No Addition against Individual if Gold belongs to Whole Family: ITAT

IN THE INCOME TAX APPELLATE TRIBUNAL

The Relevant Text of the Order as follows :

8. We have heard the rival contentions and perused the material available on record. In the statement recorded u/s 132(4), the assessee in response to question no. 28 where he was asked to explain the source of gold jewellery weighing 1240. 90 grams and silver jewellery/utensils weighing 4. 971 kg has stated that gold and silver jewellery and utensils so found during the course of search had been received/purchased on the occasion of the marriage of his parents, his own marriage and thereafter, on the birth of his children and various other social occasions from time to time. The registered valuer in his report dated 3.07.2015 has valued the same at Rs 3,22,108/-.

The Assessing officer sought assessee’s explanation during the course of reassessment proceedings and thereafter, arrived at a figure of Rs 1,50,000/- as an unexplained investment in silver items and jewellery and brought the same to tax. The AO has not specified the basis of arriving at the said figure, however, on perusal of the Valuer’s report dated 3.07.2015 and other material on record, we find that he has given the credit of Rs 143,650 in respect of 221 silver coins as well as Rs 28,325/- towards silver utensils and has thereafter, arrived at a figure of Rs 150,133/- and held the said figure (after rounding off) as an unexplained investment in the hands of the assessee.

No Addition against Individual if Gold belongs to Whole Family: ITAT

However, we find that he has failed to consider two key aspects. Firstly, the silver jewellery so found belongs to all the family members as stated by the assessee in his statement recorded u/s 132(4) of the Act. A fact, which seems to have been accepted by the AO, where he has given the credit of silver coins belonging to Rajaram Ladha and Savitri Ladha as well as silver utensils belonging to Savitri Ladha and also fairly accepted by the ld CIT(A) where she has accepted the assessee’s explanation regarding gold jewellery so found during the course of the search along with silver jewellery/items.

Therefore, once it is accepted that these items belong to all family members and where the assessee has thereafter given specific details regarding such items identified to each of the individual members as per his submissions dated 18.08.2017, the remaining items should, therefore, be accepted as belonging to respective family members and not just that of the assessee only. Secondly, the assessee and her mother have already declared silver jewellery items in their respective wealth tax returns which need to be considered. In case of the assessee, he has declared 0.5 kgs of silver in his wealth tax return for A.Y 92-93 and to that extent, the same stand explained.

Therefore, as against 1.480 kgs of silver items belonging to the assessee, he has already declared 0.5 kgs of silver in his wealth tax return for A.Y 92-93. 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 the occasion of birth and other social functions seems reasonable and the addition sustained by the ld CIT(A) is hereby deleted.