ITAT granted relief with regard to the jewellery of the married daughter kept at parent house
ITAT DELHI:- PREM PRAKASH SETHI VERSUS ACIT, CENTRAL CIRCLE-14 NEW DELHI ITA No. 1741/Del/2021 Dated: 13-6-24 was dealing an issue as to whether Credit of jewellery of belonging to married daughter to the extent of 500 gms is available to the Assessee in terms of CBDT Instruction?
Let us have a Short Overview of the case:
Facts of the Case:
The appeal was filed by the assessee against the order of the CIT(A) dated 24.09.2021, which upheld the assessment order dated 31.12.2019 passed by the Assessing Officer (AO) under Section 143(3) of the Income Tax Act, 1961. The primary disputes pertain to additions made under Section 69A on account of: Unexplained jewellery amounting to Rs. 22,20,698/- & Unexplained cash amounting to Rs. 24,91,700/-
During the search, jewellery weighing 1903.97 gms was found, out of which 1009.378 gms was seized. The total value assigned was Rs. 70,00,582/-.
The assessee claimed that the jewellery belonged to family members and a married daughter whose jewellery was kept in the assessee’s custody.
As for the unexplained cash, the assessee contended that the cash belonged to companies where he was a director and his family members.
Arguments of the Assessee:
Jewellery Additions: Relief for 1300 gms of jewellery was granted by the CIT(A), but 603.97 gms remained unexplained.
The assessee argued that 500 gms of jewellery belonged to his married daughter, which should be considered under CBDT Instruction No. 1916 dated 11.05.1995.
The remaining 103.97 gms should also be considered explained, given the family’s social status and past tax declarations.
Past Wealth Tax Returns (A.Y. 2001-02 and A.Y. 2004-05) showed that jewellery aggregating to 2110 gms was declared, justifying the family’s possession of jewellery.
Cash Additions:
The cash in question was sourced from two companies where the assessee was a director and from family members. Cash book records of the respective entities supported this claim.
The CIT(A) overlooked these facts and confirmed the addition.
Arguments of the Revenue (Departmental Representative – DR):
Jewellery Additions:
The CIT(A) had already provided maximum relief possible under CBDT guidelines.
The claim that the married daughter’s jewellery was stored at the assessee’s residence was difficult to accept without strong corroborative evidence.
Cash Additions:
The explanation lacked supporting documentation. The CIT(A) had correctly denied relief as the source of cash remained unsubstantiated.
ITAT Ruling:
1. Unexplained Jewellery:
ITAT acknowledged that married daughters sometimes store their jewellery at their maternal home. CBDT Instruction No. 1916 allows a benefit of 500 gms for a married daughter. The ITAT granted relief of 500 gms, leaving only 103.97 gms as unexplained.
The assessee accepted the finding and agreed not to contest the remaining 103.97 gms.
The Copy Of the order is as under:
