Ms Neeti Rastogi, Lucknow V. ACIT, Meerut

ITA 2696/DEL/2016

AI Insights

The case involves an appeal by Neeti Rastogi against the order of the Commissioner of Income Tax (Appeals)-IV, Kanpur, which partly confirmed an addition of Rs. 10,00,000 as unexplained jewellery found during a search at her residence. The search, conducted under section 132 of the Income Tax Act, 1961, on 09.07.2008, revealed jewellery worth Rs. 14,97,838 belonging to Neeti Rastogi and her husband, Shri Paresh Rastogi. The Assessing Officer (AO) added Rs. 10,00,000 as unexplained, which was partly relieved by the CIT (A) based on the CBDT circular allowing certain exemptions for jewellery. The Tribunal, referencing various judgments and the CBDT circular, ruled in favor of the assessee, stating that the jewellery was not unexplained and should not be added to her income.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 302698 (ITAT-DELHI)
• Duration Of Justice: 7 year(s) 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 14-06-2023
• Assessment Year: 2009-2010
• Appeal Filed On: 11-05-2016
• Other Referred Cases: CIT vs. Satya Narain Patni, CIT vs. Ratanlal Vyaparilal Jain, DCIT vs. Shri Mehul Johnson
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SAURAV RASTOGI
• Keywords: Gift
• Section: 132; 143(3); 250; 69A

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “E”: NEW DELHI BEFORE SHRI G.S. PANNU, HON’BLE PRESIDENT AND SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA No. 2696/Del/2016 Asstt. Year: 2009-10 O R D E R PER AMIT SHUKLA, JM The aforesaid appeal has been filed by the assessee against the order dated 18.03.2016 passed by Ld. Commissioner of Income Tax (Appeals)-IV, Kanpur for the quantum of assessment passed under section 143(3) of the Income Tax Act, 1961 for the assessment year 2009-10. Neeti Rastogi, 803, Rohtas Court, Gokhle Marg, Lucknow. PAN AGSPR5095E Vs. ACIT, Central Circle Meerut (Appellant) (Respondent) Assessee by: Shri Saurav Rastogi, CA Department by: Shri Dilip Singh Kothari, CIT DR Date of Hearing 15.06.2023 Date of pronouncement 26.07.2023 ITA No.2696/Del/2016 2 2. The only ground raised by the assessee in partly confirming the addition out of Rs. 10 lacs made by the AO on estimated basis on account of jewellery found during the course of search. 3. Brief facts are that a search and seizure action under section 132 was conducted on 09.07.2008 at various premises of assessee in which assessee and her husband, Shri Paresh Rastogi was also covered. During search at the residence, jewellery aggregating to Rs. 14,97,838/- was found belonging to Shri Paresh Rastogi and Smt. Neeti Rastogi which was not seized. Ld. Assessing Officer on estimated basis has treated jewellery to the extent of Rs. 10,00,000/- as unexplained in his opinion and added the same under section 69A of the Act. Ld. CIT (A) has given part relief by stating that jewellery to the extent of 500 gms per married lady should not be treated as unexplained in view of the circular No. 1916 dated 1994. 4. We have heard both the parties and also perused the relevant finding given in the impugned orders. One of the issue which was raised before the authorities below was that the jewellery found belonged to the assessee, her husband and two unmarried daughters who are staying together and all these jewelleries have been gifted over the period of time at her marriage and on birth of her both the daughters and on various festivals and occasions for more than two decades. It was also explained that, if as per the circular, 500 gms for the assessee, 100 gms for her husband and 250 gms for her two unmarried daughters are to be considered in light of CBDT circular 1916 ITA No.2696/Del/2016 3 (supra), then the value of said jewellery works out to Rs.11,31,900/. Thus, if benefit of this circular is being given, then no addition is called for. 5. We find that this proposition stands approved by various judgments of Hon’ble Rajasthan High Court, Hon’ble Gujarat High Court and various decisions of the Tribunal wherein it has been held that the quantity of gold jewellery found and to the extent it is covered by CBDT circular for family member same should not be treated as unexplained in view of the customary practice in India. The few of the judgments on this point are as under: 1. CIT vs. Satya Narain Patni in Income Tax Appeal No. 196/2010 dtd. 07.04.2014 of Hon’ble Rajasthan HC 2. CIT vs. Ratanlal Vyaparilal Jain in Income Tax Appeal No. 661 of 2009 dtd. 19.07.2010 of Hon’ble Gujarat HC 3. DCIT vs. Shri Mehul Johnson in ITA No. 1647/MUM/2020 dtd. 19.05.2012 of Mumbai ITAT 6. In view of the aforesaid judgments, the unexplained jewellery added by the Assessing Officer stands deleted. 7. In the result appeal of the assessee is allowed. Order pronounced in the open court on 26 th July, 2023. sd/- sd/- (G.S. PANNU) (AMIT SHUKLA) PRESIDENT JUDICIAL MEMBER Dated: 26/06/2023 ITA No.2696/Del/2016 4 Veena Copy forwarded to - 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi Date of dictation Date on which the typed draft is placed before the dictating Member Date on which the typed draft is placed before the Other Member Date on which the approved draft comes to the Sr. PS/PS Date on which the fair order is placed before the Dictating Member for pronouncement Date on which the fair order comes back to the Sr. PS/PS Date on which the final order is uploaded on the website of ITAT Date on which the file goes to the Bench Clerk Date on which the file goes to the Head Clerk The date on which the file goes to the Assistant Registrar for signature on the order Date of dispatch of the Order