COMMISSIONER OF INCOME TAX Vs. P.BALASUBRAMANIAN

JUDGEMENT

(1.) The Tax case Appeal is at the instance of the revenue against the Order dated 31.1.2008 in I.T.A.No.1279/ Mds/2006 on the file of Income-tax Appellate Tribunal 'D' Bench, Chennai, in and by which the Tribunal held that addition should be confined to materials during the course of survey only and also deleting the other additions towards interest on money lending business, household expenses and creditors and expunging the levy of penalty. The assessment year relates to 2003-2004.

(2.) The Tax Case Appeal is admitted on the following substantial questions of law:

(3.) Brief facts:- The assessee is doing business of manufacture of gold jewels for others on job work basis. There was a survey at the premises of the assessee on 29.10.2002. During survey, it was noticed that gold jewels weighing 900 grams were available at the premises of the assessee. During survey, a sworn statement under Section 133A sub-section 3(iii) was recorded from the assessee on 29.10.2002. The assessee filed his return of income on 21.07.2003 admitting an income of Rs.2,97,410/- and the return was processed under Section 143(1). As this is survey case, a notice under Section 148 was issued on 27.10.2004. In response to the said notice, the assessee filed return of income on 16.11.2004 admitting income of Rs.2,97,410/- and the same was taken up for scrutiny and notice under Section 143(2) was issued. While recording his statement during survey, the assessee was requested to state the investment in the gold business being in the form of jewellery to which he has stated that he has 3 kilos of gold jewellery and that 900 grams of jewellery was found in the premises during survey and inventorised and that the balance of stock was given for making jewellery, to the following three goldsmiths (i) Murali Krishnan; (ii) Balan and (iii) Ravi.