S. 69 : Unexplained investments- Unexplained jewellery-Search-Considering the assessee’s age, social status, occupation, family background and customary gifts received on various occasions, the Tribunal held the possession of 48.9 gms to be reasonable. Diamond and precious-stone-studded jewellery cannot be excluded from the benefit of CBDT Instruction No. 1916 merely because it contains diamonds or precious stones. Accordingly, the entire addition of Rs.3,86,186/- was deleted-Enhanced rate of 60%-Search conducted on 26-07-2016-Amendment by Taxation Laws (Second Amendment) Act, 2016-Enhanced rate applicable prospectively-Not applicable where search was conducted prior to 15-12-2016. [S. 69A, 115BBE, 132]
During search proceedings, jewellery weighing 2,434 gms was found at the assessee’s premises. The CIT(A) sustained an addition of Rs.3,86,186/- in respect of four items of jewellery. The Tribunal noted that two items weighing 55.8 gms were claimed by the assessee’s wife and were received by her from her parents on the birth of her two daughters. Since ownership was identifiable and the jewellery belonged to the wife, the addition could not be made in the hands of the assessee merely because the jewellery was found at the common residence. As regards the remaining jewellery, 72.6 gms was duly recorded in the assessee’s books and acquired through banking channels, while the balance 48.9 gms was within the 100 gms limit prescribed under CBDT Instruction No. 1916 dt.11 -5 -1994 . Considering the assessee’s age, social status, occupation, family background and customary gifts received on various occasions, the Tribunal held the possession of 48.9 gms to be reasonable. It further held that diamond and precious-stone-studded jewellery cannot be excluded from the benefit of CBDT Instruction No. 1916 merely because it contains diamonds or precious stones. Accordingly, the entire addition of Rs.3,86,186/- was deleted. Search conducted on 26-07-2016 , Amendment by Taxation Laws (Second Amendment) Act, 2016 hence the enhanced rate of 60% is applicable prospectively and not applicable where search was conducted prior to 15-12-2016 (AY. 2017 -18 ( ITA No. 530/NAG/2025, Dt. 10-08-2026.)
Nirmal Kumar Agrawal v. ACIT (Nagpur) (Trib) www. Itatonline.org
[Coram : Hon’ble Shri Anubhav Sharma, JM & Hon’ble Shri Khettra Mohan Roy, AM]