1990 (8) TMI 195 - AT - Income Tax

Summary

Issues:
1. Addition of Rs. 73,000 for alleged investment in the purchase of a car.
2. Ownership of the car and investment explained by the assessee.
3. Findings and conclusions of the Revenue authorities and CIT(A).

Analysis:
The appeal before the Appellate Tribunal ITAT Delhi-D involved the addition of Rs. 73,000 for the alleged investment in the purchase of a car by the assessee for the assessment year 1983-84. The Department initiated an action under section 133A, leading to the discovery of a car parked in front of the assessee's shop. Despite the insurance paper being in the name of another individual, suspicions arose regarding the ownership of the car. The Revenue authorities contended that the car was purchased by the assessee, citing various circumstantial evidence, including a cash payment made by the assessee and a revised return filed under a New Scheme. The ITO concluded that the car was indeed purchased by the assessee, leading to the addition of Rs. 73,000 to the undisclosed income of the assessee.

The CIT(A) upheld the findings of the ITO, emphasizing the possession of the car by the assessee during the survey and subsequent transfer to the assessee's name. However, the learned counsel for the assessee argued that the evidence did not conclusively prove the purchase of the car by the assessee during the assessment year in question. The counsel highlighted that the documents and explanations provided by the assessee indicated investments made in the following year, not during the relevant assessment year. The Appellate Tribunal considered all evidence on record, including registration certificates and statements of involved parties, to determine the ownership and investment in the car.

The Tribunal observed that the evidence presented did not establish that the car was purchased by the assessee in the assessment year 1983-84. The mere presence of the car outside the shop and certain documents did not definitively link the ownership to the assessee during that specific period. Additionally, the subsequent purchase of the car in a later assessment year did not serve as proof of investment in the earlier year. As a result, the Tribunal set aside the order of the CIT(A) and directed the ITO to delete the addition of Rs. 73,000 from the assessee's undisclosed income. The appeal was allowed in favor of the assessee, overturning the decision of the Revenue authorities.