1989 (11) TMI 102 - AT - Income Tax

Summary

Issues:
Appeal against deletion of addition for unexplained silver seized by Octroi Officials.

Analysis:
The appeal by the Revenue was against the deletion of an addition of Rs. 1,53,808 made by the ITO for unexplained silver seized by Octroi Officials. The main issue for consideration was whether the CIT(A) erred in deleting this addition without appreciating the facts of the case.

The assessee derived income from the sale of silver and silver ornaments. The ITO found that 59,157 kg of silver valued at Rs. 1,53,808 was seized by authorities from Churu Railway Station. The assessee explained that the silver was taken by an employee for sale in Delhi but was caught on the way back. The silver was already entered in the books of the assessee, which were seized by the Department. The ITO added Rs. 1,53,808 to the income, not satisfied with the explanation provided.

The matter was taken before the CIT(A) by the assessee. The CIT(A) considered that the silver in question was reflected in the books of the assessee, which were in possession of the Department. The CIT(A) noted that the facts regarding the purchase of old ornaments and their conversion into silver bars were not disputed by the Department. The CIT(A) also considered the submission of the ITO, who did not challenge the assessee's submissions. The CIT(A) concluded that the deletion of the addition was justified based on the evidence and explanations provided.

The Revenue appealed against the CIT(A)'s decision. The Senior Departmental Representative argued that the assessee had no evidence of melting ornaments into silver bars and questioned the explanation provided. The counsel for the assessee contended that the silver was sent for sale in Delhi, with proper entries made in the books. The counsel argued that the assessee had evidence of owning a furnace and purchasing materials for melting silver ornaments. The Tribunal heard both sides and examined the material on record.

The Tribunal found that the silver seized was properly documented in the books of the assessee, with signatures of authorities confirming the transactions. The Tribunal noted that the assessee had evidence of purchasing a furnace and materials for melting silver ornaments. Considering the facts and explanations provided, the Tribunal upheld the CIT(A)'s decision to delete the addition of Rs. 1,53,808. Consequently, the appeal of the Revenue was dismissed.