Jewellery explained under CBDT Instruction No. 1916, but unexplained cash addition sustained for lack of evidence.

CBDT Instruction No. 1916 was applied as a reasonable benchmark for jewellery ordinarily held in an Indian household, and jewellery attributed to the assessee's wife, including diamond-studded items, was treated as explained within the permissible limit; the jewellery addition was deleted. Cash of Rs. 50,000 was treated as unexplained because the assessee produced no bank withdrawal proof, cashbook entry, or other documentary support, and no material was placed to disturb the factual finding; the cash addition was sustained. The matter resulted in partial relief for the assessee.

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Issues: (i) Whether addition on account of jewellery found during search was sustainable in view of CBDT Instruction No. 1916 and the fact that the jewellery was attributable to the assessee's wife, including diamond-studded jewellery; (ii) Whether addition of cash of Rs. 50,000 as unexplained was sustainable.

Issue (i): Whether addition on account of jewellery found during search was sustainable in view of CBDT Instruction No. 1916 and the fact that the jewellery was attributable to the assessee's wife, including diamond-studded jewellery.

Analysis: The instruction was treated as laying down a reasonable benchmark for jewellery ordinarily held in an Indian household, and the source of jewellery up to the prescribed limit was accepted as explained. The jewellery in question was attributed to the assessee's wife, and the reasoning accepted that the benefit of the instruction could not be denied merely because the jewellery contained diamonds when the gold jewellery itself was otherwise explained within the permissible limit.

Conclusion: The addition relating to jewellery was deleted and the issue was decided in favour of the assessee.

Issue (ii): Whether addition of cash of Rs. 50,000 as unexplained was sustainable.

Analysis: The assessee failed to produce bank withdrawal evidence, cashbook entries, or other documentary material to explain the cash found during the search, and no fresh evidence was shown before the Tribunal to disturb the concurrent factual finding.

Conclusion: The addition of Rs. 50,000 was upheld and the issue was decided against the assessee.

Final Conclusion: The jewellery addition was deleted, but the cash addition was sustained, resulting in partial relief to the assessee.

Ratio Decidendi: Jewellery up to the limit recognized by CBDT Instruction No. 1916 is to be treated as explained in the context of ordinary household possession, and an addition for unexplained cash requires supporting evidence to rebut the factual finding of absence of explanation.

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