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Issues:
Confirmation of addition of unexplained capital in the assessment for the year. Analysis: The appeal was against the confirmation of an addition of Rs. 40,152 as unexplained capital belonging to the assessee for the assessment year 1991-92. The assessee's representative argued that the capital amount was explained and should not be treated as unexplained. The Dy. CIT(A) confirmed the AO's action, considering it a case of bogus capital formation. The representative contended that the AO's estimation of income was incorrect and that the opening capital had been accepted in the previous year's assessment, thus could not be added in the current year. The Departmental Representative supported the lower authorities' decision, claiming the income was unlikely for a lady from such a family background. The Tribunal carefully reviewed the case, noting that the assessee had confirmed her work activities and ownership of fixed deposits. The AO's estimation of income was based on the lady's statement, and the return for the previous year had been accepted without any reopening. The Tribunal concluded that the addition to the declared income was not valid, as the opening capital was verifiable and the AO could not make additions without disturbing the previous year's final assessment. Consequently, the addition was deleted, and the AO was directed to accept the declared income. The appeal was allowed in favor of the assessee.
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