Hitendrakumar Chimanlal Patel Vs DCIT (ITAT Ahmedabad)
Partial Relief in Jewellery Addition — Benefit Allowed for Relatives’ Jewellery During Search; ₹10 Lakh Addition Deleted
The Ahmedabad Bench of the ITAT partly allowed the appeals of a husband and wife arising from a common search under section 132, relating to addition for unexplained jewellery found at their residence and bank lockers.
During search, 2,668 grams of jewellery was found. After allowing relief under CBDT Instruction No. 1916, the AO treated 1,211.7 grams (₹35.74 lakh) as unexplained and added the same 50% substantively and 50% protectively in the hands of both spouses. The CIT(A) granted partial relief by accepting jewellery of ₹23.12 lakh as explained on the basis of withdrawals reflected in a cash-flow statement accepted by the Income Tax Settlement Commission, but confirmed the balance addition of ₹17.87 lakh, split between both assessees.
Before the ITAT, the assessees contended that a substantial portion of jewellery found at the residence belonged to relatives who were present for last rites and a family marriage, a fact also stated during the search proceedings. The Tribunal accepted that it was reasonable and logical that relatives attending such occasions would carry jewellery, and that the lower authorities erred in completely ignoring this aspect. At the same time, noting the absence of affidavits or corroborative evidence from relatives, the ITAT adopted a balanced approach.
Accordingly, the Tribunal directed deletion of the confirmed addition to the extent of ₹10 lakh and sustained the balance, resulting in partial relief to both assessees.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
