By TIOL News Service

CHANDIGARH, JULY 07, 2018: THE ISSUE IS - Whether assessee is entitled to additional benefits over & above the prescribed limits, pertaining to possession of silver articles bequeathed on account of unregistered will. YES IS THE ANSWER.

Facts of the case

The assessee had filed his returns for the relevant. A search and seizure operation was conducted at the assessee's premises, wherefrom silver utensils valued at Rs.10.07 lacs and gold & diamond jewellery worth Rs.33.59 lacs were found. During assessment, the assessee claimed that the gold jewellery i.e. 710.03gms, diamond jewellery and silver coins & utensils collectively belonged to the assessee, his wife and children and that the assessee had himself surrendered Rs. 10 lacs on account of the such jewellery found during search. Moreover, the assessee submitted that as per the CBDT Circular the assessee and his family should entitled to benefits of minimal possession of such jewellery (which comes to total of 950 gms of gold) and silver. However, the AO after deducting the amount already surrendered by the assessee and giving the benefit of 710.030 gms of gold and Rs.3 lacs in silver to the assessee, made addition of Rs. 14,07,000/- into the income of the assessee. On appeal, the CIT(A) concurred with the findings of the AO.

Upon hearing the parties, the Tribunal held that,

++ the CBDT has issued certain guidelines for the income tax authorities directing not to seize the gold jewellery upto 500 gms from a married lady, up to 100 gms from a male member and upto 250 gms from an unmarried girl, as up to the said extent, as it is considered to be possessed by the family members by taking into consideration the prevalent culture and customs in the society. Applying the same analogy, the various Benches of the Tribunal as well as the higher Courts have held that the addition up to the extent of quantum of jewellery which as per the CBDT Circular is directed not to be seized, should not be made into the income of the assessee as up to that extent it has been considered to be possessed by the assessee in normal circumstances. It has also been held that it is open to the assessee or the Department to show any distinguishing circumstances whereby the evidence can be lead to prove that in the set of circumstances, the jewellery more than or less than the prescribed limit can be held to be possessed by an assessee;

++ the total gold jewellery found during the course of search i.e. 710.030 gms was less than the prescribed limit by the CBDT when considered in the hands of the family members of the assessee which comes to total of 950 gms. The AO, therefore, has given the benefit of 710.030 gms to the assessee. However, there's force in the contention of the counsel for the assessee that now a days, due to the changing trend/customs, the trend of purchasing diamond jewellery has been increased. Presently, not only the purchase and gifts of gold jewellery is part of the customs but it also includes diamond jewellery. In view of this, there's force in the submissions of the counsel that the assessee has not been given any benefit of possession of diamond jewellery by the AO. Though, no limit has been prescribed by the CBDT in case of diamond jewellery, however, the fact that cannot lose sight of, is that in the normal circumstances, a family having sufficient source of income, in normal circumstances, might possess the Diamond jewellery also. In view of this, in the case in hand, the family of the assessee can also be supposed to have possessed some diamond jewellery also. The counsel for the assessee has made very reasonable submission that at least the assessee should be given benefit up to the value of gold jewellery which in normal circumstances is considered to be not abnormal i.e upto the prescribed limit which in the case of family comes out to 950 gms, which has been valued at Rs. 23,94,000/-;

++ the Revenue has not raised any objection so far as the value of the jewellery is concerned. Keeping in view such circumstances, the AO is directed to give the additional benefit to the assessee on account of diamond jewellery equal to the value of gold jewellery over and above the quantity of the gold jewellery found at the premises of the assessee upto the prescribed limit fixed by the CBDT i.e. 950 gms minus (-) 730.030 gms which comes to 240 gms;

++ so far as the addition on account of silver coins/utensils is concerned, the AO has already given benefit of Rs. 3 lacs, which in normal circumstances he has considered to be in possession of the assessee. The counsel for the assessee, however, has relied upon the unregistered Will of the mother of the assessee wherein 2500 silver coins have been bequeath to the assessee. In this Tribunal's view, looking at the Indian culture of the Society, it was not uncommon among the elders to preserve gold and silver coins. Though, the assessee has relied upon the Will of his mother to say that he has got 2500 silver coins from her mother by way of Will, however, neither the assessee has proved the said Will by way of plausible evidence before the AO nor the AO has deliberated upon regarding the authenticity of the Will. Considering the overall facts and circumstances and without going into the validity of the Will, at this stage, it will be proper to give the assessee benefit of another two lacs towards silver coins and utensils. In view of this, addition made by the AO is restricted to the extent of Rs.14,73,330/- after giving the benefit of jewellery as discussed above. Out of the said amount, the assessee has already surrendered Rs. 10 lacs. In view of this, addition of Rs. 4,73,330/- is confirmed. No other point or argument on any issue has been addressed. Hence, the appeal of the assessee is therefore, treated as partly allowed.

(See 2018-TIOL-1031-ITAT-CHD)