Shri Gyanendra Singh Shekhawat Vs ACIT (ITAT Jaipur)
Held that factors like high status, family tradition, deduction on account of purity and deduction towards Streedhan should be considered before making addition on account of unexplained investment. Accordingly, addition deleted.
Facts-
The assessee belongs to Rajput Community of Rajasthan and as per customs of the Community, some of the Gold/Silver Jewellery/articles are passed on to the subsequent generations and some of the jewellery was received on various festivals/ auspicious occasions and ceremonies. During the course of search, addition of Rs. 24,03,035/- was made on account of unexplained investment on the basis of jewellery found.
CIT(A) partly allowed the appeal and restricted the addition to Rs. 17,55,262/-. Being aggrieved, the assessee has preferred the present appeal.
Conclusion-
Held that we are of the considered view that the AO had ignored the factual position as well as failed to verify the fact that the assessee is living with his parents and belonged to a Rajput Family where the fact of having jewellery as Streedhan by the assessee’s mother and wife cannot be ignored. Thus after considering the overall factual position in this case and keeping in view of high status, family tradition, deduction on account of purity and the deduction towards Streedhan, the excess jewellery found were nominal. In this view of the matter, the addition sustained by the ld. CIT(A) deserves to be deleted and the grounds raised by the assessee are allowed. We order accordingly.
FULL TEXT OF THE ORDER OF ITAT JAIPUR
The assessee has filed an appeal against the order of the ld. CIT (A)-4, Jaipur dated 31-12-2021 for the assessment year 2018-19 raising therein following grounds of appeal.
‘’1. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has grossly erred in confirming the addition of Rs.17,55,262/- made on account of jewellery (Rs.15,52,634/- Gold Jewellery and Rs.2,02,628/- silver jewellery) found from the residence as well as bank locker of assesse during the course of search by alleging the same as unexplained u/s 69 of the Income Tax Act, 1961 arbitrarily.
1.1 That the ld. CIT(A) has further erred in confirming the actions of the AO in making addition on account of jewellery found during search by disbelieving the source of acquisition owned by the assessee and his family members and by grossly ignoring the submissions made and evidences adduced, thus the resultant addition deserves to be deleted.
1.2 That the ld. CIT(A) has further erred in ignoring the fact that the jewellery so found was the ‘’STRIDHAN” of the ladies of the family of the assesse and was acquired by them on various occasions since past long, thus the sources cannot be treated as unexplained and accordingly the addition so made u/s 69 deserves to be deleted.”
2.1 The Ground Nos. 1 and 1.2 raised by the assessee are interconnected and relates to challenging the order of the ld. CIT(A) in confirming the addition of Rs.17,55,262/- made on account of jewellery (Rs.15,52,634/- Gold Jewellery and Rs.2,02,628/-Silver Jewellery) found from the residence as well as bank locker of the assessee during the course of search. Therefore, we thought it fit to decide this issue by this consolidated order for the sake of convenience and brevity of the case.
2.2 We have heard the Counsel of both the parties and we have also perused thematerials placed on record i.e. impugned orders as well as judgements relied upon by both the parties. From the records, we noticed that the assessee is an individual and is an Architect by profession. A Search action u/s 132 of the Act was conducted on 02-08-2007 and the assessee was treated as a Member of Kiran Fine Jewellers Group whereas the assessee from the very beginning had taken a definite/ firm stand that except professional relation the assessee had no other business connections with the said Group. However, the addition of Rs.24,03,035/-was made on account of jewellery found during the course of search by treating the same as unexplained investment. The ld. CIT(A) while partly allowing the appeal of the assessee restricted the addition to Rs.17,55,262/-. The relevant extract of the finding of the ld. CIT(A) restricting the addition to the tune of Rs.17,55,262/ at para 7.2 (viii) is reproduced as under:-
(viii) Therefore, in view of the above discussion, the addition of Rs.6,47,773/- on account of valuable stones is treated as explained. However, the addition to the extent of Rs.17,55,262/- (Rs.15,52,634/-plus Rs.2,02,628/-) on account of gold jewellery and silver jewellery treated as unexplained is sustained instead of addition of Rs.24,13,,035/- made by the AO u/s 69 of the Act. The appellant gets a relief of Rs.6,47,773/-. Accordingly, the Ground No. 4 stands partly allowed.”
As per factual position as is emanating from the record is that during the course of search total jewellery comprising of gold jewellery weighing 1921.800 gms valued at Rs.47,97,013/- (studded with precious and semi precious stones valuing Rs.6,47,773/- and silver jewellery valued at Rs.2,02,628/- was found. It is also noted that the during the course of assessment proceedings, the AO allowed the benefit in respect of gold jewellery worth 1300 gms in terms of CBDT Instruction No. 1916 dated 11-05-1994 and made the addition which was restricted to Rs. 17,55,262/- by the ld. CIT(A).
2.3 During the course of hearing, the ld. AR of the assessee drew our attention towards its reply filed before the AO regarding explanation of source of total jewellery found during the search which is at Paper Book Pages 16 to 19 and the same has been reproduced below.
‘’3. Jewellery
3.1. During the course of search, Gold & Silver Jewellery valuing Rs.56,47,414/-was found. Details of Silver and Gold Jewellery found is as under
