Kusum S Kashyap , Mumbai vs Assessee

Assessee by : Shri Ratan Samal, A.R. Revenue by : Shri Rudolph N. D'Souza, D.R.

Date of Hearing : 01.12.2014 Date of Pronouncement : 04.02.2015

ORDER

Per Sanjay Garg, Judicial Member:

The present appeal has been preferred by the assessee against the order of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] dated 04.12.2012 relevant to assessment year 2008-09. The assessee has taken the following grounds of appeal:

"1. The learned CIT(A) erred in confirming the order of ITO were in learned ITO treated the sale of gold ornament of Rs.2,47,693/- as income from undisclosed assets.

2. The appellant craves leave to amend, alter or modify of the above grounds of appeal."

2. The brief facts of the case are that the Assessing Officer (hereinafter referred to as the AO) during the assessment proceedings u/s 143(3) of the ITA No.1509/M/2013 2 Smt. Kusum S. Kashyap

Income Tax Act observed that the assessee had sold gold ornaments for Rs.2,47,693/- and declared long term capital gains of Rs.39,530/- . On being asked to explain, the assessee explained to the AO that the said gold ornaments were sold out of the ornaments received by her on various occasions since child hood prior to 1.4.1981. The assessee had opted the fair market value as on 1.4.1981 and claimed the cost as per inflation index as deduction from the sale proceeds of the gold ornaments. The AO was not satisfied with the explanation given by the assessee. He therefore treated the entire sale consideration of Rs.2,47,693/- as undisclosed asset and added the said amount to the total income of the assessee. The Ld. CIT(A) also confirmed the addition so made by the AO. The assessee is thus in appeal before us.

3. We have heard the Ld. representatives of both the parties and also have gone through the records. The Ld. representative of the assessee (AR) has submitted that the assessee is an old aged lady of about 65 years and that the gold ornaments in question, in fact, was the old jewellery of the assessee purchased from time to time and some of it was received as gifts from relatives and friends on certain occasions from time to time for the past so many years.

The Ld. DR has relied upon the observations of the AO and has stressed that the assessee has failed to explain the source of the jewellery.

4. We have considered the submissions of both the representatives of the parties.

The assessee is an old aged lady. It is a very common that as per the customs and practices prevalent in our country, the jewellery/gold etc. is gifted by the relatives and friends of a person especially to a girl/lady at the time of certain occasions like marriages, birth of a child, birthdays, marriage anniversaries etc. The quantum and the worth of the gifts also depend upon the social as well as ITA No.1509/M/2013 3 Smt. Kusum S. Kashyap

financial status not only of the donor but of the donee also. Further, as per CBDT circular No.1916 dated 11.5.1994 which contains guidelines to be followed in the matters of seizure of gold and jewellery during the course of search action, it is apparent that in case of a person not assessed to wealth-tax, gold jewellery and ornaments to the extent of 500 grams per married lady, 250 grams per unmarried lady and 100 grams per male member of the family need not be seized. The Ld. AR of the assessee has brought our attention to the clause (iii) of the said guidelines wherein it has been mentioned that the authorized officer may, having regard to the status of the family, and the custom and practices of the community to which the family belongs and other circumstances of the case, decide to exclude a larger quantity of jewellery and ornaments from seizure.

5. The Hon'ble Gujarat High Court in the case of "CIT vs. Ratanlal Vyaparilal Jain"(supra) has held that though the said circular had been issued for the purpose of non seizure of the jewellery, but the basis for the same recognizes customs of gifts of jewellery by the relatives and friends on certain occasions such as marriages, birthdays, marriage anniversary and other festivals. In such circumstances, unless the Revenue shows anything to the contrary, it can be safely presumed that source to the extent of the jewellery stated in the circular stands explained. Even otherwise, the gold ornaments stated to be sold by the assessee are for an amount of Rs.2,47,693/- only which is not a high amount, jewellery worth which can be presumed to be collected/gathered by the assessee out of her savings, gifts and Streedhan though out the life.

In view of above stated position of law, we do not find any justification on the part of lower authorities in making the additions by ignoring the above ITA No.1509/M/2013 4 Smt. Kusum S. Kashyap

stated factual and legal position. The additions so made are therefore ordered to be deleted.

6. In the result, the appeal of the assessee is hereby allowed.

Order pronounced in the open court on 04.02.2015.

Sd/- Sd/- (R.C. Sharma) (Sanjay Garg) ACCOUNTANT MEMBER JUDICIAL MEMBER

Mumbai, Dated: 04.02.2015. * Kishore, Sr. P.S.

Copy to: The Appellant The Respondent The CIT, Concerned, Mumbai The CIT (A) Concerned, Mumbai The DR Concerned Bench //True Copy// [

By Order

Dy/Asstt. Registrar, ITAT, Mumbai.