1993 (3) TMI 130 - AT - Income Tax

Summary

Issues Involved:
1. Legitimacy of the gold ornaments seized.
2. Legitimacy of the silver articles seized.

Issue-Wise Detailed Analysis:

1. Legitimacy of the gold ornaments seized:

The assessee, late Shri Mathuradas Motichand, was a partner in the firm of M/s Mathuradas Motichand & Sons. During search operations under section 132 of the IT Act, 1961, gold ornaments weighing 262.37 tolas were seized. The Assessing Officer accepted the explanation for 133 tolas but treated 128.8 tolas as unexplained, resulting in an addition of Rs. 2,26,366 to the assessee's income.

The CIT(A) examined the evidence and accepted the assessee's explanation in its entirety, considering the family's status. The Department appealed, arguing that the Assessing Officer's partial acceptance was reasonable. The assessee contended that the addition was based on mere surmises and conjectures.

The Tribunal considered the rival submissions and the evidence, noting the large family and high status of the assessee. The assessee's mother came from a wealthy family, and his wife received substantial gold ornaments from her parents and mother-in-law. Affidavits from family members and other witnesses supported the assessee's claims.

The Tribunal found the Assessing Officer's partial acceptance of the explanation arbitrary and without a rational basis. The CIT(A)'s detailed examination of the evidence was upheld, confirming that the gold ornaments were satisfactorily explained. The addition under section 69A was unjustified, and the CIT(A)'s order was upheld.

2. Legitimacy of the silver articles seized:

During the search, 45.513 kgs of silver articles were found. The assessee explained that he received 38 kgs of silver in a partition and that some silver articles belonged to friends. The Assessing Officer accepted the explanation for 4.6 kgs but added Rs. 96,180 for the remaining 40.858 kgs.

The CIT(A) accepted the explanation for 15 kgs received in the partition, 6 kgs of old coins, and 4.5 kgs belonging to friends. However, the explanation for the remaining silver was not accepted, and the addition was confirmed.

Both the Department and the assessee appealed. The Tribunal reviewed the evidence and found the CIT(A)'s appreciation of the material acceptable, with no justification for interference. The CIT(A)'s order was confirmed, and the submissions by both the Department and the assessee were rejected.

Conclusion:

The Tribunal upheld the CIT(A)'s findings on both the gold ornaments and silver articles, confirming that the assessee satisfactorily explained the seized items. The appeal and cross-objections were dismissed.