Assessee voluntarily disclosed gold and diamond jewellery u/s   65(1) of VDIS, 1997 which was accepted and certificate was issued u/s 68(2) of the Act. Assessee filed return by declaring negative income from sale of above said VDIS declared gold and diamond jewellery items, which had been converted into bullion after smelting and separating diamonds through a goldsmith.AO rejected assessee’s claim and brought entire sale consideration of VDIS declared items to tax under S. 68 of the Act. Tribunal upheld the order of the AO. On appeal the Court held that AO had not disputed weight or gold sold by assessee after smelting it from jeweller. Moreover, Tribunal in its various decisions in case of other assessee’s who were similarly placed, had accepted capital gain declared on sale of VDIS declared items after smelting them through various jewellers. Accordingly the Tribunal committed an error in not accepting sale invoices submitted by assessee on ground that it was not same items which had been shown and declared by them in VDIS. Addition was deleted.  (AY.1998-99)