2002 (11) TMI 270 - AT - Income Tax

Summary

Issues Involved:
1. Addition of Rs. 1,70,000 representing unexplained cash.
2. Addition of Rs. 27,04,539 representing unexplained investments in FDRs along with accrued interest.
3. Addition of Rs. 59,985 on account of undisclosed investment in gold jewellery.
4. Addition of Rs. 77,138 on account of undisclosed investment in silver ornaments.

Summary:

Issue 1: Addition of Rs. 1,70,000 representing unexplained cash
The AO made a protective addition of Rs. 1,70,000 in the hands of the assessee, wife of Shri Kamal Narayan Jaiswal, following a search on 15th Nov., 1996. The Tribunal, referencing its findings in the case of Shri Kamal Narayan Jaiswal, deleted the addition.

Issue 2: Addition of Rs. 27,04,539 representing unexplained investments in FDRs along with accrued interest
During the search, FDRs in various names, including the assessee's, were found. The AO made additions for undisclosed investments in these FDRs. The Tribunal had previously set aside the issue for fresh adjudication, leading to the AO's order dated 21st Feb., 2002, which was challenged. The Tribunal examined each FDR, noting that many were already declared under VDIS and accepted by the CIT. Specific FDRs were either renewed or already taxed, and thus, their additions were deleted. For certain FDRs, the Tribunal directed further investigation by the AO.

Issue 3: Addition of Rs. 59,985 on account of undisclosed investment in gold jewellery
Gold jewellery weighing 470.400 gms. was found during the search. The AO treated 155 gms. as unexplained. The Tribunal referenced the Board's Circular No. 1916, dt. 11th May, 1994, which prescribes a limit of 500 gms. for gold jewellery that should not be seized. Since the jewellery was less than 500 gms., the Tribunal deleted the addition.

Issue 4: Addition of Rs. 77,138 on account of undisclosed investment in silver ornaments
Silver ornaments weighing 11,545 gms. were found during the search. The AO treated the investment as unexplained. The Tribunal considered the nature and weight of the silver articles, which indicated they could be received during ceremonial occasions like marriage. Given the reasonable weight and customary context, the Tribunal deleted the addition.

Conclusion:
The appeal filed by the assessee is partly allowed, with significant deletions of the additions made by the AO on various grounds.