The Chennai bench of the Income Tax Appellate Tribunal (ITAT) has held that the benefit of the circular issued by the Central Board of Direct Taxes (CBDT) providing a ceiling on the holding of the amount of jewellery by “family members” can be extended to the jewellery held by a minor son and daughter.
The assessing officer, after the search proceedings, made an addition of Rs.7.67 Lacs which represent unexplained investment in Jewellery. As per valuation report, gold jewellery of 815.10 grams and 19.41 carats of diamonds worth Rs.29.24 Lacs was found. Most of the jewellery was stated to be gifted by assessee’s father on the occasion of marriage in the year 2000 as streedhan and the balance was stated to be received in gift on occasion of family functions.
The assessee filed affidavit of father-in-law and relied on Board’s Instructions Nos.1916 dated 11.05.1994 which provide concession of 500 grams gold jewellery to married lady, 250 grams to unmarried lady and 100 grams to male member of the family.
Before the authorities, the assessee contended that jewellery of 815 grams could reasonably be expected to be in the possession of the household.
On first appeal, the CIT(A) noted that AO did not gave benefit for assessee’s minor son and daughter. After giving further concession of 350 grams, the impugned addition was deleted.
Holding in favour of the assessee, Shri Mahavir Singh, Vice President and Shri Manoj Kumar Aggarwal, AM observed that “It could be seen that Ld. AO has granted concession as per CBDT Instruction No.1916 dated 11.05.1994 but it failed to give applicable concession for minor son and daughter. If further quantities for minor son and daughter are considered, nothing would remain to be added since the quantity of jewellery fall within the permissible limits. Another fact to be noted is that the assessee has also discharged the onus of establishing the source of jewellery. Accordingly, the impugned additions have rightly been deleted by Ld. CIT(A).”
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