Bharat Bhushan Gupta vs ACIT Central Circle-25

PER SHRI M BALAGANESH, ACCOUNTANT MEMBER:

The appeal in ITA No.6952/Del/2025 for AY 2018-19, arises out of the order of the Id. Commissioner of Income Tax (Appeals)-29, New Delhi [hereinafter referred to as 'Id. CIT(A)', in short] dated 27.08.2025 against the order of assessment passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as 'the Act') dated 29.12.2019 by the Assessing Officer, ACIT, Central Circle-25, New Delhi (hereinafter referred to as 'Id. AO').

At the outset, the Learned AR stated that the second limb of Ground No. 1 on the aspect of approval under section 153D of the Act was stated to be not pressed. Necessary endorsement has been made by the Learned AR in our file to that effect. Accordingly, the second limb of Ground No. 1 on section 153D of the Act approval is hereby dismissed as not pressed.

The first limb of Ground No. 1, Ground No. 1.1 raised by the assessee are challenging the addition made on account of gold jewellery under section 69 A of the Act.

We have heard the rival submissions and perused the materials available on record, The assessee had originally filed his return of income under section 139 of the Act for the assessment year 2018-19 on 23-08-2018 declaring total income of Rs 1,11,82,250 which was duly processed under section 143(1) of the Act. A search and seizure action under section 132 of the Act was carried out on 5-10-2017 on the assessee. During the relevant year under consideration, the assessee had derived salary income from Jai Bharat Maruti limited, capital gains on sale of mutual funds and interest income. During the course of search, gold jewellery of 269.50 grams valued at Rs. 8,47,855 was found at the residence and 1,862.098 grams were valued at Rs. 59,90,741 was found in the locker maintained with ICICI Bank Gurugram. Out of the total 2,131.598 grams of jewellery, the search team seized 354.11 grams valued at Rs. 10,52,181 at the time of search. The source of gold jewellery was explained by the assessee vide reply dated 12-12-2019 stating that the total 2,131.598 grams of jewellery valued at Rs. 68,38,602 was found from the residence and locker of the assessee and his wife. That during the relevant period, the family of the assessee consisted of three married ladies, three male members and one child. It was also submitted that Late Smt Gayathri Gupta, mother of assessee had died on 1-4-2012 leaving behind her Will through which the assessee acquired 800 grams of jewellery. A copy of Will of Smt Gayathri Gupta dated 4-2-2012 was also filed before the learned AO. The assessee explained that after reducing the 800 grams of jewellery received from mother through Will, the remaining 1,331.598 grams is well within the limit prescribed by CBDT Instruction No. 1916 dated 11-5-1994 and therefore the same has to be treated as explained by the assessee and no addition is warranted thereon. The Learned AO noted that assessee and his family had not filed any wealth tax returns. Further, as per the Will of Late Smt Gayathri Gupta, she had three sons including the assessee. While it is so, it is very improbable that she had handed over 800 grams of jewellery only to the assessee herein and not to the other two sons. Accordingly, the Learned AO accepted partially the explanation of the assessee and proceeded to make addition only to the extent of seized jewellery of 354.11 grams comprising of gold, bullion, coins and ginni valued at Rs 10,52,181 and added the same as unexplained money under section 69A read with section 115BBE of the Act and completed the assessment. This action of the learned AO was upheld by the learned CITA.

We find that the veracity of the Will of the mother Late Smt Gayathri Gupta, was doubted by the revenue in the instant case by treating the same as an afterthought. It is pertinent to note that Late Smt Gayathri Gupta has got three sons including the assessee. The veracity of the Will could have been cross verified by the revenue with the other two brothers if the same is sought to be doubted by the revenue. Admittedly, no verification whatsoever was sought to be carried out by the revenue with the other two brothers . Had it been carried out, the veracity of the Will could have been understood better and without doing such preliminary inquiry or verification from the side of the revenue, the explanation given by the assessee cannot be ignored. Accordingly, the explanation given by the assessee had to be considered as a plausible explanation and no addition to the extent of 354.11 grams is required to be made in the instant case. Accordingly, we direct the Learned AO to delete the addition of Rs 10,52,181 as in our considered opinion, no part of seized jewellery is unexplained in the instant case. The first limb of Ground No. 1 and Ground No. 1.1 raised by the assessee are hereby allowed.

The Ground No. 2 raised by the assessee is general in nature.

In the result, the appeal of the assessee is partly allowed.