Law:

Section:

Section 256(1) of the income-tax act, 1961-Reference-Question of fact-Whether tribunal's finding that assessee has failed to prove that he owned gold which he sold and converted into cash, is a finding of fact-held, yes Section 68 of the income-tax act, 1961-Cash credits-Whether where assessee has claimed that certain cash held by him was obtained as a result of conversion of gold into cash, what he has to prove is that gold belonged to him-held, yes Facts In respect of certain cash amount, the assessee's explanation that it was obtained as a result of conversion of gold into cash was rejected by the ITO and the amount was added to the assessee's income as income from undisclosed sources. On appeal, the AAC confirmed the ITO's order, holding that the assessee had not stated as to why he sold the gold. On second appeal, the Tribunal, after taking into account the conduct of the assessee and finding that the assessee had been purchasing certain properties and had been borrowing moneys which he would not have done if he had possessed gold because then he would have sold that gold, held that the assessee had failed to prove that he owned gold which he sold and converted into cash and, therefore, the impugned cash had to be treated as the assessee's income from undisclosed sources. On reference : Held In case where the assessee claims that a certain cash is the result of conversion of certain gold into cash by him, what the assessee is required to prove is that the gold belonged to him. The assessee's claim can be accepted if there is material to support it. The material may be in the form of any direct evidence or material may be in the form of circumstances which the income-tax authorities are entitled to take into consideration in deciding the issue. In the instant case, the assessee had merely given an explanation that the gold belonged to his wife. In order to ascertain the acceptability of this explanation, the Tribunal considered certain other circumstances but found the assessee's explanation unacceptable. Having regard to the facts and findings recorded by the Tribunal, it appeared that it was clearly a case of finding of fact recorded by the Tribunal.…

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