TaxTMI 
TaxTMI 
2006 (6) TMI 87
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.... on the Revenue. The assessee is an individual and carries on business as the proprietrix of M/s. Padmaja Jewellers. A search was conducted in the business premises of the assessee on January 23, 1992. During the search operations it was found that the assessee was in possession of unaccounted stock of gold weighing 502.330 gms in the form of 77 numbers of new gold bangles. At the time of search on January 23, 1992 one Govindraj, the brother of the assessee's husband was present in the assessee's jewellery shop. A statement was recorded from him. He stated that he was engaged in the work of making gold ornaments, particularly bangles and that G.S. 12 register was kept for such work and that his brother Devarajan, the assessee's husband, ....
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....handrasekharan Pillai 150.200 gms. The assessing authority noticed that the statement filed by the assessee was contrary to the sworn statement recorded from Govindrajan during the course of search. Govindrajan had clearly stated that about 450 gms. of gold ornaments were brought by Raju, partner of M/s. Karthika Jewellery on the morning of the previous day and that the ornaments were received by his brother Devarajan. The assessing authority did not believe the statement of the assessee that the gold ornaments were entrusted by the five customers mentioned hereinbefore. The assessing authority therefore concluded that the five claimants joined the fray just to help the assessee. It was therefore concluded that the gold ornaments weig....
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....ew that there is no reason to disturb the order of the first appellate authority. The reason is, as rightly pointed out by the first appellate authority, the persons who came forward with the claim that they had entrusted gold with the assessee, are persons of means. Therefore, there is no reason why their statements should be discarded or disbelieved. It is not brought on record to show that the claim of the assessee that the machinery installed at her jewellery shop could produce or convert gold into 100 bangles per day was incorrect. No attempt has been made to discredit the above statement. It is true that there are inconsistencies in the statements of the assessee. The deponents say that they had entrusted gold as directed by Sri Raju.....
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....rson in charge of the jewellery, and it is only to wriggle out of the sworn statement made during the period of search that the letters of the five customers were subsequently obtained to show the source from where gold ornaments were obtained. Counsel placed reliance on the decision of the apex court in Chuharmal v. CIT [1988] 172 ITR 250 and submitted that since possession of the gold ornaments with the assessee has been established, the onus of proving that those gold ornaments do not belong to the assessee is on the assessee. Counsel submitted that the burden of proof was wrongly placed on the Revenue and it amounts to a substantial question of law. Counsel made reference to the decision of the apex court in Parimisetti Seetharamamma v.....
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....the five customers and consequently there is no reason to discard their evidence. In any view of the matter, counsel submitted that no substantial question of law arises for consideration in this appeal and consequently, this court shall not disturb the findings of fact rendered by the authorities below. Counsel made a reference to a recent decision of the apex court in [2005] 2 SCC 550. We are of the view that this is a case where the Commissioner of Income-tax (Appeals) as well as the Tribunal wrongly placed the burden of proof on the Revenue. It is trite law that a person who is in possession of an article has to prove its source. The Tribunal in its order though found inconsistency in the statement of the assessee concluded that ther....
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....nd answers reads as follows: The sworn statement given by Govindarajan would show that the gold ornaments were brought to the shop by Raju, partner of Karthika Jewellery on the morning of the previous day, i.e, January 22, 1992, and the gold ornaments were received by his brother Devarajan who had handed it over for preparing new ornaments. It is evident from the sworn statement that the gold ornaments given by Raju on the previous day were yet to be converted into new bangles. But what was seized from the premises of the assessee on January 23, 1992, were 77 newly made bangles. There is overwhelming evidence to show that the new gold ornaments by way of 11 bangles found at the time of search at the shop Padmaja Jewellery were not accoun....