JYOTI CARIAPPA SAIKIA,NEW DELHI vs. ACIT CENTRAL CIRCLE-5, DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, E: NEW DELHI BEFORE SHRI RAJ KUMAR CHAUHAN, JUDICIAL MEMBER AND SMT. RENU JAUHRI, ACCOUNTANT MEMBER ITA No.- 2649/Del/2026 [Assessment Year: 2021-22] Jyoti Cariappa Saikia, ACIT, F 4/2, Third Floor, Central Circle-5, Vasant Vihar, Vs ARA Centre, Jhandewalan New Delhi-110057. Extensions, New Delhi-110055. PAN- ADEPC6168Q Assessee Revenue Assessee by Sh. Ajay Wadhwa, Adv. Sh. Shivam Garg, Adv. & Sh. Vaibhav Gupta, Adv. Sh. Paritosh Jain, Adv. Revenue by Sh. Jitender Singh CIT(DR) Date of Hearing 04.06.2026 Date of Pronouncement 22.06.2026 ORDER Per Renu Jauhri, Accountant Member:

This appeal by the assessee is directed against the order dated 03.02.2026 of the Commissioner of Income – tax (Appeals)-24, New Delhi [hereinafter referred to as the ‘Ld. CIT(A)] arising out of the Assessment Order dated 26.03.2025 passed under section 153C of the Income Tax Act, 1961 (hereinafter referred to as the ‘the

ITA No.- 2649/Del/2026 Jyo� Cariappa Saikia Act’) by the Asst. CIT, Central Circle-5, New Delhi, (hereinafter referred to as the ‘AO’) pertaining to Assessment Years (A.Y.) 2021-22. 2. Grounds of appeal filed by the assessee are reproduced as under: “1. That on the facts and in law, the order dated 03.02.2026 passed by the Ld. Commissioner of Income Tax (Appeals) [CIT(A)] under section 250 of the Income-tax Act, 1961 (“the Act”), partly affirming the assessment order dated 26.03.2025 passed under section 153C, is illegal, bad in law and void ab initio, as the mandatory statutory conditions for invoking section 153C were not satisfied . 2. That the Ld. CIT(A) erred in upholding proceedings under section 153C despite the admitted position that no incriminating material belonging to or relating to the assessee was found or seized from the premises of any other searched person, and that jewellery found and seized from the assessee’s own residential premises cannot, in law, constitute incriminating material of an “other person” for the purposes of section 153C. 3. Without prejudice and in alternative, the Ld. CIT(A) failed to appreciate that the assessee’s residential premises were covered under the search conducted under section 132 and jewellery was seized therefrom, rendering the assessee a “searched person”, and consequently, any assessment could only have been framed under section 153A and not under section 153C. 4. That the Ld. CIT(A) erred in law in upholding initiation of proceedings under section 153C despite the satisfaction notes dated 18.05.2023 being invalid and bad in law, as they: a) fail to record the mandatory satisfaction that the seized jewellery “belongs to” the assessee as required under section 153C(1); and b) are vague, mechanical, non- speaking and do not identify or link any incriminating material to specific assessment years. 5. That the Ld. CIT(A) erred in law and on facts in confirming addition of ₹18,11,026/- under section 69A on account of alleged unexplained jewellery, despite having categorically accepted that the jewellery represented accumulation over a long period, inheritance from mother, streedhan and customary receipts, and despite granting substantial relief on identical facts and evidence. 6. That the Ld. CIT(A) erred in restricting relief to jewellery worth ₹35,68,974/- merely on the ground that it was not seized, and in sustaining addition only in respect of seized jewellery, without drawing any qualitative, temporal or source-based distinction, rendering the partial confirmation arbitrary and unsustainable. 7. That having accepted that CBDT Instruction No. 1916 reflects the legislative intent to treat jewellery within prescribed limits as explained, the Ld. CIT(A) erred in not extending the benefit of the said Instruction to the entire jewellery found, including the seized portion, particularly when the appellant is a married lady married since 1977 and the total quantity of jewellery was reasonable and customary. 8. That the Ld. CIT(A) failed to adjudicate the specific ground that the Ld. Assessing Officer mechanically accepted jewellery of ₹72,09,817/- as explained merely on the basis 2

ITA No.- 2649/Del/2026 Jyo� Cariappa Saikia of purchase bills valued at historical cost, and once such inconsistent approach was demonstrated, the residual addition on account of jewellery was liable to be deleted in entirety. 9. That the Ld. CIT(A) erred in sustaining addition of ₹18,11,026/- without recording any specific finding that such jewellery represented unexplained investment or undisclosed income of the relevant assessment year, and the confirmation is based purely on presumption and estimation, without any corroborative or incriminating material, contrary to section 69A. 10. That the Ld. CIT(A) erred in law and on facts in not granting complete relief despite the appellant having furnished the Will of her late mother evidencing inheritance of jewellery, and in disregarding the uncontroverted affidavit of the appellant’s brother without any verification or cross-examination, contrary to settled legal principles. 11. That the Ld. CIT(A) erred in drawing adverse inference from enhancement of jewellery value in the revised return, without appreciating that even the original return under section 139(1) was filed after the date of search, rendering such inference factually incorrect and unsustainable. 12. That the appellant craves leave to add, amend, alter or withdraw any of the above grounds at or before the time of hearing.”

ITA No.- 2649/Del/2026 Jyo� Cariappa Saikia 3.1 Aggrieved, the assessee preferred an appeal before the Ld. CIT(A), who vide order dated 03.02.2026, granted part relief of Rs. 35,68,974/- and sustained the addition to the extent of Rs. 18,11,026/-. Further aggrieved, the assessee has filed appeal before the Tribunal.

“ C. The part-confirmation of Rs. 18,11,026/- is arbitrary and unsustainable on merits: i. The Ld CIT(A) erred in sustaining the addition of Rs. 18,11,026 under section 69A by disregarding the material evidences placed on record explaining the source of the jewellery, namely, the Will of the mother, affidavit of the brother, and the factum of receipt of jewellery as streedhan, duly supported by marriage photographs. ii. At the very first opportunity, i.e., during the course of search itself, the assessee had specifically explained that the jewellery found during search included jewellery received from her mother, purchased overtime and jewellery received at the time of marriage as streedhan. The said explanation is duly evident from Question No. 41 of the statement of the assessee recorded under section 132(4) on 04.03.2021. [Refer P. No. 24 of PB] iii. The aforesaid evidences were thereafter placed before the Investigation Wing, the AO, and the CIT(A). However, the Ld. AO brushed aside the said evidences merely by observing that the explanation was a "difficult theory to believe" [Para 8.3 of the assessment order] and an "afterthought" [Para 8.5 of the assessment order], without bringing any contrary material on record. iv. The Ld. CIT(A) further erred in mechanically sustaining the addition without independently examining or discussing these evidences in the appellate order. In fact, 4

ITA No.- 2649/Del/2026 Jyo� Cariappa Saikia the CIT(A) has not dealt with the Will of the mother and affidavit while sustaining the addition. [Refer Para 5.3.6 of the CIT(A) order at P. No. 37 of the order] V. The Ld. CIT(A) failed to appreciate that once these evidences were made available at the time of search itself and consistently relied upon thereafter, the same could not have been rejected as an afterthought. Further, the said evidences have remained unrebutted throughout the proceedings and no adverse material has been brought on record to discredit the explanation of the assessee. vi. The jewellery explained through the aforesaid evidences, in fact, exceeds not only the jewellery seized but also the total jewellery found during the course of search. Therefore, there remains no unexplained jewellery so as to warrant any addition under section 69A. A consolidated reconciliation of the jewellery is set out below for ready reference:

i. The Ld. CIT(A) erred in not properly applying CBDT Instruction No. 1916 dated 11.05.1994 in its full purport, which mandates consideration of the financial and social status of the assessee while evaluating jewellery found during search. ii. The Ld. CIT(A) further erred in accepting the valuation adopted by the AO based on historical purchase bills (pertaining to the period 2016 to 2020), without correlating or reconciling the same with the valuation determined at the time of search and seizure.

ITA No.- 2649/Del/2026 Jyo� Cariappa Saikia In view of the above, the addition sustained under section 69A is without any factual or legal basis and is liable to be deleted.”

4.1 Ld. DR, on the other hand, has strongly relied upon the orders of the lower authorities and argued that the assessee’s claim regarding jewellery received upon the death of her mother is an afterthought and, in any case, the Ld. CIT(A) has granted part relief to the assessee after examining the relevant details and evidences. He has, therefore, argued that the order of the Ld. CIT(A) should be upheld.

“ (i) Jewellery received at the time of her marriage (Streedhan) (ii) Jewellery purchased over time (iii) By inheritance from mother

ITA No.- 2649/Del/2026 Jyo� Cariappa Saikia 5.1 In this regard, bills/ invoices relating to purchase of jewellery during 2016- 2021 to the extent of 481.176 grams have been filed as per the following details:

“

5.2 Copy of bank statement evidencing payments made in respect of above purchases has also been filed.

ITA No.- 2649/Del/2026 Jyo� Cariappa Saikia 5.3 With regard to the jewellery inherited from her mother, the assessee has placed on record a copy of the will of her mother, late Smt. Indu Cariappa, dated 25.12.2014 and an affidavit of her brother, Vivek Cariappa dated 19.06.2021. It has been explained that as per the will of her mother, the jewellery weighing approx. 2700 grams was to be equally divided between the assessee and her brother. As the mother was staying with the assessee, the jewellery was kept with her and assessee, who got its valuation done on 20.12.2016. A copy of the Valuation Report of the approved valuer has also been filed along with the affidavit of her brother, wherein the following explanation regarding jewellery found in the assessee’s possession has been given:

ITA No.- 2649/Del/2026 Jyo� Cariappa Saikia

5.4 In the light of these documents, Ld. AR has submitted the following reconciliation: -

ITA No.- 2649/Del/2026 Jyo� Cariappa Saikia 5.5 After careful consideration of the above facts and circumstances, we are of the view that the assessee has duly explained the sources of acquisition of jewellery found in her possession at the time of search. Considering the details and documentary evidences coupled with the high income declared by the assessee in the year under consideration, as well as in the past years, we are inclined to accept the assessee explanation regarding purchase of jewellery over the years as well as regarding inheritance of jewellery from her mother. We, therefore, delete the addition sustained by the Ld. CIT(A) to the extent of Rs. 18,11,026/- on account of unexplained jewellery u/s 69A of the Act. Accordingly, this ground of the assessee is hereby allowed.

5.6. As the appeal has been allowed on merits, remaining legal grounds are rendered academic and hence these are not being adjudicated upon.

Order pronounced in the open court on 22.06.2026.

Sd/- Sd/- [RAJ KUMAR CHAUHAN] [RENU JAUHRI] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated- 22.06.2026. Pooja.

ITA No.- 2649/Del/2026 Jyo� Cariappa Saikia Copy forwarded to: 1. Assessee 2. Respondent 3. CIT 4. CIT(A) 5. DR

Asst. Registrar, ITAT, New Delhi,