2008 (9) TMI 108 - HC - Income Tax

Search - computation of undisclosed income - Tribunal was justified in holding that the income shown by the wife of the assessee from knitting and tailoring was not the undisclosed income of the assessee within Chapter XIVB - Tribunal was justified in law in holding that no addition under Chapter XIVB was warranted in the hands of the assessee on account of the income shown in the name of the wife of the assessee as no document had been found during the search revenue s appeal dismissed

Summary

Issues:
1. Whether the income shown by the wife of the assessee from knitting and tailoring was the undisclosed income of the assessee?
2. Whether addition under Chapter XIVB was warranted in the hands of the assessee based on the income shown in the name of the wife of the assessee?

Analysis:
1. The first issue pertains to whether the income shown by the wife of the assessee should be considered as the undisclosed income of the assessee. The Income Tax Appellate Tribunal (ITAT) held that no documents were found during the search indicating that the income returned by the wife was actually the income of the assessee. The Tribunal emphasized that the Assessing Officer (AO) had solely relied on the statement of the wife without concrete evidence. The ITAT concluded that the income belonged to the wife and had been disclosed prior to the search, hence no addition could be made in the hands of the assessee. The Tribunal's decision was based on a thorough analysis of the statutory provisions and the evidence available.

2. The second issue revolves around whether an addition under Chapter XIVB was necessary in the hands of the assessee concerning the income shown in the wife's name. The ITAT correctly interpreted the law and evidence, stating that no documents found during the search linked the income to the assessee. The ITAT upheld the decision of the Commissioner of Income Tax (Appeals) and dismissed the grounds of appeal raised by the Revenue. The Tribunal's decision was based on a meticulous evaluation of the facts and legal provisions, ultimately leading to the dismissal of the appeal.

In conclusion, the ITAT's judgment was based on a comprehensive review of the evidence, statutory provisions, and legal principles. The Tribunal correctly determined that the income in question belonged to the wife and had been disclosed earlier, thus precluding any addition in the hands of the assessee. The appeal was dismissed as it did not raise any substantial questions of law, affirming the ITAT's decision.