Divya Devi Vs ACIT (ITAT Delhi)
ITAT Delhi ruling in Divya Devi vs. ACIT: Jewellery rebate as per CBDT’s Instruction No. 1916. Download full text of the order. Date: 16-05-2014.
Jewellery upto prescribed limit must be treated as explained unless Revenue shows anything to contrary
Though it is true that the CBDT Instruction No. 1916, dt. 11th may, 1996 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.” We find that the aforesaid decision of the Hon’ble Gujarat High Court would be squarely applicable to the case under appeal before us. No contrary decision is brought to our notice. We, therefore, respectfully follow the above decision of the Hon’ble Gujarat High Court and direct the AO to allow the rebate of 950 gms. of jewellery as against the 700 gms. of jewellery directed by the CIT(A).
FULL TEXT OF THE ORDER OF ITAT DELHI
In this appeal by the Assessee following grounds were raised.
“1. That having regard to the facts and circumstances of the case, Ld. CXIT(A) has erred in law and on facts in holding that the AO was right in assuming jurisdiction to frame the impugned assessment u/s. 153A and in passing the impugned assessment order, more so when there was no valid search in accordance with provisions of section 132 conduced in the case of the asseessee.
2. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in allowing a rebate of only 700 gms of jewelry in respect of the entire family and thereby upholding the addition made by the Ld. AO of the balance of 1232.8 gms. On account of unexplained investment in jewellery u/s. 69 of the I.T. Act, 1961.
3. In any view of the matter and in any case the order under appeal is bad in law and against the facts and circumstances f the case.
4. That the appellant craves the leave to add, amend, modify, delete any of the grounds of appeal before or at the time of hearing and all the above grounds are without prejudice to each other.
2. At the time of hearing before us, it is submitted by the Ld. Counsel of the assessee that there was a search at the assessee’s residence u/s. 132 of the I.T. Act. The total jewellery found from the assessee and from her bank locker valued at Rs. 15,09,955/- was treated as unexplained by the Assessing Officer and addition was made therefore.
3. Before the Ld. CIT(A), it was submitted by the assessee that the family of the assessee is consisting of herself, her husband, two minor children i.e. one son and one daughter. The assessee has claimed for relief in view of the CBDT’s Instruction No. 1916 dated 11.5.1994. The Ld. CIT(A) after considering the said Instructions directed the Assessing Officer to allow the rebate of 700 gms of jewellery in respect of assessee’s family. It is submitted by the Ld. Counsel of assessee that as per the Board’s Instruction the rebate should be 950 gms. as under:-
