Commissioner of Income Tax vs Diptiben P. Patel

Sonia Gokani, J.—Challenging the order of the income tax Appellate Tribunal dated May 24, 2013, the present tax appeal is preferred raising the following substantial questions of law for our consideration:

A. Whether, on the facts and in law, the income tax Appellate Tribunal is justified in holding the will to be genuine more so when the assessee had failed to discharge its burden of proving the genuineness of the will?

B. Whether, on the facts and in the circumstances of the case, the income tax Appellate Tribunal is justified in deleting the addition of Rs. 35,21,000 made on account of unexplained investment in jewellery?

C. Whether, on the facts and in the circumstances of the case, the income tax Appellate Tribunal is justified in not treating Rs. 10,00,000 out of the entire amount of Rs. 18,00,000 as unexplained income?

We have heard learned counsel, Mr. Sudhir Mehta, for the Revenue.

The assessee for the year 2006-07 had declared the total income of Rs. 9.55 lakhs (rounded off). On scrutiny assessment, certain additions were made by the Assessing Officer. It was challenged before the Commissioner of income tax (Appeals), who partly allowed the appeal of the assessee and deleted the addition of Rs. 35.21 lakhs (rounded off) added on account of jewellery and also the addition of Rs. 18 lakhs as unexplained income.

This was when challenged before the Tribunal, it concurred with the findings of the Commissioner of income tax (Appeals), however, partly allowed the appeal to the extent of Rs. 8 lakhs out of Rs. 18 lakhs added as unexplained income. Therefore, the present appeal raising the aforementioned questions of law.

Since the issues are interconnected, they have been decided together. We notice that the assessee is running a maternity hospital being a gynecologist. According to her, she received a sum of Rs. 53.21 lakhs by way of will of her father, out of which Rs. 35.21 lakhs was by way of ornaments and the remaining amount by way of cash. The report of the valuer was also furnished and a copy of the will was submitted as well. Her father was staying in the USA and, hence, she was asked to furnish the channel through which the cash and jewellery had been received. The capacity of the father was also examined. His income tax returns filed in the USA for the period 1994 to 1997 were also furnished along with other necessary proof establishing his capabilities. It also emerges from the record that the certificate furnished by the advocate and that of notary in whose presence the will was executed were on record and the genuineness of such will was also sustainable. The respondent-assessee being the only daughter and her father belonged to the reputed family of jewellers for more than three generations who were also jewellers to the royal family of Gaikwad, the erstwhile rulers of the Baroda State. These ancestral ornaments were passed on from generation to generation and she being the only daughter in India, married and settled, with the consent of her brothers and ailing father chose to bequeath the same. All these facts cumulatively led both the authorities to concurrently hold that the will was not questionable. Both have, therefore, rightly held that it was a presumptive action on the part of the Assessing Officer to dismiss the contents of the will. Noting the details from the certificate of the registered valuer in respect of jewellery bequeathed to the respondent by her father and also considering the supporting documents indicating clearly the transfer of amount from the USA to India, the Revenue''s grounds were not sustained correctly. The Tribunal noted that the maximum sum that could have been transferred by the father if considered by each trip from the USA was Rs. 10 lakhs and, accordingly, the Tribunal sustained a sum of Rs. 8 lakhs out of Rs. 18 lakhs. Both the authorities have concurrently held in favour of the assessee predominantly based on the factual matrix. There is no reason to interfere with no question of law arising in this appeal. The tax appeal is, therefore, dismissed.