1990 (11) TMI 191 - AT - Income Tax

Central Excise, From Other Sources, Net Wealth, Total Income, Unexplained Expenditure, Unexplained Money, Wealth Tax

Summary

Issues Involved:
1. Addition of Rs. 5,80,000 under Section 69A of the Income-tax Act, 1961.
2. Addition of Rs. 20,000 under other sources for unexplained marriage expenses.

Detailed Analysis:

1. Addition of Rs. 5,80,000 under Section 69A of the Income-tax Act, 1961:
The primary issue revolves around the addition of Rs. 5,80,000 made by the Income-tax Officer (ITO) under Section 69A of the Income-tax Act, 1961, which pertains to unexplained gold and gold jewellery. The assessee contended that the gold and jewellery in question were acquired over several years and not in the financial year relevant to the assessment year 1983-84. The assessee had filed an application for settlement with the Commissioner of Income-tax, who accepted that a substantial portion of the gold ornaments had been acquired over a period of years. The Commissioner directed the Wealth-tax Officer to assess the value of the gold jewellery for wealth-tax purposes, which was done for the assessment years 1975-76 to 1982-83.

The Tribunal found that the ITO, acting as the Wealth-tax Officer, had accepted the explanation that the gold ornaments were in existence as early as 1975-76. Consequently, it was held that Section 69A could not be invoked for the assessment year 1983-84. The Tribunal placed reliance on the decision of the Madras Bench 'A' in the case of S. Mariappa Nadar and the Ahmedabad Bench in ITO v. Nagardas Jashraj, which emphasized that the burden of proving ownership of unexplained assets lies initially on the revenue. Since the revenue had already assessed the gold for earlier years, it could not take a different stance in the income-tax proceedings. Therefore, the addition of Rs. 5,80,000 was deemed unjustified and was deleted.

2. Addition of Rs. 20,000 under other sources for unexplained marriage expenses:
The second issue pertains to the addition of Rs. 20,000 made by the ITO for unexplained marriage expenses of the assessee's daughter. The assessee had declared Rs. 30,000 as income from other sources for the marriage expenses. However, the ITO, based on entries in seized notebooks, estimated the total marriage expenses at Rs. 50,000 and added Rs. 20,000 to the income. The CIT (Appeals) upheld this addition.

The Tribunal considered the status and wealth of the assessee and concluded that the marriage expenses of Rs. 50,000 as determined by the ITO were reasonable. Therefore, the Tribunal upheld the addition of Rs. 20,000 and decided this ground against the assessee.

Conclusion:
The appeal was allowed in part. The addition of Rs. 5,80,000 under Section 69A was deleted, while the addition of Rs. 20,000 for unexplained marriage expenses was upheld.