Tribunal allows appeal for genuine gift of jewellery, exempt from tax under Income Tax Act.

The Tribunal condoned the delay in filing the appeal due to Covid, admitting it for adjudication. Regarding the addition made under section 68 of the Income Tax Act for jewellery worth Rs.11,25,900, the Tribunal accepted evidence showing the jewellery was a genuine gift from the grandmother's Streedhan, exempting it under Section 56(2)(vii) as a gift from a relative. The Tribunal dismissed the Assessing Officer's concerns, ruling in favor of the assessee and deleting the addition. The appeal was allowed, affirming the genuineness of the gift and the exemption under the Income Tax Act.

---

---

Issues:
1. Condonation of delay in filing appeal due to Covid.
2. Justification of addition made under section 68 of the Income Tax Act regarding jewellery worth Rs.11,25,900.

Analysis:

1. The Tribunal noted a delay of 77 days in filing the appeal by the assessee, attributing it to the Covid period. Citing the relaxation provided by the Supreme Court, the delay was condoned, and the appeal was admitted for adjudication.

2. The main issue revolved around the addition made under section 68 of the Income Tax Act concerning jewellery valued at Rs.11,25,900. The Assessing Officer (AO) treated the amount credited to the capital account as an unexplained cash credit. The AO raised concerns regarding the lack of reasons mentioned for the gift, the unregistered gift deed, absence of corroborative evidence, undisclosed jewellery in financial statements, and the absence of evidence to prove the donor's ownership of the jewellery.

3. The Tribunal examined the evidence presented by the assessee, including a gift deed and agricultural land holdings of the grandmother. It was established that the jewellery gifted was from the grandmother's Streedhan, and the grandmother's agricultural income justified her not filing tax returns. The Tribunal dismissed the AO's contentions, emphasizing the genuineness of the gift and the exemption under Section 56(2)(vii) as the gift fell within the meaning of "relative." Since the gift was in the form of jewellery, not cash, the provisions of Section 68 were deemed inapplicable, leading to the deletion of the addition.

4. Ultimately, the Tribunal allowed the appeal of the assessee, ruling in favor of the genuineness of the gift of jewellery and the exemption under the Income Tax Act. The decision was pronounced on 30/09/2022.

---