2008 (5) TMI 237 - HC - Income Tax

Block assessment - search documents recovered showing certain payments made by assessee to M and some jewellery found dismissing the appeal of revenue, held that there was no doubt that M was closed down several years ago and the documents could not e attributed to the block period Tribunal rightly accepted the fact that assessee received gifts from friends and relatives - no substantial question of law arises for consideration

Summary

Issues:
1. Disputed document recovered during search operation
2. Explanation regarding jewellery acquisition and gifts
3. Acceptance of explanations by Assessing Officer and Commissioner of Income Tax (Appeals)
4. Tribunal's consideration of closure of M/s. Mulberry Silk Affairs
5. Lack of comments by Assessing Officer on the document
6. Attribution of document to the block period under consideration
7. Tribunal's acceptance of jewellery explanation
8. Existence of substantial question of law

Analysis:
The case involves a dispute arising from a search and seizure operation conducted on the premises of the Assessee, revealing a document indicating payments to M/s Mulberry Silk Affairs and the presence of jewellery. The Assessee denied knowledge of the document and explained the jewellery acquisition as gifts received over the years. The Assessing Officer and Commissioner of Income Tax (Appeals) had differing views on the explanations provided.

The Tribunal considered the closure of M/s. Mulberry Silk Affairs several years ago, which was undisputed, and the lack of comments by the Assessing Officer on the document. The document did not specify any particular year, leading to a question of its attribution to the relevant block period. The Tribunal acknowledged the Assessee's explanation regarding the jewellery, including gifts received during marriage and over the years, finding it reasonable and not perverse.

Ultimately, the High Court found merit in the Assessee's arguments, noting the closure of M/s. Mulberry Silk Affairs and the lack of a substantial legal question for consideration. Consequently, the appeal was dismissed, affirming the Tribunal's decision on the disputed document and jewellery explanation.