1987 (11) TMI 138 - AT - Income Tax

Summary

Issues:
1. Addition of income from undisclosed sources representing investment in jewellery.
2. Charging of interest under sections 139(8) and 215.

Analysis:
Issue 1:
The appellant contested the addition of Rs. 48,905 to her income as income from undisclosed sources, specifically investment in jewellery. The appellant argued that the jewellery in question was received as gifts during her marriage in 1963, with detailed explanations of the origins and values of the ornaments. The appellant maintained that she did not acquire or purchase any jewellery apart from what was received during her marriage. The appellant's father's affidavit supported the claim, outlining the history of the gifts and the family's financial circumstances at the time. The appellant's counsel emphasized the lack of evidence supporting the Department's suspicions and cited relevant case law to bolster the argument.

The Senior Departmental representative countered the appellant's claims, dismissing the statements and evidence as mere stories. It was contended that the prevailing custom was to display jewellery during weddings without actually giving them. The representative pointed to the father's financial difficulties in 1981 as evidence against the appellant's claims, supporting the decision to reject the plea and make the addition to the income.

The Tribunal carefully considered the arguments and evidence presented by both parties. It noted the rejection of the appellant's request to inspect the ornaments to determine their age and authenticity. Additionally, there was no evidence of jewellery purchases by the appellant in the relevant year. The Tribunal acknowledged the validity of the appellant's argument regarding the financial circumstances at the time of marriage and the need to assess the value of jewellery based on the relevant date. Emphasizing the lack of evidence supporting the addition, the Tribunal ruled in favor of the appellant, deleting the addition to the income.

Issue 2:
The subsequent issue pertained to the charging of interest under sections 139(8) and 215, linked to the earlier addition. Since the Tribunal deleted the addition, it directed the Income Tax Officer to modify the interest charged under the mentioned sections accordingly. The appeal was allowed in part, addressing the interest charges in line with the deletion of the income addition.