ITAT allows appeal, directs deletion of Rs.7,56,105 addition for jewellery within reasonable limits. The ITAT allowed the appeal, directing the Assessing Officer to delete the addition of Rs.7,56,105 based on the findings that the jewellery was within ...
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ITAT allows appeal, directs deletion of Rs.7,56,105 addition for jewellery within reasonable limits.
The ITAT allowed the appeal, directing the Assessing Officer to delete the addition of Rs.7,56,105 based on the findings that the jewellery was within reasonable limits as per CBDT Circular No.1916 and in accordance with customs prevailing in Hindu society. The Tribunal upheld the assessee's explanation that the jewellery was received from family members, and considering the total jewellery found was less than 500 gms, it could not be treated as unexplained investment.
Issues: Challenge to correctness of order on unexplained investment in gold and diamond jewelleries under section 143(3) of the Income Tax Act, 1961 for Assessment Year 2012-13.
Analysis: The appeal challenged the order of the ld. CIT(A) regarding the addition of Rs.7,56,105 made by the AO on account of alleged unexplained investment in gold and diamond jewelleries. The assessee explained that the ornaments were received from family members, but the AO rejected this explanation, considering it insufficient. The AO treated the difference in gold and diamond jewellery as unexplained, leading to the addition of Rs.7,56,105. The ld. CIT(A) summarily rejected the arguments of the assessee, stating that no further evidence was provided to rebut the AO's findings. The ITAT noted that the total jewellery found was less than 500 gms, and considering the status and practices in Hindu families, such jewellery could not be treated as unexplained. Referring to CBDT Circular No.1916, the ITAT cited a High Court case where it was held that jewellery within specified limits should be accepted as reasonable, leading to the deletion of the addition. The Tribunal's approach in following the circular and recognizing customs prevailing in Hindu society was upheld, leading to the direction to delete the addition of Rs.7,56,105.
In conclusion, the ITAT allowed the appeal, directing the Assessing Officer to delete the addition of Rs.7,56,105 based on the findings regarding the jewellery being within reasonable limits as per CBDT Circular No.1916 and the customs prevailing in Hindu society.
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