JUDGMENT judgment of court was delivered L. Narasimha Reddy J.-These three appeals arise under similar circumstances and respondents are from same family. Hence, they are disposed of through common order. respondent in I. T. T. A. No. 132 of 2003 is Hindu undivided family (HUF). respondent in I. T. T. A. No. 229 of 2003 is kartha of family, who, in turn, is independent assessee. Similarly, respondent in I. T. T. A. No. 120 of 2003 is member of Hindu undivided family, and he is also independent assessee. All three assessees have availed of benefit under Voluntary Disclosure of Income Scheme (VDIS) and declared items, which are mostly of jewellery, namely, gold and diamonds. For example, value of gold declared by kartha of family, by name Harish Kumar, was Rs. 2,64,040, and that of diamonds-Rs. 16,38,700. Similarly, value of gold disclosed by other assessee, Tilak Raj Kumar, was Rs. 1,57,028 and that of diamonds- Rs. 1,16,000. Certificates of disclosure were also furnished to them. All three assessees are said to have sold away jewellery declared by them under VDIS. While gold is said to have sold at Hyderabad, diamonds are said to have been separated from ornaments and sold at Surat. sale proceeds of jewellery were shown in respective returns, as capital gains, for assessment year 1998-99. Assessing Officer believed transaction of sale of gold at Hyderabad but doubted genuinity of sale of diamonds at Surat. After conducting detailed enquiry, he disbelieved that and treated amount shown as sale proceeds of diamonds in all three assessments, as unexplained cash credit, in respective orders of assessment passed by him. respondents carried matter in appeal to Commissioner of Income-tax (Appeals)-V, Hyderabad. appeals were dismissed through separate orders passed in year 2002. Thereupon, respondents filed I. T. A. Nos. 212, 271 and 272/Hyd/2002, respectively, before Hyderabad Bench B of Income-tax Appellate Tribunal (for short "the Tribunal"). Tribunal allowed I. T. A. No. 212 of 2002 through order dated May 31, 2002, and I. T. A. Nos. 271 and 272 through separate orders dated June 7, 2002. Hence, these three appeals under section 260A of Income-tax Act, 1961 (for short "the Act"), by Revenue. following questions of law are urged: I. T. T. A. No. 120 of 2003 "1. Whether, on facts and in circumstances of case, Tribunal is correct in law in holding that alleged sale transaction of diamonds worth Rs. 12,73,028 as claimed by assessee is genuine transaction? 2. Whether, on facts and in circumstances of case, Tribunal is correct in law in holding that amount of Rs. 12,73,028 cannot be added under section 68 of Income-tax Act? 3. Whether, on facts and in circumstances of case, Tribunal is correct in directing Assessing Officer not aggregate sum of Rs. 2,10,000 being assessee's share from M/s. Basant Farms for rate purposes? " I. T. T. A. Nos. 132 and 229 of 2003 "1. Whether, on facts and in circumstances of case, Tribunal is correct in law in holding that alleged sale transaction of diamonds worth Rs. 51,92,750 as claimed by assessees is genuine transaction? 2. Whether, on facts and in circumstances of case, Tribunal is correct in law in holding that amount of Rs. 51,92,750 cannot be added under section 68 of Income-tax Act? 3. Whether, on facts and in circumstances of case, Tribunal is correct in directing Assessing Officer not to add aggregate sum of Rs. 3,75,000 each, being assessees' share from M/s. Basant Farms for rate purposes?" Heard learned counsel for appellant and learned counsel for respondents. It is matter of record that all three assessees made separate voluntary disclosures of their income, in response to scheme and they were also issued certificates. Most of items mentioned in disclosures are jewellery of gold and diamonds. For one reason or other, family thought of selling away jewellery. In process, diamonds were separated from gold and while gold was sold at Hyderabad, diamonds were sold at Surat. resultant sale proceeds were shown as capital gains in respective returns for assessment year 1998-99. Assessing Officer was satisfied as regards proceeds from sale of gold. controversy is only about sale of diamonds. starting point for doubt of Assessing Officer was as to very separation of diamonds from jewellery. next was about actual sale at Surat. It may be true that respondents did not declare diamonds in their unused and unembedded form. When jewellery of such huge value is declared, it is axiomatic that items of jewellery are studded with diamonds and other precious stones. No effort was made to have detailed account of nature of jewellery that was declared. There is no dispute that what was declared by respondents was in form of ornaments. It is just unthinkable that ornaments of such huge value and quantity would be in form of pure gold. There is ample evidence to show that all three assessees have sold diamonds, that are separated from jewellery at Surat. It is place known for voluminous business in diamonds. Not only particulars of persons who purchased diamonds was furnished but also manner of payment was disclosed. entire payments were through demand drafts. cross- verification undertaken by Assessing Officer did not result in noticing of any discrepancy. bank accounts of purchasers were verified and demand drafts issued to respondents towards consideration corresponded to entries in bank accounts. Unable to find any discrepancy in such important aspects, Assessing Officer started verification of travel particulars of respondents. record discloses that sale of diamonds did not take at time and it was in phased manner. purchaser was undoubtedly dealer in diamonds. Even assuming that on certain occasions, corresponding assessee did not proceed to Surat, it cannot be factor to disbelieve transaction. When not only respondents have disclosed wealth in VDIS but also have shown sale proceeds as capital gains, it was far fetched, if not unreasonable, on part of Assessing Officer to doubt their honesty in this behalf. For all practical purposes, Assessing Officer subjected respondents herein to verification equivalent to one which is made by police officials vis-a-vis person, who committed crime. Though it is prerogative of State to levy tax, referable to its sovereign power, it cannot be extended to level of regulating conduct of citizen to such minute extents. At any rate, relief granted by Tribunal is based its findings on pure question of fact. Even before us, no question of law is argued. Except that Assessing Officer intended to treat sale proceeds of jewellery under section 68 of Act, no other provision of law is invoked nor any principle is projected. We, therefore, dismiss appeals. There shall be no order as to costs. miscellaneous petitions filed in these appeals shall also stand disposed of. *** Commissioner of Income-tax v. Tilak Raj Kumar