TaxTMI 
TaxTMI 
2023 (7) TMI 1502
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....of hearing of appeal. 3. Further, vide letter dated 12.04.2023, ld. AR has filed an application under Rule 27 of the ITAT Rules, 1963 for raising the legal issue/ground, which reads as under :- Gr.No.l: "1. On the facts and circumstances of the case and in law, search assessment made u/s 143(3) rws.153A is invalid, since approval granted u/s.153D is in mechanical & routine manner without application of mind by Addl.CIT in a hasty manner, merely a formality, an empty ritual; in absence of a valid approval as mandated by law u/s. 153D as per sec.153B(1)(b), search assessment made u/s.143(3) rws!53A be treated as invalid and is liable to be quashed." It was submitted by the ld.AR that the above Gr.No.l raised which is legal in nature raised before Your Honors first time which goes to root of the matter; and the respondent-assessee is entitled to urge legal issue by way of application under Rule-27 of the IT AT Rules, 1963 on the basis of facts already available on record which though not arose before Id AO & Id CIT(A) which has direct bearing on tax liability of the respondent- assessee; relied on Sanjay Sawhney (2020) 316 CTR 392 (Del HC); NTPC Ltd (1999) (SC)....
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....er of the assessee. It is stated that Smt. Devki Devi Agrawal had transferred 2.5 kg gold bullion to the assessee Shri Gaurav Agrawal which was kept in the said locker. It was the observation of the ld. AO that during the course of search as per the statement of Shri Gaurav Kumar Agrawal dated 15.12.2018, no such fact regarding the will was revealed by the assessee, therefore, as per the ld. AO the contention of the assessee producing a copy of Will was considered as an afterthought to hide the actual facts to mislead the assessment so as to arrive at less tax liability. The ld. AO also observed that the source of gold bullion in the hands of Smt. Devki Devi Agrawal is also not verifiable has no evidence on filing of IT return or wealth tax return of Smt. Devki Devi Agrawal were submitted by the assessee along with copy of will submitted. Also, no supporting evidence like purchase bill etc. could have been provided by the assessee in support of purchase of such bullion by the erstwhile owner late Smt. Devki Devi Agrawal. Ld.AO further observed that during the proceedings while statements of the assessee were recorded on 15.12.2018 and when he was asked specifically to explain the s....
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.... the addition made by the ld. AO should be restored. 11. In response, ld. AR submitted that the gold bullion of 2.5 kg found in the locker of the assessee was explained while the assessment proceedings undergoing, the assessee has established with the support of the document that there was a Will executed by the grandmother of the assessee late Smt. Devki Devi Agrawal way back on 04.11.2013 i.e a date much prior to date of search or the dated of operating of the locker. The Will executed by the assessee's grandmother was on proper stamp duly notarized and has a mention about the distribution of jewellery and gold bullion along with many other belongings of her. Copy of the Will was placed before us at page 45 to 48 of the assessee's paper book. The same is extracted as under :- 12. In order to verify the authenticity of the Will, ld.AO has recorded the statement of the Notary Public Mr. Ramesh Kumar Sharma, who has endorsed the document of Will by affixing his stamp on all the pages of impugned Will. Ld.AR drew our attention at page 52 & 53 of the assessee's paper book where the copy of the statement of Notary Public was furnished, relevant question No.5 was read wherein the ....
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....132 of the Act on 15.12.2018. However, when the assessment proceedings after the search were in process, assessee's counsel has explained the issue before the ld. AO by submitting that the impugned piece of bullion was received by the assessee along with three other beneficiaries who are also grandsons of the assessee's grandmother as per the will of assessee's grandmother late Smt. Devki Devi Agrawal. The relevant documents i.e. copy of Will was furnished before the ld. AO and submitted that the said will could not be produced before the authorities present at the time of seizure, therefore, the same is now submitted for perusal and consideration. The explanation of the assessee was not accepted by the ld. AO observing that copy of Will or any information regarding such Will was not furnished by the assessee while statements were recorded on 15.12.2018 u/s. 132 of the Act. The assessee has failed to substantiate that the gold bullion was belonged to late Smt. Devki Devi Agrawal in absence of her IT Return, wealth tax returns and purchase bills showing existence of such bullion under the ownership of Smt. Devki Devi Agrawal. The contention of the assessee was treated as afterthough....
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...., and it was received as gifts on various occasions, functions like marriages etc.; some jewelleries has been inherited from forefathers (i.e., "Purvajon se prap thui hai") which has been kept as 'Stree Dhan' and some jewellery has been purchased from personal savings etc. Further, on being asked about gold bullion found of 2,499. 90 grams he showed his inability to say anything on the matter. The appellant soon after completion of search submitted a letter dated 21.12.2018 before the ADIT(Inv.)-II, Raipur and requested to release the alleged gold bullion saying that it was received as per the 'will' dt.4-1 1- 13 from his grand-mother who expired on 22-11-2013 at the age of 80 years and the alleged gold bullion of 2.50 kgs was belonging to the assessee and his cousins as per the share/ ratio mentioned in the alleged 'will' dt. 04-11-2013. The appellant before the ADIT(Inv.)-Il, Raipur, has given bifurcation of gold bullion as per will and explained that 830 grams belongs to Shri Gaurav Kumar Agrawal, 830 grams belongs to Shri Saurabh Agrawal-cousin, 420 grams belongs to Shri Aman Agrawal- cousin & 420 grams belongs to Shri Subham Agrawal-cousin. 4.1.2 The AO during the cou....
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....thought. The relevant findings of the Hon'ble ITAT are as under:- "4. Ld counsel contends that the AO has made the additions in respect of the amount received by the assessee out of the 'Will' of her deceased father in law on presumptions and surmises. To verify the 'Will' and its contents and agri-holdings, detailed inquiries were made by ADIT, Agra whose report is also placed on the PB. AO has merely relied on some doubts raised by ADIT, Agra on the genuineness of the 'Will', ignoring the uncontroverted statements on oath of witnesses, beneficiaries and other persons. The 'Will ' has been discarded on the basis of surmises, conjectures and presumptive preponderances of probabilities. It is signed by witnesses who are duly identified and both witnesses i.e., Nawab Singh Yadav (Ex Principal) and Suresh Yadav (Adv) are examined on oath by the AO. In their statements on oath they have confirmed the execution of 'Will', relevant circumstances and aspects of implementation The statements and the report submitted by ADIT, Agra state the fact that these 2 witnesses verified the 'Will' in que which was signed in their presence as the last and final will....
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....sible or liable for non filing of IT and WT returns of late Shri Rambharosey or his daughters. Besides this cannot invalidate a valid and duly executed will. v. Adverse inference has been drawn from the fact that Shri Ram bharosey constructed a 3 storied kothi in the village without any bank loan in 1981. It corroborates the contention that in villages prosperous families generally don't transact with banks. In villages unlike cities, houses are constructed in simple/ country style under self supervision. Thus, adverse inference can not be drawn that his funds were exhausted; it is a pure surmise on the part of AO. 4.5. It is vehemently argued that CIT(A) has relied on probabilities and assumptions by terming the 'Will' as "an over manipulated evidence ". The evidence relied by assessee is to be controverted on the basis of cogent counter evidence or picking contradictions in the evidence furnished. The same cannot be discredited without pointing any contradiction and on mere presumptions. Such observations and references to probabilities based on presumption cannot discard the credible evidence filed by the assessee. It is pleaded that these addition....
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....eneficiaries of the 'Will '. In our view, this written record and statements cannot be ignored without pointing out any contradictions or inconsistencies therein. 9.5. The assessee cannot be held responsible for the non-filing of IT and IV T returns by the deceased and his daughters after the distribution of the assets of the deceased, consequently, no adverse inference can be drawn on this count. The fact that late Shri Ram Bharosey Lal Yadav constructed a 3 storeyed village house in 1981 cannot be held as assumption that he must have exhausted all the savings even after a period of 12 years in 1993. 9.6. In our considered opinion, on the basis of material existing on record it cannot be held that 'Will ' was fake or an afterthought. AO's adverse inference is not based on any cogent evidence but on assumptions and probabilities. In our considered view when the direct evidence is available, the issue cannot be decided on assumption without contradicting the statements on record. Consequently the additions in respect of the amount arising out of the 'Will' are deleted. " Similar view was taken by Hon'ble ITAT in the case of Ra....
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....as concealed income ". 5. The assessee impugned the above assessment in appeal before CIT(A). 7. The other addition made on account of silver coins (Rs. 1,58,000) and of silver ornaments and utensils (Rs. 3,73,601) was deleted and it was held by the CIT(A) that these articles were acquired by different members of assessee's family as per the 'Will' of Smt.Magan Devi. The Id DR vehemently contested the finding of CIT(A) relating to acceptance of the Will. He drew our attention to the statement u/s 132(4) of the assessee, Poonam Mittal and Shyam Kumari and pointed out that no reference to the alleged Will was made in their statements. Only in proceedings u/s 132(5), the 'Will' was set up for the first time. The alleged original Will was never produced and only a copy notarised by a Notary Public was produced. The assessee did not demonstrate as to how notarised copy was obtained. Existence of original Will was not shown. Even Notary Public in his certificate did not refer to original Will but only to its copy. He, therefore, submitted that observations of CIT(A) in para 5 of the impugned order where it is stated that original Will was seen by Notary Public ....
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....Mohan Lal who was closely related to the testator and assessee, witnessed to her Will. 2. Affidavit of Shri Magan Lal who had scribed the Will at the instance of the testator. The assessee requested that Shri Magan Lal be summoned f or examination. 3. Affidavits of the assessee, his brothers Ashok Kumar and Surendra Kumar and their wives were filed and their statements on oath recorded. All the aforesaid persons deposed about the existence of Will and disclosed articles received by them under the Will. The affidavits and statements in this case cannot be held to be self serving as these are fully corroborated by other independent and contemporaneous evidence on record. The affidavits and statements have not been contested by the Revenue. 4. That notarised copy of Will was found and seized on 25-12- 86 from a bank locker which were put under restrain wef. 4-12-86. 5. It is wrong to suggest that evidence regarding existence of Will was not given at the first instance. The raid was started on 4- 12-86 and continued for several days. This would be clear from notices issued u/s 112A rws. 132(5) on 10-12-86 to the assessee. and his brother asking them ....
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....ll is mostly relied upon as a contemporaneous document to explain source of acquisition of certain assets. Therefore, the more important question is always the source of acquisition of disputed assets, which is sought to be explained and not valid execution of the Will. For example, in this case even if it is accepted that late Smt. Magan Devi did execute a valid Will but had no source to acquire or possess silver ornaments claimed to have been bequeathed by her, the case of the assessee would not be advanced. Therefore, the important question is the capacity or source of acquisition of articles rather than legal and valid execution of Will. As regards capacity of Smt. Magan Devi, the assessee had stated that Smt. Magan Devi in her life time was partner of M/s. Bishan Day al Makhan Lal, Lashkar. The said firm was carrying on sarrafa business and were assessed to tax. She is also claimed to be the only daughter of her parents. It is further claimed that at the time of her marriage, much before the partition, she received jewellery and silver coins which at the relevant time were less than Rs. 10,000 in value. The father of Smt. Magan Devi, died in the year 1957 and....
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....es in question were in existence even in the earlier years. This submissions has got 2 aspects. First is that if we apply the test of human mind and probabilities as have been propounded by Durga Prasad More (SC), nobody would have taken care to keep these papers in locker had they, been mere stray piece of papers having no evidential value. Secondly, the event of acquisition of the valuables stand shifted to the FY83-84 (relevant to the AY84-85) and the FY85-86 (relevant to the AY86-87). Therefore, no addition could be made in the AY under appeal which is the AY87-88." The CIT(A) further held that the Will was notarised on 3-6-81 and was therefore, in existence in FY81-82. The addition for any unexplained silver coins and silver articles could be made in the AY82-83 and not in 87-88. \We are inclined to subscribe to the aforesaid view taken by Id C1T(A). The seizer of the document from locker is not in dispute. It is further not in dispute that notarised copy available is a tailor nr a de document with complete and full description of silver articles found. The aforesaid document had only single purpose to serve, that is, to explain the....
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....he date of search and assessment proceedings, the same was further substantiated as a genuine document when the statement of Notary Public was recorded and the Notary Public had also put an affirmative stamp on the claim of the assessee with regard to aforesaid documents by confirming authenticity of the same. The observations of the ld. AO that certain other external documents like income tax return, wealth tax return pertaining to late Smt. Devki Devi Agrawal, who had executed the Will could not be made available by the assessee, without establishing the document of Will as an ingenuine document, is devoid of merits, therefore, the same cannot be accepted. Ld. AO while rejecting the explanation of the assessee could not bring upon any finding or material that can dislodge the contention of the assessee, in such circumstances, the evidence produced in the form of certain documents by the assessee, cannot be considered as an afterthought only because while the statement u/s. 132 of the Act during the search proceedings recorded the assessee was unable to come up with a spontaneous explanation for the same. We, therefore, are of the view that the ld. CIT(A) has very thoughtfully con....
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