9 hrs ago
Mumbai ITAT Deletes ₹11.23 Lakh Gold, Silver Tax Addition
Tax officials found a large amount of gold, diamonds and silver belonging to Smita Kelkar.
They questioned whether some of these items were bought with money that had not been reported for tax.
Kelkar said her family had collected the items over many years.
She said some came as marriage gifts, some were inherited, and some were bought for family occasions.
The tax officer treated some of the gold and silver as unexplained income.
Another tax authority removed the tax claim on the diamond jewellery but kept claims on some gold and silver.
The tribunal said the family’s total gold was below a reasonable household benchmark.
It also said there was not enough evidence that the items were newly bought with hidden income.
As a result, the tribunal removed the remaining ₹11.23 lakh tax addition.
The Mumbai ITAT deleted ₹11.23 lakh in tax additions against Smita Kelkar.
Officials found gold, diamond jewellery, silver articles and coins at her home and two bank lockers.
Kelkar said the assets came from marriage gifts, inheritance and family purchases accumulated over decades.
The Assessing Officer had treated ₹18.05 lakh as unexplained income under Section 69A, while the CIT(A) sustained ₹11.23 lakh.
The tribunal found no sufficient evidence that the pure gold and silver were recently acquired from undisclosed income.
- Who
- Smita Kelkar, a resident of Vashi, Navi Mumbai, and the Income Tax Department.
- What
- The Mumbai Income Tax Appellate Tribunal deleted ₹11.23 lakh in additions relating to gold and silver treated as unexplained income.
- Where
- The search covered Kelkar’s residence in Vashi, Navi Mumbai, and two bank lockers; the ruling was issued by the Mumbai ITAT bench.
- When
- The tribunal pronounced its order on 14 July 2026.
- Why
- The tribunal accepted that the assets could have accumulated through marriage gifts, inheritance and family acquisitions over several decades, and found insufficient evidence of recent undisclosed purchases.
Taxpayer and Tribunal
Income Tax Authorities
Source of the precious assets
Taxpayer and Tribunal
Kelkar said the gold and silver came from marriage gifts, inheritance and family acquisitions accumulated over several decades.
Income Tax Authorities
The tax authorities treated some assets as unexplained because they were not sufficiently supported by purchase documentation.
Use of the household gold benchmark
Taxpayer and Tribunal
The tribunal treated the CBDT benchmark as a reasonable reference and found the relevant total of 651.044 grams below the 700-gram family benchmark.
Income Tax Authorities
The Assessing Officer accepted 700 grams for the family but treated 258 grams of pure gold beyond the accepted holdings as unexplained.
Evidence required for taxation
Taxpayer and Tribunal
The tribunal said the absence of old purchase bills alone did not prove that the assets came from undisclosed income.
Income Tax Authorities
The authorities argued through the additions that unsupported gold and silver holdings could be treated as unexplained under Section 69A.
Key facts
- Tax addition deleted
- ₹11.23 lakh
- Initial addition by Assessing Officer
- ₹18.05 lakh under Section 69A of the Income-tax Act
- Gold and jewellery found
- 392.71 grams of gold jewellery, 92 grams of pure gold, and diamond jewellery containing 27.4 carats of diamonds with 161.33 grams of gold
- Silver found
- 800 grams at the residence and 10.4 kilograms of silver-mix articles in the lockers
- Locker gold
- 35 grams of gold jewellery and 166 grams of pure gold
- Value of precious articles
- Approximately ₹29.49 lakh
- Amounts sustained by CIT(A)
- ₹8.10 lakh for 258 grams of pure gold and ₹3.12 lakh for silver articles
Sources
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