Quantity of Jewellery under Limit prescribed by Circular: ITAT directs Deletion of S.69B Income Tax Addition [Read Order]
The case involved a Bangalore-based contractor, whose residence was searched by Income Tax authorities
![Quantity of Jewellery under Limit prescribed by Circular: ITAT directs Deletion of S.69B Income Tax Addition [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/02/ITAT-ITAT-Bangalore-Section-69B-of-the-Income-Tax-Act-Income-Tax-Addition-taxscan.jpg "Quantity of Jewellery under Limit prescribed by Circular: ITAT directs Deletion of S.69B Income Tax Addition [Read Order]")
In a significant ruling, the Income Tax Appellate Tribunal (ITAT), Bangalore bench, has directed the deletion of an addition made under Section 69B of the Income Tax Act concerning seized jewellery. The Tribunal held that gold jewellery found during a search at the residence of the taxpayer was within the permissible limits prescribed by CBDT Circular No. 1916, and therefore, could not...
In a significant ruling, the Income Tax Appellate Tribunal (ITAT), Bangalore bench, has directed the deletion of an addition made under Section 69B of the Income Tax Act concerning seized jewellery. The Tribunal held that gold jewellery found during a search at the residence of the taxpayer was within the permissible limits prescribed by CBDT Circular No. 1916, and therefore, could not be treated as an unexplained investment.Â
The case involved a Bangalore-based contractor, whose residence was searched by Income Tax authorities. During the search, officials discovered 1,724.82 grams of gold jewellery, out of which 612.86 grams were seized on the grounds that the taxpayer failed to explain its source satisfactorily. The Assessing Officer (AO) treated the seized jewellery as undisclosed income and made an addition of ₹16,15,611 under Section 69B.Â
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In response to the tax demand, the assessee claimed that the jewellery belonged to multiple family members, including his wife, mother-in-law, father-in-law, and himself. He explained that part of the jewellery was received as gifts at the time of marriage, while some were inherited from family elders. The taxpayer also argued that the jewellery should be assessed in line with CBDT Instruction No. 1916, which provides exemptions for jewellery up to:
500 grams for a married woman,
250 grams for an unmarried woman, and
100 grams for a male family member.
After reviewing the submissions, the ITAT Bench, comprising Waseem Ahmed (Accountant Member) and Soundararajan K (Judicial Member), ruled in favor of the taxpayer. The Tribunal found that the total jewellery claimed by the assessee’s family fell within the permissible limit and that the AO had failed to provide any contrary evidence to prove that the jewellery belonged exclusively to the taxpayer.
Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here
Furthermore, the Tribunal observed that inherited or gifted jewellery is common in Indian families, and an inability to furnish detailed purchase records does not automatically make the jewellery an unexplained investment.
The ITAT deleted the entire addition of ₹16,15,611 and directed the AO to comply with CBDT Circular No. 1916.
To Read the full text of the Order CLICK HERE
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