INDER KUMAR VASWANI,JAIPUR vs. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-3, JAIPUR

Address of the Items found Total value Details of items seized premises (In Rs.) Annexure Items Net Net weight Total value weight(in (in grams) (in Rs.) grams) 201, SDC DAV, C- JF Gold 1623.490 48,29,590 - - 2078-208, Gautam jewellery Marg, Vaishali JF Silver 2775gm 88,800 nagar, Jaipur. Jewellery During the course of the search operation, statements of Shri Inder Kumar Vaswani were recorded. A question was put for the source of jewellery found during the search proceedings. Shri Inder Kumar Vaswani has stated that Jewellery was purchased by him during the period 1980 to 2015 when he was in foreign. The statement of Shri Inder Kumar Vaswani is recorded as mentioned in the assessment. The AO during the assessment proceedings asked the assessee to explain the source of aforesaid jewellery found in above mentioned premises and locker by issuing notice dated 06.09.2019 and it was issued to assessee. In compliance, the AR of assessee submitted his reply stating that "During the course of search total net weight of 1623.490 Gms jewellery/gold ornaments were found. It is submitted that assessee was non-resident during the long period of 1980 to 2015 and he returned back to India in the middle of year 2015. The entire jewellery found was purchased by him in the foreign country. During the course of search the assessee produced the entire purchase bills of jewellery purchased and search team also found the same as correct and as such no jewellery were seized in the course of search. For verification of submission made copies of purchases bills of jewellery purchased are enclosed herewith."

Sh. Inder Kumar Vaswani vs. DCIT The reply of assessee was carefully analyzed and not found acceptable by the AO as the assessee has furnished bill for jewellery weighing around 1300 gms valued at Rs.38,67,266/-only as against above jewellery. For remaining gold jewellery weighing 323.49 gms which valued at Rs.9,62,324/- no bills/vouchers were furnished during the assessment proceedings. The AO this noted that since, the assessee has failed to furnish evidences for remaining gold jewellery weighing 323.49 gms. which was valued at Rs.9,62,324/- after giving various opportunities by the AO and thus in absence of evidences, the source of acquisition of jewellery weighing 323.49 gms remained unexplained in the hands of the assessee as per provisions of section 69 of the Income tax Act, 1961. The provisions of this section are reproduced here under for ready reference:- "Unexplained investments 69. Where in the financial year immediately preceding the assessment year the assessee has made investments which are not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of the investment s or the explanation offered by him is not, in the opinion of the [Assessing] Officer, satisfactory, the value of the investments amy be deemed to be the inscme of the assessee of such financial year." The AO noted that had there been no search in this case, the investment made out of undisclosed income of the assessee would have remained outside the tax net. Thus according to the AO, it is clear that the aforesaid jewellery amounting to Rs.9,62,324/- stands unexplained which he has Sh. Inder Kumar Vaswani vs. DCIT added to the total income of the assessee for the year under consideration on account of unexplained investment u/s 69 of the income tax Act, 1961 and taxed 60% as per provisions of section 115BBE of the income-tax Act, 1961. 2.2. Aggrieved from the order of the AO, the assessee preferred an appeal before the ld. CIT(A) who has observed as under:-

“4.2 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessmentorder for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:- A search and seizure action u/s 132 of the I.T. Act, 1961 was carried out at the business and residential premises of Chokhi Dhani Group on 30-11-2017. The search was also conducted on the residence of appellant. During the search proceedings certain Gold jewellery and silver jewellery was found and inventorized at Annexure JF. The appellant has submitted that in course of search proceedings statement of appellant Shrilnder Kumar Vaswani was recorded u/s 132(4) of the IT Act, 1961 and a question was put up in the statement for the source of jewellery found. The appellant in his statement stated that the jewellery was purchased by him during the period 1980 to 2015 when he was a non-resident and residing in foreign. The appellant during the course of search proceedings produced the source of jewellery/documentary evidences including bills of jewellery purchased. Appellant has further submitted that the search team after considering the documentary evidences and statement of appellant found the source of Gold and Silver jewellery in order and accordingly no jewellery was seized. Ld. AO in course of assessment proceedings held that out of the total jewllery found of 1623.490 gms bills of only 1300 Gms jewellery was produced and treated the remaining jewellery of 323.49 gms valued at Rs.9.62,324/- as unexplained investment in jewellery. Thereafter, the assessment was completed under section 143(3) read with section 153B(1)(b) of the IT Act, 1961 making an addition of Rs.9.62,324/- on account of alleged unexplained investment in jewellery found during the course of search.

Sh. Inder Kumar Vaswani vs. DCIT Appellant has also submitted that it is verifiable from the statement of appellant that he was a non-resident during the long period from 1980 to 2015 and he returned bank to India in the middle of year 2015. During the course of search proceedings he produced the entire purchase bills of jewellery purchased and search team also found the same as correct and as such no jewellery was seized during the course of search. Appellant has also submitted that the appellant for a long period was NRI and belongs to reputed old business family and so enjoying high status of family in society married about 50 years back when in marriage mostly gold jewellery were given to daughters on marriage as there were no other valuable things for gifts in those days. Further appellant also received gifts on the various occasions Le. birth of child, marriage anniversary, marriage of children etc. The appellant belongs to Hindu community where there is custom and practice of the community to give large quantity of gold ornaments at the time of marriage. The appellant belongs prominent Hotelier group and, therefore also there exists circumstances to receive often gifts of gold jewellery / silver articles. The appellant has also relied upon number of judgements in the submissions. Hon'ble ITAT Jaipur in Ram Prakash Mahawar v. Deputy Commissioner of Income-tax, Central Circle Alvar (Raj) [2020] 115 taxmann.com 241 (Jaipur Trib.)/[2020] 182 ITD 55 (Jaipur Trib.) [20-02-2020] in this regard has held as under- "It is pertinent to note that CBDT Instruction No. 1916 dated 11-05-1994 has explained in case of gold jewellery found in the possession of the assessee during the course of search and seizure action and the assessee is not able to explain the same then the quantity prescribed under the said CBDT Instruction No. 1916 in respect of married female member, unmarried female member and male member of the assessee would be treated as a reasonable holding of jewellery on account of acquisition of that much jewellery on various occasions of marriages. other social & customary occasions as prevailing in the society. Therefore, a reasonable possession of the jewellery as per the customs prevailing in the society is the basis for allowing the benefit of certain quantity of jewellery explained by the CBDT Instruction No. 1916 dated 11-05-1994 which means that the assessee need not to explain the source of jewellery found in his possession to the extent of specified quantity treated as reasonable possession by family members of the assessee. The said CBDT Instruction No. 1916 allowing the specific quantity as reasonable and need not to be explained, does not include the jewellery which is otherwise explained by proof of documents of acquisition as well as declared/recorded in the books of account of the assessee. Hence, the quantity of jewellery which is otherwise explained Sh. Inder Kumar Vaswani vs. DCIT by the assessee by producing the purchase bills as well as recorded in the books of account of the assessee and the AO had not disputed the said explanation then the quantity which is explained otherwise by producing the purchase bills and books of account would not be treated as part of the quantity of reasonable possession as prescribed under the said CBDT Instruction No. 1916 dated 11-05-1994. Therefore, the benefit of CBDT Instruction No. 1916 dated 11-05-1994 will not take away the benefit of the explained jewellery acquired by the assessee. Accordingly, in the facts and circumstance of the case, the quantity of jewellery to the extent of 343.328 gms. has to be allowed separately as explained jewellery and no addition can be made to that extent." From the facts of the case, it is observed that during the search action the appellant had tried to explain the jewellery found however the entire jewellery could not be explained. During the assessment proceedings also the appellant could not explain part of the jewellery which has been added in the assessment order as the unexplained jewellery. The entire jewellery belongs to the appellant only it is not the case that some of the jewellery belongs to or was purchased by the family members as is clear from the replies of the appellant during the course of search and seizure action and also during the course of assessment proceedings and appeal proceedings. It is also not the case of the appellant that the jewellery was shown by him in the wealth tax returns before the search and seizure action took place. It is stated by the appellant that he had returned to India in the year 2015 whereas the search and seizure action took place on 30.11.2017. The appellant has claimed that the jewellery was purchased by the appellant when he was a non-resident Indian, however no material has been placed on record to substantiate this argument and this statement is self-serving statement. It is also not the case of the appellant that said jewellery was having marking of the foreign Jewellers or foreign authorities like hallmarking in India, which would have substantiated that the jewellery was purchased when the appellant was a non- resident Indian. The appellant has also not furnished documents submitted to the customs authority or the immigration authority (as applicable) which the appellant would have submitted wherein the appellant would have declared the jewellery being carried by him from outside India in the year 2015. Considering the total weight of the gold jewellery which the appellant has claimed he has carried from outside India is more than 1600 gms, the documentation would have been done at the time of appellant's immigration to India.

Sh. Inder Kumar Vaswani vs. DCIT It is the settled law that the onus to explain the source of the jewellery found during the course of search and seizure action is completely on the appellant. The basic principles of the onus are same as is provided in section 68 with respect to the unexplained credits. Where the assessee has failed to prove satisfactorily the source and nature of a credit entry in his books, and it is held that the relevant amount is the income of the assesse, it is not necessary for the department to locate its exact source (CIT v. M.Ganapathi Mudaliar [1964] 53 ITR 623 (SC)/A. Govindarajulu Mudaliar v. CIT [1958] 34 ITR 807 (SC)) In the case of Roshan Di Hatti v. Commissioner of Income-tax [1977] 107 ITR 938 (SC) (08-03-1977) it is held by the Hon'ble Supreme Court as under- Now, the law is well settled that the onus of proving the source of a sum of money found to have been received by an assessee is on him. If he disputes the liability for tax, it is for him to show either that the receipt was not income or that if it was, it was exempt from taxation under the provisions of the Act. In the absence of such proof, the revenue is entitled to treat it as taxable income. This was laid down as far back as 1958 when this court pointed out in A. Govindarajulu Mudaliar v. Commisioner of Income-tax [1958] 34 ITR 807, 810 (SC) that: "There is ample authority for the position that where an assessee fails to prove satisfactorily the source and nature of certain amount of cash received during the accounting year, the Income-tax Officer is entitled to draw the inference that the receipts are of an assessable nature." In the case of Kale Khan Mohammad Hanif v. Commissioner of Income-tax [1963] 50 ITR 1 (SC) [08-02-1963] it is held by the Hon'ble Supreme Court as under- "It seems to us that the answer to this question must be in the affirmative and that is how it was answered by the High Court. It is well established that the onus of proving the source of a sum of money found to have been received by the assessee is on him. If he disputes liability for tax, it is for him to show either that the receipt was not income or that if it was, it was exempt from taxation under the provisions of the Act. In the absence of such proof, the Income-tax Officer is entitled to treat it as taxable income. see A Govindarajulu Mudaliar v. Commissioner of Income-tax [1956] 34 ITR 807 (SC) Honourable Hon'ble ITAT Jaipur in Ram Prakash Mahawar (supra) has held that CBDT Instruction No. 1916 allowing the specific quantity as reasonable Sh. Inder Kumar Vaswani vs. DCIT and need not to be explained, does not include the jewellery which is otherwise explained by proof of documents of acquisition as well as declared/recorded in the books of account of the assessee. As per CBDT Instruction 100 gms. per male member is considered explained. This also is sufficient to cover the informal receipt of gifts if any by the appellant. The appellant has relied upon the judgements which are in the context of gold jewellery of female members. In the judgements relied upon the jewellery is not owned solely by the male member whereas in the present case the jewellery solely belongs and is solely owned by the appellant who is a male member. Thus the case of the appellant is distinguished from the judgements relied upon by the appellant. Going by the normal practices and going by the traditions, jewellery holdings and gifting are considered to be relatively much higher in hands of the female members in comparison to the male members of the same family. The CBDT Instruction also provides for 500 gms of gold jewellery in case of a married lady whereas in comparison only 100 gms has been provided for the male member of the family. However at the same time the relief is being allowed to the appellant as per the facts of the case respectfully following the ratio of judgements to the extent applicable to the case of appellant. Considering this discussion, 100 gms of the gold jewellery is additionally considered to be explained in the hands of the appellant. In the assessment order gold jeweliery weighing 323.49 gms has been found to be unexplained. Accordingly, the remaining 223.49 gms jewellery remains unexplained. Accordingly the proportionate addition with respect to unexplained 223.49 gms gold jewellery equivalent to Rs. 6,65,027 is hereby upheld. Accordingly this ground of appeal is hereby partly allowed

5. Ground of Appeal No. 2 is as under: Ground No. 2: The assessing officer is further wrong and has erred in law in holding that addition of Rs. 962324 made to the income of the appellant shall be chargeable to tax at the rate of 60 per cent under section 115BBE of the I.T. Act, 1961. 5.2 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:- In this ground of appeal the appellant has challenged the rate of tax and the challenge in this ground of appeal is consequential in nature. The appellant has also stated so in the submissions that this ground is consequential in nature. In the earlier ground of appeal relief has been allowed in part on the quantum of the addition on the issue of unexplained gold jewellery with respect to the Sh. Inder Kumar Vaswani vs. DCIT jewellery found with the appellant during the course of search and seizure action. Thereby the rate of tax applied in the assessment order at the rate of 60% as per section 115BBE is correct. The same is hereby upheld. Accordingly this ground of appeal is hereby dismissed.” 2.3 Now the assessee is in appeal before this Bench against the order of the order of the ld. CIT(A) by filing following written submission.

“The appellant is an Individual. A return of income declaring total of Rs.8.48.170/- as per provisions of section 139(1) of the I.T. Act, 1961 was filed on 25-08-2018 for the above said assessment year. The said return of income was processed under section 143(1) of the IT Act 1961 accepting the declared income. A search and seizure action u/s 132 of the I.T. Act, 1961 was carried out at the business and residential premises of Chokhi Dhani Group on 30-11-2017. The search was also conducted on the residence of assessee. During the search proceedings certain Gold jewellery and silver jewellery was found inventorized at Annexure-JF. The complete details thereof are as under:

Address of premises Item Description Qty. Found Value of Seized (in Gms) items found 201, SDC DAV, C-2078- Gold Jewellery Ann.JF 1623.490 48,29,590 Nill 208, Gautam Marg, Silver Ann.JF 2775.000 88,300 Nil Vaishali nagar, Jaipur. Jewellery In course of search proceeding, a statement u's 132(4) of the IT Act, 1961 was recorded in the said statement, a question was put to explain the source of the jewellery/gold ornaments found during the course of search. In reply to the said question, assessee explained that the jewellery has been purchased by him during the period of 1980 to 2015 and in support of his claim he produced documentary evidences including bills of the jewellery purchased before the search team. The documentary evidences furnished by the assessee were examined/verified by the search team. after being satisfied with the said evidences and guidelines issued by CBDT regarding seizer of jewellery/gold ornaments, no gold jewellery and silver jewellery was seized.

Action of Ld. AO The Ld. Assessing officer, after the search issued notice(s) under section 143(2) & 142(1) of the Act requiring certain details/information, which were duly furnished complied by assessee. The assessee in course of assessment proceedings submitted Sh. Inder Kumar Vaswani vs. DCIT that besides the jewellery purchased by him, gold jewellery and silver jewellery items were also presented to him and his wife and children at the time of marriage and thereafter, on various other festivals and auspicious occasions. For which, although, there is a no documentary evidences is available but in Hindu family, it is a known fact that at the time of marriage and thereafter, every female and male member gets gold/silver jewellery in gifts from his/her parents in-laws and close family friends, etc. However, the learned AO in the assessment order, out of the jewellery found weighing 1623.490 gms accepted, 1300 gms. jewellery as explained on the basis of bills produced by the assessee. The remaining jewellery 323.490 gms, was treated as unexplained investment and added a sum of Rs. 9.62.124 as undisclosed income of the assessee. Order of CIT (A) The assessee filed appeal before CIT(A) against said assessment order and in course of hearing filed written submissions which reproduced in appeal order of CIT(A). The Ld. CIT(A)-4, Jaipur in his order dated 30-05-2024 partially allowed the appeal by giving credit of 100 gm jewellery for appellant himself only and not allowed the credit of jewellery for his wife Smt. Amita Vaswani out of total alleged unexplained jewellery of 323.49 gms. Accordingly, remaining jewellery weighing 223.49 gms equivalent to Rs.6,65,027/- is upheld by Ld. CIT(A). The present appeal is against the said addition of Rs.6,65,027/- confirmed by Ld. CIT(A):- Ground wise submissions Ground No. (1) 1. That on the facts and in the circumstances of the case the Ld. CIT(A) is wrong, unjust and has erred in law in upholding addition to the extent of Rs. 6,65,027/- out of addition of Rs. 9.62,324/- made by the Ld. AO on account of alleged excess jewellery weighing 323.49 gms. [223,49 gms. upheld by the Ld. CIT(A)] found at the time of the search with the appellant 1.1 In course of search proceedings the assessee submitted the same explanation as above which was accepted by authorized officer of search in view of copies of purchase bills produced/ guidelines issued by CBDT relating to seizure of gold jewellery etc. which may found at the time of search and, therefore, no item of gold jewellery/silver utensils was seized in search. However ready reference and sake of convenience the relevant part of questions put up by relevant authorized officer and answer given by assessee in the statement recorded u/s 132(4) of the IT Act, 1961 are reproduced herein below:- �� 15 -कृपया बताये आप भारत म� िकतने समय व कब 2 रहे और िवदेश म� िकतने समय व कब-2 रहे, इसका पूण� िववरण देवे ?

Sh. Inder Kumar Vaswani vs. DCIT उ�र- म� भारत म� ज� से 1980 वष� तक रहा �ँ उसके बाद म� दुबई और USA म� रहा �ँ तथा सन् 2015 के म� म� वापस भारत आ गया �ँ तब से म� यही पर रह रहा �ँ। राि� िव�ाम करने हेतु बयान िदनांक 30.11.2017 को 11.30 P.M. पर बयान अ�थाई �प से �थिगत िकये । िदनांक 1.12.2017 समय 8.20 A.M. पर बयान पुनः �ारम्भ िकये गये। �� 18- िदनांक 30.11.2017 से आपके िनवास पर चल रही आयकर िवभाग की तलाशी एवं ज�ी की काय�वाही के दौरान आपके घर का भौितक स�ापन करने पर कुछ सोने व चांदी के आभूषण िमले है, िजनका मु�ांकन आयकर िवभाग के रिज��ड� valuer �ारा आपकी तथा 2 �तं� गवाहो की उप��थित म� िकया गया है िजनको Annexure J.F (पृ� 1-2) के तहत सूचीब� िकया गया है. िजसके अनुसवार सोने के आभूषणो का कुल शु� बनाज 1623.490 gm कीमत �. 48.29,500/- आंकी गई है तथा इसी �कार silver items का कुल शु� वजन 2.775 gm. कीमत �. 88,800/- आकी गई है। �ा आप उपरो� मु�ांकन से सहमत है और साथ ही इस jewellery खरीद के �ोत द�ावेज सा�ों के साथ �� कर� ? उ�र -म� उ� मु�ांकन से पूण�त सहमत है जो मेरी तथा 2 �तं� गवाहों की उप��थित म� िकया गया है। उ� jewellery के खरीद के �ोत के बारे म� �� करना चाहता �ँ िक म� वष� 1980 से ही िवदेश म� रह रहा था और वष� 2015 के म� म� भारत आया, ये jewellery उसी दौरान िवदेश म� खरीदी गई है िजसके bill voucher आपको ��ुत कर िदये है, िजनको ��ेक item से िमलान िकया जा सकता है। ��-19 -आपके घर म� िमली jewellery के स�� म� जो bill voucher ��ुत िकये है, उनका आपकी jewellery से िमलान करने पर िमलान करीब 2 हो गया है लेिकन इन िबलों को देखने से पता चलता है िक उ� jewellery �ादातर नकद म� खरीदी गई है कृपया इसका कारण �� कर� ? उ�र- उपरो� िबलो को देखने से ये �� होता है िक ये सभी िबल िवदेश म� खरीदी गई jewellery के है िजनका भुगतान मैने अपने Bank Account से Cash िनकालकर तथा कुछ item का मैने अपने credit card से भी िकया है। It is verifiable from the above statement of assessee that he was a non-resident during the long period from 1980 to 2015 and he returned bank to India in the middle of year 2015. During the course of search proceedings he produced the entire purchase bills of jewellery purchased and search team also found the same as correct and as such no jewellery was seized during the course of search. The Ld. AO only on the basis that, assessee during the course of assessment proceedings produced bills of around 1300 Gms only and accordingly treated the remaining 329 Gms as unexplained investment in jewellery. It is submitted that assessee for the long period was a NRI and does not know about the complex provisions of Income Tax Act. After the search he might not Sh. Inder Kumar Vaswani vs. DCIT kept the entire bills with him though during the course of search all the bills were produced upto the satisfaction of Authorizing officer. It is further submitted that the Board guidelines, provides that authorized officer may. having regard to the status of family and the custom and practices of the community to which family belongs and other circumstances of the case, decide to exclude a large quantity of jewellery and ornaments for seizure in course of search. The assessee for a long period was NRI and belongs to reputed old business family and so enjoying high status of family in society married about 50 years back when in marriage mostly gold jewellery were given to daughters on marriage as there were no other valuable things for gifts in those days. Further assessee also received gifts on the various occasions i.e. birth of child, marriage anniversary, marriage of children etc. The assessee belongs to Hindu community where there is custom and practice of the community to give large quantity of gold ornaments at the time of marriage. The assessee belongs prominent Hotelier group and, therefore also there exists circumstances to receive often gifts of gold jewellery/silver articles. In view of these facts the gold jewellery of remaining 329 gms found from assessee and his wife are deserves to be treated as explained. Without prejudice to the above it is submitted that during the course of search the Authorizing officer verified all the documents pertaining to jewellery and treated all the jewellery and Gold Ornaments found in order/correct and accordingly no jewellery was seized. The Ld. AO questioning/suspecting his own department's officer that is too without any basis/supporting corroborative evidences. The Ld. CIT(A) is wrong in allowing only 100 gms as explained and remaining 223.49 gms (value Rs. 6,65,027/-) as not properly explained. Thus the addition of Rs. 6,65,027/- confirmed in the hands of assessee by treating the gold jewellery as unexplained investment and subjecting the same to tax u/s 69 is wrong, unjust and bad in law. 1(a) It is submitted that the Hon'ble Rajsthan High Court in the case of Commissioner of Income-tax, Alwar vs Satya Narain Patni [2014] 46 taxmann.com 440 (Rajasthan) dated 07-04-2014 held that:- The Assessing Officer had not given any has is for restricting the claim of jewellery at 1600 gma as reasonable while the Assessing Officer has simply mentioned about there being four lodies, but ignored that in addition to four ladies, there were four male members so also three children are considered, then even factually the claim of respondent assessee appears to be reasonable in the light of the aforesaid instruction dated 11-5-1994 If the circular is strictly followed, then to the extent of 2700 gms, no jewellery could be seized [(500-4 (for ladies) 100-7)(for male children) -2700 gms.). In the aforesaid facts, this Court jail to understand the basis of 1600 gms, held reasonable by the Assessing Officer. [Para 9] The Central Board of Direct Taxes keeping in view the status of the family, customs and practice of the community, came down with the said circular and one has to go Sh. Inder Kumar Vaswani vs. DCIT with the weight and not with the value as the value may fluctuate over the years. The Tribunal has also appreciated the fact on record that the marriage of three sons were performed in the year 1996, 2000 and 2003 and all the marriages including the assessee and three sons were performed prior to 2003. It is also on record that the statement of variosa family members were recorded and none has stated that these are not personal wearing jewellery and same were received by the respective ladies/daughter-in-law on/or at the time of their marriages either from the parental side or in-laws side and even subsequently at the time of birth of their children. (Para 10] On perusal of the circular of the Board, it is clear that in the case of wealth tax assessee, whatever gold jewellery and ornaments have been found and declared in the wealth tar return, need not be seized. However, zub-clause (ii) prescribes that in case of a person not assessed to wealth tax gold jewellery and ornaments to the extent of 500 gms, per married lady, 250. gms per unmarried lady and 100 gms. per male member of the family need not be seized. Sub-clause (iii) also prescribes that the authorised officer may, having regard to the status of the family, and the custom and practices of the community to which the family belongs and other circumstances of the case, decide to exclude a larger quantity of jewellery and ornaments from seizure [Para 11] Admittedly, looking to the status of the family and the jewellery found in possession of four ladies, was held to be reasonable and therefore, the authorized officers, in the first instance, did not seize the said jewellery as the same being within the tolerable limit or the limits prescribed by the Board and, thus, subsequent addition is also not justifiable on the part of the Assessing Officer and rightly deleted by both the two appellate authorities namely Commissioner (Appeals) as well as the Tribunal. Since jewellery was found to be within tolerable limit prescribed by CBDT, no addition was justifiable (Para 13] 1(b) The Hon'ble ITAT, Jodhpur bench, Jodhpur in the case of Anoop Agarwal Vs DCIT [2024] 161 taxmann.com 151 (Jodhpur-Trib.) held that "It is noted that though the assessee out of the seizure of jewellery worth Rs. 62.67.319 seized admitted disclosure of Rs. 70 lakho in the statement recorded under section 132(4). But based on the reconciliation chart submitted by the assessee the income of Rs. 41.03 lakhs was offered for tax against the disclature of Rs. 70 lakhs in lumpsum made by the assessee. The bench noted that out of the total gold jewellery found at the time of search is 3592.896 grams and valuable of silver made 26983 grama. Is the statement recorded during the search the assessee submitted that he is not aware about the holding the gold ornaments of his mother, wife and himself, his son and his son's wife which the family has received on various family occasions. The assessee submitted that to buy the mental peace at the time of search he surrendered a sum of Rs. 70 lakhs in respect of these valuables. The bench noted working placed on record by the Sh. Inder Kumar Vaswani vs. DCIT assessee read with the CBDT guideline for not seizure of gold ment wherein it is stated that per person in a family a married women 500 gna and married woman 250 gms and male member 100 gms be considered as reasonable holding. Thus accordingly 3 married lady and two male member (300*3-100*2-1700 gram) 1700 grams holding be considered as reasonable, as against this, the assessee had claimed 1450 grams which cannot be denied to the assessee and gold ornaments declared in the HUF also claimed as deduction from the total gold ornaments/valuable found and the balance amount of Rs. 38.02 lakhs is offered for tax by the assessee and in respect of silver items/valuation the weight of the found items comes to 26,983 out of which 17,400 declared in wealth tax return and balance amount of Rs 3.01 lakhs considered as income and offered for total value of Rs. 41.003 lakhs for which there is no infirmity found in the working provided by the assessee as the value and quantity was not disputed and only the grams were disputed which are found to be in order and considering these factual aspect of the matter there is no need to sustain the addition merely on the reasons that the assessee has at the time of recording of statement under section 132(4) admitted lumpsum as unexplained investment which is not found correct and the working which is based on the evidence and guidelines of the CBDT cannot be ignored and therefore, the Assessing Officer is to be directed to delete the addition of Rs. 28.96 lakhs made in the assessment order. [Para 8] 1(c) Similarly Hon'ble Jurisdictional ITAT, Jaipur Bench, Jaipur in the case of Mohd Akhlaq Vs DCIT, CC-2, Jaipur (ITA No. 436/JP/2017) dated 24-05-2019 following the judgment of Hon'ble Rajasthan High Court in the case of Satya Narayn Patni (Supra) allowed the higher qty. of jewellery in view of CBDT's Circular and deleted the additions made by ld. AO. 1(d) It is submitted that Hon'ble ITAT, Delhi Bench, Delhi in a recent case of Shri Vibhu Aggarwal Vs DCIT, CC-6, New Delhi (ITA No. 1540/DEL/2015) dated 04- 05-2018 following the judgement of the High Court of Delhi in the case of Ashok Chadha vs. ITO (Supra) & of Sushila Devi in Writ Petition No. 7620 of 2011 dated 21.10.2016 and the ITAT Delhi decision in the case of Suneela Soni vs. DCIT passed in dated 16.3.2018 held that:- ""Para 6. We have heard both the parties and perused the records, especially the orders of the authorities below and the case laws referred by Assessee's counsel. We find that in this case a search & seizure operation under section 132 of the IT Act was conducted at the business premises of M/s Best Group and as well as in the residential premise of the Directors on 28.03.2011, in consequence to which the case of the assessee was taken up for scrutiny. The AO called for an explanation during the assessment proceedings explaining all the items of jewellery found during the course of search. In reply, the assessee explained that the jewellery belongs to the assessee's parents, their HUF, assessee's family members and his HUF Most of the jewellery items were inherited from his grandparents and received as gifts on the occasion of Sh. Inder Kumar Vaswani vs. DCIT marriage and birth of his children and also gifts were received on marriage anniversary, birthdays of children etc, and there was no occasion to file the wealth tax a 6 exceed the minimum limit prescribed under the Wealth Tax from period to period in each case, therefore neither the assessee nor his family members were assessed to wealth tax. The AO has completed the assessment by making an addition of 40.73,373 on account of unexplained investment in jewellery. The total jewellery found during the course of search was 2531.5 gms, out of which the AO has given assessee the benefit of 950 gms, as per the CBDT Instruction No. 1916 on account of wife and two children of the assessee. We further note that in appeal Ld. CIT(A) has further allowed the benefit of 600 gms. Of jewellery on account of mother and father of the assessee. holding that the same was allowable to the assessee as per the CBDT Instruction No. 1916, but however, sustained the balance addition made by the AO, vide order dated 22.12.2014, treating the balance jewellery weighting 1050 gms of gold as unexplained, without appreciating the fact that assessee belongs to a wealthy family where gifting of jewellery possessed by each of the family members, all the family members as well as the HUF were assessed to tax separately, the assessee has been married from the past 18 years, and also had two children, the jewellery was gifted/inherited to the assessee and his wife by their parents and grandparents and 7 other relatives at the time of their marriage, and also on several occasions after that, such as birth of their two children, marriage anniversaries etc. Also some of the jewellery was purchased by assesse's wife out of the cash gifts received by her from the relatives on various occasions. We also observe that that the CBDT Instruction No. 1916 dated 11.5.1994 vide para no. (ii) stipulates as under: "The authorized officer may, having regard to the status of the family, and the custom and practices of the community to which the family belongs and other circumstances of the case, decide to exclude a larger quantity of jewellery and ornaments from seizure." 6.1 In view of above instructions, the excess jewellery found in the case of assessee, his parents, his wife, their children and the HUF was very nominal, and was very much reasonable, keeping in mind the riches and high status and more customary practices. Our aforesaid view is fortified by following decisions/judgments:- i) Judgment of the Hon'ble High Court of Delhi in the case of Ashok Chadha vs. ITO reported in 14 taxmann.com 57 (Delhi.)/202 Taxmann 395 wherein the Hon'ble High Court has accepted the jewellery of 906.60 grams in the case of married lady even without documentary evidence as the denying the explanation would tantamount to overlooking the realities of life by holding as under:- "As far as addition qua jewellery is concerned, during the course of search, jewellery weighing 906.900 grams of the value amounting to Rs. 6,93.582 was found The appellant's explanation was that he was married about 25 years back and the jewellery Sh. Inder Kumar Vaswani vs. DCIT comprised "streedhan" of Smt. Jyoti Chadha, his wife and other small items jewellery subsequently purchased and accumulated over the years. However, the Assessing Officer did not accept the above explanation on the ground that documentary evidence regarding family status and their financial position was not furnished by the 9 appellant. The Assessing Officer accepted 400 grams of jewellery as explained and treated jewellery amounting to 506.900 grams as unexplained and made an ad hoc addition of Rs. 3,87,364 under section 694 of the Act working on unexplained jewellery, by applying average rate of the total jewellery found. The relevant portion of the assexxment order reads as follows "a very reasonable allowance of ownership of gold jewellery to the extent of 400 grams is considered reasonable and the balance quantity of 506 grams by applying average rate, the unexplained gold jewellery is considered at Rs. 3,87,364 (506/900 x 6,93,382) w/x 694 of the Act." The CIT (A) confirmed this addition stating that the Assessing Officer had been fair in accepting the part of jewellery as unexplained. The ITAT has also endorsed the aforesaid view Learned counsel for appellant Ms. Kapila submitted that there was no basis for the Assessing Officer to accept the ownership of the 10 gold jewellery to the extent of 400 grams only as "reasonable allowance" and treat the remaining jewellery of Rs. 506.900 as unexplained. She also submitted that another glaring fact ignored by the Assessing Officer as well as other authorities was that as the department had conducted a search of all the financial dealings which were within his knowledge and no paper or document was found to indicate that this jewellery belonged to the appellant and that it was undisclosed income of the assessment year 2006-07. In a search operation, no scope is left with the tax department to make addition on subjective guess work, conjectures and surmises. It was also argued that jewellery is "streedhan" of the assessee's wife, evidenced in the form of declaration, which was furnished by mother-in-law of the assessee stating that she had given the jewellery in question to her daughter. She argued that it is a normal custom for a woman to receive jewellery in the form of marriage and other occasions such as birth of a child. The assessee had been married more than 25-30 years and acquisition of the jewellery of 906.900 grams could not be treated as excessive.

2.4. The ld. AR of the assessee also filed a detailed paper book in support of the contentions so raised. The index of the document submitted by the ld. AR of the assessee reads as under:-

S. No. Name of cases/statement Name of Date of Page Court order No. 1. Copy of statement of Shri Inder 1-7 Kumar Vaswani dated 30.11.2017 recorded u/s 132(4) of the I.T. Act, 1961. 2. Commissioner of Income Tax, High Court 07.04.2014 8-14 Alwar vs. satya narain Patni of Rajasthan Anup Agrawal vs. Deputy ITAT, 18.03.2024 15-24 3. commissioner of Income Tax Jodhpur Bench 4. Shri Mohammed Akhaq vs. Deputy ITAT Jaipur 24.05.2019 25-43 commissioner of Income Tax Bench Central Circle-2, Jaipur.

2.5. On the other hand, ld. Sr. DR supported the order of the ld. CIT(A) and filed the detailed written submission with following prayer ‘’The Revenue position remains that the addition of Rs.6,65,027/- for unexplained jewellery as upheld by the ld. CIT(A) is justified based on the absence of supporting documentation, non-compliance with customs regulations and failure to substantiate the source of jewellery as required under the law’’ 2.6. We have heard both the parties, perused materials available on record. The Bench has taken into consideration the detailed written Sh. Inder Kumar Vaswani vs. DCIT submission of the assessee and the orders of the lower authorities wherein the main grievance of the assessee is that the ld. CIT(A) has erred in law in upholding the addition to the extent of Rs.6,65,027/- out of addition of Rs.9,62,324/- made by the AO on account of alleged excess jewellery weighing 323.49 gms [223.49 gms jewellery was upheld by the ld. CIT(A)] found at the time of search with the assessee. The Bench observes that there is dispute of 223.49 gms jewllery on which addition of Rs.6,65,027/- is confirmed by the ld. CIT(A). From the entire facts and circumstances of the case, it will be in the interest of equity and justice to restore the issue to the file of the ld.CIT(A) to decide it afresh by providing one more opportunity to the assessee as according to the Department there was failure on the part of the assessee to substantiate the source of jewellery as well as supporting documents to settle the dispute. Hence, in this view of the matter, we direct the assessee to put forth his defence before the ld. CIT(A) as to the addition of Rs.6,65,027/- upheld by him. Hence, the matter is restored to the file of the ld. CIT(A) to decide the issue as to the addition of Rs.6,65,027/- upheld by him afresh by providing one more opportunity of hearing, however, the assessee will not seek any adjournment on frivolous ground 2.7 Before parting, we may make it clear that our decision to restore the matter back to the file of the ld. CIT(A) shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by ld. CIT(A) independently in accordance with law.

3.0 In the result, the appeal of the assessee is allowed for statistical purposes

Order pronounced in the open Court on 01 /01/2025.