Now Reading: ITAT upholds taxpayer claim on Rs 1.56 crore inherited jewellery
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ITAT upholds taxpayer claim on Rs 1.56 crore inherited jewellery
The Kolkata Income Tax Appellate Tribunal has ruled that inherited jewellery found during a search does not automatically count as unexplained wealth of the person in possession, provided other evidence exists to…
The Kolkata Income Tax Appellate Tribunal has ruled that inherited jewellery found during a search does not automatically count as unexplained wealth of the person in possession, provided other evidence exists to show its true ownership. The order, passed on 11 September 2026, dismissed the Revenue's appeal against the deletion of a Rs 1.56 crore tax addition relating to 3,233.11 grams of jewellery.
The case arose from a June 2022 search at the residence and business premises of Miraj Digvijay Shah, where jewellery and bullion worth Rs 14.69 crore were found. Shah claimed the disputed items belonged to his deceased grandparents, father and the late father's HUF. The ITAT accepted this after noting the jewellery was held in joint lockers, old 1997 valuation reports matched the pieces, and Shah's mother submitted an affidavit. The Revenue had not challenged the valuation reports' veracity.
The ruling does not create an automatic exemption for ancestral gold. The CBDT's 1994 instruction on seizure limits, 500 grams for married women, 250 grams for unmarried women and 100 grams for men, is considered case-by-case and does not override the need to explain ownership.
Indian Opinion Analysis
The ruling reinforces that the burden of proof in tax searches shifts when multiple family members have documented claims over assets, not just the person searched. The key evidence accepted here was a 1997 valuation report, almost three decades old, that matched the seized jewellery. Most families do not retain such reports, and the tribunal itself stressed its decision turned on the specific evidence available. The CBDT instruction of 1994, often cited by taxpayers, has never been a statutory exemption, courts have consistently treated it as an internal guideline that does not bar seizure or addition. Families holding significant ancestral gold without any contemporaneous record still face a steep uphill battle, as the instruction alone does not substitute for proof of ownership.
The CBDT instruction of 1994, often cited by taxpayers, is an internal guideline and not a statutory exemption, courts have consistently held it does not bar seizure or addition.
Source: livemint.com
This brief was synthesised by AI from the source linked above.
