1977 (6) TMI 34 - AT - Income Tax

Summary

Issues:
1. Addition of Rs. 8,000 to the assessee's income.
2. Reopening of assessment.
3. Credibility of explanations provided by the assessee regarding the source of the deposit.

Detailed Analysis:
1. The judgment concerns the objection raised by the assessee against the addition of Rs. 8,000 to their income, which was sustained by the Appellate Assistant Commissioner. The deposit in question was made in the assessee's name but claimed to be on behalf of the mother. The Income-tax Officer rejected the explanations provided by the assessee, including the assertion that the deposit was intended for the second son's foreign tour. The Officer considered the amount as income from undisclosed sources, a decision upheld by the Appellate Assistant Commissioner.

2. The assessee's counsel did not press the ground related to the reopening of the assessment. The primary focus was on challenging the addition of Rs. 8,000. The counsel argued that the deposit was made by the mother for the second son's foreign trip, supported by a statement from Sanna Thippaiah indicating the origin of the funds. The departmental representative, however, supported the lower authorities' decision to uphold the addition.

3. The Vice President analyzed the evidence, including the statement of the mother and Sanna Thippaiah. The mother's statement confirmed giving the amount to her elder son for deposit, which was later used for the second son's foreign trip. The Income-tax Officer had questioned the credibility of Sanna Thippaiah's statement, highlighting inconsistencies and lack of evidence. The VP found that the assessee had sufficiently proven the source of the deposit based on the evidence presented, concluding that the addition of Rs. 8,000 was unwarranted. The appeal was allowed in favor of the assessee.