TMI Blog2019 (6) TMI 347X X X X Extracts X X X X X X X X Extracts X X X X ..... the stand that only part of the statement is accepted and remaining is not acceptable. Where the Revenue disputes a part of the statement as not correct, the onus shifts on the Revenue to prove otherwise and not the assessee. Therefore, going strictly by clause (i) of the CBDT Circular dated 11.05.1994, the gold jewellery found in possession of the assessee is within the permissible limits as belonging to the assessee and other family members including married daughter and children. The assessee belongs to a reputed old Jagirdar family and so enjoying high status in society, married about 30 years back and has three daughters and one son and possession of gold and silver jewellery is customary in the Indian society and also gifts on marriages and other social functions. The Courts have held that where the CBDT looking to such customs and practices prevailing throughout India, in one way or the another, came out with this Circular and the search team makes no such seizure effectively accepting the status of the assessee, customs and practices and possession of the jewellery, it should also mean that to the extent of the aforesaid jewellery, found in possession of the assessee, e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earch proceedings. During the course of assessment proceedings, the assessee was asked by the Assessing officer to explain the source of investment in such jewellery. 4. In response, the assessee submitted that the said jewellery belongs to him and his family which has been received from both sides of relatives and friends at the time of marriage and thereafter on various other festivals and auspicious occasions. It is customary in Indian society that parents, friends relatives present gold ornaments and silver items etc to their daughter and son in law at the time of marriage and other social functions/festivities. It was submitted that the said fact can be verified from the items of jewellery duly inventorised by the search team that the jewellery items were acquired long back and at that time, the value was very low. Due to sharp increase in the price of the gold/silver in the preceding years and in the year of search, the value of the said items has increased and has been determined at ₹ 51,08,301/-. It was submitted that the family of assessee and his inlaws are families of repute and means and his in-laws were old Jagirdars. Therefore, lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld to be acquired out of the undisclosed income and the same was also brought to the tax. Therefore, out of the total gold jewellery and silver articles found during search and valued at ₹ 51,08,301/-, jewellery and silver items worth ₹ 30,55,822/- were considered as explained and the balance amount of ₹ 20,52,479/- was brought to tax equally in the hands of the assessee and his wife u/s 69A of the Act. 6. Being aggrieved, the assessee carried the matter in appeal before the ld. CIT(A) who has since confirmed the addition and the relevant findings are contained at para 3.1.3 of his order which is reproduced as under:- 3.1.3 I have duly considered assessee's submissions and carefully gone through assessment order. I have also taken a note of factual matrix of the case as well as applicable case laws relied upon. It is submitted that jewellery weighing 1979.92 gms and silver articles weighing 3229.00 gms found at the time of search were received by the appellant and his family members from their relatives and friends on occasion of marriage and other occasions. It is also submitted that during the course of assessment proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. The ld. AR drawn our reference to the CBDT Instruction No. 1916 dated 11/05/1994 wherein it has been held as under:- Instances of seizure of jewellery of small quantity in course of operations under section 132 have come to the notice of the Board. The question of a common approach to situations where search parties come across items of jewellery, has been examined by the Board and following guidelines are issued for strict compliance. (i) In the case of a weath-tax assessee, gold jewellery and ornaments found in excess of the gross weight declared in the wealthtax return only need be seized. (ii) 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. (iii) 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. This should be reported to the Director of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw. 10. Further, the ld. AR relied on the Co-ordinate Bench decision in case of Sh. Vibhu Aggarwal vs. DCIT, CC-06, New Delhi (ITA No. 1540/DEL/2015 dated 04/05/2018) which has followed the decision of the Hon ble Delhi High Court in case of Ashok Chadha vs. ITO (14 taxmann.com 57) and decision of the Hon ble Rajasthan High Court in case of CIT vs Satya Narain Patni (46 Taxmann.com 440). 11. The ld CIT DR is heard who has vehemently argued the matter and submitted that the AO has been reasonable in allowing the credit for jewellery possessed by the assessee and his family and the excess jewellery has rightly been brought to tax. He accordingly submitted that there is no infirmity in the order of the ld CIT(A) and the same should be confirmed. 12. We have heard the rival contentions and gone through the material available on record. The assessee is married for last 30 years and the family of the assessee consists of his wife, three daughters out of which two are unmarried and one unmarried son. It is not in dispute that the assessee over the period of time had purchased some gold jewellery for himself and his family members, and further c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Revenue to prove otherwise and not the assessee. Therefore, going strictly by clause (i) of the CBDT Circular dated 11.05.1994, the gold jewellery found in possession of the assessee is within the permissible limits as belonging to the assessee and other family members including married daughter and children. 14. Further, if we read clause (ii) of the said CBDT circular, even as per said clause, the search team has found the possession of the above jewellery by the assessee and other members of the family within the reasonable limits as per the status, customs and practices of the community to which the family belongs and has not carried any seizure of the aforesaid jewellery. The assessee belongs to a reputed old Jagirdar family and so enjoying high status in society, married about 30 years back and has three daughters and one son and possession of gold and silver jewellery is customary in the Indian society and also gifts on marriages and other social functions. The Courts have held that where the CBDT looking to such customs and practices prevailing throughout India, in one way or the another, came out with this Circular and the search team makes no such seizu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e weight and not with the value as the value may fluctuate over the years. The Tribunal has also appreciated the fact on record that the marriage of three sons were performed in the year 1996, 2000 and 2003 and all the marriages including the assessee and three sons were performed prior to 2003. It is also on record that the statement of various family members were recorded and none has stated that these are not personal wearing jewellery and same were received by the respective ladies/daughter-in-law on/or at the time of their marriages either from the parental side or in-laws side and even subsequently at the time of birth of their children. 11. On perusal of the circular of the Board, quoted supra, it is clear that in the case of wealth tax assessee, whatever gold jewellery and ornaments have been found and declared in the wealth tax return, need not be seized. However, sub-clause (ii) prescribes that in 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. Sub-clause (iii) also prescribes that the authorised offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry beyond the said limit as unexplained investment of the person with whom the said jewellery has been found. 13. Admittedly, looking to the status of the family and the jewellery found in possesssion of four ladies, was held to be reasonable and therefore, the authorized officers, in the first instance, did not seize the said jewellery as the same being within the tolerable limit or the limits prescribed by the Board and thus, in our view, subsequent addition is also not justificable on the part of the Assessing Officer and rightly deleted by both the two appellate authorities namely' CIT(A) as well as the Tribunal. 14. It can also be observed here that prior to 1992, when the exemption limit under the Wealth Tax Act was about ₹ 1,00,000/- or ₹ 1,50,000/-, then in most of the cases, returns were filed under the Wealth Tax Act because even in case of possession of 500 gms per lady and the other assets namely; capital, investments in firms/shares, landed property etc. etc. being taxable return of wealth were invariably filed by the assessees. However, by the Finance Act, 1992 w.e.f. 01/04/1993 drastic change was introduced under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and against the Revenue. The order of the lower authorities is set-aside and the appeal of the assessee is allowed. 16. In ITA No. 434/JP/2017, the assessee has taken the following grounds of appeal. 1. That on the facts and in the circumstances of the case the ld. CIT(A) is wrong, unjust and has erred in law in confirming addition of ₹ 10,26,240/- made to the income of the appellant by the ld. Assessing Officer on account of share in alleged unexplained investment in jewellery valuing ₹ 20,52,479/- (weighing 779.92 gms) and silver articles valuing ₹ 1,00,000/- claimed by the appellant have been received from friends and relatives on marriage and other occasion. 17. Admittedly, under the identical facts and circumstances as in ITA No. 436/JP/17, the impugned addition has been made in the hands of the assessee. Therefore, following our detail discussions and reasoning as in ITA no. 436/JP/17, the matter is decided in favour of the assessee and against the Revenue. The order of the lower authorities is setaside and the appeal of the assessee is allowed. In the result, both of the appeals are allowed. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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