Sh. Vinod Gupta vs DCIT

“6.

We have heard both the parties and perused the material available on record. During the search and seizure operation conducted on 08/10/2019, the jewellery worth Rs. 67,80,418/- were found which collectively belongs to the Assessee, Sh. Amit Singhal and Smt. Vinod Gupta. The assessment has been framed against the Assessee by making an addition of Rs. 67,80,418/- u/s 69A of the Act. In order to prove the source and ownership of the jewellery found during the search the Assessee contended that jewellery seized during the search, belongs to family members of the Assessee and the same is from disclosed source. It is the case of the Assessee that, there are six family members who can held maximum 1,550.00 grams of jewellery as per CBDT Instruction No. 1916 dated 11/05/1994 dated 111/05/1994. The Assessee has also given the working Chart which reproduced as under:-

S. No.	Name	Relationship	Jewelry in Gms.
1	Mahabir Prasad Gupta Aged 77 Years	Head of the Family	100.000
2	Mrs. Vinod Gupta-Aged 73 Years	Wife Mahabir of Prasad Gupta	500.000
3	Amit Singhal- Aged	Son (passed away)	100.000
4	Sonika Singhal Aged 46 Years	Wife of Amit Singhal	500.000
5	Kevina Singhal-Aged 22 Years	Grand Daughter	250.000
6	Timinesh Singhal-Aged 17 Years	Grand son	100.000
		Total	1550.000

7.

The net jewellery seized by the Revenue is 1119.700 grams. As per the Assessee which is well within the guidelines of the CBDT vide Instruction No. 1916 dated 11/05/1994. The said instructions reads as under:

“In the case of a wealth-tax assessee, gold jewellery and and ornaments found in excess of the gross weight declared in the wealth-tax return only need to 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.”

8.

Further the Assessee had purchased 257.780 grams gold jewellery and to substantiate the said claim, the Assessee produced copy of invoices at 256 to 258 of the Paper Book, which has been produced before the Lower Authorities as well.

9.

The Co-ordinate Bench of the Tribunal in ITA No. 6397/Del/2012 vide order dated 16/05/2014 held as under: -

“4.

We have considered the arguments of both sides and perused the material placed before us. We find that the issue of applicability of the Instruction No. 1916 dated 11.5.1994 to the assessment proceedings was considered by the Hon’ble Gujarat High Court in the case of CIT vs. RatanlalVyaparilal Jain (339 ITR 351). In this case the ITAT has allowed the rebate to the assessee as per the aforesaid CBDT’s Instructions. The Revenue aggrieved with the decision of the ITAT, has filed the appeal before the Hon’ble Gujarat High Court which held “The Tribunal found that the jewellery held by the assessee and his family members was well within the limit laid down the CBDT circular and accordingly, deleted the whole addition on the ground that the jewellery held by each of the family members was below the limits specified in the said circular. Though it is true that the CBDT Instruction No. 1916, dt. 11th may, 1996 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. The approach adopted by the Tribunal in following the said circular and giving benefit to the assessee, even for explaining the source in respect of the jewellery being held by the family is in consonance with the general practice in Hindu families whereby jewellery is gifted by the relatives and friends at the time of social functions, viz., marriages, birthdays, marriage anniversary and other festivals. These gifts are customary and customs prevailing in a society cannot be ignored. Thus although the circular had been issued for the purpose of non-seizure of jewellery during the course of search, the basis for the same recognizes customs prevailing in Hindu society. In the circumstances, unless the Revenue shows anything to the contrary, it can safely be presumed that the source to the extent of the jewellery stated in the circular stands explained. Thus, the approach adopted by the Tribunal in considering the extent of jewellery specified under the said circular to be a reasonable quantity, cannot be faulted with. In the circumstances, it is not possible to state that the Tribunal has committed any legal error so as to give rise to a question of law.” We find that the aforesaid decision of the Hon’ble Gujarat High Court would be squarely applicable to the case under appeal before us. No contrary decision is brought to our notice. We, therefore, respectfully follow the above decision of the Hon’ble Gujarat High Court and direct the AO to allow the rebate of 950 gms. of jewellery as against the 700 gms. of jewellery directed by the CIT(A).”

10.

Further, the Hon'ble High Court of Rajasthan in the case of Commissioner of Income Tax, Alwar Vs. Satya Narain Patni reported in (2014) 46 Taxmann.com 440 Rajasthan held as under: -

“It is true that the circular of the CBDT, referred to supra dt. 11/05/1994 only refers to the jewellery 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 and it does not speak about the questioning of the said jewellery from the person who has been found with possession of the said jewellery. However, the Board, looking to the Indian customs and traditions, has fairly expressed that jewellery to the said extent will not be seized and once the Board is also of the express opinion that the said jewellery cannot be seized, it should normally mean that any jewellery, found in possesion of a married lady to the extent of 500 gms, 250 gms per unmarried lady and 100 gms per male member of the family will also not be questioned about its source and acquisation. We can take notice of the fact that at the time of wedding, the daughter/daughter-in-law receives gold ornaments jewellery and other goods not only from parental side but in-laws side as well at the time of 'Vidai' (farewell) or/and at the time when the daughter-in-law enters the house of her husband. We can also take notice of the fact that thereafter also, she continues to receive some small items by various other close friends and relatives of both the sides as well as on the auspicious occasion of birth of a child whether male or female and the CBDT, looking to such cutoms prevailing throughout India, in one way or the another, came out with this Circular and we accordingly are of the firm opinion that it should also mean that to the extent of the aforesaid jewellery, found in possession of the varoius persons, even source cannot be questioned. It is certainly 'Stridhan' of the woman and normally no question at least to the said extent can be made. However, if the authorized officers or/and the Assessing Officers, find jewellery beyond the said weight, then certainly they can question the source of acquisation of the jewellery and also in appropriate cases, if no proper explanation has been offered, can treat the jewellery beyond the said limit as unexplained investment of the person with whom the said jewellery has been found.”

11.

In view of the above, considering the status of the family and the customs and practice of the community to which the Assessee family belongs to and also considering the CBDT Instruction (supra) and by relying on the above-mentioned judicial precedents, we find no justification to uphold the order of the Ld. CIT(A) in sustaining addition made by the A.O. Accordingly, the addition of Rs. 67,80,418/- made u/s 69A of the Act by the A.O. which has been confirmed by the Ld. CIT(A) is hereby deleted by allowing Ground No. 12 of the Assessee.”