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TMI Blog1996 (2) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... ts 6,41,091 4,04,141 3. Silver utensils 92,827 NIL Except for the part of the gold ornaments nothing was seized. In his preliminary statement obtained on 20-1-1984 the assessee submitted before the Authorised Officer that the ornaments found at his residence belonged to his family members, i.e., his wife Smt. Rupaben; his mother Smt. Bhanumatiben and his sister-in-law (brother's wife) Smt. Ranjanben. It will be worthwhile to reproduce question No. 9 and answer to it in the said statement: " Question No. 9 : How much quantity of the ornaments is in your house ? Answer : There may be at my residence and locker gold ornaments, weighing 100 tolas of my wife Rupaben, 199 tolas of my mother Bhanumatiben, 60 to 70 tolas of --- Ranjanben the wife of my brother Bharatbhai and also silver vessels, items of Puja and over and above diamond and pearl ornaments. " In response to question No. 13, he stated as under : " Question No. 13 : If your family members have filed Income-tax or Wealth-tax returns, give particulars thereof ? Answer: Income-tax and Wealth-tax returns are correct. My wife and my brother's wife Ranjanben have filed their Income-tax returns for the first time. Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Smt. Bhanumatiben in 1975 before the I.T. Department. 4. Copy of the will dated 21-1-1977 made by Late Shri Mohanlal Ranchhodlal Chokshi --- Father of Smt. Bhanumatiben. 5. Copy of Valuation report dated 5-4-1983 filed by Shri Jagjivandas Thakkar. " The I.T.O. accepted 1495 grams as explained and held that ornaments weighing 2425 grams (3920 grams - 1495 grams) remained unexplained. He estimated the value of these unexplained ornaments at the rate of Rs. 165 per gram at Rs. 4,00,125 as per his order dated 17-5-1984 under section 132(5). 3. During the course of assessment proceedings, before the Assessing Officer the assessee maintained that the gold ornaments found at his residence during the course of search operations belonged to his family members; viz., his wife Smt. Rupaben, his mother Smt. Bhanumatiben and his sister-in-law Smt. Ranjanben and reiterated the submissions made before the Assessing Officer during the course of proceedings under section 132(5). The assessee also produced before the Assessing Officer the documents in respect of disclosures made by Smt. Velbai, disclosure by Smt. Bhanumatiben, the Estate Duty order of his late father and the wealth-tax orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the onus was on the assessee to explain the source of acquisition of these ornaments. He submitted that the statement of the assessee that the gold ornaments belonged to the three lady members was a self serving statement and hence it could not be relied upon because the ladies had no ostensible source of income and were not in a position to acquire these ornaments. He admitted that the ladies might have received some ornaments at the time of their marriage and for that the ITO had already accepted the explanation furnished in respect of 1495 grams of gold ornaments. He submitted that taking into consideration the totality of the circumstances, the addition made by the Assessing Officer was justified. In support of his contentions, he relied upon the judgment of the Supreme Court in the case of CIT v. Durga Prasad More [1971] 82 ITR 540. 6. Shri N.R. Divatia, the learned counsel for the assessee strongly supported the order of the CIT(A). He took us through the voluminous paper book running into 143 pages and drew our attention to the statements of the assessee recorded during the course of search (pages 49 to 53 of the paper book and pages 54 to 61 of the paper book); submiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amidars of the assessee clearly lay on the taxing authority and the said burden was not discharged and in any case the said burden could not have been discharged by taxing authority if they were careful to examine to material and evidence produced by the assessee both during the course of proceedings under section 132(5) and under section 143. According to the learned counsel, the ITO erred in solely relying on the order under section 132(5) which is a summary assessment. The learned counsel for the assessee further submitted that the assessee belonged to a status family, his father Late Shri Jagjivandas was assessed to wealth-tax and after his death the assessee became an accountable person and filed Estate Duty Returns. The learned counsel submitted that the three lady members had explained the source of their respective ornaments by documentary evidence which evidence has not been found false by the Assessing Officer. Refuting the charge of the learned D.R. that the statements of the assessee and the lady members of the family were self serving statements so also the supporting evidence by way of disclosure petitions and wills of various persons from whom the ladies had received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Authorised Officer, spontaneously submitted that the ornaments found at his residence and in lockers with the banks belonged to his family members viz., Smt. Rupaben --- wife of the assessee; Smt. Bhanumatiben --- mother of the assessee and Smt. Ranjanben --- sister-in-law of the assessee. Again on conclusion of the search operations in his final statement he steadfastly stuck to the position as stated above. The two lady members viz., assessee's mother Smt. Bhanumatiben and the assessee's wife Smt. Rupaben who were present during the course of search operations also in their spontaneous statements recorded at the beginning of the search and on the conclusion of the search not only owned up the ornaments belonging to them but also identified them. The third lady viz., Smt. Ranjaben --- who is sister-in-law of the assessee and who at the time of search was residing at Delhi also confirmed that she had kept her jewellery with the assessee at Ahmedabad. At no stage she controverted the statement of the assessee that part of the jewellery found at his residence belonged to her. Vide letter dated 12-4-1984 addressed to the ITO she requested for the release of her ornaments and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Rs. 55,000. The A.C.E.D. included part of the jewellery in the estate of the deceased but the High Court held as follows : " Jewellery normally is possessed by womenfolk and there was no finding that they were such which males usually wear or possess. Since the deceased migrated from one country to another, he must have taken the entire jewellery of his wife with him, as he was the head of the family. The fact that he had brought jewellery alongwith his wife and children will not necessarily mean that the jewellery was his personal property. In the absence of any proper details, the authorities were in error in assuming that the entire lot of jewellery must have belonged to the deceased personally. " Though the above judgment was pronounced under the Estate Duty Act the ratio decidendi of the judgment will squarely apply to the facts of the case before us because the Assessing Officer has assumed even in the face of overwhelming evidence to the contrary that the entire jewellery/ornaments belonged to the assessee and not to the lady members. 7.1 Lastly, we note that the Assessing Officer has erred in solely relying on the order made under section 132(5) of the Act. The e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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