ITAT grants benefit of CBDT Instruction with regard to Jewellery of Grand Mother [Read Order]

The Delhi bench of Income Tax Appellate Tribunal (ITAT) granted benefit of Central Board of Direct Tax (CBDT) Instruction with regard to jewelry of grandmother.

When a search and seizure operation was conducted in  Faqir Chand Lockers and Vaults Pvt. Ltd. Group of cases of the assessee Sharad Kumar Garg, locker was also covered.

 The assessee filed his return of income declaring an income of Rs. 4,03,730/- and the case was taken up for scrutiny. During the course of assessment proceedings the assessee was asked to explain about jewelry weighing 1822.380 gms., amounting to Rs. 65,05,721/-.

It was stated that apart from the family, the assessee also received jewelry from his grand-mother and a Will was also produced to this effect. The Assessing Officer after giving benefit of CBDT Instruction in respect of wife, the assessee himself and two minor children. The excess value of the jewelry was treated as unexplained amounting to Rs. 41,19,198/- against the returned income of Rs. 4,93,730/-.

Thereafter the matter was considered before the CIT(A) by way of appeal. Which was filed by assessee but the CIT(A) after giving benefit of the CBDT Instruction in respect of other family members  partly allowed the appeal. Without satisfaction the order assesee filed a second appeal before the ITAT.

M.P. Rastogi, counsel for the Assesee submitted that balance jewelry belonged to the grand-mother of the assessee who had given her jewelry to the assessee. Also lower authorities failed to consider the Will of the grand-mother of the assessee.

Om Parkash, counsel for the revenue submitted that authorities below have specifically pointed out that there was no specification regarding the jewelry, which was being bequeathed to the assessee, assessee’s wife and sons. In the absence of such specific information, the authorities below were justified in not taking cognizance of the Will and rightly made the addition.

The single bench of the tribunal comprising Kul Bharat, (Judicial Member) allowed the appeal and direct the assessing officer to grant set off of 500 gms., of jewelry as per CBDT Instruction relating to the grand-mother of the assessee in addition to the relief given by the CIT(Appeals).

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