2004 (10) TMI 63 - HC - Income Tax

Search additions - Ownership of ornaments - Whether Tribunal was justified in deleting an addition of Rs. 1,54,236 from the income of the assessee-Hindu undivided family? - Tribunal has accepted the statement given by Sri Ramesh Chandra regarding ownership of the ornaments and deleted addition of Rs. 1,54,236 which is based on appreciation of evidence and the materials available on the record. It is always open to the Tribunal to accept or discard the statement and in the present case the Tribunal has given cogent reason for accepting the statement made and it cannot be said to suffer from any legal infirmity. We find that the findings recorded by the Tribunal are based on appreciation of evidence and the materials on record and cannot be said to suffer from any perversity. Hence additions were rightly deleted

Summary

Issues:
1. Justification of deletion of addition from the income of the assessee-Hindu undivided family.

Analysis:
The High Court of ALLAHABAD was presented with a question of law regarding the deletion of an addition of Rs. 1,54,236 from the income of a Hindu undivided family for the assessment year 1975-76. The respondent Hindu undivided family had earned income from money-lending business and share income from a firm in previous years. A search and seizure operation conducted at their premises revealed ornaments with conflicting ownership claims. The Income-tax Officer initially treated the ornaments as belonging to the Hindu undivided family, but the Tribunal, upon appeal, accepted the statement of a family member regarding ownership and deleted the addition.

The court considered the arguments presented by the Revenue and noted that the Tribunal had based its decision on the appreciation of evidence and materials available on record. The Tribunal had the authority to accept or reject statements, and in this case, it had provided valid reasons for accepting the ownership claim made by the family member. The court found that the Tribunal's findings were well-founded, supported by evidence, and not legally flawed. Therefore, the court upheld the Tribunal's decision to delete the addition from the income of the assessee-Hindu undivided family for the assessment year in question.

In conclusion, the High Court ruled in favor of the assessee and against the Revenue, affirming the Tribunal's decision to delete the addition from the income of the Hindu undivided family. The judgment emphasized that the Tribunal's findings were based on a proper evaluation of evidence and materials, indicating no legal irregularities. No costs were awarded in this matter.