9911796707
TMI Blog1990 (4) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... jewellery, source from which they were acquired have not been explained. 4. The CIT(A) also erred in deleting Rs. 16,500 disclosed by the assessee as income of the assessee though no nexus has been established between this and other additions and his decision is based purely on premises and presumption." 2. The grounds taken by the assessee in its cross-appeal can be summarised as under: 1. The CIT(A) erred in partially confirming the addition to the extent of Rs. 4,716 out of jewellery and ornaments claimed to be belonging to minor son Manoj and minor daughter Sapna, which were acquired out of withdrawal of Recurring Deposits in their names. 2. The CIT(A) erred in sustaining an addition of Rs. 26,958 being value of items of jewellery and oranaments which belonged to the sister of the assessee's wife, who had given the same on the basis of temporary exchange of her ornaments with assesse's wife's jewellery worth Rs. 20,130 which was duly disclosed in her wealth tax return. 3. The CIT(A) also erred in sustaining an addition of Rs. 9,837 being value of jewellery belonging to minor son Sharad which was brought or got made from cash gifts received by him and gifts on various ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s done purely on temporary basis and this type of exchange is commonly prevalent amongst the ladies. An affidavit of Smt. Mohinidevi was also filed but she was not produced for examination by the ITO. The assessee requested the ITO to record her evidence by issuing a commission as she resides in U.P. but this request was rejected on the ground that this was a search case and he was investigating the matter and, therefore, the statements will have to be recorded by him. (b) Gold ornaments appearing at Sl. Nos. 5 & 6 of Annexure E of the value of Rs. 12.326 and Rs. 6,332 (totalling Rs. 18,658) weighing 86,500 gms. and 45.00 gms. was claimed to have been acquired out of the proceeds of the matured recurring deposit of Rs. 4876 with Kalupur Commercial Bank. It was submitted that the petty gifts received by the minor children of the assessee were deposited in recurring deposit accounts on 6th Dec., 1973 in the names of minor daughter Sapna and minor son Manoj. These recurring deposits matured on 1st Nov., 1975 and the assessee received Rs. 4876 on behalf of his minor children. These ornaments valued at Rs. 18,658 as on the date of search were acquired out of the aforesaid proceeds of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch in U.P. gave in exchange the aforesaid ornaments to the assessee's wife Smt. Geetadevi. As regards items mentioned at (b) above, the CIT(A) accepted in principle that the assessee utilised the proceedings of matured recurring deposits of Rs. 4,876 received during Nov., 1975 for acquiring the items of gold ornaments mentioned therein. However, he estimated that the value of gold in the year 1975 being Rs. 531 for 10 gms. of 24, cts., the assessee could have acquired about 95 gms. of jewellery out of the aforesaid amount of Rs. 4,876. Thus out of 131 gms. the CIT(A) held that 36 gms. should be added as income of the assessee. Thus out of the addition on a/c of unexplained jewellery amounting to Rs. 18,658, the CIT(A) confirmed the amount of Rs. 4,716. As regards item (c) above, the CIT(A) did not accept the assessee's contention about the ownership of assessee's son Sharad over gold ornaments totalling to Rs. 9,837 claimed to have been received on Jiana. As regards item (d) above, containing list of gold ornaments claimed to be belonging to minor daughter Sapna, it appears that before the CIT(A) only two items appearing at s. Nos. 10 & 12 of annexure E of Rs. 1,762 and Rs. 2,972 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessment order. He submitted that Smt. Geetadevi in her statement recorded during the course of search expressed her complete ignorance about her share income in the said firm. She even did not remember the name of the firm and also expressed her inability about the quantum of share of profits or loss of the various partners in the said firm. The mere fact that in her subsequent statement recorded during the course of assessment proceedings on 7th Nov., 1984 she stated that she is a partner in the said firm would not alter the true fact that she is not a real partner as is evidence from her statement recorded during the course of search. He also relied upon the decision of Tribunal Ahmedabad Bench in the case of Kanubhai N. Amin vs. Asst. CIT (1989) 79 CTR (Trib) (Ahd) 93 in which it has been held that the version given by any person in the first statement should be considered to be more reliable. He also relied upon the judgment of Hon'ble Supreme Court in the case of CIT vs. Durga prasad More (1971) 82 ITR 540 (SC). The further fact that the share income has been assessed in the hands of Smt. Geetadevi will also not preclude the Department to tax said income in the hands of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8-79 to 1983-84 dt. 2nd March, 1989 that the said partnership firm was granted registration in asst. yr. 1978-79 and for several years thereafter. During the course of search on 11th Dec., 1981 a statement of Smt. Geetadevi was recorded in which she stated that she is a partner in the firm but does not know the name of the firm and the share of profit or loss therein. On the basis of this statement and similar statements of other lady partners Smt. Santoshidevi and Smt. Kusumdevi, registration was refused to the said partnership firm and their respective share income was added in the hands of their husbands. During the course of assessment proceedings statements of these ladies including that of Smt. Geetadevi were recorded on 7th Nov., 1984 in which Smt. Geetadevi clearly stated that the statement given during the course of search was given out of fear. She further stated that she is a partner of the aforesaid firm and her shares is 25 per cent. She also gave the details about the other partners of the said firm. It was further stated that she invested Rs. 10,000 in this firm at the time when she became a partner. She also signed the partnership deed and other forms connected with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are exactly similar and, therefore, the order of the CIT(A) on this point should be cancelled and the addition made by the ITO restored. 8. The learned counsel for the assessee contended that the facts of Omkarmal Jayanarayan's case are different from the present case. In that case the argument that no silver utensils were found in place of bars in the intensive search was not advanced. Further more the assurance given by Mrs. Mehra, the then Director of IT (Investigation) to the C.A.'s Association was also not brought to the notice of the Tribunal in the case of Omkarmal Jayanarayan. He supported the order of the CIT(A) and contended that since the disputed item of silver found during the course of search is adequately covered by the silver disclosed by Smt. Geetadevi, wife of the assessee, under the voluntary Disclosure Scheme, the addition was rightly deleted by the CIT(A). 9. We have considered the rival submissions and have also gone through the relevant material. After considering the entire material and submissions, we are of the considered opinion that the CIT(A) has deleted the aforesaid addition on valid grounds. While considering the explanations relating to sources ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee has failed to produce any evidence to support his contention that the aforesaid amount of recurring deposit was utilised for purchase of jewellery in the year 1975. He further contended that at the time of search the assessee had stated that the total value of the ornaments seized of Rs. 2,01,308 and silver ornaments worth Rs. 27,925 totalling Rs. 2,29,233 have not been declared in the wealth-tax returns either in his own case or in the case of his HUF, his wife, his children or any other relative and it was further stated that he would like to go before the Settlement Commission for the acquisition of these ornaments. He further invited our attention towards the order passed by the Tribunal in the case of assessee's father Shri Omkarmal Jayanaryan in which additions with regard to gold ornaments under similar facts and circumstances made by the ITO have been sustained by the Tribunal. He relied upon the detailed reasons given in the assessment order and contended that the relief granted by the CIT(A) with regard to gold ornaments should be cancelled and the addition should be restored back. 11. The learned counsel for the assessee contended that the facts of assessee's c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have to be appreciated and examined on the basis of broad probabilities. It is an undisputed fact that an amount of Rs. 4,876 was received from the recurring deposit account in the names of two minor children in the year 1975. The said amount in the normal course would have been reinvested or what the assessee contended that those were utilised for acquiring ornaments for the children may also be probable. Thus on the basis of probabilities the contention of the assessee was acceptable and the CIT(A) was justified in accepting such contention. As regards the conclusion derived by the CIT(A) that the amount received in the year 1975 from these R.D. accounts was adequate only for acquiring about 95 gms. Of jewellery, we find that the CIT(A) has arrived at such conclusion on the basis of a very reasonable basis and, therefore, we do not find any justification in interfering with his findings in this regard. The relief of Rs. 13,942 given by the CIT(A) out of gold ornaments valued at Rs. 18,658 claimed to have been acquired out of proceeds of aforesaid R.D. accounts is confirmed. The balance addition of Rs. 4,716 sustained by the CIT(A) out of the aforesaid ornaments which is the subje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the order passed by him. In ground No. 3 the Department has challenged the relief of Rs. 20,236 allowed by the CIT(A) out of which we have held that the relief accounting Rs.13,942 was rightly allowed by the CIT(A). In view of this, addition to the extent of Rs. 6,296 is restored. 14. As regards ground No. 4 in the Department's IT appeal, the learned Departmental Representative invited our attention towards the order passed by the Tribunal in the case of assessee's father Omkarmal Jaynaran in which a similar addition of Rs. 18,000 deleted by the CIT(A) was reversed vide para 12 of the aforesaid order. He submitted that since the facts relating to the aforesaid ground are similar, the relief of Rs. 16,500 granted by the CIT(A) should be cancelled and the addition made by the ITO restored. 15. The learned counsel for the assessee invited our attention towards the statement of income annexed with the return of income submitted by the assessee in which the aforesaid amount of Rs. 16,500 was included by the assessee himself in the total income with the following remarks: "Income on estimated basis, as may be added under proceedings under s. 132. This income is shown on only es ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fully justified. Thus ground No. 4 in Revenue's IT appeal is rejected. 17. Now we will consider the assessee's IT appeal. All the four grounds raised by the assessee relate to additions on account of unexplained gold ornaments made by the ITO which have been partially confirmed by the CIT(A). 18. The learned counsel for the assessee contended that the entire additions confirmed by the CIT(A) as per details mentioned in grounds No. 1 to 4 deserve to be cancelled. The additions were made by the ITO mainly by relying upon the alleged admission made during the course of search. The learned D.R. has also placed heavy reliance on the decision of the Tribunal in the case of Omkarmal Jayanarayan while arguing the Revenue's appeal in this case and he also contended that same arguments will be equally applicable with regard to the various grounds of appeal taken by the assessee. Before going to the itemwise explanations, the assessee's counsel, therefore, contended that he would like to meet both these points prior to making his submissions with regard to the aforesaid four grounds. It was contended that the alleged admission recorded in the statement of the assessee during the course of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laced on such statements. 19. As regards the order of the Tribunal in the case of assessee's father, it was submitted that a decision based on facts of that case cannot be applied to the present case. There is nothing like precedent relating to appreciation of facts. He also submitted a chart showing that the facts of Omkarmal Jayanarayan's case and the case of the assessee and other brothers are different and the decision in the case of Omkarmal should not be applied in the case of the assessee and his other two brothers. For instances, he pointed out that the ITO in respect of unexplained jewellery is same whereas in the case of the assessee there is a substantial difference in the value of ornaments seized and the addition made with regard to the same. In the case of Omkarmal it was contended by the Department that shifting explanations were submitted with regard to sources of ornaments in the proceedings under s. 132(5) and under s. 143(3) whereas no such charge of shifting explanation have been levelled in the present case. In the case of Omkarmal, the matter was not argued at length and judgments of various Courts and Tribunal which have been cited in the present case were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been accepted. He also invited our attention towards the decision of Tribunal, Bombay Bench in the case of Haridas Valji (1982) 12 TLR 213 (Bom) in which it has been held that for considering the source of jewellery we should go by broad probabilities and should not insist upon clinching and conclusive evidence. He also relied upon the judgment of Bombay High Court in the case of Dilip Kumar Roy vs. CIT (1974) 94 ITR 1 (Bom) to support his contention that as the veracity of the statements in the affidavit had not been challenged or disputed, the appellate authority was not justified in its conclusion that the amount was income liable to tax in the hands of the assessee. He also relied upon the decision of Tribunal, Allahabad Bench in the case of Smt. Uma Jhunjhunwala vs. ITO 27 TTJ (All) 587 to support his contention that it customary that such gifts are received on ceremonial occasions. In that case, looking to the good status of the family gifts amounting to Rs. 4,500 received by the family members of the said Hindu family was treated as explained. He further invited our attention towards the judgment of Hon'ble Supreme Court in the case of Surya Moorthi vs. Govinda Swamy A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es are not discussed in detail as the decision will depend upon the facts of this case. We have also gone through the order passed by the Tribunal in the case of assessee's father Omkarmal Jayanarayan. Since that decision is also based on the appreciation of facts and evidence existing in that case, the same cannot be made applicable to the present case without thoroughly and properly considering the facts and evidence relating to the matter under consideration. We are also of the view that in such matters while considering the source of gold ornaments or silver found during the search, we should go by broad probabilities and the evidence required for this purpose cannot be expected to be clinching and conclusive. Keeping this principle or mind we will now consider the various items of additions confirmed by the CIT(A). 22.1. As regards the addition of Rs. 4,716 mentioned on ground No. 4, we have already held while considering the Revenue's appeal that the CIT(A) was fully justified in sustaining the aforesaid amount of Rs. 4,716 out of the addition of Rs. 18,658 claimed as ornaments acquired out of proceeds of maturity value of recurring deposits in the names of the children. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aring fact in the first explanation submitted to the ITO vide letter dt. 11th Jan., 1982 but instead promised to submit the explanation after making necessary enquiries. Such contradictory material compels us to disbelieve the contents of the affidavit of a close relative who would naturally be willing to go out of the way to help her close relative. In view of the aforesaid facts and in view the detailed reasons given by the ITO and the CIT(A) we are of considered opinion that the CIT(A) was fully justified in confirming the addition of Rs. 26,958. 22.3. As regards ground No. 3 & 4 relating to jewellery claimed to be belonging to minor son Sharat and minor daughter Sapna to the tune of Rs. 9,837 and Rs. 4,734, the learned authorities below have discussed in details the reasons justifying the additions. The assessee has not even furnished any evidence in support of his contention that these gold ornaments were received from various relatives at the time of jiana ceremony and/or were acquired out of cash gifts received from time to time. Furthermore, in the order under s. 132(5) the ITO had already allowed jewellery totalling to Rs. 8,037 consisting of items at Sl. Nos. 13 & 15 of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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