Benefit of CBDT’s Instruction No. 1916 available towards jewellery of wife’s mother found at residence of husband: ITAT

Case Details: Muppavarapu Kavitha v. ACIT - [2022] 142 taxmann.com 250 (Visakhapatnam-Trib.)

Judiciary and Counsel Details

• • Duvvuru RL Reddy, Judicial Member & S. Balakrishnan, Accountant Member
  • M.V. Prasad, CA for the Appellant.
  • M.N. Murthy Naik, CIT-DR for the Respondent.

Facts of the Case

Assessee was an individual who derives income from business and remuneration from a partnership firm M/s. Lifestyle Housing. A Search and Seizure operation was conducted in the group cases of M/s. Yugandhar Housing Private Limited and others including the residence of Sri M. Maheswara Reddy, Managing Director of M/s. Yugandhar Housing Pvt Ltd who was the assessee’s husband.

A notice under section 143(2) was issued and served on the assessee. During the course of assessment proceedings, the Assessing Officer (AO) assessed the income of the assessee including an amount being the value of gold jewellery which was found in excess after considering the eligible exemption as per the CBDT Instruction No. 1916, dated 11/05/1994. AO assessed the excess gold jewellery under 69A of the Act.

On appeal, the CIT(A) upheld the order of AO. Aggrieved-assessee filed the instant appeal before the Tribunal.

ITAT Held

The Tribunal held that it was admitted fact that the gold jewellery belonging to family members was seized to the extent of 1628.025 grams. There was no dispute on the fact that as per the CBDT Instruction No. 1916, in a case of a person who is not assessed to wealth tax, gold jewellery and ornaments to the extent of 500 grams per married lady, 250 grams per an unmarried lady and 100 grams per male member of the family should not be seized.

The AO had allowed the benefit of CBDT’s instruction to the gold jewellery belonging to the mother-in-law of the assessee. It should be noted that the mother of the assessee was staying with her daughter and the assessee was her only daughter. Thus, the assessee’s mother would be considered a family member. Hence the benefit of CBDT Instruction No. 1916 should also be extended to the mother of the assessee as well.