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Woman Wins Tax Battle Over Seized Jewelry
7 Sep
Summary
- Taxpayer proved jewelry was acquired through gifts and inheritance.
- ITAT Mumbai ruled that explanations of origin were reasonable.
- Seized gold, diamond, and silver items were returned to the owner.
Mrs. Kelkar, married for 35 years, successfully contested a tax dispute concerning seized jewelry. The Income Tax Department had observed her declared income and subsequently searched her residence and bank lockers, retrieving gold, diamond, and silver items.
Initially, the Assessing Officer deemed a significant portion of these items unexplained, imposing tax and penalty based on CBDT Instruction No. 1916 regarding permissible gold holdings. Mrs. Kelkar contended that the jewelry represented gifts received over her long marriage and her inheritance.
Appealing to ITAT Mumbai, Mrs. Kelkar's explanation of the items as long-term accumulations and customary acquisitions was accepted. The tribunal noted the lack of evidence for recent undisclosed acquisition and ruled that the possession of silver articles should be considered within the context of Indian family customs.
ITAT Mumbai ultimately ruled in Mrs. Kelkar's favor, deleting additions of Rs 8.1 lakh for gold and Rs 3.12 lakh for silver. The tribunal clarified that CBDT Instruction No. 1916 serves as a benchmark, not an absolute ceiling, and that assessments must consider marriage duration, customs, inheritance, and financial status.
