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<h1>Gold jewellery found during search treated as unexplained; agricultural income accepted as source and addition deleted</h1> 107.48 grams of gold jewellery found during search was treated as unexplained by the assessing officer; the taxpayer contended the jewellery was purchased ... Addition u/s 69A - treating 107.48 grams of gold/jewellery found during search as unexplained - HELD THAT:- Appellant was in possession of the gold, jewellery of 957.48 gms and out of which gold, jewellery of 850 gms was treated as explained by the AO in terms of the CBDT Instruction. As regards to the balance of jewellery of 107.48 gms, the assessee had offered an explanation that this jewellery was acquired out of the agricultural income generated by the Bigger HUF on the lands held by it. This explanation cannot be termed as “not plausible explanation” and, therefore, we are of the considered opinion that the AO was not justified in treating the gold, jewellery of 107.48 gms as unexplained and brought to tax. We direct the AO to delete the addition made u/s 69A. Appeal filed by the assessee stands allowed. Issues: Whether the addition of Rs. 3,26,740/- made under Section 69A of the Income-tax Act, 1961 in respect of 107.48 grams of gold/jewellery found during search was justified.Analysis: Section 69A of the Income-tax Act, 1961 permits deeming of unaccounted money, bullion or jewellery as income where the assessee offers no explanation or an explanation is unsatisfactory. The record shows possession of 957.48 grams of gold/jewellery, of which 850 grams were treated as explained under the cited CBDT guidance and 107.48 grams were treated as unexplained by the Assessing Officer. The assessee explained that the 107.48 grams were acquired out of agricultural income of the Bigger HUF pursuant to partition; that explanation was examined and found to be plausible and satisfactory for the purposes of Section 69A.Conclusion: The addition of Rs. 3,26,740/- made under Section 69A in respect of 107.48 grams of gold/jewellery is deleted and the appeal is allowed in favour of the assessee.
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