1994 (8) TMI 55 - AT - Income Tax

Summary

Issues Involved:
1. Addition for low household expenses.
2. Addition for unexplained investment in gold ornaments.
3. Addition for unexplained investment in gold ornaments.
4. Addition on account of various articles found at the time of search.
5. Addition for investment in cassettes, etc.
6. Addition for education expenses.
7. Enhancement of interest charged u/s 234A and u/s 234B while making assessment u/s 143(3).

Summary:

1. Addition for low household expenses:
The assessee contested the addition of Rs. 1,34,542 for alleged low household expenses. The total withdrawals of the family were Rs. 3,15,458. The Assessing Officer estimated household expenses based on the statement of the assessee's wife, but the Tribunal found the withdrawals sufficient to cover the expenses and directed the deletion of the addition.

2. Addition for unexplained investment in gold ornaments (Rs. 29,535):
The addition was based on seized paper with figures Rs. 6,133 and Rs. 1,135. The Tribunal noted the lack of specific evidence linking the paper to the assessee and directed the deletion of the addition, stating that presumption u/s 132(4A) is limited to proceedings under s. 132.

3. Addition for unexplained investment in gold ornaments (Rs. 11,004):
The addition related to ornaments claimed to belong to the assessee's daughter. The Tribunal found the explanation based on the wealth-tax record of the assessee's mother satisfactory and directed the deletion of the addition.

4. Addition on account of various articles found (Rs. 2,50,000):
The Tribunal found it unreasonable to assume all items were purchased in the relevant year without evidence. Considering the withdrawals and the long-term tax assessment of the family, the Tribunal reduced the addition to Rs. 50,000, granting relief of Rs. 2,00,000.

5. Addition for investment in cassettes, etc. (Rs. 2,766):
The Tribunal deleted the addition, accepting the possibility that the expenses were covered by the substantial withdrawals made by the family members.

6. Addition for education expenses (Rs. 56,000):
The Tribunal found the estimate of Rs. 85,000 by the Assessing Officer excessive. Considering the withdrawals, the Tribunal restricted the addition to Rs. 15,000, providing relief of Rs. 35,000.

7. Enhancement of interest charged u/s 234A and u/s 234B:
The Tribunal noted the lack of proper findings by the Appellate Commissioner and remitted the matter back for a decision on whether the assessee is liable for interest under ss. 234A and 234B, after giving adequate opportunity for hearing.

Conclusion:
The appeal was partly allowed with significant deletions and reductions in the additions made by the Assessing Officer. The issue of interest u/s 234A and 234B was remitted back to the Appellate Commissioner for a detailed decision.