2003 (4) TMI 21 - HC - Income Tax

Unexplained Investment - Tribunal held that there was no material placed before the Commissioner of Income-tax (Appeals) to have tinkered with the order of the Assessing Officer whereby he has given sound reasons for holding that there is no evidence on record to suggest that the wife of the assessee received 40 tolas to 50 tolas of gold ornaments at the time of her marriage - there is no perversity in approach of Tribunal

Summary

Issues:
1. Assessment of undisclosed income based on seized gold ornaments and primary gold.
2. Appeal against the assessment order before the Commissioner of Income-tax (Appeals).
3. Further appeal before the Tribunal by both the Department and the assessee.
4. Dismissal of the application for reference to the High Court under section 256(2) of the Income-tax Act.

Assessment of Undisclosed Income:
The applicant's income tax return showed income from various sources, including interest, agriculture, and profession as an advocate. Following a search operation, gold ornaments and primary gold were seized from a locker, leading to an assessment of unexplained investment under section 69A of the Act. The Inspecting Assistant Commissioner determined the total income and assessed the balance as undisclosed investment. The Commissioner of Income-tax (Appeals) upheld the explanation for gold ornaments but sustained an addition for primary gold. The Tribunal later restored the original addition, prompting the applicant to seek reference to the High Court under section 256(2).

Appeals and Tribunal Decision:
The Commissioner of Income-tax (Appeals) accepted the explanation for gold ornaments but upheld the addition for primary gold. The Tribunal, on appeal by both the Department and the assessee, reversed the Commissioner's decision and reinstated the original addition. The applicant then sought a reference to the High Court, challenging the Tribunal's findings.

Dismissal of Application for Reference:
The applicant argued that the Tribunal erred in its approach and that the findings were not supported by reasons or evidence. The Revenue contended that the matter was factual, not legal, and no error existed. The Tribunal's order was based on a proper factual analysis, leading to the dismissal of the application under section 256(2) of the Act. The High Court found no perversity in the Tribunal's decision and concluded that the facts did not warrant a reference.

This detailed analysis covers the assessment of undisclosed income, the progression of appeals, and the final dismissal of the application for reference to the High Court, providing a comprehensive overview of the legal judgment.