Ramnath Gupta Bysani Vs JCIT (ITAT Bangalore)
The Bangalore ITAT in the case of Shri Ramnath Gupta Bysani dealt with addition of ₹1.03 crore as unexplained jewellery u/s 69B arising from a search, where the assessee relied on CBDT Instruction No. 1916 (11.05.1994).
The AO and CIT(A) rejected the claim, holding that the instruction applies only to seizure during search and not for taxation. However, the Tribunal disagreed and held that the instruction provides a reasonable benchmark for explaining jewellery holdings, especially when supported by customary and family factors.
The ITAT relied on multiple High Court rulings (including Satya Narain Patni and Ratanlal Jain) to hold that:
- Jewellery within prescribed limits (500g married lady, 250g unmarried lady, 100g male) should be treated as explained,
- The instruction, though framed for seizure, has evidentiary value for determining unexplained investment,
- Where the assessee provides plausible explanations (stree dhan, family gifts, disclosed assets, etc.), additions cannot be made mechanically.
In this case, since the assessee had:
- Explained jewellery as family holdings and gifts,
- Produced some supporting evidence (wealth-tax records, purchase by son),
the Tribunal directed deletion of addition to the extent covered by Instruction 1916, granting substantial relief.
Accordingly, the appeal was partly allowed, reaffirming that CBDT Instruction 1916 is not merely procedural but also relevant for taxation of jewellery found in search.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
1. ITA No. 1763/Bang/2025 is filed by Shri Ramnath Gupta Bysani for Assessment Year 2019-20 against the Appellate Order passed by the Commissioner of Income Tax (Appeals) – 11, Bangalore (the Ld. CIT(A)) wherein the Appeal filed by the Assessee against the Assessment Order passed by the Joint Commissioner of Income tax (OSD),Central Circle – 1(3), Bangalore (the Ld. Assessing Officer) u/s. 143(3) of the Income Tax Act, 1961 (the Act) dated 18.06.2021 was partly allowed.
