9911796707
|
Home
Issues involved: Assessment of undisclosed income based on seized precious stones, application of section 69A of the Income-tax Act, 1961, burden of proof on ownership of seized items.
Summary: The assessee, a registered firm dealing in precious stones, filed a return for the assessment year 1967-68 but faced scrutiny due to the seizure of precious stones valued at Rs. 2,21,487. The Income Tax Officer (ITO) added Rs. 74,766 as undisclosed income after finding discrepancies in the explanation provided by the assessee. The Assistant Commissioner and the Appellate Tribunal upheld parts of the addition under section 69A of the Act, while deleting some amounts based on evidence presented. The Tribunal was directed to refer questions of law regarding the application of section 69A. The assessee argued that ownership must be established before applying section 69A, citing legal precedents. The High Court held that possession can imply ownership, especially in the absence of a satisfactory explanation from the assessee. The Tribunal's conclusion that the assessee was the owner of the seized precious stones was deemed valid based on the facts of the case. Various legal cases were referenced to support arguments related to ownership and undisclosed income. The High Court emphasized that the burden of proof lies on the party contesting ownership of seized items. The Court rejected the argument that the assessment should have been based on a different financial year, affirming that the inclusion of the amount in the assessment year 1967-68 was appropriate. In conclusion, the High Court answered both questions in favor of the revenue, upholding the addition of undisclosed income based on the seized precious stones. Each party was directed to bear their own costs. The separate judgment by SABYASACHI MUKHARJI J. agreed with the decision.
|
