Sale proceeds of old gold ornaments can be taxed as undisclosed income absent proof of ownership and satisfactory explanation.

Sale proceeds of old gold ornaments may be treated as income from undisclosed sources where the assessee fails to establish that the ornaments belonged to him or were otherwise his property. The note explains that mere proof of cash realisation is insufficient; the assessee must support the source and ownership of the asset sold. The Tribunal's inference was supported by surrounding circumstances, including an unsatisfactory explanation for the sale, borrowing activity, acquisition of properties, and unreliability in relation to other financial explanations. On that material, the amount could be brought to tax as undisclosed income.

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Issues: Whether there was material before the Tribunal to hold that the sale proceeds of old gold ornaments constituted the assessee's income from undisclosed sources.

Analysis: The reference was confined to the existence of material supporting the Tribunal's finding. The assessee was required to prove not merely that cash was realised on sale, but that the gold ornaments belonged to him or were otherwise shown to be his property. The explanation that the ornaments belonged to the wife was rejected by the authorities. The Tribunal relied on surrounding circumstances, including the absence of a satisfactory explanation for the sale, the assessee's borrowing of funds and acquisition of properties, and his unreliability in relation to other financial explanations. On those materials, the Tribunal was entitled to treat the amount as income from undisclosed sources.

Conclusion: The question was answered in the affirmative in favour of the Revenue and against the assessee.

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