1981 (12) TMI 82 - AT - Income Tax

Summary

Issues:
- Addition of Rs. 57,500 as income from undisclosed sources
- Weightage given to evidence and affidavits filed by the assessee
- Justification of sustaining the addition by the lower authorities
- Source of acquisition of silver utensils weighing 50 kgs.

Analysis:
The case involves an appeal by the assessee against an addition of Rs. 57,500 made by the ld. AAC, which was sustained by the lower authorities. The dispute revolves around the source of acquisition of silver utensils weighing 50 kgs. The assessee, an HUF involved in a gold and silver business for over 200 years, underwent partial partitions in 1954 and 1976. The ITO added Rs. 57,500 as income from undisclosed sources, contending that the acquisition of 50 kgs of silver utensils remained unexplained. The assessee provided detailed explanations and affidavits to prove the acquisition, but the lower authorities upheld the addition, considering the affidavits as self-serving documents.

Before the Tribunal, the assessee argued that the lower authorities did not give due weight to the evidence presented. The assessee emphasized the family's wealth-tax assessment history and the partial partitions that took place. The Tribunal considered the detailed submissions and material on record, including affidavits and wealth details provided by the assessee. It was noted that the family members possessed significant wealth and that the possession of gold ornaments was accepted by the ITO. The affidavits filed by family members and acquaintances supported the long-standing possession and use of the silver utensils for household purposes.

The Tribunal highlighted that the ITO himself acknowledged the family's reputation and the possession of gold ornaments and a portion of the silver utensils. Despite the lack of cross-examination of the deponents of the affidavits, the Tribunal found the evidence presented by the assessee to be credible and in line with the family's status and historical practices. Relying on legal precedents emphasizing the acceptance of unchallenged affidavits, the Tribunal concluded that the assessee satisfactorily proved the source of acquisition of the silver utensils. Consequently, the addition of Rs. 57,500 was deemed unjustified and was deleted, allowing the appeal in favor of the assessee.