Delhi High Court
Income Tax Officer vs Late Shri Jawahar Lal Jain (Smt. Archana ... on 2 February, 1994
Equivalent citations: (1994)48TTJ(DEL)653
ORDER
SATISH CHANDRA, A. M. :
These two Revenue appeals and cross-objection by the assessed (late Shri Jawahar Lal Jain) pertain to the asst. yr. 1987-88 and are directed against the orders of the learned CIT(A), Agra dt. 17th Aug., 1990. As the issue is common, for the sake of convenience, these are disposed of by a single order.
2. The facts briefly are that a search and seizure operation was conducted on 30th May, 1986 at the residential and business premises of the assesseds. As a result, the following jewellery was, inter alia, found at the residence as well as from the locker :
Rs.
(a) Jewellery at the residence including silver ornaments and silver coins 1,03,065
(b) Jewellery from the locker 51,297 During the course of assessment proceedings in the case of Shri Jawahar Lal Jain (since deceased) it was submitted before the Assessing Officer that whatever jewellery was found either at the residence of the assessed or on the person of the wife of the assessed or from the locker belonged to Smt. Archana Jain, wife of Shri J. L. Jain and was received by her at the time of her marriage about 22 years ago. No part of the jewellery was purchased either by Smt. Archana Jain or by her husband. The Assessing Officer did not accept the explanation in full. He held that no satisfactory explanation was given in respect of source of acquisition of the jewellery valued at Rs. 1,03,065 found at the residence. He, accordingly, added the same in the hands of the husband of Smt. Archana Jain on substantive basis under S. 69A of the IT Act, 1961 (for short "the Act") and in the hands of Smt. Archana Jain on protective basis, as she claimed the ownership of the jewellery.
3. Being aggrieved, appeals were filed before the learned CIT(A), who passed a detailed order in the case of Smt. Archana Jain. Before the learned CIT(A) the same explanation as given before the learned Assessing Officer was repeated. The learned CIT(A) held that the entire jewellery belonged to Smt. Archana Jain and that the source thereof was explained. In paragraph 3 of his appellate order in the case of Smt. Archana Jain he observed thus :
"3. I have considered the facts. The argument of the husband that the jewellery belonged to his wife has been summarily rejected by the Assessing Officer. Total jewellery amounting to Rs. 1,54,362 was found, out of which the Assessing Officer has considered reasonable only of Rs. 51,297 which was found in locker. Balance has been considered in the hands of the husband of the appellant as not explained. There are instructions of the Board that jewellery worth Rs. 1 lac for each lady should not be seized. Thus, at least the jewellery up to Rs. 1 lac the Assessing Officer should have been accepted. In this case in whole of the family jewellery of Rs. 1,54,362 was found which, in any case, does not appear to be unreasonable. In a business family the jewellery of Rs. 1,54,362 is not impossible. The lady got married 23 years ago when the gold price and silver price was not even 1/10 of today. Therefore, receipt of jewellery of about Rs. 15,000 before 23 years in business family cannot be said impossible. I, therefore, hold that whole of the jewellery belongs to the lady which is considered explained."
He, accordingly, deleted the addition of Rs. 1,03,065 made protectively in her hands. Following his order (supra) he deleted the substantive addition also made in the hands of her husband. Aggrieved by the decisions above, the Revenue is in appeal before us.
4. Shri H. N. Nautiyal, the learned Departmental Representative, submitted that the learned CIT(A) was not justified in deleting the impugned addition by holding that the source of acquisition of the jewellery in question was explained. He argued that the explanation regarding source of acquisition was not found to be satisfactory by the learned Assessing Officer and, therefore, he was perfectly justified in making the addition under S. 69A of the Act. He further stated that in his appellate order the learned CIT(A) has not given any finding whether the source of silver jewellery and silver coins were also explained. He also submitted that there was no justification for the learned CIT(A) to rely on the instructions of the Board that jewellery worth Rs. 1,00,000 for each lady should not be seized as such instructions, if at all, do not have any bearing on the question whether the source of the jewellery is explained or not. He concluded his arguments by stating that the orders of the CIT(A) deserved to be vacated. Shri K. Sampath, the learned counsel for the assessed, on the other hand, strongly supported the orders of the learned CIT(A). He submitted that the learned CIT(A) was correct in holding that the jewellery in question belonged to the lady Smt. Archana Jain. In support he described the details of the seized jewellery which, inter alia, included bangles, chains, tops and necklace, etc., and submitted that the description of the jewellery itself would show that such jewellery can be used by the lady only. The assessed has been consistent in her explanation right from the day of search as it was explained that the entire jewellery found at the residence or on person of Smt. Archana Jain or from her locker belonged to her, which was received by her at the time of her marriage or on other ceremonial occasions like birth of a child. It was explained that neither Smt. Archana Jain nor her husband purchased any jewellery after their marriage which took place about 22 years ago. Relying on the ratio of decision of the Hon'ble Supreme Court in the case of Chuhar Mal vs. CIT (1988) 172 ITR 250 (SC) he argued that in view of the claim of ownership of the jewellery which was in the possession of Smt. Archana Jain, the onus of proving that she is not the owner is on the Revenue, according to which, she is not the owner. He further argued that the assessed comes from a business family and the learned CIT(A) was fully justified in holding that receipt of jewellery of about Rs. 15,000 twenty-two years ago in a business family was not impossible. He submitted that if assessed is entitled to the benefit of a beneficial circular issued by the Board, the benefit should be conferred on her and there is nothing wrong if the learned CIT(A) has considered a benevolent Boards circular in allowing the relief to the assessed. In his counter argument the learned Departmental Representative submitted that it could not be said with certainty that the entire jewellery found at the residence occupied by both husband and wife was owned by the wife only.
5. We have considered the rival submissions and perused the evidence on records. It is not in dispute that the jewellery weighing 492.600 gms. including silver coins and silver jewellery were found from the possession of Smt. Archana Jain from her residential premises. It is well-settled that possession is evidence of ownership and the strength of the presumption of ownership arising from the fact of possession depends on the nature of property involved. We have gone through the nature of the jewellery which include Kara bangles, chains, tops and necklace, etc. These items of jewellery are exclusively usable by a lady. Possession of jewellery of the nature described above raises a strong presumption that Smt. Archana Jain is the owner of the jewellery in question. The jewellery weighing 51 gms. was found on the person of Smt. Archana Jain. In addition jewellery weighing 315.500 gms. were found in a locker No. 12 in the Canara Bank, Loha Mandi, Agra which stood in the name of Smt. Archana Jain. The learned Assessing Officer has accepted the source of jewellery found in the locker valued at Rs. 51,297 as explained. Now the question for consideration is whether the Assessing Officer is justified in accepting the explanation as to the source of the acquisition of the jewellery found in search in part. At the time of search Smt. Archana Jain was questioned about the nature and source of the jewellery found at the residence on her person and in the locker No. 12 in the Canara Bank Loha Mandi, Agra standing in her name. Her statement was also recorded. She explained that the entire jewellery was acquired and received by her on the occasion of the marriage or on other occasions such as giving birth to children. The same explanation was reiterated during the course of regular assessment proceedings as well. It was further explained that in view of the status enjoyed by the assessed, Smt. Archana Jain, the jewellery found could be considered as reasonable. The learned Assessing Officer accepted the explanation in so far as the jewellery found in locker valued at Rs. 51,297 was concerned. As regards the balance jewellery he held that the source thereof was not explained satisfactorily. However, he did not state the reasons as to why he did not consider the same explanation as satisfactory in respect of the remaining jewellery. The learned CIT(A) has recorded a finding that in whole of the family jewellery of Rs. 1,54,362 was found which did not appear unreasonable in a business family. He further looked into the fact that it is not impossible to receive jewellery worth Rs. 15,000 at the time of marriage in a business family 23 years ago, when the gold and silver price was not even 1/10th of what is now. He has also observed that as per Boards instructions the jewellery worth Rs. 1,00,000 for each lady should not be seized thereby implying that to the extent of jewellery valued up to Rs. 1,00,000, the Assessing Officer should have accepted as explained. We do not find any merit in the contention of the learned Departmental Representative that the Boards instructions should not have been relied upon by the learned CIT(A) for holding the source of the jewellery as explained. The Assessing Officer has himself accepted the source of jewellery found in the locker as explained. The assesseds case is that she received the entire jewellery and silver coins at the time of her marriage and subsequently at the time of birth of her children. The factum of receipt of jewellery in marriage has thus been accepted by the learned Assessing Officer. In our opinion, acceptance of the explanation in part of the Assessing Officer is not justified in the facts and circumstances of the case. In taking this view, we are supported by the decision of Hon'ble Calcutta High Court in the case of Tara Devi Goenka vs. CIT (1980) 122 ITR 14 (Cal). We agree with the finding of the learned CIT(A) that Smt. Archana Jain, who comes from a business family, could have received the jewellery in her marriage 23 years ago which has been valued at Rs. 1,54,362 at the time of search. We, therefore, confirm the finding of the learned CIT(A) that there was no justification for making the addition of Rs. 1,03,065 in the hands of the husband of Smt. Archana Jain as the jewellery belongs to her and the source thereof stands explained. The learned CIT(A) has thus rightly deleted the addition in the hands of Smt. Archana Jain and following the said finding deleted the same addition in the hands of her husband, Shri Jawahar Lal Jain.
6. In the result, both the appeals of the Revenue are dismissed.
7. In the Cross-objection Nos. 23 and 24/Del/1992 the assessed Smt. Archana Jain has supported the order of the learned CIT(A). No new issue has been raised. Hence the cross-objection is dismissed as infructuous.