Mrs. Divya Devi, C/o Rakesh Raj & Associates, Chartered Accountants, D-28, South Extension Part-I, New Delhi Vs. ACIT, Central Circle-1, Faridabad
May, 20th 2014
1 ITA 6397/Del/12
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "B" NEW DELHI
BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT
SHRI I.C. SUDHIR, JUDICIAL MEMBER
ITA No. 6397/Del/2012
Asstt. Yr: 2010-11
Mrs. Divya Devi, vs. ACIT, Central Circle-1,
C/o Rakesh Raj & Associates, Faridabad
D-28, South Extension Part-I,
( Appellant ) ( Respondent )
Appellant by : Shri Ashwani Taneja, Adv and Sh.
Rohan Khare, Adv.
Respondent by : Mrs. Sudha Kumari, CIT(DR)
Date of Hearing: 12-05-2014
Date of order: 16-05- 2014
PER G.D. AGRAWAL : VICE PRESIDENT
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
2 ITA 6397/Del/12
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,
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
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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:-
- 500 gms. for assessee
- 100 gms. for assessee's husband
- 250 gms. for assessee's unmarried daughter
- 100 gms. for assessee's son.
Total = 950 gms.
He, therefore, submitted that the AO may be directed to allow the
relief of 950 gms as against 700 gms as directed by the Ld. CIT(A).
3.1 Ld. Departmental Representative, on the other hand submitted that
the CBDT's Instructions No. 1916 dated 11.5.1994 is only in respect of
seizure of the jewellery. In these instructions the Authorised Officer
were instructed not to seize the jewellery to the extent of 500 gms. per
married lady member; 250 gms of jewellery per unmarried lady member
and 100 gms. of jewellery per male member. These instructions have no
relevance with the assessment proceedings. That during the assessment
proceedings, the assessee did not give any explanation. Therefore, the
AO has treated the entire jewellery as unexplained. The Ld. CIT(A) was
4 ITA 6397/Del/12
quite fair and reasonable to allow rebate of 700 gms. of jewellery. She,
therefore, submitted that no further relief is due to the assessee.
4. We have considered the arguments of both sides and perused the
material placed before us. We find that the issue of applicability of the
Instruction No. 1916 dated 11.5.1994 to the assessment proceedings was
considered by the Hon'ble Gujarat High Court in the case of CIT vs.
Ratanlal Vyaparilal Jain (339 ITR 351). In this case the ITAT has
allowed the rebate to the assessee as per the aforesaid CBDT's
Instructions. The Revenue aggrieved with the decision of the ITAT, has
filed the appeal before the Hon'ble Gujarat High Court which held
"The Tribunal found that the jewellery held by the assessee and his
family members was well within the limit laid down 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. 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
5 ITA 6397/Del/12
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
6 ITA 6397/Del/12
the rebate of 950 gms. of jewellery as against the 700 gms. of jewellery
directed by the CIT(A).
5. In the result, assessee's appeal is allowed.
Order pronounced in open court on 16-05-2014.
( I.C. SUDHIR) ( G.D. AGRAWAL )
JUDICIAL MEMBER VICE PRESIDENT
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