Jigishaben Minesh Patel Vs ACIT (Gujarat High Court)
The Gujarat High Court allowed a writ petition seeking release of jewellery seized during an income-tax search, holding that continued detention of the jewellery was illegal after the petitioner had discharged the entire tax liability under the Vivad Se Vishwas Scheme, 2020.
A search under Section 132 of the Income Tax Act, 1961 was conducted on 02.12.2015 in the Bipinchandra Patel Group, including the petitioner. During the search, gold and diamond jewellery valued at ₹1.53 crore belonging to the petitioner and her family members was found, out of which jewellery valued at ₹87.85 lakh (gold weighing 3473.700 grams and diamond weighing 6.97 carats) was seized. Assessment proceedings under Section 153A culminated in an order dated 29.12.2017 for Assessment Year 2016–17, wherein additions were made towards unexplained jewellery on a presumptive 50:50 ownership basis between the petitioner and her mother-in-law, without any item-wise bifurcation.
The petitioner challenged the assessment before the Commissioner of Income Tax (Appeals). The CIT(A), by order dated 07.01.2019, deprecated the mechanical approach of the Assessing Officer and categorically held that the jewellery belonged to the petitioner. The earlier presumption-based substantive and protective additions were declared invalid. After detailed examination of explanations, disclosures, VDIS declarations, wealth-tax records, and CBDT Instruction No.1916, the CIT(A) quantified the unexplained jewellery owned by the petitioner and directed enhancement of the addition accordingly. An appeal effect order dated 11.03.2019 followed.
