1981 (3) TMI 127 - AT - Income Tax

Summary

Issues:
1. Addition of sale proceeds of gold ornaments as income from undisclosed sources.
2. Disbelief of affidavit filed by the mother of the assessee by the ITO and AAC.

Analysis:
1. The appeal before the Appellate Tribunal ITAT Jaipur pertains to the addition of Rs. 20,502 representing the sale proceeds of gold ornaments for the assessment year 1971-72. The assessee claimed to have sold gold ornaments, but the Income Tax Officer (ITO) disbelieved the source of acquisition of the ornaments. The ITO treated the sale proceeds as income from undisclosed sources, leading to the addition. The AAC upheld the ITO's decision. The Tribunal was tasked with determining whether the assessee could prove the ownership of the ornaments and the crediting of sale proceeds to his account.

2. The affidavit of the mother of the assessee, Smt. Liladevi, played a crucial role in the case. The affidavit stated that the gold ornaments were given to her by her late husband and were subsequently given to the assessee as she did not need them. The AAC disbelieved the affidavit citing lack of important details. However, the Tribunal found the AAC's reasoning flawed as the affidavit clearly established the ownership of the ornaments by the mother and their transfer to the assessee. The Tribunal criticized the AAC for not examining the deponent and disbelieving the affidavit without proper grounds. The Tribunal concluded that the assessee had adequately proven the ownership of the ornaments by his mother and the crediting of sale proceeds to his account, leading to the deletion of the addition of Rs. 20,502 as income from undisclosed sources.

3. The Tribunal allowed the appeal, overturning the decisions of the lower authorities. The Tribunal emphasized the importance of properly considering the evidence presented and criticized the AAC for disbelieving the affidavit without sufficient justification. The judgment highlights the necessity of thorough examination of evidence and adherence to legal principles in determining additions to income from undisclosed sources.