New Delhi, Oct. 11 -- Families may accumulate gold jewellery over decades through weddings, inheritance and gifts. When the Income Tax Department finds jewellery during a search, the absence of old purchase bills can make it difficult to establish when and how the gold was acquired.

In a ruling involving Ankur Sharma, the Delhi bench of the Income Tax Appellate Tribunal (ITAT) held that the tax department cannot mechanically restrict the quantity of jewellery accepted as explained to the limits mentioned in Central Board of Direct Taxes (CBDT) instructions. The tribunal deleted a Rs.20.45 lakh addition to Sharma's taxable income after considering the family's financial circumstances and income-tax returns.

The order was pronounced on 6 ...