Income Tax

Mr. Parag Gupta vs Dy. CIT

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Assessee is an individual having income from salary, business and other sources. A search proceeding was carried at his residence during which jewellery was seized. Assessee was asked to explain the source of jewellery found, to which he submitted that most of the it was received by various family members as gifts and was part of their stridhan and the assessee also relied on the instruction No. 1916 dated 11.05.1994 issued by CBDT to contend the quantum of jewellery which is held by an individual is to be considered to be explained. AO was of the view that the CBDT instructions relied by the assessee was not applicable as the Investigation Wing had not seized the entire jewellery. Also noted that the assessee had not furnished the copy of Wealth Tax Return to explain the jewellery found. AO noted that in the absence of any explanation about excess jewellery of 800 gms which has remained unexplained, its addition needs to be made as income. CIT(A) noted that the unexplained jewellery which remained was only 71.83 gms.

Delhi ITAT finds that CIT(A) has given credit for jewellery only to the assessee and his wife and no credit has been given to assessee’s son. If the credit for 100 gms of jewellery to the son of the assessee is granted, then there would remain no unexplained excess jewellery in the hands of the assessee and therefore no addition is called for. Thus, the ground of assessee is allowed. 

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