Naveen Bansal (HUF), Karnal V. ITO, Karnal

ITA 1631/DEL/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 53195 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 12-10-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 21-04-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R S NEGI
• Assessee Lawyers: C S AGGARWAL; R P MALL
• Keywords: Gift; Business income; Income from undisclosed sources; Search and seizure; Cost of acquisition; Fair market value; Valuation report
• Section: 131; 68; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E DELHI BEFORE SHRI RAJPAL YADAV AND SHRI K.G. BANSAL ITA NO. 1631 (DEL)/2009 ASSESSMENT YEAR: 2006-07 NAVEEN BANSAL (HUF), INCOME-TAX OFFICER, 357, OLD HOUSING BOARD COLONY, VS. WARD-4, K ARNAL. KARNAL. PAN: AADHN2028N (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI C.S. AGGARWAL , SR. ADVOCATE & SHRI R.P. MALL, ADVOCATE RESPONDENT BY : S HRI R.S. NEGI, SR. DR DATE OF HEA RING : 12.10.2011 DATE OF PRO NOUNCEMENT : 18.11.2011 ORDER PER K.G. BANSAL : AM THE FACTS OF THE CASE ARE THAT THE ASSESSEE-H UF FILED ITS RETURN ON 25.07.2006 DECLARING TOTAL INCOME OF RS. 1,04,756 /-. THE ASSESSEE INCLUDED LONG-TERM CAPITAL GAINS (LTCG FOR SHORT) AMOUNTI NG TO RS. 9,338/- IN THIS INCOME. WHILE COMPUTING THE CAPITAL GAINS, THE S ALE CONSIDERATION WAS SHOWN AT RS. 21,85,440/- AND THE INDEXED COST AT RS. 21,76,102/-. APART FROM THIS, THE MAJOR SOURCE OF INCOME HAS BEEN SH OWN UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION, A T RS. 1,35,820/-, COMPUTED ON A PRESUMPTIVE MANNER U/S 44AF OF THE INCOME- TAX ACT, 1961 (THE ACT ITA NO. 1631(DEL)/2009 2 FOR SHORT). THE CAPITAL GAINS HAVE BEEN SHOWN TO BE ACCRUING ON SALE OF GOLD JEWELLERY WEIGHING 3121.240 GRAMS, SOLD @ R S. 7,003/- PER 10 GRAMS. THUS, THE SALE PROCEEDS HAVE BEEN SHOWN AT RS. 21,85,440/-. THE JEWELLERY IS CLAIMED TO BE ANCESTRAL PROPERTY AND, THEREFORE, ITS FAIR MARKET VALUE AS ON 01.04.1981 HAS BEEN TAKEN AT RS. 1670 /- PER 10 GRAMS FOR 24 CT. GOLD. AFTER REDUCING THE AMOUNT BY 16%, THE FAIR MARKET VALUE HAS BEEN TAKEN AT RS. 1402.80 PER 10 GRAMS. THE VAL UE IS INDEXED BY MULTIPLYING THE SAME BY A FACTOR OF 4.97. THUS, THE INDEXED COST OF ACQUISITION HAS BEEN WORKED OUT AT RS. 21,76,102/- . THIS LEADS TO COMPUTATION OF LTCG AT RS. 9,338/-. 1.1 IN THE COURSE OF ASSESSMENT PROCEEDINGS, DETA ILED ENQUIRIES WERE MADE REGARDING THE ACQUISITION AND SALE OF JEW ELLERY. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE AO DID NOT ACCEPT THAT THE JEWELLERY WAS ACQUIRED BY THE ASSESSEE AT THE TIME OF HIS MARRIAGE ETC. THE CONTENTION THAT THE ASSESSEE-HUF WAS IN POSSESSIO N OF THIS JEWELLERY ON 31.3.2005 WAS ALSO NOT ACCEPTED. THE EVIDENCE OF SALE OF JEWELLERY WAS ALSO DISBELIEVED. THEREFORE, IT WAS HELD THAT TH E ASSESSEE INTRODUCED HIS OWN MONEY IN THE BANK ACCOUNT BY SHOWING THE ALL EGED SALE OF JEWELLERY. IN VIEW THEREOF, THE SALE PROCEEDS AMOUNTING TO RS. 21,85,440/- WERE ITA NO. 1631(DEL)/2009 3 ADDED TO THE TOTAL INCOME. THUS, THE TOTAL INCOME W AS COMPUTED AT RS. 22,80,860/-. 1.2 THE ASSESSEE MOVED AN APPEAL AGAINST THIS O RDER BEFORE THE LD. CIT(APPEALS), KARNAL. VARIOUS SUBMISSIONS WERE MADE BEFORE HIM. AFTER CONSIDERING THE ASSESSMENT ORDER AND THE S UBMISSIONS MADE BEFORE HIM, HE UPHELD THE ORDER OF THE AO BY MAKING THE FOLLOWING REMARKS:- 6. I HAVE CONSIDERED THE FACTS OF THE CASE A ND THE SUBMISSIONS OF THE ASSESSEE. THE ASSESSEE HAS NOT GIVEN ANY EVIDENCE W.R.T. THE SOURCE AND ACQUISITION OF GOLD JEWELLERY BY IT. NO EVIDENCE REGARDING THE INCOME OR STA TUS OF HIS FATHER OR FOREFATHERS HAVE BEEN GIVEN. ON THE CON TRARY, AS POINTED OUT BY THE AO THAT THE GRAND FATHER OF MR . NAVEEN BANSAL HAD FOUR SONS AND FOUR DAUGHTERS AND, THEREFORE, ORDINARILY SAME GIFT OR JEWELLERY SHOULD HAVE BE EN GIVEN TO ALL SONS AND DAUGHTERS BUT THE EVIDENCE OF INCOME OR HOLDING OF JEWELLERY IS NOT THERE EVEN TO THE EXTENT, IT IS CLAIMED TO HAVE BEEN RECEIVED BY THE ASSESSEE. THE CIRCUMS TANCES IN WHICH THE CLAIM OF JEWELLERY AND ITS SALE HAS BE EN MADE ARE ALSO VERY SUSPICIOUS BECAUSE THERE WAS NO TALK OF THIS JEWELLERY EARLIER TO 30.03.2006, WHEN THE RETURN OF WEALTH WAS FILED BY THE ASSESSEE IN THE WRONG CHARGE. EARLIER TO 30.03.2006, THE JEWELLERY WAS NOT SHOWN IN ANY OTHER DOCUMENT OR OTHERWISE. FURTHER, THE RETURN OF WE ALTH WAS FILED IN THE WRONG CHARGE BECAUSE THE JURISDICTION OF T HE ASSESSEE LIES IN WARD-4, WHEREAS RETURN OF WEALTH WAS F ILED IN WARD- 2. IT IS ALL THE MORE SUSPICIOUS BECAUSE THE WT O SELECTED THE CASE FOR SCRUTINY, ISSUED NOTICE AND MADE ASSESSMENT U/S 16(3), WITHIN ONE DAY AND THEN RETIRED ON THE S AME DAY FROM SERVICE, WHICH CLEARLY SHOWS THE HASTE AND IRREGU LARITIES COMMITTED BY THE ASSESSEE AND THE AO. THE ORDER P ASSED BY ITA NO. 1631(DEL)/2009 4 WTO, WARD-2 IS CLEARLY OUT OF JURISDICTION AND, THEREFORE, THE ORDER PASSED U/S 16(3) OF WEALTH-TAX ACT FOR A.Y. 2005-06 IS NULL AND VOID AND NO COGNIZANCE OF THE SAME CAN BE TAKEN AND NO BENEFIT OF THE SAME CAN BE GIVEN TO THE ASSESSE E FOR EXPLAINING THE SOURCE OF JEWELLERY IN THE INCO ME-TAX PROCEEDINGS. THE ASSESSEE HAS NOT FILED EVEN AN IOTA OF EVIDENCE TO PROVE THE SOURCE OF ACQUISITION OF JEWELLERY. EVEN NO EVIDENCE OF INCOME OR STATUS HAS BEEN FILED W.R.T. HIS FATHER AND FOREFATHERS FROM WHOM HUGE QUAN TITY OF GOLD JEWELLERY, MORE THAN 3 KG. HAVE BEEN CLAIMED TO HAVE BEEN RECEIVED AS GIFT, THEREFORE, IT IS CLEAR THAT T HE ASSESSEE HAD NOT RECEIVED ANY GIFT OF JEWELLERY FROM FATHER OR FOREFATHERS AND NONE OF THEM WERE HAVING THE CAPACITY TO GIFT SUCH A HUGE QUANTITY OF JEWELLERY. IT IS MERELY THE UNEXPLAINED INCOME OF THE ASSESSEE WHICH HAS BEEN INTRODUC ED IN THE GARB OF SALE OF JEWELLERY, THEREFORE, THE ACTION OF THE AO IS UPHELD AND THE GROUND OF APPEAL OF THE ASSESSEE IS REJECTED. 1.3 AGGRIEVED BY THIS ORDER, THE ASSESSEE MOVED AN APPEAL BEFORE THE TRIBUNAL. IN THIS APPEAL, NINE GROUNDS HAVE BEEN TAKEN. THE GROUNDS CONTAIN FACTS AS WELL AS ARGUMENTS AND THUS TH EY ARE NOT IN ACCORDANCE WITH THE ITAT RULES. IN THE COURSE OF HEARING O F THE APPEAL, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THERE IS ONLY ONE EFFECTIVE GROUND TO BE DECIDED BY THE TRIBUNAL, I.E., GROUND NO. 1. THE GROUND IS TO THE EFFECT THAT THE LD. CIT(APPEALS) ERRED ON FACTS AND IN LAW IN CONFIRMING THE ADDITION OF RS. 21,85,440/- MADE BY THE AO AS INCOME FROM UNDISCLOSED SOURCES BY INVOKING THE PROVISI ON CONTAINED IN SECTION 69 OF THE ACT. IT IS FURTHER SUBMITTED THAT OT HER GROUNDS, TO THE EXTENT MATERIAL, WILL BE COVERED BY WAY OF ARGUMENTS A ND, THEREFORE, THE APPEAL ITA NO. 1631(DEL)/2009 5 MAY BE DISPOSED OFF ON THE BASIS OF CONTENTS OF GROUND NO.1 AND SUBMISSIONS MADE IN THIS BEHALF. 2. THE LD. COUNSEL HAS MADE TWO BROAD SUBMISSION S MADE BEFORE US:- (I) THE ASSESSEE HAS PROVED WITH REASONABLE EVID ENCE THAT IT WAS IN POSSESSION OF JEWELLERY AS ON 31.03.2005, THERE FORE, ONLY CAPITAL GAINS CAN BE BROUGHT TO TAX IN THIS YEAR AND NOT THE SALE PROCEEDS; AND (II) THE ASSESSEE HAS PROVED ACQUISITION OF JEWEL LERY WITH REASONABLE EVIDENCE AND, THEREFORE, ONLY CAPITAL GAINS ON SAL E THEREOF, AS WORKED OUT BY IT, COULD BE BROUGHT TO TAX. WE PROCEED WITH THE DETERMINATION OF THESE PROPOS ITIONS. 2.1 THE LD. COUNSEL HAS RELIED ON TWO MAJOR EVIDE NCES TO PROVE THAT THE ASSESSEE-HUF WAS IN POSSESSION OF THE JEWELLERY AS ON 31.03.2005. THESE EVIDENCES ARE THE ORDER OF ASSESSMENT UNDER WE ALTH-TAX ACT DATED 31.03.2006 FOR ASSESSMENT YEAR 2005-06 IN THE CASE OF THE ASSESSEE, AND THE VALUATION REPORT AS ON 31.03.2005 OF THE JE WELLERY MADE BY SHRI ITA NO. 1631(DEL)/2009 6 SANJAY AGGARWAL, OF S.K. JEWELLERS, AMBALA CANTT. VALUING THE JEWELLERY AT RS. 16.50 LAKH BY APPLYING THE RATE OF GOLD A T RS. 6,180/- PER 10 GRAMS. 2.2 IN REGARD TO FIRST MENTIONED EVIDENCE, IT IS SUBMITTED THAT THE ASSESSEE-HUF HAD FILED ITS RETURN ON 30.03.2006 DECLARING NET WEALTH AT RS. 16,95,500/-. IN THIS RETURN, JEWELLERY WEIGH ING AT 2669.9 GRAMS WAS SHOWN AT RS. 16.50 LAKH AND CASH-ON-HAND AT RS. 45, 500/-. TAX AND INTEREST OF RS. 2,154/- WAS PAYABLE. THIS TAX WAS PAID ON 30.3.2006 AS SELF- ASSESSMENT TAX. THE WTO ISSUED A NOTICE U/S 1 6(2) OF THAT ACT ON 30.3.2006 ITSELF. THE ASSESSEE EXPLAINED THE FACTS OF THE CASE IN LETTER DATED 31.3.2006. THE SUBMISSIONS MADE IN THIS LET TER ARE THAT IT HAS JEWELLERY OF THE VALUE OF RS. 16.50 LAKH AS ON 31 .03.2005, WHICH IS SHOWN IN THE RETURN. THE JEWELLERY IS ANCESTRAL, BEING GIFTS TO IT FROM HIS FATHER AT THE TIME OF MARRIAGE. SOME JEWELLERY IS ALSO RECEIVED AS GIFT ON MARRIAGE ANNIVERSARY FROM THE IN-LAWS IN THE YEAR 2004-05. THE WTO COMPLETED THE ASSESSMENT ON 31.03.2006. IN A O NE PAGE ORDER DATED 31.03.2006, IT IS MENTIONED THAT THE VALUE OF TH E JEWELLERY IN THE REPORT OF THE REGISTERED VALUER HAS BEEN SHOWN AT RS. 16.5 0 LAKH. THE JEWELLERY IS STATED TO BE RECEIVED AT THE TIME OF MARRIAGE AND MARRIAGE ANNIVERSARY. IT IS ITA NO. 1631(DEL)/2009 7 FURTHER MENTIONED THAT AFTER LONG DISCUSSION, T HE NET WEALTH IS ASSESSED AT RS. 17,45,500/- BY MAKING AN ADDITION OF RS. 50, 000/-. 2.3 AS MENTIONED EARLIER, THE SECOND EVIDENCE REGARDING OWNERSHIP OF JEWELLERY AS ON 31.03.2005 IS THE VALUATION R EPORT MADE BY SHRI SANJAY AGGARWAL. THIS REPORT HAS NOT BEEN DATED. THE J EWELLERY HAS BEEN CLASSIFIED UNDER FIVE HEADS. UNDER EACH HEAD, NAME OF THE ORNAMENT AND THE GROSS WEIGHT HAVE BEEN MENTIONED; AND THE TOTAL GROSS WEIGHT IS SHOWN AT 3362.240 GRAMS. THE NET WEIGHT HAS BEE N TAKEN AT 2669.900 GRAMS. THIS JEWELLERY IS VALUED @ RS. 618/- PER GRAM AS ON 31.03.2005 AT RS. 16.50 LAKH. AT THIS STAGE, IT MAY BE MENTI ONED THAT STATEMENT OF SHRI SANJAY AGGARWAL WAS RECORDED ON 17.03.2005 BY T HE ASSESSING OFFICER. IT IS INTER-ALIA STATED THAT HE CARRIES ON TH E WORK OF VALUATION AT THE SHOP ONLY. WHENEVER SOME BODY COMES FOR VALUATION, T HE JEWELLERY IS WEIGHED, HOWEVER, NO RECORD OF THIS WORK IS MAI NTAINED. THE RECORD IS MAINTAINED ONLY IN RESPECT OF VALUATION OF WORK DO NE DURING THE COURSE OF SEARCHES AND SURVEYS. THE WORK OF VALUATION ON OT HER OCCASIONS IS DONE AS A GESTURE OF GOODWILL AND, THUS, NO RECORD IS MA INTAINED. ABOUT 40 TO 50 PERSONS WOULD HAVE COME TO HIM FOR SUCH VALUATION WORK IN THE LAST FOUR TO FIVE YEARS. FOR SUCH PRIVATE WORK, HE MAINT AINED ONLY A PAD, WHICH ITA NO. 1631(DEL)/2009 8 CONTAINS HIS NAME AND THE NAME OF HIS FIRM. THE VALUATION REPORT IS FURNISHED ON THIS PAD. THE PAD DOES NOT BEAR SERIAL NUMBERS AND ONLY DATE IS WRITTEN ON THE PAD. THE SIGNATURE OF T HE PERSON WHO COMES FOR VALUATION IS ALSO TAKEN ON THE PAD. NO CARBON COP Y OF THE VALUATION REPORT IS MAINTAINED AND ONLY ONE COPY OF THE REPORT IS DRAWN, WHICH IS HANDED OVER TO THE PERSON WHO BRINGS THE JEWELLERY. I T IS FURTHER STATED THAT HE DOES NOT KNOW SHRI NAVEEN BANSAL OF KARNAL, HOWEV ER, THE REPORT CAN BE VERIFIED ON ITS PRODUCTION. ON SEEING THE REPOR T IT IS STATED THAT IT HAS BEEN MADE IN HIS HAND-WRITING AND IT BEARS HIS S IGNATURE. THE DATE OF MAKING VALUATION IS NOT MENTIONED DUE TO MISTAKE. THE VALUE AS ON 31.03.2005 IS RS. 16.50 LAKH. NO MONEY WAS REC EIVED FROM SHRI NAVEEN BANSAL FOR MAKING THIS REPORT. IT IS ALSO STA TED THAT SHRI BANSAL TOLD HIM THAT THIS WAS HIS JEWELLERY AND A VALUAT ION REPORT HAS TO BE PREPARED, THEREFORE, HE PREPARED THE REPORT. THE REPORT WAS SIGNED BY SHRI BANSAL IN HIS PRESENCE. 2.4 THE FINDINGS OF THE AO ARE TO THE EFFECT THA T BOTH THE EVIDENCES ARE FABRICATED. IN CONNECTION WITH THE WEALTH-TAX ASSESSMENT ORDER, IT IS MENTIONED THAT THE SAME HAS BEEN PASSED BY WTO, WARD 2, KARNAL, WHO DOES NOT HAVE JURISDICTION OVER THE CASE OF THE ASSESSEE AS IT IS VESTED IN ITA NO. 1631(DEL)/2009 9 HIM, I.E., WTO, WARD-4, KARNAL. THE ASSESSEE FI LED ITS RETURN OF INCOME ON 19.01.2006, I.E., ABOUT TWO MONTHS BEFORE FIL ING THE WEALTH-TAX RETURN BEFORE A WRONG WTO. THE ADDRESS IN BOTH THE R ETURNS IS THE SAME. THE RETURN WAS FILED ON 30.03.2006 AND THE ASSESSME NT WAS COMPLETED ON 31.03.2006 AFTER ISSUING NOTICE U/S 16(2). TH IS IS THE ONLY WEALTH-TAX RETURN FILED BY THE ASSESSEE. IF THE ASSESSEE S VERSION IN THE RETURN IS TO BE ACCEPTED, IT SHOULD HAVE FILED RETURN FROM ASSESSMENT YEAR 1992-93. SINCE THIS ORDER HAS BEEN PASSED BY AN ASSESSING OFFICER WHO DID NOT HAVE JURISDICTION OVER THE CASE, THE ORDER IS NON-EST AND VOID AB-INITIO. 2.5 COMING TO THE VALUATION REPORT, IT IS MENTIO NED THAT THE DATE OF MAKING THE REPORT IS NOT MENTIONED THEREIN. NO R ECORD HAS BEEN MAINTAINED BY THE VALUER. NO FEES IS STATED TO HAVE BEEN CHARGED, WHEREAS HE WAS REQUIRED TO CHARGE FEES FOR VALUATION AS PER RULE 8C OF THE WEALTH-TAX RULES. ON THE OTHER HAND, THE KARTA OF THE ASS ESSEE IS STATED TO HAVE PAID A SUM OF ABOUT RS. 5,000/- FOR THE VALUATION IN T HE STATEMENT RECORDED ON 13.06.2008. THUS, THERE IS A CONTRADICTION AS WELL AS MATERIAL DEFICIENCY IN THE STATEMENT AND THE REPORT BECAUSE OF WHI CH THE REPORT IS OF NO VALUE. ITA NO. 1631(DEL)/2009 10 2.6 THE CASE OF THE LD. COUNSEL IN THIS REGARD IS THAT THE RETURN OF WEALTH HAS BEEN FILED ON 30.03.2006. THE ASSESSMENT HAD BEEN MADE ON 31.03.2006. THE ORDER MAY BE ERRONEOUS BUT IT HA S NOT BEEN SET ASIDE TILL DATE. THEREFORE, THE CONTENTS OF THE ORDER HAVE TO BE TAKEN AS TRUE AND CORRECT. THIS MEANS THAT THE ASSESSEE HAD DISCLO SED JEWELLERY AS ON 31.03.2005, THUS, ONLY CAPITAL GAINS COULD BE BR OUGHT TO TAX IN ASSESSMENT YEAR 2006-07. AS AGAINST THE AFORE SAID, THE LD. DR SUBMITTED THAT ONLY ONE RETURN HAD BEEN FILED BEFORE WTO, WARD-2, KARNAL, FOR ASSESSMENT YEAR 2005-06, WHILE THE JEWELLERY IS STATED TO HAVE BEEN RECEIVED AT THE TIME OF MARRIAGE. THIS RETURN WAS ALSO FILED WITH THE ASSESSING OFFICER WHO DID NOT HAVE JURISDICTION O VER THE CASE. SURPRISINGLY, THE ASSESSMENT WAS ALSO COMPLETED IN ONE DAY AFTER ISSUING NOTICE U/S 16(2). THE AO, WHO COMPLETED THE A SSESSMENT RETIRED ON THE SAME DAY ON WHICH HE PASSED THE ORDER. THE CIRC UMSTANCES SURROUNDING THE FILING OF THE RETURN AND THE ASSESSMENT ORDE R SHOW THAT THE RETURN WAS FILED ONLY FOR THE PURPOSE OF STRENGTHENING THE CLA IM THAT THE ASSESSEE WAS OWNER OF JEWELLERY AS ON 31.03.2005. THE ORDER WAS PASSED IN A GREAT HURRY AS NORMALLY DOES NOT HAPPEN AND THAT TOO AFTER SERVING THE NOTICE ON THE ASSESSEE. IF UNUSUAL FACTORS BEH IND THESE EVENTS ARE TAKEN INTO ACCOUNT, IT CAN BE SAID THAT THE ORDER WAS A PROCURED ORDER. THE ITA NO. 1631(DEL)/2009 11 VALUATION REPORT DOES NOT GIVE THE DATE ON WHIC H THE VALUATION HAS BEEN ACTUALLY MADE. THE VALUER ALSO DOES NOT HAVE THE RECORD OF VALUATION. THERE IS A CONTRADICTION BETWEEN THE STATEMENT OF THE KARTA OF THE ASSESSEE-HUF AND THE VALUER IN RESPECT OF PAYM ENT AND RECEIPT OF REMUNERATION FOR VALUATION. THE ASSESSEE STAT ED THAT HE PAID RS. 5,000/- WHILE THE VALUER STATED THAT HE DID NOT CHARGE ANY MONEY FOR PRIVATE VALUATIONS AS THIS WORK IS DONE AS A GESTURE O F GOODWILL. THE ASSESSEE IS A RESIDENT OF KARNAL WHILE THE JEWELLERY WAS GOT VALUED AT AMBALA CANTT. ALL THESE FACTORS SHOW THAT THE VALUATION DOES NOT LEAD TO INFERENCE THAT THE ASSESSEE WAS OWNER AND IN POSSESSION OF JEWELLERY AS ON 31.03.2005. 2.7 AT THIS STAGE, WE MAY CONSIDER VARIOUS CASE S RELIED UPON BY THE LD. COUNSEL. IN THE CASE OF SIR PADAMPAT SINGHANIA VS . CIT, (1953) 24 ITR 184 (ALL.). THE QUESTION BEFORE THE HONBLE COURT W AS-WHETHER, IN THE CIRCUMSTANCES OF THE CASE, THE INCOME OF GOPAL HA RI, A MINOR MEMBER OF THE HINDU UNDIVIDED FAMILY OF SIR PADAMPAT SINGH ANIA ARISING FROM SHARE AND INTEREST ON DEPOSITS IN THE FIRM OF M/S HARISH ANKAR GOPAL HARI REPRESENTS THE INCOME OF HINDU UNDIVIDED FAMILY LIABLE TO ASSESSMENT IN THE HANDS OF SIR PADAMPAT SINGHANIA AS ITS KARTA ? THE SUBMISSION OF MR. ITA NO. 1631(DEL)/2009 12 S.C. DAS, THE LD. COUNSEL FOR THE COMMISSIONER, WAS THAT THERE WAS NO REASON WHY THREE STRANGERS, WHO MUST BE WORKING PARTNERS IN THIS FIRM, SHOULD ADMIT TO THE BENEFITS OF THE PARTNERSHIP THREE MINORS AND GIVE THEM THE LARGER SHARE OF THE PROFITS, UNLESS THE MIN ORS REPRESENTED THEIR FATHERS INTEREST AND UNLESS THEIR FATHERS HAD MADE SUBSTANTIAL INVESTMENTS. IF ANY INVESTMENTS WERE MADE BY TH E THREE SINGHANIA BROTHERS FROM JOINT FAMILY FUNDS, IT SHOULD HA VE BEEN EASY FOR THE DEPARTMENT TO GIVE EVIDENCE ON THE POINT AND PR OVE IT. FROM THE FACT THAT NO MENTION IS MADE IN THE ORDERS OF THE INCOME-T AX OFFICER AND APPELLATE ASSISTANT COMMISSIONER THAT THERE WERE ANY SUCH IN VESTMENTS, THE HONBLE COURT TOOK IT THERE WAS NO EVIDENCE TO SHOW TH AT ANY FUNDS OF THE HINDU UNDIVIDED FAMILY WERE UTILIZED IN THE BUSINESS O F HARISHANKER GOPAL HARI. AS REGARDS THE POINT WHY STRANGERS SHOULD ADMIT THE THREE MINORS TO THE BENEFITS OF THE PARTNERSHIP, THE ANSWER APPEARS TO BE PLAIN ENOUGH. THE THREE SINGHANIA BROTHERS MIGHT HAVE FOUND IT U NNECESSARY AND UNPROFITABLE TO TAKE THE SOLE SELLING AGENCY CO NTRACT AS IT WOULD ONLY ADD TO THE BURDEN OF INCOME-TAX AND SUPER TAX ETC ., AND THEY MIGHT HAVE AGREED TO USE THEIR INFLUENCE TO GET THE SOLE SEL LING AGENCY CONTRACT FOR THE FIRM HARISHANKER GOPAL HARI IF THEIR MINOR SON S WERE BENEFITED BY BEING ADMITTED TO THE BENEFITS OF THE PARTNERSHIP. THE RE BEING NO EVIDENCE THAT ITA NO. 1631(DEL)/2009 13 ANY JOINT FAMILY FUNDS WERE USED IN THE BUSINES S OF THE FIRM HARISHANKAR GOPAL HARI OR ANY JOINT FAMILY FUNDS WERE INV ESTED IN THAT BUSINESS, IT IS NOT POSSIBLE TO HOLD THAT THE THREE MINORS, WHO WERE MEMBERS OF THEIR RESPECTIVE JOINT FAMILIES OF WHICH THEIR FATHERS WERE KARTAS, MERELY REPRESENTED THE JOINT FAMILIES AND WERE NOT THE RE IN THEIR OWN RIGHTS. THUS, THE TRIBUNAL HAD NO MATERIAL BEFORE IT ON WHICH IT COULD COME TO THE CONCLUSION THAT IT DID. 2.8 FURTHER, RELIANCE HAS BEEN PLACED ON THE D ECISION OF HONBLE SUPREME COURT IN THE CASE OF RAJ KUMAR SINGH HUKA M CHANDJI VS. CIT, (1970) 78 ITR 33. THE QUESTION BEFORE THE HONBL E COURT WAS-WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE MANAGING DIRECTORS REMUNERATION RECEIVED BY SRI RAJ KUMAR SINGH WAS ASSESSABLE IN HIS INDIVIDUAL HAND AND NOT IN THE HANDS OF HINDU UNDI VIDED FAMILY? IT HAS BEEN MENTIONED THAT THE BROADER PRINCIPLE THAT E MERGES IS WHETHER THE REMUNERATION RECEIVED BY THE COPARCENER IN SUBSTA NCE THOUGH NOT IN FORM WAS BUT ONE OF THE MODES OF RETURN MADE TO THE F AMILY BECAUSE OF THE INVESTMENT OF THE FAMILY FUNDS IN THE BUSINESS OR WHETHER IT WAS A COMPENSATION MADE FOR SERVICES RENDERED BY THE INDIVIDUAL COPARCENER. THE TRIBUNAL HAD FOUND THAT HE RECEIVED HIS SAL ARY FOR PERSONAL SERVICES. ITA NO. 1631(DEL)/2009 14 THERE IS NO MATERIAL TO HOLD THAT HE WAS ELECTED MANAGING DIRECTOR ON BEHALF OF THE FAMILY. IN THE PAST SALARY RECEI VED BY HIM WAS ASSESSED AS HIS INDIVIDUAL INCOME. THE SAME WAS THE CASE A S REGARDS SALARIES RECEIVED BY OTHER MANAGING DIRECTORS. THE TRIBUNAL HAS FOUND THAT HE WAS NOT APPOINTED AS MANAGING DIRECTOR AS A RESULT OF ANY OUTLAY OR EXPENDITURE OF OR DETRIMENT TO THE FAMILY PROPE RTY. IT HAS FURTHER BEEN INFORMED THAT MANAGING DIRECTORSHIP WAS AN EMPL OYMENT OF PERSONAL RESPONSIBILITY AND ABILITY. IN THESE CIRCUMSTAN CES, THE COURT AGREED WITH THE CONCLUSION OF THE TRIBUNAL THAT THE INCOME IN QUESTION CANNOT BE TREATED AS INCOME OF THE ASSESSEE-HUF. 2.9 RELIANCE WAS ALSO PLACED ON THE DECISION O F HONBLE SUPREME COURT IN THE CASE OF RAFIQUE BIBI (D) BY LRS. VS . SAYED WALIUDDIN (D) BY LRS. DATED 28.08.2003, AIR 2003 SC 3789. IT IS MENTIONED THAT A DISTINCTION EXIST BETWEEN A DECREE PASSED BY A COURT HAVING NO JURISDICTION AND CONSEQUENTLY BEING A NULLITY A ND NOT EXECUTABLE AND A DECREE OF THE COURT WHICH IS MERELY ILLEGAL OR N OT PASSED IN ACCORDANCE WITH THE PROCEDURE LAID DOWN BY THE LAW. A DECRE E SUFFERING FROM ILLEGALITY OR IRREGULARITY OF PROCEDURE, CANNOT BE TERMED INEXECUTABLE BY THE EXECUTING COURT; THE REMEDY OF A PERSON A GGRIEVED BY SUCH A DECREE ITA NO. 1631(DEL)/2009 15 IS TO HAVE IT SET ASIDE IN A DULY CONSTITUTED LEGAL PROCEEDINGS OR BY A SUPERIOR COURT FAILING WHICH HE MUST OBEY THE C OMMAND OF THE DECREE. A DECREE PASSED BY A COURT OF COMPETENT JURISDICT ION CANNOT BE DENUDED OF ITS EFFICACY BY ANY COLLATERAL ATTACK OR IN INCID ENTAL PROCEEDINGS. SIMILAR IS THE EFFECT OF THE DECISION IN THE CASE OF CI T VS. GANESHI LAL SHAM LAL, (1966) 61 ITR 408. 2.10 WE HAVE CONSIDERED THE FACTS OF THE CASE AN D SUBMISSIONS MADE BEFORE US. THE FACTS ARE THAT A RETURN OF WEALT H WAS FILED BY THE ASSESSEE BEFORE AN INCOMPETENT ASSESSING OFFICER, WHICH WAS ASSESSED BY HIM WITHIN A DAY OF FILING THE RETURN. THE ASSESSEE KNEW THAT THE RETURN HAS NOT BEEN FILED BEFORE AN OFFICER OF COMPETENT JU RISDICTION BECAUSE ALL THROUGH THE RETURNS OF INCOME HAVE BEEN FILED BE FORE INCOME-TAX OFFICER, WARD-4, KARNAL. IF THIS ORDER IS TREATED AT PAR WITH A DECREE, AS ARGUED BY THE LD. COUNSEL, IT HAS TO BE BORNE IN MIND THA T ALL THE PROCEEDINGS HAVE TAKEN PLACE BEFORE AN INCOMPETENT ASSESSING OFFIC ER. THIS IS APPARENT FROM THE FACE OF THE RECORD. THEREFORE, IN TER MS OF THE DECISION IN THE CASE OF RAFIQUE BIBI (SUPRA), THE ORDER OF THE WE ALTH-TAX OFFICER, WARD-2, KARNAL, IS NOT IN THE NATURE OF AN EXECUTABLE D ECREE. THUS, THIS ORDER HAS NO VALIDITY IN THE EYE OF LAW AND IT CAN BE V ERY WELL IGNORED WHILE ITA NO. 1631(DEL)/2009 16 PASSING THE ASSESSMENT ORDER IN THE CASE OF THE ASSESSEE FOR ASSESSMENT YEAR 2006-07. IT MAY ALSO BE MENTIONED THAT TH E ORDER HAS BEEN PASSED IN A HASTE. THE PROCESS OF SERVING NOTICE AND HEARIN G THE ASSESSEE HAS BEEN COMPLETED IN A DAY. THIS LEADS TO AN INFEREN CE THAT THE ORDER WAS PROCURED WITH A VIEW TO STRENGTHEN THE INCOME-TA X PROCEEDINGS FOR ASSESSMENT YEAR 2006-07. IN THESE CIRCUMSTANCES, WE DO NOT HAVE ANY HESITATION IN COMPLETELY IGNORING THE WEALTH-TAX RETURN AND THE ASSESSMENT ORDER. 2.11 COMING TO THE VALUATION, THE OBJECTIVE FACT IS THAT NO DATE HAS BEEN PUT ON THE PAD SHOWING THE DATE ON WHICH REPORT IS MADE. OSTENSIBLY THE JEWELLERY HAD BEEN VALUED AS ON 31.03.2005. HO WEVER, VALUATION AS ON THIS DATE CAN BE MADE ON ANY DATE BECAUSE THE RA TE OF GOLD ON ANY DATE IS EASILY AVAILABLE FROM READY RECKONER AND FROM MARKE T QUOTATIONS. THEREFORE, THE REPORT DOES NOT SHOW THAT THE AS SESSEE WAS OWNER AND IN POSSESSION OF THE JEWELLERY AS ON 31.03.2005. AS A MATTER OF ILLUSTRATION, LET US ASSUME THAT THE VALUATION WAS MADE ON OR ABOUT 30.03.2006. THE VALUER DETERMINED THE VALUE OF THE JEWELLERY AS ON 31.03.2005. HE WOULD NOT BE KNOWING WHETHER THE ASSESSEE POSSESSE D THE JEWELLERY ON 31.03.2005 EVEN IF HE HAD SEEN THE JEWELLERY ON OR ABOUT 31.03.2006. ITA NO. 1631(DEL)/2009 17 THEREFORE, WITHOUT GOING INTO OTHER INFIRMITIES, IT CAN BE HELD THAT THE REPORT DOES NOT ESTABLISH THAT THE ASSESSEE OWNED AND PO SSESSED THE JEWELLERY ON 31.03.2005. 2.12 THE AFORESAID DISCUSSION LEADS TO A CLEAR CONCLUSION THAT THERE IS NO RELIABLE EVIDENCE, NOT TO SPEAK OF COGENT AND STRON G EVIDENCE, TO SHOW THAT THE ASSESSEE WAS OWNER AND IN POSSESSION OF THE J EWELLERY AS ON 31.03.2005. WHAT CAN BE SAID AT BEST IS THAT THE ASSESSEE WAS IN POSSESSION OF JEWELLERY ON 30.03.2006, WHEN THE W EALTH-TAX RETURN WAS FILED. IN OTHER WORDS, THE EXISTENCE OF JEWEL LERY CAME TO LIGHT ON OR ABOUT 30.03.2006. IN THESE CIRCUMSTANCES, WE A RE UNABLE TO ACCEPT THE SUBMISSIONS OF THE LD. COUNSEL THAT THE ASSESSEE WAS OWNER AND IN POSSESSION OF THE SAID JEWELLERY AS ON 31.03.200 5. ON THE CONTRARY, IT IS HELD THAT THE EXISTENCE OF JEWELLERY CAME TO LIGH T IN FINANCIAL YEAR 2005-06 ON OR ABOUT 30.03.2006. 3. THE SECOND ISSUE IN THIS CASE IS-WHETHER, THE ASSESSEE-HUF RECEIVED ABOUT 250 TOLAS OF GOLD JEWELLERY FROM LATE SH RI DHARAMPAL BANSAL, THE FATHER OF THE KARTA? IN THIS CONNECTION, REL IANCE HAS BEEN PLACED ON THE STATEMENTS OF THE ASSESSEE AND HIS MOTHER, SMT. RADHA RANI. ITA NO. 1631(DEL)/2009 18 3.1 THE STATEMENT OF THE ASSESSEE WAS RECORDED B Y THE AO ON OATH ON 13.06.2008 UNDER THE PROVISIONS OF SECTION 131 OF THE ACT. IN SO FAR AS THE ISSUE AT HAND IS CONCERNED, IT IS STATED THAT HE RECEIVED APPROXIMATELY 250 TOLAS OF GOLD JEWELLERY IN THE YEAR 2002 ON THE DEATH OF HIS FATHER. THE ITEM-WISE DETAILS ARE NOT AVAILABLE, HOWEVER , MAIN ITEMS HAVE BEEN NARRATED AS BANGLES, SOVEREIGNS, NECKLACE, CHAIN S ETC. NO EVIDENCE IN THE MATTER IS STATED TO BE IN HIS POSSESSION FOR THE REASON THAT HE WAS THE ONLY SON OF HIS FATHER AND IT WAS NOT POSSIBLE T O MAINTAIN ANY DETAIL. INCOME-TAX RETURNS OF THE HUF HAVE BEEN FILED F OR THE LAST 7 TO 8 YEARS BUT WEALTH-TAX RETURN WAS REQUIRED TO BE FILED ON LY FOR THE ASSETS HELD AS ON 31.03.2005, THEREFORE, THE WEALTH-TAX RETURN WAS FILED ONLY FOR ASSESSMENT YEAR 2005-06. HE WAS NOT KOWING WHETH ER THE FATHER OF KARTA OF THE ASSESSE-HUF OR THE GRAND-FATHER FILED ANY RETURN WHATSOEVER UNDER EITHER OF THE TWO ACTS. THE REASON FOR FILING TH E RETURN WITH INCOMPETENT ASSESSING OFFICER WAS STATED TO BE THAT THE COUNS EL FILED THE RETURN AND ONLY HE CAN TELL ANYTHING FURTHER IN THIS MATTER. THE JEWELLERY WAS GOT VALUED FROM AN APPROVED VALUER AT AMBALA BUT HE DID NOT REMEMBER THE NAME OF THE VALUER. HE DID NOT REMEMBER AS TO WHEN HE PUT HIS SIGNATURE ON THE REPORT. ITA NO. 1631(DEL)/2009 19 3.2 COMING TO THE STATEMENT OF RADHA RANI RECORD ED ON 11.11.2008 IN SO FAR AS IT IS RELEVANT FOR THIS PURPOSE, IT IS STATED THAT SHE GOT MARRIED IN THE YEAR 1968 AND HER HUSBAND WAS AN EMPLOYEE W ITH USHA SEWING MACHINE AT THAT TIME. SHE GOT JEWELLERY WEIGHIN G ABOUT ONE KILOGRAM FROM HIS FATHER, LALA CHATURBHUJ, R/O KAITHAL. T HEREAFTER, SHE GOT JEWELLERY ON THE OCCASIONS OF BIRTHDAY OF THE SON AND THE DAUGHTER. SHE ALSO PURCHASED FOUR TO FIVE TOLAS OF GOLD JEWE LLERY OUT OF HER OWN RESOURCES SUBSEQUENTLY. SHE ALSO GOT JEWELLERY WEIGHING ABOUT 3.00 KILOGRAMS AT THE TIME OF DEATH OF HER HUSBAND. THERE IS NO RECORD MAINTAINED IN RESPECT OF AFORESAID ACQUISITION OF THE JEWELLERY ON VARIOUS OCCASIONS. SHE ALSO FILED AN AFFIDAVIT SWORN IN NOVEMBER, 2008 TO THE EFFECT THAT SHE GOT GOOD QUANTITY OF JEWEL LERY ON HER MARRIAGE FROM BOTH THE SIDES AND ON BIRTHDAYS OF THE SON AND TH E DAUGHTER. SHE ALSO RECEIVED GIFTS FROM THE PARENTS, HUSBAND AND BROT HERS ETC. ON OTHER SOCIAL OCCASIONS. AT THE TIME OF EXPIRY OF HER HUSBAND IN THE YEAR 2002, SHE HAD JEWELLERY WEIGHING ABOUT 300 TOLAS. 3.3 THE CASE OF THE LD. COUNSEL IS THAT THE ASSES SEE AND HER MOTHER HAVE DEPOSED THAT JEWELLERY WEIGHING ABOUT 250 TOLAS WAS RECEIVED AT THE TIME ITA NO. 1631(DEL)/2009 20 OF THE DEATH OF THE FATHER, LATE SHRI DHARAMPA L BANSAL. THE MOTHER HAS ALSO FILED AN AFFIDAVIT. THERE IS NO EVIDENCE TO THE CONTRARY. HE REFERRED TO THE FINDINGS OF THE AO THAT THE ASSESSEE DOES NOT MAINTAIN ANY LOCKER AND IT WOULD BE UNBELIEVABLE THAT HUGE JEWELLERY WAS KEPT AT HOME. THE MOTHER IS AN ILLITERATE LADY. SHE DOES NOT REMEM BER THE DETAILS OF THE JEWELLERY AS MENTIONED IN ASSESSEES REPLY DAT ED 05.11.2008. HOWEVER, AS PER HER STATEMENT SHE STUDIED UP TO 8 TH STANDARD AND SHE IS PROPRIETOR OF M/S UNION INDUSTRIES, TO WHOM LOAN OF RS. 2,38 ,727/- HAS BEEN ADVANCED OUT OF SALE PROCEEDS OF SOME OF THE JEWELLERY, OF WHICH SHE WAS NOT AWARE. SHE IS NOT AWARE OF PURCHASE OF AGRICULTURAL LA ND WORTH ABOUT RS. 10,63,800/-. THE KARTA ALSO DOES NOT REMEMBER I TEM-WISE DETAILS OF JEWELLERY OR ANYTHING ABOUT THE FACT WHETHER TH E FATHER WAS EITHER ASSESSED TO WEALTH-TAX OR INCOME-TAX. HIS CASE I S THAT THE MATERIAL FACT IS ABOUT RECEIPT OF JEWELLERY FROM THE FATHER AT THE TIME OF HIS DEATH. BOTH THE MOTHER AND THE KARTA HAVE CLEARLY DEPOSED THAT J EWELLERY WEIGHING ABOUT 250 TOLAS WAS RECEIVED. THESE STATEMENTS AND THE AFFIDAVIT HAVE NOT BEEN CONTROVERTED BY BRINGING ANY CONTRARY EVIDEN CE ON RECORD AND, THEREFORE, THE SAME SHOULD HAVE BEEN ACCEPTED. ITA NO. 1631(DEL)/2009 21 3.4 ON THE OTHER HAND, THE LD. SENIOR DR RELIED ON THE ORDERS OF THE AUTHORITIES BELOW THAT THE BURDEN TO FURNISH SA TISFACTORY EXPLANATION OF THE POSSESSION OF JEWELLERY AND ITS OWNERSHIP LIES ON THE ASSESSEE. NO EVIDENCE HAS BEEN PRODUCED IN THIS REGARD. THE ST ATEMENTS ARE IN THE NATURE OF SELF-SERVING STATEMENTS WHICH GO AGAIN ST THE CONDUCT OF A NORMAL HUMAN PERSON IN RESPECT OF ACQUISITION AN D ITS SAFE CUSTODY. THEREFORE, THESE STATEMENTS CANNOT BE RELIED UPON . FURTHER, THE JEWELLERY RECEIVED BY THE MOTHER FROM VARIOUS RELATIVES IS IN THE NATURE OF STREE DHAN OVER WHICH THE ASSESSEE COULD NOT HAVE ANY OWNERSHIP. THEREFORE, IT IS ARGUED THAT THE ORDERS OF THE AUTHORITIES B ELOW MAY BE CONFIRMED IN THIS BEHALF. 3.5 WE HAVE CONSIDERED THE FACTS OF THE CASE A ND SUBMISSIONS MADE BEFORE US. THE FACTS ARE THAT THE ASSESSEE CLA IMS TO HAVE RECEIVED JEWELLERY WEIGHING ABOUT 250 TOLAS AFTER THE DE ATH OF LATE SHRI DHARAMPAL BANSAL. THERE IS NO EVIDENCE ON RECORD ABOUT HIS FINANCIAL POSITION IN TERMS OF INCOME OR WEALTH. ALTHOUGH THE EXTENT O F INCOME OF THE ASSESSEE IS NOT MATERIAL, IT MAY BE MENTIONED THAT IT DERI VES BUSINESS INCOME, WHICH HAS BEEN COMPUTED ON PRESUMPTIVE BASIS U/S 44AF A T RS. 1,35,820/- ONLY. THUS, IT IS A SMALL TIME TRADER. THE ASSESSEE HAS NOT FURNISHED THE DETAILS ITA NO. 1631(DEL)/2009 22 OF JEWELLERY ITEM-WISE. IN FACT, NO RECORD IS STATED TO HAVE BEEN MAINTAINED BY HIM. SIMILARLY, THE MOTHER HAS NOT BEEN ABLE TO FURNISH ITEM-WISE DETAILS OF THE JEWELLERY. BOTH THE A SSESSEE AND THE MOTHER ARE INTERESTED PARTIES. IN SUCH A SITUATION, THE S TATEMENTS AND THE AFFIDAVIT ARE NOT BELIEVABLE IN ABSENCE OF ANY RECORD WHAT SOEVER. IN FACT, THE CONTENTS THEREOF TO THE EXTENT OF RECEIPT OF 250 TOLAS OF GOLD JEWELLERY ON THE DEATH OF LATE SHRI DHARAMPAL BANSAL IS I NCONSISTENT WITH FINANCIAL POSITION, WHICH HAS BEEN DISCLOSED ONLY IN RESPECT OF THE ASSESSEE. SECTION 69A REGARDING UNEXPLAINED MONEY ETC. PLACES T HE BURDEN ON THE ASSESSEE TO PROVE THE NATURE AND SOURCE OF ACQUI SITION OF MONEY, JEWELLERY ETC. OF WHICH HE IS FOUND TO BE THE OWNER. WE HAVE ALREADY HELD THAT THE ASSESSEE WAS FOUND TO BE THE OWNER OF JEWELLERY ON OR ABOUT 30.03.2006. THUS, THE BURDEN TO ADDUCE SATISFACTORY EXPLANA TION IN THE MATTER LIES ON THE ASSESSEE. AS DISCUSSED EARLIER, IT HAS FAIL ED TO PRODUCE ANY SATISFACTORY EXPLANATION IN THIS MATTER. ACCORDINGLY, IT IS HEL D THAT THE ASSESSEE HAS FAILED TO ESTABLISH THAT THE WHOLE OF JEWELLERY WEI GHING 3,362.240 GRAMS OWNED BY IT WAS ACQUIRED FROM LATE SHRI DHARAMP AL BANSAL. 3.6 THE LD. COUNSEL MADE SOME OTHER ARGUMENTS OF MINOR IMPORTANCE, WHICH MAY BE DISPOSED OFF AT THIS JUNCTURE. IT I S SUBMITTED THAT IF THE ITA NO. 1631(DEL)/2009 23 JEWELLERY WAS NOT ACQUIRED BY THE KARTA BUT BY SOME OTHER PERSON, THEN IT COULD NOT HAVE BEEN ASSESSED IN THE HANDS OF TH E ASSESSEE. THE CASES IN THIS REGARD HAVE ALREADY BEEN DISCUSSED. ACCORDI NG TO US, THIS ARGUMENT IS OF NO CONSEQUENCE BECAUSE OUR FINDING IS THAT THE HUF WAS FOUND TO BE THE OWNER AND IN POSSESSION OF THE JEWELLERY ON OR ABOUT 30.03.2006. THIS FACT BRINGS SECTION 69A INTO PLAY BY PLACING T HE BURDEN OF SATISFACTORY EXPLANATION ON THE ASSESSEE. IT IS FURTHER SUB MITTED THAT THE ASSESSEE MERELY MADE A BOOK ENTRY AND NO INCOME CAN ARISE IN ABSENCE OF A SUBSTANTIVE TRANSACTION. WE ARE UNABLE TO UNDER STAND THE REAL IMPORT. HOWEVER, IT MAY BE MENTIONED THAT THE FACTUM OF O WNERSHIP IS NOT MERELY A FICTION AS THE JEWELLERY HAS BEEN SOLD IN THIS YEAR AND THE SALE PROCEEDS HAVE BEEN ACTUALLY RECEIVED IN THE IMMEDIATELY SUCCEEDING YEAR. THEREFORE, THIS ARGUMENT DOES NOT CARRY ANY WEIG HT. IT IS ALSO ARGUED THAT NO ENTRY HAS BEEN MADE IN THIS YEAR EITHER IN THE BOOKS OF ACCOUNT OR IN THE BANK ACCOUNT, THEREFORE, PROVISIONS OF SECTION 68 ARE NOT APPLICABLE. IN THIS CONNECTION, RELIANCE HAS BEEN PLACED ON THE DECISION IN THE CASE OF CIT VS. OM PRAKASH MAHAJAN & SONS, (1985) 152 ITR 583. IN THIS CASE, THE TRIBUNAL HAD ACCEPTED THE EXPLANATION TO THE EXTENT THAT THE AMOUNT WAS IN EXISTENCE ON 30.03.1966, THOUGH IT WAS NOT ACCEPTED THAT THE AMOUNT BELONGED TO THE WIFE. THEREFORE, IT FOLLOWED THAT THE AMOUNT ITA NO. 1631(DEL)/2009 24 COULD NOT HAVE BEEN EARNED IN ASSESSMENT YEAR 1 967-68. THE FACTS OF THE INSTANT CASE ARE TOTALLY DISTINGUISHABLE. IT IS NOT ACCEPTED THAT THE ASSESSEE WAS THE OWNER OF THE JEWELLERY AS ON 31.03.2005. THE JEWELLERY CAME TO SURFACE FOR THE FIRST TIME ON OR ABOUT 30.03.2006. THEREFORE, THE RIGHT YEAR OF TAXATION, IF IT IS FOUND TO BE TA XABLE, IS ASSESSMENT YEAR 2006-07. 3.6 THIS BRINGS US TO THE QUESTION-WHETHER, THE A SSESSEE WAS IN POSSESSION OF ANY JEWELLERY WHATSOEVER, WHICH CO ULD BE TAKEN AS EXPLAINED U/S 69A OF THE ACT? THE CASE OF THE AO IS THAT THE TRANSACTIONS OF THE ASSESSEE WITH M/S M.R. JEWELLERS, KAROL BAGH, NEW DELHI ARE BOGUS. IN THIS CONNECTION, HE RECORDED THE ST ATEMENT OF SHRI MAHENDER GOYAL, PROPRIETOR M.R. JEWELLERS, ON 08.05.200 8. HE FOUND A NUMBER OF INCONSISTENCIES IN THE STATEMENT OF SHRI MAHEN DER GOYAL AS WELL AS IN THE STATEMENT OF THE ASSESSEE IN SO FAR AS THE TRANSACTIONS OF SALE OF JEWELLERY ARE CONCERNED. THEREFORE, HE CONCLUDED THAT THE ENTRIES PROVIDED BY M/S M.R. JEWELLERS WERE IN THE NATURE OF A CCOMMODATION ENTRIES, SHOWING THE SALE OF JEWELLERY IN FOUR LOTS BET WEEN 18.03.2006 AND 23.03.2006. CONSEQUENTLY, THE AMOUNTS RECEIVED FROM HIM WERE ADDED TO THE TOTAL INCOME OF THE ASSESSEE. WE NEED NOT GO INTO THE DETAILS OF THE ITA NO. 1631(DEL)/2009 25 STATEMENT FOR THE REASON THAT WE HAVE COME TO TH E CONCLUSION THAT THE ASSESSEE WAS FOUND TO BE THE OWNER OF THE JEWELL ERY ON OR ABOUT 30.03.2006. THE JEWELLERY IS STATED TO HAVE BEE N SOLD ON VARIOUS DATES BETWEEN 18.03.2006 AND 23.03.2006. THE DATES O F SALE AND OUR FINDING IN THE MATTER ARE IN HARMONY. THEREFORE, THE PROV ISION OF SECTION 69A ARE APPLICABLE. FURTHER, THE FAIR MARKET VALUE OF T HE JEWELLERY WHEN THE ASSESSEE WAS FOUND TO BE OWNER WILL BE MORE OR L ESS THE SAME AS THE SALE PROCEEDS. THIS OBVIATES THE NECESSITY OF COMPUTA TION OF CAPITAL GAINS AS THE VALUE AND SALE PROCEEDS WILL BE THE SAME A MOUNT. 3.7 WE HAVE ALREADY HELD THAT THE ASSESSEE HAS F AILED TO DISCHARGE ITS BURDEN TO ESTABLISH THAT IT RECEIVED 3362.240 GRAMS OF GOLD JEWELLERY ON THE DEATH OF LATE SHRI DHARAMPAL BANSAL. HOWEVER , THAT DOES NOT MEAN THAT NO JEWELLERY WHATSOEVER WAS RECEIVED BY THE ASSESSEE-HUF FROM LATE SHRI BANSAL. THE AO AND THE LD. CIT(APPEALS) HAVE COMPLETELY DISBELIEVED THE VERSION OF THE ASSESSEE AND CAM E TO THE CONCLUSION THAT NO JEWELLERY WAS RECEIVED. SUCH A CONCLUSION MAY NO T BE CORRECT HAVING REGARD TO THE CUSTOM IN HINDU FAMILIES. NONE OF THE PARTIES HAVE ADDRESSED US ON THE ISSUE AS TO HOW MUCH JEWELLER Y COULD HAVE BEEN LEFT BEHIND BY LATE SHRI BANSAL. HOWEVER, WE HAVE BEEN ABLE TO BRING ON ITA NO. 1631(DEL)/2009 26 RECORD THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF ASHOK CHADDHA VS. ITO, (2011) 202 TAXMAN 395. IN THI S CASE, THE POSSESSION AND OWNERSHIP WAS PROVED FROM ACTUAL DISCOVERY O F THE JEWELLERY IN THE COURSE OF SEARCH AND SEIZURE. IN THE CASE AT H AND, THE SAME IS PROVED BY THE SALE OF JEWELLERY. IN THE CASE OF ASHOKA CHADDHA (SUPRA), THE AO HAD ACCEPTED THE EXPLANATION TO THE EXTENT OF 400 GRAMS, FOR WHICH ALLOWANCE WAS GRANTED. THE REMAINING JEWELLERY WEIGHING 506.900 GRAMS WAS TAKEN AS UNEXPLAINED. THE FINDINGS OF THE HONBLE COURT ARE AS UNDER:- AFTER CONSIDERING THE AFORESAID SUBMISSIONS WE ARE OF THE VIEW THAT ADDITION MADE IS TOTALLY ARBITRARY AND IS NOT FOUNDED ON ANY COGENT BASIS OR EVIDENCE. WE HAVE TO KEEP IN MIND T HAT THE ASSESSEE WAS MARRIED FOR MORE THAN 25-30 YEARS. THE JEWELLERY IN QUESTION IS NOT VERY SUBSTANTIAL. THE LEARNED CO UNSEL FOR THE APPELLANT/ASSESSEE IS CORRECT IN HER SUBMISSION THA T IT IS A NORMAL CUSTOM FOR WOMAN TO RECEIVE JEWELLERY IN THE FORM OF STREE DHAN OR ON OTHER OCCASIONS SUCH AS BIRTH OF A CHILD ETC. COLLECTING JEWELLERY OF 906.900 GRAMS BY A WOMAN IN A MARRIED LIFE OF 25-30 YEARS IS NOT ABNORMAL. FURTHERMORE, T HERE WAS NO VALID AND/OR PROPER YARDSTICK ADOPTED BY THE ASSESS ING OFFICER TO TREAT ONLY 400 GRAMS AS REASONABLE ALLOWANCE A ND TREAT THE OTHER AS UNEXPLAINED. MATTER WOULD HAVE BEEN DIFF ERENT IF THE QUANTUM AND VALUE OF THE JEWELLERY FOUND WAS SUBSTA NTIAL. TAKING A GUIDANCE FROM THIS DECISION, IT WOULD BE REASONABLE TO HOLD THAT JEWELLERY OF 1000 (ONE THOUSAND) GRAMS COULD HA VE BEEN ACCUMULATED BY THE ASSESSEE AS RECEIVED FROM LATE SHRI DHARAMP AL BANSAL WHICH CAME IN ITA NO. 1631(DEL)/2009 27 POSSESSION AND OWNERSHIP OF THE ASSESSEE ON HIS DEATH, AND ON OTHER OCCASIONS. THE REMAINING JEWELLERY IS TAKEN TO B E UNACCOUNTED JEWELLERY. ITS FAIR MARKET VALUE HAS TO BE INCLUDED IN THE TOTAL INCOME OF THE ASSESSEE AS PER THE RATES MENTIONED IN SALE BILLS. THE AO IS DIRECTED TO MODIFY HIS ORDER ACCORDINGLY. 4. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. SD/- SD/- (RAJPAL YADAV) (K.G.BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER SP SATIA COPY OF THE ORDER FORWARDED TO:- (I) NAVEEN BANSAL (HUF), KARNAL. (II) ITO, WARD -4, KARNAL. (III) CIT (IV) CIT(A) (V) THE DR, ITAT, NEW DELHI. ASSISTANT REGISTRAR.