannot be said to be unexplained investment under section 69A of the Income Tax Act 1961.while perusing the available material facts on records it is clear that the Assessee had been married more than 20 years and the acquisition of the jewellery valued to Rs. 10,65,312.00 could not be treated as unexplained. Accordingly, the orders of the authorities below are cancelled and the AO was directed to delete the addition made him while concluding the issue.
Subscribe Taxscan Premium to view the Judgment
