1999 (2) TMI 671 - AT - Income Tax

Summary

Issues Involved:
1. Unexplained Jewellery
2. NRE Gifts
3. Non-NRI Gifts
4. Unexplained Property Investment

Issue-wise Detailed Analysis:

1. Unexplained Jewellery:

On 26-3-1996, a search of the residential premises revealed jewellery weighing 802.90 gms. valued at Rs. 3,44,534. The Assessing Officer (AO) considered 402.90 gms. out of this as unexplained and added it to Dr. Arunkumar Gupta's income. Additionally, 998.40 gms. of jewellery sold to M/s. Vipul Jewellers was found, with the AO conceding 250 gms. as explained and considering the remaining 748.40 gms. valued at Rs. 3,25,570 as unexplained in the hands of Dr. (Mrs.) Renu Gupta. The Tribunal found that the assessee had disclosed 1000 gms. of gold jewellery in her wealth-tax returns for 1991-92 and 1992-93, which were accepted by the Wealth Tax Officer. Therefore, the addition of Rs. 3,25,570 under section 68 of the Income-tax Act for the assessment year 1995-96 was deemed unjustified and was deleted.

2. NRE Gifts:

The AO added Rs. 2,11,000 towards unproved NRE gifts and Rs. 16,880 towards the alleged premium for the assessment year 1994-95. The Tribunal noted that the assessee failed to produce the donor for examination and confirmation of the gifts. The donor's intimate relationship with the assessee was also found to be unsubstantiated. Following the reasoning in the case of Smt. Raj Rani Gupta, where similar NRI gifts were considered benami, the Tribunal confirmed the additions of Rs. 2,11,000 and Rs. 16,880 towards NRE gifts and the alleged premium.

3. Non-NRI Gifts:

The AO added Rs. 1,46,112 towards non-NRI gifts for the assessment year 1995-96. The Tribunal, following its reasoning in the case of Smt. Raj Rani Gupta, found no justification to sustain this addition and cancelled it.

4. Unexplained Property Investment:

The AO added Rs. 4,06,666 as unexplained investment in property for the assessment year 1992-93. The property in question was purchased under an agreement dated 30-12-1991 for Rs. 6,10,000, but the books of the assessee showed an investment of Rs. 10,16,666. The Tribunal noted that the assessee was not an income-tax assessee in 1992-93 and had no source of income to explain the purchase. The discrepancy between the agreement value and the book value was also unexplained. The Tribunal sustained the addition on the ground that the nature and source of the purchase money were not explained.

Conclusion:

The appeal was partly allowed. The addition of Rs. 3,25,570 towards unexplained jewellery was deleted, while the additions of Rs. 2,11,000 and Rs. 16,880 towards NRE gifts and the premium were confirmed. The addition of Rs. 1,46,112 towards non-NRI gifts was cancelled, and the addition of Rs. 4,06,666 towards unexplained property investment was sustained.