High Status and Family Tradition of Assessee shall be Considered: ITAT deletes Addition of Heavy Gold Jewellery received as ‘Streedhan’ by Royal Family Member [Read Order]

While deleting an addition in respect of heavy gold jewellery received as “Streedhan”, the Income Tax Appellate Tribunal (ITAT), Jaipur bench has held that the high status and family traditions shall be considered while making addition.

The assessee, Shri Gyanendra Singh Shekhawat  belongs to Rajput Community of Rajasthan and as per customs of the Community, some of the Gold/Silver Jewellery/articles are passed on to the subsequent generations and some of the jewellery was received on various festivals/ auspicious occasions and ceremonies. During search proceedings, the department found excess jewellery and made addition.

Challenging the addition, the assessee had furnished photographs of functions and marriages to show that ladies of his family wearing heavy gold jewellery which according to him is a part of STREEDHAN and deserves to be treated as explained. It was contended that the acquisition of jewellery is not excessive looking to the social status of the assessee.

A bench comprising Shri Sandeep Gosain, JM & Shri Rathod Kamlesh Jayantbhai, AM observed that the intention of law is to stick to the jewellery limits mentioned in the Circular.

“There was no point in inserting the provision at clause (iii) which grants discretionary power to the Income Tax Authorities to decide as to what can be reasonable quantity of jewellery held by an assessee in view of community practices and social status,” the Tribunal said.

Allowing relief to the assessee, the Tribunal held that “Therefore, looking into the totality of the facts and circumstances of the case, we are of the considered view that the AO had ignored the factual position as well as failed to verify the fact that the assessee is living with his parents and belonged to a Rajput Family where the fact of having jewellery as Streedhan by the assessee’s mother and wife cannot be ignored. Thus after considering the overall factual position in this case and keeping in view of high status, family tradition, deduction on account of purity and the deduction towards Streedhan, the excess jewellery found were nominal.”

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