High Court Of Rajasthan
Smt. Huma Hussain vs. CIT & Anr.
Section 69
Asst. Years 1993-94, 1995-96
Rajesh Balia & R.P. Vyas, JJ.
IT Appeal Nos. 81 & 83 of 2002
10th November, 2005
Counsel Appeared
Arun Bhansali, for the Assessee : K.K. Bissa, for the Revenue
JUDGMENT
By the court :
These two appeals are directed against the order of Tribunal dt. 11th June, 2002 in the case of appellant for asst. yrs. 1993-94 and 1995-96.
2. Appeal No. 83 of 2000 relates to the asst. yr. 1993-94 and appeal No. 81 of 2000 relates to the asst. yr. 1995-96. In these two appeals, following substantial questions have been framed respectively :
Appeal No. 83 of 2002
“Whether, in the facts and circumstances, the addition of Rs. 1,76,400 in the assessment of assessee claimed to have been received from her father over a number of years and supported by materials placed by her on protective basis is not sustainable by rejecting such claim on conjectures and surmises without holding any enquiry into correctness of such materials.”
Appeal No. 81 of 2002
(i) Whether, in the facts and circumstances of the case, rejection of assessee’s claim to having received gift of Rs. 20,000 from her father, who is a Lecturer, during the previous year relevant to assessment year is founded on conjectures and surmises without making any effort to verify the correctness of the material placed before the AO ?
(ii) Whether, in the facts and circumstances, the addition of Rs. 27,572 on account of value of 78.16 gms. of gold as income from undisclosed sources is founded on any material ?
(iii) Whether assessment made against the assessee by making addition of Rs. 47,512 on protective basis is sustainable at all in law ?”
3. As it appears from the tenor of questions framed that they primarily related to the consideration whether the finding recorded by the Tribunal affirming the finding recorded by the lower authorities is founded on any material and has not been vitiated on any account so as to lose its binding character, which primarily relates to making of protective assessment in the hands of assessee and not on substantive basis.
4. The circumstances in which these appeals have arisen are that a search and seizure operation under s. 132(1) of the IT Act, 1961 was carried on at the residential premises of Sh. Hafij Mohd., father-in-law of the assessee on 28th Sept., 1994. As a result of aforesaid search and seizure, a notice under s. 148 of the IT Act for asst. yrs. 1993-94 to 1996-97 were issued in the case of assessee and the cases were taken up under scrutiny. In response thereto, returns were submitted by the assessee on 26th Dec., 1997 for the asst. yr. 1993-94. The assessee declared of Rs. 21,000 as income from interest which was below taxable limit. For the asst. yr. 1995-96, she submitted return for a sum of Rs. 30,000 which was also below taxable limit.
5. For the asst. yr. 1993-94, she has claimed certain investment as opening capital balance and source of said investments were shown to be marriage gifts received during the year ending 31st March, 1990 and subsequent gifts from her parents from time to time every year on marriage anniversary. Though details had not been furnished about the interest received from different persons, the assessee filed a declaration dt. 29th Feb., 2000 from Sh. W.A. Siddiqui regarding giving of gifts to his daughter Smt. Huma Hussain.
6. The assessment orders were passed in both the cases on 29th Feb., 2001 by discarding the declaration of Siddiqui by mentioning that address of Sh. Siddiqui is not mentioned. Sh. Siddiqui is employed at Ajmer, but the affidavit has been sworn at Bhilwara from where the assessee belongs and in absence of production of bank passbook, accounts, accounts of the donor, the declaration of Sh. W.A. Siddiqui was discarded. The learned AO also held that in the absence of evidence of initial capital and evidence regarding marriage gifts received during the year ending 31st March, 1990 and gift from father right from 11th Feb., 1990 appear to be made-up story.
7. The aforesaid orders have been affirmed by the CIT(A) vide order dt. 13th Oct., 2000 and on further appeals, the Tribunal dismissed the appeal of the assessee’s husband as well as assessee herself.
8. Sh. Zakir Hussain had preferred appeals against the aforesaid order challenging the subsequent assessment made in his case bearing ITA No. 82/2002 and 84/2002. The aforesaid two appeals have been decided by a separate order on 7th Nov., 2005 [reported as Zakir Hussain vs. CIT & Anr. (2006) 202 CTR (Raj) 40—Ed]. In the case of Zakir Hussain, it has been held that there is no material to link the investment found to be made in the name of Smt. Huma Hussain as investment from undisclosed sources of Sh. Zakir Hussain and said appeals have been allowed.
9. So far as nature of assessment in the hands of present assessee is concerned, the same has to be considered as substantive and not protective.
10. Be that as it may, from the material facts noticed by us, it is clear that affidavit of father of the petitioner has been rejected on the very day it was presented by passing the assessment order without affording any opportunity of hearing to the assessee or by calling upon the deponent to clarify the deficiency in affidavit if any and to ask for any corroborating material of the statement of said Mr. W.A. Siddiqui. The existence of petitioner’s father as genuine person is not in dispute. That he is employed as lecturer in Ajmer is also not in dispute. The fact that the assessee is married and staying at her matrimonial home at Bhilwara, is also not in dispute. Under these circumstances making of declaration at Bhilwara, where the daughter is residing, by itself cannot be a ground of suspecting about the veracity of declaration on the ground of place where it has been sworn in. Non-mentioning of address of a genuinely existing person in his declaration, which is being presented by the daughter of said person also cannot be a ground by itself for rejecting the truthfulness of the declaration without giving an opportunity to explain any aspect of affidavit which in the opinion of AO may be lacking in any manner. In absence of giving any opportunity to explain the reasons for not accepting the affidavit submitted by the assessee when genuineness of the person making such declaration and disclosing source of investment to the AO, its rejection cannot be sustained particularly keeping in view that declaration has been discarded on the very date it was produced without giving an opportunity of hearing to the assessee or deponent. In the aforesaid circumstances, the findings recorded by the authorities below about the unsatisfactory nature of explanation submitted by the assessee about the source from which investment has been made cannot be sustained as it vitiated the findings of fact and loses its binding character.
11. In the aforesaid circumstances, the appeals deserve to be allowed and the orders passed by the learned authorities below are set aside. However, it is a fit case to direct the AO to hold a proper enquiry into the source of investment claimed to have been made by the assessee in accordance with law by giving her proper opportunity for substantiating her explanation and make a fresh assessment order in the case of assessee in accordance with law. No order as to costs.
[Citation : 291 ITR 475]
