Allahabad H.C : If statement of ownership of gold busicuit was not recorded as not belonging to person searched, mere affidavit can not establish it belonged to others ?

High Court Of Allahabad

Dharmendra Kumar Varshney VS. CIT

Assessment Year : 2006-07

Section : 68

Sunil Ambwani And Surya Prakash Kesarwani, Jj.

It Appeal No. 350 Of 2013

December 9, 2013

JUDGMENT

1. We have heard Shri Rahul Agarwal, learned counsel appearing for the assessee-appellant. Shri Ashok Kumar appears for the Income-tax Department.

2. This income-tax appeal filed under section 260A of the Income-tax Act, 1961, arises from an order of the Income-tax Appellate Tribunal, Agra Bench, Agra, dated March 26, 2013, for the assessment year 2006-07.

3. The appeal has been preferred the following substantial questions of law:

“(a) Whether the Tribunal below was legally correct in affirming the rejection of the affidavit filed by Sri Ashok Kumar Varshney under rule 46A of the Income-tax Rules, 1961 ?

(b) Whether, in the facts and in the circumstances of the case, the order of the Tribunal below, confirming the addition of Rs. 2,89,693 on account of two gold biscuits in the hands of the appellant is sustainable in law and is liable to be set aside ?”

4. We have examined the orders of the Assessing Officer, the Commissioner of Income-tax (Appeals) and the Income-tax Appellate Tribunal and find that all the three authorities have not accepted the explanation of the assessee-appellant that two gold biscuits, which were recovered from the locker of the assessee, did not belong to him. The findings recorded by the Tribunal are quoted as below :

“6. Learned Departmental representative, on the other hand, relied upon the order of the Commissioner of Income-tax (Appeals) and submitted that the assessee has failed to furnish any evidence that the so-called loose paper dated December 14, 2002, was in fact pertaining to the gold biscuits found in the locker of the assessee. The learned Departmental representative submitted that some cash was found in the locker of the assessee. Shri Ashok Kumar Varshney submitted in his statement that the cash to the extent of Rs. 5,00,000 belonged to him. But at that time he did not say that the two gold biscuits also belonged to him.

7. We have heard the learned representatives of the parties and records perused. The assessee has taken inconsistency approach in his submission regarding two gold biscuits found in the locker of the assessee. In the explanation furnished before the Assessing Officer, it was submitted that the gold ornaments and gold biscuits belonged to sister, Rekha Varshney. Shri Ashok Varshney never admitted that the said two gold biscuits belonged to him. When Shri Ashok Varshney, brother of the assessee, in his statement pointed out that cash of Rs. 5,00,000 found in the locker of the assessee belonged to him, he did not point out that these two gold biscuits also belonged to him. The Commissioner of Income-tax (Appeals) recorded the fact that if these gold biscuits belonged to Shri Ashok Kumar Varshney, why it was kept in the locker belonging to the assessee. Even during the course of search and seizure operation, these gold biscuits were not owned up by Shri Ashok Kumar Varshney at the time of recording his statement while making declaration/surrender of undisclosed income.

8. It appears from the facts that coincidentally some of the item of jewellery found in loose paper dated December 14, 2002, for which the addition in the hands of the assessee’s brother was made. The assessee has tried to get the benefit of that addition in his hand with out sufficient evidence. We, therefore, find that the Commissioner of Income-tax (Appeals) has rightly confirmed the addition of Rs. 2,89,693 on account of two gold biscuits found from the locker of the assessee.

9. The Commissioner of Income-tax (Appeals) has noted that the explanations of the assessee is nothing but after thought and the same is being justified in the appeal proceeding by filing an affidavit of Ashok Kumar Varshaney which was not filed during the course of the appellate proceeding for which no reasonable explanation could be given by the assessee justifying as to how the assessee was pre vented by sufficient cause from producing this affidavit before the Assessing Officer. The learned authorised representative contended that the Commissioner of Income-tax (Appeals) has wrongly not admitted the affidavit filed by Shri Ashok Kumar Varshney. He relied upon the judgment of the hon’ble Allahabad High Court in the cases of Smt. Mohindar Kaur v. Central Government [1976] 104 ITR 120 (All.) and the order of Income-tax Appellate Tribunal, Delhi Bench in the case of ITO v. Jitender Mehra [1995] 53 ITD 396 (Delhi). The judgment of the hon’ble Allahabad High Court and the order of Income-tax Appellate Tribunal both do not help to the assessee as the facts of that cases are different than the facts of the case under consideration The Commissioner of Income-tax (Appeals) did not accept the said affidavit as rule 46A(1) clearly provides the condition that the appellant was to show that he was prevented by sufficient cause from producing evidence before the Assessing Officer. In the case under consideration, the assessee has failed to give any sufficient cause for not producing the same before the Assessing Officer, therefore, we find that the Commissioner of Income-tax (Appeals) has rightly rejected the contention of the assessee.”

5. Shri Rahul Agarwal, appearing for the assessee-appellant, submits that the same amount has been added to the income of the assessee’s brother, Shri Ashok Kumar Varshaney, and thus the assessee’s explanation should have been considered. He further submits that in the explanation before the Assessing Officer it was clearly stated that the gold weighing 363.35 gms. valued at Rs. 2,89,693 found from locker No. 27A (S. Nos. 5 and 6 of the valuation report) was kept for the sister, Rekha Varshney, and deemed belonging to her and, therefore, instantly in the statement it was stated to belong to the sister, Rekha Varshney. He then explained the source of investment in gold (ticket) at serial No. 5 gold. He also tried to explain the investment in annexure A-4 page 42, which was recovered from the respondent that it relates to Shri Ashok Kumar Varshney and is out of income, which has been declared in the statement under section 132(4) and included in the income shown in his return The investment in gold cannot be treated as unexplained investment and as such there is no question of adding it at the prevalent rate of gold on the date of search It was also stated in his explanation dated November 24, 2007, that if any further information is required or the evidence does not satisfy the assessee may be informed so that he may furnish such evidence.

6. We find that the explanation of the appellant was considered by all the authorities and they clearly held that the two gold biscuits recovered from the locker of the assessee were not owned by Shri Ashok Kumar Varshney at the time of recording his statement while making declaration/surrender of undisclosed income. So far as the slip A-4 is concerned, the income-tax authorities recorded findings that the assessee has tried to get the benefit of that addition in his hands without sufficient evidence. The details recorded in the slip A-4 were the investment and not the actual quantity of gold, which was recovered from the locker of the assessee.

7. We are of the view that the findings recorded by the income-tax authorities are findings of fact on which no question of law as formulated in the grounds of appeal arise for consideration in this appeal.

8. The income-tax appeal is dismissed.

[Citation : 360 ITR 563]