Section 69A burden on possessor of jewellery not discharged where records were inconsistent and unsupported.

Section 69A treats bullion, jewellery or other valuable articles found in a person's possession as income unless the nature and source of acquisition are satisfactorily explained. Possession also raises a prima facie presumption of ownership, shifting the burden to the possessor to rebut it with contemporaneous and credible evidence. Here, the explanation based on employment with a jeweller, a stock register and an issue challan was found internally inconsistent, unsupported by regular business records, and unable to reconcile the contradictions regarding where, when and in what quantity the ornaments were issued or carried. The seized jewellery was therefore not satisfactorily explained, and the addition under section 69A was sustained.

---

---

Issues: Whether the assessee satisfactorily explained the possession and acquisition of the seized gold ornaments so as to exclude the application of section 69A of the Income-tax Act, 1961.

Analysis: Section 69A creates a statutory presumption that bullion, jewellery or valuable articles found in the assessee's possession may be treated as income unless the nature and source of acquisition are satisfactorily explained. Read with the principle embodied in section 110 of the Indian Evidence Act, 1872, possession raises a prima facie presumption of ownership, and the burden shifts to the possessor to establish that someone else owned the goods and that their possession was explained by contemporaneous and credible evidence. The assessee relied on employment with the jeweller, a stock register, and an issue challan, but the materials were found to be internally inconsistent, unsupported by regular business records, and incapable of reconciling the contradictions as to where, when, and in what quantity the ornaments were issued or carried. The stock register was not maintained in the regular course of business, lacked contemporaneous corroboration, and did not reliably explain the seized ornaments. The explanation therefore failed to discharge the statutory burden.

Conclusion: The assessee did not satisfactorily explain the seized jewellery, and the addition under section 69A was rightly sustained in the hands of the assessee.

---