Income Tax Appellate Tribunal - Ahmedabad
Smt. Suchitra S. Dhanani,, Indore vs The Acit, Circle-1(2),, Baroda on 4 January, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD "D" BENCH AHMEDABAD
BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER,
AND SHRI S. S. GODARA, JUDICIAL MEMBER.
ITA No. 3014/Ahd/2014
(Assessment Year: 2011-12)
Smt. Suchitra S. Dhanani,
BF - 8/9, Scheme no. 74C, Vijay
Nagar, Indore - 452010 Appellant
Vs.
ACIT,
Circle-1(2), Baroda Respondent
PAN: ACTPD1159Q
आवेदक क ओर से/By Assessee : Shri D. K. Parikh, A.R.
राज व क ओर से/By Revenue : Shri V. K. Singh, Sr. D.R.
सन
ु वाई क तार ख/Date of Hearing : 13.12.2017
घोषणा क तार ख/Date of
Pronouncement : 04.01.2018
ORDER
PER S. S. GODARA, JUDICIAL MEMBER
This assessee's appeal for assessment year 2011-12, emanates from the CIT(A)-I, Baroda's order dated 02.08.2014, in case no. CAB-I/106/2013-14, upholding Assessing Officer's action making addition of Rs.6,71,113/- as unexplained investment in jewellery weighing 410grams found during search conducted on 11.02.2011, in proceedings u/s. 153A r.w.s. 143(3) of the Income Tax Act, 1961, hereinafter 'the Act'.
Heard both the parties. Case file perused.
ITA No. 3014/Ahd/2014 (Smt. Suchitra S. Dhanani vs. ACIT)A.Y. 2011-12 -2-
2. We come to the relevant facts pertaining to the above sole ground. There is no dispute that the department found gold jewellery of Rs.6,61,917/- alongwith silver coins of Rs.9,196/-; totaling to Rs.6,71,113/- in assessee's bank locker during search. The Assessing Officer thereafter framed the impugned assessment on 31.03.2013 rejecting her explanation placing reliance upon CBDT's circular no.1,916/- dated 11.05.1994 that jewellery and ornaments upto 500 grams are to be excluded from seizure. He was of the view that it was assessee's onus to explain source thereof instead of merely quoting the above circular. All this resulted in the impugned addition being made in assessee's hands.
3. The CIT(A) upholds the impugned addition as follows:
"2.4 The reason for making addition of Rs. 6,71,113/- as mentioned by the AO in the assessment order u/s 153A r.w.s. 143(3) as well as above submission of the AR of the appellant have been considered. The submission of the AR of the appellant is that appellant being a married woman had accumulated the said jewellery over a period of time and the same was part of her stri-dhan. The AR has referred to instruction no. 1916 of 11.05.1994 of the CBDT, and has submitted that the said jewellery may be considered as explained. It is also submitted that silver articles found were of negligible quantity and were received from time to time as gifts on festive occasions. In my opinion, as per instruction no. 1916 of CBDT dated 11/05/1994, the jewellery and ornaments to the extent of 500 gms in the case of a married women may be excluded from seizure. However, facts involved in the case of appellant are different and therefore the appellant is required to explain the sources of above amounts of jewellery which was found in her locker. Firstly the submission of the AR of the appellant is that the appellant being a married woman had accumulated the said jewellery over a period of time. But this submission of the appellant's AR is of very general nature and not specific and therefore the same is not acceptable. Further, the AR has pleaded on different ground that it is equally possible that a major part of jewellery would have been received by the appellant during her marriage and some part may also have been purchased over the period of her marriage out of her household savings. But again this submission of the AR of the appellant is of very general nature and not specific. The AR without prejudice to his above plea has also stated that the AO in AY 2010-11 in the case of appellant had made an addition of Rs. 11,54,050/- on account of invoices of jewellery recovered during the search proceedings and it is possible that the jewellery found in possession of the appellant was a part of the jewellery which was explained for and purchased in 2010-11. Thus, as per the AR the addition made by the AO in the year under consideration is a double addition and has resulted in double taxation of the same amount. But this submission of AR of the appellant is again not acceptable. In my opinion, this is the appellant who knows the sources of jewellery of Rs. 6,71,113/- which was found by the Department from her locker. The appellant has not furnished any evidences to establish that this jewellery of Rs. 6,71,113/- was part of the jewellery of Rs. 11,54,050/- as per the invoices and which was added by the AO to her total income being unexplained investment. In my opinion, the appellant herself is not sure that the ITA No. 3014/Ahd/2014 (Smt. Suchitra S. Dhanani vs. ACIT) A.Y. 2011-12 -3- jewellery of Rs. 6,71,113/- was whether accumulated by way of gifts and purchases over the period are such jewellery was part of the jewellery of Rs. 11,54,050/- which was added by the AO to her total income. Considering all these facts, it is held that the AO has correctly made addition of above amount of Rs. 6,71,113/- being unexplained expenditure and therefore such addition is confirmed. Thus, the grounds of appeal no. 1 and 2 of the appellant are dismissed."
4. We have heard both the parties reiterating their respective stands. Case file perused. The sole question that arises for our adjudication in the instant appeal is as to whether assessee's jewellery in question not seized during search could be taken as explained since falling within the prescribed quantity upto 500 grams as per CBDT's abovestated circular dated 11.05.1994 (supra). We find that this question is no more res integra as per a co-ordinate bench decision in ACIT vs. Shri Jerambhai B. Khokhariya ITA No.2613/Ahd/2009 decided in assessee's favour on 05.11.2015 quoting hon'ble jurisdictional high court's judgment in CIT vs. Ratanlal Vyaparilal Jain (2010) 235 CTR 568 (Guj) as follows:
"7.2 The CBDT instruction no.1916 dated 11.05.1994 suggests that a family is supposed to hold certain jewellery received at the time of marriages from parents and in laws within the limit of 500 gr. of jewellery for a married woman, 250 gr. for unmarried daughters and 100 gr. with unmarried child. Though, the instruction speaks of not seizing the same during search operation extended meaning of the same shows extension that the jewellery should be treated as explained one and is not to be treated as unexplained for the purpose of income tax. Hon'ble Jurisdictional High Court in case of CIT vs. Ratanlal Vyaparilal Jain (2010) 235 CTR 0568 (Guj) has held as under:
"Though it is true that the CBDT Circular No. 1916, dt.11th May, 1994 lays down guidelines for seizure of jewellery and ornaments in the course of search, the same takes into account the quantity of jewellery which would generally be held by family members of an assessee belonging to an ordinary Hindu household. The approach adopted by the Tribunal in following the said circular and giving benefit to the assessee, even for explaining the source in respect of the jewellery being held by the family is in consonance with the general practice in Hindu families whereby jewellery is gifted by the relatives and friends at the time of social functions, viz., marriages, birthdays, marriage anniversary and other festivals. These gifts are customary and customs prevailing in a society cannot be ignored. Thus although the circular had been issued for the purpose of non- seizure of jewellery during the course of search, the basis for the same recognizes customs prevailing in Hindu society. In the circumstances, unless the Revenue shows anything to the contrary, it can safely be presumed that the source to the extent of the jewellery stated in the circular stands explained. Thus, the approach adopted by the Tribunal in considering the extent of jewellery specified under the said circular tobe a reasonable quantity, cannot be faulted with. In the circumstances, it is not possible to state that the Tribunal has committed any legal error so as to give rise to a question of law."ITA No. 3014/Ahd/2014 (Smt. Suchitra S. Dhanani vs. ACIT)
A.Y. 2011-12 -4- From going through the above judicial pronouncement, it is ample clear that gold jewellery found to the extent of limit mentioned in the circular is treated as explained and this can be clearly applied on the assessee's case, wherein no specific deduction of gold jewellery possessed by family members and grand children was given by the Assessing Officer from the total gold jewellery found at the time of search and seizure operation and differential gold jewellery of 1924.22 gr. is the gold jewellery possessed by the female members and minor children of the assessee's joint family and this quantity of 1924.22 gr. is well within the total limit of jewellery at 2100 gr. as per the CBDT instruction no.1916 dated 11.05.1994. Therefore by respectfully following the decision of Hon'ble Jurisdictional High Court in case of CIT vs. Ratanlal Vyaparilal Jain (supra) and in view of our discussions made above, we find no infirmity in the order of the CIT(A) so as to warrant interference and accordingly, the grounds taken by the Revenue are rejected. Accordingly appeal of the Revenue is dismissed."
It is therefore clear that gold jewellery found upto the abovestated quantity of 500 grams is to be treated as explained as per the Board's circular hereinabove. We therefore delete the impugned addition of Rs.6,71,113/- made by both the lower authorities.
5. This assessee's appeal is allowed.
[Pronounced in the open Court on this the 04th day of January, 2018.] Sd/- Sd/-
(PRAMOD KUMAR) (S. S. GODARA)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Ahmedabad: Dated 04/01/2018
True Copy
S.K.SINHA
आदे श क त ल
प अ े
षत / Copy of Order Forwarded to:-
1. राज व / Revenue
2. आवेदक / Assessee
3. संबं धत आयकर आय!
ु त / Concerned CIT
4. आयकर आयु!त- अपील / CIT (A)
5. )वभागीय ,-त-न ध, आयकर अपील य अ धकरण, अहमदाबाद /
DR, ITAT, Ahmedabad
6. गाड3 फाइल / Guard file.
By order/आदे श से,
उप/सहायक पंजीकार
आयकर अपील य अ धकरण, अहमदाबाद ।