High Court Refuses Section 260A Review as Gold Bar Value Addition Pertains Purely to Facts

By | October 16, 2026
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High Court Refuses Section 260A Review as Gold Bar Value Addition Pertains Purely to Facts

Issue

Whether a substantial question of law arises under Section 260A of the Income-tax Act, 1961 against the Tribunal’s order upholding the Section 69A addition for unexplained gold bars found in the assessee’s locker.

Facts

  • Locker Search & Discovery: The assessee (an individual) maintained a bank locker from which gold ornaments and gold bars were recovered.
  • Explanation Acceptability: The Assessing Officer (AO) accepted the explanation regarding the gold ornaments as duly explained.
  • Disputed Gold Bars: The explanation for 426 grams of gold bars was rejected, and the AO treated their value as unexplained money under Section 69A.
  • Tribunal Order: The ITAT sustained the addition on merits, recording a concurrent factual finding that the 426 grams of gold bars remained unexplained.
  • Appeal to High Court: The assessee filed an appeal under Section 260A before the High Court challenging the Tribunal’s decision.

Decision

  • Held that the finding regarding the unexplained nature and value of 426 grams of gold bars is purely a factual finding.
  • Held that no substantial question of law arises under Section 260A of the Income-tax Act, 1961 warranting High Court interference.
  • The assessee’s appeal was dismissed in favor of the Revenue.

Key Takeaways

  • Concurrent Factual Findings: Additions under Section 69A based on the valuation and unexplained source of physical assets (e.g., gold bars) are questions of fact.
  • Scope of Section 260A Appeals: High Courts will not entertain appeals under Section 260A unless a genuine, substantial question of law is demonstrated; pure re-appreciation of evidence on record is impermissible.
  • Distinction in Asset Types: Acceptability of explanation for personal gold ornaments does not automatically extend to bullion or gold bars without specific, verifiable source documentation.
HIGH COURT OF DELHI
Nirmal Puri
v.
Assistant Commissioner of Income-tax, Central
Dinesh Mehta and Rajneesh Kumar Gupta, JJ.
IT Appeal No. 529 of 2026
CM APPL. No. 43607 of 2026
JULY  21, 2026
Rajat Navet and Kushagra Pandit, Advs. for the Appellant. Gaurav Gupta, SSC, Shivendra Singh and Yojit Pareek, JSCs for the Respondent.
ORDER
1. Learned counsel for the appellant argued that the authorities below have erred in rejecting concurrently treating the small quantity of bullion (426 grams) to be unexplained.
2. Learned counsel for the appellant further argued that the appellant/assessee is 70 year old lady, residing with her family and that in a family set-up in an Indian society, a lady receives gold ornaments and jewellery not only from her parents but also from her in-laws and other family members, including son apart from her husband.
3. He submitted that the total gold found in the locker was 1242 grams, including gold ornaments belonging to the appellant as well as her daughter-in-law, which cannot be said to be excessive. Yet, the Assessing Officer vide order dated 29.03.2022 found 426 grams of gold to be unexplained and made an addition in the hands of the appellant. Such addition, despite the satisfactory explanation furnished by the appellant, was affirmed by Commissioner of Income Tax (Appeals) vide order dated 16.07.2025 so also by Income Tax Appellate Tribunal vide order dated 23.12.2025.
4. Mr. Gaurav Gupta, learned Senior Standing Counsel for the respondent, submitted that all the authorities have concurrently held against the appellant. He pointed out that what was found in appellant’s locker was 4 gold bars of 24-carat and not gold jewellery. He pointed out that the authorities have treated the gold bars to be unexplained, while the ornaments have been held duly explained and no addition in that regard was made in the hands of the appellant/assessee.
5. Having heard learned counsel for the parties and considering the fact that the addition made in the hands of the appellant pertains to the value of the gold bars, we are of the view that no interference is warranted in the appeal that has been filed under Section 260A of the Income Tax Act, as no substantial question of law arises for our consideration.
6. The appeal is dismissed along with pending application.