Law:

Section:

Section 69A of the Income-tax Act, 1961 - Unexplained money - Assessment year 2001-02 - Assessee's firm was engaged in business of purchasing gold bullion and converting same into ornaments for export - There was a raid in its business premises by custom authorities during which certain gold jewellery and gold idols were seized as they were of foreign origin and smuggled goods and had no valid import document - Relying on findings of custom authorities, Assessing Officer made additions to assessee's income on account of unexplained jewellery - Facts revealed that findings of custom authorities, relying on which Assessing Officer made additions, had been set aside by appellate authorities; that Assessing Officer had not made any independent enquiry; and that there was no corroborating evidence to support case of revenue - Whether on facts, Tribunal was correct in deleting additions - Held, yes FACTS The assessee's firm was engaged in the business of purchasing gold bullion and converting same into ornaments for export. There was a raid in the business premises of the assessee by the custom authorities during which certain gold jewellery and gold idols were found and seized as they were of foreign origin and smuggled goods and had no valid import document. Relying on the findings of the custom authorities, the Assessing Officer made additions under section 69A to the income of the assessee on account of unexplained jewellery and unaccounted sales. On appeal, the Commissioner (Appeals) deleted the additions. The Tribunal confirmed the order passed by the Commissioner (Appeals). On the revenue's appeal to the High Court: HELD The additions were made only by relying on the findings of the custom authorities and the said findings, which were the basis for making additions, had been set aside by the appellate authority. The Assessing Officer had not made any independent enquiry and also there was no corroborating evidence to support the case of the revenue. It was also found that even the assessee, whose statement was recorded by the Department of Central Excise, had not been examined by the Assessing Officer. Further, the assessee was not given an opportunity to…

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