Unexplained possession of gold supports presumption of ownership and permits addition as income when unrebutted.

Unexplained possession of gold can support a presumption of ownership, and the burden shifts to the person in possession to rebut it. Applying section 110 of the Evidence Act, the High Court held that the assessee, found in possession of 220 tolas of gold and unable to displace the presumption, could not require the Revenue to prove ownership. It further held that the value of unexplained assets in possession may be treated as income under section 69A of the Income-tax Act, so the addition of the gold's value was sustainable and the Tribunal's contrary view was erroneous.

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Issues: Whether, on the facts and in the circumstances of the case, the Revenue was required to prove ownership of the gold recovered from the assessee, and whether the addition of Rs. 44,000 representing its value could be sustained under section 69A of the Income-tax Act, 1961.

Analysis: Possession of property gives rise to a presumption of ownership under section 110 of the Evidence Act, 1872, and the burden lies on the person in possession to disprove ownership. Since the assessee was found in possession of 220 tolas of gold and failed to rebut the presumption, the Tribunal was not justified in placing the onus on the Department. The wide meaning of "income" under section 69A also permits the value of unexplained assets in possession to be treated as income.

Conclusion: The issue was decided against the assessee and in favour of the Revenue. The addition of Rs. 44,000 was held to be sustainable, and the Tribunal's contrary view was held to be erroneous.

Ratio Decidendi: Where an assessee is found in unexplained possession of property, a presumption of ownership arises and, unless rebutted, the value of the property may be treated as income under section 69A.

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