R K JAIN Vs. COMMISSIONER OF INCOME-TAX

JUDGEMENT

(1.) THIS is an application under Section 256 (2) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), for calling for the statement of case from the Income-tax Appellate Tribunal (for brevity "the Tribunal" ).

(2.) THE facts which are essential to be stated for adjudication of this application are that the applicant filed his return of income in the status of an individual and his income was shown at Rs. 38,535. The same consisted of three components, namely, income from profession as an advocate amounting to Rs. 20,000, income of interest received from one Kanhaiyalal Sao to the tune of Rs. 18,535 and from agriculture a sum of Rs. 5,000. The Income-tax Department conducted a search at his residence as well as office on September 22, 1981. The premises of his father, Kanhaiyalal Sao, and his brother, Dr. D. K. Jain, was also effected. During the search of his residence no ornaments were found but from the locker in the Punjab National Bank, Sagar, gold ornaments weighing 664. 900 gms. , and primary gold weighing 102. 900 gms. , were found and seized. The primary gold was taken over by the Central Excise Department and eventually was confiscated. When an enquiry was made to find out the source of acquisition of these items an explanation was preferred that the gold ornaments and primary gold belonged to his wife, Smt. Kiran Devi. She had received about 40 tolas of gold ornaments and some silver ornaments at the time of her marriage in the year 1960, the value of which at that time was estimated at Rs. 5,000. In the family partition he had received 50 tolas of gold ornaments which also included the ornaments given to his wife at the time of her marriage. Regarding the extent of ornaments held by his wife, Smt. Kiran Devi, it was confirmed by his father-in-law that the said ornaments were given to Smt. Kiran Devi. The father of the assessee, Kanhaiyalal Sao, and his brother, Dr. D. K. Jain, also confirmed the fact of partition and the receipt of about 50 tolas of ornaments in the family partition by the applicant. Regarding primary gold it was explained that some ornaments were got melted by the wife for making new ornaments for the marriage of their daughter but the new ornaments could not be made and the melted gold as such was kept in the locker.

(3.) THE Inspecting Assistant Commissioner of Income-tax held that the applicant's wife, Smt. Kiran Devi, could have only 32 tolas of gold ornaments and deducting the value thereof he fixed at Rs. 48,373. The total value of ornaments as well as that of primary gold was found to be Rs. 1,00,340. Thus, the Inspecting Assistant Commissioner assessed the balance of Rs. 51,967 as unexplained investment under Section 69a of the Act. Thus, the total income was determined at Rs. 90,502 plus agricultural income of Rs. 5,000. The assessment order is dated March 22, 1985.