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TMI Blog2023 (7) TMI 1502X X X X Extracts X X X X X X X X Extracts X X X X ..... 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); Peter Vaz (2021)128 taxmann.com 180 (Bom); Ingram Micro (I) Exports (P) Ltd (2015 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld 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 source of gold bullion of 2.5 kg valued at Rs. 80,99,676/-, he did not say a single word ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Notary Public has answered that the impugned Will document was presented before him on 04.11.2013 by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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 afterthought and, thus, discarded by the AO and has made addition u/s. 69B of the Act. On perusal of the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 course of assessment proceedings in- order to verify the genuineness of the 'will' issued summons u/s!31 to Shri Ramesh Kumar Sharma s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 of Shri Ram Bharosey Lal Yadav. 4.1. The 'Will' contained various beneficiaries including the assesses's husband, her brothers and house-hold servants. The oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 additions deserve to be deleted. 9. Ld counsel in rejoinder contends that: i) The 'Will' is an independent evidence which is confirmed by as many cis 7 persons viz., Yashpalsingh, Rameshchandra, Nawahsingh Yadav-ex principal. Suresh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sets 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 Rajender Kumar (1995) 53 ITD 130 (Del-Trib) dt. 17-2-95, stating as under: "3. In respect of addition of Rs. 1,08,000 and of silver coins (valued at Rs. 1,58,373) and silver ornaments and utensils (value Rs. 3,73,601), the Id CIT(A) accepted the case of the assessee that above articles belonged to different persons and were bequeathed by Smt. Magan Devi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 are factually wrong. The AO was fully justified in insisting on production of the original will as signatures of the testator for comparison were available only on the original. The contents of the Will further suggested that the testator was fully aware of registration. Yet the. alleged Will was not registered. He further submitted that Will was an important and precious document usually kept in safe custody. But. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll 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 to file certain information by 24-12-86. As search operation was going on and as officers were busy with other important matters, the detailed information was filed on 29-12-86 wherein existence and contents of Will were explained. The father of the assessee not being a legatee under the Will did not keep the Will under safe custody. " 11. We have given careful thought to the rival submissions of the parties. The que of existence and legal execution of a Will propounded by a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtant 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 on his death, Smt. Magan Devi received large quantity of ornaments and silver coins as legal heir of her father. The claim was supported by filing affidavits of assessee and his brother. The AO rejected the entire claim. He observed that Smt. Magan Devi was not shown to he assessed under the IT or the WT. In our considered opinion. AO's approach was not correct. All perse JUS assessable under the IT and WT are not filing their correct returns and therefore, there is no presumption that a person who has not filed a return does not possess an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 existence of articles mentioned in the Will. In support of the notarised document, the assessee produced certificate from Mohd. Iliyas, Notary Public, which is available at page 117 of the PB. According to aforesaid certificate, Shri Mohd.Illyas, Adv, Saharanjnir confirmed that he attested the photostat copy of original Will of Smt. Magpin Devi, which was compared by Shri Rakesh Gupta on 3-6-81. The aforesaid certificate of Notary Public has evidentiary value and cannot be rejected without good ground. In the present case, the AO did not examine Shri Mohd. Ulyas or made tiny adverse comment to refute the claim in the certi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 considered the facts of the case and has offered a very reasonable finding against the observations of the AO. We, therefore, do not see any reason to interfere with the findings of the ld. CIT(A) in deleting the addition made by the AO. Thus, we dismiss the appeal of the revenue. 15. Initially the assessee in its cross objection has supported the order of the ld. CIT(A) and subsequently, the assessee has filed an application under Rule 27 of the Act for raising the legal ground. In respect of supporting to the order of the ld. CIT(A), since we have upheld the findings of the ld. CIT(A) in deleting the addition made by the AO u/s.69B of the Act by dismissing the appeal of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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