TaxTMI 
TaxTMI 
2021 (6) TMI 968
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....nst order passed by the Ld. Commissioner of Income Tax (Appeals) - Muzzafarnagar {CIT (A)} vide order dated 02/02/2016. The assessee has raised the following grounds of appeal: " That on the facts and in the circumstances of the case and in law, the authorities below erred in holding- 1. That the claim of the appellant the addition of Rs. 2,07,218.00 on account of allegedly unexplained investment in Jewellery. It is prayed that the above actions being misconceived, arbitrary and unlawful must be quashed." 3.0 The brief issue involved in the appeal is addition on account of jewellery found during the course of search action u/s 132 of the Income Tax Act, 1961 (hereinafter called 'the Act'). At the time of search....
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....Circular No. 1916 dated May 11, 1994, set aside the matter to assessing officer to calculate the quantity of jewellery from the invoices and assess the same after giving benefit of CBDT Circular. Pursuant to the direction issued by ITAT, the assessing officer computed the quantum of total jewellery found in the search at 858.70 grams as against available limit of 950 grams as per the CBDT Circular. It was accordingly submitted before us that since the total jewellery found was less than the prescribed limit by CBDT, the addition made was not sustainable. 5.0 The Ld. DR, on the other hand, relied upon the order passed by the Ld. CIT (A) and the assessing officer. 6.0 We have considered the rival submissions and gone through the facts a....
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....ect Taxes Circular No. 1916 and observed that in an earlier decision of the Tribunal, the Tribunal has accepted the applicability of the circular and has held that having regard to the circular and size of the family, the ornaments to the extent specified in the circular should be accepted as reasonable. The Tribunal, accordingly, found that the jewellery held by the assessee and his family members was well within the limit laid down under the Central Board of Direct Taxes circular and, accordingly, deleted the whole addition on the ground that the jewellery held by each of the family members was below the limits specified in the said circular. 10. Though it is true that the Central Board of Direct Taxes Circular No. 1916, dated Ma....
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....e of jewelry were found instead of jewellery itself and assessee has explained that the jewellery is purchased for the friends and relatives of the assessee. In the above decision of Hon Gujarat High court the purpose of the issue of the circular was accepted. When the jewelry itself is found but the bills are not found the addition is made u/s 69 of the act. Further when the bills are found but the jewellery is not available with the assesseeduring the course of search the addition is also required to be made u/s 69 of the act. Therefore we do not find any difference in the above those situations so far as the overall jewellery found during the course of search as well as the bills of such jewellery do not exceed the limits specified in th....
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....wing the directions of Hon'ble ITAT, relief of Rs, 1,25,240/- is being allowed to the assessee on this issue." 6.2 In the aforesaid background and respectfully following the decision of the Coordinate bench for AY 2010-11 and 2013-14, we are of the considered view that addition of Rs. 2,07,218/- on account of unexplained investment in jewellery is in teeth of CBDT Circular no. 1914 and deserves to be deleted. Accordingly, we direct the assessing officer to delete the addition. 6.3 In the result, the appeal of the assessee is allowed. 7.0 As far as appeal relating to Assessment Year 2009- 10 (ITA No. 2802/Del/2016) is concerned, the grounds raided by the assessee are as under: " That on the facts and in the circumsta....