Smt. Nirmal Puri Vs ACIT (ITAT Delhi)
CBDT Jewellery Instruction Not Applicable to Bullion: ITAT Delhi Upholds Addition under Section 69A
The Delhi Bench “G” of the ITAT dismissed the appeal of Smt. Nirmal Puri (AY 2020-21) and upheld the addition of ₹16.72 lakh under section 69A read with section 115BBE in respect of bullion seized during search proceedings.
During a search under section 132 conducted in connected cases, bullion weighing 426.600 grams valued at ₹16,72,272 and cash of ₹2.41 lakh were found in the assessee’s bank locker. While the cash was not disputed, the assessee claimed that the bullion was sourced from melting of old jewellery, relying on a post-search affidavit and a confirmation letter from a jeweller. The Assessing Officer rejected the explanation and treated the bullion as unexplained investment.
The Tribunal concurred with the lower authorities and held that:
- The affidavit of the assessee was self-serving and prepared long after the search and assessment;
- The jeweller’s confirmation lacked crucial particulars, such as date of melting, description and weight of jewellery melted, charges paid, or supporting records; and
- No contemporaneous evidence was produced either at the time of search or during assessment to substantiate the claim of conversion of jewellery into bullion.
On the assessee’s reliance on CBDT Instruction dated 11.05.1994, the ITAT categorically held that the Instruction applies only to jewellery and not to bullion. The Tribunal noted that the Department had already granted full benefit of the Instruction for 816.130 grams of jewellery found, for which no addition was made, but bullion stands on a different footing. Judicial precedents allowing benefit of “stridhan” and CBDT tolerance limits were also held to be inapplicable to bullion.
Accordingly, the Tribunal found no infirmity in the order of the CIT(A) and confirmed the addition under section 69A, dismissing the assessee’s appeal in entirety.
FULL TEXT OF THE ORDER OF ITAT DELHI
The captioned appeal is filed by the assessee against the order of Ld. CIT(A)-29, New Delhi u/s 250 of the Income Tax Act, 1961 [“the Act”] dt. 16.07.2025 arising out of the assessment order dt. 29.03.2022 passed u/s 143(3) r.w.s. 153C of the Act for Assessment Year 2020-21.
