1990 (5) TMI 81 - AT - Income Tax

Issues Involved:
1. Addition of Rs. 1,35,948 as unexplained investment.
2. Addition of Rs. 23,948 alleged to be received from the assessee's mother.
3. Addition of Rs. 37,000 claimed to be from the assessee's own savings.
4. Charging of interest under section 215 of the IT Act.

Detailed Analysis:

1. Addition of Rs. 1,35,948 as Unexplained Investment

The primary issue is the addition of Rs. 1,35,948 as unexplained investment by the Assessing Officer (AO), which was confirmed by the Commissioner of Income Tax (Appeals) [CIT(A)]. The assessee claimed that Rs. 75,000 was received as gifts from three individuals, Rs. 23,948 from his mother, and Rs. 37,000 from his own savings. The AO rejected these explanations, citing that the gift-tax returns were filed much later and appeared to be fabricated. The CIT(A) upheld this view.

However, the appellate tribunal found that the assessee had provided affidavits and gift-tax returns from the donors, who were assessed to income-tax. The tribunal referenced several judicial decisions, including CIT vs. Orissa Corporation Pvt. Ltd., which emphasized that the burden of proof shifts to the Revenue once the assessee provides credible documentation. The tribunal concluded that the AO should have conducted further inquiries rather than rejecting the evidence outright. Consequently, the tribunal reversed the CIT(A)'s order and allowed the appeal on this point.

2. Addition of Rs. 23,948 Alleged to be Received from the Assessee's Mother

The second issue pertains to the addition of Rs. 23,948, which the assessee claimed to have received from his mother. The AO and CIT(A) rejected this explanation based on the wealth-tax records, which did not show sufficient cash in hand.

The tribunal noted that the assessee's mother had rental income and was assessed to income-tax and wealth-tax. She had revised her wealth-tax returns to show the cash in hand, which was accepted by the AO. The tribunal cited the same Supreme Court decision (CIT vs. Orissa Corporation Pvt. Ltd.) to argue that the AO should have made further inquiries if he doubted the explanation. The tribunal found the explanation and supporting documents credible and allowed the appeal on this point.

3. Addition of Rs. 37,000 Claimed to be from the Assessee's Own Savings

The third issue concerns Rs. 37,000, which the assessee claimed to have saved from his house property income. The AO and CIT(A) rejected this explanation, citing discrepancies in the wealth-tax returns.

The tribunal found that the assessee had income from house property for several years, which was not disputed. The assessee had revised his wealth-tax returns, showing cash in hand, which was accepted by the department. The tribunal concluded that the availability of funds was established and allowed the appeal on this point.

4. Charging of Interest Under Section 215 of the IT Act

The final issue is the charging of interest under section 215 of the IT Act. The CIT(A) rejected the assessee's appeal on this point, and the tribunal found no detailed particulars to support the appeal. Consequently, this part of the appeal was rejected.

Conclusion

The appeal by the assessee was partly allowed. The tribunal reversed the CIT(A)'s order concerning the addition of Rs. 1,35,948 as unexplained investment, Rs. 23,948 alleged to be received from the assessee's mother, and Rs. 37,000 claimed to be from the assessee's own savings. However, the appeal regarding the charging of interest under section 215 of the IT Act was rejected.

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