Quantity of Gold Jewellery Less than Allowable Limit by CBDT Circular not Unexplained Jewellery u/s 69 of Income Tax Act: ITAT [Read Order]

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) held that as per the CBDT (Central Board of Direct Taxes)  circular, 500 gms for the assessee, 100 gms for her husband and 250 gms for her two unmarried daughters is the allowable limit for making addition. Thus the Tribunal deleted the addition made as the quantity of gold jewellery found is less to the extent covered by CBDT circular for family member.

The assessee in this present case is Neeti Rastogi. A search and seizure action under Section 132 of the Income Tax Act, 1961 was conducted at various premises of assessee in which assessee and her husband, Paresh Rastogi was also covered. During search at the residence, jewellery aggregating to Rs. 14,97,838/- was found belonging to Paresh Rastogi and Neeti Rastogi which was not seized.

Assessing Officer on estimated basis has treated jewellery to the extent of Rs. 10,00,000/- as unexplained in his opinion and added the same under Section 69A of the Income Tax Act. Aggrieved by the order the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [CIT (A)],which partly allowed the relief by stating that jewellery to the extent of 500 gms per married lady should not be treated as unexplained in view of the circular No. 1916 dated 1994.

The assessee filed an appeal before the Tribunal. Saurav Rastogi appeared as Authorised Representative of assessee(AR) and Dilip Singh Kothari as Departmental Representative.

The Bench comprising of G. S. Pannu, President and Amit Shukla, Judicial Member observed that according to the circular No. 1916 dated 1994, allowable limit for gold jewellery to the extend of 500 gms for the assessee, 100 gms for her husband and 250 gms for her two unmarried daughters.

According to the observation then the value of said jewellery works out to Rs.11,31,900/. Thus, if benefit of this circular is being given, then no addition can be made.

Thus the Tribunal held that the quantity of gold jewellery found and to the extent it is covered by CBDT circular for family member same should not be treated as unexplained in view of the customary practice in India.

Hence appeal of the assessee was allowed.

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