Income Tax Appellate Tribunal - Jodhpur
Mr. Om Prakash Agarwal (Bansal), ... vs Assessee on 9 May, 2013
1
IN THE INCOME TAX APPELLATE TRIBUNAL
JODHPUR BENCH, JODHPUR
BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER
AND SHRI N.K. SAINI, ACCOUNTANT MEMBER
ITA No. 201/Jodh/2012
Assessment year : 2009-10
PAN: AAVPA 4753 F
The DCIT vs. Shri Om Prakash Agarwal (Bansal)
Central Circle- 1 Sohan Pratap Bhawan, Jagat Mehta Ji Bari
Udaipur Fatehpura, Udaipur
(Appellant) (Respondent)
ITA No. 199/Jodh/2012
Assessment year : 2009-10
PAN: AAVPA 4753 F
Shri Om Prakash Agarwal (Bansal) vs. The DCIT
Sohan Pratap Bhawan, Jagat Mehta Ji Bari Central Circle- 1
Fatehpura, Udaipur Udaipur
(Appellant) (Respondent)
Department by : Dr. Deepak Sehghal
Appellant by : Shri Amit Kothari
Date of hearing : 09-05-2013
Date of pronouncement : 28-06-2013
ORDER
PER N.K. SAINI, A.M.
These cross appeals by the Department and the assessee are directed against the order dated 14-02-2012 of the ld. CIT(A) ,Central, Jaipur.
2.1 In the departmental appeal, the only effective ground raised reads as under:-
''Whether on the facts and circumstances of the case, the ld. CIT(A)(Central), Jaipur has erred in law and on facts in deleting the addition of Rs. 11,15,005/- (wrongly mentioned as Rs. 11,50,005) out of total addition of Rs. 12,00,000/- made on account of unexplained investment in gold and silvery jewellery.'' 2.2 In the assesee's appeal, the only effective ground raised reads as under:-
''On the facts and circumstances of the case, the ld. CIT(A) Central, Jaipur has erred in not deleting the addition of Rs. 11,83,000/- made by the Assessing Officer on account of 2 unexplained cash and Rs. 84,995/- on account of undisclosed investment in silver.'' 2.3 First, we will deal with the common issue involved in the departmental appeal and the assesee's appeal. The grievance of the department relates to deletion of addition of Rs. 11,15,005/- out of total addition of Rs. 12,00,000/- made on account of unexplained investment in gold and silver jewellery while the assessee is in appeal for sustenance of addition of Rs. 84,995/-.
2.4 The facts related to this issue in brief are that a search and seizure proceedings were carried out at the residential and business premises of the assessee group (Om Prakash Agarwal & family) on 23-04-2008 and survey proceedings u/s 133A of the Act were simultaneously carried out at the business premises of the assessee. During the course of search and survey, cash, jewellery, valuables, books of account and incriminating documents were found and seized. The assessee filed the return of income declaring an income of Rs.94,70,774/- on 31-07-2009. The return of income included disclosure of income of Rs. 69.00 lacs on account of cash found and seized during the course of search.
The Assessing Officer during the course of assessment proceedings noticed that during the course of search, jewellery amounting to Rs. 60,60,737/- was found and inventorised which belonged to the assessee and his family members as per the Panchnama dated 24-04-2008 and that in view of the failure of the assessee to give any satisfactory explanation for the jewellery found at his residential premises, jewellery valuing Rs. 33,67,662/- was seized.
The Assessing Officer also pointed out that the assessee vide statement dated 11-06-2008 offered Rs. 12.00 lacs on account of undisclosed investment in jewellery for the financial year 2007-08. The Assessing Officer asked the assessee vide his query letter dated 4-01- 2010 to give details of source of the acquisition of the jewellery alongwith necessary corroborative evidences and as to whether the assessee had surrendered the amount on this 3 account in the return of income. The assessee submitted as under:-
"Gold jewellery found 4113.926 gm at different locations of the entire family tallies with the jewellery declared in the wealth tax returns and VDIS with further purchases in totality. However, silver articles found in search are less over the declared one by 0.501 kg. Hence both the valuables are disclosed and explained. In view of the above, gold and silver surrendered of Rs 12,00,000/- viz. 600 gm. Gold and 18 kg. silver valuating Rs 12,00,000/- in reply to Q. No.3 of statement dated 11.06.08, in adhoc manner and without carrying out due verification and reconciliation is withdrawn. Further, holding of jewellery in the hands of Smt. Sohani Devi Agarwal, Smt. Lalita Devi Agarwal, Smt. Sonu Bansal and Ms. Pooja Bansal as furnished and explained above stated in respective statement to be there "stridhan". It was also furnished adequacy of holding jewellery in view of length of marriage, reasonableness of possession, status of family and traditional prominence of possession vis-a-vis guidelines of CBDT in this regard. "
2.5 After receiving the above reply from the assessee, the Assessing Officer again asked the assessee to explain the following.
''8.4. The submission furnished by the assessee has been considered carefully but found not convincing. Therefore, the assessee vide queryletterdated18.03.2010 was required to explain the followings:-
"1. During the course of search operation, jewellery belonging to you and your family members was found and inventoried as per Annexure-J (page No. 1 to 13) of Panchnama dated 24.04.2008 valuing of Rs. 6060737/-gold weighing 4113.926 Gms and silver weighing 32.770 Kg.). Further you, vide your statement dated 11.06.2008, have offered Rs. 12.00 Lacs on account of undisclosed investment in jewellery for F.Y. 2007-08 but no such disclosure has been made by you in the return filed by you for A.Y. 2008-09. Therefore, vide this office query letter dated 04.01.2010, you were required to give details of the sources of acquisition of above jewellery alongwith necessary corroborative evidences and also required to get the investments verified with regular books of accounts.
In response thereof, you have claimed to have gold jewellery weighing 4896.536 Gms. and silver jewellery/utensils of 41.071 Kg belonging to you and your family.4
From the above, it is noticed that during search, gold was found weighing 4113.926 Gms, whereas you have claimed to have gold weighing 4896.536 gms, i.e. you have claimed excess gold than found in search. It is also noticed that during search, silver was found weighing 32.770 Kg. whereas you have claimed to have silver weighing 41.071 Kg, i.e. you have claimed excess silver than found in search. You are therefore, requested to please explain the reasons thereof as well as details of the gold jewellery which were not found in the course of search operation. Also explain where the jewellery was lying at the time of search operation.
2. On verification of seized documents and other incriminating documents, it is found that two Vasiyatnama(s) (Will) were found and seized as per page No. 36 to 44 and page No. 47 to 52 of Anx-A-
36. One was prepared by you on 26.03.2008 and other was prepared by your wife Smt. Lalita Devi Agarwal on the same day i.e. on 26.03.2008 which is 27 days before the date of search 23.04.2008. On perusal of your will, it is found on page No. 4 in Para. 1.11 that you have declared gold weighing 701.2 Gms (net), 3.6 Kg silver utensil and 50 coins of silver. Similarly, on perusal of will of your wife Smt. Lalita Devi, it was found on page No. 2 Para. 5 that she has declared gold weighing 4317.916 Gms, silver jewellery/utensil at 3.6 Kg and 50 coins of silver. On the basis of these wills, the gold jewellery belonging to you and your wife comes to 5019.116 Gms and silver jewellery/utensils of 7.2 Kg besides 100 coins of silver. On the other hand, in your submission, you have disclosed gold jewellery belonging to you as well as your wife only 2722.736 Gms and silver jewellery/utensils of 27.550 Kg. Please explain the reasons for this discrepancy and also explain as to why the difference in gold as well as silver jewellery/utensil should not be considered as acquired after the preparation of these wills and the value of investments therein should not be added to your total income.
3. You have also claimed that you have declared certain jewellery under VDIS scheme. In this regard, please intimate whether any jewellery which was declared in VDIS has been re-maked, if yes; please give complete details thereof such as date of remaking, article which was remake, jewellery which was made from it, relevant charges, its bills and details of its payment etc.
4. Please file year-wise statement for all the assessment years mentioning details of opening investment in gold bonds, investment made during the year, closing balance and interest earned thereupon alongwith its rate.
5. You have also claimed to had purchased silver gift items of Rs.150000/-as appearing in the balance sheet filed for F.Y. 2003- 04,pleasefurnishdetails of gift items, item-wise weight, value and copies of supporting bill/vouchers"
52.6 The Assessing Officer after considering the submissions of the assessee made addition of Rs. 12.00 lacs by observing that gold jewellery weighing 600 gms and silver of 18 kg amounting to Rs. 12.00 lacs as offered for taxation in the statement u/s 132(4) of the Act remained unexplained and therefore, the same is brought to tax in the hands of the assessee as undisclosed investment from undisclosed sources.
2.7 The assessee carried the matter to the ld. CIT(A) and submissions made before him as mentioned in para 2.4 to 2.4.10 are reproduced verbatim as under:-
''2.4 ADDITION OF 600 GRAMS OF GOLD / DIAMONDS JEWELLERY AND ORNAMENTS AND 18 KILOGRAMS OF SILVER JEWELLERY, ORNAMENTS AND SILVER COINS AMOUNTNG TO RS12,00,000.
At the time of search total gold jewellery and ornaments and silver jewellery/ ornaments , silver coins , utensils found are as under:-
Gold/diamond jewellery and ornaments: 4113.926 gms
Silver jewellery, ornaments and silver coins utensils: 32.7770 kgs
The assessee has submitted all the documents alongwith proofs in respect of Gold jewellery and ornaments and silver utensils and coins found at the time of search vide its letter dt. 11.03.2010 and 26.03.2010. The copy of letter dated 11.03.2010 and 26.03.2010 alongwith all enclosures are enclosed in Annexure D. In respect of Gold/diamond jewellery and ornaments, silver jewellery/coins/ utensils our humble submissions are as under-
2.4.1 Gold Jewellery and ornaments net weight 678 Gms. And silver jewellery,utensils,coins and ornaments 16891 Grams belongs to Mr. O. P. Agarwal.
The gold jewellery and ornaments of 678.000 grams belongs to assessees which have already been disclosed in the wealth tax return of the assessee for the assessment year 1991-92. The copy of wealth tax return was submitted before learned A.O. alongwith letter dt. 11.03.2010 during assessment proceeding and is also enclosed in Annexure A. Silver jewellery, utensils and silver coins of 4100.00 grams relates to the assessee which have already been declared in Wealth Tax return of assessee for 6 the assessment year 1991-92. The copy of return already submitted with the lower authority is also enclosed in Annexure A. The assessee has purchased 12791 Grams of silver utensils/articles amounting to Rs. 150000 and the same has been disclosed in the Balance Sheet as at 31.03.2004 filed with the department. The copy of balance sheet has already been furnished before learned A.O alongwith letter dt. 11-03-2010.
2.4.2 Gold Jewellery and ornmanets 2044.736 gms and silver jewellery, utensils, coins and ornaments 3710 gms belongs to Mrs. Lalita Devi Agarwal Gold/ diamond Jewellery and ornaments of 826.916 grams was shown in wealth tax return of Mrs. Lalita Devi Agarwal for the assessment year 1995-96. Mrs. Lalita Devi Agarwal has also declared Gold/ diamond Jewellery and ornaments of 3392.500 grams in VDIS 1997.(copy enclosed) Thus total Gold/diamond Jewellery and ornaments with Mrs.Lalita Devi agarwal which was disclosed in the returns filed/VDIS with income tax department was 4219.946 Grams.
Out of above 4219.946 Grams she has sold 1399.68 grams of Gold/diamond Jewellery and ornaments .The copy of sale bill has already been submitted before learned A.O. alongwith letter dt.26.03.2010. Further 775.000 grams Gold/diamond Jewellery and ornaments were given to her daughter Sonu Bansal on her marriage. Hence the Gold/diamond Jewellery and ornaments of Mrs. Lalita Devi Agarwal weighing 2044.736 grams found at the time of search and included in total Gold/diamond Jewellery and ornaments of 4113.926 grams. The copy of affidavit of Mrs. Lalita Devi Agarwal has already been submitted before learned A.O. Further 3710.00 grams silver jewellery relates to Mrs. Lalita Devi Agarwal which have already declared in wealth tax return of Mrs. Lalita Devi Agarwal for the assessment year 1995-96.
The assessee has also confirmed the above facts in reply to question no.8 of his post search statement recorded on 11.06.2008.
2.4.3 Gold/diamond Jewellery and ornaments belongs to Sonu Bansal 775.000 Grams.
As explained in above para the Gold/diamond Jewellery and ornaments of 775.000 grams were given to Sonu Bansal by Mrs. Lalita Devi Agarwal at the time of her marriage. The affidavit has already been submitted before learned A.O.The copy of affidavit is enclosed. The assessee has also confirmed the above facts in reply to question no.8 of his post search statement recorded on 11.06.2008.
72.4.4Gold/diamond Jewellery and ornaments belongs to Mrs. Sohan Devi 684.80 Grams Mrs. Sohan Devi is mother of assessee and married during 1935 with Mr. Pratap Mal Agarwal (Bansal). This Gold/diamond Jewellery and ornaments have been received by Mrs Sohan Devi at the time of her marriage and after the marriage from her parents and other relatives. Considering the length of her marriage , age and status of the family the Gold/diamond Jewellery and ornaments of 684.80 grams is not abnormal. It is also evident that this jewellery has been found from Locker no.58 with UBI ,New Fatehpura,Udaipur in which First name of locker holder is Mrs.Sohan Devi Agarwal . This fact has also been confirmed by Mrs.Sohan Devi Agarwal vide her affidavit dt.05.05.2008.Copy enclosed in Annexure B. Moreover assessee has also confirmed the above facts in reply to question no.8 of his post search statement recorded on 11.06.2008.The copy of affidavit is enclosed.
2.4.5 Gold/diamond Jewellery and ornaments on the body of persons 68.61 Grams It is submitted that the Gold/diamond Jewellery and ornaments of about 68.16 grams was on the body of persons. Out of which the Gold/diamond Jewellery and ornaments of net weight 18.61 grams was on the body of Mr. O. P. Agarwal and 50.00 grams on the body of his wife Mrs.Lalita Devi Agarwal which have not been inventorised at the time of search by search party. The affidavit were submitted before learned A.O.The contention taken by the learned Assessing Officer that the Gold/diamond Jewellery and ornaments which have not been inventorised should have to intimated to Authorised Officer at the time of search on this basis he rejected the contention which is baseless, arbitrary and against the facts and circumstances of the case.
It is humbly submitted that at the time of search the assessee and his family members were under the great mental stress and pressure and in such circumstances normally the attention is not attracted towards Gold/diamond Jewellery and ornaments on his/her body. Looking to the status of the family the Gold/diamond Jewellery and ornaments of 68.16 grams on body is not abnormal.
2.4.6 Silver jewellery,utensils,coins and ornaments 12169 Grams belongs to Om Bansal HUF .
Silver jewellery, utensils,coins and ornaments weighing 12169 grams belong to Shri Om Bansal HUF declared under VDIS scheme, 1997.The copy of 8 VDIS Certificates and declaration is enclosed .The same has already been furnished before learned A.O alongwith letter dt. 11.03.2010.
2.4.7 RECONCILIATION OF GOLD JEWLLERY, ORNAMENTS SHOWN IN THE WILL OF SHRI OM PRAKASH AGARWAL AND LALITA DEVI AGARWAL AND PHYSICALLY FOUND AT THE TIME OF SEARCH.
The assessee O P Bansal and his wife Mrs. Lalita Devi Agarwal has executed a will on 26.03.2008 in which the property shall be transferred after his /her death to his/her spouse.
The assessee has mentioned the quantity of gold ornaments weighted 701.200 grams in his will. The gold ornaments shown by the assessee in his will are already readymade gold ornaments and contained the impurity of weighted 23.200 grams which is less than the standard norms of impurity published in the V.G. Mehta's ready reckoner. The above quantity of impurity of gold ornaments 23.200 grams should be reduced out of the total quantity of gold ornaments shown in the will. After making the reduction of weight of the above gold ornaments out of the total quantity of gold shown in the will, the balance quantity of gold ornaments comes with the parity of the net weight of gold ornaments found at the time of search.
Smt. Lalita Devi Bansal(Wife of the assessee) has mentioned the gold ornaments weighted 4317.916 grams in her will. The sold quantity of gold ornaments weighted 1399.600 grams should be reduced out of the total quantity of gold ornaments shown in the will. The gold ornaments weighted 775.00 grams relates to sonu bansal ( her daughter) were lying in locker 22 of Mrs. Sonu Bansal in UBI, fatehpura, Udaipur. The gold ornaments shown by Mrs. Lalita Devi Agarwal in her will are already readymade gold ornaments and contained the impurity of weighted 98.580 grams which is less than the standard norms of impurity published in the V.G. Mehta's ready reckoner.(copy enclosed).The above quantity of impurity of gold ornaments 98.580 grams should be reduced out of the total quantity of gold ornaments shown in the will. After making the reduction of weight of the above gold ornaments out of the total quantity of gold shown in the will, the balance quantity of gold ornaments comes with the parity of the net weight of gold ornaments found during the course of search.
Apart from the above the gold jewellery and ornaments weighted 68.61 grams were found on the body of the assessee and his wife for which no inventory have been prepared by the search party at the time of search.
Thus there is no difference in the quantity of gold ornaments shown in the will of assessee and Smt. Lalita Devi Agarwal as compared to weight of gold ornaments found during the course of search.
9Therefore, adverse inference or conclusion cannot be drawn with regards to the gold jewellery and ornaments shown in the will of Smt. Lalita Devi Agarwal.
The assessee has mentioned the silver jewellery and ornaments, utensils weighted 3600 grams and 50 silver coins in his will. The each silver coin contains the weight of .10--grams. The total silver jewellery and ornaments, utensils and coins weighted 4100 grams were also found in the hands of the assessee which has been disclosed in wealth tax return for A.Y. 1991 -92.
Thus there is no difference in the quantity of silver jewellery and ornaments, utensils and coin mentioned in the will of the assessee as compared to the weight of silver jewellery and ornaments, utensils and coins found during the cource of search.
2.4.8 Similarly Smt. Lalita Devi Agarwal has also mentioned the silver jewellery and ornaments, utensils weighted 3600 grams and 50 silver coins in her will. The each silver coin contains the weight of 2 grams.The total silver jewellery and ornaments, utensils and coins weighted 3710 grams were found with her at the time of search which has been disclosed in wealth tax return for A.Y. 1995-96.
Thus there is negligible difference of 10 grams in the quantity of silver jewellery and ornaments, utensils and coins mentioned in the will of Mrs. Lalita Devi Agarwal as compared to the weight of silver jewellery and ornaments, utensils and coins found during the course of search.
It is humbly submitted that to avoid subsequent litigation between their daughters after the death of assessee and his spouse, the wills were prepared by the assessee and his wife with the intention to discuss the details of the will with their daughters and therefore the contents of will were neither notarized and nor witnessed by anyone. It is the necessary ingredient that the will should be attested by two or more witnesses, each of whom has seen the testator sign the will or affix his mark or seen some other person sign the will in the presence of and under the direction of the testator or received from the testator. A personal acknowledgement of his signature or of the signature of such other person. In the case of assessee and his wife's will it was not witnessed by anyone. Hence contents of the will is null and void. However the reconciliation of Gold Jewellery and ornaments of assessee Shri Om Prakash Bansal and his wife Mrs.Lalita Devi Agarwal shown in the will and found at the time of search was furnished to learned A.O. which is reproduced herein below.
10S.N. Particulars Shri Om Smt. Lalita Devi Remarks
Prakash Bansal Bansal quantity
quantity in in grams
grams
1. Gold jewellery and 701.2 4317.916 Including gold
ornaments as per Will jewellery and
ornaments of
Sonu Bansal net
weighted 775
grams included
by mistake
2. Gold jewellery and - 1399.6 Bills and
ornaments as per bill affidavit
produced enclosed
3. Balance 701.2 2918.316
4. Gold jewellery and - 775 Added by
ornaments of Smt. Sonu inadvertent
Bansal mistake
(affidavit
enclosed)
5. Balance 701.2 2143.316
6. Average impurity in 23.2 98.58 Copy of
readymade gold standard norms
ornaments enclosed
7. Gold jewellery and 678 2044.736 As explained in
ornaments para n. 1 above
8. Gold jewellery and 18.61 50 Not inventorised
ornaments by the search
party on the
body of persons
9. Balance 659.39 1994.736 -
Total gold jewellery and ornaments found during the course of search and already explained.
1. Shri Om Prakash Bansal 659.390 gms
2. Smt. Lalita Bansal 1994.736 gms
3. Smt. Sonu Bansal 775.000 gms
4. Smt. Sohan Devi 684.800 gms Total 4113.926 gms 2.4.9 It is humbly submitted that the gold/ diamond jewellery and ornaments of 4113.926 gms and silver jewellery, utensils, coins and ornaments of 32270 gms has been sustained by documentary evidence in the form of wealth returns, declaration in VDIS, Affidavits etc. But the learned Assessing Officer has added the 600 gms of gold jewellery and silver of 18 kg worth Rs. 12,00.000/- on the basis of declaration by the assessee.
11It is humbly submitted that only on the basis of statement the addition cannot be made unless it is supported by any corroborative evidence.
The assessee has submitted all the documents, informtions and explanations to the learned Assessing Officer and now it was the duty of learned Assessing Officer to appreciate the details / documents on record but the learned Assessing Officer has failed to appreciate properly the documents. He added the 600 gms of gold jewellery and silver of 18 kg worth Rs. 12,00,000/- on the basis of declaration by the assessee on the ground that the assessee has offered for taxation and reconciliation of jewellery filed during the course of assessment proceedings having no means fabricated. He has not pointed out any defect in the documents, explanation.
In this respect, we wish to submit that at the time of search the assessee was under mental stress and tension and the statement given by anyone under mental stress and tension cannot reflect the real state of affairs. Only on the basis of statement, it is not supported by corroborative evidence then the addition cannot be made.
2.4.10 Reliance is placed on the following judicial decisions .
(i) Hon'ble Apex Court in Pullangode Rubber Produce Co. Ltd. vs State of Kerala [1973] 91 ITR 18 has held that an admission is an extremely important piece of evidence but it cannot be said that it is inconclusive. It is open to the person who made the admission to show that it is incorrect.
(ii) Gardgidin Jawla Prasad vs CIT, (1974) 96 ITR 97(All.)
(iii) CIT vs G. Krishnan (1994) 210 ITR 707 (Mad) Held that addition cannot be made merely on the basis of statement.
(iv) ACIT vs Ashok Kumar Jain 32 TW 114 (ITAT Jaipur) (v) Shri Rajendra Kr. Kedia vs DCIT 22 TW 506 (ITAT Jaipur) : No valid
addition can be made on the basis of such invalid confessional statement;
particularly when supporting corroborative documentary evidence in the form of book was forthcoming.
(vi) ITO vs Vijay Kumar Keasar , 327 ITR 497 (Chattisgarh High Court) : -
12Assessee has retracted from disclosure for undisclosed income made by him during the survey proceedings. The addition made on account of excess cash in stock was deleted by accepting update books of accounts prepared by the assessee. There were primary evidences on record for acceptance of cash.
(vii) M/s Krishna Fruit Co.vs DCIT(2006) 34 TW 280(ITAT Jodhpur ): In this case, it has been held that contents of a duly sworn and affirmed affidavit have to be taken as a proof of content unless controverted.
(viii) Anand Prakash Gupta vs ACIT(2004) 32 TW 221(ITAT Jodhpur): In this case it has been held that Assessing Officer is duty bound to controvert the affidavit by cross examining the deponents or by bringing adverse material on record in case the affidavits are to be disbelieved.
(ix) Kuldeep ChandGargee vs ITO (2007) 37 TW 127:- In this case, it has been held that contents of a duly sworn affidavit have to be accepted as such unless such persons are cross examined to establish fallacy of the contents.
(x) M/s Kanchwala Gems vs JCIT (2004) 31 TW 77 :- Affidavit cannot be rejected without cross examination unless there is sufficient material on record for doubting the veracity of the statements made in the affidavit.
In view of above, your honour is requested to accept the appeal and direct the Assessing Officer to delete the addition made by him.'' 2.8 The ld. CIT(A) after considering the submissions of the assessee deleted the addition of Rs. 1,15,005/- and sustained the addition of Rs. 84,995/- by observing in the impugned order as under:-
''2.4 As regards addition on account of gold jewellery, it is seen that gold jewellery/ ornament of 826.916 gms were shown in the W.T. return of Mrs. Lalita Devi wife of appellant for A.Y 1995-96 and thereafter Mrs. Lalaita Devi has also declared gold/diamond jewellery of 3392.500 gms in VDIS 1997. Thus total explained gold jewellery in the hands of Mrs Lalita Devi comes to 4219.416 gms, and out of the above jewellery 1398.68 gm has been admitted to be sold and further 775.0 gm was claimed to be given to her daughter Sonu Bansal on her marriage, (which was found during the course 13 of search in her locker), remaining explained jewellery with Mrs. Lalita Devi comes to 2044.736 gms. The gold jewellery of 775 gm found from the locker related to Sonu Bansal is already explained as above. Apart from it, gold jewellery/ornament of 678 gms has been shown in the W.T. return of the appellant, the copy of which was submitted before the A.O. also, making total explained jewellery in these three hands as 3497.736 gms. As total gold jewellery / ornament found were 4113.926 gms, it leaves gold ornament weighing 616.190 gms to be explained. The appellant has claimed 616.190 gm as belonging to his mother Smt. Sohan Devi. In fact during the course of search in the statement so recorded, the jewellery belonging to mother Smt. Sohan Devi Agarwal being Stridhan was prima-faciely accepted and it was after excluding the same that the balance jewellery of around 600 gms were offered for taxation. As, during the course of search the appellant could not furnish evidence of jewellery shown in his own W.T. Return weighing 678 gms, the surrender of 600 gm of gold jewellery seems to be made during the course of search. However, since the jewellery 678 gms in the hands of appellant is found explained in view of the W.T. return, the A.O. was not justified in just repeating the same addition as admitted during the course of search, which was on account of non-availability of all the evidence immediately during the progress of the search.
2.5 Now coming to the silver utensils, the appellant has purchased 12.791 kg of the silver utensils amounting to Rs. l,50,000/~, which is disclosed in the balance sheet as on 31.3.2004 filed with the department, the copy of which was furnished before the A.O. Further 3.710 kg silver jewellery /ornament is disclosed in the W.T. Return of Smt. Lalita Devi and further silver jewellery / utensils, coins weighing 12169 gms was declared under the VDIS Scheme, 1997 in the hands of Sh. O. P. Bansal HUF, the copy of VDIS certificate was also filed before the A.O., making total explained silver ornaments as 28.670 kg leaving 4.107 kg silver ornaments as unexplained.
Taking the value of Rs. 6,78,180/- of 32.770 Kg, from the order of A.O, the value of 4.107 Kg silver utensil comes to Rs. 84,995/-and the same is sustained. Therefore, balance addition of Rs. 11,15,005/- on account of gold and silver ornament / jewellery / utensils is deleted.'' 2.9 Now the Department is in appeal for deletion of addition of Rs. 11,15,005/- while the assessee has filed the cross appeal for sustenance of addition of Rs. 84,995/-.
2.10 The Ld. D.R. for the Revenue strongly supported the order of the Assessing Officer and further submitted that the assessee himself agreed for surrender of Rs. 12.00 lacs but did not say anything about the jewellery . Therefore, the addition made by the Assessing Officer on account of unexplained jewellery was fully justified and the ld. CIT(A) wrongly deleted the addition made by the Assessing Officer.
142.11 In his rival submissions, ld. counsel for the assessee reiterated the submissions made before the authorities below and further submitted that the assessee fully explained the gold / diamond jewellery and silver utensils/ coins/ jewellery which were also shown in the wealth tax return. However, the Assessing Officer did not appreciate the facts in right perspective while making the addition and the ld. CIT(A) was not justified in sustaining the addition of Rs. 84,995/-.
2.12 We have considered the submissions of both the parties and carefully gone through the material available on record. As regards the addition on account of gold jewellery, it appears that Smt. Lalita Devi Agarwal wife of the assessee had shown gold jewellery / ornaments weiging 826.916 gms in the wealth tax return of the assessment year 1995-96 and also declared gold/ diamond jewellery of 3392.500 gms in VDIS 1997. Thus the total explained jewellery in the hands of Smt. Lalita Devi Agarwal came at 4219.416 gms ( 826.916 +3392.500 gms ), out of said jewellery 775.00 gms was claimed to be given to the daughter on her marriage and 1399.680 gms was claimed to be sold. The remaining explained jewellery available with Smt. Lalita Devi Agarwal was 2044.736 gms and the jewellery weighing 775 gms found from the locker of the daughter of the assessee was also explained (since it was given by Smt. Lalita Devi Agarwal to her daughter at the time of her marriage). Apart from above gold jewellery , the assessee had shown 678 gms in his wealth tax return. In this manner, the total explained jewellery in three hands was at 3497.736 gms (2044.736 + 775+678 gms) as the total gold jewellery / ornaments found were at 4113.926 gms which left the ornaments weighing 616.190 gms and the explanation of the assessee was that the said ornaments belonged to his mother Smt. Sohan Devi and during the course of search in the statement so recorded, the jewellery belonging to the mother of the assessee being stridhan, was prima facie accepted and after excluding the same balance jewellery of around 600 gms were offered for taxation. However, the assessee could not furnish the evidence of jewellery weighing 678 gms in his wealth tax return but later on the 15 said jewellery weighing 678 gms in the hands of the assessee was found explained in his wealth tax return. Therefore, the Assessing Officer was not justified in just repeating the addition which was admitted during the course of search on account of non-availability of the evidence when, later on the evidence was found in the shape of wealth tax return.
Therefore, the ld. CIT(A) was fully justified in deleting the addition made by the Assessing Officer on account of gold jewellery / ornaments.
2.13 As regards the addition on account of silver utensils, it appears that the assessee purchased 12.971 kg of silver utensils for a sum of Rs. 1.50 lacs which was disclosed in the balance sheet as on 31-03-2004 filed with the Department, the copy of which was also furnished before the Assessing Officer and the silver jewellery / ornaments weighing 3.710 kg was disclosed in the wealth tax return of Smt. Lalita Devi Agarwal, wife of the assessee and silver jewellery / utensils and coins weighing 12169 gms were declared under VDIS in the hands of HUF of the assessee i.e. Shri O.P. Bansal, HUF. The ld. CIT(A) categorically stated that evidence for the aforesaid jewellery / utensils and coins were furnished before the Assessing Officer. Therefore, the total explained silver ornaments were 28.670 kgs out of 32.770 kgs worked out by the Assessing Officer and the silver ornaments weighing 4.107 kg were required to be explained. In this regard, the explanation of the assessee was that 50 silver coins and 3.600 kgs articles and utensils were declared by the assessee in computation of wealth for the assessment year 1991-92, copy of which is placed at page 56 and 57 of assesee's compilation. It appears that neither the Assessing Officer nor the ld.
CIT(A) has given cognizance to the said fact. We therefore, remand this limited issue i.e. relating to silver utensils / articles and coins weighing 4.107 kg to the file of the Assessing Officer to be decided afresh after proper verification from the old record and if it is found that the assessee had already disclosed the same then no addition which has been sustained by the ld. CIT(A), is called for.
163.1 Another issue agitated by the assessee in his appeal relates to confirmation of addition of Rs. 11.83 lacs made by the Assessing Officer on account of unexplained cash.
3.2 The facts related to this issue in brief are that the during the course of search, cash amounting to Rs. 80,83,000/- was found from the residential portion of the assessee. As per annexure C-1 to the panchnama dated 24-04-2008 out of the above, cash Rs. 80.00 lacs was seized. The assessee disclosed a sum of Rs. 41.33 lacs out of this cash seized amounting to Rs. 80.00 lacs as his unexplained cash in Financial Year 2007-08 for taxation, in his statement dated 11-06-2008.
3.3 During the course of assessment proceedings, the Assessing Officer vide office query letter dated 4-01-2010 asked the assessee as under:-
''Please explain and produce evidence regarding accumulation of cash found Rs. . 8083000/-. Please get the cash balances verified with regular books of accounts. In the absence of it, cash amount will be treated as unexplained and will be added to your total income. If the cash belongs to any other person then please furnish the name and complete address of such person, the name of his Assessing Officer along with his confirmation in the form of affidavit should be given. The person should also be produced for verification. Please also explain why this cash was lying in your custody.
Whether you have declared the surrendered amount on this account in your return of income filed in response to notice U/s 153A or not, if not, why? Give explanation and produce evidences.'' 3.4 In response to that, the assessee submitted as under-
"During the search there is found cash totaling to Rs.. 80.83 Lac and seized Rs. 80.00 Lac at residence at Om Prakash Agarwal belonging to different family members and business concerns. Assessee has surrendered Rs. 41.33 Lac on account of unexplained cash in reply to Q.9 of statement recorded on 11.06.2008.
Further, at the time of filing of ROI, assessee has offered for taxation whole cash i.e. Rs. . 69.00 Lacs (80.00 Lacs - 11.00 Lacs) instead of Rs. 41.33 Lac for want of corroborating evidence to prove otherwise and to purchase mental peace. We would like to inform your goodself that Rs. . 11.00 belongs to assessee's mother, part of her balance and savings, hence, excluded from total cash found. Confirmation enclosed."17
3.5 The Assessing Officer after considering the submissions of the assessee made the addition of Rs. 1.83 lacs by observing in para 7.5 to 7.7 of the assessment order dated 11- 10-2010 which read as under:--
''7.5 While filing the return of income, the assessee has disclosed unexplained cash of Rs. 69.00 lacs completely differed the above statements. This shows that while recording statements, the assessee has manipulation in mind to settle the issue in any way wich was possible. Now in return, he disclosed Rs. 69.00 lacs as unexplained cash and raised his new claim that balance Rs. 11.00 lacs was belonging to his mother. In support of his claim he also filed confirmation of Smt. Sohan Devi Agarwal stating therein that the amount of Rs. 11.00 lacs lying with the assessee was actually belongs to her. The confirmation was made on non-judicial stamp paper of Rs. 10/- mentioning dated 05-05-2008.
7.6 The contention raised now by the assessee is not acceptable for the reasons that generally, if any people having such huge amount like Rs. 11.00 lacs with him, they would definitely be aware with custody of this cash. But in this case, when confronted the assessee with cash found and seized, he never disclosed the belongingness of Rs. 11.00 lacs to his mother before the I.T. Department. This fact is also supported with the above quoted statement.
7.7 From the above, the amount of Rs. 11.83 lacs remained unexplained and therefore, the same is brought to tax in the hands of the assessee for the assessment year 2009-10 as his undisclosed income.'' 3.6 Being aggrieved, the assessee carried the matter before the ld. CIT(A) and the submissions as incorporated in para 2.3.1 to 2.3.3 of the impugned order are reproduced verbatim as under:-
''2.3.1 Out of above Rs. 1100000 pertains to the mother of assessee Mrs. Sohan Devi Agarwal and balance Rs. 100000 belongs to Mrs. Santa Bai Jorawarmal Agarwal Trust. The copy of confirmation from mother of assessee Mrs. Sohan Devi Agarwal have already been submitted before learned A.O. vide letter dated 05.03.2010. (Copy of letter is enclosed in Annexure B.) The affidavit of Santa Bai Agarwal dated .05.05.2008 was submitted before the lower authority vide letter dated 11.03.2010.(Copy enclosed in annexure A) In the affidavit it has been categorically mentioned by Santa Bai Agarwal that the money of Rs. 100000 which was lying with the assessee belongs to her and kept with the assessee for the reason that after her demise the funeral and other death ceremonial expenses can be done out of that moneyof Rs. 100000 lying with the assessee. She was alone and age of 87 18 years. Her husband was retired session judge and in view of above Rs. 100000 is not a very abnormal amount.
2.3.2 Further in respect of Rs. 1100000 which belongs to Mrs. Sohan Devi Agarwal i.e. . mother of assessee, It is humbly submitted that search was conducted on 23.04.2008 and affidavit of Mrs. Sohan Devi Agarwal was given on 05.05.2008. Mrs. Sohan Devi Agarwal has expired on 21.06.2009 and proceedings by Income Tax Department for filing the return was initiated vide letter no. DCIT/CC-1/Udr/2009-10/1484 dated
04.01.2010.
Further the copy of death certificate was submitted before lower authority vide letter dated 11.03.2010.(Copy enclosed in Annexure A) Before her death Mrs. Sohan Devi Agarwal called to her sons namely Shri O. P. Agarwal, Shri Sunil Kumar Agarwal and Shri Shakti Kumar Agarwal and orally directed that amount of Rs. 1100000 lying with shri O. P. Agarwal may be distributed between the children of Sunil Kumar Agarwal and Shakti Kumar Agarwal after release from the Income Tax Department. The affidavit of assessee as well as Sunil Kumar Agarwal and Shakti Kumar Agarwal has been submitted before the learned assessing officer vide letter dt. 22.03.2010 (Copy enclosed in Annexure C).
It is humbly submitted that at the time of search the assessee was under mental stress and he explained the source of Rs. 3962000 belongs to Lalita Devi Agarwal, Mrs. Mohan Bapna and assessee^s HUF but subsequently on 05.05.2008 just after 12 days from the initiation of search the assessee submitted the correct position duly supported by affidavit.
2.3.3 The learned AO has not accepted the corroborative evidences on record and added the cash of Rs 1100000 on the ground that the assessee has manipulation in his mind to settle the issue in any way. Further he has rejected on the ground that if any people having such a huge amount with him then he definitely be aware with custody of this cash. In this respect we wish to submit that at the time of search the assessee was under mental stress and tension and the statement given by anyone under mental stress and tension cannot reflect the real state of affairs. The addition cannot be made only on the basis of statement unless it is supported by corroborative evidence. Our contention is also supported by the fact that t statement was given on 23.04.2008 and only after 12 days of search the affidavits was sworned.
We most respectfully submit that affidavits duly sworned have been submitted in both the cases i.e. Sohan Devi Agarwal and Santa Bai Agarwal . However Sohan Devi Agarwal had expired and further her sons have given the affidavit in which before the death of Sohan Devi Agarwal she has directed them to distribute Rs 1100000 lying with the assessee and seized by the Income Tax Department between the children of her two sons i.e 19 Shakti Kumar Agarwal and Sunil Kumar Agarwal . A specific request was made for recording the statement which has not been done by learned AO.
It is humbly submitted that affidavits submitted by the party cannot be rejected without cross examining the facts. There is no any sufficient material on the record for doubting the veracity of the statement made in the affidavit. Onus to disprove the facts of affidavit lies on learned A.O. It was the prime duty of the learned AO to disprove the contents of affidavit before rejecting. Further it is a well settled law that averment made in the affidavit have to be accepted as correct unless the same is controverted with documentary evidence and the AO is duty bound to controvert the affidavit by cross examining the deponents or by bringing adverse material on record in case the affidavits are to be disbelieved.'' 3.7 The ld. CIT(A) after considering the submissions of the assessee confirmed the addition made by the Assessing Officer by observing in para 2.3 of the impugned order which reads as under:-
''2.3 I have considered the submission of Id. A.R. and have perused the material on record. As already mentioned by the A.O., during the course of search, cash of Rs 80,83,000/- was found out of which, the appellant in his statement tried to give explanation of Rs. 3.5 lakhs further Rs. 19.02 lakhs and further Rs. 36 lakhs as reproduced by the A.O. on page
4 & 5. Immediately thereafter realizing that only Rs. 39.50 lakhs is explainable, he admitted remaining amount of Rs. 41.33 lakhs to be unaccounted. However, while filing return of income, the appellant has disclosed Rs. 69 lakhs as undisclosed cash, thereby he has on its own admitted that the claim made during the course of search in the statement was incorrect but the appellant has come up with altogether new claim that Rs. 11 lakhs was belonging to his mother and Rs. 83,000/- belonging to Mrs. Santa Bai Jorwarmal Agarwal Trust during the assessment proceedings. The argument of cash amount of as high as Rs. 11 lakhs contended to be available with the mother of the appellant was never ever mentioned during the entire search proceedings. Instead the appellant, during the course of search has taken various other pleas to try to explain part of the cash so found. However, as these explanations were later on found to be wrong/unsubstantiated by the appellant himself, he has tried to take up new explanation of money of as high as Rs. 11 lakh belonging to his mother and Rs. 83,000/- belonging to Mrs. Santa Bai Jorwarmal Agarwal Trust. The A.R has tried to justify that the affidavit was given by the mother after few days of the search but this argument is also lacking merit as though the appellant might have obtained the confirmation of his mother but it was never submitted before the department immediately after the execution of the confirmation, thus denying the department the opportunity of investigating the matter further. This confirmation was submitted as late as on 15th March, 2010 which is nothing but an attempt to take a plea which could not have been properly investigated by the department. Accordingly claim of the appellant is rejected and addition of Rs. 11,83,000/- is confirmed.'' 20 3.8 Now the assessee is in appeal.
3.9 The ld. counsel for the assessee reiterated the submissions made before the authorities below and further submitted that the assessee furnished the details of the documents of Rs. 12.00 lacs before the Assessing Officer vide letter dated 10-03-2010. the amount of Rs. 11.00 lacs pertained to the mother of the assessee Smt. Sohan Devi Agarwal and balance of Rs. 1.00 lacs belonged to Mrs. Santa Bai Jorawarmal Agarwal Trust and the copy of the confirmation from the mother was already submitted to the Assessing Officer vide letter dated 5-03-2010. It was contended that affidavit of Smt.Santa Bai Agarwal dated 5-05-2008 was submitted vide letter dated 11-03-2010, in the said affidavit, it was clearly mentioned that the money of Rs. 1.00 lac which was lying with the assessee belonged to Smt. Santa Bai Agarwal and kept with the assessee for the reason that after her demise, the funerals and ceremonial expenses could be done out of that money of Rs. 1.00 lac. It was also stated that she was alone and the amount of Rs. 1.00lac was not very abnormal amount. It was also stated that specific request was made to the Assessing Officer to record the statement of Smt. Santa Bai Agarwal at her residence because her age was around 87 years and she was suffering from paralysis but the Assessing Officer had not done the same for the reason that he was convinced with the contents of the affidavit. As regards the claim of Rs. 11.00 lacs belonging to Smt. Sohan Devi Agarwal i.e. mother of the assessee, it was stated that search was conducted on 23-04-2008 and affidavit of Smt. Sohan Devi Agarwal was given on 05-05-2008. It was stated that Smt. Sohan Devi Agarwal expired on 21-06- 2009 and the proceedings by the Income Tax Department for filing the return was initiated vide letter dated 04-01-2010. It was submitted that the copy of the death certificate was furnished to the Assessing Officer. It was also submitted that before her death, Smt. Sohan Devi Agarwal called her sons and orally directed that the amount of Rs. 11.00 lacs lying with Shri O.P. Agarwal may be distributed between the children of Shri Sunil Kumar 21 Agarwal and Shri Shakti Kumar Agarwal (sons of Smt. Sohan Devi Agarwal) after release from the Income Tax Department. The affidavit of the assessee as well as Shri Sunil Kumar Agarwal were furnished before the Assessing Officer vide letter dated 22-03-2010.It was contended that at the time of search, the assessee was under mental stress and he explained the source of Rs. 39.62 lacs belonged to Smt. Lalita Devi Agarwal, Mrs. Mohan Bapna and assessee's HUF but subsequently on 05-05-2008 just after 12 days from the initiation of search, the assessee submitted the correct position duly supported by affidavit. However, the Assessing Officer had not accepted the corroborative evidence on record and added the cash of Rs. 11.00 lacs by observing that the assessee had manipulation in his mind because if any person having such a huge amount with him then he definitely would be aware about the custody of this cash. It was stated that statement was given by the assessee during the course of search under mental stress and tension which did not reflect the real state of affairs. Therefore, the addition should not have been made only on the basis of the statement particularly when only after 12 days of search, the affidavit was sworn. It was contended that the ld. CIT(A) has also not appreciated the facts in right perspective and sustained the impugned addition.
3.10 In his rival submissions, the ld. D.R. for the revenue strongly supported the orders of the authorities below and reiterated the observations made by the Assessing Officer in the assessment order .
3.11 We have considered the submissions of both the parties and carefully gone through the materials available on record. In the instant case, the Assessing Officer made the addition of Rs. 11.83 lacs for the reason that cash amounting to Rs. 80.83 lacs was found during the course of search but the assessee disclosed only Rs. 69.00 lacs in the return of income. The balance amount of Rs. 11.83 lacs was added by the Assessing Officer in the hands of the assessee. In the present case, the assessee explained that Rs. 11.00 lacs belonged to the mother of the assessee Smt. Sohan Devi Agarwal who also gave an 22 affidavit notorized on 05-05-2008, the copy of which is placed at pages 31 to 32 of the assessee's compilation. In the said affidavit, it is clearly mentioned that she was married in 1935 and her husband expired in 1993. She also stated that she saved Rs. 11.00 lacs in cash which was received as gifts or savings from the amount received by her for expenses from her husband. She also stated in the said affidavit that a sum of Rs. 11.00 lacs was given to her son Shri Om Prakash Agarwal i.e. assessee which was kept in Bank Locker No. 58 at Bank of India, New Fatehpua, Udaipur and this locker was taken in the joint names i.e. Smt. Sohan Devi Agarwal and the assessee. She also stated that she was on Oxygen and her son Shri O.P. Agrwal i.e. assessee did not tell her about the search of the Income-Tax Department on 23-04-2008 and that her jewellery and cash had been taken by the Department. The contents of the said affidavit had not been controverted and it is not the case of the Department that an amount of Rs. 11.00 lacs belonging to Smt. Sohan Devi Agarwal, mother of the assessee was not her own money. Therefore, the Assessing Officer was not justified in treating the said amount as undisclosed income of the assessee particularly when nothing was brought on record in contravention of the contents stated in the affidavit of Smt. Sohan Devi Agarwal. Similarly Smt. Santa Bai Agarwal had also given an affidavit which is placed at pages 33 and 34 of the assessee's compilation. In the said affidavit, it has been clearly stated by Smt. Santa Bai Agarwal that she had given a sum of Rs. 1.00 lac to the assessee which was to be used for performing her last rites.
Therefore, it cannot be said that the amount of Rs. 1.00 lac kept by Smt. Santa Bai Agarwal with the assessee who is also President of Smt. Santa Bai Jorawar Mal Agarwal Trust, was the assesee's money. Therefore, the explanation given by the assessee was plausible explanation. As such, the Assessing Officer was not justified in making impugned addition and the ld. CIT(A) without appreciating the facts of the present case in the right perspective had sustained the addition made by the Assessing Officer. We therefore, by 23 considering the totality of the facts as discussed hereinabove direct the Assessing Officer to delete the impugned addition sustained by the ld. CIT(A) 4.0 In the result, the appeal filed by the Revenue is dismissed and the appeal filed by the assessee is partly allowed for statistical purposes.
(Order Pronounced in the Open Court on this 28-06-2013.) Sd/- Sd/-
(HARI OM MARATHA) (N.K. SAINI)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 28th June, 2013
Mishra
Copy to:-
1.The Appellant
2. The Respondent
3. The ld. CIT
4. The ld. CIT(A)
5. The DR
6. The Guard File
Assistant Registrar
ITAT, Jodhpur