1982 (4) TMI 123 - AT - Income Tax

Summary

Issues:
1. Addition of cost of jewellery found at the residence of the assessee.
2. Addition of value of GEM refrigerator as undisclosed income.

Analysis:
1. The first issue pertains to the addition of Rs. 9,800 being the cost of jewellery found at the residence of the assessee during a search conducted by income-tax officials. The assessee contended that the jewellery belonged to his wife, who is an independent taxpayer. The wife provided an affidavit listing the jewellery items received as gifts from her parents. The Income Tax Officer (ITO) added the value of jewellery to the total income of the assessee, but the Appellate Authority for Income Tax (AAC) deleted the addition, stating that the jewellery belonged to the wife and any addition should be considered in her hands. The AAC's decision was upheld as the jewellery was found in the couple's bedroom, and the wife claimed ownership without dispute. Hence, the addition was rightly deleted by the AAC.

2. The second issue involves the addition of the value of a GEM refrigerator to the total income of the assessee as undisclosed income. The ITO treated the refrigerator as made out of undisclosed sources and added its value to the assessee's income. However, the AAC accepted the explanation that the refrigerator was a gift received by the assessee at the time of his marriage from his parents. The Revenue argued that section 69A of the Income Tax Act applied, justifying the addition. The assessee's counsel contended that the AAC found the explanation satisfactory, and there was no evidence of investment during the relevant period. The AAC's decision to delete the addition was upheld as there was a satisfactory explanation for the acquisition of the refrigerator, and it was received as a gift during the marriage, making the addition unjustified under section 69A. The order of the AAC was upheld, and the appeal of the Revenue was dismissed.