2000 (7) TMI 231 - AT - Income Tax

Summary

Issues Involved:
1. Addition of Rs. 46,597 as income from undisclosed sources under Section 68.
2. Addition of Rs. 50,433 on account of investment in gold treated as from undisclosed sources under Section 69B.
3. Additions on account of unexplained expenditure incurred on marriage and household expenses.

Issue-wise Detailed Analysis:

1. Addition of Rs. 46,597 as Income from Undisclosed Sources under Section 68:

The Revenue's appeal contested the deletion of Rs. 46,597 by the CIT(A), which was initially added by the AO as income from undisclosed sources. The AO treated the sale proceeds of silver as undisclosed income, citing lack of evidence for the purchase and sale of silver and irregularities in the transaction with M/s Hameer Mal Sukhraj. The CIT(A) deleted the addition, recognizing the silver's declaration in the assessee's income-tax and wealth-tax returns under the Amnesty Scheme, which was supported by CBDT Circular No. 451, dt. 17th Feb., 1986, precluding further inquiry into the source. The Tribunal upheld the CIT(A)'s decision, noting the transaction's confirmation by M/s Hameer Mal Sukhraj and the established possession of silver by the assessee.

2. Addition of Rs. 50,433 on Account of Investment in Gold Treated as from Undisclosed Sources under Section 69B:

The assessee's appeal challenged the addition of Rs. 50,433 related to gold ornaments given to the assessee's daughter. The AO rejected the claimed gift from the late Smt. Sua Bai, citing inconsistencies and lack of corroborative evidence. The CIT(A) upheld the AO's addition, doubting the gift's authenticity. The Tribunal, however, sided with the assessee, emphasizing the direct evidence of the gift declaration and the confirmation by Shri Kanwar Lal. The Tribunal criticized the lower authorities for relying on assumptions and human probabilities over direct evidence, recognizing the cultural context of gold possession among Indian women.

3. Additions on Account of Unexplained Expenditure Incurred on Marriage and Household Expenses:

Both the assessee and the Revenue appealed against the CIT(A)'s partial confirmation of additions related to marriage and household expenses. The AO had estimated these expenses at Rs. 1 lakh, considering the assessee's status as a company director, while the CIT(A) reduced this to Rs. 20,000. The Tribunal found the CIT(A)'s assessment fair and reasonable, considering the sudden death of the assessee's uncle on the marriage day, which limited the celebrations. The Tribunal upheld the CIT(A)'s order, dismissing both appeals.

Conclusion:

The Tribunal dismissed the Revenue's appeal and partly allowed the assessee's appeal, affirming the CIT(A)'s deletion of the silver sale addition and overturning the addition related to gold investment. The Tribunal upheld the CIT(A)'s balanced approach to the marriage and household expenses, finding no reason to interfere with the order.