Jewellery not found during Search cannot be Treated as Sold to levy Capital Gain

Bina Aggarwal Vs ACIT (ITAT Delhi)

The issue under consideration is whether short of the jewellery found during search be treated as sold and capital gain attracted?

ITAT states that, the assessee has given the explanation that the short of the jewellery found during the search was due to the reason that in a recent time the assessee’s daughter got married and some of the jewellery is either with the relatives or with the valuer. These facts were brought on record during the search and in the statement of the assessee taken during the search has given details of the relatives of assessee with whom she has kept the jewellery. It is the fact that the assessee has not filed any confirmation of these relatives but it is also pertinent to note that the Revenue has not issued 133(6) notice for obtaining the real picture of assessee’s submissions. There is no mechanism under the provisions of Income Tax Act, if there is short of the jewellery declared by the assessee then the same should be treated as sold and the capital gain is attracted. In the present case the Assessing Officer as merely suspected that the jewellery was sold, but has not brought any material on record. Therefore the Assessing Officer as well as CIT(A) overlooked the practical aspect that the jewellery is with relatives / valuer. Hence, assessee’s appeal is allowed.

FULL TEXT OF THE ITAT JUDGEMENT

This appeal is filed by the assessee against the order dated 21.02.2019 passed by CIT(A)-24, New Delhi for Assessment Year 2015-16.

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