1994 (7) TMI 126 - AT - Income Tax

Summary

Issues:
1. Addition of gold ornaments and silver coins under section 69.
2. Addition of unproved cash credits.

Analysis:

Issue 1: Addition of gold ornaments and silver coins under section 69
The case involved the Department appealing against the CIT(A)'s decision to delete the addition of Rs. 1,51,913 and Rs. 2,000 made by the ITO under section 69, relating to gold ornaments and silver coins. The gold ornaments and silver coins were found in possession of an individual, leading to a legal dispute regarding ownership. The individual claimed ownership along with his brother, filing declarations under the Voluntary Disclosure of Income & Wealth Tax Act, 1976. The CIT(A) accepted the submissions, noting that the ornaments were recovered from the possession of the individual after he had separated from the HUF. The Tribunal upheld the CIT(A)'s decision, emphasizing that the assets belonged to the individual and his brother, not the HUF. The Tribunal found no justification for the addition in the hands of the HUF, considering the accepted partition and ownership details.

Issue 2: Addition of unproved cash credits
The Assessing Officer had made an addition of Rs. 90,000 on account of unproved cash credits, with the main reason being the non-production of creditors before the Assessing Officer. The CIT(A) deleted Rs. 70,000 out of the total addition based on earlier statements and appearances of the creditors. The Tribunal upheld the CIT(A)'s decision, finding sound reasons for the deletion. The Tribunal rejected the Revenue's appeal on this ground, affirming the CIT(A)'s order.

The Tribunal also addressed a contention regarding the assessment period's limitation, raised by the assessee during the appeal. The Tribunal examined the submission, considering the timeline of the assessment completion and the objections filed by the assessee. It was found that the assessment was completed within the prescribed period, and the plea based on limitation was rejected. The Tribunal dismissed the appeal, upholding the decisions made by the CIT(A) on both issues.