Presumption of ownership for gold articles found in possession keeps section 69A addition alive absent rebuttal.

Where valuable gold articles are found in an assessee's possession, ownership may be presumed and the burden shifts to the assessee to rebut that presumption and prove acquisition in a different assessment year. On the facts discussed, the assessee produced no cogent evidence to show that the articles belonged to someone else or were acquired in another year, and an earlier statement did not support the claimed 1972 acquisition. The illegality of retaining contraband does not, by itself, negate ownership for tax purposes. The discussion concludes that the deletion of the addition under section 69A was erroneous and that the unexplained value remained assessable.

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Issues: Whether the addition under section 69A of the Income-tax Act, 1961, was rightly deleted when gold articles were recovered from the assessee's compound and the assessee failed to prove that they belonged to someone else or were acquired in a different year.

Analysis: Gold bars and biscuits were recovered from the assessee's compound. In the absence of cogent evidence from the assessee, possession gave rise to a presumption of ownership. The burden then shifted to the assessee to rebut ownership and to establish that the articles were acquired in some year other than the year under assessment. The statement recorded by the Income-tax Officer did not contain any assertion that the articles were acquired in 1972, and the contrary inference drawn from other proceedings could not displace the effect of the assessee's own statement before the assessing authority. The Court also held that even contraband articles may be owned and possessed unlawfully, and the mere illegality of retention does not negate ownership for tax purposes.

Conclusion: The deletion of the addition under section 69A was erroneous. The presumption of ownership and acquisition in the relevant year stood unrebutted, and the questions were answered against the assessee and in favour of the Revenue.

Final Conclusion: The assessment addition for unexplained gold articles was restored in principle, as the assessee failed to disprove ownership and the relevant year of acquisition.

Ratio Decidendi: When valuable property is found in an assessee's possession, ownership may be presumed and the assessee bears the burden to rebut that presumption and to show a different year of acquisition; failing that, the value is assessable as unexplained income under section 69A.

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