Income Tax Appellate Tribunal - Raipur
Assistant Commissioner Of Income Tax ... vs Shri Gaurav Kumar Agrawal, Raigarh on 17 July, 2023
आयकर अपीलीय अिधकरण, रायपुर यायपीठ, रायपुर
IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR
ी र वश सूद, याियक सद य एवं ी अ ण खोड़ पया, लेखा सद य के सम ।
BEFORE SHRI RAVISH SOOD, JM & SHRI ARUN KHODPIA, AM
आयकर अपील सं./ITA No.95/RPR/2021
(िनधारण वष / Assessment Year :2019-2020)
ACIT (Central), Bilaspur Vs Shri Gaurav Kumar Agrawal,
Near Lal Tank, Bus Stand Road,
Raigarh (C.G.)
PAN No. : AHHPA 2629 P
AND
Cross Objection No.08/RPR/2018
(Arising out of ITA No.95/RPR/2021)
(िनधारण वष / Assessment Year :2014-2015)
Shri Gaurav Kumar Agrawal, Vs ACIT (Central), Bilaspur
Near Lal Tank, Bus Stand Road,
Raigarh (C.G.)
PAN No. : AHHPA 2629 P
(अपीलाथ /Appellant) .. ( यथ / Respondent)
िनधा रती क ओर से /Assessee by : Shri Sunil Kumar Agrawal
& Smt. Laxmi Sharma, Cas
राज व क ओर से /Revenue by : Smt. Illa M. Parmar, CIT-DR
सुनवाई क तार ख / Date of Hearing : 12/07/2023
घोषणा क तार ख/Date of Pronouncement : 17/07/2023
आदे श / O R D E R
Per Arun Khodpia, AM :
The appeal under consideration is filed by the revenue directed against the order of the ld.CIT(A)-3, Bhopal, dated 24.08.2021 for the assessment year 2019-2020. The assessee has also filed cross objection supporting to the order of the ld. CIT(A).
2. The revenue has raised the following grounds of appeal :-
1. Whether on the facts and circumstances of the case and on the points of the law Ld.CIT(A) was justified deleting the addition made by the AO u/s.69B of the I.T.Act, 1961.
2. The order of the Ld. CIT(A) s erroneous both in law and on facts.
3. Any other ground that may be adduced at the time of hearing of appeal.2 ITA No.95/RPR/2021 & CO No.04/RPR/2021
3. Further, vide letter dated 12.04.2023, ld. AR has filed an application under Rule 27 of the ITAT Rules, 1963 for raising the legal issue/ground, which reads as under :-
Gr.No.l:
"1. On the facts and circumstances of the case and in law, search assessment made u/s 143(3) rws.153A is invalid, since approval granted u/s.153D is in mechanical & routine manner without application of mind by Addl.CIT in a hasty manner, merely a formality, an empty ritual; in absence of a valid approval as mandated by law u/s.153D as per sec.153B(1)(b), search assessment made u/s.143(3) rws!53A be treated as invalid and is liable to be quashed."
It was submitted by the ld.AR that the above Gr.No.l raised which is legal in nature raised before Your Honors first time which goes to root of the matter; and the respondent-assessee is entitled to urge legal issue by way of application under Rule-27 of the IT AT Rules, 1963 on the basis of facts already available on record which though not arose before Id AO & Id CIT(A) which has direct bearing on tax liability of the respondent-
assessee; relied on Sanjay Sawhney (2020) 316 CTR 392 (Del HC);
NTPC Ltd (1999) (SC); Peter Vaz (2021)128 taxmann.com 180 (Bom);
Ingram Micro (I) Exports (P) Ltd (2015) (Bom); Mavany Brothers (2015) (Bom).
4. Though the ld.CIT-DR objected to the legal ground raised by the assessee, however, in view of the judgment of the Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd., reported in (1998) 229 ITR 383 (SC), it is open to the assessee to raise the points of law even before the Tribunal which was not raised earlier. Therefore, the arguments advanced by the ld. Sr. DR objecting to the additional ground 3 ITA No.95/RPR/2021 & CO No.04/RPR/2021 of assessee, is not accepted and the legal grounds raised in the form of additional ground is admitted and taken on record.
5. Brief facts of the case are that the assessee is a resident having income from salary as director of Suraj Rolling Pvt. Ltd., bank interest & interest received from Suraj Rolling Pvt. Ltd. and income from trading of agricultural products shown u/s 44AD of the Act. A search was conducted on the business/resident/factory premises of the assessee on 22.11.2018.
The case of the assessee was previously assessed by the ITO-1,Raigarh, which was latter after giving a proper opportunity of being heard has been centralized with ACIT (Central) Bilaspur vide order u/s.127 of the Act, dated 25.09.2019. The notices u/s.153A/142(1) of the Act dated 17.02.2020 was issued too the assessee. In response to the statutory notices, the assessee filed returns showing income of Rs.23,93,130/- for the assessment year 2019-2020. Detailed questionnaire were issued on the assessee and in response the authorized representative of the assessee has furnished written submissions with supporting documents and the case was discussed by the ld. AO on various aspects. During the course of search and seizure a locker key was found from the bedroom of the assessee Shri Gaurav Kumar Agrawal, S/o Suresh Agrawal, the said locker i.e. Locker No.SA-42, maintained at Union Bank of India, Itbari Bazar, Raigharh was operated on 15/12/2018 through execution of consequential warrant issued u/s.132 of the Act. During the course of proceedings, on opening of locker gold bullion of 2499.90 gms and jewellery of 3300 gms were found and statement of Shri Gaurav Agrawal 4 ITA No.95/RPR/2021 & CO No.04/RPR/2021 were recorded. During the post search verification the ld. AR of the assessee has submitted a copy of Will dated 04.11.2013 executed by Smt. Devki Devi Agrawal, who was the grandmother of the assessee. It is stated that Smt. Devki Devi Agrawal had transferred 2.5 kg gold bullion to the assessee Shri Gaurav Agrawal which was kept in the said locker. It was the observation of the ld. AO that during the course of search as per the statement of Shri Gaurav Kumar Agrawal dated 15.12.2018, no such fact regarding the will was revealed by the assessee, therefore, as per the ld. AO the contention of the assessee producing a copy of Will was considered as an afterthought to hide the actual facts to mislead the assessment so as to arrive at less tax liability. The ld. AO also observed that the source of gold bullion in the hands of Smt. Devki Devi Agrawal is also not verifiable has no evidence on filing of IT return or wealth tax return of Smt. Devki Devi Agrawal were submitted by the assessee along with copy of will submitted. Also, no supporting evidence like purchase bill etc. could have been provided by the assessee in support of purchase of such bullion by the erstwhile owner late Smt. Devki Devi Agrawal. Ld.AO further observed that during the proceedings while statements of the assessee were recorded on 15.12.2018 and when he was asked specifically to explain the source of gold bullion of 2.5 kg valued at Rs.80,99,676/-, he did not say a single word regarding the Will. With such observations, ld. AO has concluded that a plea regarding gold bullion was transferred to the assessee through Will appears to be an afterthought to hide the unaccounted income of the assessee. While culminating the 5 ITA No.95/RPR/2021 & CO No.04/RPR/2021 assessment order the ld. AO has mentioned certain observations as to why the plea of the assessee regarding gold bullion is not tenable and the addition of Rs.80,99,676/- was made in the hands of the assessee invoking the provisions of Section 69B of the Act.
6. Since the explanation of the assessee could not find favour before the ld. AO and the addition was made, the assessee preferred to challenge the observation of the AO before the ld.CIT(A), wherein the ld.CIT(A) has accepted the contention of the assessee and has decided the issue in favour of the assessee by deleting the addition made by the ld. AO.
7. Now, the department is in appeal before us, assailing the issue that ld. CIT(A) was not justified in deleting the addition made by the AO u/s.69B of the Act.
8. The sole controversy involved in the present appeal is with regard to the addition made by the AO for Rs.80,99,676/- on account of gold, bullion found in the locker of the assessee for which the explanation given by the assessee along with supporting documents were not found convincing by the AO, however, the same was understood as reasonable and justified by the ld. CIT(A) and, therefore, the addition was deleted.
9. At the outset, ld. CIT-DR has reiterated the facts from the order of the ld. AO as well as from the order of the ld. CIT(A) and has submitted that the order of the ld. AO wherein the issue in hand was elaborately discussed and also has narrated with all the reasons causing the addition to be sustained in the hands of the assessee, therefore, the order of the 6 ITA No.95/RPR/2021 & CO No.04/RPR/2021 ld. AO was a reasoned, speaking and well deliberated order, thus, the same deserves to be sustained.
10. According to the ld. CIT-DR , the order of the ld.CIT(A) accepting the explanation of the assessee which were all based on certain information indicating afterthought of the assessee, therefore, accepting such explanation by the ld. CIT(A) was unjustified and erroneous on law as well as on facts. Therefore, it was the prayer that the order of the ld.
CIT(A) shall be set aside and the addition made by the ld. AO should be restored.
11. In response, ld. AR submitted that the gold bullion of 2.5 kg found in the locker of the assessee was explained while the assessment proceedings undergoing, the assessee has established with the support of the document that there was a Will executed by the grandmother of the assessee late Smt. Devki Devi Agrawal way back on 04.11.2013 i.e a date much prior to date of search or the dated of operating of the locker.
The Will executed by the assessee's grandmother was on proper stamp duly notarized and has a mention about the distribution of jewellery and gold bullion along with many other belongings of her. Copy of the Will was placed before us at page 45 to 48 of the assessee's paper book. The same is extracted as under :-
7 ITA No.95/RPR/2021 & CO No.04/RPR/2021.2.8 ITA No.95/RPR/2021 & CO No.04/RPR/2021
12. In order to verify the authenticity of the Will, ld.AO has recorded the statement of the Notary Public Mr. Ramesh Kumar Sharma, who has endorsed the document of Will by affixing his stamp on all the pages of impugned Will. Ld.AR drew our attention at page 52 & 53 of the assessee's paper book where the copy of the statement of Notary Public was furnished, relevant question No.5 was read wherein the Notary Public has answered that the impugned Will document was presented before him on 04.11.2013 by Smt. Devki Devi Agrawal and he has notorised the said document. He has also produced receipt No.1066 and accepted that he has received Rs.100/- towards his fee for providing such services. The Notary Public has also produced a copy of his register showing the entry at Sl. No.86 wherein sat column No.10, signatures of Smt. Devki Devi 9 ITA No.95/RPR/2021 & CO No.04/RPR/2021 Agrawal were verified by him. Ld. AR further drew our attention to page 29 of the paper book where a question pertaining to the issue in hand was asked to the assessee by the ld. AO during the search proceedings wherein the assessee has explained about the jewellery and gold bullion found in his locker. It is further explained by the ld. AR that as per the distribution details mentioned in the Will, the gold bullion of 2.5 kg was to be distributed amongst four grand children namely, Saurabh Kumar Agrawal, Aman Agrawal, Subham Agrawal and the assessee himself were submitted before the ld. CIT(A) to substantiate that they were entitled to receive a share from the said gold bullion and were aware about the fact that the entire gold bullion of 2.5 kg was kept in the locker of the assessee Mr. Gaurav Agrawal because of non-availability of locker facilities with other beneficiaries. Copies of such affidavits are filed before us at paper book page Nos.37 to 40. Ld. AR further submitted that the gold so confiscated by the department during the search and seizure procedure was returned to the assessee on 25.05.2022 and the same was distributed amongst the beneficiaries according to the Will of Late Smt. Devki Devi Agrawal, to substantiate its contention, affidavit of all the three beneficiaries along with supurdginama by the assessee were placed before us at page No.73 to 79 of the assessee's paper book. Ld. AR in view of the aforesaid submissions and evidence has requested to accept the contention of the assessee which was approved by the ld. CIT(A) and has rightly deleted the addition made by the ld.AO.
10 ITA No.95/RPR/2021 & CO No.04/RPR/202113. We have heard the rival submissions and perused the material available on record. As per the facts of the case, it was submitted that during the search proceedings, gold bullion of 2.5 kg was found in the locker of the assessee for which a precise explanation could not be offered by the assessee while recording the statement u/s.132 of the Act on 15.12.2018. However, when the assessment proceedings after the search were in process, assessee's counsel has explained the issue before the ld. AO by submitting that the impugned piece of bullion was received by the assessee along with three other beneficiaries who are also grandsons of the assessee's grandmother as per the will of assessee's grandmother late Smt. Devki Devi Agrawal. The relevant documents i.e. copy of Will was furnished before the ld. AO and submitted that the said will could not be produced before the authorities present at the time of seizure, therefore, the same is now submitted for perusal and consideration. The explanation of the assessee was not accepted by the ld. AO observing that copy of Will or any information regarding such Will was not furnished by the assessee while statements were recorded on 15.12.2018 u/s.132 of the Act. The assessee has failed to substantiate that the gold bullion was belonged to late Smt. Devki Devi Agrawal in absence of her IT Return, wealth tax returns and purchase bills showing existence of such bullion under the ownership of Smt. Devki Devi Agrawal. The contention of the assessee was treated as afterthought and, thus, discarded by the AO and has made addition u/s.69B of the Act. On perusal of the order of the ld. CIT(A) wherein the contentions of the 11 ITA No.95/RPR/2021 & CO No.04/RPR/2021 assessee were found satisfactory and reasonable by the ld. CIT(A) and, therefore, the addition made by the ld. AO was deleted. The operative para of the observations of the ld. CIT(A) are as under :-
4. After taking into consideration the AO's findings and appellant's oral and written submission made in the course of hearing as well as the facts of the case the issues involved in appeal are discussed and decided as under:-
4.1 Ground No I:- Through this ground of appeal, the appellant has challenged the addition of Rs. 80,99,676/- on account of unexplained gold bullion u/s. 69B of the IT Act, 1961. During the course of search, in bank locker of the appellant, containing gold bullion 2499.90 gm and jewellery 33.00 gm was found. The gold bullion 2499.90 gms was valued at Rs.80,99,676/-. Statement of Shri Gourav Agrawal was also recorded during the course of search which has been reproduced on page no 4 to 6 of the assessment order. Shri Gourav Agrawal, during search, failed to explain the acquisition of gold bullion found from bank locker. However, dur ing post serach investigation Id AR of the appellant filed a copy of will dated 04.1 1.2013 and stated that the entire gold bullion was received by will of his grandmother. The AO during the course of assessment proceedings has stated that the 'Will' is mere an after-
thought and is misleading. The AO further stated that no document of Late Smt Devki Devi Agrawal viz. IT Return, Wealth Tax Return and purchase bills has been filed by the assessee. Thus, the AO after considering entire facts and submission of the assessee did not find any merit in the plea of the assessee and made z addition to the income of the assessee.
4.1.1 I have considered the facts of the case, plea raised by the appellant and findings of the AO. The appellant before me has taken a plea that during the course of search gold bullion 2499.90 gms of Rs. 80,99,676/- was found and seized. Statement of appellant was recorded on oath on 15.12.2018 u/s 132(4) of the Act, the appellant in his statement recorded u/s 132(4) on 15-12-18 in reply to Q.No 7 has stated that whatever jewelry has been found/ seized by the search team, was of the assessee and his family members, and it was received as gifts on various occasions, functions like marriages etc.; some jewelleries has been inherited from forefathers (i.e., "Purvajon se prapt hui hai") which has been kept as 'Stree Dhan' and some jewellery has been purchased from personal savings etc. Further, on being asked about gold bullion found of 2,499. 90 grams he showed his inability to say anything on the matter. The appellant soon after completion of search submitted a letter dated 21.12.2018 before the ADIT(Inv.)-II, Raipur and requested to release the alleged gold bullion saying that it was received as per the 'will' dt.4-1 1- 13 from his grand-mother who expired on 22-11-2013 at the age of 80 years and the alleged gold 12 ITA No.95/RPR/2021 & CO No.04/RPR/2021 bullion of 2.50 kgs was belonging to the assessee and his cousins as per the share/ ratio mentioned in the alleged 'will' dt. 04-11-2013. The appellant before the ADIT(Inv.)-Il, Raipur, has given bifurcation of gold bullion as per will and explained that 830 grams belongs to Shri Gaurav Kumar Agrawal, 830 grams belongs to Shri Saurabh Agrawal-cousin, 420 grams belongs to Shri Aman Agrawal- cousin & 420 grams belongs to Shri Subham Agrawal-cousin.
4.1.2 The AO during the course of assessment proceedings in- order to verify the genuineness of the 'will' issued summons u/s!31 to Shri Ramesh Kumar Sharma s/o late Shri Brijbhushan Sharma (aged 64 years), advocate cum Notary, Raigarh, who has notarized the alleged 'will' dated 04.11.2013 of late Smt.Devki Devi Agrawal. Shri Ramesh Kumar Sharma attended before the AO and his statement on oath was recorded u/s!31 on 05.03.2021. Shri Ramesh Kumar Sharma in his statement has stated that he is working as an advocate cum notary by profession since 14-1-1984 and working as notary since 27-12-08. In reply to Q.No 5 & 6 he stated that he had notarized the 'will' of Smt. Devki Devi Agrawal on 4-11-13 and she was present before him at the time of notary. Thus, it is very clear that the AO has made enquiry from the alleged notary who notarized the alleged 'will' of Smt. Devki Devi Agrawal on 4-11-13 and the alleged Notary has clearly stated before the AO that, he has notarized the alleged a will in-front of Smt. Devki Devi Agrawal along with 2 witnesses i.e., Shri Shital Sao s/o Shri Chain Singh Sao & Shri Prithivi Pal Singh s/o Shri Radheshyam Singh. Hence, the sanctity and genuineness of the will has been fully established before the AO. Once, it was established that the will has been signed by Late Smt Devki Devi Agrawal and appellant has received gold bullion as per 'will', the AO has no locus to treat the same as bogus. As culled out from assessment order the sole reason for making • addition was that the appellant was not able to explain the bullion at the time of search, however, the same was explained immediately withi n a week to the ADIT(inv), Raipur. The impunged addition has been made by the AO purely on presumption and assumption basis. The another allegation being made by the AO that no documents such and IT return and Wealth tax return of late Smt Devki Devi Agrawal has been furnished by the appellant. The AO ought to have considered the fact that the appellant cannot be held responsible for non-filing of ITR and WT returns by the deceased. Thus, considering the findings of the AO, statement of the notary the will of late Smt Devki Devi Agrawal cannot be held to be an afterthought, 4.1.3 Hon'ble ITAT Delhi in the case of Rama Yadav (2012) 22 taxmann.com 144 (Del trib.) with similar facts has deleted the impunged addition made by the AO treating the will as fake and afterthought. The relevant findings of the Hon'ble ITAT are as under:-
13 ITA No.95/RPR/2021 & CO No.04/RPR/2021"4. Ld counsel contends that the AO has made the additions in respect of the amount received by the assessee out of the 'Will' of her deceased father in law on presumptions and surmises. To verify the 'Will' and its contents and agri-holdings, detailed inquiries were made by ADIT, Agra whose report is also placed on the PB.
AO has merely relied on some doubts raised by ADIT, Agra on the genuineness of the 'Will', ignoring the uncontroverted statements on oath of witnesses, beneficiaries and other persons. The 'Will ' has been discarded on the basis of surmises, conjectures and presumptive preponderances of probabilities.
It is signed by witnesses who are duly identified and both witnesses i.e., Nawab Singh Yadav (Ex Principal) and Suresh Yadav (Adv) are examined on oath by the AO. In their statements on oath they have confirmed the execution of 'Will', relevant circumstances and aspects of implementation The statements and the report submitted by ADIT, Agra state the fact that these 2 witnesses verified the 'Will' in que which was signed in their presence as the last and final will of Shri Ram Bharosey Lal Yadav.
4.1. The 'Will' contained various beneficiaries including the assesses's husband, her brothers and house-hold servants. The other recipients/ beneficiaries of the 'Will' i.e., Shri Ramesh Chandra Yadav brother in law of the assessee were also examined who verified the 'Will' to be true and correct. Three other servants of the family household of Shri Ram Bharosey Lal Yadav also were beneficiaries who also deposed about the correctness of the 'Will' and the fact of having received the amount as mentioned in the 'Will ' of Shri Ram Bharosey Lalyadav.
With all this material available on record and in the absence of any contradiction in any of the statement, the 'will' cannot be held to be an afterthought.
4.3. Ld counsel for the assessee assails these findings and contends that:
i. There is no law which prescribed registration of a will in India, it only requires that the testator should be in a state to depose a will, which should be in writing and attested by two witnesses. All these conditions are fulfilled, both the witnesses have been examined along with co beneficiaries, they all have confirmed the will. There is no obligation on witnesses advise that the Will registered more so in a village. Therefore, no adverse inference can be drawn from this observation or finding by AO.
ii. If there was any issue about the signature of late Shri Rambharosey, AO could have referred to a hand writing expert. He can not assume the role of a handwriting expert and hold the 14 ITA No.95/RPR/2021 & CO No.04/RPR/2021 signature to be forged merely on the assumption that he was marginally qualified. More so it has not been disputed that he was a leading citizen of area and freedom fighter. Therefore, no adverse inference can be drawn from this observation.
iii. As per Indian law, any testator can make a will as per terms •for distribution among heirs as agreeable to him. No adverse inference can not be drawn of the fact that more cash was given to assessee and her husband and land and ornaments to others. Assessee's family was living away from the remaining family. As per Shri Rambharosey's understanding and wishes it was appropriate to give more cash to them in lieu of land. Thus the abnormality as pointed out by AO neither exists nor has any legal or circumstantial consequence.
iv. The assessee cannot be held responsible or liable for non filing of IT and WT returns of late Shri Rambharosey or his daughters. Besides this cannot invalidate a valid and duly executed will.
v. Adverse inference has been drawn from the fact that Shri Ram bharosey constructed a 3 storied kothi in the village without any bank loan in 1981. It corroborates the contention that in villages prosperous families generally don't transact with banks. In villages unlike cities, houses are constructed in simple/ country style under self supervision. Thus, adverse inference can not be drawn that his funds were exhausted; it is a pure surmise on the part of AO.
4.5. It is vehemently argued that CIT(A) has relied on probabilities and assumptions by terming the 'Will' as "an over manipulated evidence ".
The evidence relied by assessee is to be controverted on the basis of cogent counter evidence or picking contradictions in the evidence furnished. The same cannot be discredited without pointing any contradiction and on mere presumptions. Such observations and references to probabilities based on presumption cannot discard the credible evidence filed by the assessee. It is pleaded that these additions deserve to be deleted.
9. Ld counsel in rejoinder contends that:
i) The 'Will' is an independent evidence which is confirmed by as many cis 7 persons viz., Yashpalsingh, Rameshchandra, Nawahsingh Yadav-ex principal. Suresh bahu Yadav-Adv, Vimlesh Yadav, Bhawan Chandra. Jeevan. None of the statement has been controverted by A 1)1 Agra or A O.
ii) The 'Will' is duly executed, properly implemented. Assessee is lady and cannot demand evidence from the family beyond this limit. Therefore, there is no basis in holding the 'Will' to be fake or 15 ITA No.95/RPR/2021 & CO No.04/RPR/2021 bogus, assessee has inherited the amount by due process of law, it cannot be wished away on raising objections on assumptions.
9.1 It is pertinent to mention that AO chose only to get the issue about 'Will ' and agri-holdings to be investigated by the AD! Agra, report was accordingly submitted dt.21-1-03 on these aspects.
9.2 Coming to the issue about genuineness of the 'Will', Id counsel for the assessee has countered the observations of AO as mentioned above.
In our considered view the contention of Id counsel for the assessee has substance inasmuch as Indian law does not prescribe registration of the 'Will', it should be in writing, attested by 2 witness; there is no requirement of any registration or notarization thereof.
In this case the 'Will' is in writing and duly attested by 2 witnesses, therefore, no adverse inference can be drawn on the aspect that witness did not advice for registration of the same.
9.3 Apropos the issue of flow of signature of late Shri Ram Bharosey Lal Yadav, in our view, the AO is not an handwriting expert, therefore, the observation amounts to a surmise.
Besides, late Shri Ram Bharosey Lal Yadav is not disputed to be a freedom fighter and an affluent landlord, he is held to be marginally qualified.
In our view, flow of writing as pointed out by AO cannot be held to be determinative to discard the 'Will', in the absence of any opinion of the handwriting expert.
vi. ADI has examined the witnesses Shri Nawab Singh Yadav, ex-Principal and Shri Suresh Babu Yadav Adv., they have deposed the 'Will ' to be genuine, bearing signatures of deceased and about the distribution of assets.
This fact has further been confirmed by the sons of the deceased and the servants who are also beneficiaries of the 'Will '.
In our view, this written record and statements cannot be ignored without pointing out any contradictions or inconsistencies therein.
9.5. The assessee cannot be held responsible for the non-filing of IT and IV T returns by the deceased and his daughters after the distribution of the assets of the deceased, consequently, no adverse inference can be drawn on this count. The fact that late Shri Ram Bharosey Lal Yadav constructed a 3 storeyed village house in 1981 cannot be held as assumption that he must have exhausted all the savings even after a period of 12 years in 1993.
16 ITA No.95/RPR/2021 & CO No.04/RPR/20219.6. In our considered opinion, on the basis of material existing on record it cannot be held that 'Will ' was fake or an afterthought. AO's adverse inference is not based on any cogent evidence but on assumptions and probabilities.
In our considered view when the direct evidence is available, the issue cannot be decided on assumption without contradicting the statements on record. Consequently the additions in respect of the amount arising out of the 'Will' are deleted. "
Similar view was taken by Hon'ble ITAT in the case of Rajender Kumar (1995) 53 ITD 130 (Del-Trib) dt. 17-2-95, stating as under:
"3. In respect of addition of Rs. 1,08,000 and of silver coins (valued at Rs.l, 58,373) and silver ornaments and utensils (value Rs.3,73,601), the Id CIT(A) accepted the case of the assessee that above articles belonged to different persons and were bequeathed by Smt. Magan Devi, the mother of the assessee through her Will dt.25-11-73.
Therefore, considerable arguments were addressed before us, during the hearing of this appeal, on 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 AO did not accept the above plea as no Will was claimed at the time of search operations. The AO insisted on production of original Will which was not produced on the ground that the same was eastern away by ants.
The AO 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 AO observed:
"Smt.Magan Devi, was never a WT assessee. She was not even IT asses-see. 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 IT or Smt.Magan Devi, at least should have been a WT assessee. In the absence of original 'Will' and the fact that Smt. Magan Devi is not the assessee of WT and IT, and that the assessee failed to prove authenticity of the 'Will' at the time of proceedings u/sl43(3) and the plea taken by the assessee that ants have eaten away the original 'Will', all these facts reflects nothing except that it is a cooked up story of the assessee. But not filing the original 'Will' and acceptance of the facts by Shri Rajender Kumar that the 'Will' eaten away by the, 17 ITA No.95/RPR/2021 & CO No.04/RPR/2021 ants, the assessee failed to prove his contention and has not filed any evidence in his contention.
I, therefore, hold that the jewellery of gold, silver articles and coins of Rs. 5,66,556 represents pent-up resources income (concealed) of the assessee and added as concealed income ".
5. The assessee impugned the above assessment in appeal before CIT(A).
7. The other addition made on account of silver coins (Rs.1,58,000) and of silver ornaments and utensils (Rs.3,73,601) was deleted and it was held by the CIT(A) that these articles were acquired by different members of assessee's family as per the 'Will' of Smt.Magan Devi.
The Id DR vehemently contested the finding of CIT(A) relating to acceptance of the Will. He drew our attention to the statement u/s 132(4) of the assessee, Poonam Mittal and Shyam Kumari and pointed out that no reference to the alleged Will was made in their statements. Only in proceedings u/sl32(5), the 'Will' was set up for the first time. The alleged original Will was never produced and only a copy notarised by a Notary Public was produced. The assessee did not demonstrate as to how notarised copy was obtained. Existence of original Will was not shown. Even Notary Public in his certificate did not refer to original Will but only to its copy. He, therefore, submitted that observations of CIT(A) in para 5 of the impugned order where it is stated that original Will was seen by Notary Public are factually wrong. The AO was fully justified in insisting on production of the original will as signatures of the testator for comparison were available only on the original. The contents of the Will further suggested that the testator was fully aware of registration. Yet the. alleged Will was not registered. He further submitted that Will was an important and precious document usually kept in safe custody. But. In the present case, the notarised copy was kept in safe custody (Locker) but original was permitted to be eaten by anls. This was unbelievable. The documents executed at the time of search of premises of assessee's son Rakesh Kumar showed that even torn pieces of Panchnama were collected and retained safely but strangely enough, the Will was permitted to be mutilated and destroyed. This was unacceptable. The testator was neither IT assessee nor assessed under the WT Act nor any return of her estate was filed under the Estate Duty Act. There is further no evidence to show that the 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, Id DR relied upon Sri Krishna (1983) (All HC). 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.
18 ITA No.95/RPR/2021 & CO No.04/RPR/20218. Shri Garg, Id counsel for the assessee supported the impugned order. I le explained that Smt. Magan Devi died in 1974 whereas her husband Shri Makhan Lal died on 23-12-80. 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 PB.
The notarised copy was seized by the Revenue on 24-12-86 from the lodker held by the assessee's son Shri Rakesh Kumar.
As original Will could not be produced, secondary evidence relating to execution of Will was filed before C1T(A). The secondary evidence accepted by the CIT(A) is as under:
" 1. Statement of affidavit of Brij Mohan Lal who was closely related to rhe testator and assessee, witnessed to her Will.
2. Affidavit of Shri Magan Lal who had scribed the Will at the instance of the testator. The assessee requested that Shri Magan Lal be summoned f or examination.
3. Affidavits of the assessee, his brothers Ashok Kumar and Surendra Kumar and their wives were filed and their statements on oath recorded. All the aforesaid persons deposed about the existence of Will and disclosed articles received by them under the Will. The affidavits and statements in this case cannot be held to be self serving as these are fully corroborated by other independent and contemporaneous evidence on record. The affidavits and statements have not been contested by the Revenue.
4. That notarised copy of Will was found and seized on 25-12- 86from a bank locker which were put under restrain wef.4-12-86.
5. It is wrong to suggest that evidence regarding existence of Will was not given at the first instance. The raid was started on 4- 12-86 and continued for several days. This would be clear from notices issued u/s 112A rws. 132(5) on 10-12-86 to the assessee .and his brother asking them to file certain information by 24-12-86. As search operation was going on and as officers were busy with other important matters, the detailed information was filed on 29-12- 86 wherein existence and contents of Will were explained. The father of the assessee not being a legatee under the Will did not keep the Will under safe custody. "
11. We have given careful thought to the rival submissions of the parties. The que of existence and legal execution of a Will 19 ITA No.95/RPR/2021 & CO No.04/RPR/2021 propounded by a party and disputed by the other, is always a complex que.
A Will is required to be executed and attested in the manner provided by sec59 & 63 of the Indian Succession Act. It is required to be proved in a Civil Court u/s67-68 of the Evidence Act, normally by calling scribe and attesting witnesses.
In the present case also, the assessee tried to prove the Will by filing affidavits of Shri Magan Lal, who is claimed to have scribed the Will and of Shri Brij Mohan Lal who is one of the witnesses of the Will.
The assessee as per letter dt.25-9-88further requested the AO to make enquiry by issuance of a commission. The ITO did examine Shri Brij Mohan Lal, one of the witnesses, of the Will, but did not examine scribe or the other witness.
Although technical rules of Evidence Act are not applicable to proceedings under the IT Act, the que of execution of Will is required to be examined on the basis of valid testimony of the witnesses to the Will and other relevant circumstances.
Unfortunately, in this case the relevant material was not collected and it is difficult to decide the que whether Smt. Magan Devi executed a valid Will, as claimed.
The AO while holding that no Will was executed relied mainly upon the f act that original Will was not produced in proceedings before hint. He refused to accept notarised copy of the Will. The production of an original Will, no doubt, is important as otherwise Will is presumed to be revoked. But aforesaid questions relating to execution or revocation of the Will, in our opinion, are not very material for disposing of the controversy before us. We shall discuss this in the following paras.
12. The 'Will' is a 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 IT 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 20 ITA No.95/RPR/2021 & CO No.04/RPR/2021 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 Day al 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 partition, she received jewellery and silver coins which at the relevant time were less than Rs. 10,000 in value. The father of Smt. Magan Devi, died in the year 1957 and on his death, Smt. Magan Devi received large quantity of ornaments and silver coins as legal heir of her father. The claim was supported by filing affidavits of assessee and his brother. The AO rejected the entire claim.
He observed that Smt. Magan Devi was not shown to he assessed under the IT or the WT.
In our considered opinion. AO's approach was not correct. All perse JUS assessable under the IT and WT are not filing their correct returns and therefore, there is no presumption that a person who has not filed a return does not possess any assessable income or wealth or no income/ wealth.
In our considered opinion, it was necessary for the AO to cross examine she deponents relating to capacity of Smt.Magan Devi and then decide the is^ue as per facts available on record. This unfortunately has not been done. 7 he position, therefore, is that no proper finding relating to valuable ass-els possessed by Smt.Magan Devi, can be recorded although it is difficult to reject assessee's contention that the claim made in the affidavit was riot refuted by the A O.
13. However, even without deciding above aspect of the matter, the impugned order of CIT(A) deleting addition on account of silver coins and silver ornaments and utensils can be upheld.
It is an admitted position that Will dt.25-11-73 is tailor made and contains complete description with slight variation of silver coins and silver articles seized in raid. Though the original Will was not produced, a copy of the Will notarised by Mohd.Illyas, Adv-cum- Notary Public on 3-6-81 was found and seized from locker No.709 with PNB. In the name of Smt.Shyam Kumari and Shri Rakesh Kumar in Dec, 1986. The said locker was under restrain since 4- 12-86. It was shown to have been earlier operated upon on 24-12-
85. Thus, this notarised document which clearly showed that it was made to cover and explain different articles, was in existence in 1985. The CIT(A) while deleting addition from the AY87-88, observed as under:
21 ITA No.95/RPR/2021 & CO No.04/RPR/2021"5.4(a) The typed papers containing a reference to these valuables (even if the said typed papers are not treated as 'Will 'for the sake of argument) had been found from the locker which had earlier been operated on 24-12-85 and prior to that on 3-1-84 and 30-11- 83 and attention is invited to page 18 of the PB. This shows that the valuables in question were in existence even in the earlier years. This submissions has got 2 aspects.
First is that if we apply the test of human mind and probabilities as have been propounded by Durga Prasad More (SC), nobody would have taken care to keep these papers in locker had they, been mere stray piece of papers having no evidential value.
Secondly, the event of acquisition of the valuables stand shifted to the FY83-84 (relevant to the AY84-85) and the FY85-86 (relevant to the AY86-87). Therefore, no addition could be made in the AY under appeal which is the AY87-88."
The CIT(A) further held that the Will was notarised on 3-6-81 and was therefore, in existence in FY81-82. The addition for any unexplained silver coins and silver articles could be made in the AY82-83 and not in 87-88.
\We are inclined to subscribe to the aforesaid view taken by Id C1T(A). The seizer of the document from locker is not in dispute.
It is further not in dispute that notarised copy available is a tailor nr a de document with complete and full description of silver articles found. The aforesaid document had only single purpose to serve, that is, to explain the existence of articles mentioned in the Will. In support of the notarised document, the assessee produced certificate from Mohd. Iliyas, Notary Public, which is available at page 117 of the PB.
According to aforesaid certificate, Shri Mohd.Illyas, Adv, Saharanjnir confirmed that he attested the photostat copy of original Will of Smt. Magpin Devi, which was compared by Shri Rakesh Gupta on 3-6-81. The aforesaid certificate of Notary Public has evidentiary value and cannot be rejected without good ground.
In the present case, the AO did not examine Shri Mohd. Ulyas or made tiny adverse comment to refute the claim in the certificate. The certificate is further corroborated by affidavit of assessee and other members of the family. Having regard to the material available on record, the aforesaid certificate cannot be rejected.
It, therefore, necessarily follows that at least a notarised document was made on 3-6-81 to cover silver coins and silver articles in dispute. Therefore, on the basis of documentary evidence, it can 22 ITA No.95/RPR/2021 & CO No.04/RPR/2021 safely be held that the family of the assessee did possess articles in dispute in FY81-82 which could be assessed only in A Y82-83. In view of above circumstances, it is really not material whether Smt.Magan Devi executed a valid Will and possessed all these silver articles at the time of her death around 1974 or not. The deletion of addition made by the CIT(A) on above account has to be upheld.
14. Shri Garg also supported impugned order of CIT(A) as in his view, the assessee cannot be held to be owner of coins and other silver articles not found to be in possession and control of the assessee. These were in control of different persons who were occupying the permises subjected to search. For the reasons given while dealing with seizer of cash and gold jewellery, we accept this submission of Shri Garg. In the above back ground, we uphold order of CIT(A) deleting addition of Rs.5,66,556. "
4.1.4 In view of the above discussion and judicial pronouncement cited the addition made by the AO amounting to Rs. 80,99,676/- is Deleted. Therefore, appeal on this ground is Allowed.
14. We have carefully perused the orders of the ld. AO and ld.CIT(A), copies of the supporting evidences relied on by the assessee.
Undoubtedly, the document of Will furnished by the assessee was executed much prior to the date of search and assessment proceedings, the same was further substantiated as a genuine document when the statement of Notary Public was recorded and the Notary Public had also put an affirmative stamp on the claim of the assessee with regard to aforesaid documents by confirming authenticity of the same. The observations of the ld. AO that certain other external documents like income tax return, wealth tax return pertaining to late Smt. Devki Devi Agrawal, who had executed the Will could not be made available by the assessee, without establishing the document of Will as an ingenuine document, is devoid of merits, therefore, the same cannot be accepted.
Ld. AO while rejecting the explanation of the assessee could not bring 23 ITA No.95/RPR/2021 & CO No.04/RPR/2021 upon any finding or material that can dislodge the contention of the assessee, in such circumstances, the evidence produced in the form of certain documents by the assessee, cannot be considered as an afterthought only because while the statement u/s.132 of the Act during the search proceedings recorded the assessee was unable to come up with a spontaneous explanation for the same. We, therefore, are of the view that the ld. CIT(A) has very thoughtfully considered the facts of the case and has offered a very reasonable finding against the observations of the AO. We, therefore, do not see any reason to interfere with the findings of the ld. CIT(A) in deleting the addition made by the AO. Thus, we dismiss the appeal of the revenue.
15. Initially the assessee in its cross objection has supported the order of the ld. CIT(A) and subsequently, the assessee has filed an application under Rule 27 of the Act for raising the legal ground. In respect of supporting to the order of the ld. CIT(A), since we have upheld the findings of the ld. CIT(A) in deleting the addition made by the AO u/s.69B of the Act by dismissing the appeal of the revenue, therefore, the cross objection filed by the assessee becomes infructuous and the same is dismissed.
16. Further in respect of the legal ground raised under Rule 27 of ITAT Rules, 1963 by the ld. AR of the assessee vide application dated 12.04.23, that the approval granted u/s.153D of the Act is in mechanical & routine manner without application of mind by the Addl. CIT in a hasty manner, therefore, in absence of a valid approval as mandated by the law 24 ITA No.95/RPR/2021 & CO No.04/RPR/2021 u/s.153D as per Section 153B(1)(b) of the Act, the assessment made by the ld. AO u/s.143(3) r.w.s.153A of the Act, is invalid and the same deserves to be quashed. Since we have decided the appeal of the revenue on merits upholding the findings of the ld.CIT(A), we are not adverting to the legal ground raised by the assessee.
17. In the result, the appeal of the revenue as well as the cross objection of the assessee is dismissed.
Order pronounced in the open court on 17/07/2023.
Sd/- Sd/-
(RAVISH SOOD) (ARUN KHODPIA)
याियक सद य / JUDICIAL MEMBER लेखा सद य / ACCOUNTANT MEMBER
रायपुर/Raipur; दनांक Dated 17/07/2023
Prakash Kumar Mishra, Sr. P.S.(on tour)
आदे श क ितिल प अ े षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant-
2. यथ / The Respondent-
3. आयकर आयु (अपील) / The CIT(A),
4. आयकर आयु / CIT
5. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, रायपुर/ DR, ITAT, Raipur
6. गाड फाईल / Guard file. आदे शानुसार/ BY ORDER, स या पत ित //True Copy// (Assistant Registrar) आयकर अपीलीय अिधकरण, रायपुर/ITAT, Raipur