ITAT Mumbai Delivers Victory to Taxpayer Over Ancestral Jewellery Claim

The Income Tax Appellate Tribunal (ITAT), Mumbai Bench, has ruled in favour of a Mumbai taxpayer who claimed that jewellery worth Rs 67.39 lakh was part of her ancestral inheritance and not subject to tax under Section 69A of the Income Tax Act.

The taxpayer, Anjani Ashok Parikh, had disclosed the jewellery in her income tax return for the assessment year 2021-22. However, the assessing officer had asked her to explain its origin and source. The taxpayer had submitted older records.

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This includes her wealth-tax return for assessment year 1997-98. Valuation reports, and a family declaration recording the distribution of ancestral jewellery among legal heirs.

The ITAT found that the department's reasoning involved too many assumptions and that the taxpayer had established a documentary trail covering nearly three decades. The tribunal noted that not filing a wealth-tax return establishes only that the taxpayer's taxable wealth was below the applicable threshold.

And it does not establish that a particular item of jewellery was sold or otherwise disposed.

However, the tribunal upheld a separate Rs 12 lakh disallowance relating to brokerage paid to an HUF, finding that the services involved were carried out by the broker and had already been paid Rs 12 lakh for those services.

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Chartered Accountant Suresh Surana notes that the ITAT Mumbai found that the taxpayer had been able to establish a documentary trail covering nearly three decades. "Her own wealth-tax return for AY 1997-98 recorded jewellery of Rs 19.55 lakh, while historical valuation reports and wealth-tax records supported the ancestral jewellery." Surana told ET.

The order was passed on September 1, 2026, in the case of Anjani Ashok Parikh v. Income Tax Officer, Ward 34(1)(1), Mumbai, for assessment year 2021-22.