Shri Pankaj Ladha Vs DCIT (ITAT Jaipur)
The issue under consideration is whether the addition can be made against an individual member of the family, even if the that gold in possession belongs to entire family?
In the present case, during the search operations, jewellery including gold and silver items, silver coins, etc. were found in the locker being operated by Smt. Savitri Devi, mother of the assessee and inventoried by the Income Tax Department. When the assessee was asked for the source of jewelry found, it was stated that the impugned jewellery belongs to the family members and also submitted the wealth tax returns filed by appellant and Smt. Savitri Laddha, mother of assessee along with a chart of ownership of such jewellery to the AO. The AO was however not satisfied with the reply of the assessee and hence made addition in the name of the assessee.
ITAT states that AO has failed to consider two key aspects. Firstly, the silver jewellery so found belongs to all the family members as stated by the assessee in his statement recorded u/s 132(4) of the Act. A fact, which seem to have been accepted by the AO, where he has given credit of silver coins belonging to Rajaram Ladha and Savitri Ladha as well as silver utencils belonging to Savitri Ladha and also fairly accepted by the ld CIT(A) where she has accepted the assessee’s explanation regarding gold jewellery so found during the course of search along with silver jewellery/items. Therefore, once it is accepted that these items belong to all family members and where the assessee has thereafter given specific details regarding such items identified to each of the individual members as per his submissions, the remaining items should therefore be accepted as belonging to respective family members and not just that of the assessee only. Secondly, the assessee and her mother have already declared silver jewellery items in their respective wealth tax returns which need to be considered. In case of assessee, he has declared 0.5 kgs of silver in his wealth tax return for A.Y 92-93 and to that extent, the same stand explained. Therefore, as against 1.480 kgs of silver items belonging to the assessee, he has already declared 0.5 kgs of silver in his wealth tax return for A.Y 92-93. The possession of remaining 0.98 kgs of silver items over the period of 24 years and given the societal customs of accepting/buying such items on occasion of birth and other social functions seems reasonable and the addition sustained by the ld CIT(A) is hereby deleted. Accordingly, the appeal of the assessee is allowed.
FULL TEXT OF THE ITAT JUDGEMENT
The assessee has filed the present appeal against the order of ld. CIT(A)-II, Udaipur dated 26.12.2018 for the assessment year 2016-17 wherein the assessee has taken the following ground of appeal:-
“The ld. CIT(A) erred in law as well as on the facts of the case in confirming the addition of Rs. 1,50,000/-made by the ld. AO on account of unexplained jewellery. The addition so made and confirmed by the ld. CIT(A), Kota being contrary to the provisions of law and facts, kindly be deleted in full.”
2. The ld AR submitted that a search and seizure operation U/s 132(1) of the Act were carried out on 02-07-2015 at the residential premises of the assessee situated at Kota. During the search operations, jewellery including gold and silver items, silver coins, etc. were found in the locker being operated by Smt. Savitri Devi, mother of the assessee and inventoried by the Income Tax Department. The same were got valued by the authorized departmental valuer, Shri Kamal Kant Parekh on 03-07-2015 as under:-
