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2016 (1) TMI 1070 - ITAT AHMEDABAD

2016 (1) TMI 1070 - ITAT AHMEDABAD - TMI - Addition on account of unexplained jewellery out of the jewellery found at the time of search - CIT(A) deleted the addition - Held 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 .....

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urt) 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. - Decided against revenue - ITA No. 2613/Ahd/2009 - Dated:- 5-11-2015 - Rajpal Yadav, JM And Manish Borad, AM For the Appellant : Smt Vibha Bhalla, Sr.DR For the Respondent : Shri P M Mehta, AR ORDER Per Manish Borad, Accountant Member This appeal of the Revenue is directed against the order of CIT(A)-II, Ahm .....

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that the facts of the case are clearly distinguishable from that of the cases relied upon. 3. The Ld.CIT(A) failed to appreciate that the Instruction no.1916 dated 11/05/1994 is guide lines for seizure of jewellery and ornaments in course of search with respect to the seizure in the case of person not assessed to tax and not to treat the unexplained jewellery as explained to the extent provided in the instruction even when no supporting evidences and bifurcation about its belonging to members o .....

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"CIT Vs Rameshchandra R Patel (Third member Decision) 89 ITD 203(Ahd)" which is not relevant as that dealts with the unaccounted investment in shares 6. The Ld C1T(A) has erred in law and on facts in ignoring the ratio laid down in the following case laws, which clearly state that the instructions of the Department are in respect of seizure and they do not prescribe that to the extent of limits given, jewellery will be treated &s explained without any explanation and evidence:-. a .....

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nd at the time of search. 3. Briefly stated facts are that a search and seizure action was conducted in the case of assessee on 21.02.2006. Assessee filed his return of income on 28.02.2007 declaring total income of ₹ 35,430/-. Notice u/s.143(2) was issued on 17.09.2007 for initiating assessment proceedings. Assessing Officer completed the assessment of the assessee at a total income of ₹ 16,69,802/- by making two additions; i. for unaccounted cash at ₹ 2,10,450/- and ii. For u .....

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sessee (967.9 gr. Gold and 16.95 carat diamond were found from the residence and 4639.9 gr. Gold and 84.23 carat diamond were found form the lockers). Out of this, 1542.100 gr. Gold was seized by the department. During the assessment proceedings, assessee was asked about the source of investment in the Gold jewellery of 5607.90 gr. and assessee was able to explain the source of jewellery of 3683.68 gr. Gold and in relation to balance jewellery of 192422 gr. Gold, assessee pleaded to take benefit .....

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ed at the time of search and seizure action, keeping in mind, the sentimental value of the jewellery of the lady members of the assessee family nowhere the instruction says that the excess jewellery should not be taxed at the time of framing assessment. Ld. D.R. further submitted that Assessing Officer has already accepted the explained jewellery of 3683.68 gr. and diamond of 117.63 carat and for the remaining jewellery of 1924.22 gr. as there was no justifiable explanation given by the assessee .....

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aluables are normally given and taken from amongst the family members on various social occasions including marriages. 6.1 During course of search operation, total jewellery of 5607.90 gr. gold and 101.18 carat diamond were found to the premises of assessee and sources of investment as submitted before the Assessing Officer was as under: SR. NO. NAMES OF THE MEMBERS GOLD.GMS DIAMOND CTS. 1. JEWELLERY AS PER W.T, RECORDS:& AS ON; 3 1.03. 2005 IN THE CASE OF ASSESSEE AS PER NOTE 1. BELOW : 191 .....

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63 6.2 Ld. A.R. took us through the above chart and brought to our notice that 5783.68 gr. gold and 117.63 carat diamond was duly explained on the basis of wealth tax records, purchases during F.Y. 2005-06, gifts received by two sons, namely, Shri Chandrakant Khokhariya and Shri Pareshbhai Khokhariya and jewellery owned and possessed in the joint name by assessee's wife, two daughters-in-law, three grand children. Ld. A.R. further submits that CBDT instruction no.1916 dated 11.05.1994 refers .....

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500 6. Karya Pareshbhai Grand Son 100 Total 2100 As the remaining jewellery which the Assessing Officer has treated unexplained of 1924.22 gr. amounting to ₹ 14,23,922/- is covered within the limit of 2100 gr. and therefore, ld. CIT(A) was justified in deleting the addition. 7. We have heard the rival contentions and perused the material on record. During search conducted on 21.02.2006 at the residence and lockers of the assessee 5611.19 gr. gold jewellery and 101.18 carat diamond was fou .....

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r. gold jewellery and 22.88 carat diamond and gift given by assessee to his son Pareshbhai Khokhariya at 1007.310 gr. gold jewellery and 48.14 carat diamond. 7.1 Assessing Officer ought to have appreciated that there are six other family members including assessee's wife, two recently married daughter-inlaw, 3 grand children, who certainly had received gift of gold jewellery from their parents, relatives and other family members on various auspicious occasions, festivals and marriage ceremon .....

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eated 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. Th .....

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