Neeti Rastogi Vs ACIT (ITAT Delhi)
Introduction: The Income Tax Appellate Tribunal (ITAT) in Delhi, in a recent case between Neeti Rastogi and ACIT, passed a judgment concerning the “unexplained jewellery” under section 69 of the Income Tax Act. The case delved into the acceptable limits of gold jewellery as defined by the CBDT Circular.
Background of the Case: Neeti Rastogi appealed against an order dated 18.03.2016 passed by the Commissioner of Income Tax. The primary contention revolved around an addition of Rs. 10 lacs estimated by the Assessing Officer (AO) for the jewellery found during a search operation.
Search & Seizure Details: A search under section 132 was executed on 09.07.2008 across various premises of Neeti Rastogi and her husband, Shri Paresh Rastogi. Jewellery worth Rs. 14,97,838/- was discovered but not confiscated. The AO considered Rs. 10,00,000/- of this jewellery as unexplained and added it under section 69A of the Act.
Circular No. 1916 and Its Significance: The CIT (A) provided partial relief by referencing the CBDT Circular No. 1916 from 1994. The circular suggests that 500 grams of jewellery for each married lady should not be labeled as unexplained. Rastogi argued that the discovered jewellery belonged to her family, acquired as gifts over the years from events like weddings, births, and festivals.
Relief Sought Based on the CBDT Circular: Neeti Rastogi’s contention was that, considering the CBDT Circular’s provisions, the total allowable jewellery for her family, comprising herself, her husband, and her two unmarried daughters, comes to Rs.11,31,900/-. Hence, no addition should be made to her income.
Precedents Backing the Assessee’s Claim: Various rulings, from the Rajasthan High Court, Gujarat High Court, and the Tribunal, have supported such a viewpoint. These judgments confirm that if the gold jewellery found falls within the permissible limit as per the CBDT circular, it shouldn’t be deemed unexplained, acknowledging the customary practices in India. Notable cases include:
