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Issues Involved:
1. Addition of Rs. 50,000 in each assessment year 1986-87 and 1987-88 for low household withdrawals. 2. Revenue's appeal against relief of Rs. 79,500 for 1986-87 and Rs. 79,000 for 1987-88. 3. Confirmation of additions of Rs. 6,000 and Rs. 8,000 for the assessment year 1987-88. Summary: 1. Addition of Rs. 50,000 in each assessment year 1986-87 and 1987-88 for low household withdrawals: The preliminary common contention in the assessee's appeals for the assessment year 1986-87 was against sustaining an addition of Rs. 50,000 in each of the two assessment years. The Revenue is aggrieved against the relief of Rs. 79,500 for 1986-87 and Rs. 79,000 for 1987-88. The controversy arises from the addition made on the ground that the assessee's version of withdrawals for household expenses was understated. The assessee, assessed as an individual, showed withdrawals of Rs. 20,500 and Rs. 21,000 for the respective years. The Tribunal referred to a similar case of Shri Desh Raj Jain, where the Allahabad Bench had dismissed the Revenue's appeal and accepted the assessee's contention that there was no justification for retaining the addition. The Tribunal found the facts of the present case similar to those in Desh Raj Jain's case and concluded that the Assessing Officer's opinion could not be the basis for any addition without supporting evidence. Therefore, the Tribunal dismissed the Revenue's appeals and allowed the assessee's appeals, lifting the addition sustained. 2. Revenue's appeal against relief of Rs. 79,500 for 1986-87 and Rs. 79,000 for 1987-88: The Revenue's appeal against the relief granted by the Commissioner of Income-tax (Appeals) was dismissed. The Tribunal found that the Assessing Officer's approach was erroneous and that the fact of receiving gifts could not give rise to a presumption that the assessee was giving gifts also. The Tribunal emphasized the need for legally admissible evidence to justify any additions. Since no such evidence was brought on record, the Tribunal upheld the relief granted by the Commissioner of Income-tax (Appeals). 3. Confirmation of additions of Rs. 6,000 and Rs. 8,000 for the assessment year 1987-88: The assessee's appeal in respect of the assessment year 1987-88 included contentions against the confirmation of additions of Rs. 6,000 and Rs. 8,000. The first addition represented a claim as reimbursement of expenses incurred on behalf of Messrs. Quality Steel Tubes Ltd., and the second related to investment in a scooter. The Tribunal confirmed the addition of Rs. 6,000, relying on a similar case of Shri Desh Raj Jain. The other addition of Rs. 8,000 was also upheld for the reasons given by the lower authorities. Separate Judgment by Accountant Member: The Accountant Member disagreed with the Judicial Member's conclusion that the assessee's version of household expenses could not be discarded without material evidence. Instead, he proposed restoring the issue to the Assessing Officer for proper enquiries and investigations to justify the household expenditure. He emphasized that the Tribunal should not condone the inefficiency of the Departmental authorities and should direct them to make proper assessments. The matter was referred to the President of the Income-tax Appellate Tribunal for a decision. Order of the Third Member: The President agreed with the Judicial Member, stating that the expenses disclosed by the assessee could not be said to be insufficient or inadequate compared to the household drawings shown in earlier years and the income assessed. He emphasized that the Tribunal's role is to determine whether the assessment was according to law and supported by material, not to conduct further investigations. The President concluded that the additions made by the Assessing Officer were without material and should be deleted, agreeing with the Judicial Member's view. The matter was then referred back to the regular Bench for a decision according to the majority opinion.
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