2025 (2) TMI 920 - AT - Income Tax

Appeal allowed, Section 69A additions deleted for unexplained jewellery in joint locker owned by daughter in UK

Geeta Subhash Dalal (L/ h. of Late Subhash B. Dalal), Baroda Versus Deput y Commissioner of Income Tax, Central Circle-2, Vadodara

ITAT Ahmedabad allowed the appeal and deleted additions made under Section 69A for unexplained jewellery found in a joint locker. The assessee ... Addition u/s. 69A - unexplained jewellery found in locker - locker was in the joint name of the assessee and her daughter - At the time of search assessee had given a categorical statement that the jewellery in the said locker belonged to her daughter, who was now a resident of UK - HELD THAT:- Daughter of the assessee filed an Affidavit stating that the jewellery seized from the locker belonged to her and that the same was received from her parents and relatives at the time of her marriage, on the occasion of birth of her children and on other occasion etc. Nothing has been brought on record to dispute the veracity of the statement of the assessee or the contents of the Affidavit filed by the daughter of the assessee. The only reason for the addition was that since the locker was being regularly operated by the assessee, the natural presumption would be that the jewellery found in said locker, belonged to the assessee only. Looking into the instant facts, no such presumption can necessarily be drawn, looking into the fact that the locker in question was jointly held by the assessee and her daughter. Daughter of the assessee was residing in UK and hence it was practically not possible for her to operate the locker and further, the daughter of the assessee also filed an Affidavit stating that the jewellery impounded from the locker belonged to her and her family members. Accordingly, looking into the assessee’s set of facts, in our considered view, the additions made by the AO are liable to be deleted. Appeal of the assessee is allowed. The appeal in this case concerns the addition of unexplained jewellery amounting to Rs. 6,16,620 under Section 69A of the Income Tax Act for the assessment year 2018-19. The key issues presented and considered in this case are as follows:1. Whether the jewellery found in a locker jointly held by the assessee and her daughter should be treated as unexplained income belonging to the assessee.2. Whether the evidence provided by the assessee, including an affidavit from the daughter and the circumstances of the case, sufficiently explain the ownership of the jewellery.The Appellate Tribunal analyzed these issues as follows:The brief facts of the case reveal that during a search action at the assessee's residential premises, a locker key for a locker jointly held by the assessee and her daughter was seized. The jewellery found in the locker was claimed by the daughter to belong to her, supported by an affidavit and other evidence. However, the Assessing Officer presumed that the jewellery belonged to the assessee since the locker was frequently operated by her. The Commissioner of Income Tax (Appeals) upheld this addition of unexplained jewellery as income of the assessee.The Tribunal considered the evidence and arguments presented by both parties. The Tribunal noted that the locker was jointly held by the assessee and her daughter, and the daughter had provided a detailed affidavit stating the jewellery belonged to her and her family members. The Tribunal found no evidence disputing the authenticity of these claims. Despite the presumption based on the locker operation, the Tribunal reasoned that the circumstances, including the daughter residing in the UK and the joint ownership of the locker, supported the daughter's ownership claim. Therefore, the Tribunal concluded that the additions made by the Assessing Officer were not justified and allowed the appeal of the assessee.Significant holdings include the Tribunal's emphasis on the joint ownership of the locker, the daughter's affidavit, and the lack of evidence contradicting the ownership claim. The Tribunal's decision highlights the importance of considering all relevant evidence and circumstances in determining the ownership of assets in tax assessments.In conclusion, the Tribunal allowed the appeal of the assessee, ruling that the additions of unexplained jewellery as income of the assessee were not justified based on the evidence and circumstances presented in the case.