The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) removed Rs 1.13 crore additions of jewellery and cash discovered during the NIA search, carrying that married daughters could keep their jewellery at their parents’ home.
The taxpayer, Vakil Ahmed, had submitted his income tax return (ITR) reporting income of Rs 10,45,480. In a search by the National Investigation Agency, cash of Rs. 21 lakh and about 3.9 kg of jewellery were discovered at his residence.
The taxpayer stated that the jewellery belonged to his late wife and three married daughters and that he received it as gifts from family members and in-laws at their weddings. He submitted an affidavit and wedding photographs to establish the jewellery’s identity.
AO did not accept the explanation because the taxpayer’s married daughters were expected to keep their jewellery at their respective homes. After allowing a credit for 1.6 kg, the Assessing Officer (AO) added the balance. He added Rs 21 lakh cash after denying the explanation of family withdrawals.
The counsel of the taxpayer claimed that the jewellery had been discovered via NIA and not by the Income Tax Department and had never been valued accurately. They placed reliance on affidavits, photographs, and family custom to explain the jewellery. They depend on family bank withdrawals for the cash.
The counsel of the revenue upheld the findings of the AO and CIT(A) and asked the reason for placing the jewellery belonging to married daughters at the taxpayer’s residence.
The two-member Bench, S. Rifaur Rahman (Accountant Member) and Raj Kumar Chauhan (Judicial Member), said that the taxpayer had given proof and that the reason used to deny the claim did not specify the customs relied upon by him.
The Tribunal mentioned that, “The reason for rejection of the submissions of the assessee for the reason is that the jewellery belonging to the married daughters cannot be kept at the residence of the assessee, overlooking the fact that it is a part of customs to keep the jewellery of the married daughters at the maternal place and it is not prohibited in law to keep the jewellery of the related persons at the residence.”
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The Tribunal also found that the jewellery had not been valued and that an additional sum of ₹92 lakh had been added without any concrete basis. Regarding the cash, the Tribunal noted that the family had withdrawn significant amounts, and a valid explanation was provided for the ₹21 lakh that was found. Both these additions were deleted, and the appeal was allowed.
| Case Title | Vakil Ahmed Vs Income Tax Officer |
| Case No. | ITA No.2550/DEL/2026 |
| Assessee by | Shri S. Krishnan, Ms Sanya Khurana |
| Revenue by | Shri Raghubir Singh |
| Delhi ITAT | Read Order |
