CBDT jewellery guidelines can guide assessments too, and only residual unexplained jewellery may be added.

The addition for unexplained jewellery was held not fully sustainable because the assessee's explanation of marriage-linked acquisition was rejected for lack of corroboration, and the statement could not be relied on selectively. Once that explanation was discarded, the whole statement was ignored. The CBDT jewellery instruction was treated as a reasonable guide in assessment proceedings as well as search cases, reflecting customary possession of jewellery in ordinary Hindu families. Credit therefore had to be allowed for jewellery attributable to the assessee, her husband and daughters, and only the balance could be treated as unexplained and added.

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Issues: Whether the addition made towards unexplained jewellery was sustainable, and whether the CBDT jewellery guidelines could be applied in assessment proceedings for granting credit of family jewellery.

Analysis: The assessee's explanation regarding acquisition of the jewellery at the time of marriage was not accepted for want of corroborative evidence, and the statement could not be relied upon only in part. Once that explanation was discarded, the entire statement had to be ignored. In such a situation, the standard quantity of jewellery recognised in the CBDT instruction was required to be applied in assessment as well, since the instruction reflects the customary possession of jewellery in ordinary Hindu families and can be used as a reasonable guide for explaining the source of jewellery found in search. On that basis, credit was required to be granted for the jewellery allowable to the assessee, her husband, and their daughters, and only the balance could be treated as unexplained.

Conclusion: The addition was not fully sustainable; the assessee was entitled to credit under the CBDT jewellery guidelines, and only the residual unexplained value, after adjusting the husband's declared amount, could be added.

Ratio Decidendi: CBDT jewellery guidelines may be applied not only to seizure proceedings but also in assessment to determine whether found jewellery stands reasonably explained, and an assessee's statement cannot be selectively relied upon in part.

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