Case Law Details
Shekhar Agarwal Vs ACIT (ITAT Delhi)
Shekhar Agarwal has contested against the addition of Rs. 4,48,796/- under section 69A of the Act, pertaining to A.Y. 2015-16. The issue revolves around diamond jewellery found during search proceedings and its declaration in the Wealth Tax Return.
Detailed Analysis: During a search operation at Shekhar Agarwal and his wife’s premises, diamond jewellery of 38.75 carats was found. However, this jewellery was not declared in the Wealth Tax Return. The Assessing Officer (AO) made an addition of Rs. 4,48,796/- under section 69A, believing it was undisclosed wealth.
Agarwal contested this addition, arguing that the jewellery was studded with diamonds, not loose diamonds, and the declared jewellery in the Wealth Tax Return exceeded what was found during the search. He cited a similar case where the Tribunal deleted the addition for a family member.
The ITAT Delhi, considering the absence of loose diamonds during the search and the higher declaration of jewellery in the Wealth Tax Return, ruled in favor of Agarwal. Citing a previous decision, the Tribunal emphasized that studded diamond jewellery cannot be added when it forms part of the gross weight found and has been duly disclosed.
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