Self serving recitals cannot be accepted as true Unless the assessee proves it

Brief Fact of the case

In the present case, AO come to know about cash deposit of Rs.13.01 Lac by the assessee through AIR Information. On being called upon to explain the source of such cash deposit, assessee submitted that he has inherited a sum of Rs.13 lac from his mother who has died on 14-08-2006 and produced copy of her income tax return, copy of will and death certificate in support of his claim. However, the A.O. was not satisfied with the explanations and evidences submitted by the assessee.

A.O. also expressed the applicability of wealth tax as the value of cash and jewellery as claimed by the assessee exceeded Rs.15 Lacs. Since no Wealth-tax return was filed and there was nothing to show the availability of cash to the extent of Rs.13.01 lac, the AO made addition for this sum as ‘Income from undisclosed sources.’ On being aggrieved, the assessee filed the appeal with CIT(A) who deleted the addition made by the AO based on submissions made by the assessee. Revenue filed the appeal against such deletion before the Tribunal.

Contention of Assessee

It was claimed that Shri A.C. Gupta, executor of the will of his mother, opened the locker of Almirah on 12.02.2007 kept at their residence in the present of three witnesses and cash of Rs.15.06 Lacs was found.

Contention of Revenue

From the will, AO observed that she possessed Moveable assets including saving bank account, FDRs, NSCs, shares of limited company, cash as “Istridhan”, Gold and diamond jewellery. As per her will, Cash (which was not quantified) was to be given to assessee and Gold and diamond jewellery to the wife of assessee. It was also noticed as under:-

• Copy of balance sheets as on 31.03.2005 of her two proprietory concerns namely M/s Mahajan Investments and Financial Services and M/s Satyam Investments filed by the assessee shows only the minimal cash balance of Rs.16706/- and Rs.7754/-.
• Profit & Loss account of M/s Mahajan Investments and Financial services shows gross receipts from operations to Rs.5050/- and her capital balance as on 31.03.2005 was Rs.114243/-. Gross income from operations of M/s Satyam Investments was Rs.1.73 Lacs and capital balance Rs.3.56 Lac only. Beside she had made withdrawal of Rs.1.52 Lacs from this concern.
• Statement of affairs of her mother as on the date of her death shows Nil cash as on date.
• Her return of income for A.Y. 2005-06 was filed with total income of Rs.142710/-.

Held by Tribunal

The assessee has claimed it as `Istridhan’, which was not reflected anywhere. Now the question as to whether the existence of cash to the above extent as `Istridhan’ can be accepted as genuine was decided by the tribunal observing the below facts.

• Deceased was proprietor of two concerns and it was noticed negligible cash balance in the balance sheets of these two proprietorship concerns which have been placed on record. If she really had lacs of cash in hand, her business would not have been run on such negligible cash balance
• We fail to comprehend as to how such a wise person, being fully aware of and actually earning interest income by investing funds, can be expected to keep huge cash of Rs.15.06 lac in her almirah for years together.
• It is relevant to note that Shri A.C. Gupta, claimed to be the executor of the will of deceased, is none other than father of the assessee and husband of the deceased.
• Further, what has been claimed to have been opened by him is not a bank locker, but, simply an almirah in the house.
• When there were no conflicting claims on the Will of the deceased and the beneficiaries were only the assessee and his wife, it was not understandable as to what prompted the family of the deceased to allegedly open the almirah after six months and that too in the presence of three witnesses.

Tribunal found that this was nothing but camouflage. The entire exercise appears to have been carried out for giving a colour of genuineness to the availability of cash of Rs.15.06 lac from the almirah of the deceased. Another interesting aspect of the matter is when the AO pointed out the obligation of filing wealth-tax return in case she had cash and jewellery etc. exceeding Rs.15 lac, the assessee came out with a fantastic explanation that out of Rs.15.06 lac found at the time of death, only a sum of Rs.13.01 lac was available up to the end of the year, that is, 31.3.2006 and the remaining amount was received during the period 1.4.2006 to 14.8.2006, being the date of her death. This was just a futile attempt to escape from the obligation of filing wealth tax return and bearing the consequences for its non-filing.

All the above circumstances prove it beyond any shadow of doubt that there was no cash in hand available as ‘Istridhan’ on the death of mother of the assessee that was bequeathed by the assessee to the tune of Rs.13.01 lac. Except for a bald claim of finding cash of Rs.15.06 lac on the sudden opening of the almirah on the death of his mother, there is no evidence about the source of the availability of cash to such a huge extent in her hands. In our considered opinion, the assessee just concocted a story of inheriting cash from his mother after her death. The assessee was not justified in claiming that a sum of Rs.13.01 lac was bequeathed from his mother. Therefore the opinion of the AO was restored. In the result, the appeal by revenue was allowed.