Section 69A and explained gold ornaments: contemporaneous records and corroborative evidence defeat an unexplained investment addition.

Contemporaneous records and corroborative statements can satisfy the assessee's burden under section 69A when gold ornaments are shown to be recorded in books, lying with artisans, or belonging to identified third parties. The revenue's reliance on Central Excise material did not displace that explanation for income-tax purposes. On that basis, no unexplained investment was established in the seized gold ornaments, and section 69A was held inapplicable.

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Issues: Whether the addition made under section 69A of the Income-tax Act, 1961 in respect of 933 gms. of gold ornaments was justified.

Analysis: The assessee explained that the gold ornaments were recorded in the relevant registers and books of account and were either lying with artisans or belonged to identified third parties. The explanation was supported by contemporaneous records and corroborative statements of artisans and other concerned persons. The material relied upon by the revenue through the Central Excise proceedings did not displace the assessee's evidence for income-tax purposes. The assessee thus discharged the burden of showing the nature and source of the gold and that there was no unexplained investment.

Conclusion: The addition under section 69A was not warranted and was rightly deleted.

Final Conclusion: The revenue failed to establish unexplained investment in the seized gold ornaments, and the deletion of the addition was sustained.

Ratio Decidendi: Where an assessee produces contemporaneous records and corroborative evidence showing that the assets found are recorded or otherwise satisfactorily explained, section 69A of the Income-tax Act, 1961 does not apply.

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