Case Law Details
Suresh Bansal Vs DCIT (ITAT Delhi)
Basing on the CBDT instruction No 1916 dated 11/5/1994 and while referring to the answer to question No. 10 in the statement of the assessee recorded at the time of search and seizure, Ld. AR submitted that out of the total gold of 590 g, learned Assessing Officer only attributed 1 g with a diamond therein to the possession of the assessee, while giving credit of 500 g to the assessee’s wife and hundred grams to the assessee, the assessee’s possession could be presumed to have been explained up to 600 g and therefore in terms of CBDT instruction No. 1916 no addition could be sustained. He placed reliance on the decision of the Hon’ble Gujarat High Court in the case of CIT vs. Ratan Lal Vyaparilal Lal Jain (2011) 339 ITR 0351.
DR, per contra, submitted that the CBDT instruction No. 1916 covers only in respect of gold but not in respect of diamond and therefore, even if the benefit of such circular is given to the assessee, addition to the extent of worked of the diamond has to be sustained.
In respect of the argument of the Ld. DR in respect of the diamond, Ld. AR submits that in the case of Smt. Satya Bhalla vs. ACIT ITA No. 5714/del/2015 by order dated 30/5/2016 the Tribunal held that when the gold jewellery in which the diamonds were studded has been accepted by the department as the jewellery received at the time of marriage or other occasion, then, it cannot be said that the diamond studded in the said jewellery were out of the undisclosed income of the assessee.
It could be seen from the assessment order that at page No. 3 the learned Assessing Officer himself mentioned that the gold worth Rs. 10,14,418/-is attributable to Smt. Kanta Bansal, wife of the assessee. According to the CBDT instructions in case of a married woman 500 g is the threshold limit and Hon’ble Gujarat High Court said that to such an extent of jewellery, the source shall be presumed to have been explained. In view of this position of law laid down by the Hon’ble Gujarat High Court in the case of Ratan Lal (supra) and also the view taken by the Tribunal in the case of Smt. Satya Bhalla (supra) we are of the considered opinion that pursuant to the CBDT instructions, the wife of the assessee is entitled to keep 500 g of jewellery the source of which is a demoted have been explained and, therefore, no addition could be made are sustained. We accordingly allow ground No. 1 and 2 of assessee’s appeal.
FULL TEXT OF THE ORDER OF ITAT DELHI
Aggrieved by the order dated 21/12/2016 passed by the learned Commissioner of Income Tax (Appeals), Karnal (“Ld. CIT(A)”) in the case of Sh. Suresh Bansal (“the assessee”), for the assessment year 2013-14, assessee preferred this appeal.
2. Brief facts of the case are that the assessee is an individual and was deriving income during the assessment year 2013-14, from salary, agriculture and from other sources. On 9/5/2012 there was a search and seizure operation at the residential as well as business/office premises of M/s SRS group, in the case of assessee during which jewellery worth Rs. 66, 31, 229/-was found from the residential premises of the assessee, out of which jewellery worth Rs. 10, 14, 418/-belong or to the accused and in respect of which no documentary evidence was produced by the assessee. Report of valuation of jewellery, as could be found at page No. 11 of the paper book, shows the weight of gold attributable to the possession of the assessee was about 295.1 g and there is also a diamond of 16.5 carats in that jewellery. Learned Assessing Officer proceeded to add the worth of this jewellery, namely, Rs. 10, 14, 418/-to the income of the assessee. Apart from this learned Assessing Officer also added a sum of Rs. 50,000/- on account of the cash possessed but unexplained of its sources. Learned Assessing Officer, therefore, determined the income of the assessee at Rs. 15, 75, 818/-for the assessment year 2013-14 as against the returned income of Rs. 3, 91, 400/-and Rs. 1.20 Lacs towards agricultural income.
3. Aggrieved by such an addition assessee carried the matter in appeal before the Ld. CIT(A) and pleaded that in view of the CBDT instruction No. 1916 dated 11/5/1994, 600 g of jewellery stands explained and there is no justification for making the addition on account of jewellery. In respect of the cash of Rs. 50,000, it was submitted that as the withdrawal from the bank by the members of the family.
4. CIT(A) by way of impugned order observed that keeping in view the CBDT instruction No. 1916, credit for hundred grams of jewellery needs to be given to the appellant in view of the various statements and references to CBDT instruction No. 1916 and accordingly, directed the learned Assessing Officer to modify the addition to the extent of giving relief to the value relating to the hundred grams and confirmed the addition in respect of the balance of jewellery. So also, Ld. CIT(A) confirmed the addition of Rs. 50,000 on the ground that the assessee could not explain the availability of 50,000 through any cash withdrawals from the bank or cashbook or through any other document evidence. Assessee is therefore before us in this appeal.
5. Basing on the CBDT instruction No 1916 dated 11/5/1994 and while referring to the answer to question No. 10 in the statement of the assessee recorded at the time of search and seizure, Ld. AR submitted that out of the total gold of 590 g, learned Assessing Officer only attributed 1 g with a diamond therein to the possession of the assessee, while giving credit of 500 g to the assessee’s wife and hundred grams to the assessee, the assessee’s possession could be presumed to have been explained up to 600 g and therefore in terms of CBDT instruction No. 1916 no addition could be sustained. He placed reliance on the decision of the Hon’ble Gujarat High Court in the case of CIT vs. Ratan Lal Vyaparilal Lal Jain (2011) 339 ITR 0351.
6. DR, per contra, submitted that the CBDT instruction No. 1916 covers only in respect of gold but not in respect of diamond and therefore, even if the benefit of such circular is given to the assessee, addition to the extent of worked of the diamond has to be sustained.
7. We have gone through the record in the light of the submissions made on either side. In the case of Ratan Lal (supra) the Hon’ble Gujarat High Court, on the relevant point observed that,-
9. As can be seen from the impugned order of the Tribunal, the Tribunal has referred to the CBDT Circular No. 1916 and observed that in an earlier decision of the Tribunal, the Tribunal has accepted the applicability of the circular and has held that having regard to the circular and size of the family, the ornaments to the extent specified in the circular should be accepted as reasonable. The Tribunal, accordingly, found that the jewellery held by the assessee and his family members was well within the limit laid down under the CBDT circular and accordingly, deleted the whole addition on the ground that the jewellery held by each of the family members was below the limits specified in the said circular.
10. Though it is true that the CBDT Circular No. 1916, dt. 11th May, 1994 lays down guidelines for seizure of jewellery and ornaments in the course of search, the same takes into account the quantity of jewellery which would generally be held by family members of an assessee belonging to an ordinary Hindu household. The approach adopted by the Tribunal in following the said circular and giving benefit to the assessee, even for explaining the source in respect of the jewellery being held by the family is in consonance with the general practice in Hindu families whereby jewellery is gifted by the relatives and friends at the time of social functions, viz., marriages, birthdays, marriage anniversary and other festivals. These gifts are customary and customs prevailing in a society cannot be ignored. Thus although the circular had been issued for the purpose of non-seizure of jewellery during the course of search, the basis for the same recognizes customs prevailing in Hindu society. In the circumstances, unless the Revenue shows anything to the contrary, it can safely be presumed that the source to the extent of the jewellery stated in the circular stands explained. Thus, the approach adopted by the Tribunal in considering the extent of jewellery specified under the said circular to be a reasonable quantity, cannot be faulted with. In the circumstances, it is not possible to state that the Tribunal has committed any legal error so as to give rise to a question of law.
8. In respect of the argument of the Ld. DR in respect of the diamond, Ld. AR submits that in the case of Smt. Satya Bhalla vs. ACIT ITA No. 5714/del/2015 by order dated 30/5/2016 the Tribunal held that when the gold jewellery in which the diamonds were studded has been accepted by the department as the jewellery received at the time of marriage or other occasion, then, it cannot be said that the diamond studded in the said jewellery were out of the undisclosed income of the assessee.
9. It could be seen from the assessment order that at page No. 3 the learned Assessing Officer himself mentioned that the gold worth Rs. 10,14,418/-is attributable to Smt. Kanta Bansal, wife of the assessee. According to the CBDT instructions in case of a married woman 500 g is the threshold limit and Hon’ble Gujarat High Court said that to such an extent of jewellery, the source shall be presumed to have been explained. In view of this position of law laid down by the Hon’ble Gujarat High Court in the case of Ratan Lal (supra) and also the view taken by the Tribunal in the case of Smt. Satya Bhalla (supra) we are of the considered opinion that pursuant to the CBDT instructions, the wife of the assessee is entitled to keep 500 g of jewellery the source of which is a demoted have been explained and, therefore, no addition could be made are sustained. We accordingly allow ground No. 1 and 2 of assessee’s appeal.
10. Now coming to ground No. 3 in respect of the cash to the tune of 50,000/-, found during the search operations, learned Assessing Officer observed that no proper explanation supported by documents was given by the assessee regarding this amount. Ld. CIT(A) observed that even during the appellate proceedings, though it was submitted on behalf of the assessee that the amount of Rs. 50,000/- was available due to the withdrawal from the bank from different members of the family, no evidence to show the withdrawals from the bank or the cashbook or through any other documentary evidence was produced and thereby confirmed the addition. Before us also no new facts are forthcoming nor any bank withdrawals are proved by any evidence. We therefore, do not consider it necessary to interfere with the findings of the Ld. CIT(A) on this issue and accordingly uphold the same. Ground No. 3 is accordingly dismissed.
11. In the result, appeal of the assessee is allowed in part.
Order pronounced in the open court on this the 3rd day of November, 2021.
