NITIN PASSI,NEW DELHI V. ACIT, CENTRAL CIRCLE-20, NEW DELHI

ITA 2795/DEL/2022

AI Insights

The case involves multiple appeals by the Passi family members and the Revenue against the orders of the Commissioner of Income Tax (Appeals) concerning additions made for unexplained jewellery and cash following a search operation under section 132 of the Income Tax Act, 1961. The search, conducted on the premises of the Passi family, led to the discovery of substantial jewellery and cash, which the Assessing Officer (AO) deemed unexplained. The CIT(A) reduced some of these additions, which both the assessee and the Revenue contested in their respective appeals. The Tribunal's decision emphasized the collective ownership of jewellery by the family and the adequacy of cash records, leading to a favorable outcome for the assessee.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 848301 (ITAT-NEW DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2026
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Delhi
• Assessment Year: 2019-2020
• Appeal Filed On: 28-11-2022
• Other Referred Cases: PCIT vs Krishan Kumar Modi, Bawniet Kaur Punihani vs DCIT, GC Bafna Vs. DCIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: POOJA SWAROOP
• Assessee Lawyers: ROHIT JAIN
• Keywords: Opportunity of being heard; Question of law; Corroborative evidences; Unexplained expenditure; Search and seizure; Valuation report; Loose papers
• Section: 143(3); 132; 153A; 69C; 234B

Judgement Text

"THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘B’: NEW DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.2795/Del/2022 (ASSESSMENT YEAR 2019-20) Nitin Passi, A-18, Ansal Villas, Satbari Farm House, Chattarpur, Delhi-110 074. PAN-AIRPP7743G Vs. DCIT, Central Circle-20, New Delhi. (Appellant) (Respondent) ITA No.2806/Del/2022 (ASSESSMENT YEAR 2019-20) DCIT, Central Circle-20, New Delhi. Vs. Nitin Passi, A-18, Ansal Villas, Satbari Farm House, Chattarpur, Delhi-110 074. PAN-AIRPP7743G (Appellant) (Respondent) ITA No.2796/Del/2022 (ASSESSMENT YEAR 2019-20) Roshni Passi, A-18, Ansal Villas, Satbari Farm House, Chattarpur, Delhi-110 074. PAN-ACGPM7509J Vs. DCIT, Central Circle-20, New Delhi. (Appellant) (Respondent) Printed from counselvise.com 2 ITA Nos.2795/Del/2022 & Ors. ITA No.2807/Del/2022 (ASSESSMENT YEAR 2019-20) DCIT, Central Circle-20, New Delhi. Vs. Roshni Passi, A-18, Ansal Villas, Satbari Farm House, Chattarpur, Delhi-110 074. PAN-AIRPP7743G (Appellant) (Respondent) ITA No.2808/Del/2022 (ASSESSMENT YEAR 2019-20) DCIT, Central Circle-20, New Delhi. Vs. Swarn Lata Passi A-18, Ansal Villas, Satbari Farm House, Chattarpur, Delhi-110 074. PAN-AAHPP1972H (Appellant) (Respondent) Assessee by Shri Rohit Jain, Adv., Ms. Deepashree Rao, Adv. and Shri Shivam Gupta, CA Department by Ms. Pooja Swaroop, CIT- DR Date of Hearing 15/01/2026 Date of Pronouncement 25/03/2026 O R D E R PER MANISH AGARWAL, AM: The captioned appeals filed by the above-mentioned different Assessees and the Revenue arising out of the respective orders of the Commissioner of Income Tax (Appeals)-27, New Delhi [“Ld. CIT(A)”] passed under s. 250 of the Income Tax Act, 1961 [the Act] emanating from respective assessment orders passed by the Assessing Officer [“AO”] tabulated hereunder: Printed from counselvise.com 3 ITA Nos.2795/Del/2022 & Ors. Sr. No. Appeal Nos. Asst. Years CIT(A)’s Order dated Assessment order dated Assessment Order under section 1 2795/Del/2022 2019-20 26.09.2022 30.09.2021 143(3) of the Act 2. 2806/Del/2022 2019-20 26.09.2022 -Do- -do- 3. 2796/Del/2022 2019-20 26.09.2022 28.09.2021 -do- 4. 2807/Del/2022 2019-20 26.09.2022 -Do- -do- 5. 2808/Del/2022 2019-20 26.09.2022 30.09.2021 -do- 2. Since all the appeals filed by the assessee and the Revenue are with respect to one single family having common issue of additions made on account of jewellery found during the course of search treated as unexplained. Part of which were deleted by Ld. CIT(A) against which the Revenue is in appeal and on the additions sustained by Ld. CIT(A), the respective assessee is in appeal before us. Therefore, all these appeals having single and common issue arising from the common search therefore, all the appeals are decided by a common order. 3. First we take appeal in ITA Nos. 2795/Del/2022 and ITA No.2806/Del/2022 [Assessment Year 2019-20] in the case of Nitin Passi where the assessee has challenged the addition on account of unexplained jewellery and unexplained cash sustained by ld. CIT(A) whereas Revenue has challenged the deletion of addition made on account of jewellery and unexplained expenditure on foreign currency. ITA Nos. 2795/Del/2022 and ITA No.2806/Del/2022 [Assessment Year 2019-20] 4. Ground of appeal No.1 raised by the assessee is general in nature hence, dismissed. Printed from counselvise.com 4 ITA Nos.2795/Del/2022 & Ors. 5. Ground of appeal Nos.2 to 2.3 raised by the assessee and Ground of appeal Nos. 1 to 7 raised by the Revenue are with respect to the addition made on account of jewellery found during the course of search as unexplained. 6. Brief facts of the case are that a search and seizure action u/s 132 of the Act was carried out on 31.10.2018 on Lotus Group promoted by Passi family. Residential premises of the assessee situated at A-18, Ansal Villas, Satbari Farm House, Chhattarpur, New Delhi-110074 was also covered under search therefore, the proceedings u/s 153A were initiated for various Assessment Years. The return of income was filed on 11.12.2019, declaring total income of INR 1,97,93,930/-. The year under appeal being the year of search, thus the proceedings u/s 143(3) were initiated by issue of notice u/s 143(2) on 23.09.2020. The AO observed that during the course of search, total jewellery found from the residence of the assessee as well as bank lockers owned the assessee alongwith his wife, Smt. Roshani Passi, which was valued at INR 15,20,76,861/- by the approved valuer out of which jewellery worth INR 5,05,58,482/- was seized during the course of search. The assessee claimed that as per the copies of the bills and vouchers and the jewellery declared in the wealth tax return, total jewellery found during the course of search was explained however, the AO has matched each individual item found at various places independently and observed that there were difference in the gross weight and net weight and also weight of the precious and semi-precious stones Printed from counselvise.com 5 ITA Nos.2795/Del/2022 & Ors. embedded with the jewellery physically found and as declared by the assessee. Therefore, claim of the assessee was not accepted and out of total jewellery found, the jewellery worth of INR 3,31,16,088/- was treated as undisclosed jewellery belonging to the assessee and his wife Smt. Roshni Passi and made the addition of INR 1,65,58,044/- in the hands of the assessee being 50% of the said jewellery. Besides this, out of the total cash found at the residence of the assessee [INR 70,80,400/- seized INR 65,00,000/-], the AO allowed the credit of the cash as per books of accounts of the assessee of INR 13,41,401/- and remaining cash of INR 57,38,999/- was treated as unexplained and made the addition in the hands of the assessee. Further, during the course of search, certain WhatsApp Chat and loose papers were found according to which assessee had purchased foreign currency on various occasions, the source of which remained unexplained. Therefore, an addition of INR 4,67,400/- was made u/s 69C of the Act. An addition of INR 6,77,528/- was made u/s 69A for the foreign currency in US $ 5100 and Euros-3600 found from the possession of the assessee and his family members. Accordingly, the total income of the assessee was assessed at INR 4,32,35,901/-. 7. Against the said order, assessee filed appeal before Ld. CIT(A) who partly allowed the appeal of the assessee and addition made on account of jewellery was reduced to INR 56,89,895/- and the additions on account of unexplained cash is sustained. The Printed from counselvise.com 6 ITA Nos.2795/Del/2022 & Ors. remaining additions on account of purchase of foreign currency were deleted by Ld. CIT(A). 8. Aggrieved by the order of Ld. CIT(A), both Revenue and the assessee are in appeal before the Tribunal by taking following Grounds of appeal:- ITA No.2806/Del/2022 [AY 2019-20] [Nitin Passi] Revenue’s Appeal 1. “The Ld. CIT (A) has erred on facts and in law by allowing the appeal of the assessee while restricting the addition of Rs. 1,65,58,044/- to Rs. 56,89,985, made on account of unexplained jewellery found on the premises of the assessee. 2. The Ld. CIT (A) has erred on facts and in law, by not appreciating the fact that the jewellery declared by the assessee in VDIS scheme was not only materially different in appearance and form, but also in caratage and weight to the ones seized during the search operation. 3. The Ld. CIT(A) has erred on facts and in law by not appreciating the fact that the jewellery shown in the invoices submitted by the assessee is substantially different to the ones which has been added as his unexplained jewellery u/s 69A of the Income Tax Act, 1961. 4. The Ld. CIT(A) has erred on facts and in law in allowing the appeal of the assessee by ignoring the fact that the assessee failed to provide any proof of remodeling or alteration of the jewellery in question during the assessment proceedings despite being accorded multiple opportunities. 5. The Ld. CIT(A) has erred on facts and in law in allowing the appeal of the assessee by considering the value of jewelry items encrusted with diamonds based on gross gram weightage of Gold only, ignoring the fact that the value of diamonds predominantly depends on the caratage, color, cut and clarity and valuation of it cannot be equated with the valuation of Gold items. 6. The Ld. CIT(A) has erred on facts and in law in allowing the appeal of the assessee by ignoring the fact that a composite valuation of the jewelry item with diamond encrusted on it based on gross weightage will not yield the actual value of such jewelry items, since it does not cover the value of diamond encrusted on such jewelry items. Printed from counselvise.com 7 ITA Nos.2795/Del/2022 & Ors. 7. The Ld. CIT(A) has erred on facts and in law in allowing the appeal of the assessee by ignoring the fact that in the valuation report of jewelry items prepared at the time of search, value of diamonds encrusted on the Gold Jewellery items were separately mentioned in the valuation report by the Valuer. 8. The Ld. CIT(A) has erred on facts and in law in allowing the appeal of the assessee by deleting the addition of Rs. 4,67,000/- made u/s 69C of the Income Tax act, 1961 on account of forex bought from unexplained cash. 9. The Ld. CIT(A) has erred on facts and in law in allowing the appeal of the assessee by accepting the contention of the assessee that cash used to make forex purchase was withdrawn from saving accounts, when the assessee himself failed to produce any supporting documents to substantiate his contention. 10. The Ld. CIT(A) has erred on facts and in law in allowing the appeal of the assessee by ignoring the fact that there was major time lag between cash withdrawals and the purchase of foreign currency. 11. (a) The order of the Ld. Commissioner of Income Tax (Appeals) is erroneous and not tenable in law and on facts. (b) The appellant craves to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal.” ITA No.2775/Del/2022 [AY 2019-20] [Nitin Passi] Assessee’s appeal 1. “That on the fact and circumstances of the case and in law, the assessment order dated 30.09.2021 passed under section 143(3) of the Income Tax Act, 1961 (\"the Act\") is without jurisdiction, illegal, bad in law and is liable to be quashed. 2. Without prejudice, that the Commissioner of Income Tax (Appeals) erred on facts and in law in confirming addition to the extent of Rs.56,89,895 made under section 69A of the Act on account of alleged unexplained jewellery found during the course of search. 2.1. That the Commissioner of Income Tax (Appeals) erred on facts and in law in not appreciating that gross weight of jewellery declared by the appellant and his family members exceeded the gross weight of jewellery found during the course of search and thus, no addition on this account was called for. 2.2. That the Commissioner of Income Tax (Appeals) erred on facts and in law in not considering the reconciliation provided by the appellant Printed from counselvise.com 8 ITA Nos.2795/Del/2022 & Ors. during the course of assessment proceedings, which was duly supported by documentary evidences. 2.3. Without prejudice, that the Commissioner of Income Tax (Appeals) erred in adopting incorrect value of diamond jewellery for the purpose of valuation/ addition. 3. That the Commissioner of Income Tax (Appeals) erred on facts and in law in upholding the addition of Rs.57,38,999 on account of unexplained money found during the course of search under section 69A of the Act. 3.1. That the Commissioner of Income Tax (Appeals) erred in disregarding the reconciliation of cash found provided during the course of assessment and not appreciating that the alleged cash found during the course of search belonged to other members of the family and business entities. 4. That the Commissioner of Income Tax (Appeals) erred in upholding levy of higher rate of tax under section 115BBE on additions confirmed under section 69A of the Act. 5. That the Commissioner of Income Tax (Appeals) erred in not directing deletion of interest charged under sections 234B and 234C of the Act. The appellant craves leave to add, alter, amend or vary from the aforesaid grounds of appeal at or before the time of hearing.” 9. Ground of appeal Nos. 1 to 2.3 of the assessee and Ground of appeal Nos. 1 to 7 raised by the Revenue are with respect to the addition of INR 1,65,58,044/- made towards jewellery found during the course of search held as unexplained u/s 69A r.w.s. 115BBE of the Act, out of which Ld. CIT(A) has confirmed the addition of INR 56,89,895/- and balance was deleted. Since all these Grounds of appeal pertained to single issue therefore, all these Grounds of appeal of both the parties are taken together. 10. Brief facts leading to this issue are that during the course of search, total jewellery having gross weight of 11860.740 Grams and Printed from counselvise.com 9 ITA Nos.2795/Del/2022 & Ors. 9377.130 net weight was found from the possession of the assessee and his wife Smt. Roshani Passi at his residences and in three bank lockers which was valued at INR 15,20,76,861/- by the approved valuer. The jewellery so found was studded with diamonds, precious and semi-precious stones of 1376.010 Carats. During the course of assessment proceedings, assessee was asked to explain the source of the same for which it was stated by the assessee that assessee alongwith his family members has declared jewellery in their respective Wealth Tax Returns filed upto AY 2015-16. Besides this they have purchased jewellery thereafter out of the disclosed sources and therefore, the entire jewellery was explained. However, the AO by alleging that there are certain items which are not matching with the description as given in the declarations made by the assessee therefore, the AO treated the jewellery worth of INR 3,31,16,088/- as unexplained and assessee’s share being 50% made the addition of INR 1,65,58,044/- u/s 69A r.w.s. 115BBE of the Act. 11. In first appeal, Ld. CIT(A) partly accepted the claim of the assessee and allowed deduction on account of jewellery in terms of the CBDT Instructions and confirmed the addition of INR 56,89,895/-. Against the said confirmation, the assessee is in appeal and against the deletion, Revenue is in appeal before us. 12. Before us, Ld.AR for the assessee submits that the total jewellery found at the residential premises of the assessee and in the lockers of various family members was owned by him alongwith his Printed from counselvise.com 10 ITA Nos.2795/Del/2022 & Ors. wife. Besides this, assessee claimed that the jewellery found from the possession of his mother Smt. Swarn Lata Passi, should also be considered for working out the unexplained jewellery. Ld.AR submits that the lower authorities have not allowed to consider the jewellery of the entire family as a whole and treated the jewellery found from the possession of the assessee alongwith his wife at the residence and in the lockers jointly owned with his wife separately with the jewellery found from the possession and lockers owned by his mother, Smt. Swarn Lata Passi. Ld.AR submits that since beginning of the search proceedings, in the statements recorded u/s 132(4) during the course of search at the residence as well as at the time of operation of bank lockers, all the family members including assessee himself have stated that the total jewellery found available with them may have included the jewellery related to other family members also. However, the lower authorities has not appreciated this fact and further not considered the entire jewellery as owned by the whole family to work out the unexplained jewellery and rejected the claim. Ld.AR further submits that if the jewellery declared by the assessee, his wife and his mother are taken together, the gross and net weight of the jewellery and also the weight of precious and semi- precious stones embedded therein is much higher and therefore, no addition is required to be made on this account. For this, reliance is placed on the judgement of Hon’ble Jurisdictional High Court in the case of PCIT vs Krishan Kumar Modi in ITA No.48-54 of 2021 order dated 20.02.2021. Ld.AR further submits that AO has ignored the fact that precious and semi-precious stones embedded Printed from counselvise.com 11 ITA Nos.2795/Del/2022 & Ors. in the jewellery were approximately weighted by the approved valuer since the same cannot be quantified and weighed separately. Therefore, the difference as pointed out by the AO in various items is nothing but due to such estimation of debate. Ld.AR also filed a detailed written submission which is reproduced as under:- Printed from counselvise.com 12 ITA Nos.2795/Del/2022 & Ors. Printed from counselvise.com 13 ITA Nos.2795/Del/2022 & Ors. Printed from counselvise.com 14 ITA Nos.2795/Del/2022 & Ors. Printed from counselvise.com 15 ITA Nos.2795/Del/2022 & Ors. Printed from counselvise.com 16 ITA Nos.2795/Del/2022 & Ors. Printed from counselvise.com 17 ITA Nos.2795/Del/2022 & Ors. Printed from counselvise.com 18 ITA Nos.2795/Del/2022 & Ors. 13. In view of above submission, ld. AR requested for the deletion of the addition made and uphold by ld. CIT(A). 14. On the other hand, Ld. CIT DR vehemently supported the order of the AO and submits that during the course of search, person-wise, locker-wise, jewellery was found and inventoried by the search team which was valued in the presence of the family members of the assessee. The assessee never doubted the valuation done by the approved valuer at the time of search. Ld. CIT DR further submits that claim of the assessee of re-making of jewellery was without any supporting evidence, nor any material was found during the course of search in this regard. Ld. CIT DR placed reliance on the order of the AO in this respect and submits that all the family members of the assessee separately disclosed the jewellery owned by them in their wealth tax returns and thus the jewellery found from their possession are rightly treated as belong to them by the AO. It is further submitted that since some items are not matching with the jewellery declared in the wealth tax return, the AO has rightly made the addition which deserves to be confirmed. Regarding deletion made by Ld. CIT(A) by allowing credit as per CBDT Instruction No.1916 dated 11.05.1994, ld. CIT DR submits that the said instruction only speaks about the jewellery which should not be seized during the course of search, however, it never provides that jewellery to such extent be treated as explained. It is thus requested by Ld. CIT DR that Ld. CIT(A) has wrongly deleted the additions which deserves to be restored. She prayed accordingly. Printed from counselvise.com 19 ITA Nos.2795/Del/2022 & Ors. 15. In the re-joinder, Ld. AR submits that in majority of items, the description given in wealth tax return/ purchases invoices are matching and only in few items it was alleged as not matched which is mainly due to the fact that either the said item was re-make or due to the fact the weight of precious or semi-precious stones and the metal are taken on approximate basis by the approved valuer. Ld. AR further submits that in case of the jewellery only gross weight of total jewellery found vis-a-vis jewellery declared in wealth tax return/ purchased thereafter is to be considered and not the item- wise matching should be done as it is a normal practice that during the course of search, all the jewellery items found at various places were pooled together and then valued by the approved valuer thus, there is every possibility that one complete set got mixed with the other items and their description declared in the bill as well as in the wealth tax return be differ from the description given by the approved valuer. He thus, prayed that the addition so confirmed be deleted. 16. Heard the contentions of both the parties and perused the material available on record. In the instant case, the issue of dispute in these grounds of appeal between the parties is wither the jewellery owned by the entire family should be taken together for working of the unexplained jewellery, if any, or it should be considered person-wise separately in terms of the separate Panchama prepared for various places where the jewellery was found and possession of the respective family members vis-a-vis the declaration made by Printed from counselvise.com 20 ITA Nos.2795/Del/2022 & Ors. them in the wealth tax return and the subsequent purchases. During the course of hearing, Ld.AR was asked to file the copies of the statements relevant to the issue in hand i.e. the questions put by the search period regarding the ownership of jewellery which was submitted in the shape of the Paper Book by Ld.AR alongwith chart containing the respective question and answer thereof. The said table of the questions and respective answers given by various family members of the assessee including the assessee during the course of search and at the time of operation of the bank lockers as tabulated by Ld.AR is reproduced as under:- Printed from counselvise.com 21 ITA Nos.2795/Del/2022 & Ors. Printed from counselvise.com 22 ITA Nos.2795/Del/2022 & Ors. Printed from counselvise.com 23 ITA Nos.2795/Del/2022 & Ors. Printed from counselvise.com 24 ITA Nos.2795/Del/2022 & Ors. Printed from counselvise.com 25 ITA Nos.2795/Del/2022 & Ors. 17. From the perusal of the answer to each question as reproduced herein above, it is observed that in reply to the specific question whether jewellery found also belong to any other person, every family member has replied that since we are in joint family and therefore, cannot ruled out the possibility of jewellery related to other Passi family members kept with them or in the bank lockers. This reply was given by all the family members during the course of search operations at their residence as well as at the locker owned by them. Printed from counselvise.com 26 ITA Nos.2795/Del/2022 & Ors. This clearly shows that there was clear cut admission that jewellery related to the other family members might be available with them and therefore, the approach of the AO in considering the jewellery found in the hands of each individual separately to work out the unexplained jewellery, if any. In such circumstances, claim of the assessee to consider the total jewellery owned by the whole family should be accepted as against comparison of the jewellery found from the possession of each individual members with the jewellery declared by that members in its wealth tax returns and subsequent purchases. 18. In this respect, Ld.AR vide para 12 of his submission, has given a chart which is reproduced herein above according to which the total jewellery found from the possession all the family members and the bank lockers owned by them is having gross weight of 20217.130 Grams and net weight of 16579.140 Grams and diamonds/stones of 2282.682 Carats as against which the gross jewellery declared by the assessee, his wife Smt. Roshni Passi and his mother Smt. Swarn Lata Passi in their wealth tax return and subsequently purchased by them/offered for tax in the return as undisclosed return comes to 22,445.890 Grams gross weight, 18220.286 net weight and diamond/stones at 2999.870 Carats. From the above, it is clear that the gross weight of jewellery found from the possession of entire family, if taken together, is much higher than the jewellery physically found during the search and therefore, no addition could be made on account of unexplained jewellery. The Hon’ble Jurisdictional High Printed from counselvise.com 27 ITA Nos.2795/Del/2022 & Ors. Court in the case of PCIT vs Krishan Kumar Modi in ITA No.53/2021 vide para 9-10 confirming the order of ITAT, has made following observations:- 9. “Further, in ITA 53/2021, pertaining to AY 2012-13, there were certain additional facts regarding the discovery of undisclosed jewellery which were dealt with by the learned ITAT in detail. Before moving to the observations of the learned ITAT in this regard, it is necessary to highlight the additional question proposed to be framed by the Appellant-Revenue. The same reads as under: “a. Whether ITAT has not erred in deleting the addition of Rs. 1,12,89,616/- on account of alleged unexplained jewellery found during the course of search, which has been confirmed n appeal by CIT(A) without appreciating that assessee was unable to provide an item wise reconciliation of jewellery to the extent of 6,716.700 grams (valued at Rs. 1,12,89,616) by the departmental valuer applying the rates prevailing on the date of search? The issue being canvassed in the aforementioned question has been dealt with by the learned ITAT and the relevant portion of the impugned order reads as under- “8.11 We have carefully considered the rival submissions and the relevant material and ratio of the orders and judgment relied by both the parties, at the very outset we note that undisputedly the quantum of jewellery declared in the wealth tax returns of the assessee and his family members was much higher, than the jewellery found during the course of search. CBDT Instruction dated 11- 5-1994 provides that no seizure should be made in the search for the jewellery held by the ladies at 500 gms, girls at 250 gms and males at 100 gms each. Though the Instruction speaks of not seizing the same, the extended meaning of the same shows the intention that the jewellery is to be treated as explained one and is not to be treated as unexplained for the purpose of Income-tax Act. This instruction came to be considered by several Benches all over India in which it has been held that it would be relevant for the purposes of making addition as well. The Hon'ble Rajasthan High Court in the case CIT v. Kailash Chand Sharma 147 Taxman 376 has upheld this view. When this instruction is applied to the facts of Printed from counselvise.com 28 ITA Nos.2795/Del/2022 & Ors. the case, we observe that the possession of gold jewellery of 38,748.28gms, which is far less than declared jewellery of 46,634.842 gms it cannot be held to be unexplained.” 10. In our view of the finding of fact noted above, the conclusion arrived at by the learned ITAT does not warrant any interference. No question of law, much less a substantial question of law, has arisen for our consideration in the present appeals. Accordingly, the present appeals are dismissed along with the pending applications.” 19. The Hon’ble High Court has held that when the quantum of jewellery declared in the wealth tax return by all the family members was much higher than the jewellery found during the course of search, no addition is required to be made. Similarly, Co-ordinate Bench of Delhi Tribunal in the case of Bawniet Kaur Punihani vs DCIT in ITA No.1925/Del/2022 vide order dated 14.02.2024 in para 15 has made the following observations:- 15. “The main plank of arguments of the Ld. Counsel is that all the family members of the Punihani are joint family members and, therefore, should be considered as one single unit. On perusal of the statements recorded from the family members of the assessees during search the family members have deposed that the jewellery found were either belonging to them or to their family members/relatives. This shows that all the family members comprising of 14 persons are from joint family staying together. We further observed that sister-in-law of Smt. Gurpreet Kaur who is an NRI occasionally coming to India also stays with them and her jewellery was also found in the lockers of the family members of the assessees. In the circumstances, the contentions of the assessee that the entire family of 14 persons should be considered as one single unit has got lot of force and deserves to be accepted. This view of ours is further fortified by the Third Member decision of the Pune Bench in the case of GC Bafna Vs. DCIT (19 ITD 115), wherein it has been held as under: \"32. We have considered the rival submissions and perused the facts on record. We find that vide letter dated 26th September, 1997, the assessee had brought to the notice of the Ld. CIT that the lady members of Bafna Printed from counselvise.com 29 ITA Nos.2795/Del/2022 & Ors. family had declared jewellery in their Wealth-tax returns filed for the AY 1982-83. This fact was not before the Assessing Officer. It was also pointed out that jewellery was purchased in subsequent period from disclosed sources of funds. There was an addition of jewellery also on account of lady members when they got married in the family. The submissions made before us now by the Ld. Counsel with facts and figures were not before the Assessing Officer and accordingly, we restore this issue to the file of the Assessing Officer to re-adjudicate upon the same after giving an opportunity of being heard to the assessee. Same is the position with silver. The issue of gold jewellery and silver has to be considered in the context of different members of the family as a whole and accordingly we restore both the issues to the file of the Assessing Officer with direction that he should go through the details furnished before us in the paper book and referred to supra and re-adjudicate upon the issue after giving an opportunity of being heard to the assessee.\" 20. It is further observed that the AO has doubted some of the items as not matching. It is a matter of common knowledge that during the course of search, jewellery found at various places have been pooled together at one place and thereafter their descriptions were noted and valued by the approved valuer. In this process, many times, the jewellery items of one particular set got mixed up with the other items of jewellery and therefore, without physical comparison, it is impossible to match them with their description as the bill or as declared in the wealth tax returns. Under these circumstances, best method to compute the undisclosed investment in jewellery is to consider the entire family as one unit and gross weight of the jewellery of entire family should be compared with the gross weight of total jewellery found during the course of search from various places belonging to various family members more particularly in Printed from counselvise.com 30 ITA Nos.2795/Del/2022 & Ors. case where they have categorically stated that the jewellery owned by other family member might have been available with them. 21. As observed above, if the gross jewellery declared by the entire family members is taken together and compared with the jewellery found during the search, there was no deficiency either in the gross weight nor in the weight of precious and semi-precious stones embedded therein. Under these circumstances, by respectfully, following the judgement of Hon’ble Jurisdictional High Court in the case of Krishna Kumar Modi (supra) and of the coordinate bench of ITAT Delhi, we hold that jewellery of the entire family should be compared with the total jewellery found and as observed above, in such case there was no excess jewellery was found as a result of search and therefore, the addition made towards unexplained jewellery in the hands of assessee is hereby, deleted. Accordingly, Grounds of appeal Nos. 1 to 2.3 of the assessee are allowed and Grounds of appeal Nos. 1 to 7 of the Revenue are dismissed. 22. Grounds of appeal Nos. 3 to 3.1 raised by the assessee are with respect to the confirmation of addition of INR 57,38,999/- towards cash found during the course of search treated as unexplained. 23. Before us, Ld.AR for the assessee made a detailed written submissions in this respect which reads as under:- Printed from counselvise.com 31 ITA Nos.2795/Del/2022 & Ors. Printed from counselvise.com 32 ITA Nos.2795/Del/2022 & Ors. Printed from counselvise.com 33 ITA Nos.2795/Del/2022 & Ors. Printed from counselvise.com 34 ITA Nos.2795/Del/2022 & Ors. Printed from counselvise.com 35 ITA Nos.2795/Del/2022 & Ors. Ld. AR thus, requested to delete the addition made. Printed from counselvise.com 36 ITA Nos.2795/Del/2022 & Ors. 24. On the other hand, Ld. CIT DR for the Revenue submits that during the course of search in the statements recorded u/s 132(4), assessee has never stated that the cash found from his possession also relates to other family/group companies. For this, Ld. CIT DR drew our attention to page 26 of the assessment order wherein reply of the assessee is reproduced and submits that AO has duly considered the submissions and thereafter, made the addition. Accordingly, she prayed for the confirmation of the same. 25. Heard the contentions of both the parties and perused the material available on record. The claim of the assessee is that the cash found from possession also included the cash belonged to various family members and group companies which was kept with the assessee for safety purposes. The immediate source of the same was explained as recorded in the books of account of all the respective entities as on the date of search and in support the necessary copies of the cash book were also filed which are duly supported by the bank withdrawals etc. The relevant copies of the documents are placed at page 243 onwards of the Paper Book filed before us. 26. After considering the overall facts and the circumstances of the case, we find that the AO by observing that assessee has not made this claim during the course of search, had denied the same without pointing out any defects in the details so filed. It is also a matter of fact that AO has not alleged that the cash of the equivalent amount Printed from counselvise.com 37 ITA Nos.2795/Del/2022 & Ors. as claimed by the assessee belonging to other family members, were found from their possessions. Looking to the entirety of the facts and circumstances of the case, we are of the considered view that the cash found at INR 70,80,400/- is matching with the total cash available as on date of search in the hands of the various entities as tabulated herein below:- 27. Since there was no deficit in cash as per the cash books of the various entities with the cash found from the possession of the assessee therefore, no addition is required to be made when such cash books have not been doubted by the AO. Accordingly, addition of INR 57,38,999/- as confirmed by Ld. CIT(A) after allowing the credit of cash as per cash book of the assessee is hereby, deleted. Grounds of appeal Nos. 3 to 3.1 of the assessee are thus, allowed. Printed from counselvise.com 38 ITA Nos.2795/Del/2022 & Ors. 28. Ground of appeal No.4 raised by the assessee is with respect of application of section 115BBE of the Act confirmed u/s 69A of the Act. 29. Since we have already deleted the additions made u/s 69A of the Act therefore, Ground of appeal No.4 raised by the assessee became infructuous thus, dismissed. 30. Ground of appeal No.5 raised by the assessee is with respect to levy of interest u/s 234B & 234C which are consequential in nature, we order accordingly. 31. The remaining Grounds of appeal Nos. 8 & 10 raised by the revenue are with respect to the deletion of addition of INR 4,67,000/- made towards the foreign exchange purchases by the assessee held as out of undisclosed sources. 32. Heard the contentions of both the parties and perused the material available on record. It is observed that Ld. CIT(A) has deleted the addition after verifying the evidences with respect to the purchases of foreign currency of INR 4,67,400/- of 5000 Pounds of Great Britain for which the assessee has filed the copy of bills and the copy of bank statements explaining the immediate source as out of cash withdrawal from the bank accounts. Printed from counselvise.com 39 ITA Nos.2795/Del/2022 & Ors. 33. Under these circumstances, we find no error in the order of Ld. CIT(A) which is hereby, confirmed. Accordingly, Grounds of appeal Nos. 8 to 10 raised by the assessee are dismissed. 34. In the result, appeal of the assessee is partly allowed and the appeal of the Revenue is dismissed. ITA No.2796 & 2807/Del/2022 [AY 2019-20] Roshni Passi 35. These are the cross appeals filed by both the parties. The assessee has raised following Grounds of appeal:- “1. That on the fact and circumstances of the case and in law, the assessment order dated 28.09.2021 passed under section 143(3) of the Income Tax Act, 1961 (\"the Act\") is without jurisdiction, illegal, bad in law and is liable to be quashed. 2. Without prejudice, that the Commissioner of Income Tax (Appeals) erred on facts and in law in confirming addition to the extent of Rs.56,89,895 made under section 69A of the Act on account of alleged unexplained jewellery found during the course of search. 2.1. That the Commissioner of Income Tax (Appeals) erred on facts and in law in not appreciating that gross weight of jewellery declared by the appellant and his family members exceeded the gross weight of jewellery found during the course of search and thus, no addition on this account was called for. 2.2. That the Commissioner of Income Tax (Appeals) erred on facts and in law in not considering the reconciliation provided by the appellant during the course of assessment proceedings, which was duly supported by documentary evidences. 2.3. Without prejudice, that the Commissioner of Income Tax (Appeals) erred in adopting incorrect value of jewellery for the purpose of valuation/ addition. 3. That the Commissioner of Income Tax (Appeals) erred in upholding levy of higher rate of tax under section 115BBE on additions confirmed under section 69A of the Act. Printed from counselvise.com 40 ITA Nos.2795/Del/2022 & Ors. 4. That the Commissioner of Income Tax (Appeals) erred in not directing deletion of interest charged under sections 234B and 2340 of the Act. The appellant craves leave to add, alter, amend or vary from the aforesaid grounds of appeal at or before the time of hearing.” 36. The Revenue has raised following Grounds of appeal:- 1. “The Ld. CIT (A) has erred on facts and in law by allowing the appeal of the assessee while restricting the addition of Rs. 1,65,58,044/- to Rs. 56,89,985, made on account of unexplained jewellery found on the premises of the assessee. 2. The Ld. CIT (A) has erred on facts and in law, by not appreciating the fact that the jewellery declared by the assessee in VDIS scheme was not only materially different in appearance and form, but also in caratage and weight to the ones seized during the search operation. 3. The Ld. CIT(A) has erred on facts and in law by not appreciating the fact that the jewellery shown in the invoices submitted by the assessee is substantially different to the ones which has been added as his unexplained jewellery u/s 69A of the Income Tax Act, 1961. 4. The Ld. CIT(A) has erred on facts and in law in allowing the appeal of the assessee by ignoring the fact that the assessee failed to provide any proof of remodeling or alteration of the jewellery in question during the assessment proceedings despite being accorded multiple opportunities. 5. The Ld. CIT(A) has erred on facts and in law in allowing the appeal of the assessee by considering the value of jewelry items encrusted with diamonds based on gross gram weightage of Gold only, ignoring the fact that the value of diamonds predominantly depends on the cartage, color, cut and clarity and valuation of it cannot be equated with the valuation of Gold items. 6. The Ld. CIT(A) has erred on facts and in law in allowing the appeal of the assessee by ignoring the fact that a composite valuation of the jewelry item with diamond encrusted on it based on gross weightage will not yield the actual value of such jewelry items, since it does not cover the value of diamond encrusted on such jewelry items. 7. The Ld. CIT(A) has erred on facts and in law in allowing the appeal of the assessee by ignoring the fact that in the valuation report of jewelry items prepared at the time of search, value of diamonds encrusted on the Gold Jewellery items were separately mentioned in the valuation report by the Valuer. 8. (a) The order of the Ld. Commissioner of Income Tax (Appeals)is erroneous and not tenable in law and on facts. Printed from counselvise.com 41 ITA Nos.2795/Del/2022 & Ors. (b) The appellant craves to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal.” 37. Ground of appeal Nos.1 to 7 raised by the Revenue and Ground of appeal Nos. 1 to 2.3 raised by the assessee are with respect to the addition on account of jewellery where 50% of the total unexplained jewellery was made in the hands of husband of the assessee Shri Nitin Passi. 38. This issue is identical to the facts and issue decided by us in the case of husband of the assessee Shri Nitin Passi in Revenue’s appeal in ITA No.2806/Del/2022 and assessee’s appeal in ITA No. 2795/Del/2022 for AY 2019-20 wherein we have hold that the jewellery belonged to various family members should be considered as a whole family to work out the unexplained jewellery and deleted the additions made. The assessee being part of the same family and the jewellery owned by her is also taken into consideration for comparison with the total jewellery found during the search thus the observations made in the case of Shri Nitin Passi in ITA Nos. 2806/Del/2022 (revenue appeal) and 2795/Del/2022 (assessee appeal) are Mutatis Mutandis applied to the facts of this case also. Thus, by following the same observations, the additions uphold by ld. CIT(A) in the hands of the assessee are also deleted. Grounds of appeal Nos. 1 to 2.3 raised by the assessee are accordingly, allowed and Ground of appeal Nos. 1 to 7 raised by the Revenue are dismissed. Printed from counselvise.com 42 ITA Nos.2795/Del/2022 & Ors. 39. Ground of appeal No.3 raised by the assessee is with respect to the action of AO in invoking the provisions of 115BBE on the additions made u/s 69A of the Act. 40. Since we have already deleted the addition made u/s 69A of the Act therefore, Ground of appeal No.3 raised by the assessee become infructuous thus, dismissed. 41. In the result, appeal of the assessee is partly allowed and appeal of the Revenue is dismissed. ITA No.2808/Del/2022 [AY 2019-20] [Revenue’s appeal] [Smt. Swarn Lata Passi] 42. The Revenue has raised following grounds of appeal:- 1. “The Ld. CIT (A) has erred on facts and in law by allowing the appeal of the assessee by deleting the addition of Rs. 1,63,69,629/- made on account of unexplained jewellery found on the premises of the assessee. 2. The Ld. CIT (A) has erred on facts and in law, by not appreciating the fact that the jewellery declared by the assessee in the invoices was not only materially different in appearance and form, but also in caratage and weight to the ones seized during the search operation. 3. The Ld. CIT(A) has erred on facts and in law by deleting the addition, ignoring the fact that the assessee had failed to furnish any documentary proof including any invoice/bills about the source of the jewellery item no. 12 of the jewellery item seized from her HDFC locker no. 238. 4. The Ld. CIT(A) has erred on facts and in law in allowing the appeal of the assessee by ignoring the fact that the assessee failed to provide any proof of remodeling or alteration of the jewellery in question during the assessment proceedings despite being accorded multiple opportunities. 5. The Ld. CIT(A) has erred on facts and in law in allowing the appeal of the assessee by considering the value of jewelry Printed from counselvise.com 43 ITA Nos.2795/Del/2022 & Ors. items encrusted with diamonds based on gross gram weightage of Gold only, ignoring the fact that the value of diamonds predominantly depends on the caratage, color, cut and clarity and valuation of it cannot be equated with the valuation of Gold items. 6. The Ld. CIT(A) has erred on facts and in law in allowing the appeal of the assessee by ignoring the fact that a composite valuation of the jewelry item with diamond encrusted on it based on gross weightage will not yield the actual value of such jewelry items, since it does not cover the value of diamond encrusted on such jewelry items. 7. The Ld. CIT(A) has erred on facts and in law in allowing the appeal of the assessee by ignoring the fact that in the valuation report of jewelry items prepared at the time of search, value of diamonds encrusted on the Gold Jewellery items were separately mentioned in the valuation report by the Valuer. 8. (a) The order of the Ld. Commissioner of Income Tax (Appeals)is erroneous and not tenable in law and on facts. (b) The appellant craves to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal.” 43. All Grounds of appeal taken by the Revenue is with respect to addition of INR 1,63,69,629/- treating the jewellery as unexplained. This issue is identical to the facts and issue decided by us in the case of son of the assessee Shri Nitin Passi in Revenue’s appeal in ITA No.2806/Del/2022 and assessee’s appeal in 2795/Del/2022 for AY 2019-20 wherein we have hold that the jewellery belonged to various family members should be considered as a whole to work out the unexplained jewellery and deleted the additions made. The assessee being part of the same family and the jewellery owned by her is also taken into consideration for comparison with the total jewellery found during the search thus the observations made in the case of Shri Nitin Passi in ITA Nos. 2806/Del/2022 (revenue appeal) and 2795/Del/2022 (assessee appeal) are Mutatis Mutandis Printed from counselvise.com 44 ITA Nos.2795/Del/2022 & Ors. applied to the facts of this case also. Thus, by following the same observations, all Grounds of appeal raised by the Revenue in this appeal are dismissed. 44. In the result, appeal of the Revenue is dismissed. 45. In the final result, all appeals of the respective assessee in ITA Nos. 2795 to 2796/Del/2022 for Assessment Year 2019-20 are partly allowed and appeals of the Revenue in ITA Nos. 2806 to 2808/Del/2022 for Assessment Year 2019-20 are dismissed. Order pronounced in the open Court on 25.03.2026. Sd/- Sd/- Sd/- Sd/- (ANUBHAV SHARMA) (MANISH AGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 25.03.2026 *PK & Amit Kumar/Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI Printed from counselvise.com "