DCIT Vs Smt. Kushal Singh (ITAT Delhi)
The appeal before the Income Tax Appellate Tribunal Delhi arose from the order of the Commissioner of Income Tax (Appeals) deleting additions made during assessment under Section 143(3) of the Income Tax Act, 1961, following a search conducted under Section 132. The Revenue challenged deletions relating to unexplained wrist watches and jewellery found during the search for Assessment Year 2019–20.
During the search, nine wrist watches were seized from the assessee’s residence and valued by a departmental valuer at ₹58.70 lakh. The Assessing Officer treated this amount as unexplained investment under Section 69, relying on the assessee’s statement recorded under Section 132(4) and rejecting a later claim by an elderly family member who asserted ownership without documentary proof. The CIT(A) deleted the addition on the ground that wrist watches constitute “valuable articles” and therefore fall under Section 69A, not Section 69, particularly since the assessee did not maintain books of account. The Tribunal upheld this deletion, holding that Section 69 applies only to unexplained investments, whereas unexplained ownership of valuable articles is governed by Section 69A. As the Assessing Officer had invoked an incorrect provision, the deletion was confirmed without examining the merits.
