Income Tax Appellate Tribunal - Ahmedabad
Income Tax Officer vs Mathuradas Motichand. on 29 March, 1993
Equivalent citations: (1993)47TTJ(AHD)488
ORDER
R. L. SANGANI, J. M. :
This appeal by the Department and cross objection by the assessee are directed against the order dt. 12th June, 1987 passed by the learned CIT(A), Rajkot.
2. The assessee is late Shri Mathuradas Motichand, resident of Bhuj. The assessment year is 1983-84 for which previous year has been mentioned as financial year ending on 31st March, 1983. The assessee filed return on 23rd July, 1983 and died on 24th Oct., 1985. The assessment was made on his legal representative Shri Vijaykumar Mathuradas. In the present order the deceased Shri Mathuradas Motichand shall be referred to as assessee.
3. The assessee was partner in the firm of M/s. Mathuradas Motichand & Sons. Search operations under S. 132 of the IT Act, 1961 were carried out at the residential premises of the assessee situated at Vejnath Street, Nagar Chakla, Bhuj on 9th and 10th Aug., 1982. Cash of Rs. 20,902 was found but the said cash tallied with the entries in the cash book and as such the cash amount stood fully explained.
4. In the course of search gold ornaments and silver articles were also found. We shall first deal with the gold ornaments. The weight of gold ornaments seized under S. 132 of the Act was 262.37 tolas. In the course of proceedings under S. 132(5) of the Act the assessee gave the names of the members of the family to whom gold ornaments belonged. The Assessing officer accepted the explanations of the assessee in respect of 133 tolas out of 262.37 tolas and did not accept the explanation of the assessee in respect of 128.8 tolas. The figure is mentioned as 129.5 tolas in the assessment order. He added the value of said gold ornaments which he had treated as unexplained. The addition came to Rs. 2,26,366. The following table gives necessary details :
Seized under S. 132 Ownership accepted by IAC (A) Ownership in dispute in appeal before CIT (A) Smt. Manjulaben Mathuradas 63.85 30.00 33.85 Smt. Urmilaben Vijaykumar 52.79 35.00 17.79 Smt. Hiralaxmi Jayantkumar 57.92 30.00 27.92 Shri Vijaykumar Mathuradas 3.50 3.00 Shri Jayant Kumar Mathuradas 4.38 4.60 Shri Rameshchandra Mathuradas 9.43 10.00 Smt. Kumudben Himatlal 21.24 21.00
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Smt. Vasantiben Chandrakant 11.16 11.16 Smt. Bhanumati Kishorchandra 12.86 12.86 Smt. Kokila Chandrakant 20.74 20.74 Others 4.50 4.50 262.37 133.00 128.82
5. The CIT(A) examined the entire evidence produced by the assessee and held that the explanation of the assessee was acceptable in its entirely and there was no justification for accepting the explanation partially. He took into account the status of the family in arriving at his conclusion. He accordingly deleted the above addition and the Department is in appeal before the Tribunal.
6. The learned Departmental Representative has relied on the reasons given by the Assessing Officer. According to him, the Assessing Officer had taken a reasonable view of the matter and the estimate made by him was fair and, hence, the CIT(A) should not have interfered in his order.
7. The learned counsel for the assessee, on the other hand, relied on the reasons given in the order of the CIT(A) and it was submitted that the addition in the assessment order had been made on the basis of mere surmises and conjectures and had been rightly deleted by the CIT(A). The assessee has filed voluminous paper book in which copies of all the relevant documents have been furnished which include copies of statements of witnesses, affidavits, etc.
8. We have considered the rival submissions and facts on record. We have also paid due attention to the documents filed before us. The above mentioned table gives the list of members of the assessees family. Smt. Manjulaben is wife of the assessee. S/Shri Vijaykumar, Jayantkumar and Rameshchandra are three sons of the assessee. Smt. Urmilaben and Smt. Hiralaxmi are daughters-in-law of the assessee. Smt. Kumudben, Smt. Vasantiben and Smt. Bhanumati and Smt. Kokila are four married daughters of the assessee. It is thus seen that the assessee had a fairly large family.
9. As regards the status there was no serious dispute on the point that the assessees mother Smt. Parvatiben came from a very rich family of Lalji Parshottam Group. The assessees wife Smt. Manjulaben was daughter of Shri Makanji Champshi of Mandvi who had business of snuff and tobacco at Mandvi and had also rice mill in West Bengal and had also agricultural lands. Even at the time of search said family had 28 acres of agricultural lands.
10. The assessees case was that Smt. Manjulaben had received gold ornaments of about 90 tolas from her parents at the time of her marriage and had also received 100 tolas of jewellery and gold ornaments from her mother-in-law Smt. Parvatiben on that occasion and that out of 190 tolas of jewellery and gold ornaments received by her, she had parted with 123 tolas of jewellery and gold ornaments at the time of marriage of her children and at the time of other auspicious occasions in the family over the years and that she had been left with about 66 tolas out of which 63 tolas were seized and she was allowed to wear about three tolas at the time of search. It is explained that the maternal uncle of the assessee had set apart some funds, interest of which used to be handed over to Smt. Parvatiben in the form of gold ornaments. The assessees father had died before the date on which the assessees marriage took place and it was the elder brother of the assessee Shri Vallabhdas Motichand who was the head of the family. The affidavits of Smt. Manjulaben, wife of the assessee, Shri Vallabhdas and also of assessees brother-in-law Shri Shantilal and family priest Shri Karunashanker Harishanker Gor and elderly person of the community Shri Shamji Premji Shah as also affidavit of maternal cousin of the assessee Shri Nanalal Shamji, support these assertions. In support of ornaments of each of the members of the family necessary affidavits have been filed. For example in respect of ornaments belonging to daughter-in-law Smt. Urmilaben there is her affidavit in which she had stated that she received 18 tolas from her parents and 26 tolas of gold ornaments from her mother-in-law Smt. Manjulaben and that 9 tolas had been received at the time of birth of her children and in that manner she had 53 tolas of ornaments which were lying in safe custody with her mother-in-law Smt. Manjulaben. The affidavit of her father Shri Bhagwandas Narandas, her husband Shri Vijaykumar and her mother-in-law Smt. Manjulaben had also been filed in respect of her version.
11. For explaining 38 tolas of second daughter-in-law Smt. Hiralaxmi, the affidavit of her father Shri Devraj D. Shah and her husband Shri Jayantkumar as also her mother-in-law Smt. Manjulaben have been filed. Similarly, to explain 21 tolas of ornaments of third daughter-in-law Kumudben, the affidavits of her father her husband and mother-in-law have been filed. Similarly, the daughters have also filed affidavits in support of their versions. One of the daughters had certain chronic illness in respect of which affidavits were filed and 21 tolas of ornaments belonged to her, have been accepted by the Assessing Officer. The Assessing Officer has specifically mentioned that local inquiries made by him indicated that the version of the assessee about Kumudbens condition was true. In order to prove the richness of the parents of assessees mother Smt. Parvatiben several periodicals of early forties were produced to show that large charities had been made by said family. All the evidence produced in the present case clearly indicate that the assessee was person of high status and it was common in the early days for a person of such status to possess gold ornaments and jewellery in large quantities. Consequently the version of the assessee that at the time of his marriage his wife Smt. Manjulaben had 190 tolas of gold ornaments was wholly acceptable. The value of gold ornaments of this quantity was not very high at that time and there was nothing improbable in the version given by the assessee. The Assessing Officer had held one day camp at Bhuj on 19th Dec., 1985 and had examined five persons, viz., Vijaykumar, Jayantkumar, Smt. Urmilaben, Smt. Hiralaxmi and Karunashanker. The copies of statements have been filed in the paper book. Smt. Manjulaben could not remain present because she was mourning death of her husband (assessee) which had taken place few weeks before. Whatever evidence was required by the Assessing Officer has been produced by the assessee. There was no attempt on the part of the assessee or assessees legal representative to evade the inquiry. We do not accept the submission of the learned Departmental Representative that the assessee had failed to produce all the persons whose affidavits had been filed. The learned Departmental Representative has not shown from the record that the Assessing Officer had required the presence of a particular person and the assessee had failed to produce the said particular person.
12. It is to be noted that the Assessing Officer was quite conscious of the fact that there was no material for falsifying the statements of the persons whose affidavits were filed. It is for this reason that he observed at the outset as follows :
"At the outset, I may point out that after considering all the submissions and the evidence produced by the assessee, I am of the opinion that the only criteria to decide this case to apply the standards of reasonable probability taking into account the social customs, financial position and other circumstances."
He has referred to certain contradictions which are obviously minor in nature. The Assessing Officer has referred to the fact that at the time of search the assessee who was an old person could not state as to which gold ornaments belonged to which member of the family. We find that this was wholly natural. A male person in the family is not supposed to know which ornaments belonged to which female member of the family. However, he has categorically stated in the very first statement that the gold ornaments belonged to his wife, daughter-in-law, daughters and sons. It has been submitted on behalf of the Department that it was unnatural for the daughters to keep their ornaments with the parents. However, the assessee has given reasons why daughters had kept the ornaments with him. The daughters had come to assessees place to attend the marriage of assessees son and there were certain incidents of robbery on account of which the daughters thought it proper to keep the ornaments at the parents place while returning to their respective home. The crucial fact is that before the assessee got time to think over the matter he had stated in the very first statement that his daughters ornaments were also with him. In the circumstances the CIT(A) has rightly accepted the explanation to the effect that the ornaments of the daughters were also lying with the assessee at the relevant time. As already stated, the Assessing Officer himself has accepted the version in respect of one of the daughters. Considering the entire circumstances including the status of the family there was absolutely no basis for accounting the explanation of about 50% of the ornaments and not accepting the explanation about remaining 50% of the ornaments, as has been done by the Assessing Officer. There is absolutely no rational basis for his estimate. As already stated, he had himself proceeded to adopt the criterion of reasonable probability. If that criterion is applied the entire explanation regarding gold ornaments should have been accepted. We have carefully considered the entire reasons given by the Assessing Officer and we find that the Assessing Officer has not been able to justify the disallowance of 50% of the gold ornaments on broad basis. The learned CIT(A) has examined the entire evidence in great detail and we agree with the reasons recorded by him. It is to be noted that in the valuation report of the approved valuer appointed by the Department it is specifically mentioned that the ornaments were old ornaments. We uphold the order of the CIT(A) and confirm his finding to the effect that the assessee had satisfactorily explained the gold ornaments that had been found at the time of search in his premises and as such no addition by resorting to provisions of S. 69A was justified. We accordingly confirm the deletion of addition made by the Assessing Officer.
13. As regards silver articles we find that 45.513 kgs. of silver articles were found at the time of search. The assessee had pleaded that the assessees father was carrying on business in silver in large scale and was keeping large quantity of silver and that in the partition the assessee got 38 kgs. of silver and utensils and coins and that some of the utensils were later on converted for day to day use and that the currency erstwhile state were used for sticking in the account books in Diwali days. It was also submitted that many of the utensils bear the name of Shri Motichand Hirachand. This has been found to be correct. It was also submitted that 4.5 kgs. of silver articles had chits of other and those articles belonged to his friends who had got them from the assessee at the time of taking small loans. The Assessing Officer has accepted the explanation in respect of 4.6 kgs. and has not accepted the explanation in respect of 40.858 kgs. and has made addition of Rs. 96,180 being the value of said silver utensils.
14. The CIT(A) has examined the entire evidence and has held that the assessee had received 15 kgs. of silver as his share at the time of partition. He has also held that the possession of old coins and other silver coins, which were in legal use in the erstwhile princely states of Kutch and other States by business community was not unknown and that those coins were used at the time of Diwali Poojan. He, therefore, accepted the explanation in respect of 6 kgs. of silver coins. Similarly he accepted the explanation in respect of 4.5 kgs. of silver items belonging to other persons to whom monies had been advanced by the assessee. As regards the balance he did not accept the explanation of the assessee and confirmed the addition.
15. The Department is now in appeal before the Tribunal in respect of the relief given by the CIT(A) while the assessee is in cross-objection in respect of confirmation made by the CIT(A). According to the assessee the value of silver utensils about which the CIT(A) has made confirmation, is Rs. 47,111 and his confirmation should be deleted.
16. We have perused the entire evidence. We have also examined the documents to which our attention was drawn in the course of arguments. We find that appreciation of material on record made by the CIT(A) was wholly acceptable and there was no justification for interference therein. It is not necessary for us to examine each and every item again. We agree with the reasons given by the CIT(A) and confirm his order. We reject the submissions made by the Department and by the assessee.
17. Before parting, we may mention that the assessee had stated before us that although in the wealth-tax proceedings in the case of Smt. Manjulaben assessments were made on protective basis but no substantive assessment in the wealth-tax proceedings of the assessee for asst. yr. 1983-84 had been made in respect of the value of the ornaments.
18. The appeal and the cross-objections are dismissed.