Statement recorded by the Police not relevant for re-opening assessment

By | January 27, 2016

Held :-

The sole reliance on the statement recorded by the police under section 161 of CrPC on 09.12.2009 itself was wrong because Section 161 of CrPC deals with examination of witness by police. It requires that the Investigation Officer may examine orally any person supposed to be acquainted with the facts and circumstances of the case. The statement recorded by the Police Officer under section 161 of the CrPC is not signed by the witness. The genuineness of the statement recorded under section 161 of CrPC could be tested only at the time of the statement of witness recorded in the court. The statement recorded by Police Officer during investigation is neither given ‘on oath’ nor it is tested by Cross Examination. According to the law of evidence, such statement is not evidence of the fact stated therein and therefore, it is not considered as ‘substantive evidence’.

IN THE ITAT CHANDIGARH BENCH

Subhash Chander Goel

v.

Income-tax Officer, Ward 1(3), Chandigarh

BHAVNESH SAINI, JUDICIAL MEMBER
AND MS. ANNAPURNA MEHROTRA, ACCOUNTANT MEMBER

IT APPEAL NOS. 282 & 389 (CHD.) OF 2014
[ASSESSMENT YEAR 2006-07]

NOVEMBER  18, 2015

Tej Mohan Singh for the Appellant. Manjit Singh for the Respondent.

ORDER

Bhavnesh Saini, Judicial Member – Both the cross appeals are directed against the order of ld. CIT(Appeals) Chandigarh, dated 28.01.2014 for assessment year 2006-07 (wrongly mentioned 2010-11).

2. In the appeal of the assessee, assessee challenged the initiation of the re-assessment proceedings under section 148 of the Income Tax Act claiming to be illegal and void abinitio, challenged the addition of Rs. 8 lacs (out of Rs. 10,87,500/- originally made by the Assessing Officer) on account of estimation of marriage expenses of daughter of the assessee and addition of Rs. 24,30,000/- (originally made by Assessing Officer at Rs. 55 lacs) on account of assessee allegedly gifting jewellery to the daughter of assessee at the time of her marriage.

2(i) The revenue is in appeal against the order of ld. CIT(Appeals) in allowing part relief on the additions made on the above grounds relating to marriage expenses and jewellery gifted at the time of marriage.

3. Briefly the facts of the case are that assessee had admitted in his statement given to Police Authorities on 09.12.2009 that he had spent approximately Rs. 45.50 lacs on the marriage of his daughter. In the assessment proceedings, assessee submitted that he had spent a sum of Rs. 10 lacs only on the marriage of his daughter besides jewellery and silver ornaments, value of which was Rs. 29-30 lacs at that time. It was also contended that assessee had received shagun of Rs. 14.13 lacs and list of 144 persons who had given shagun was also filed before the Assessing Officer. The Assessing Officer noted that the explanation of the assessee was not in consonance with the statement given to the police authorities. The Assessing Officer asked for the details of marriage expenses incurred by assessee on the marriage of his daughter including the amount spent in the engagement and ring ceremony and source of this expenditure and also to furnish the evidence in respect of shagun of Rs. 11,000/- and above. The Assessing Officer questioned the claim of assessee that he had spent only Rs. 3 lacs on dinner arrangements. The Assessing Officer, ultimately, made addition of Rs. 10,87,000/- by estimating the expenditure on marriage at Rs. 25 lacs and giving benefit of shaguns received of Rs. 14.13 lacs.

4. During the course of appellate proceedings, the assessee filed written submissions which is incorporated in the appellate order in which the assessee briefly explained that Assessing Officer never asked for the estimate of the expenditure. The Assessing Officer in the re-opening of the assessment has noted that marriage expenses appear to be of Rs. 10 lacs, therefore, estimate is very excessive and without bringing any independent evidence or enquiry conducted by the Assessing Officer. No evidence is brought on record to support the estimate of Rs. 25 lacs as marriage expenses. It was explained that assessee is a government servant and has source of income. Various family members, friends and relatives have contributed the expenses by offering shaguns in a sum of Rs. 14.13 lacs. The jewellery was gifted by mother of the assessee to his daughter as per ‘will’ and the valuation of the jewellery as in 2005 was reasonable, therefore, addition of marriage expenses should be deleted. It was also submitted that assessee gave statement to the police authorities in 2009. The FIR was lodged by his daughter who was in complete mental trauma. The statement of the assessee was recorded by police authorities and such statement would not lead to conclusion that said marriage expenses were incurred by the assessee alone.

5. The ld. CIT(Appeals) noted that no details of marriage expenses have been given. The assessee made a claim of receipt of shaguns of Rs. 14.13 lacs which is now stated to be expenses incurred on marriage as contributed by various family members, friends and relatives.

6. The ld. CIT(Appeals), considering submissions of the assessee, facts and circumstances of the case and status of the assessee, estimated the marriage expenses in a sum of Rs. 20 lacs, out of which benefit of estimated past savings of Rs. 6 lacs, was given and benefit of Rs. 6 lacs of shaguns was also given and accordingly, addition was maintained in a sum of Rs. 8 lacs as against made by Assessing Officer of Rs. 10,87,000/-

7. The assessee also challenged the addition of Rs. 55 lacs on account of gift of jewellery to the daughter of the assessee. The assessee has stated in the FIR that jewellery of approximately 55 lacs was given in the marriage of his daughter. The Assessing Officer asked for the source. The assessee submitted a reply explaining therein that jewellery and silver utensils were given as per ‘Will’ dated 04.07.2002 of mother of the assessee and value of the jewellery was Rs. 29.3 lacs at the time of marriage. The Assessing Officer was not satisfied with the explanation of the assessee and noted that ‘Will’ is unregistered and no Letter of Administration has been obtained from the Court. It was also found that the fact of gift of entire jewellery to the grand daughter is unbelievable. The Assessing Officer, therefore, made addition of Rs. 55 lacs on account of unexplained jewellery given in the marriage of daughter of the assessee.

8. The assessee challenged the addition before ld. CIT(Appeals) and written submissions of the assessee are reproduced in the appellate order in which the assessee explained that assessee never made any statement of value of jewellery of Rs. 55 lacs. The value of jewellery in 2005 at the time of marriage was Rs. 29.30 lacs. The valuation report was provided to Assessing Officer which clearly support the explanation of assessee. It was also explained that assessee has not gifted any jewellery to his daughter at the time of her marriage. The jewellery was given as per ‘Will’ of his mother who has expired on 15.05.2003. Copy of the ‘Will’ and Death Certificate was filed. It was submitted that the jewellery was given out of the ‘Will’, therefore, the same would not fall in assessment year under appeal. The jewellery was kept in the custody of Smt. Anju, wife of the assessee which was given to the daughter of the assessee Ms. Megha at the time of her marriage, therefore, the said gift transaction would not fall in assessment year under appeal. The ‘Will’ was witnessed by two independent persons and was attested by Notary Public. The affidavits of the witnesses and Notary Public were filed before the Assessing Officer. Therefore, no addition in the hands of the assessee could be made. The adoption of the value by the Assessing Officer was also incorrect.

9. The ld. CIT(Appeals) noted that the ‘Will’ is unregistered so it cannot be treated as genuine. Therefore, the Will witnessed by two witnesses is not much relevant. The ld. CIT(Appeals), considering difference in the gold mentioned in the ‘Will’ and gold jewellery given in the marriage, did not accept contention of the assessee that jewellery at the time of marriage was out of the gift received from the mother of the assessee. The ld. CIT(Appeals), however, accepted the valuation of the jewellery at the time of marriage in 2005 at Rs. 29.30 lacs and after giving benefit of old family jewellery in sum of Rs. 5 lacs, restricted the addition to Rs. 24.30 lacs.

10. The ld. CIT(Appeals), as regards issue of notice under section 148 of the Income Tax Act noted that the case law relied upon by assessee are distinguishable on facts. The reasons recorded by the Assessing Officer shows that Assessing Officer had formed his own reasons to believe on the basis of the information, therefore, issue of notice under section 148 was valid. The approval of JCIT was also taken. The ld. CIT(Appeals) also noted that the reasons were recorded on the basis of subjective satisfaction of the Assessing Officer, therefore, re-opening of the assessment was held to be valid and accordingly, dismissed this ground of appeal of the assessee. The appeal of the assessee was thus, partly allowed.

11. We have heard ld. Representatives of both the parties and perused the material on record. The ld. counsel for the assessee reiterated the submissions made before authorities below and referred to PB-66 which is the reasons recorded for re-opening of the assessment. PB-23 is the statement of the assessee to the Police Authorities under section 161 of the CPC dated 09.12.2009. PB-106 is the judgment of the High Court dated 12.12.2014 through which the matrimonial disputes were settled between the daughter of the assessee Ms. Megha Garg and her husband Shri Dheeraj Garg. He has referred to PB-33 which is FIR lodged by daughter of assessee on 21.11.2009 in which it was explained that in the marriage of complainant, the parents of the complainant and relatives and friends gave gold, silver and diamonds ornaments. List of the items was also enclosed. The ld. counsel for the assessee submitted that there is no requirement in the column of return to disclose marriage expenses. The Assessing Officer in the reasons for re-opening of assessment wanted to verify the marriage expenses and jewellery given to his daughter through the ‘Will’ of his mother, therefore, for verification purposes only, re-opening of the assessment would not be valid. The Assessing Officer cannot be allowed fishing enquiries in the garb of re-opening of the assessment. The assessee disclosed all the material evidence at the time of assessment but Assessing Officer wanted to verify the facts. He has submitted that Assessing Officer, without, verifying the facts has recorded the reasons for re-opening of the assessment and relied upon decision of the Hon’ble Punjab & Haryana High Court in the case of CIT v.Smt. Paramjit Kaur [2009] 311 ITR 38/[2008] . He has relied upon the order of ITAT Chandigarh in the case of ITO v. Dr. S.S. Chauhan IT Appeal No. 368 (Chd.) of 2011, dated 29.03.2012. The ld. counsel for the assessee submitted that statement given to the police is not relevant for re-opening of the assessment. The ld. counsel for the assessee, on merits submitted that assessee submitted list of shaguns given by various friends, relatives and guests on which Assessing Officer did not make any enquiry and ultimately Assessing Officer accepted receipt of ‘shaguns’ by assessee at the time of marriage of his daughter in a sum of Rs. 14,13,100/- copy of the same is filed at page 51 of the Paper Book. In the reasons, Assessing Officer has stated that marriage expenses were incurred for Rs.10 lacs only. There is no evidence on record to support the estimate of marriage expenses by Assessing Officer, addition is made without bringing any evidence on record. Addition on account of estimate of marriage expenses was made on surmises and conjectures. No enquiry have been made from any guest or relative who have offered shagun. The ld. CIT(Appeals), without any reasons, reduced the relief granted by the Assessing Officer in respect of ‘shagun’ of Rs. 14,13,000/-

11(i). The ld. counsel for the assessee further submitted that mother of the assessee executed a genuine ‘Will’ which was witnesses by the witnesses and attested by Notary Public. The registration of ‘Will’ is not required as per law and there is no requirement to get Letter of Administration or Probate. He has relied upon decision of Hon’ble Supreme Court in the case ofIshwar Deo Narain Singh v Kanta Devi AIR 1954 SC 280 in which it was held that “There is nothing in law which requires the registration of ‘Will’ and ‘Wills’ are in a majority of cases, are not registered at all. To draw any inference against the genuineness of the ‘Will’ on the ground of its non registration appears to us to be wholly unwarranted”. He has submitted that valuation report of the jewellery at the time of marriage was filed which support value of the jewellery as per ‘Will’ was Rs. 29.30 lacs. Family jewellery benefit has been correctly given by the ld. CIT(Appeals) of Rs. 6 lacs. He submitted that assessee did not give gift any jewellery to his daughter. The ‘Will’ is genuine and after death of testator of ‘Will’ the jewellery was handed over to his wife who in-turn at the time of marriage of his daughter has given the entire jewellery to his daughter. Therefore, addition of jewellery in the hands of assessee is unjustified. Affidavits of both the witnesses to the ‘Will’ and Notary Public were filed before Assessing Officer which have not been disbelieved. Mother of assessee expired on 15.05.2003 and thereafter daughter of assessee became owner of the gold jewellery. Therefore, no addition in assessment year under appeal could be made. The ld. counsel for the assessee, therefore, submitted that the re-opening of assessment is bad in law and both the additions on merit are also required to be deleted.

12. On the other hand, ld. DR relied upon order of the Assessing Officer and also relied upon decision of the Hon’ble Punjab & Haryana High Court in the case of Jagan Nath Singhal v. Dy. CIT [2000] 242 ITR 554 and submitted that once information came to the department about unaccounted expenses incurred in the marriage of daughter of assessee, re-opening was correctly made and relied upon decision of the Supreme Court in the case Asstt. CIT v. Rajesh Jhaveri Stock Brokers (P.) Ltd. [2007] 291 ITR 500

13. We have considered the rival submissions and perused the material available on record. The return of income declaring an income of Rs. 2,97,290/- has been filed by assessee on 17.07.2006. The same was processed under section 143(1) of the Income Tax Act. Subsequently, proceedings were reopened by issuing notice under section 148 of the Income Tax Act on the basis of information received from DDIT (Investigation), Chandigarh. The Assessing Officer recorded the reasons for re-opening of the assessment. Copy of the reasons dated 13.03.2011 is filed at page 66 of the Paper Book and reproduced as under:

“Name of the assessee : Shri Subhash Chander Goyal

House No. 737, Sector 7B

(Now # 699, Sector 7-B, Chandigarh)

PAN ABEPG3737H
Assessment year 2006-07

Reasons for initiating proceedings under section 147

The return of income was filed by the assessee for the assessment year 2006-07 on 17.07.2006 declaring total income of Rs. 2,97,920/-. The return has been processed u/s 143(1) of the Income-tax Act, 1961 on 28.04.2008 accepting the returned income.

It has come to the notice that during the year 2005-06 relevant to assessment year 2006-07, the assessee has solemnized the marriage of his daughter, Ms Megha, on 18.11.2005. In a statement given to the Police on 09.12.2009, the assessee, Sh. Subhash Goyal has stated that he had incurred approximately Rs. 45-50 lakh on the marriage of his daughter. Besides, it has come to notice that the assessee has gifted jewellery worth Rs. 55 lakh to his daughter at the time of marriage which is stated to be as per Will of assessee’s mother. The sources of expenditure incurred on marriage including cost of jewellery gifted by the assessee to his daughter are required to be verified.

1 have, therefore, reasons to believe that approximate income of Rs. 65 lakh (Rs. 10 lakh on marriage ceremony + Rs. 55 lakh on jewellery) has escaped income. In view of above, 1 have reasons to believe that by reason of omission on the part of assessee to disclose fully & truly all material facts in the return of income, income to the tune of approximately Rs. 65 lakh has escaped assessment.

Sd/-

(Vinod K. Sharma)

Income-tax Officer

Ward 1(3), Chandigarh

Dated 13.03.2011″

According to the above reasons, the marriage of daughter of assessee Ms. Megha was solemnized on 18.11.2005. It is also noted in the reasons that in the statement given to the police on 09.12.2009, assessee has stated to have incurred approximately Rs. 45-50 lacs on the marriage of his daughter. Further, the gift of jewellery of Rs. 55 lacs to his daughter at the time of marriage was stated to be as per ‘Will’ of assessee’s mother. The Assessing Officer in the reasons noted that source of expenditure incurred on the marriage including cost of jewellery gifted by assessee to his daughter are required to be verified. Thus, Assessing Officer in the reasons recorded wanted to verify the facts of incurring of the marriage expenses by assessee for performing the marriage of his daughter on 18.11.2005. Thus, the Assessing Officer referred to the statement given to the police on 09.12.2009 under section 161 CrPC as well as ‘Will’ of his mother dated 04.07.2002 (PB-42). The Assessing Officer, therefore, stated to have had a reason to believe for escapement of income only after verification of the fact of marriage expenses of daughter of the assessee after verifying the statement made to the police as well as consideration of the ‘will’. The re-opening of the assessment only on the basis of verification of the facts is not permissible under the law. The Assessing Officer is not empowered to reopen the assessment nor verify the facts for re-assessment. We rely upon decision of Delhi High Court in the case of CIT v. Orient Craft Ltd. [2013] 354 ITR 536  in which it was held as under :

“Held, dismissing the appeal, that the reasons disclosed that the Assessing Officer reached the belief that there was escapement of income “on going through the return of income” filed by the assessee after he accepted the return under section 143(1) without scrutiny, and nothing more. This was nothing but a review of the earlier proceedings and an abuse of power by the Assessing Officer. The reasons recorded by the Assessing Officer did confirm the apprehension about the harm that a less strict interpretation of the words “reason to believe” vis-a-vis an intimation issued under section 143(1) could cause to the tax regime. There was nothing in the reasons recorded to show that any tangible material had come into the possession of the Assessing Officer subsequent to the issue of the intimation. The notice reflected an arbitrary exercise of the power conferred under section 147″.

14. The Hon’ble Gujarat High Court in the case of Inductotherm (India) (P.) Ltd. v M. Gopalan, Dy. CIT [2013] 356 ITR 481 also observed that “There should be tangible material to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with the formation of the belief”. It was held as under :

“(ii) That in two out of the four reasons recorded by the Assessing Officer for reopening the assessment, he stated that he needed to verify the claims to bad debts and the admissibility of the bad debts written off. For mere verification of the claim, power for reopening of assessment could not be exercised. The Assessing Officer in the guise of power to reopen an assessment cannot seek to undertake a fishing or rowing inquiry and seek to verify the claims as if it were a scrutiny assessment.”

15. The sole reliance on the statement recorded by the police under section 161 of CrPC on 09.12.2009 itself was wrong because Section 161 of CrPC deals with examination of witness by police. It requires that the Investigation Officer may examine orally any person supposed to be acquainted with the facts and circumstances of the case. The statement recorded by the Police Officer under section 161 of the CrPC is not signed by the witness. The genuineness of the statement recorded under section 161 of CrPC could be tested only at the time of the statement of witness recorded in the court. The statement recorded by Police Officer during investigation is neither given ‘on oath’ nor it is tested by Cross Examination. According to the law of evidence, such statement is not evidence of the fact stated therein and therefore, it is not considered as ‘substantive evidence’.

16. Hon’ble Himachal Pradesh High Court in the case of Smt. Sewaki v. State of Himachal Pradesh 1981 CriLJ 919 held that “It is beyond the pale of controversy that statement made by witness under section 161 of the CrPC during investigation of the case, are not substantive evidence.

16(i) Hon’ble Gauhati High Court in the case of Gyasudin v. State of Assam 1977 CriLJ 1512 held that “The Trial Judge in the course of his judgment had freely referred to the statement said to have been made by prosecution witnesses before police. They were not substantive evidence in the case and should not have been considered against the appellants but the judgment, we find, unfortunately bristles with reference to such inadmissible material”. Therefore, considering the above discussion, it is clear that statements made to the police under section 161 of the CrPC is not substantive evidence. Section 162 of the CrPC imposes a bar on the use of any statement made by any person to Police Officer in the course of investigation at any enquiry or trial in respect of any officer under investigation at the time when such statement was made, except for the purpose of contradicting the witnesses in the manner provided by Section 145 of the Evidence Act. Where any part of such statement is so used, any part thereof may also be used in re-examination of the witness for the limited purpose of explaining any matter referred to in his cross examination. The only other exception to this embargo on the use of the statements made in the course of investigation relates to the statements falling within the provisions of Section 32(1) of the Evidence Act or permitted to be proved under section 27 of the Evidence Act.”

17. The ld. counsel for the assessee filed a copy of the judgment of the Hon’ble Punjab & Haryana High Court in FAO-M No. 234 of 2014 dated 12.12.2014 in which the daughter of the assessee and her husband have settled the matrimonial dispute and some of the conditions for compromise were that parties will move for quashing of the FIR No. 482/2009 under section 498A/406 IPC pending at Jaipur and assessee’s daughter will not object in the Court. Another was that the family members of the husband of the assessee will not pursue the case of income tax against the father of Ms. Megha Garg i.e. the assessee. The assessee has also intimated that the case in question in which the assessee has made a statement under section 161 CrPC which is referred to in the reasons for re-opening of the assessment, the trial is pending at Jaipur. It would, therefore, show that statement of the assessee under section 161 CrPC was not signed by him and could not be treated as substantive evidence and it was merely part of the investigation. It could be used only for a limited purpose under the law, therefore, reliance placed by the Assessing Officer on such a statement was wholly misplaced for the purpose of recording the reasons for re-opening of the assessment. The Assessing Officer also referred to the ‘will’ of mother of the assessee through which jewellery was given after death of the testator to Ms. Megha and mother of the assessee expired on 15.05.2003, therefore, after death of the testator if jewellery of gold is inherited by Ms. Megha, the same would not fall in assessment year under appeal and further in the ‘Will” nothing is mentioned if assessee was beneficiary of any of the articles or that assessee has gifted any gold jewellery to his daughter at the time of marriage. Therefore, Assessing Officer was not justified in re-opening of the assessment on the basis of the aforesaid facts. It would show that there was nothing in the reasons recorded to show that any tangible material had come into the possession of Assessing Officer subsequent to the issue of intimation under section 143(1) of the Act. The notice under section 148 reflected arbitrarily exercise of power conferred under section 147 of the Income Tax Act. In the reasons recorded by the Assessing Officer for re-opening of the assessment, Assessing Officer stated that he wanted to verify the marriage expenses of the daughter of the assessee. For mere verification of the claim, power for re-opening of the assessment could not be exercised. The Assessing Officer in the guise of power to reopen the assessment, cannot seek to undertake a fishing or rowing enquiry and seek to verify the claim as if it were a scrutiny assessment. The judgment of Gujarat High Court in the case of Inductotherm (India) (P.) Ltd. (supra) therefore, squarely apply in favour of the assessee and would not justify the re-opening of the assessment in the matter.

17(i) The ld. DR, however, relied upon decision of the Hon’ble Punjab & Haryana High Court in the case of Jagan Nath Singhal (supra) in which in the divorce proceedings before District Judge, daughter of the assessee filed an affidavit wherein she had stated that her father had spent Rs. 7-8 lac in the marriage. On the basis of this affidavit, the Assessing Officer recorded the reasons for re-opening of the assessment which were held to be justified. We may note that there is difference between affidavit filed in the judicial proceedings as well as statement recorded by police under section 161 of the CrPC as explained above. Therefore, statement recorded by Investigating Officer at the investigation stage, cannot be equated with affidavit filed in judicial proceedings. Therefore, this case is clearly distinguishable on facts.

18. Considering facts and circumstances above and discussion, we are of the view Assessing Officer was not justified in re-opening the assessment under section 148 of the Act. We, therefore, quash the re-opening of the assessment under section 148 of the Income Tax Act. Resultantly, orders of the authorities below are set aside and quashed. This ground of appeal of assessee is accordingly allowed.

19. As far as the additions on merits are concerned, the Assessing Officer estimated the marriage expenses in a sum of Rs. 25 lacs and has given a benefit of shaguns received by assessee of Rs. 14,13,000/- and made addition of Rs. 10,87,000/-. The assessee has given list of persons who have given shagun at the time of marriage of daughter of the assessee. This list contained the complete names and addresses and in some of the cases, their telephone number as well. The Assessing Officer, without making any enquiry from any of these persons who have given shagun to the assessee in the marriage of his daughter, has accepted the claim of assessee of receipt of shaguns in a sum of Rs. 14,13,000/-. The ld. CIT(Appeals), without giving any notice to the assessee for taking any adverse view in this regard, has restricted the benefit of shaguns in a sum of Rs. 6 lacs only. The order of the ld. CIT(Appeals) is, therefore, unjustified and cannot be sustained in law. If ld. CIT(Appeals) wanted to reduce the benefit extended by the Assessing Officer, it would amount to enhancement of the assessment and as such, ld. CIT(Appeals) is required to give specific notice to the assessee showing his intention to enhance the assessment by reducing the relief already granted by the Assessing Officer. However, the impugned order did not show anything and as such, ld. CIT(Appeals) was not justified in restricting the benefit of shagun of Rs. 6 lacs as against benefit given by the Assessing Officer in a sum of Rs. 14,13,000/-. It may also be noted here again that when assessee disclosed complete names, address and telephone numbers in some of the cases of the persons who have offered shagun to the assessee at the time of marriage of his daughter, the ld. CIT(Appeals) was required to verify the same facts if he was not satisfied with the finding of the Assessing Officer. However, ld. CIT(Appeals) has also did not make any enquiry from any such person and without any basis or justification, disbelieved the receipt of shagun by assessee in a sum of Rs. 14,13,000/-. It may also be noted here that Assessing Officer without bringing any evidence on record estimated the marriage expenses in a sum of Rs. 25 lacs. Similarly, ld. CIT(Appeals) without any basis or justification or without bringing any evidence on record, made the estimate of marriage expenses of assessee in a sum of Rs. 20 lacs. Therefore, both the estimates made by Assessing Officer and ld. CIT(Appeals) cannot be sustained.

19(i) The Assessing Officer in the reasons recorded for re­assessment has considered Rs. 10 lacs spent by assessee on marriage ceremony. Therefore, if Assessing Officer wanted to enhance the marriage expenses or to estimate the higher marriage expenses should have examine the independent witnesses, particularly of the persons who have offered shagun to the assessee at the time of marriage of daughter of the assessee. The Assessing Officer failed to examine any of the guests in this regard as per list given to him. The Assessing Officer did not examine the assessee or his daughter under section 131 of the Income Tax Act nor elicit the truth from them of marriage expenses. No evidence has been brought on record to support the estimate of marriage expenses. No supporting evidences have been brought on record to prove to what extent marriage expenses were incurred by assessee in the marriage. Therefore, it is case where estimate of marriage expenses have been made without any basis or evidence or material on record. May be the assessee has not filed the complete details according to the Assessing Officer but it was the duty of the Assessing Officer to make a reasonable estimate on marriage expenses based on the evidence and material on record. In the absence of anything on record, ld. counsel for the assessee is justified in contending that marriage expenses have been estimated merely on surmises and conjectures. Thus, there is no basis to sustain the orders of authorities below for estimating marriage expenses in a sum of Rs. 20/25 lacs. The ld. CIT(Appeals) gave a benefit of estimated past savings and contributions made by the family members of Rs. 6 lacs for the purpose of restricting part addition. If the same amount is added to shagun received by assessee in a sum of Rs. 14,13,000/-, no addition of Rs. 8 lacs would sustain because Assessing Officer has himself granted relief to the assessee in a sum of Rs. 14.13 lacs which ld. CIT(Appeals) without any reasons did not consider favourably to the assessee.

19(ii) The Assessing Officer in the assessment order, considering the status of the assessee has presumed that assessee might have incurred so many expenditure on different occasions but nothing was brought on record whether assessee has performed any of such ceremonies which are large in number noted in the assessment order. Therefore, the order of the Assessing Officer was wholly based upon assumptions on certain facts which did not exist. In this case, at the time of hearing of the appeal, the assessment record was available with ld. DR but no tax evasion petition was containing. From the settlement arrived at between the husband and wife before Hon’ble High Court, as noted above, which contained the disposal of the income tax matter, would clearly reveal that from the side of in-laws of Ms. Megha Garg, daughter of the assessee, same information might have been provided to the Income Tax Department so as to initiate the above proceedings but the Assessing Officer did not record statement of any of the in-laws of Ms. Megha nor arrived at fair estimate of marriage expenses. It is, therefore, a clear case of additions made merely on assumptions and presumptions. Thus, there were no basis, what-so-ever to estimate higher marriage expenditure as against the explanation given by the assessee. May be there is some vague explanation given by assessee before Assessing Officer but it would not prove the case of the Assessing Officer to make higher estimate of marriage expenses.

20. Considering the totality of the facts and circumstances noted above, we do not sustain the additions made by the authorities below. We, accordingly, set aside the orders of authorities below and delete the addition of Rs. 8 lacs on account of marriage expenses.

21. In the result, appeal of the assessee is allowed and departmental appeal is dismissed.

22. The second issue is with regard to addition made on account of jewellery, silver utensils and diamonds etc. given to Ms. Megha Garg in her marriage. The assessee pleaded that her mother Smt. Sheela Devi has executed a ‘Will’ on 04.07.2002 which was executed in the presence of the witnesses Shri Pawan Kumar and Shri K.K.Gupta, Advocate. It was also attested before Notary Public. Copy of the ‘Will’ is filed at page 42 along with translated copy in which Smt. Sheela Devi has made ‘will’ of her entire jewellery and silver utensils in favour of Ms. Megha, daughter of the assessee. It is stated in the ‘will’ that she will remain owner of the ornaments and silver utensils and after her death, all the ornaments and silver utensils will be given to her granddaughter Ms. Megha. Upto the marriage of Ms. Megha, all the ornaments and silver utensils will remain with Smt. Anju and in the marriage of Ms. Megha, all these ornaments will be used by Smt. Anju according to her wish. The testator Smt. Sheela Devi expired on 15.05.2003. Thus, according to the ‘will’ of Smt. Sheela Devi, Ms. Megha became owner of all the jewellery and silver utensils. These ornaments thus, came in possession of Ms. Megha according to the ‘Will’ and would pertain to assessment year 2004-05. May be that her mother on account of custodian of the ornaments and silver utensils have given the physical custody to Ms. Megha at the time of her marriage on 18.11.2005 but she became rightful owner of these ornaments on the death of Smt. Sheela Devi. Therefore, same would not fall in assessment year under appeal i.e. 2006-07. The assessee filed affidavit of both the witnesses before the Assessing Officer along with affidavit of Notary Public who has attested the ‘Will’ of Smt. Sheela Devi. They have confirmed execution of the genuine ‘Will’ by testator Smt. Sheela Devi. If the Assessing Officer wanted to dispute the genuineness of the ‘Will’, the Assessing Officer should have examined the witnesses to the ‘Will’ at the assessment stage, but the Assessing Officer did not make any effort to examine any of the witnesses or the Notary Public who has attested the ‘Will’ at the assessment stage. The Assessing Officer disbelieved the execution of the ‘Will’ because ‘will’ was not registered and no probate or Letter of Administration has been obtained. There is no law to prescribe that ‘Will’ should necessarily be registered. There is also no need in each and every case to obtain probate or Letter of Administration from the Court because when there is no dispute amongst the legal heirs of inheritance of the property through the ‘Will’. Thus, the objections of the authorities below are wholly irrelevant and against the provisions of law. The Assessing Officer also disbelieved execution of Will because Smt. Sheela Devi must be having any other family members and there may be some objection but nothing in this regard has been brought on record. Further, it was noted that since assessee has not shown this jewellery and silver utensils in his service record, therefore, no benefit was given to assessee. Since assessee has not acquired any jewellery or silver utensils, therefore, there was no need to declare the same in the service record.

22(i) Further, it is admitted fact that no jewellery has been gifted by assessee to her daughter in the marriage performed on 18.11.2005. The Assessing Officer has also not brought any evidence on record if assessee gifted any gold jewellery or silver ornaments to her daughter in the marriage. Therefore, all objections of authorities below for not considering the genuine ‘will’ were wholly unjustified and against the law. The assessee has produced sufficient evidence and material on record to prove ‘will’ genuinely executed by his mother and through the ‘will’, the gold ornaments and silver utensils were given to Ms. Megha. Therefore, the entire addition against the assessee was wholly unjustified. The assessee also produced sufficient evidence on record about the valuation of the jewellery at the time of marriage of the daughter of assessee. No evidence against the valuation report has been brought on record, therefore, departmental appeal would have no merit and is liable to be dismissed.

23. Considering the totality of facts and circumstances and above discussion, we are of the view that entire addition sustained by ld. CIT(Appeals) is liable to be deleted. We, accordingly, set aside the orders of authorities below and delete the entire addition on account of valuation of the gift. In the result, this ground of appeal of assessee is allowed and departmental appeal is dismissed.

24. No other point is argued or pressed.

25. In the result, appeal of the assessee is allowed and departmental appeal is dismissed.

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