JUDGMENT R.K. Agrawal, J.
1. The Tribunal, Allahabad has referred the following questions of law under Section 256(2) of the IT Act, 1961 (hereinafter referred to as "the Act") for opinion to this Court :
1. Whether the Tribunal was legally correct in upholding the addition of Rs. 16,100 representing the value of jewellery found by the Department at the time of search carried out on 8th Oct, 1974, in the hands of the assessee-HUF, by relying on the provisions of Section 132(4A) which were introduced later on ?
2. Whether the Tribunal was legally correct in holding that legal plea with regard to the question of ones which was not before the authorities below could not have been raised for the first time before it and the addition of Rs. 16,100 was liable to be confirmed ?
3. Whether there was any material before the Tribunal in upholding the addition of Rs. 16,100 on account of the value of ornaments, in the hands of the assessee-HUF ?
2. The present reference relates to the asst. yr. 1975-76.
Briefly stated the facts giving rise to present reference are as follows :
The applicant is assessed to income-tax in the status of HUF. A search was conducted in the applicant premises on 8th Oct., 1974 in which 23 kgs. of silver ornaments were seized. The applicant stated that these ornaments belonged to the parties who had pawned them with him. The articles did not bear the slip indicating the name of the person who pawned them. The applicant also did not produce any evidence to show that the ornaments have been pawned with him. The authorities, therefore, held that those ornaments belonged to the applicant and he had failed to explain the source of their acquisition. The value of the seized silver ornaments of Rs. 16,100 was treated as his income. The addition has been upheld up to the stage of the Tribunal.
3. We have heard Sri Vikram Gulati, learned Counsel for the applicant and Sri Shambhoo Chopra, learned standing counsel for the Revenue.
4. Learned Counsel for the applicant submitted that the seized silver ornaments were all pawned articles and it did not belong to the applicant and, therefore, the authorities were not justified in adding the value of the seized silver ornaments in the income of the applicant. In any event, he submitted that it was the burden/onus on the Department to prove that the seized silver ornaments belonged to the applicant and in absence of which the addition could not have been made. He further submitted that the provisions of Sub-section (4A) of Section 132 of the Act had been inserted by the Taxation Law Amendment Act, 1975 w.e.f. 1st Oct., 1975 and the presumption raised therein is not available to the Department as search and seizure was conducted on 8th Oct., 1974. In support of the aforesaid plea, he has relied upon the following decisions :
1. CIT v. Daulat Ram Rawatmull ;
2. Addl CIT v. Karnail Singh v. Kalemn ; and
3. Anil Kumar Roy Chowdhury and Ors. v. CIT .
He further submitted that the Tribunal had given benefit in respect of other items which have been found in possession of the applicant by accepting his plea and, therefore, on the basis of the same analogy the Tribunal ought to have deleted the addition in question.
5. The learned standing counsel submitted that none of the decisions relied upon by the learned Counsel for the applicant is applicable to the facts of the present case. According to him even without taking recourse to the provisions of Sub-section (4A) of Section 132 of the Act, the onus/burden was upon the applicant to prove by cogent evidence and materials that the seized silver ornaments did not belong to him. In the present case the applicant has failed to discharge that onus/burden as the silver ornaments were seized from the possession of the applicant. The natural presumption is that they belonged to him and nobody else. He, thus, submitted that the order of the Tribunal does not call for any interference.
6. Having heard the learned Counsel for the parties, we find that it is not in dispute that the search was conducted on 8th Oct., 1974 on the applicant's premises and 23 kgs. silver ornaments were seized. No doubt, the applicant gave an explanation that these ornaments did not belong to him but to various parties who had pawned them but the applicant has failed to produce any cogent material or evidence to establish the ownership of the seized silver ornaments. As it is not in dispute that the ornaments have been seized from the premises of the applicant, the onus lays upon the applicant that the ornaments did not belong to him. The natural presumption is that any article or goods found in the possession of the person belongs to such person only if proved otherwise and onus is upon such a person to establish and prove that the goods or article did not belong to him. Any thing that is in the special knowledge of a person, burden is upon such a person to prove and to explain. Sub-section (4A) of Section 132 incorporates only such a presumption which otherwise is available under the general rule of evidence. Nothing turns on the provisions of Section 132(4A) of the Act in the present case, as the rule of evidence is very clear and well established.
7. In the case of Daulat Ram Rawatmull (supra) the IT Department was of the opinion that the fixed deposit receipt in the name of another person belonged to Daulat Ram Rawatmull. In this background the apex Court has held that the-onus of proving that the apparent was not the real was on the party who claimed it to be so. As it was the Department which claimed that the amount of fixed deposit receipt belonged to the respondent-firm even though the receipt had been issued in the name of another person, the burden lay on the Department to prove that the respondent was the owner of the amount despite the fact that the receipt was in the name of other person. In the present case the articles have been seized from the possession of the applicant and the seized silver ornaments did not bear any name of any person regarding ownership, therefore, it was the duty of the applicant to prove that it did not belong to him.
8. In the case of Karnail Singh (supra) the Punjab & Haryana' High Court has held that the assessee has to be an owner before anything in his possession can be deemed to be his income. It cannot be said in the case of stolen property that the thief is the owner thereof and, therefore, provisions of Section 69A of the Act would not be applicable. The aforesaid case is of no assistance in the present case. The articles have been found in the possession of the applicant and he had not been able to prove that it belonged to some other person. It is not the case of stolen property.
9. In the case of Anil Kumar Roy Chowdhury (supra) the apex Court has held that the person who asserts that certain property is joint family property has to prove that it is so. The principle laid down in the aforesaid case is not applicable to the present case.
10. In view of the aforesaid discussions, we find no legal infirmity in the order of the Tribunal. We, accordingly, answer all the questions referred to us in the affirmative i.e., in favour of the Revenue and against the assessee. However, there shall be no order as to costs.