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Judgment
PER SUDHIR KUMAR, JUDICIAL MEMBER:
This appeal by the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-30 New Delhi [hereinafter referred to as “Ld. CIT(A))”] vide order dated 21-08-2025 pertaining to A.Y. 2019-20, arising out the assessment order dated 28-05-2021 passed under section 143(3) of the Income-tax Act, 1961, (in short ‘the Act’).
The assessee has raised the following grounds in appeal:
1.That the order dated 28-05-2021 is not digitally signed on 28-05-2021 and unsigned order has no legal authority. The Assessment order was passed in violation of office procedures, as on the basis of unsigned order, entries were made in demand and control register, That the Ld. AO has passed the said order in violation of office procedures which specifically states in para5.1 (XX) at page no.37 of Manual of office procedure, Volume-II (Technical) issued by the Directorate of Income Tax, (Organisation and Management Services) CBDT Department of Revenue GOI that the AO shall perform the following tasks simultaneously:-a) sign the Assessment order, Demand notice. b) make necessary entries in the Demand & Collection Register (D&R)
2.The page of Panchnama on which authorized officer not signed should not be read/given any weightage as unsigned pages of panchnama are non-est in the eye of law. That Assessing Officer deliberately violated the CBDT circular/notification no 1994 dated 11-05-1994 which specifically allows 500gms jewellary to married women, 250gms jewellary to unmarried women and 100gms to male member. Accordingly, 1400gms jewellary is allowable/exempt in view of the above stated CBDT circular. Section 69A is not applicable in the assessee case as assessee has discard his liability to proof without doubt that 1400gms jewellary were belongs to family member of the assessee and his family members of the assessee by submitting the Valuation reports taken by the assessee and his family members. Valuation report dated 10-04-2001 of Smt. Kanta Devi and Sh. Ved Prakash Aggarwal and Valuation report dated 01-04-2009 of Smt. Ritika Jalan and Sh. Vikas Jalan have not been questioned/rejected by the Assessing Officer.
3.The assessee could not check the notice as there was complete lockdown declared by DDMA under epidemic act and the assessee is infected to COVID-19 and his father also infected and expired on 24-04-2021, therefore we could not submit the reply of notice.
4The appellant craves for leave to add or make alteration in grounds of appeal before the hearing at the time of hearing or after the hearing of the case.
The brief facts of the case are that the assessee filed his original return of income declaring total income of Rs.12,24,260/-. The return was processed under section 143(1) of the Act on 24-01-2020. A search under section 132 of ACT was conducted at the business premises of M/s Faquir Chand Lockers and Vaults Private Limited. During the course of search, it was found that there were 300 lockers in the name of different persons mostly belonging to nearby business entities. In these lockers one locker No. 371 was allotted in the name of Shri Vikas Lalan, accordingly a search warrant issued in the name of the assessee and executed on 01-12-2018. During the search 2088.78gms jewellery of worth Rs.63,93,594/- was found form the locker of the assessee. The assessment jurisdiction was transferred to the Circle by the Pr. CIT Delhi-15 New Delhi. Notice under section 142(1) of the Act along with questionnaire was issued and served upon the assessee. The assessee did not furnish the source of jewellery found from the locker No.371. According to Assessing Officer the assessee was found the owner of jewellery/gold coin/ bullion worth of Rs.63,93,594/-. It was also found that the valuation report filed by the assessee do not prove that the said jewellery was acquired out of disclosed sources. The Assessing Officer completed the assessment proceedings after making the addition of RS. 63,93,594/- under section 69 of the Act.
Aggrieved with the additions, the assessee preferred the appeal before the Ld. CIT(A), who vide order dated 21-08-2025 dismissed the appeal of the assessee. Aggrieved the order of the Ld.CIT(A), the assessee is in appeal before the Tribunal. The Ld. CIT(A) has observed in his order as under:-
12.2Section 69A of the Income Tax Act “where in any financial year the assessee is found to be the owner of any money, bullion. Jewellery or other valuable article and such money, bullion. Jewellery or valuable article is not recorded in the books of account, if any maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the money and the value of the bullion jewellery or other valuable article may be, deemed to be the income of the assesee for such financial year”. In the instant case, Shri Vikas Jalan has been found to be the owner of jewellery /gold/coin /bullion worth of Rs.63,93,594/- from the locker No. 371 owned by him is his personal capacity and thus the jewellery /gold coin /bullion of the assessee Shri Vikas Jalan represent unexplained jewellery /gold coin/bullion of the assessee and his represent individual hand as per provisions of Section 69A of the Act. The CBDT circular no.1916 dated 11-05-1994 pertains to guidelines for seizure during search under wealth tax provisions and is not applicable to the facts of this case, where the additions is made u/s 69 A for unexplained jewellery founded during search requiring satisfactory explanation of source, which the appellant failed to provide despite opportunities. The old valuation reports do not substantiate acquisition or and the jewellery was found in the assessee’s sole locker. Section 69A is correctly applied and these grounds are dismissed.
The Ld. AR of the assessee submitted that the jewellery found from the locker no 371 belongs to the assessee and his family members. He also submitted that as per clarification circular dated 01-12-2026 of the CBDT the jewellery to the extent of 500gms for married lady, 250gms for unmarried lady and 100gms for male member will not be seized, even if prima facie it does not seem to be matching with the income record of the assessee. He also submitted that the assessee has filed the valuation report of the jewellery of Shri Ved Prakash and Smt. Kanta Devi in which the jewellery held by them was disclosed. He further submitted that valuation report dated 01-04-2009 of Smt. Ritika Jalan was filed but the valuation reports were not accepted and without rejecting the valuation report the AO made the addition. The valuation reports prove that the jewellery was the old jewellery of the assessee and his family members. In the case of DCIT v. Mehul Johnson ITA No. 1647/Mum/2020 the CO-ordinate bench held that the old jewellery valuation report proves that these jewelleries are old and belonging to the assessee and his family.
The Ld. AR of the assessee further submitted that assessee has explained the seized jewelleries and proved that these belong to the assessee and his family. It was also submitted that as per the social custom and practices in India, whereby jewellery is gifted by the family members on the occasion of marriage, birthday, and auspicious occasion and such acquisition of jewellery cannot be supported by the bills and vouchers. Reliance is placed the decision of Ashok Chadha 337 ITR 399(Del), in this case the Hon’ble Delhi High Court held that it is a normal custom for woman to receive jewellery in the from of “stree dhan” or on other occasions such as birth of child etc. Collecting jewellery of 906.900 grams by a woman in married life of 25-30 years in not abnormal. Reliance also placed on the following decisions:
Sushila Devi v. CIT 76 taxmann.com 163 (Del)
CIT V Ratanlal Vyaparilal Jain (2011) 339 ITR 351 (Guj)
CIT V. Ghanshyam Das Johri [2014]41 taxmann. com.295 (ALL)
CIT vs Satya Narain Patni [2014]366 ITR 325 (Raj)
Rameshchandra R. Patel [2004]89 ITD 203 ITAT Ahd (TM)
Smt. Kasturben m. Pithavadiwala in ITA No.70 to 72 AHD/2017
Chander Pal v. ACIT ITA No. 978/Del/2023
Kirti Singh v ACIT 157 taxmann.com 298 (Del Trib)
Jyoti Bhalla v ITO ITA No. 714/CHD/2022
Bawniet Kaur Punihani & Others v. DCIT 2024(9) TMI 337 (ITAI Del) 24-02-2024
The Ld. Departmental Representative submitted that the assessee has failed to prove that the seized jewellery belons to his and his family members. The assessee did not file any bill vouchers in support of claim the appeal was rightly rejected by the Ld. CIT(A). We have heard the parties and perused the material available on record. In the present case the Ld. CIT(A) has rejected the Government approved valuer, valuation reports submitted by the assessee in the name of Smt. Kanta Devi and Shri Ved Prakash Aggarwal on the ground that these reports are old. These valuation reports, proves that these, jewellery are 20-22 years old belonging to the family members. The assessee also filed the valuation report of the Government approved valuer, in the name of Ritika and Vikas Jalan and this report proves that the jewellery is old. The valuation reports are for the year 2001 & 2009. Thus, the jewellery which was found in the locker of the assessee during the search, was old jewelleries and ancestral inheritance and also gifted 20-30 years ago. Apart from that, even if we go to the CBDT instruction no.1916 which was subject matter of interpretation by the court in the case of CIT v Ghanshyam Das Johri 41 taxmann.com 295 (All), the court has held that CBDT instruction should be taken as guiding factor of presuming assessee to the extent of limit prescribed for the family members should be treated as explained looking to the Indian Customs and traditions where jewelleries were given to the ladies at the time of marriage and other occasions. In the instant case the assessee’s family belongs two males, two male children and two females total six members. The Assessing Officer did not give the benefit of the circular no 1916 to the assessee and added the total seized jewellery valuation in the income of the assessee. The circular No.1916 dated 11-05-1994 of the CBDT provides exemption to the exetent, of 1400 grams of gold jewellery to the assessee based on the family members. In the paper book (page no79 to 86 the assessee filed the copy of the ITR of the Ved Prakash Aggarwal, Smt. Kant Devi & Smt. Ritika to show the status of the assessee’s family. We also observe that the CBDT Instruction No.1916 dated 11-5-1994 vide para no.(iii) stipulates as under:
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.
In view of above instructions, the excess jewellery found in the case of assessee, his parents, his wife, his children and assessee were nominal, and was very much reasonable, keeping in mind the riches and status and more customary practices. Our aforesaid view is also supported the judgement in the csase of the Hon’ble High Cort of Delhi in the case of Ashok Chadha v. ITO 14 taxmann.com 57(Delhi) held as under:
3.Learned Counsel for the respondent on the other hand relied the reasoning given by the authorities below. After considering the aforesaid submissions we are of the view that addition made is totally arbitrary and is not founded on any cogent basis or evidence. We have to keep in mind that assessee was married for more than 25-30 years. The jewellery in question is not very substantial. The learned counsel for the appellant/assessee is correct in her submission that it is a normal custom for woman to receive jewellery in the form of “stree dhan” or on other occasions such as birth of a child etc. Collecting jewellery of 906.900 grams by a woman in a married life of 25-30 years is not abnormal. Furthermore, there was no valid and/ or proper yardstick adopted by the Assessing Officer to treat only 400 grams as “reasonable allowance” and treat the other as “unexplained”. Matter would have been different if the quantum and value of the jewellery found was substantial/
4.We are, therefore, of the opinion that the findings of the Tribunal are totally perverse and far from the realities of life. In the peculiar facts of this case we answer the question in favour of the assessee and against the revenue thereby deleting the aforesaid addition of Rs.3,87,364/-.
5.Appeal is allowed in the aforesaid terms.
Keeping in view of the aforesaid facts and circumstances of the case as well as the status of the family and on the anvil judgement of the Hon’ble Court of Delhi in case of Ashok Chadha vs. ITO and other decisions sited by the assessee, the explanation given by the assessee is accepted. The additions made by the Assessing Officer and confirmed by the Ld. CIT(A) are deleted. The ground no.2 raised by the assessee is allowed.
In the result, the appeal of the assessee is allowed.