The circular of the Central Board of Direct Taxes, dated May 11, 1994, prescribes that jewellery 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 and it does not speak about the questioning of the said jewellery from the person who has been found with possession of the said jewellery. However, the Board, looking to the Indian customs and traditions, has fairly expressed that jewellery to the said extent will not be seized and once the Board is also of the express opinion that the said jewellery cannot be seized, it should normally mean that any jewellery, found in possession of a married lady to the extent of 500 gms., 250 gms. per unmarried lady and 100 gms. per male member of the family will also not be questioned about its source and acquisition.

1. - This instant income-tax appeal under section 260A of the Income-tax Act, 1961 (hereinafter referred to in short as "the Act of 1961") filed by the Revenue assailing the order of the Income-tax Appellate Tribunal, Jaipur Bench "A", Jaipur, dated January 15, 2010, passed in I.T.A. No. 715/JP/09 and cross-objection No. 150/JP/2009, relates to the assessment year 2005-06. Though the Revenue has raised as many as seven questions which, according to the Revenue, are substantial questions of law but primarily, during the course of arguments, counsel for the Revenue has contended that question No. 3 pertains to the addition of Rs. 2,88,176 made by the Assessing Officer on account of unexplained jewellery found during the search, and whether there was any proper explanation for its deletion deserves consideration of this court, and, according to him, rest of the substantial questions of law, needs no consideration of this court.

2. Brief facts which have been culled out on a perusal of the impugned orders, are that a search and seizure operation was carried out at the business and residential premises of the assessee on June 30, 2004, where certain incriminating books of account and documents were seized. During the course of search operation, cash amounting to Rs. 1,50,600 was found besides gold jewellery weighing 2202.464 gms. valued at Rs. 10,53,520 and silver items valued at Rs. 93,678. Looking to the status of the assessee and the statement given during the course of search operation by various family members and considering the fact that there are four married ladies in the house including the wife of the assessee, no jewellery was seized by the authorised officer, however, the jewellery to the extent of 1600 gms. was treated as reasonable by the Assessing Officer which had been received by them at the time of their marriage. The balance jewellery weighing 602.464 gms. was treated as unexplained in the absence of any satisfactory explanation from the assessee and the value of the same which was determined at Rs. 2,88,176 was added back to the income of the assessee treating the same as purchased out of income from undisclosed sources of the assessee and, accordingly, added back to his income. The assessment order came to be passed on December 28, 2006, where this addition was made along with the other additions based on the incriminating documents found during the course of search.

3. Being dissatisfied with the observations and the addition, the respondent-assessee preferred an appeal before the Commissioner of Income-tax (Appeals) Central, Jaipur, who, vide order dated June 19, 2009, substantially deleted the additions made by the Assessing Officer including the addition of the jewellery made by the Assessing Officer to the tune of Rs. 2,88,176.

4. Being aggrieved of the order dated June 19, 2009, whereby certain deletions were made, the Department preferred an appeal before the Income-tax Appellate Tribunal and the assessee also filed cross-objection. The learned Tribunal also on appreciation of facts and evidence available on record, confirmed the order of the Commissioner of Income-tax (Appeals). Hence, this appeal.

5. Learned counsel for the Revenue has contended that the Assessing Officer had given due credit of jewellery to the various family members. He has also contended that out of jewellery of Rs. 10,53,520, only jewellery of Rs. 2,88,176 was found unexplained and almost 75 per cent of the jewellery found was treated as explained by the Assessing Officer himself and only where the respondent-assessee or family members were not in a position to explain the balance jewellery, the addition was made. The respondent-assessee or/and other family members were not in a position to adequately explain the source of receipt of the aforesaid jewellery and it was the duty of the assessee to lead proper evidence but since no evidence was led, therefore, according to the status of the respondent, the Assessing Officer righ