ACIT Vs Sharada Narayanan (ITAT Bangalore)
ITAT Bangalore held that non-registration of will doesn’t lead to any inference against its genuineness. Thus, jewellery inherited from mother in law based on non-registered will be capital assets and sell thereof results into long term capital gain.
Facts- The assessee has claimed capital gains of Rs.6,29,20,349/- arising out of sale of jewellery of Rs.7,09,53,800/-. This capital gains is stated to be reinvested in purchase of a residential house for an amount of Rs.6,00,00,000/-excluding stamp duty and registration charges. The total rein-vestment as per computation of total income is Rs.6,45,00,000/-.
On going through the sale bills, it is seen that during the year the assessee has shown total jewellery of Rs.7,12,63,800/- though the assessee has claimed sale of jewellery at Rs.7,09,53,800/-.
Notably, the long term capital gains claimed by the assessee and deduction of Section 54F of the Act amounting to Rs.6,29,29.348/- is rejected by AO and the amount received by her from M/s. Navarathan Jewellers through RTGS/Cheques amounting to Rs. 7,12,63,800/- is treated as her Income under the head Income from other sources and brought to tax U/s.56 of the Act. However, CIT(A) quashed the assessment order.
Conclusion- In the case of Ishwardeo Narain Singh vs Srn. Kamta Devi and Ors. AIR 1954SC 280, 1953 (1) BLJR 690, it was held by the Supreme Court that non-registration of the will cannot be held as a reason for the invalidity of the will. Registration of will is not Compulsory.
Held that CIT(A) is not justified in giving the findings with regard to existence of long term capital assets in the form of jewellery acquired through the Will from Late Kasturi Shoury and consequently granting the relief which is incorrect without reconciling the quantity of jewels mentioned in the Will vis-à-vis Valuation Certificate issued by the Navarathan Jewellers Pvt. Ltd. In our opinion, this issue has to be required to be re-examined at the end of CIT(A)/NFAC and the assessee is directed to reconcile the quantum of jewellery inherited through the impugned Will along with valuation report issued dated 28.5.2015 by Navarathan Jewellers Pvt. Ltd., No.85, Bangalore-1 valuing the jewellery as on 31.3.2015 vis-à-vis with the quantum of sale of jewellery.
FULL TEXT OF THE ORDER OF ITAT BANGA-LORE
This appeal by revenue is directed against order of NFAC for the as-sessment year 2016-17 dated 28.7.2023 passed u/s 250 of the Act. The revenue has raised follow-ing grounds of appeal:
1. The Id. CIT(A) erred in not considering the fact that the assessee had duly responded certain notices issued to him by submitting the copy of Will vide his submission dated 26.12.2018. This clearly shows that the assessee co-operated in as-sessment proceedings.
2. The Id. CIT(A) allowed the grounds of ap-peal without considering the fact that the assessee has failed to prove the existence of long term cap-ital asset in the form of jewellery in the hands of her mother in law. The WT return of assessee’s mother in law was never produced to evidence the availability of asset for testamentary succes-sion
3. The Id. CIT(A) erred in not considering the fact that the quantum of jewellery alleged to have been received by the assesses and the quantum of jewellery claimed to have sold to M/s. Navarathan jewellers does not tally. The gross weight of the jewellery shown in the WT return filed by the assessee alleged to have received through Will is 7243 grams and the gross weight of jewellery sold to M/s. Navarathan jewellers is 26038.97grams
4. The CIT(A) also did not consider that the assessee failed to furnish the list and description of the jewellery which is alleged to have received by her by way of a Will in FY 2014-15 and also failed to furnish description and list of the jewellery which has been sold to M/s. Navarathan jewellers.
2. Facts of the case are that as per the computation of total income, the assessee has claimed capital gains of Rs.6,29,20,349/- arising out of sale of jewellery of Rs.7,09,53,800/-. This capital gains is stated to be reinvested in purchase of a residential house through a registered sale deed dated 09-02-015 situated at No.223, Defence Colony, HAL II Stage, Indiranagar, Bengaluru, consisting of ground plus three floors of 7000 sq.ft. and site area of 4000 sq. ft. for an amount of Rs.6,00,00,000/-excluding stamp duty and registration charges. The total rein-vestment as per computation of total income is Rs.6,45,00,000/-. The computation of capital gains as claimed by the assessee is given as under:-
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