The Mumbai Income Tax Appellate Tribunal (ITAT) deleted a ₹67,39,949 addition for jewellery disclosed by a taxpayer in her income-tax return, but upheld a separate ₹12 lakh disallowance for brokerage claimed as paid to a Hindu Undivided Family (HUF). The September 1, 2026 decision turned on the records supporting the jewellery’s history and ownership, and on the lack of evidence that the HUF provided a distinct brokerage service.
What the ITAT decided
The appeal, Anjani Ashok Parikh v. Income Tax Officer, Ward 34(1)(1), Mumbai (ITA No. 6650/Mum/2025), concerned assessment year 2021–22. The taxpayer had disclosed jewellery valued at ₹67,39,949 in Schedule AL of her return. The Assessing Officer treated that amount as unexplained under Section 69A of the Income-tax Act. The ITAT deleted that addition after considering the documents and the explanation of how the jewellery came to be owned.
The tribunal did not delete every adjustment in the assessment. It upheld a separate ₹12,00,000 disallowance for brokerage claimed as paid to Ajit Rao HUF in connection with an investment in a residential flat. The appeal was therefore partly allowed.
Why the jewellery addition was deleted
Section 69A can apply where a taxpayer is found to own money, bullion, jewellery or another valuable article, it is not recorded in the books (if any), and the taxpayer gives no explanation—or an explanation the tax authority finds unsatisfactory—of its nature and source. The tribunal described the essential requirement as ownership coupled with the absence of a satisfactory explanation of “its nature and source.” In this appeal, the issue was whether the taxpayer’s explanation was supported by the record.
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The Assessing Officer’s inference about missing wealth-tax returns
The Assessing Officer relied in part on the fact that the taxpayer had not filed wealth-tax returns after assessment year 1997–98, and inferred that the jewellery might have been disposed of. The ITAT said that non-filing, without more, did not prove that a particular item of jewellery declared in an earlier year had been sold or otherwise disposed of. Nor did it establish that the taxpayer had received proceeds from a sale. The order reasoned that the absence of a return showed only that taxable wealth was below the applicable threshold for the relevant year; it was not independent evidence of what had happened to specific jewellery.
The documentary trail considered by the tribunal
The ITAT relied on a combination of records rather than treating one document as conclusive. The order describes these materials:
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- A wealth-tax return for assessment year 1997–98 showing jewellery valued at ₹19,55,105.
- Valuation reports dated March 31, 1989, and wealth-tax workings relating to ancestral estates and an HUF.
- A family distribution declaration dated December 8, 2022, recording a distribution agreed in 2015.
- A registered valuer’s report dated December 10, 2022.
The order records the taxpayer’s explanation that the jewellery comprised both ancestral jewellery and self-owned jewellery. In the appeal record, she attributed ₹46,94,547 to her stated share of jewellery associated with family estates and an HUF, and ₹20,45,402 to self-owned jewellery. These are figures presented in the case record, not a general valuation or independently verified measure of inherited jewellery.
Considered together, the historical return, valuations, family records and later valuation supported the explanation of the jewellery’s ownership and lineage. The tribunal also found no independent evidence establishing a sale, disposal or consideration received that would support the Assessing Officer’s inference.
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Why the brokerage disallowance remained
The taxpayer claimed ₹12,00,000 in brokerage paid to Ajit Rao HUF as part of an investment in a new residential flat. The record also showed an identical ₹12,00,000 payment to an individual associated with the HUF for the same transaction.
The ITAT upheld the disallowance because the evidence did not establish that the HUF had performed a separate service warranting its own brokerage payment, while the individual’s services for the transaction had already been paid for. The decision was about the evidence for these two payments in this transaction. It did not establish a blanket rule that an HUF can never earn brokerage.
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What this decision means for someone declaring inherited jewellery
The case shows why a coherent record of origin, ownership and present possession can matter when a tax authority questions jewellery. It does not create an automatic exemption for inherited or ancestral jewellery, and it does not guarantee that the same types of records will be sufficient in another assessment or appeal. The outcome depended on the particular documents and findings in this case.
Records that may help explain the history
The tribunal considered a connected documentary trail covering earlier existence and valuation, family ownership or distribution, and a more recent valuation. For someone assembling records about jewellery, potentially relevant material may include:
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- Old wealth-tax returns, asset schedules or valuation reports that identify jewellery or family holdings.
- Wills, inheritance documents, partition records or written family distribution agreements that explain how ownership passed.
- Records concerning an estate or HUF where the jewellery was held or from which a share was distributed.
- A current valuation that can be reconciled with older records and the ownership history.
These are practical record categories, not a checklist prescribed by the ITAT or a promise that any one document will settle a dispute. A tax professional can assess how the documents fit the facts and the applicable law in a particular matter.
A Schedule AL disclosure is not, by itself, the tax issue decided here
The assessment concerned jewellery the taxpayer had disclosed in Schedule AL and the explanation provided when the Assessing Officer examined it. The decision does not say that making a first-time Schedule AL disclosure itself makes jewellery taxable, or that disclosure alone triggers an addition. Whether a tax authority questions an entry, and whether an explanation is accepted, depends on the circumstances and evidence.
Case figures at a glance
| Amount | What it represents in this appeal |
|---|---|
| ₹67,39,949 | Jewellery value disclosed in Schedule AL; the Section 69A addition was deleted by the ITAT. |
| ₹19,55,105 | Jewellery shown in the taxpayer’s wealth-tax return for assessment year 1997–98, as recorded in the ITAT order. |
| ₹12,00,000 | Brokerage claimed as paid to the HUF; the disallowance was upheld. |
| ₹106 crore | Consideration for the Mumbai property sold by three co-owners, as recorded in the order; the appellant’s one-third share was about ₹35.33 crore. |
Limits of the ruling
This is a fact-specific appellate decision, not a general rule that old jewellery cannot be taxed or that a taxpayer’s explanation must be accepted whenever purchase bills are unavailable. It addresses the evidence and reasoning in this appeal; it does not determine whether another taxpayer’s records are sufficient. Anyone responding to an assessment should evaluate the applicable rules and their own documents with a qualified Indian tax professional.
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