Kanishk Bafna vs DCIT, CC-28

PER MAHAVIR SINGH, VP:

This appeal by the assessee is emanating from the order of the Ld. Commissioner of Income Tax (Appeals-29), New Delhi dated 27.1.2026. Assessment was framed by the DCIT, CC-27, New Delhi, vide order dated 22.10.2021 u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred as “Act”) relevant to assessment year 2020-21.

The only issue in this appeal of assessee is as regards the order of the CIT(A) in confirming the action of the Assessing Officer in making addition of Rs. 69,97,492/- u/s. 69A of the Act found during the course of search.

We have heard the rival contentions and gone through the facts and circumstances of the case. We noted from the facts of the case that during the course of search u/s. 132 of the Act on the residential premises of the assessee on 4.3.2020 the following total gold, diamond and silver jewellery was found during course of search:-

The Assessing Officer accepted the jewellery except (i) jewellery supported with marriage pictures of 581.30 gms out of total jewellery of 1281.30 gms; (ii) jewellery disclosed under VDIS 899.95 gms. Therefore, the Assessing Officer treated the jewellery weighing 581.30 gms + 899.95 gms as unexplained total weighing of 1481 gms.

Firstly, the Assessing Officer dealt the issue of 1281.30 gms of jewellery that the assessee produced photo of his wife taken in their marriage wearing gold and ornaments which were found and no documentary evidences was brought on record. Therefore, the Assessing Officer allowed 700 gms as covered by the CBDT’s Instruction No. 1916 dated 11.4.1994 as explained and balance 581.30 gms was treated as unexplained. As regards the second issue of jewellery disclosed under VDIS of 899.95 gmrs. Assessing Officer stated that since there is no VDIS certificate produced by the assessee, hence, he treated the same as unexplained.

Aggrieved, assessee preferred appeal before the Ld. CIT(A), who confirmed the action of the Assessing Officer.

Before us, in regard to 899.95 gms jewellery declared under VDIS scheme 1997, assessee produced return of income filed for A.Yrs. 2001-02, 2002-03 and 2006-07 supported with balance sheets where aforesaid jewellery was disclosed under VDIS. When this argument was confronted to the Ld. CIT(DR), he could not controvert the same. These documents were also placed before the Assessing Officer as well as before the CIT(A), but no adverse comments given by either of the authorities below. It seems that assessee has already disclosed this jewellery and hence, this cannot be treated as unexplained and accordingly, we delete the addition and allow this issue of the assessee.

Coming to jewellery treated as unexplained u/s. 69 weighing 581.30 grms out of 1281.30 gms supported by photos, we noted that the Assessing Officer has already allowed rebate in terms of CBDT’s Instruction No. 1916 dated 11.4.1994 to the extent of 700 gms and there is no evidence brought on record to substantiate the source of purchase of this jewellery, hence, in our view, the Assessing Officer has rightly added the balance jewellery of 581.30 gms and accordingly, we confirm the same. Resultantly, this issue raised by the assessee is dismissed.

In the result, the appeal of the assessee is partly allowed.