ANIL KUMAR BHAIYA,DELHI vs. DCIT, CENTRAL CIRCLE 1(1),, KOLKATA

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, KOLKATA SHRI DUVVURU RL REDDY, VICE PRESIDENT RAJESH KUMAR, ACCOUNTANT MEMBER

I.T.A. No. 1519/Kol/2025 (Assessment Year 2023-2024)

Anil Kumar Bhaiya, J-123, Ashok Vihar, PH-I, (North West), Delhi - 110052 [PAN: ADEPB3736B] …..…...…………….... Appellant vs. DCIT, Central Circle-1(1), Kolkata, Aayakar Bhawan, Poorva, 110, Shantipally, E.M. Bypass, Kolkata - 700107 ……..…...…………….... Respondent I.T.A. No. 2697/Kol/2025 (Assessment Year 2023-24)

DCIT, Central Circle-1(1), Kolkata, Office of the Deputy Commissioner of Income Tax, Central Circle-1(1), Kolkata, R.No. 305, 3rd Floor, Aayakar Bhawan Poorva, 110, Shanti Pally, Kolkata - 700107 …..…...…………….... Appellant vs. Anil Kumar Bhaiya, J-123, Ashok Vihar, PH-I, (North West), Delhi - 110052 [PAN: ADEPB3736B] ……..…...…………….... Respondent

Appearances by: Assessee represented by : Shri Siddharth Agarwal, AR Department represented by : Raman Garg, CIT, DR

Date of concluding the hearing : 12.08.2026 Date of pronouncing the order : 30.10.2026

2 ITA No. 1519 & 2697/Kol/2025 Anil Kumar Bhaiya

O R D E R Per Rajesh Kumar, AM

The present cross appeals filed by the assessee and the revenue arise from order dated 16.06.2025 passed u/s 250 of the Income Tax Act, 1961 (hereafter referred to as “the Act”) by the Ld. Commissioner of Income Tax (Appeals) Kolkata-20 [hereafter referred to “the Ld. CIT(A)] for the Assessment Year 2023-24.

3 ITA No. 1519 & 2697/Kol/2025 Anil Kumar Bhaiya 3. Revenue’s Appeal 4. We now take up the appeal of the Revenue for assessment year 2023- 24 in ITA No. 2697/KOL/2025. 5. Ground Nos. 1 and 2 raised by the Revenue are interconnected and are directed against the action of the Ld. CIT(A) in deleting the addition of Rs.33,46,739/- pertaining to 182.45 carats of diamonds found during the course of search and seizure proceedings and in relying upon CBDT Instruction No.1916 dated 11.05.1994. We have heard the rival contentions and perused the materials on records. 5.1. During the course of search, diamonds aggregating to 447.43 carats were found. The assessee furnished reconciliation in respect of 264.98 carats and the Assessing Officer treated the balance 182.45 carats as unexplained and made addition of Rs.33,46,739/-. The assessee explained that the diamonds were embedded/studded in gold jewellery and furnished valuation material prepared during the course of search, bill-wise and item-wise reconciliation and other supporting documents. The assessee also relied upon the judicial decisions including ITA No.5714/Del/2015 dated 30.05.2016 and Suresh Bansal v. DCIT, ITA No.833/Del/2017. 5.2. The Ld. CIT(A), after considering the explanation of the assessee and the material available on record, deleted the entire addition of Rs.33,46,739/-. The Ld. CIT(A) considered the fact that the diamonds were embedded in jewellery and also considered the supporting reconciliation and the judicial precedents relied upon by the assessee. 5.3. We find that the Ld. CIT(A) has examined the issue on the basis of the material placed on record. The valuation of the jewellery was carried out during the search and the assessee furnished reconciliation in respect of the diamonds along with the supporting documents. The diamonds in question formed part of the jewellery found during the search. The Ld. CIT(A) has also considered the

4 ITA No. 1519 & 2697/Kol/2025 Anil Kumar Bhaiya judicial precedents relied upon by the assessee while arriving at the conclusion that the addition was not sustainable. 5.4. The Revenue has not brought before us any material which would justify interference with the findings recorded by the Ld. CIT(A). The mere fact that the Revenue has taken a different view regarding the applicability of CBDT Instruction No.1916 cannot, in the facts of the present case, displace the findings recorded by the Ld. CIT(A) after examining the documentary material and the nature of the jewellery found. We, therefore, find no reason to interfere with the order of the Ld. CIT(A). Accordingly, Ground Nos. 1 and 2 raised by the Revenue are dismissed. 6. Ground No. 3 raised by the Revenue is directed against the action of the Ld. CIT(A) in deleting the addition of Rs.21,25,371/- out of the addition of Rs.1,59,25,371/- made under section 69A of the Act on account of unexplained cash. We have heard the rival contentions and perused the material available on record. 6.1. During the course of search, total cash of Rs.1,76,00,000/- was found. The assessee explained the source of the cash found with reference to the opening cash balances of himself and his wife, cash withdrawals from bank, rental receipts and the cash balance of M/s Silver Collections Pvt. Ltd. The assessee also claimed that a sum of Rs.1,38,00,000/- represented cash received by his wife under the Will of her deceased mother. The Assessing Officer accepted certain sources of cash but rejected, inter alia, the opening cash balances, certain earlier cash withdrawals, the additional rental receipts and the cash claimed to have been received under the Will, and accordingly made an addition of Rs.1,59,25,371/-. 6.2. In appellate proceedings, the Ld. CIT(A), after examining the material available on record, accepted the opening cash balance as on 01.04.2022 of Rs.9,57,871/- in the case of the assessee and Rs.6,80,338/- in the case of his wife, aggregating to Rs.16,38,209/-

5 ITA No. 1519 & 2697/Kol/2025 Anil Kumar Bhaiya . The Ld. CIT(A) noted that these balances were reflected in the respective returns of income, the return of the assessee having been accepted in regular assessment and the return of his wife having been accepted under section 143(1) without demur. The Ld. CIT(A) further accepted cash withdrawals of Rs.1,00,000/- each by the assessee and his wife on 08.04.2022 and rental receipts of Rs.1,95,000/- for the period April to June 2022. The cash balance of Rs.18,49,046/- belonging to M/s Silver Collections Pvt. Ltd. was also accepted, the same having already been accepted by the Assessing Officer. 6.3. On the basis of the aforesaid findings, the Ld. CIT(A) determined the explained cash at Rs.38,82,255/-, comprising opening cash balance of Rs.16,38,209/-, bank withdrawals of Rs.2,00,000/-, rental receipts of Rs.1,95,000/- and cash balance of M/s Silver Collections Pvt. Ltd. of Rs.18,49,046/-. After reducing household expenses of Rs.82,255/-, the Ld. CIT(A) held that cash of Rs.38,00,000/- stood explained. Consequently, against the addition of Rs.1,59,25,371/- made by the Assessing Officer, the Ld. CIT(A) sustained the addition of Rs.1,38,00,000/- and deleted the balance amount of Rs.21,25,371/-. 6.4. We find that the relief granted by the Ld. CIT(A) is based on specific factual findings recorded after examination of the material available on record. The opening cash balances were duly reflected in the respective returns of income and, in the case of the assessee, were accepted in regular assessment. The bank withdrawals of Rs.1,00,000/- each were specifically accepted by the Assessing Officer himself. The rental receipts were accepted by the Ld. CIT(A) on the basis of the material and statement recorded during the course of search. Further, the cash balance of Rs.18,49,046/- belonging to M/s Silver Collections Pvt. Ltd. had itself been accepted by the Assessing Officer.

6 ITA No. 1519 & 2697/Kol/2025 Anil Kumar Bhaiya 6.5. We further note that the Ld. CIT(A) has not allowed the entire claim of the assessee. The claim of Rs.1,38,00,000/- stated to have been received under the Will was specifically examined by the Ld. CIT(A) and rejected for want of corroborative evidence, and the said amount has been sustained as addition. Thus, the relief granted by the Ld. CIT(A) is confined only to those sources of cash which, on examination of the material on record, were found to be satisfactorily explained. 6.6. The Revenue has not brought on record any specific material or evidence to controvert the aforesaid factual findings of the Ld. CIT(A), nor has it demonstrated any infirmity in the documentary material on the basis of which the aforesaid sources were accepted as explained. In the absence of any material to dislodge the findings recorded by the Ld. CIT(A), we find no reason to interfere with the deletion of Rs.21,25,371/-. Accordingly, Ground No. 3 raised by the Revenue is dismissed. 7. Ground No. 4 raised by the Revenue is directed against the action of the Ld. CIT(A) in deleting the addition of Rs.78,39,247/- made on account of alleged unexplained gold bullion. We have heard the rival contentions and perused the material available on record. 7.1. During the course of search, gold bullion was found and inventorised. The assessee explained that 300 grams thereof represented gold received pursuant to family partition and that the remaining bullion represented purchases made by the assessee and his wife in earlier years. In support of the said explanation, the assessee furnished the relevant purchase invoices, bank statements evidencing corresponding cash withdrawals and documents relating to the family partition. The assessee also furnished confirmation from Shri Ajay Jain, proprietor of M/s Abhinandan Jewellers, and relied upon the response furnished by the vendor to the notice issued under section 133(6) of the Act.

7 ITA No. 1519 & 2697/Kol/2025 Anil Kumar Bhaiya 7.2. The Ld. CIT(A) examined the explanation and the supporting material in detail. In respect of the 300 grams of bullion claimed to have been received pursuant to family partition, the Ld. CIT(A) noted that the same had not been disputed by the Assessing Officer and accordingly granted relief in respect thereof. In respect of the remaining bullion, the Ld. CIT(A) examined the purchase-wise details, the purchase invoices and the corresponding bank statements and found that the cash purchases were supported by corresponding cash withdrawals. 7.3. The Ld. CIT(A) also considered the objections raised by the Assessing Officer regarding the differences in the invoices, including the absence of seals on certain office copies, the description as “Tax Invoice” or “Retail Invoice”, and the difference in markings on the original and office copies. The Ld. CIT(A) accepted the explanation furnished by the assessee in this regard. The Ld. CIT(A) further considered the difference between the number of bullion pieces found during search and the number of purchase bills and accepted the assessee's explanation that multiple purchases made on the same dates were subsequently represented by larger-sized bullion pieces. 7.4. The vendor, Shri Ajay Jain, proprietor of M/s Abhinandan Jewellers, had confirmed the transactions in response to notice issued under section 133(6) of the Act and had also furnished a sworn affidavit. The Ld. CIT(A) noted that no adverse material or rebuttal had been brought on record against such confirmation. The Ld. CIT(A), after considering the purchase invoices, bank statements, vendor confirmation and affidavit, as well as the explanations furnished in respect of the invoice and bullion discrepancies, held that the explanation of the assessee was supported by the material available on record and deleted the addition of Rs.78,39,247/-. 7.5. We find that the Ld. CIT(A) has examined the issue on the basis of the documentary evidence available on record and has recorded

8 ITA No. 1519 & 2697/Kol/2025 Anil Kumar Bhaiya specific findings in respect of the family-partition bullion as well as the bullion claimed to have been purchased by the assessee and his wife. The purchases were supported by invoices and corresponding cash withdrawals reflected in the bank statements, while the vendor independently confirmed the transactions in response to statutory notice under section 133(6) of the Act and also furnished an affidavit. 7.6. The Revenue has not brought before us any specific material or evidence to controvert the aforesaid factual findings recorded by the Ld. CIT(A). In the absence of any such material demonstrating any infirmity in the findings of the Ld. CIT(A), we find no reason to interfere with the order deleting the addition of Rs.78,39,247/-. Accordingly, Ground No. 4 raised by the Revenue is dismissed. 8. Ground No. 5 raised by the Revenue is general in nature and does not require any separate adjudication. 9. The appeal of the Revenue for assessment year 2023-24 in ITA No. 2697/KOL/2025 is dismissed. Assessee’s Appeal 10. We now take up the appeal of the assessee for assessment year 2023- 24 in ITA No. 1519/KOL/2025. 11. Ground Nos. 1 and 2 raised by the assessee are interconnected and are directed against the action of the Ld. CIT(A) in sustaining the addition of Rs.1,38,00,000/- out of the cash found during the course of search, despite the explanation of the assessee that the said cash belonged to his deceased mother, Smt. Tansukhi Devi Bhaiya, and was entrusted to the assessee for carrying out the wishes expressed by her in the Will. We have heard the rival contentions and perused the materials on records. 11.1. During the course of search, cash aggregating to Rs.1,76,00,000/- was found. The assessee explained that the amount of Rs.1,38,00,000/- did not belong to him but belonged to his deceased

9 ITA No. 1519 & 2697/Kol/2025 Anil Kumar Bhaiya mother, Smt. Tansukhi Devi Bhaiya. It was explained that the deceased had accumulated the amount from sale of jewellery over a period of time and had entrusted the amount to the assessee for carrying out her wishes regarding temple construction. In support of the explanation, the assessee furnished a copy of the Will dated 14.04.2022 executed by Smt. Tansukhi Devi Bhaiya. The assessee also explained that, since the deceased had resided at different places during her lifetime and had subsequently passed away, the documents relating to the historical sale of jewellery could not be traced. 11.2. The Ld. CIT(A), however, rejected the claim of the assessee primarily on the ground that no independent documentary evidence had been produced to substantiate the sale of the jewellery belonging to the deceased and the consequent generation of cash which, according to the assessee, constituted the source of the amount under consideration. The Ld. CIT(A) was of the view that, in the absence of supporting evidence regarding the sale of jewellery and the actual receipt of sale consideration, the assessee’s explanation regarding the availability of such cash could not be accepted. On this basis, the Ld. CIT(A) sustained the addition of Rs.1,38,00,000/-. At the same time, it is significant that the genuineness and validity of the Will under which the jewellery was stated to have devolved upon the assessee were never doubted by the Ld. CIT(A). The Department has also not disputed the genuineness of the Will or brought on record any material to suggest that the jewellery referred to therein did not form part of the estate of the deceased. Thus, the rejection of the assessee’s explanation was founded essentially on the absence of independent evidence to establish the subsequent sale of the jewellery and generation of cash therefrom, and not on any adverse finding regarding the genuineness of the Will itself.

10 ITA No. 1519 & 2697/Kol/2025 Anil Kumar Bhaiya 11.3. Before us, the assessee has filed an application seeking admission of additional evidence. The additional evidence comprises declarations and invoice copies along with PAN and Aadhaar particulars of (i) Om Prakash, (ii) Babu Lal Sharma, (iii) Sandeep, (iv) Ashok Kumar Upadhyay and (v) Arvind Jakmola and affidavits along with PAN and Aadhaar particulars of (i) Amit Toshniwal, (ii) Sangeeta Devi Ghorawat and (iii) Chandra Prakash Sarda. It has been submitted that the aforesaid persons had purchased gold/jewellery from Smt. Tansukhi Devi Bhaiya and that the documents now produced provide corroboration of the explanation furnished by the assessee regarding the source and ownership of the cash. We have considered the application for admission of additional evidence and the submissions of the assessee. We find that the additional evidence sought to be placed on record is directly relevant to the issue under consideration. The Ld. CIT(A) sustained the addition, inter alia, on the ground that there was no independent evidence regarding the sale of jewellery by the deceased. The additional evidence now produced consists of declarations, affidavits and invoices of persons stated to have purchased gold/jewellery from the deceased and therefore directly addresses the very factual aspect which weighed with the Ld. CIT(A) while sustaining the addition. We further note that the explanation furnished by the assessee before the lower authorities was that the cash of Rs.1,38,00,000/- belonged to his deceased mother and represented money accumulated by her from sale of jewellery. Thus, the assessee is not setting up a new explanation before us. The additional evidence is sought to be produced for the purpose of corroborating the explanation which had already been furnished before the lower authorities. The Will dated 14.04.2022 also assumes relevance in considering the additional evidence. The said Will was executed prior to the search proceedings and records the wishes of the deceased regarding the amount and its utilisation for temple construction. The Ld. CIT(A) has also recorded

11 ITA No. 1519 & 2697/Kol/2025 Anil Kumar Bhaiya the existence of the Will and its date while considering the explanation of the assessee. The Hon'ble Supreme Court in Raj Kumari & Ors. v. Surinder Pal Sharma, Civil Appeal No.9683 of 2019, decided on 17.12.2019, has reiterated the requirements relating to proof of a Will under section 63 of the Indian Succession Act and the requirement of establishing its due execution and attestation. In the present case, the Will is being relied upon along with the other material relating to the underlying transactions and the circumstances in which the cash was stated to have been accumulated and entrusted to the assessee. Section 69A of the Act applies where the assessee is found to be the owner of money, bullion, jewellery or other valuable article and such asset is not recorded in the books of account and the explanation regarding the nature and source thereof is not satisfactory. Thus, the question as to the ownership of the money found during the course of search is material for determining the applicability of the provision. In the present case, the assessee has consistently stated that the amount of Rs.1,38,00,000/- belonged to his deceased mother, Smt. Tansukhi Devi Bhaiya. The assessee had also relied upon the Will dated 14.04.2022 and has now placed on record declarations, affidavits and invoices of persons stated to have purchased gold/jewellery from the deceased. These documents are relevant to the explanation furnished by the assessee. 11.3.1. We find that the additional evidence requires examination by the Assessing Officer. The Assessing Officer shall verify the documents and the persons concerned and consider the same along with the Will dated 14.04.2022 and the other material available on record. 11.3.2. In the above circumstances, we admit the additional evidence filed by the assessee and restore the issue relating to the addition

12 ITA No. 1519 & 2697/Kol/2025 Anil Kumar Bhaiya of Rs.1,38,00,000/- to the file of the Assessing Officer for fresh consideration. 11.3.3. The Assessing Officer shall examine the additional evidence, including the declarations, affidavits and invoices furnished by the assessee, and consider the same, the Assessing Officer shall thereafter decide only this issue afresh in accordance with law, after giving reasonable opportunity of being heard to the assessee. 11.4. In view of the above discussion, Ground Nos. 1 and 2 raised by the assessee are allowed for statistical purposes. 12. In the result, the appeal of the Revenue is dismissed and the appeal of the assessee is allowed for statistical purposes. Order pronounced on 30.10.2026

Sd/- Sd/- (DUVVURU RL REDDY) (RAJESH KUMAR) (VICE PRESIDENT) (ACCOUNTANT MEMBER) Kolkata, Dated: 30.10.2026 Sudip Sarkar, Sr.PS