9911796707
TMI Blog1995 (2) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... ned CIT(A) has erred in law and on facts in deleting the addition of Rs. 1,08,000 being investment in gold ornaments & of silver coins by observing that the same has been received by way of Will. 3. That the learned CIT(A) has erred in law and on facts in setting aside the assessment to be made afresh by observing that the same belong to others. 4. That the order of the learned CIT(A) may be set aside and that of the Assessing Officer be restored. " 2. The facts of the case briefly stated, are that the business and residential premises of the assessee, his brother Surendra Kumar and his sister-in-law Smt. Poonam Mittal were subjected to search operation under section 132 of the Income-tax Act on 4-12-1989. A joint Panchnama in the name of assessee and Mrs. Poonam Mittal was prepared in respect of cash, gold ornaments and silver assets found at house situated at Mohalla Misar Murar, Saharanpur. These assets were seized. Apart from cash of Rs. 40,000 jewellery (valued at Rs. 1,37,053), silver articles (valued at Rs. 5,66,556) were found from the premises. According to the Revenue, the above cash and silver articles belonged to the assessee and his brother Shri Surendra Kumar. As p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... existence and validity of aforesaid Will. The Revenue contended that Smt. Magan Devi executed no Will, whereas the assessee argued that she executed a legal and valid Will. 4. To explain source of acquisition of various assets found and seized during the course of raid, the assessee submitted that these articles were acquired through Will of Smt. Magan Devi. The Assessing Officer did not accept the above plea as no Will was claimed at the time of search operations. The Assessing Officer insisted on production of original Will which was not produced on the ground that the same was eastern away by ants. The Assessing Officer held that acquisition of jewellery of estimated value of Rs. 1,08,000 and of silver articles and coins (value Rs. 5,66,556) was not explained. While rejecting the case of the assessee, the Assessing Officer observed, " Smt. Magan Devi was never a wealth-tax assessee. She was not even income-tax assessee. The assessee has taken up this plea when the assets have been seized. Had it been so, the assets of the assessee such a big HUF would have been assessed to income-tax or Smt. Magan Devi at least should have been a wealth-tax assessee. In the absence of original ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (individual) ; (ii) Shri Surendra Kumar (individual) ; (iii) Smt. Poonam Mittal, wife of Shri Surendra Kumar ; (iv) Smt. Shyam Kumari, wife of Shri Rajendra Kumar ; (v) Shri Surendra Kumar & Sons (HUF) ; and (vi) (Km.) Poonam, aged about 22 years, daughter of Shri Rajendra Kumar. The CIT(A) accepted that cash belonged to aforesaid persons. The revenue has accepted the aforesaid factual finding of CIT(A) and deletion of addition on account of cash is not in dispute and has become final. Thus, if sons of Shri Makhan Lal and their families were residing in the demised premises where from cash and jewellery were found, 36 tolas claimed to be belonging to four families on facts of the case, can reasonably be held to be explained. It is not in dispute that the assessee, his father and other brothers were carrying on sarrafa business for the past several years. From the assets found in the shape of cash, jewellery, silver utensils, etc., it is quite evident that earnings of above persons was substantial. Ladies in such families as per custom among Hindus generally received reasonable jewellery at the time of their marriage. Therefore, in our opinion, claim of 36 tolas with three l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e lady had any reasonable source to acquire and possess articles claimed to belong to her and bequeathed by her through the Will. The affidavits produced by different persons were self serving documents having no evidentiary value. In this connection, learned D.R. relied upon decision of jurisdictional High Court in the case of Sri Krishna v. CIT [1983] 142 ITR 618 (All.). The statements recorded at the time of raid showed that none of the legaties under the Will was aware of the Will. This and above circumstances clearly showed that Will set up by the assessee was not a genuine document. The learned departmental representative accordingly impugned the order of CIT(A). 8. Shri Garg, learned Counsel for the assessee supported the impugned order. He explained that Smt. Magan Devi died in 1974 whereas her husband Shri Makhan Lal died on 23-12-1980. The Will was got mutilated in hands of Shri Makhan Lal and, therefore, a necessity to prepare a notarised copy of the Will arose in the year 1981. Accordingly notarised copy was prepared. Certificate of Notary Public who had notarised the Will was filed with the authorities and copy thereof was available at page 117 of the Paper Book. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this connection, Shri Garg invited our attention to order passed in the case of Makhan Lal and Sons bigger HUF and Smt. Pooran Rani. These persons as per the assessment orders were shown to have same residential address. Therefore, the assessment of entire jewellery exclusively in the hands of the assessee was totally unjustified. 10. Shri Garg further argued that Revenue authorities wrongly placed onus on the assessee to explain source of acquisition. It was for the Revenue to prove first that assessee was owner of the articles for the purposes of section 69A. These articles were not seized from the persons of the assessee but from different persons occupying the seized premises. Shri Garg further relied upon orders passed by CIT under section 132(11) of the Income-tax Act in the case of Smt. Shyam Kumari and Smt. Kamlesh Kumari who were shown as legaties under the same Will. The claim was duly accepted. In this connection, Shri Garg relied upon CIT v. Shanishuddin Manzoor Haque [1988] 172 ITR 696 (All.). He further submitted that order passed under section 143(1) of the Act has all the force of a valid assessment order. Shri Garg submitted that nature of assets were such that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... private document concerning legatees/heirs of a testator and the Revenue can by no stretch of imagination raise any dispute relating to validity of a Will. In income-tax proceedings, a Will is mostly relied upon as a contemporaneous document to explain source of acquisition of certain assets. Therefore, the more important question is always the source of acquisition of disputed assets, which is sought to be explained and not valid execution of the Will. For example, in this case even if it is accepted that late Smt. Magan Devi did execute a valid Will but had no source to acquire or possess silver ornaments claimed to have been bequeathed by her, the case of the assessee would not be advanced. Therefore, the important question is the capacity or source of acquisition of articles rather than legal and valid execution of Will. As regards capacity of Smt. Magan Devi, the assessee had stated that Smt. Magan Devi in her life time was partner of M/s. Bishan Dayal Makhan Lal, Lashkar. The said firm was carrying on sarrafa business and were assessed to tax. She is also claimed to be the only daughter of her parents. It is further claimed that at the time of her marriage, much before the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reated as WILL for the sake of argument) had been found from the locker which had earlier been operated on 24th December, 1985 and prior to that on 3rd January, 1984 and 30th November, 1983 and attention is invited to page 18 of the Paper Book. This shows that the valuables in question were in existence even in the earlier years. This submissions has got two aspects. First is that if we apply the test of human mind and probabilities as have been propounded by the Hon'ble Supreme Court in the case of CIT v. Durga Prasad More reported in 82 ITR page 540, nobody would have taken care to keep these papers in locker had they been merestray piece of papers having no evidencial value. Secondly, the event of acquisition of the valuables stand shifted to the financial year 1983-84 (relevant to the assessment year 1984-85) and the financial year 1985-86 (relevant to the assessment year 1986-87). Therefore, no addition could be made in the assessment year under appeal which is the assessment year 1987-88. " The CIT(A) further held that the Will was notarised on 3rd June, 1981 and was therefore in existence in financial year 1981-82. The addition for any unexplained silver coins and silver ar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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