Explained gold jewellery in search cases: purchase bill and customary gifts justified deletion of the balance addition.

Gold jewellery and coins found in a locker were treated as explained where part was shown as customary gifts and part as purchased from self funds. The Tribunal accepted the evidentiary value of the purchase bill and applied the CBDT instructions governing search cases involving gold jewellery, holding that the remaining addition could not be sustained on the overall facts. The balance addition relating to the gold was deleted.

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Issues: Whether the addition sustained in respect of 40 grams of gold found in the locker was liable to be deleted in view of the CBDT instructions, the bill for purchased gold, and the explanation that part of the gold represented customary gifts.

Analysis: The assessee's case was that the jewellery and gold coins were partly received on social occasions and partly acquired out of explained funds, supported by a purchase bill placed on record. The earlier authorities had already accepted part of the gold as customary gifts and part as purchased from self funds, but had sustained the remaining addition. The Tribunal held that, on the overall facts, the assessee was entitled to the benefit of the CBDT instructions applicable to gold jewellery found in search, and also to the evidentiary value of the purchase bill, so the balance addition could not be maintained.

Conclusion: The addition of Rs. 2,32,000/- relating to 40 grams of gold was deleted and the issue was decided in favour of the assessee.

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