ITAT Rules Excess Gold Belongs to Family, Not Income; Reverses Prior Decision Allowing Appeal on CBDT Guidelines.

The ITAT ruled in favor of the assessee, overturning the Ld. CIT(A)'s decision. The Tribunal determined that the excess gold jewellery, initially assessed as income by the AO, belonged to family members, particularly the mother of the assessee. Considering CBDT guidelines and familial relationships, the Tribunal quashed the previous order, allowing the appeal.

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Issues:
Assessment of excess gold jewellery under section 69A of the Income Tax Act, 1961.

Analysis:
The appeal was filed by the assessee against the order of the Ld. CIT(A)-12, Hyderabad, for the AY 2018-19. The assessee derived income from business and remuneration from a partnership firm. A Search and Seizure operation under section 132 of the Act was conducted in the group cases of a particular firm, including the residence of a specific individual related to the assessee. The Assessing Officer (AO) assessed the income of the assessee, including an amount representing the value of excess gold jewellery found during the operation. The Ld. CIT(A) dismissed the appeal as no one attended the hearing. The assessee then appealed to the Appellate Tribunal.

The assessee raised various grounds of appeal challenging the order of the Ld. CIT(A). The Authorized Representative argued that the excess gold jewellery belonged to family members as detailed in the assessment order. The Ld. AR contended that the AO erred in not considering the relationship of the gold jewellery with the mother of the assessee, who was staying with her daughter, the only daughter. The Ld. DR supported the AO's order but could not dispute the taxing of excess jewellery belonging to the mother of the assessee.

After considering the contentions and available material, the Tribunal found that the excess gold jewellery belonged to family members and that the AO erred in disallowing the excess gold belonging to the mother of the assessee. The Tribunal noted that the CBDT Instruction specified limits for gold jewellery not to be seized based on the individual's status. Given the circumstances and relationship of the mother with the assessee, the Tribunal concluded in favor of the assessee, quashing the Ld. CIT(A)'s order and allowing the appeal.

In conclusion, the Tribunal allowed the appeal of the assessee, pronouncing the judgment on the 27th of July, 2022.

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