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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
                                                                        Divya Devi

                DELHI BENCH "B" NEW DELHI

                         ITA No. 6397/Del/2012
                         Asstt. Yr: 2010-11

Mrs. Divya Devi,                     vs. ACIT, Central Circle-1,
C/o Rakesh Raj & Associates,             Faridabad
Chartered Accountants,
D-28, South Extension Part-I,
New Delhi


( 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



      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
                                                                         Divya Devi

      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
                                     3                            ITA 6397/Del/12
                                                                       Divya Devi

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
                                                                           Divya Devi

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
                                                                               Divya Devi

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
                                                                      Divya Devi

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.

             Sd/-                                              Sd/-

        ( I.C. SUDHIR)                                ( G.D. AGRAWAL )
     JUDICIAL MEMBER                                  VICE PRESIDENT

Dated: 16-05-2014.
Copy to :
   1. Assessee
   2. AO
   3. CIT
   4. CIT(A)
   5. DR

                                 TRUE COPY

                                               ASSISTANT REGISTRAR,
                                                    DELHI BENCHES.
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