Rajasthan High Court - Jaipur
Smt. Huma Hussain vs Commissioner Of Income-Tax And Anr. on 10 November, 2005
Equivalent citations: [2007]291ITR475(RAJ)
JUDGMENT
1. These two appeals are directed against the order of the Income-tax Appellate Tribunal dated June 11, 2002, in the case of the appellant for the assessment years 1993-94 and 1995-96.
2. Appeal No. 83 of 2002, relates to the assessment year 1993-94 and Appeal No. 81 of 2002 relates to the assessment year 1995-96. In these two appeals, the following substantial questions have been framed respectively:
Appeal No. 83 of 2002:
Whether, on the facts and circumstances, the addition of Rs. 1,76,400 in the assessment of the assessee claimed to have been received from her father over a number of years and supported by materials placed by her on protective basis is not sustainable by rejecting such claim on conjectures and surmises without holding any enquiry into correctness of such materials ?
Appeal No. 81 of 2002:
(i) Whether, on the facts and circumstances of the case, rejection of the assessee's claim to having received gift of Rs. 20,000 from her father, who is a lecturer, during the previous year relevant to the assessment year is founded on conjectures and surmises without making any effort to verify the correctness of the material placed before the Assessing Officer ?
(ii) Whether, on the facts and circumstances, the addition of Rs. 27,572 on account of value of 78.16 gms. of gold as income from undisclosed sources is founded on any material ?
(iii) Whether assessment made against the assessee by making addition of Rs. 47,512 on protective basis is sustainable at all in law ?
3. As it appears from the tenor of questions framed they primarily related to the consideration whether the finding recorded by the Tribunal affirming the finding recorded by the lower authorities is founded on any material and has not been vitiated on any account so as to lose its binding character, which primarily relates to making of protective assessment in the hands of the assessee and not on substantive basis.
4. The circumstances in which these appeals have arisen are that a search and seizure operation under Section 132 of the Income-tax Act, 1961 was carried on at the residential premises of Sh. Hafij Mohd., father-in-law of the assessee on September 28, 1994. As a result of the aforesaid search and seizure, notices under Section 148 of the Income-tax Act for the assessment years 1993-94 to 1996-97 were issued in the case of the asses-see and the cases were taken up under scrutiny.
5. In response thereto, returns were submitted by the assessee on December 26, 1997. For the assessment year 1993-94, the assessee declared income of Rs. 21,000 as income from interest which was below the taxable limit. For the assessment year 1995-96, she submitted a return for a sum of Rs. 30,000 which was also below the taxable limit.
6. For the assessment year 1993-94, she has claimed certain investment as opening capital balance and the source of the said investments were shown to be marriage gifts received during the year ending March 31, 1990, and subsequent gifts from her parents from time to time every year on marriage anniversary. Though details had not been furnished about the interest received from different persons, the assessee filed a declaration dated February 29, 2000, from Sh. W.A. Siddiqui regarding giving of gifts to his daughter Smt. Huma Hussain.
7. The assessment orders were passed in both the cases on February 28, 2001, by discarding the declaration of Siddiqui by mentioning that the address of Sh. Siddiqui is not mentioned. Sh. Siddiqui is employed at Ajmer, but the affidavit has been sworn at Bhilwara from where the assessee belongs and in the absence of production of bank passbook, accounts, accounts of the donor, the declaration of Sh. W.A. Siddiqui was discarded. The learned Assessing Officer also held that in the absence of evidence of initial capital and evidence regarding marriage gifts received during the year ending March 31, 1990, and gift from father right from February 11, 1990, appear to be made-up story.
8. The aforesaid orders have been affirmed by the Commissioner of Income-tax (Appeals) vide order dated October 13, 2000, and on further appeals, the Income-tax Appellate Tribunal dismissed the appeal of the assessee's husband as well as the assessee herself.
9. Sh. Zakir Hussain had preferred appeals against the aforesaid order challenging the subsequent assessment made in his case bearing I.T.A. Nos. 82/2002 and 84/2002. The aforesaid two appeals have been decided by a separate order on November 7, 2005. In the case of Zakir Hussain, it has been held that there is no material to link the investment found to be made in the name of Smt. Huma Hussain as investment from undisclosed sources of Sh. Zakir Hussain and the said appeals have been allowed.
10. So far as the nature of assessment in the hands of the present assessee is concerned, the same has to be considered as substantive and not protective.
11. Be that as it may, from the material facts noticed by us, it is clear that the 11 affidavit of the father of the petitioner has been rejected on the very day it was presented by passing the assessment order without affording any opportunity of hearing to the assessee or by calling upon the deponent to clarify the deficiency in the affidavit if any and to ask for any corroborating material for the statement of the said Mr. W.A. Siddiqui. The existence of the petitioner's father as a genuine person is not in dispute. That he is employed as lecturer in Ajmer is also not in dispute. The fact that the assessee is married and staying at her matrimonial home at Bhilwara, is also not in dispute. Under these circumstances the making of declaration at Bhilwara, where the daughter is residing, by itself cannot be a ground of suspecting about the veracity of declaration on the ground of place where it has been sworn in. Non-mentioning of the address of a genuinely existing person in his declaration, which is being presented by the daughter of the said person also cannot be a ground by itself for rejecting the truthfulness of the declaration without giving an opportunity to explain any aspect of the affidavit which in the opinion of the Assessing Officer may be lacking in any manner. In the absence of giving any opportunity to explain the reasons for not accepting the affidavit submitted by the assessee when the genuineness of the person making such declaration and disclosing source of investment to the Assessing Officer, its rejection cannot be sustained particularly keeping in view that the declaration has been discarded on the very date it was produced without giving an opportunity of hearing to the assessee or deponent. In the aforesaid circumstances, the findings recorded by the authorities below about the unsatisfactory nature of the explanation submitted by the assessee about the source from which investment has been made cannot be sustained as it vitiated the findings of fact and loses its binding character.
12. In the aforesaid circumstances, the appeals deserve to be allowed and 12 the orders passed by the learned authorities below are set aside. However, it is a fit case to direct the Assessing Officer to hold a proper enquiry into the source of investment claimed to have been made by the assessee in accordance with law by giving her proper opportunity for substantiating her explanation and make a fresh assessment order in the case of the assessee in accordance with law. No order as to costs.