1989 (2) TMI 152 - AT - Income Tax

Summary

Issues:
1. Addition of Rs. 35,000 to the assessee's income on account of two deposits in the bank.
2. Addition of Rs. 21,600 on account of unexplained investment in three motor vehicles.
3. Addition of Rs. 11,000 on account of low withdrawals.

Analysis:

Issue 1: Addition of Rs. 35,000 to the assessee's income
The first ground raised in the appeal was regarding the addition of Rs. 35,000 to the assessee's income due to deposits made by the assessee's wife in her bank account. The Income Tax Officer (ITO) did not accept the explanation provided by the assessee that the deposits were made from the wife's independent income from a tailoring business. The ITO held that the deposits were from the assessee's undisclosed sources. The CIT(A) confirmed the ITO's findings. The Tribunal noted the lack of direct evidence of the benami character of the deposits and the absence of tangible evidence of the wife's tailoring business. The Tribunal agreed with the authorities below that the deposits likely came from the assessee's income, given the circumstances, and upheld the addition.

Issue 2: Addition of Rs. 21,600 on account of unexplained investment in three motor vehicles
The second contention was about the addition of Rs. 21,600 due to unexplained investment in three motor vehicles registered in the name of the assessee's minor son. The son claimed to have purchased the vehicles as a hobby, financed by a loan from his uncle. However, the Tribunal found discrepancies in the son's explanation, considering his age and lack of income sources. The Tribunal upheld the addition, concluding that the vehicles were likely the property of the assessee, and the source of acquisition remained unexplained.

Issue 3: Addition of Rs. 11,000 on account of low withdrawals
The last challenge was against the addition of Rs. 11,000 for low withdrawals by the assessee for household expenses. The ITO found the withdrawals insufficient based on the lifestyle indicated by the purchase of multiple vehicles. The Tribunal upheld the addition, noting that the wife's drawings were not considered due to lack of shown income. The Tribunal found the addition reasonable given the lifestyle and upheld it based on previous rulings.

In conclusion, the Tribunal dismissed the appeal, upholding all three additions to the assessee's income based on the analysis and findings presented in the judgment.