Usha Tibrewal, Kolkata V. ITO, Ward - 30(4), Kolkata, Kolkata

ITA 1928/KOL/2010

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70423 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-11-2013
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 27-12-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 12-10-2010
• Court: TRIBUNAL
• Department Lawyers: DAVID Z CHAWNGTHU
• Keywords: Unexplained cash credit; Income from undisclosed sources; Charitable institution; Source of fund; Valuation report
• Section: 143(3); 131

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA () BEFORE , /AND . . . . ' '' ''# '#'# '#, $% ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI ABRAHAM P. GEORGE, AM] & & & & / I.T.A NOS. 1927 & 1928/KOL/2010 '( )* '( )* '( )* '( )*/ // / ASSESSMENT YEARS: 2006-07 & 2007-08 USHA TIBREWAL VS. INCOME-TAX OFFICER, WARD-30( 4), KOLKATA. (PAN: ABRPT9990N) (,- /APPELLANT ) (./,-/ RESPONDENT ) DATE OF HEARING: 08.11.2013 DATE OF PRONOUNCEMENT: 21.11.2013 FOR THE APPELLANT: SHRI SOUMITRA CHOUDHURY, ADVOCAT E FOR THE RESPONDENT: SHRI DAVID Z. CHAWNGTHU, SR. DR $0 / ORDER PER BENCH: BOTH APPEALS ARE ARISING OUT OF SEPARATE ORDERS OF CIT(A)-XIV, KOLKATA IN APPEAL NOS. 288/CIT(A)-XIV/09-09 AND 194/CIT(A)-XIV/09-10 DATED 28.07.2010. ASSESSMENTS WERE FRAMED SEPARATELY BY ITO, WARD-30(4), KOLKATA U/S. 143(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASS ESSMENT YEAR 2006-07 AND 2007-08 VIDE HIS ORDERS DATED 27.11.2008 AND 29.12.2009 RESPECTI VELY. 2. THE ONLY COMMON ISSUE IN THESE TWO APPEALS OF AS SESSEE IS AS REGARDS TO THE ORDERS OF CIT(A) CONFIRMING THE ADDITIONS MADE BY AO IN RE SPECT OF UNEXPLAINED CASH CREDIT ON ACCOUNT OF DEPOSITS FOUND IN THE BANK ACCOUNT OF TH E ASSESSEE AT RS.14.90 LAC AND RS.25.07 LAC IN AY 2006-07 AND 2007-08 RESPECTIVELY. FOR TH IS, WE WILL TAKE UP ITA NO. 1928/KOL/2010 FOR AY 2007-08 AND WILL DECIDE THE IS SUE. ON THE ABOVE ISSUE, ASSESSEE RAISED VARIOUS GROUNDS WHICH ARE REPETITIVE IN NATU RE. HENCE, WE WILL REPRODUCE ONLY GROUND NOS. 2 AND 3: 2. FOR THAT ON THE FACTS OF THE CASE, THE LD. CIT( A) WAS WRONG IN CONFIRMING THE ADDITION OF RS.25,07,000/- AS UNEXPLAINED CASH CRED IT IN THE BANK A/C OF THE ASSESSEE WHICH IS COMPLETELY ARBITRARY, UNJUSTIFIED AND ILLE GAL. 3. FOR THAT ON THE FACTS OF THE CASE, SHOULD HAVE C ONSIDERED THE LETTER OF THE DECEASED MOTHER OF THE ASSESSEE WHEREIN SHE HAS GIVEN ALL HE R STRIDHAN (JEWELLERY) TO THE ASSESSEE FOR MAKING CHARITY WHICH HAS NOT BEEN CONS IDERED BY THE LD. CIT(A), THEREFORE, THE ORDER PASSED BY THE LD. CIT(A) IS CO MPLETELY ARBITRARY, UNJUSTIFIED AND ILLEGAL. 2 ITA NO. 1927-1928/K/2010 USHA TIBREWAL., AY:2006-07&2007-08 3. BRIEFLY STATED FACTS ARE THAT DURING THE COURSE OF ASSESSMENT FOR AY 2006-07 AND 2007-08 THE AO FOUND THAT THERE ARE DEPOSITS IN ASS ESSEES BANK ACCOUNT MAINTAINED WITH STANDARD CHARTERED BANK, GARIAHAT BRANCH NO. 327-1- 030430-0. ACCORDING TO AO, THIS BANK ACCOUNT IS NOT DISCLOSED IN ASSESSEES RETURNS OF INCOME. HENCE, HE REQUIRED THE ASSESSEE TO EXPLAIN THE DEPOSITS. WHEN NO INFORMAT ION WAS COMING FORTH, HE REQUIRED THE ASSESSEE TO DEPOSE BEFORE HIM U/S. 131 OF THE ACT. THE ASSESSEE IN HER DEPOSITION BEFORE AO, ADMITTED VIDE QUESTION NO. 6 ON 4.11.2008 THAT SHE IS MAINTAINING ONLY ONE BANK ACCOUNT I.E. SAVINGS BANK ACCOUNT NO. 6005016 WITH ALLAHABAD BANK, BURRABAZAR BRANCH. WHEN THE AO REQUIRED THE ASSESSEE TO EXPLAIN THE DE POSITS MADE IN STANDARD CHARTERED BANK, GARIAHAT BRANCH, KOLKATA, SHE STATED VIDE QUE STION AND ANSWER NO. 12 AND 13 THAT SOURCE OF DEPOSIT IN THAT BANK ACCOUNT IS OUT OF SA LE PROCEEDS FROM GOLD ORNAMENT OF HER LATE MOTHER RAMPIYARI DEVI. IT WAS FURTHER ENQUIRED BY AO TO STATE THE SOURCE OF DEPOSITS MADE IN THE BANK ACCOUNT I.E. STANDARD CHARTERED BANK, G ARIAHAT BRANCH AND ALSO DETAILS OF SALE PROCEEDS OF GOLD JEWELLERY OF ASSESSEES MOTHER RAM PIYARI DEVI AND ALSO NAMES AND COMPLETE ADDRESSES OF PERSONS TO WHOM JEWELLERY WAS SOLD. HE WAS REQUIRED TO PRODUCE SALE MEMOS IN ITS SUPPORT. ASSESSEE STATED THAT TH IS BANK ACCOUNT OF STANDARD CHARTERED BANK, GARIAHAT BRANCH, KOLKATA, WHICH WAS OPENED IN HER NAME ACTUALLY BELONGS TO HER MOTHER RAMPIYARI DEVI, WHO EXPIRED IN THE YEAR 1999 AND THE SAID ACCOUNT WAS OPENED IN THE MONTH OF MAY, 2005 ONLY FOR THE PURPOSE OF DEPO SITING THE CASH RECEIPT FROM SALE PROCEEDS OF GOLD AND DIAMOND JEWELLERY OF HER MOTHE R AND TO FULFILL HER WISH TO GIVE THE SAME IN CHARITY. IT WAS CONTENDED BY ASSESSEE THAT SHE WAS MORE THAN 70 YEARS OLD AT THE TIME OF HER DEATH IN THE YEAR 1999 AND JEWELLERY WE RE RECEIVED BY HER AT THE TIME OF HER MARRIAGE AS STRIDHAN EARLIER THAN 1950S. THE ASSES SEE STATED THAT TO FULFILL HER WISH, SHE SOLD JEWELLERY IN THE FY 2005-06 AND 2006-07 AND SALE PR OCEEDS WERE RECEIVED AND DEPOSITED IN THE SAVINGS BANK ACCOUNT OF STANDARD CHARTERED BANK , GARIAHAT BRANCH, KOLKATA, SB A/C. NO.327-1-030430-0 AMOUNTING TO RS.14.90 LACS AND RS .25.07 LACS. THE ASSESSEE STATED THAT FOR FY 2005-06 GOLD AND JEWELLERY WERE SOLD IN SONA PATTI FOR WHICH NO SALE BILLS WERE RECEIVED BUT IN THE YEAR 2006-07 DIAMOND WAS SOLD I N SURAT THROUGH HER BROTHER SHRI NARESH KUMAR AND EVEN THE SALE BILLS WERE RECEIVED. ASSES SEE FILED COPIES OF SALE BILLS BEFORE THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IT WAS ALSO EXPLAINED BY ASSESSEE THAT VALUATION REPORT OF REGISTERED VALUER SHRI RAJENDRA KUMAR DHANUKA VALUING JEWELLERY IN THE YEAR 1997 WAS SUBMITTED. EVEN THIS VALUATION REPOR T, WHICH IS ENCLOSED AT ASSESSEES PAPER BOOK PAGES 16 AND 17 WAS FILED BEFORE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THIS VALUATION REPORT STATES THE DESCRIPTION OF JEW ELLERY, GROSS WEIGHT IN GRAMS I.E. IN 3 ITA NO. 1927-1928/K/2010 USHA TIBREWAL., AY:2006-07&2007-08 PRECIOUS METAL AND SEMI PRECIOUS STONE. TOTAL VALU E OF JEWELLERY AS PER THIS VALUATION REPORT, IS IN RUPEES AND VALUE AS PRECIOUS METAL AN D SEMI PRECIOUS STONES. THIS VALUATION REPORT DATED 03.10.1997 CONTAINS TOTAL ITEMS AT 19. FURTHER, A COPY OF LETTER FROM ASSESSEES MOTHER SMT. RAMPIYARI DEVI DUDHEWALA DATED 27.10.19 97 WAS ALSO ENCLOSED FOR REFERENCE OF THE AO AND EVEN NOW ENCLOSED WITH ASSESSEES PAP ER BOOK AT PAGE 20. THE RELEVANT TEXT OF THE LETTER OF SMT. RAMPIYARI DEVI DATED 27.10.19 97 TO HER DAUGHTER SMT. USHA TIBREWAL READS AS UNDER: YOU ARE AWARE THAT MY HEALTH IS NOT IN A GOOD CON DITION AND I FEEL THAT IT MAY NOT SURVIVE LONGER. I AM HAVING VARIOUS GOLD AND D IAMOND JEWELLERIES WHICH WERE RECEIVED BY ME AT THE TIME OF MY MARRIAGE AND ON SOME OCCASION THEREAFTER. THE SAID JEWELLERIES ARE ABSOLUTELY MY STRIDHAN AND AS SUCH I HAVE DISCUSSED THIS MATTER WITH YOUR BROTHERS THAT I AM WILLING TO HAND IT OVER TO YOU FOR SELLING AT A BEST PRICE AND GIVE THE SALE VALUE IN CHARITY AS YOU DEEM FIT AND PROPER. AS YOU ARE MY BELOVED DAUGHTER AND I FEEL YOU CAN TAKE THIS BURDEN FOR DOING THIS NOBLE CAUSE. 4. FURTHER, ASSESSEE HAS FILED AFFIDAVIT STATING F ACTS AND THE RELEVANT AFFIDAVIT IS ENCLOSED AT ASSESSEES PAPER BOOK PAGE 10 AND RELEV ANT PORTION OF SAME READS AS UNDER: I, USHA TIBREWAL, WIFE OF SARAD KUMAR TIBREWAL, RE SIDING AT 14/1, HINDUSTAN ROAD, KOLKATA-700029 BY FAITH HINDU, BY OCCUPATION HOUSEWIFE, AGED ABOUT 47 YEARS DO SOLEMNLY AFFIRM, SAY AND DECLARE AS FOL LOWS: 1) THAT I AM THE DAUGHTER OF SMT. RAMPYARI DEVI DUDWEL LA WHO HANDED OVER ME HER JEWELLERIES MADE OF GOLD, DIAMONDS, PEARLS ETC. WHICH WAS ABSOLUTELY BELONGING TO HER AND WAS HER STRIDHAN. 2) THAT THE SAID JEWELLERIES WERE HANDED OVER ME AS PE R WISH OF MY MOTHER TO SALE THE SAME AND GIVE THE SALE PROCEEDS IN CHARITY WITH THE INSTRUCTION TO TAKE THIS RESPONSIBILITY TO DO THE GOOD CAUSE. 3) THAT I OPENED A BANK A/C. WITH STANDARD CHARTERED B ANK, GARIAHAT BRANCH, KOLKATA BEING NO. 327-1-030430-0 WHICH WAS THOUGH I N MY NAME BUT WAS ACTUALLY BELONGING TO MY MOTHER AND WAS OPENED TO D EPOSIT THE SALE PROCEEDS OF MY MOTHERS JEWELLERY AND SPEND THE SAME IN CHAR ITY. 4) THAT THE JEWELLERIES OF MY MOTHER WERE SOLD IN PHAS ED MANNER FROM THE YEAR 2005-06 TO 2008-09 FROM TIME TO TIME AND THE SAID A MOUNTS WERE GIVEN IN CHARITY. 5) THAT MY MOTHER HANDED OVER ME THE JEWELLERIES IN OC TOBER 1997 DUE TO HER ILL HEALTH WHO EXPIRED IN SEPTEMBER, 1999 WITH THE INST RUCTION TO SALE THE SAME AND GIVE THE PROCEEDS IN CHARITY. THAT THE STATEMENTS MADE ABOVE ARE TRUE TO THE BEST OF MY KNOWLEDGE AND BELIEF. EVEN SALE BILLS OF DIAMOND JEWELLERY, SOLD DURING T HE FY 2006-07 RELEVANT TO AY 2007-08, ARE ALSO ENCLOSED AT ASSESSEES PAPER BOOK PAGES 4 TO 9. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS EXPLAINED TO AO, THAT, THE ASSES SEE BEING THE YOUNGEST DAUGHTER OF OLD LADY TO WHOM SHE HAD GIVEN RESPONSIBILITY TO DO THI S GOOD CAUSE OF CHARITY SO AS TO FULFILL 4 ITA NO. 1927-1928/K/2010 USHA TIBREWAL., AY:2006-07&2007-08 HER OBLIGATION, SHE SOLD THE JEWELLERIES AND DEPOSI TED THE SALE PROCEEDS IN THE STANDARD CHARTERED BANK AND THEREAFTER GAVE AWAY MONEY IN CH ARITY TO RAMKRISHNA MISSION. THE FACT REGARDING CHARITY TO RAMKRISHNA MISSION WAS EV IDENCED BY BANK STATEMENT WHEREBY THESE AMOUNTS WERE GIVEN TO RAMKRISHNA MISSION AS C HARITY. THE AO IN BOTH THE ASSESSMENT YEARS DISBELIEVED THE EVIDENCE SUBMITTED BY THE ASSESSEE ON THE GROUND THAT HOW THE JEWELLERY REACHED SURAT FROM PATNA AND THER E IS NO EVIDENCE REGARDING INHERITANCE OF JEWELLERY BY HER LATE MOTHER OR HER LATE MOTHER HAS GIVEN TO HER FOR MAKING CHARITY. IT WAS EXPLAINED BY THE ASSESSEE THAT COMPLETE NAME AN D ADDRESS OF ASSESSEES BROTHER SHRI NARESH KUMAR WAS DULY GIVEN TO THE AO AND EVEN THE PURCHASE BILL OF PURCHASER OF DIAMONDS FOR FY 2006-07 RELEVANT TO AY 2007-08 OF M /S KARNI ENTERPRISES ALONG WITH ADDRESS WAS SUBMITTED BUT NO INQUIRY WHATSOEVER WA S CARRIED OUT. THE AO COMPLETELY DISBELIEVED SOURCES OF JEWELLERY AND SALE OF JEWELL ERY AND POSSESSION OF JEWELLERY BY ASSESSEE FROM HER MOTHER FOR THE PURPOSE OF CHARITY BY GIVING FOLLOWING REASONS: (I) ASSESSEE COULD NOT PRODUCE ANY EVIDENCE TOWA RDS ALLEGED INHERITANCE OF THE GOLD JEWELLERIES, IN QUESTION FROM HER LATE MOTHER RAMPIYARI DEVI. (REFER ANSWER TO QUESTION NO. 14 ABOVE). (II) SHE (ASSESSEE) COULD NOT PRODUCE EVEN SALE MEM O (PRIME EVIDENCE) IN SUPPORT OF HER ALLEGED CLAIM THAT CASH DEPOSITS OF RS.14,90,000/- IN A/C. NO.327-1-030430-0 WITH STANDARD CHARTERED BANK, GA RIAHAT BR, KOLKATA REPRESENT SALE PROCEEDS OF INHERITED JEWELLERIES. ( REFER ANSWER TO QUESTION NO. 13 ABOVE). (III) SHE (ASSESSEE), COULD NOT EVEN FURNISH NAME A ND ADDRESS OF THE PERSON(S) TO ALLEGED INHERITED JEWELLERIES CLAIMED TO HAVE BEEN SOLD. (REFER ANSWER TO QUESTION NO. 13 ABOVE.) (IV) THOUGH SHE (ASSESSEE) CLAIMS TO HAVE INHERITE D THE ALLEGED GOLD JEWELLERIES FROM HER LATE MOTHER RAMPIYARI DEVI IN THE YEAR 1 999 BUT SURPRISINGLY THIS WAS NOT SHOWN IN HER BALANCE SHEET AS AT 31.3.2005. IN THE BALANCE SHEET AT 31.3.2005 JEWELLERIES AND ORNAMENTS HAD BEEN SHOWN AT RS. 72,852/-. HAD SHE ACTUALLY INHERITED THE JEWELLERIES, HER BALANCE SHEET AS AT 31.3.2005 WOULD HAVE BEEN CERTAINLY REFLECTED THE SAME. BUT T HERE WAS NO SUCH REFLECTION. (V) FINALLY HER CLAIM THAT IT WAS LAST WISH OF HER MOTHER TO DONATE THE SALE PROCEEDS OF GOLD JEWELLERIES FOR CHARITABLE PURPOSE S AND ACCORDINGLY I NEVER TREATED THESE JEWELLERIES AS MY OWN AND NOT SHOWN IT IN MY BALANC E SHEET, IS NOTHING BUT AN AFTERTHOUGHT AND AN ATTEMPT TO PUT A VEI1 ON HE R ALLEGED UNDISCLOSED INCOME OF RS. 14,90,000/- DEPOSITED IN THE BANK A/C . DURING THE YEAR UNDER CONSIDERATION. (VI) APART FROM ABOVE, IT IS QUITE SURPRISING TO NO TE THAT ASSESSEE WAS TOTALLY SILENT ABOUT HER A/C. NO. 327-1-030430-0 - WITH STA NDARD CHARTERED BANK, 5 ITA NO. 1927-1928/K/2010 USHA TIBREWAL., AY:2006-07&2007-08 GARIAHAT BR, EVEN IN COURSE OF HER DEPOSITION U/S. 131 AT THE INITIAL STAGE. (REFER ANSWER TO Q.6 ABOVE). NOT ONLY THIS, SHE HA S NOT DISCLOSED HERE INTEREST INCOME OF RS.2209/- EARNED ON THIS A/C (A/ C NO. 327-1-030430-0 WITH STANDARD CHARTERED BANK, GARIAHAT BR.) IN THE RETURN. THIS FURTHER PROVES SHE WAS TOTALLY AWARE OF HER ACT OF NON DISC LOSURE OF HER INCOME OF RS.14,90,000/- WHICH SHE NOW CLAIMS TO BE THE SALE PROCEEDS OF THE INHERITED GOLD JEWELLERIES. 5. AGGRIEVED AGAINST ASSESSMENT OF CASH DEPOSIT IN BANK ACCOUNT I.E. STANDARD CHARTERED BANK, GARIAHAT BRANCH IN THE NAME OF THE ASSESSEE AS UNDISCLOSED INCOME OF THE ASSESSEE, SHE PREFERRED APPEAL BEFORE CIT(A), WHO A LSO CONFIRMED THE ACTION OF AO VIDE PARA 5 OF HIS ORDER AS UNDER: 5. I HAVE CAREFULLY CONSIDERED ALL THE FACTS AND C IRCUMSTANCES OF THIS CASE, ARGUMENTS GIVEN BY THE A.O. AND THE SUBMISSIONS MAD E BY THE ASSESSEE AND HER A/R. HERE WE FIND THAT FOR THE CASH DEPOSITED IN THE BANK ACCOUNT OPENED IN THE NAME OF THE ASSESSEE SHE HAS CLAIMED THAT TH E CASH WAS SALE PROCEEDS OF JEWELLERY RECEIVED BY HER FROM HER LATE MOTHER. I FEEL THAT ON THE BASIS OF THE EVIDENCES PRODUCED BY THE ASSESSEE THIS CLAIM DOES NOT GET SUBSTANTIATED. THE FIRST POINT WHICH GOES AGAINST THE ASSESSEE IS THAT THOUGH THIS BANK ACCOUNT WAS IN HER NAME SHE DID NOT DISCLOSE IT IN HER BALA NCE SHEET AND RETURN OF INCOME. THIS SHOWS THAT SHE INTENDED TO CONCEAL THI S BANK ACCOUNT AND ITS TRANSACTIONS FROM THE INCOME TAX DEPARTMENT. SIMILA RLY, IF THE JEWELLERY HAD INHERITED BY HER FROM HER MOTHER IN 1997 AND SHE BE CAME ITS OWNER SHE SHOULD HAVE REFLECTED THE SAME N HER BALANCE SHEET WHERE SHE WAS ALREADY DISCLOSING OTHER JEWELLERY OWNED BY HER. IN SUPPORT OF HER CLAIM THAT THIS JEWELLERY WAS GIV EN TO HER BY HER MOTHER SHE HAS FILED A LETTER PURPORTED TO BE SIGNED BY HER MO THER ON 18.10.1997. I THINK THIS LETTER DOES NOT HAVE ANY EVIDENTIARY VALUE AS IT HAS NOT BEEN REGISTERED ANY WHERE. IT IS NOT PROVED THAT THIS LETTER HAS AC TUALLY BEEN SIGNED BY SMT. RAMPAIYARI DEVI. THIS LETTER DOES NOT CONTAIN ANY D ESCRIPTION OF THE JEWELLERY PURPORTED TO BE GIVEN TO THE ASSESSEE. FURTHER, IT IS NOT UNDERSTOOD WHY A MOTHER WILL GIVE JEWELLERY TO THE YOUNGEST DAUGHTER WHEN SHE HAS THREE SONS AND THREE DAUGHTERS. NORMAL PRESUMPTION IS THAT A M OTHER WOULD ENTRUST THE TASK FOR MAKING CHARITY TO ONE HER SONS AND NOT THE DAUGHTERS. EVEN THERE IS NO DOCUMENTARY EVIDENCE THAT ANY JEWELLERY WAS OWNE D BY ASSESSEES MOTHER. DURING THE APPELLATE PROCEEDINGS THE A/R OF THE ASS ESSEE WAS ASKED TO EXPLAIN IF THE MOTHER OF THE ASSESSEE WAS ASSESSED TO TAX A ND IF SHE HAD SHOWN HER JEWELLERY IN ANY OF IT OR WT RETURNS. THE A/R STATE D THAT ASSESSEES MOTHER WAS NOT ASSESSED TO TAX AND HER JEWELLERY WAS NOT S HOWN IN ANY IT/WT RETURNS. IF THESE KINDS OF EXPLANATIONS ARE ACCEPTE D THEN ANYBODY WOULD BE ABLE TO EXPLAIN ANY AMOUNT OF CASH BY CLAIMING IT T O BE SALE PROCEEDS OF STRIDHAN JEWELLERY OF HIS/HER MOTHER WITHOUT MOTH ER HAVING SHOWN SUCH JEWELLERY IN ANY IT/WT RECORDS. THE ASSESSEE ALSO FILED A VALUATION REPORT OF 1997 PREPARED BY SOME JEWELER ON 03.10. 1997. THIS VALUATION REPORT ALSO DOES NOT HAVE ANY EVIDENTIARY VALUE BECAUSE IT HAS NOT BEEN FILED WITH ANY IT OR WT RETURNS. SUCH REPORTS CAN BE PRODUCED BY ANYBODY GIVING ANY DATE. THIS IS ONLY A SELF-SERVING 6 ITA NO. 1927-1928/K/2010 USHA TIBREWAL., AY:2006-07&2007-08 EVIDENCE AND DOES NOT PROVE THAT THE JEWELLERY MENT IONED IN THE VALUATION REPORT ACTUALLY EXISTED; WAS GIVEN TO THE ASSESSEE AND WAS SOLD TO DEPOSIT CASH IN HER STANDARD CHARTERED BANK ACCOUNT. THE ASSESSE E HAS ALSO PRODUCED CERTAIN SALE BILLS FOR SALE OF DIAMONDS AT SURAT TO SUBSTANTIATE HER CLAIM. THESE BILLS ALSO APPEAR TO BE SELF- SERVING. IN THE SE BILLS CUT AND POLISHED DIAMOND HAVE BEEN SHOWN AS SOLD AT VERY HIGH PRICES N CASH. A CAREFUL EXAMINATION OF THESE BLLS SHOWS THAT THESE HAVE BE EN CREATED WITH THE INTENTION OF SHOWING GENERATION OF MAXIMUM AMOUNT O F CASH. HOWEVER, N THE PROCESS ASTRONOMICALLY HIGH PRICES HAVE BEEN CHARGE D WHICH ARE DIFFICULT TO BELIEVE UNDER NORMAL CIRCUMSTANCES. -TO DEMONSTRATE THIS, THE DETAILS OF THE SALE OF DIAMONDS IS REFLECTED IN THESE BILLS ARE RE PRODUCED BELOW; BILL DATE DESCRIPTION WEIGHT (CARAT) RATE (RS.) AMOUNT 29.04.06 01.12.06 29.08.06 26.10.06 28.06.06 02.01.07 DIAMONDS CUT & POLISHED DIAMONDS CUT & POLISHED DIAMONDS CUT & POLISHED CUT & POLISHED DIAMONDS CUT & POLISHED DIAMONDS CUT & POLISHED DIAMONDS CUT & POLISHED DIAMONDS CUT & POLISHED DIAMONDS CUT & POLISHED DIAMONDS CUT & POLISHED DIAMONDS 3.00 8.00 6.00 1.50 1.50 0.50 0.25 3.50 2.00 4.00 105,000/- 59,500/- 67,000/- 92,000/- 92,000/- 60,000/- 35,000/- 1,03,000/- 93,000/- 93,000/- 315,000.00 476,000.00 402,000.00 138,000.00 138,000.00 60,000.00 35,000.00 360,500.00 186,000.00 372,000.00 I WOULD LIKE TO SHOW THE ABSURDITY OF THE PRICES RE FLECTED IN THESE BILLS BY COMPARING THE RATE IN SOME OF THESE BILLS AND THE V ALUATION DONE BY THE VALUER IN THE SO CALLED VALUATION REPORT. IN THE BLL DATED 0 1.12.2006 DIAMONDS OF WEIGHT 8 CT. HAVE BEEN SHOWN AS SOLD FOR RS. 4,76,000/-. IN THE VALUATION REPORT 8 CT. DIAMONDS ARE SHOWN TO BE SET IN JEWELLERY AT ITEM N O.3. IN THIS ITEM NO. 3 THE VALUE OF 8 CT. DAMONDS IS SHOWN AS RS. 16,000/-. T HUS IT CAN BE SEEN THAT DIAMONDS WORTH RS.16,000/- IN 1997 ARE SHOWN TO BE SOLD FOR RS. 4,76,000/- IN 2006. THIS MEANS THAT IN A PERIOD OF 10 YEARS THE V ALUE OF THE DIAMONDS INCREASED TO ABOUT 30 TIMES THE ORGINAL VALUE, WHI CH IS ABOUT 2900% INCREASE. THIS IS ABSOLUTELY ABSURD FIGURE. SIMILARLY IN THE BILL DATED 29.08.2006 DIAMONDS OF WEIGHT. 6 CT. HAVE BEEN SHOWN AS SOLD FOR RS. 4, 02,000/-. IN THE VALUATION REPORT 6 CT. DIAMONDS ARE SHOWN TO BE SET IN JEWELL ERY AT ITEM NO.4. IN THIS ITEM NO. 4 THE VALUE OF 6 CT. DIAMONDS IS SHOWN AS RS. 1 2,000/-. THUS IT CAN BE SEEN THAT DIAMONDS WORTH RS. 12,000/- IN 1997 ARE SHOWN TO BE SOLD FOR RS. 4,02,000/- /- IN 2006. THIS MEANS THAT IN A PERIOD OF 10 YEARS THE VALUE OF THE DIAMONDS INCREASED TO ABOUT 33 TIMES THE ORIGINAL VALUE, WHI CH IS ABOUT 3200% INCREASE. THIS IS ALSO ABSOLUTELY ABSURD FIGURE. SUCH ABSURD FIGURES OF INCREASE IN VALUE CAN BE FOUND FOR OTHER ITEMS OF DIAMOND SHOWN TO BE SOLD BY THE ASSESSEE ALSO. FROM THE ABOVE IT CAN BE SAID THAT THESE BILLS FOR SALE OF DIAMONDS ARE NOT GENUINE AND HAVE BEEN MANUFACTURED TO SHOW THE GENE RATION OF CASH DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE. FURTHER, IT IS S EEN THAT THE JEWELLERY LYING AT PATNA IS TAKEN TO SURAT FOR SALE AND THE CASH RECEI VED ON SALE IS BROUGHT TO PATNA AND KOIKATA. IT IS DIFFICULT TO BELIEVE WHY ANYBODY WOULD TAKE RISK IN TAKING JEWELLERY ALL THE WAY TO SURAT AND THEN BRING CASH TO KOLKATA AGAIN TAKING A HUGE RISK. 7 ITA NO. 1927-1928/K/2010 USHA TIBREWAL., AY:2006-07&2007-08 IN VIEW OF THE ABOVE DISCUSSION I FEEL THAT THERE I S NO EVIDENCE TO SUGGEST THAT THE ASSESSEE INHERITED ANY JEWELLERY FROM HER MOTHER AND THE CASH DEPOSITED IN HER BANK IN STANDARD CHARTERED WAS SALE PROCEEDS OF SUCH JEWELLERY. THEREFORE, THE A.O. HAS RIGHTLY TREATED THE SOURCE OF CASH OF RS. 25,07,000 /- DEPOSITED IN THE STANDARD CHARTERED BANK ACCOUNT OF THE ASSESSEE AS UNEXPLAINED. HENCE, I CONFRM THIS ADDITION OF RS 2 5,07,000/-. IDENTICAL ORDER IN AY 2006-07 WAS PASSED BY CIT(A). AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE TRIBUNAL IN BOTH THE YEARS. 6. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE ASSESSEE HAS ONLY SOURCE OF INCOME I.E. INCOME FROM OTHER SOURCES, INTEREST ON LOANS AND INTEREST ON BANK. APART FROM THIS, THERE IS NO OTHER SOURCE OF INCOME OF ASSESSEE. THE ASSESSEE HAS ONLY BANK ACCOUNT MA INTAINED WITH ALLAHABAD BANK, BURRABAZAR BRANCH AS ADMITTED BY HER IN HER DEPOSIT ION BEFORE THE AO ON 22.12.2009 U/S. 131 OF THE ACT VIDE QUESTION NO. 4. SHE HAS OPENED ONE BANK ACCOUNT WITH STANDARD CHARTERED BANK, GARIAHAT BRANCH, KOLKATA JUST TO DE POSIT THE SALE PROCEEDS OF JEWELLERY, WHICH WAS HANDED OVER BY HER MOTHER FOR THE PURPOSE OF CHARITY. SMT. RAMPIYARI DEVI, WHO DIED IN THE YEAR 1999 AND EXPRESSED HER LAST WI SH TO THE ASSESSEE TO DO CHARITY OUT OF THE SALE PROCEEDS OF THE JEWELLERY POSSESSED BY HER . THE POSSESSION OF JEWELLERY WAS ADMITTED BY ASSESSEES MOTHER SMT. RAMPIYARI VIDE A LETTER WRITTEN ON 27.10.1997. ANOTHER EVIDENCE IN REGARD TO POSSESSION OF JEWELLERY BY SM T. RAMPIYARI DEVI IS THE REPORT OF VALUATION OF JEWELLERY DATED 03.10.1997 OF ONE REGI STERED VALUER RAJENDRA KUMAR DHANUKA, THE REPORT OF VALUATION CONTAINS THE DETAILS OF JEW ELLERY WHICH INCLUDES GOLD AND DIAMOND JEWELLERY. EVEN THE SALE PROCEEDS WERE DEPOSITED I N THE STANDARD CHARTERED BANK ACCOUNT, GARIAHAT BRANCH OPENED BY ASSESSEE IN HER NAME ONLY FOR THE PURPOSE OF DEPOSITING SALE PROCEEDS OF JEWELLERY, FOR WHICH THE ASSESSEE WAS O NLY CUSTODIAN AND THIS ACCOUNT WAS OPENED JUST AS A FACILITATOR. BY GOING THROUGH THE ABOVE STATED BANK ACCOUNT OF STANDARD CHARTERED BANK, IT IS CLEAR THAT IMMEDIATELY AFTER SALE OF JEWELLERY THE AMOUNT WAS DEPOSITED IN THIS BANK AND WAS ISSUED CHEQUE IN THE NAME OF RAMKRISHNA MISSION FOR THE PURPOSE OF CHARITY. THESE FACTS WERE NEVER DENIED EITHER BY AO OR BY CIT(A). THE CIT(A) AND THE AO REJECTED THE EVIDENCES PRODUCED BY ASSES SEE ON THE BASIS OF CONJECTURE AND SURMISES. THE REASONS GIVEN BY CIT(A) IS THAT THE EVIDENCE PRODUCED BY ASSESSEE DURING ASSESSMENT PROCEEDINGS SUCH AS LETTER PURPORTED TO BE SIGNED BY HER MOTHER AS HER MOTHER, ACCORDING TO CIT(A), DOES NOT OWN SO MUCH JEWELLERY AT THE TIME OF HER DEATH FOR THE REASON THAT SHE WAS NOT ASSESSED TO ANY INCOME TAX OR WEAL TH TAX. SECONDLY, ACCORDING TO CIT(A), THE ASSESSEE DOES NOT HAVE ANY EVIDENCE TO SHOW THA T THIS JEWELLERY WAS INHERITED BY 8 ITA NO. 1927-1928/K/2010 USHA TIBREWAL., AY:2006-07&2007-08 ASSESSEE FROM HER MOTHER IN 1997. ACCORDING TO CIT (A), THE ASSESSEE IS UNABLE TO GIVE THE NAMES AND ADDRESSES OF THE PARTIES TO WHO THE JEWEL LERY WAS SOLD. EVEN THE ASSESSEE HAS NOT DECLARED THIS JEWELLERY IN HER BALANCE SHEET AL THOUGH SHE IS DECLARING HER OWN JEWELLERY IN HER BALANCE SHEETS ALTHOUGH. EVEN THE ASSESSEE HAS CONCEALED THIS BANK ACCOUNT AND HAS CONCEALED THE TRANSACTIONS FROM INCOME TAX DEPARTME NT. EVEN SHE DOES NOT HAVE ANY SALE MEMO TO SUPPORT THE CLAIM OF SALE OF JEWELLERY. TH E CIT(A) HAS ALSO POINTED OUT DISCREPANCIES IN THE RATES MENTIONED IN THE VALUATI ON REPORT OF 1997 AND THE SALE BILL OF 2006. SIMILAR ARE THE REASONING OF AO FOR TREATING THE DEPOSITS AS UNEXPLAINED. 7. WE HAVE CONSIDERED THE FACTS IN ENTIRETY AND ARE OF THE VIEW THAT THE ASSESSEE IS ABLE TO PRODUCE THE LETTER OF SMT. RAMPIYARI DEVI WHICH CLEARLY STATES THAT SHE IS HAVING GOLD AND DIAMOND JEWELLERY, WHICH WAS RECEIVED AT THE TI ME OF HER MARRIAGE, AND EXPRESSING HER WILL FOR CHARITY OUT OF THE SALE PROCEEDS OF THE AB OVE JEWELLERY THROUGH HER DAUGHTER I.E. THE PRESENT ASSESSEE. THE ASSESSEE OPENED A BANK ACCOU NT WITH STANDARD CHARTERED BANK AND DEPOSITED SALE PROCEEDS OF GOLD AND DIAMOND JEWELLE RY AND GAVE AWAY THE AMOUNTS IN CHARITY TO RAMKRISHNA MISSION AS IS EVIDENCED FROM BANK ACCOUNT AND SALE BILLS, ENCLOSED IN ASSESSEES PAPER BOOK. IN HER DEPOSITION U/S. 1 31 OF THE ACT ON 22.12.2009, THE ASSESSEE, CLEARLY ADMITTED THAT SHE IS FULFILLING THE WISH OF HER MOTHER TO DO CHARITY AFTER SELLING THE GOLD AND DIAMOND JEWELLERY OWNED BY HER MOTHER SMT. RAMPIYARI DEVI AND ONLY FOR THAT PURPOSE THE BANK ACCOUNT WAS OPENED AND SHE WAS MER ELY A FACILITATOR AND NOTHING ELSE. SHE CLEARLY ADMITTED IN HER DEPOSITION THAT SHE NEV ER INTEND TO TAKE JEWELLERY KEPT WITH HER BY HER MOTHER FOR THE PURPOSE OF CHARITY AND SHE HA S NEVER INCLUDED THE SAME IN THE ASSET SIDE OF HER BALANCE SHEET AND EVEN THE BANK ACCOUNT WAS NOT DISCLOSED TO THE DEPARTMENT FOR THE PURPOSE THAT THIS BANK ACCOUNT DOES NOT BEL ONG TO HER AS SHE WAS MERELY A FACILITATOR. EVEN OTHERWISE THE EVIDENCE PRODUCED BY ASSESSEE I. E. THE LETTER SIGNED BY HER MOTHER EXPRESSING HER WILL FOR CHARITY OUT OF SALE PROCEED S OF GOLD AND DIAMOND JEWELLERY DATED 27.10.1997, THE VALUATION REPORT OF JEWELLERY DATED 03.10.1997 OF REGISTERED VALUER, SALE BILLS OF DIAMONDS AND ENTRIES EVIDENCING THAT THE S ALE PROCEEDS WERE GIVEN IN CHARITY TO RAMKRISHNA MISSION WERE NEVER REJECTED BY THE LOWER AUTHORITIES I.E. THE AO AS WELL AS CIT(A). EVEN IF THESE ARE REJECTED, FOR THE SAKE O F ARGUMENT WE ACCEPT, NO PROPER OPPORTUNITY OR NO SHOW CAUSE NOTICE WAS GIVEN TO TH E ASSESSEE AND THESE WERE REJECTED MERELY ON THE BASIS OF CONJECTURE AND SURMISES. TH E ASSESSEE HAS PRODUCED ALL THE ABOVE MENTIONED EVIDENCE BEFORE THE AO. WHAT EVIDENCE WI LL, IN A PARTICULAR CASE, BE SUFFICIENT TO ESTABLISH ASSESSEES REPRESENTATION, AS ALSO WHA T MATERIAL IS RELEVANT OR NOT RELEVANT WOULD 9 ITA NO. 1927-1928/K/2010 USHA TIBREWAL., AY:2006-07&2007-08 DEPEND OF THE FACTS OF EACH CASE. BUT THE PRINCIPL ES THAT EMERGED FROM THESE ARE THAT ANYTHING WHICH HAS A BEARING ON THE QUESTION AT ISS UE BEFORE THE JUDICIAL FORUM WOULD BE RELEVANT FACT. THE AOS REJECTION, NOT OF THE EXPL ANATION, BUT OF THE EXPLANATION REGARDING THE SOURCE OF INCOME OF DEPOSITOR, CANNOT BY ITSELF LEAD TO ANY INFERENCE. BY PRODUCING THE EVIDENCE BEFORE THE LOWER AUTHORITIES THE ASSESSEE HAS DISCHARGED THE INITIAL BURDEN WHICH LIES UPON HIM. NOW THE BURDEN SHIFTS ON THE DEPART MENT AS TO WHY THE ASSESSEES CASE CANNOT BE ACCEPTED AND WHY IT MUST BE HELD THE ENTR Y, THOUGHT PURPORTING TO BE IN THE NAME OF A THIRD PARTY, STILL REPRESENT THE INCOME OF THE ASSESSEE FROM AN UNDISCLOSED INCOME. IN ORDER TO ARRIVE AT SUCH A CONCLUSION, HOWEVER, THE DEPARTMENT HAS TO REJECT THE EVIDENCE ON THE BASIS OF STRONG AND SUFFICIENT MATERIAL. THE A O OR THE CIT(A) HAS NEITHER EXAMINED THESE EVIDENCES NOR PUT TO CROSS EXAMINATION LIKE T HAT OF SALE BILL, THE VALUATION REPORT OR THE OWNERSHIP LETTER WRITTEN BY ASSESSEES MOTHER. 8. IN THE SIMILAR CIRCUMSTANCES HONBLE KERALA HIGH COURT IN THE CASE OF S. KANNAN KUNHI VS. CIT (1969) 72 ITR 757, 763-4 (KER), WHICH WAS FURTHER CONFIRMED BY HONBLE SUPREME COURT AS REPORTED IN CIT VS. K. S. KANNAN K UNHI (1973) 87 ITR 395 (SC) CONSIDERED THE ISSUE AS UNDER: THE QUESTION RAISED BY THE ASSESSEE IN THE CASE BE FORE US IS NOT WHETHER THE INCOME-TAX OFFICER IS ENTITLED TO DRAW THE INFERENC E THAT THE RECEIPTS ARE INCOME OF THE YEAR IN WHICH THEY WERE FOUND WITH THE ASSES SEE ON HIS FAILURE TO EXPLAIN THEIR SOURCE, BUT WHETHER THERE IS MATERIAL TO REJE CT THE ASSESSEE'S EXPLANATION AND DRAW SUCH AN INFERENCE ON THE FACTS OF THIS CAS E. NOW, AS STATED IN THE PASSAGE QUOTED ABOVE, THE QUESTION WHETHER A RECEIP T IS TO BE TREATED AS INCOME OR NOT MUST DEPEND VERY LARGELY ON THE FACTS AND CI RCUMSTANCES OF EACH CASE. IT IS NOT THE LAW THAT, WHEN ONCE THE EXPLANATION IS R EJECTED, IT AUTOMATICALLY FOLLOWS THAT THE RECEIPTS ARE INCOME. WHETHER AN EX PLANATION IS ACCEPTABLE, AND IF NOT, WHETHER IT SHOULD BE INFERRED THAT THE RECE IPTS CONSTITUTE INCOME, ARE DIFFERENT ASPECTS OF THE SAME QUESTION. BOTH THESE ASPECTS ARE INTERRELATED, AND THE QUESTION WHETHER SUCH RECEIPTS CONSTITUTE INCOM E OR NOT HAS TO BE DECIDED ON A CONSIDERATION OF ALL THE RELEVANT FACTS AND CIRCU MSTANCES OF THE CASE. IT IS QUITE LEGITIMATE IN THE CASE OF AN ASSESSEE WHO IS KNOWN TO BE CARRYING ON SEVERAL ACTIVITIES OF AN INCOME-EARNING CHARACTER OR WHO CA N REASONABLY BE FOUND TO BE INVOLVED IN SUCH ACTIVITIES, TO DRAW THE INFERENCE THAT THE AMOUNTS FOUND WITH HIM CONSTITUTE INCOME FROM UNDISCLOSED SOURCES, IN THE ABSENCE OF SATISFACTORY EXPLANATION REGARDING THEIR SOURCE. SUCH AN INFEREN CE SHOULD NOT BE READILY MADE IN THE CASE OF A PERSON, WHO HAS NO KNOWN BUSI NESS OR OTHER SOURCE OF INCOME, OR WHO CANNOT EVEN BE REASONABLY SUSPECTED AS ENGAGED IN ANY INCOME- EARNING ACTIVITIES. IN THE LATTER CASE, THERE MUST BE MORE SUBSTANTIAL REASONS TO REJECT THE ASSESSEE'S EXPLANATION, AND DRAW THE INF ERENCE THAT THE AMOUNTS FOUND WITH HIM CONSTITUTE INCOME. LET US NOW EXAMINE THE FACTS OF THE INSTANT CASE I N THE LIGHT OF THE ABOVE PRINCIPLES. SANKUNNI, THE KARTA OF THE ASSESSEE FAM ILY, CARRIED ON BUSINESS IN 10 ITA NO. 1927-1928/K/2010 USHA TIBREWAL., AY:2006-07&2007-08 CEYLON FOR ABOUT 20 YEARS, UNTIL HE RETURNED TO IND IA AND SETTLED DOWN IN HIS VILLAGE IN 1940. KANNAN KUNHI, THE ELDEST SON OF SA NKUNNI AND THE PRESENT KARTA OF THE FAMILY, HAS BEEN CARRYING ON BUSINESS IN CEY LON FROM 1942 ONWARDS IN PARTNERSHIP WITH OTHERS. THE LICENCE OF THE TODDY B USINESS STARTED IN KERALA ON AUGUST 17, 1950, WAS TAKEN IN THE NAME OF KANNAN KU NHI. OUT OF THE SUM OF RS. 60,813 ASSESSED AS INCOME FROM UNDISCLOSED SOURCES, RS. 46,563 IS THE AMOUNT CREDITED IN THE BOOKS OF ACCOUNT OF THIS BUSINESS O N AUGUST 17, 1950. THE ASSESSEE'S EXPLANATION, AS WE HAVE ALREADY STATED, WAS THAT THIS AMOUNT AS WELL AS THE AMOUNTS INVESTED FOR BUYING IMMOVABLE PROPER TIES CAME FROM PAST REMITTANCES FROM CEYLON AND SAVINGS FROM AGRICULTUR AL PROPERTY. THIS EXPLANATION DID NOT RECEIVE ANY CONSIDERATION BY TH E APPELLATE TRIBUNAL. ALL THAT IT STATED ABOUT THE MATTER IS CONTAINED IN THE ONE SENTENCE APPEARING IN PARAGRAPH 37 OF ITS ORDER; AND IT READS: ' THE ASSESSEE HAD NO PROPER AND SATISFACTORY EXPLA NATION FOR THE SOURCE OF THESE AMOUNTS. ' THE INCOME-TAX OFFICER DEALT WITH THIS MATTER AS FO LLOWS: ' OTHER SOURCES.-INCOME FROM UNDISCLOSED SOURCE.-AN AMOUNT OF RS. 46,563 HAS BEEN BROUGHT INTO THE BOOKS FOR THE NEW TODDY BUSINESS. THE ASSESSEE WAS ASKED TO EXPLAIN THE NATURE AND SOURCE OF THESE FUNDS. THE EXPLANATION FURNISHED IS NOT AT ALL SATISFACTORY, A ND SO I WILL TREAT THIS AMOUNT AS INCOME FROM UNDISCLOSED SOURCES. FURTHER IT IS SEEN THAT THE ASSESSEE HAS PURCHASED TWO ITEMS OF PROPERTIES DURING THE ACCOUNT YEAR AS FOLLOWS: ON 19-5-1950 RS. 14,250 ON 16-2-1951 RS. 3,000 --------- RS. 17,250 IN THE ABSENCE OF ANY EVIDENCE AS TO THE SOURCE OF FUNDS FOR INVESTMENT OF THESE ASSETS, I WILL TREAT THIS AMOUNT ALSO AS INCO ME FROM UNDISCLOSED SOURCES. ' ALL THAT THE APPELLATE ASSISTANT COMMISSIONER SAID ABOUT THIS QUESTION IS: 'THE APPELLANT'S EXPLANATION REGARDING THEIR SOURCE IS NOT IN THE LEAST CONVINCING, AND I AM SATISFIED THAT THE INCOME-TAX OFFICER WAS QUITE JUSTIFIED IN ASSESSING THEM AS INCOME FROM UNDISCLO SED SOURCES. AS REGARDS THE INVESTMENT OF RS. 3,000 ON FEBRUARY 16, 1951, I FEEL IT CAN BE HELD TO HAVE COME OUT OF THE INCOME FROM TODDY B USINESS OUTSIDE ACCOUNTS ESTIMATED BY THE INCOME-TAX OFFICER, AND T HIS SUM OF RS. 3,000 HAS ACCORDINGLY TO BE DELETED. ' THUS WE FIND THAT THE INCOME-TAX OFFICER AND THE AP PELLATE ASSISTANT COMMISSIONER ALSO HAVE NOT CONSIDERED THE ACCEPTABI LITY OR OTHERWISE OF THE ASSESSEE'S EXPLANATION, EXCEPT MAKING AN ASSERTION THAT IT WAS NOT ACCEPTABLE. THE OTHER IMPORTANT ASPECT, NAMELY, WHETHER, ON THE FAC TS AND IN THE CIRCUMSTANCES OF 11 ITA NO. 1927-1928/K/2010 USHA TIBREWAL., AY:2006-07&2007-08 THE CASE, IT SHOULD BE INFERRED THAT THESE AMOUNTS CONSTITUTED INCOME OF THE PREVIOUS YEAR, THOUGH THE EXPLANATION OFFERED BY THE ASSESSE E WAS NOT ACCEPTABLE, DID NOT RECEIVE THE CONSIDERATION OF THE APPELLATE TRIBUNAL OR THE SUBORDINATE AUTHORITIES. EXCEPT SOME AGRICULTURAL PROPERTIES, WHOSE ANNUAL I NCOME CAME TO ABOUT RS. 6,000 ACCORDING TO THE ASSESSEE, IT HAD NO KNOWN SOURCE O F INCOME IN INDIA, UNTIL IT STARTED THE TODDY BUSINESS ON AUGUST 17, 1950. NOR IS THERE ANY MATERIAL IN THE CASE EVEN TO RAISE A REASONABLE SUSPICION THAT THE ASSESSEE INDU LGED IN ANY ACTIVITY OF AN INCOME- EARNING NATURE IN THE ACCOUNTING YEAR OR IN PRIOR Y EARS. IN THESE CIRCUMSTANCES, A FINDING THAT THE SUM OF RS. 60,518 FOUND WITH THE A SSESSEE MUST BE ITS INCOME FROM UNDISCLOSED SOURCES DURING A PERIOD OF ABOUT SEVEN AND A HALF MONTHS PRIOR TO AUGUST 17, 1950, APPEARS A LITTLE PREPOSTEROUS. WHA TEVER IT MAY BE, THE EXPLANATION OFFERED BY THE ASSESSEE WAS NOT ON THE FACE OF IT I MPROBABLE, THOUGH IT IS ENTIRELY A MATTER FOR THE FACT-FINDING AUTHORITY TO ACCEPT IT OR NOT. BUT IF THE APPELLATE TRIBUNAL REJECTS THE EXPLANATION WITHOUT CONSIDERING ITS ACC EPTABILITY IN THE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE, OR IT REJECTS THE EX PLANATION WITHOUT STATING ANY GROUNDS WHATSOEVER, OR UPON A VIEW OF FACTS WHICH C OULD NOT REASONABLY BE ENTERTAINED BY ANY PERSON ACTING JUDICIALLY, THE CA SE WOULD FALL WITHIN THE PRINCIPLE LAID DOWN BY THE SUPREME COURT IN MEHTA PARIKH & CO . VS. CIT (1956) 030 ITR 181, AND THE FINDING OF THE TRIBUNAL WOULD NOT BE V ALID. IN OUR VIEW, THE SAME IS THE POSITION IN THIS CASE; THE ADDITION OF RS. 60,813 A S THE INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES WAS NOT VALID OR JUSTIFIED. IN THE RESULT, WE ANSWER THE QUESTION IN THIS REFE RENCE IN THE NEGATIVE AND IN FAVOUR OF THE ASSESSEE. THE PARTIES WILL BEAR THEIR OWN COSTS. A COPY OF THIS JUDGMENT WILL BE FORWARDED TO THE INCOME-TAX APPELLATE TRIBU NAL AS REQUIRED BY SECTION 66(5) OF THE ACT. 9. FROM THE ABOVE CASE LAW OF HONBLE KERALA HIGH C OURT IN THE CASE OF K. S. KANNAN KUNHI (SUPRA), IT IS CLEAR THAT IT IS NOT THE LAW T HAT, WHEN ONCE THE EXPLANATION IS REJECTED, IT AUTOMATICALLY FOLLOWS THAT THE RECEIPTS ARE INCOME. WHETHER AN EXPLANATION IS ACCEPTABLE, AND IF NOT, WHETHER IT SHOULD BE INFERRED THAT THE RECEIPTS CONSTITUTE INCOME, ARE DIFFERENT ASPECTS OF THE SAME QUESTION. BOTH THESE ASPECTS A RE INTER-RELATED, AND THE QUESTION WHETHER SUCH RECEIPTS CONSTITUTE INCOME OR NOT HAS TO BE DE CIDED ON A CONSIDERATION OF ALL THE RELEVANT FACTS AND CIRCUMSTANCES OF THE CASE. IT I S QUITE LEGITIMATE IN THE CASE OF AN ASSESSEE WHO IS KNOWN TO BE CARRYING ON SEVERAL ACTIVITIES O F AN INCOME-EARNING CHARACTER OR WHO CAN REASONABLY BE FOUND TO BE INVOLVED IN SUCH ACTI VITIES, TO DRAW THE INFERENCE THAT THE AMOUNTS FOUND WITH HIM CONSTITUTE INCOME FROM UNDIS CLOSED SOURCES, IN THE ABSENCE OF SATISFACTORY EXPLANATION REGARDING THEIR SOURCE. S UCH AN INFERENCE SHOULD NOT BE READILY MADE IN THE CASE OF A PERSON, WHO HAS NO KNOWN BUSI NESS OR OTHER SOURCE OF INCOME, OR WHO CANNOT EVEN BE REASONABLY SUSPECTED AS ENGAGED IN A NY INCOME-EARNING ACTIVITIES. IN THE LATTER CASE, THERE MUST BE MORE SUBSTANTIAL REASONS TO REJECT THE ASSESSEES EXPLANATION, AND DRAW THE INFERENCE THAT THE AMOUNTS FOUND WITH HIM CONSTITUTED INCOME. HONBLE SUPREME 12 ITA NO. 1927-1928/K/2010 USHA TIBREWAL., AY:2006-07&2007-08 COURT ALSO OBSERVED THAT THE DEPARTMENTAL AUTHORITI ES AND THE TRIBUNAL HAD NOT EXAMINED THE MERITS OF THE ASSESSEES CASE AND HAD ARBITRARILY R EJECTED THE EXPLANATION GIVEN BY IT. NOW, IN THE PRESENT CASE, THE ASSESSEE HAS PRODUCE D ALL THE EVIDENCES AND WHICH HAVE ARBITRARILY BEEN REJECTED BY THE LOWER AUTHORI TIES. IT IS ALSO A FACT THAT ASSESSEE WAS NEVER THE OWNER OF GOLD AND DIAMOND JEWELLERY INSTE AD HER MOTHER HAS HANDED OVER THE POSSESSION OF JEWELLERY FOR DOING CHARITY OUT OF TH E SALE PROCEEDS OF THE SAME AND ASSESSEE ACTED ACCORDINGLY, AS CAN BE GATHERED FROM THE ABOV E FACTS AND CIRCUMSTANCES. THE ASSESSEE BEING ONLY A FACILITATOR FOR DOING CHARITY ON BEHAL F OF HER LATE MOTHER, THE DEPOSITS MADE IN ONE BANK ACCOUNT ON ACCOUNT OF SALE OF JEWELLERY CA NNOT BE ASSESSED AS INCOME OF THE ASSESSEE. HENCE, WE REVERSE THE ORDERS OF THE LOWE R AUTHORITIES AND DELETE THE ADDITION. 10. IN THE RESULT, APPEALS OF ASSESSEE ARE ALLOWED . 11. ORDER IS PRONOUNCED IN THE OPEN COURT ON 21 ST NOVEMBER, 2013 . SD/- SD/- . . . . ' '' ''# '#'# '# , $% , (ABRAHAM P. GEORGE) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 21ST NOVEMBER, 2013 12 '3' 4 JD.(SR.P.S.) $0 5 . 6$ )7- COPY OF THE ORDER FORWARDED TO: 1 . ,- / APPELLANT SMT. USHA TIBREWAL, 14/1, HNDUSTHAN ROA D, KOLKATA-700 029 2 ./,- / RESPONDENT ITO, WARD-30(4), KOLKATA. 3 . 0' ( )/ THE CIT(A), KOLKATA 4. 5. 0' / CIT KOLKATA. <= .' / DR, KOLKATA BENCHES, KOLKATA / ./ TRUE COPY, $0'>/ BY ORDER, ' /ASSTT. REGISTRAR .