TMI Blog2024 (4) TMI 1028X X X X Extracts X X X X X X X X Extracts X X X X ..... o all other daughters and sons (except father of the assessee) whatever she and her husband wanted during their hard times as well as on various occasions and festivals. However, no details regarding the gifted assets or their values to other children have been specified, unlike the case of the appellant. She has gifted all her shares and other properties at Sl. Nos.1 and 2 of the Will to her son Sevantilal. The value of assets given to the father of assessee is also not high. She has ,however, gifted gold ornament weighing about 738 grams and 187 carats of diamonds to her grandson, Milan Sevantilal Seth (appellant herewith). It is beyond the realm of human probability that she gifted/ gave away such high value gold jewellery and diamonds to her grandson but there is no evidence of any such gift to her own children (3 sons 2 daughters). There are also no supporting documents to prove the source of the aforesaid assets, since she is a housewife with no regular source of income. Also, there is no independent evidence apart from the Will which can prove that she was in possession of the impugned assets at the time of creation of the will. It is also not clear as to why the receipt of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it. The creditworthiness of the will maker and genuineness of the transaction has not been proved for the reasons that assessee s grandmother was a housewife with no regular sources of income. No evidences have been produced to show that she was in possession of so many assets to give to the appellant and her six children. The Will deed appears to be a concocted story as no specific details/quantification is mentioned in it of the assets given to other children. Shares have also been gifted but no details regarding the quantity and value of shares is mentioned. No DMAT account or any evidence from Stock Exchange was produced to support the Will. There is also inordinate and intentional delay in submission of the details. As the Will was made in January, 1999 but no Income-tax or Wealth-tax details were furnished for 17 years long upto 2017-18 or for the prior period to prove the existence of the gold jewellery and diamonds. The officially authenticated copy of a probated will is not available with the appellant. Thus we hold that the onus with regard to creditworthiness and genuineness of the transactions has not been discharged satisfactorily as mandated in section 68 of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the sale of jewellery and diamonds is not verified and explained. Hence, the AO issued a show notice to the assessee requesting him to furnish explanation along with supporting evidences and various details. In response to the show cause notice, the assessee stated that the sale is duly reflected in the books of account and he has paid tax on the capital gains on the sale of the jewellery and diamonds. Regarding the source of acquisition of the impugned jewellery and diamonds, it was explained that the assessee received jewellery upon death of his grandparent as per the Will dated 15.01.1999 executed by the deceased person. A copy of the Will was enclosed to justify the receipt of the impugned valuable assets by the assessee. 3. The details submitted by the assessee and the explanation were duly considered by the AO. However, he did not accept the explanation by observing various defects which are mentioned in para 3.5 of the assessment order. The AO has stated that in the Will the age of the testator is stated to be 75 years in the first para and in second para it is mentioned as 70 years. The AO also observed that the possession of high quantity of jewellery and carats of diamo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmation from the Investigation Wing without proving anything further and made the addition merely on the basis of information from the Investigation Wing. The Ld. CIT(A) stated that the assessee did not raise the issue of cross-examination of Shri Bijal Ashok Shah, proprietor of M./s Swastik Corporation, to whom the jewellery was sold, during the assessment proceedings. The Ld.CIT(A) observed that the AO had made enquiry during the assessment proceedings and provided sufficient opportunity of hearing to the appellant regarding the proposed addition. The reply of the appellant and supporting documents were also duly considered by the AO. The Ld. CIT(A) further held that the appellant could not rebut the findings of the AO during the appellate proceedings as well. The authenticity of source of jewellery as explained in the background of the Will is not plausible, as discussed by the AO in detail in the assessment order. Regarding the issue of cross-examination, the Ld. CIT(A) has relied upon the following decisions to reject the claims of the assessee: (i) GTC Industries Ltd. v. ACIT, ITAT Mumbai, 1995 (1998) 65 ITD 380 (Bom.) (ii) Nokia India (P.) Ltd v. DCIT, ITAT Delhi, 2015 (2015 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... para 7.1.3 of the appellate order and has particularly assailed the observation of the Ld. CIT(A) that The authenticity of source of jewellery as explained in the background of will is not plausible as discussed by the AO in detail in assessment order . The Ld. AR stated that expression plausible used in the order of the Ld. CIT(A) leads to conclusion that he was not very sure regarding the findings given by the AO. The Ld. AR emphasized that the addition has been made on the basis of assumption and presumption and therefore is liable to be set aside. For this, the Ld. AR relied upon the decisions of the Surat Tribunal in the case of Mukesh Nanubhai Desai v. ACIT, (2022) 142 taxmann.com 85. 7. On the other hand, the learned Senior Departmental Representative (Ld. Sr. DR) for the Revenue strongly supported the orders of the authorities below and argued that there is no independent evidence to support the Will of the grandmother. The appellant has also not disclosed the acquisition of the impugned jewellery and diamonds for the last 17 years. The Ld. Sr. DR emphasised that source of jewellery and diamond through a Will from the grandmother has not been satisfactorily proved. The appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at 2055 Posh Vad Thirteenth day of Friday, the 15th day of the month of January, the English day of the year 1999. I, PUTLIBEN KALIDAS SETH, Age about 75 years, Occupation: Housework, Caste Hindu, Residing at: 13, Vimalnath Society, Mitakhali Ahmedabad, today make my last and final will and I hereby declare same to all those connected to me. I am over 70 years old. I am mentally fit healthy. I can understand what is good and bad for myself. I do not trust my body and am not sure when this body will end. I have therefore make this my last will and testament to the intent that there should be no quarrel or strife between my heirs regarding my property in future, that after my death my immovable property may be disposed of according to my wishes as per will. Although I have not executed any other will or testament or any such writing but if any such will or testament or any such writing later on found, I hereby revoke all said will and testament and I order my property to be disposed of as decreed by me in this will. My Husband Shri. Kalidas Seth Passed away 9 (nine) years ago. I have four sons and two daughters. All my sons are married and all of them are happily settled with their o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whereas it is over 70 years in para 2. The testator unlikely to make such glaring mistake when she states that she was mentally fit and healthy and that she has not executed any other will or testament. Though she had 4 sons and 2 daughters, she has not given anything to her 3 sons and 2 daughters in this Will by stating that she had earlier given to all other daughters and sons (except father of the assessee) whatever she and her husband wanted during their hard times as well as on various occasions and festivals. However, no details regarding the gifted assets or their values to other children have been specified, unlike the case of the appellant. She has gifted all her shares and other properties at Sl. Nos.1 and 2 of the Will to her son Sevantilal. The value of assets given to the father of assessee is also not high. She has ,however, gifted gold ornament weighing about 738 grams and 187 carats of diamonds to her grandson, Milan Sevantilal Seth (appellant herewith). It is beyond the realm of human probability that she gifted/ gave away such high value gold jewellery and diamonds to her grandson but there is no evidence of any such gift to her own children (3 sons 2 daughters). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en able to prove the genuineness of the Will and its content by furnishing corroborative and supporting evidences. Even the Will was not probated. Further, the appellant has not produced any evidence to show that the other three sons and two daughters were actually given assets of such high value as had been given to the appellant (grandson). The appellant has not been able to furnish any balance sheet or wealth tax return of self and his grandmother to prove the existence of the given jewellery and diamonds. 12. At this juncture, it would be apt to state that the strict rule of evidence is not applicable to Income-tax proceedings and surrounding circumstances are material in determining the taxability of an event. Application of the theory of human probability to particular facts and circumstances is well recognised in the proceedings under the Income-tax Act, 1961. There is no reason why these principles should not be applicable to the case of the appellant. If such tests are applied to the facts of the present case, as elaborated above, it would lead to the inescapable conclusion that the appellant has miserably failed in establishing its claim regarding the nature and source of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 68 of the Act reposes in the AO the jurisdiction to enquire from the assessee the nature and source of the sum credited in his books of account. If the explanation given by the assessee is found not to be satisfactory, further inquiries can be made by the AO himself, both in regard to the nature and source of the income credited by the assessee in the books of account. The section accords statutory recognition to the principle that cash credits which are not satisfactorily explained, or not at all explained, might be assessed to be tax as income of the assessee. The onus of proving source of sum found to have been received by the assessee is on the assessee. It is for the assessee to prove that even if cash credit represents income, it is income from a source which has been already taxed. The burden to prove the cash credit and genuineness of transaction lies on the assessee, who in order to discharge the onus must prove (i) the identity of the creditors, (ii) creditworthiness or the capacity of the creditors to advance the money and (iii) the genuineness of the transaction. Only when all the above three ingredients are prima facie and cumulatively established, the Department is re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... genuineness of the transaction has not been proved for the reasons that assessee s grandmother was a housewife with no regular sources of income. No evidences have been produced to show that she was in possession of so many assets to give to the appellant and her six children. The Will deed appears to be a concocted story as no specific details/quantification is mentioned in it of the assets given to other children. Shares have also been gifted but no details regarding the quantity and value of shares is mentioned. No DMAT account or any evidence from Stock Exchange was produced to support the Will. There is also inordinate and intentional delay in submission of the details. As stated earlier, the Will was made in January, 1999 but no Income-tax or Wealth-tax details were furnished for 17 years long upto 2017-18 or for the prior period to prove the existence of the gold jewellery and diamonds. The officially authenticated copy of a probated will is not available with the appellant. In view of the above factual and statutory positions and the decisions cited supra, we hold that the onus with regard to creditworthiness and genuineness of the transactions has not been discharged satis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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