Heavy Gold Jewellery received as ‘Streedhan’ and found in income tax raid vs. validity of its addition
Shri Gyanendra Singh Shekhawat (ITA No. 49/JP/2022)
Facts:
- During the course of search at the assessee’s residence, total jewellery comprising of gold jewellery weighing 1921.800 gms valued at Rs.47,97,013/- (studded with precious and semi precious stones valuing Rs.6,47,773/- and silver jewellery valued at Rs.2,02,628/- was found.
- During the course of assessment proceedings, the AO allowed the benefit in respect of gold jewellery worth 1300 gms in terms of CBDT Instruction No. 1916 dated 11-05-1994 and made the addition which was restricted to Rs. 17,55,262/- by the ld. CIT(A).
- As per Instruction No. 1916, dated 11.05.1994 issued by the CBDT with regard to seizure of jewellery in course of operations under section 132, which laid down that in the case of a person not assessed to wealth tax, gold jewellery and ornaments to the extent of 500 gms per married lady, 250 gms per unmarried lady and 100 gms per male member of the family need not be seized. The authorized officer may, having regard to the status of the family, and the custom and practices of the community to which the family belongs and other circumstances of the case, decide to exclude a larger quantity of jewellery and ornaments from seizure.
- The assessee maintained that he 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. In fact, 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.
ITAT Jaipur held as follows:
- 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.
- There was no point in inserting the clause (iii) of the instruction, 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.
