Background of the Case: Sony Sareen vs ACIT
In a landmark decision, the Income Tax Appellate Tribunal Delhi Bench ‘G’ resolved a contentious issue involving Sony Sareen of New Delhi and the Assistant Commissioner of Income Tax, Central Circle-26, New Delhi. The case, cited as ITA No. 1777/Del/2022, for the assessment year 2017-18, revolved around an addition of ₹71,19,587 made by the assessing officer pertaining to jewellery found in the locker under the joint names of Sony Sareen and her husband, Mr. Bimal Krishan Sareen, during a search operation.
The pivotal question was whether the jewellery, claimed to have been received by Mrs. Sareen at the time of her marriage from her parents and subsequently from in-laws and relatives over 35 years, should contribute to her taxable income. The appellant’s stand, supported by affidavits from Mrs. Indu Wig (mother) and the late Mrs. Swaraj Sareen (mother-in-law), highlighted a tradition of gifting jewellery during significant life events, arguing these should not be assessed as part of her wealth.
Proceedings and Contentions
At the heart of the appeal was the appellant’s challenge against the learned Commissioner of Income Tax (Appeals)’ confirmation of the addition. Despite thorough submissions and affidavits attesting to the nature and origin of the jewellery, the appellate authority had sided with the assessing officer, prompting the appellant to seek redress from the Income Tax Appellate Tribunal.
During the hearing, both parties presented their arguments, with the appellant pointing out lapses in the assessment process and emphasizing the personal significance and traditional context of the jewellery in question. The Revenue, represented by Sh. H. K. Choudhary, CIT DR, argued for the affirmation of the addition, suggesting potential oversight of taxable assets.
Judicial Findings and Verdict
The Tribunal, led by Dr. B. R. R. Kumar, Accountant Member, and Sh. Yogesh Kumar US, Judicial Member, meticulously reviewed the submissions, affidavits, and the legal framework governing such assessments. Recognizing the complexity of ascertaining the nature of the jewellery and its acquisition, the bench found merit in granting the appellant an opportunity for a comprehensive reassessment of the matter.
The verdict allowed the appeal for statistical purposes, directing a remand to the Commissioner of Income Tax (Appeals) for a detailed examination on the merits. This decision underscored the importance of a nuanced approach to cases involving long-standing traditions and familial gifts, particularly in the context of taxation.
Conclusion
This case epitomizes the delicate balance between statutory compliance and respecting personal and cultural practices. By remanding the case for detailed examination, the Tribunal has paved the way for a more informed and equitable assessment, setting a precedent for similar disputes in the future.
