1996 (4) TMI 142 - AT - Income Tax

Tribunal removes additions after assessee proves ownership of cash and gold ornaments through credible sources.

The Tribunal allowed the appeal filed by the assessee, deleting the additions of Rs. 1,29,186 in cash and Rs. 58,031 in gold ornaments. The Tribunal found ... Assessing Officer, Assessment Year, Burden Of Proof Issues:Confirmation of addition of cash and gold ornaments in the appeal by the assessee.Analysis:The appeal raised by the assessee primarily concerns the confirmation of the addition of Rs. 1,29,186 in cash and Rs. 58,031 in gold ornaments found in a steel bag carried by the assessee. The assessee, an individual working as a motor mechanic, was intercepted by the police authorities while returning home during communal disturbances. The steel bag containing the cash and gold ornaments was handed over to him by his father-in-law for safekeeping. The Income-tax Department subsequently took custody of the items under section 132 of the Act. The assessee's explanation, supported by his father-in-law's statement and affidavits of individuals who had deposited money with the father-in-law, was not accepted by the Assessing Officer, leading to the additions. The CIT(A) upheld the additions, stating that the assessee failed to provide evidence supporting his claims regarding the ownership of the cash and gold ornaments.During the assessment proceedings, the assessee presented various documents, including salary certificates and passbooks, to establish his financial position. The father-in-law and other individuals provided explanations and affidavits confirming the ownership of the cash and gold ornaments. However, the Assessing Officer disregarded these explanations, citing the lack of tax assessments and account books for the individuals involved. The CIT(A) also rejected the explanations, deeming them unnatural and unsupported by evidence.In the appellate stage, the learned counsel for the assessee argued that the authorities overlooked the circumstances under which the cash and gold ornaments were found in the possession of the assessee during a period of communal disturbances. The counsel emphasized the statements and affidavits provided by the father-in-law and other individuals, asserting the legitimacy of the ownership claims. The counsel contended that the authorities did not consider the peculiar situation faced by the assessee and failed to appreciate the evidence presented. On the other hand, the Departmental Representative supported the lower authorities' decisions, emphasizing the presumption that the contents of the steel bag belonged to the assessee due to its possession.Upon thorough consideration, the Tribunal recognized the unique circumstances surrounding the case, including the communal disturbances and the social and political status of the father-in-law. The Tribunal noted that the father-in-law and the individuals who deposited money with him were credible sources, and their statements corroborated the assessee's claims. Relying on legal precedents, the Tribunal held that the assessee had discharged the burden of proof by establishing the ownership of the cash and gold ornaments. Consequently, the additions of Rs. 1,29,186 in cash and Rs. 58,031 in gold ornaments were deleted, and the appeal was allowed.