- (1.) Present appeal under section 260(A) of the Income Tax Act, 1961 (hereinafter referred to as the Act) has been filed against the order dated 12.3.2008 passed by the Tribunal, Agra Bench, Agra. The Revenue has proposed the following questions said to be substantial question of law which arises out of the order of the Tribunal: - 1. WHETHER the Hon'ble ITAT is correct in concluding on the facts of the case that the source of silver bullion weighing 240 kgs seized from the residence of the assessee during the course of search under section 132 (1) was explainable. 2. WHETHER the Hon'ble ITAT was correct in concluding on the facts of the case that the cash of Rs. 50,787 found during the course of search and seizure operation was explainable. Whether the Hon'ble ITAT was correct in concluding on the facts of the case that the investment of Rs. 3,89,545 in shares certificates found during the search and seizure operation is explainable. Briefly stated the facts giving rise to the present appeal are as follows: - The present appeal relates to the block assessment for the period 1.4.1987 to 3.11.1996. It appears that a search was conducted under section 132(1) of the Act at the residence of the assessee and the business premises. During the search certain materials and valuable articles were found, which according to the Revenue was not duly accounted for. During the course of search, statement of the assessee was recorded wherein he admitted an excess investment of Rs. 5,00,000 and also owing of 20.150 kg. sliver ornaments which he surrendered for taxation. A notice under section 158BC of the Act was issued on 15th April, 1997 calling upon the assessee to file return of undisclosed income for the block period 1.4.1987 to 3.11.1996. The return was filed on 29.9.1997 declaring a total income of Rs. 11,58,200 including undisclosed income of Rs. 5,21,200 The assessing officer did not accept the computation of undisclosed income declared by the assessee and determined undisclosed total income for the block period at Rs. 3834546. The Assessee preferred an appeal before the Tribunal. There was a difference of opinion between the Judicial member and the Accountant member on the question whether for the silver bullion weighing 240 kgs. seized from the residence of the assessee during the course of search U/s. 132(1) of the Act the explanation given by the assessee should be accepted or not. The matter was referred to the third member, who has held as follows: - Parties are heard and their rival submissions considered. On a careful consideration of the rival submissions and the material brought on record, one thing is clear that the silver bullion was seized from the house belonging to two sons who claimed the ownership of the silver bullion. Though, there is no direct evidence to prove the factum of gift of the silver bullion of 240 kgs., by the assessees mother to her son and admittedly no will was executed by her, but that could, however, be the situation because of common features prevailing in the Indian families. Looking to the circumstantial evidence and material on record it. The fact that the assessees father was carrying on silver business at Kherly, District Alwar, Rajasthan stands; the fact that before his death 240 kgs. of silver bullion were handed over to his wife Smt. Narvada Devi as averred in the affidavit of Sh Girraj Prasad Agrawal, the claim of the assessee deserves to be accepted. The suspicion entertained by the A.O. that Smt. Narvada Devi handed over the said bullion received from her husband to her only one son i.e., assessee and not to the other with the expressed desire that the same may be distributed equally amongst his sons Shri Anil Kumar and Shri Manoj Kumar also stands explained by the affidavit stating that she resided with the assessee and his family who had taken care of in her old age. The confirmations of the sons of the assessee also affirmed the ownership of the said silver bullion received through the grandmother. Non -disclosure of the silver bullion by the two sons in their wealth -tax returns were stated to be not liable to tax under the Wealth -Tax Act. On these facts and circumstances, the addition on account of the silver bullion in the hands of the assessee to the extent of 240 kgs. of silver may not be justified and the same has to be considered in the hands of his sons Shri Anil Kumar and Shri Manoj Kumar who are assessees in their own right.
(2.) In accordance with opinion expressed by 3rd member the Tribunal vide order dated 12 -3 -2008 has partly allowed the appeal. 3. Feeling aggrieved the Revenue has preferred the present appeal raising the aforementioned questions of law.
(3.) WE have heard Sri Shambhu Chopra, learned senior standing counsel for the Revenue and perused the orders passed by the assessing officer as also the order passed by the Tribunal.;