INCOME TAX ACT, 1961

Section 69A

Income from undisclosed sources - Addition under section 69A - AO treated jewellery and items found during course of search as unexplained -

During course of search operation in case of assessee, jewellery including gold and silver items, silver coins, etc. were found in the locker operated by mother of the assessee. Assessee stated that the impugned jewellery belonged to all the family members and also submitted wealth tax returns filed by him and his mother along with a chart of ownership of such jewellery. He further stated that the jewellery and utensils were received/ purchased on the occasion of marriages, birth of his children and various other social occasions from time to time. However, AO was not satisfied with the explanation of the assessee, accordingly, he accepted some gold jewellery and balance gold jewellery along with silver items and jewellery were treated as unexplained under section 69A. CIT(A) deleted the addition relating to the gold jewellery, however, the addition relating to silver jewellery and coins was sustained. Held: It was not disputed that out of total jewellery, coins and utensils found during course of search, AO and CIT (A) accepted some of the said items as belongings of the family members of the assessee. Thus, once it was accepted that those items belonged to all the family members and where the assessee had thereafter given specific details regarding such items identified to each of the individual members, the remaining items should, therefore, be accepted as belonging to respective family members and not just that of the assessee. Further, the assessee and her mother already declared silver jewellery items in their respective wealth tax returns. In case of assessee, he declared 0.5 kgs. of silver in his wealth-tax return and to that extent, the same stood explained. Therefore, as against 1.480 kgs of silver items belonging to the assessee, he already declared 0.5 kgs. of silver. Further, the possession of remaining 0.98 kgs. of silver items over the period of 24 years and given the societal customs of accepting/buying such items on occasion of birth and other social functions seemed reasonable. Hence, the addition sustained by the CIT(A) was deleted.

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2016-17

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