Sushila Devi vs. CIT (Delhi High Court)

(i) The search of the petitioner’s husband’s premises and property led to a follow-up search in Ranchi; his bank locker with the IOB too was searched. This contained the jewellery in question. Concededly, the jewellery is 398 gms and of gold. The assessee relies on circulars of 1985 and 1994 to say that when such small quantities are recovered, no follow-up action is necessary and that in any case, the jewellery is her stridhan. The respondent counters by saying that though in the first round of litigation, the assessee’s contentions were accepted, that AO’s order was set aside and a fresh de novo proceeding led to addition of a greater quantum. It is further submitted that till tax demands are satisfied, the property can be validly retained.

(ii) This court is of opinion that the respondent’s recalcitrance is not mere inaction; it is one of deliberate harassment. Unarguably, the first round of assessment proceedings culminated in no addition of the jewellery or its value in the hands of the petitioner’s husband. The matter ought to have rested there, because the further proceedings were at the behest of the petitioner’s husband who was aggrieved by the additions made (and not aggrieved by the decision on issues in his favour). The ITAT’s decision to proceed de novo, nevertheless strengthened the respondents’ obduracy and hardened their resolve not to release the jewellery. The de novo order did not result in any addition on that aspect at all; still the respondents cling to another ingenious argument- that till the petitioners’ husband’s tax demands are satisfied, they can detain the jewellery.

(iii) The respondents’ rationale or justification is entirely insubstantial. The petitioner says that she was married in mid 1960s and her daughters were born in 1967- she was 70 when these proceedings were started. The respondents do not deny this. In the circumstances, the further explanation that the jewellery belonged to her and represented accumulation of gifts received from family members over a period of time, and also acquired during the subsistence of her marriage is reasonable and logical. The nature of ownership of a woman’s Stridhan is explained by the Supreme Court in its decision Pratibha Rani vs. Suraj Kumar 1985 (2) SCC 70 in the following terms:

“a Hindu married woman is the absolute owner of her Streedhan property and can deal with it in any manner she likes and, even if it is placed in the custody of her husband or her in-laws they would be deemed to be trustees and bound to return the same if and when demanded by her”.

In Ashok Chaddha v Income Tax Officer [2012] 20 taxmann.com 387 (Delhi) a Division Bench of this Court held as follows:

“After considering the aforesaid submissions we are of the view that addition made is totally arbitrary and is not founded on any cogent basis or evidence. We have to keep in mind that the assessee was married for more than 25-30 years. The jewellery in question is not very substantial. The learned counsel for the appellant/assessee is correct in her submission that it is a normal custom for woman to receive jewellery in the form of “stree dhan” or on other occasions such as birth of a child etc.

We are, therefore, of the opinion that the findings of the Tribunal are totally perverse and far from the realities of life. In the peculiar facts of this case we answer the question in favour of the assessee and against the revenue thereby deleting the aforesaid addition of Rs.3,87,364/-.”

(iv) The petitioner’s explanation is justified and reasonable. Like in Ashok Chadha (supra), her contention that the gold jewellery was acquired through gifts made by relatives and other family members over a long period of time, is in keeping with prevailing customs and habits. The obdurate refusal of the respondents to release the jewellery constitutes deprivation of property without lawful authority and is contrary to Article 300-A of the Constitution of India. The petition has to succeed; a direction is issued to the respondents to release the jewellery within two weeks and in that regard intimate to the petitioner the time and place where she (or her representative) can receive it. The respondents shall also pay costs quantified at Rs. 30,000/- to the petitioner, within four weeks, directly. The writ petition is allowed in terms of these directions.