SHRI DEVI SINGH, TONK V. ITO WARD 4-2, JAIPUR

ITA 1014/JPR/2015

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3746 (ITAT-JAIPUR)
• Appeal Type: Income Tax (International Taxation) Appeal
• Pronouncement Date: 29-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 29-12-2015
• Court: TRIBUNAL

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 1014/JP/2015 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR :2009-10 SHRI DEVI SINGH 3C, 3 RD FLOOR, TILAK BHAWAN, TILAK MARG, C- SCHEME, JAIPUR CUKE VS. INCOME TAX OFFICER, WARD-4(2), JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: BLKPS8501G VIHYKFKHZ@ AP PELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI SHIWANGI SAMDHANI & SHRI RAJIV SOGANI (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI J. C. KULHARI (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 27/08/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 01/10/2018 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-2, JAIPUR DATED 27.10.2015 FOR A.Y. 2009-10 WHEREIN THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL. 1. (A) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION O F LD. AO IN TREATING CASH DEPOSITS OF RS. 10,33,563/- AS UND ISCLOSED INCOME. THE ACTION OF LD. CIT (A) IS ILLEGAL, UNJUS TIFIED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY ITA NO. 1014/JP/2015 SHRI DEVI SINGH, JAIPUR VS. ITO, JAIPUR 2 PLEASE BE GRANTED BY DELETING THE SAID ADDITIONS OF RS. 10,33,563/-. (B) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION O F LD. AO IN CALCULATING THE PEAK BALANCE IN BANK ACCOUNT WHI CH HAS NOT BEEN CORRECTLY WORKED OUT. THE ACTION OF LD. CI T(A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAINST THE FAC TS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY APPROPRIATELY WORKING THE PEAK BALANCE. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF LD . AO IN TREATING THE OPENING BALANCE OF CAPITAL ACCOUNT OF RS. 4,31,450/- AS UNDISCLOSED INCOME. THE ACTION OF LD. CIT(A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY DELETING THE SAID ADDITIONS OF RS. 4,31,450/-. 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD. AO HAS ERRED IN ESTIMATING THE NET PROFIT @ 8% AGAINST THE DECLARED NET PROFIT RATE OF 2.30% RESULTING INT O TRADING ADDITION OF RS. 6,23,202/-. THE ACTION OF LD. AO IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY DELETING THE TRADIN G ADDITION OF RS. 6,23,202/-. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSMENT WAS COMPLETED U/S 143(3) READ WITH SECTION 144 WHEREIN THE AO HAS TREATED CASH DEPOSIT OF RS. 10,33,563/- AS UNDISCLOSED INCO ME IN THE HANDS OF THE ASSESSEE. FURTHER, THE OPENING BALANCE OF CAPIT AL ACCOUNT OF RS. 2,51,450/- WAS ALSO TREATED AS UNDISCLOSED INCOME. BESIDES, THE AO HAS ESTIMATED THE NET PROFIT OF ASSESSEE FROM HIS L IQUOR BUSINESS AT 8% AS AGAINST 2.3% DECLARED IN THE RETURN OF INCOME. ITA NO. 1014/JP/2015 SHRI DEVI SINGH, JAIPUR VS. ITO, JAIPUR 3 3. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R IN APPEAL BEFORE LD. CIT(A) WHO HAS CONFIRMED THE SAID ADDITI ONS AND NOW THE ASSESSEE IS IN APPEAL BEFORE US. 4. REGARDING GROUND NO. 1, THE ASSESSEE HAS SUBMIT TED AS UNDER:- 3.1 DURING THE YEAR UNDER CONSIDERATION, THE ASSES SEE HAS DECLARED A TURNOVER OF RS. 1,09,33,148/- FROM HIS BUSINESS OF LIQUOR TRADING, WHICH WAS ACCEPTED BY THE LOWER AUTHORITIES. IT WAS ALSO SUBMITTED THAT IT IS A WELL ESTABLISHED FACT THAT THE ENTIRE SALES OF LIQU OR SHOP ARE MADE IN CASH ONLY, THE LOWER AUTHORITIES AGAIN ACCEPTED THE SAID FACT WITHOUT DISPUTING THE SAME. 3.2 THE ASSESSEE DURING THE YEAR DEPOSITED A TOTAL SUM OF RS. 19,22,790/-I.E 17.59% OF HIS TOTAL TURNOVER IN HIS SBBJ SB A/C. KEEPING IN VIEW THE NATURE OF THE BUSINESS IN WHICH THE ASSESSEE IS ENGAGED, THERE IS A DIRECT NEXUS BETWEEN THE SALES AND THE CASH DEPOSITS. THE ASSESSEE ON VARIOUS DATES DEPOSITED A PART OF CASH GENERATED FROM BUSINESS AND USED THE SAME FOR MAKIN G PURCHASES OF LIQUOR FROM GOVERNMENT AGENCIES NAMELY RAJASTHAN ST ATE BEVERAGES CORPORATION LIMITED (RSBCL) AND RAJASTHAN STATE GAN GANAGAR SUGAR MILLS (RSGSM) AND FOR MAKING PURCHASES OF THE LIQUO R LICENSES. 3.3 FURTHER, IT IS PERTINENT TO NOTE THAT OUT OF TH E ENTIRE MONEY DEPOSITED IN THE BANK ACCOUNT, SOME OF THE MONEY WA S OF ASSESSEES FATHER. THE ASSESSEES FATHER IS A FARMER AND DO NO T HAVE A BANK ACCOUNT. IT IS A WELL KNOWN FACT THAT SMALL FARMERS DO NOT KEEP BANK ACCOUNTS. THUS, IN ORDER TO KEEP MONEY IN SAFE CUST ODY, ASSESSEES ITA NO. 1014/JP/2015 SHRI DEVI SINGH, JAIPUR VS. ITO, JAIPUR 4 FATHER GAVE HIS MONEY TO THE ASSESSEE AS TRUST MONE Y WITH A DIRECTION TO DEPOSIT THE SAME IN BANK. 3.4 IT IS SUBMITTED THAT LD. AO ERRED IN MAKING THE ADDITION IN AN ARBITRARY MANNER WITHOUT LOOKING INTO THE NATURE OF THE BUSINESS OF THE ASSESSEE. FURTHER, LD. AO FAILED TO DISCHARGE HIS D UTY FOR MAKING ADDITION BY BRINING ON RECORD ANY OTHER SOURCE OF I NCOME FOR GENERATION OF CASH. HENCE, THERE CAN BE NO DOUBT ON DEPOSITION OF RS. 19,22,790/- KEEPING IN VIEW THE ABOVE SUBMISSIONS. 3.5 IT IS FURTHER SUBMITTED THAT DURING THE APPELLA TE PROCEEDINGS, THE ASSESSEE SUBMITTED BEFORE LD. CIT(A) THAT THE CASH DEPOSITED WAS THE PART OF CASH GENERATED FROM THE SALE OF LIQUOR. HOW EVER, LD. CIT(A) WITHOUT CONSIDERING THE CONTENTION OF THE ASSESSEE ON THE BASIS OF SURMISE AND CONJECTURE, IN A VERY SUMMARY MANNER UP HELD THE ADDITION MADE BY THE LD. AO. 3.6 IT IS CLEAR THAT LOWER AUTHORITIES HAVE ERRED I N INTERPRETATION OF SECTION 69. AS PER THE LANGUAGE OF SECTION, ITO IS NOT OBLIGED TO TREAT SUCH SOURCE OF INVESTMENT AS INCOME IN EVERY CASE W HERE THE EXPLANATION OFFERED BY THE ASSESSEE IS FOUND TO BE NOT SATISFACTORY. A DISCRETION HAS BEEN CONFERRED ON THE ITO UNDER SECT ION 69 TO TREAT THE SOURCE OF INVESTMENT AS THE INCOME OF THE ASSES SEE IF THE EXPLANATION OFFERED BY THE ASSESSEE IS NOT FOUND SA TISFACTORY AND THE SAID DISCRETION HAS TO BE EXERCISED KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE PARTICULAR CASE. RELIANCE IS P LACED ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF CI T VS. SMT. P.K. NOORJAHAN [1999] 103 TAXMAN 382 (SC) WHEREIN IT IS HELD AS UNDER: ITA NO. 1014/JP/2015 SHRI DEVI SINGH, JAIPUR VS. ITO, JAIPUR 5 ' ..THE SUBMISSION IS THAT ONCE THE EXPLANATION OFF ERED BY THE ASSESSEE FOR THE SOURCES OF THE INVESTMENTS FOUND T O BE NON- ACCEPTABLE THE ONLY COURSE OPEN TO THE ITO WAS TO TREAT THE VALUE OF THE INVESTMENTS TO BE THE INCOME OF THE ASSESSEE. T HE SUBMISSION IS THAT THE WORD 'MAY' IN SECTION 69 SHOULD BE READ AS `SHALL'. WE ARE UNABLE TO AGREE. AS POINTED OUT BY THE TRIBUNAL, IN THE CORRESPONDING CLAUSE IN THE BILL WHICH WAS INTRODUCED IN THE PARL IAMENT, THE WORD SHALL HAD BEEN USED BUT DURING THE COURSE OF CONS IDERATION OF THE BILL AND ON THE RECOMMENDATION OF THE SELECT COMMIT TEE, THE SAID WORD WAS SUBSTITUTED BY THE WORD 'MAY'. THIS CLEARL Y INDICATES THAT THE INTENTION OF THE PARLIAMENT IN ENACTING SECTION 69 WAS TO CONFER A DISCRETION ON THE ITO IN THE MATTER OF TREATING THE SOURCE OF INVESTMENT WHICH HAS NOT BEEN SATISFACTORILY EXPLAI NED BY THE ASSESSEE AS THE INCOME OF THE ASSESSEE AND THE ITO IS NOT OBLIGED TO TREAT SUCH SOURCE OF INVESTMENT AS INCOME IN EVE RY CASE WHERE THE EXPLANATION OFFERED BY THE ASSESSEE IS FOUND TO BE NOT SATISFACTORY. THE QUESTION WHETHER THE SOURCE OF TH E INVESTMENT SHOULD BE TREATED AS INCOME OR NOT UNDER SECTION 69 HAS TO BE CONSIDERED IN THE LIGHT OF THE FACTS OF EACH CASE. IN OTHER WORDS, A DISCRETION HAS BEEN CONFERRED ON THE ITO UNDER SECT ION 69 TO TREAT THE SOURCE OF INVESTMENT AS THE INCOME OF THE ASSES SEE IF THE EXPLANATION OFFERED BY THE ASSESSEE IS NOT FOUND SA TISFACTORY AND THE SAID DISCRETION HAS TO BE EXERCISED KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE PARTICULAR CASE... ITA NO. 1014/JP/2015 SHRI DEVI SINGH, JAIPUR VS. ITO, JAIPUR 6 5. THE LD. DR RELIED ON THE FINDINGS OF THE LOWER AUTHORITIES AND TAKEN US THROUGH THE FINDINGS OF THE LD. CIT(A) WHI CH IS CONTAINED AT PARA 2.3 OF HIS ORDER WHICH IS REPRODUCED AS UNDER: 2.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASSE SSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. THE FACTS OF THE CASE AS THEY EMERGE ARE THAT THE ASSESSING OFFICER HAD INFORMATI ON OF A BANK ACCOUNT OF THE ASSESSEE WITH SBBJ CHAKASU IN WHICH HUGE CASH TRANSACTION HAD BEEN MADE. THIS IS THE FIRST YEAR OF BUSINESS IN LIQUOR, OF THE ASSESSEE. THE ASSESSEE INITIALLY DID NOT DISCLOSE THIS BANK ACCOUNT AND ALSO THE CASH BOOK PRODUCED B Y THE ASSESSEE DID NOT HAVE ANY ENTRY RELATED TO THIS ACC OUNT. THIS WAS AN ACCOUNT WHICH WAS CONCEALED AND WAS BEING US ED TO DEPOSIT UNRECORDED RECEIPTS OF THE ASSESSEE. FURTHER AS PER THE AUDIT REPORT, THE STATUTORY AUDITORS HAVE REPORTED THAT NO STOCK REGISTER IS BEING MAINTAINED BY THE ASSESSEE. CONSI DERING, THE ENTIRE FACTUAL MATRIX THE BOOKS OF ACCOUNTS WERE REJECTED BY THE ASSESSING OFFICER U/S 145(3) OF THE IT ACT, 1961 AND THE PROF IT FROM THE LIQUOR BUSINESS HAS BEEN ESTIMATED AT 8%. AS REGARDS, THE AMOUNTS IN THE UNDISCLOSED BANK ACCOUNT, THE PEAK CREDIT HAS BEEN ARRIVED AT AND ADDED AS UNDISCLOSED RECEIPTS. FURTHER, THE ASSESSI NG OFFICER HAS TELESCOPED THE ADDITION OF BUSINESS INCOME WITH THE ADDITION FOR THE AMOUNTS FOUND IN BANK ACCOUNT. IN THE PRESENT PROCE EDING THE AR HAS SUBMITTED THAT THE ADDITION OF RS. 4,10,361 MAY BE DELETED / TELESCOPED WITH 8% OF TURNOVER. THIS PLEA OF THE AR CANNOT BE HEEDED TO AS THE TELESCOPING HAS ALREADY BEEN CORRE CTLY ALLOWED BY THE ASSESSING OFFICER. THIS GROUND OF APPEAL IS DIS MISSED. ITA NO. 1014/JP/2015 SHRI DEVI SINGH, JAIPUR VS. ITO, JAIPUR 7 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PURUSED THE MATERIAL AVAILABLE ON THE RECORD. THE LD CIT(A) HAS RETURNED A FINDING THAT THIS IS THE FIRST YEAR OF BUSINESS IN LIQUOR, OF THE ASS ESSEE. THE ASSESSEE INITIALLY DID NOT DISCLOSE THIS BANK ACCOUNT AND AL SO THE CASH BOOK PRODUCED BY THE ASSESSEE DID NOT HAVE ANY ENTRY REL ATED TO THIS ACCOUNT. THIS WAS AN ACCOUNT WHICH WAS CONCEALED AN D WAS BEING USED TO DEPOSIT UNRECORDED RECEIPTS OF THE ASSESSEE . GIVEN THAT THE CASH DEPOSITS WERE FOUND DEPOSITED IN THE BANK ACCO UNT MAINTAINED BY THE ASSESSEE IN HIS OWN NAME, THE ONUS IS ON THE ASSESSEE TO DEMONSTRATE THAT THESE DEPOSITS ARE OUT OF HIS BUSI NESS TRANSACTIONS. IN THIS REGARD, THE LD AR HAS MAINLY CONTENDED THAT THERE IS A DIRECT NEXUS BETWEEN THE SALES AND THE CASH DEPOSITS. THE ASSESSEE ON VARIOUS DATES DEPOSITED A PART OF CASH GENERATED FR OM BUSINESS AND USED THE SAME FOR MAKING PURCHASES OF LIQUOR FROM G OVERNMENT AGENCIES NAMELY RAJASTHAN STATE BEVERAGES CORPORATI ON LIMITED (RSBCL) AND RAJASTHAN STATE GANGANAGAR SUGAR MILLS (RSGSM) AND FOR MAKING PURCHASES OF THE LIQUOR LICENSES. IN OUR VI EW, THERE ARE MERELY CONTENTIONS WHICH MAY SOUND ATTRACTIVE BUT UNLESS A ND UNTIL THE SAME ARE SUPPORTED AND DEMONSTRATED THROUGH VERIFIABLE E VIDENCE, THE SAME CANNOT BE ACCEPTED. THE ASSESSEE HAS FAILED T O LINK THE CASH SALES SO CLAIMED WITH THE DEPOSITS IN THE BANK ACCO UNT AS THE LD CIT(A) HAS CLEARLY RETURNED A FINDING THAT THE CAS H BOOK PRODUCED BY THE ASSESSEE DID NOT HAVE ANY ENTRY RELATED TO THE DEPOSIT IN THIS BANK ACCOUNT AND THE SAID FINDINGS OF THE LD CIT(A) REMA IN UNCONTROVERTED BEFORE US. FURTHER, WE HAVE GONE THROUGH OTHER CONT ENTIONS SO RAISED BY THE LD AR AS WELL AS THE LEGAL DECISION RELIED U PON BY THE LD AR HOWEVER, WE FIND THAT THE SAME DOESNT SUPPORT THE CASE OF THE ITA NO. 1014/JP/2015 SHRI DEVI SINGH, JAIPUR VS. ITO, JAIPUR 8 ASSESSEE. IN THE RESULT, WE DONOT SEE ANY INFIRMIT Y IN THE ORDER OF THE LOWER AUTHORITIES AND THE SAME IS HEREBY CONFIRMED. THE GROUND SO TAKEN BY THE ASSESSEE IS HEREBY DISMISSED. 7. REGARDING GROUND NO. 2, THE LD. AR HAS SUBMITTE D AS UNDER:- 31. IT IS SUBMITTED THAT IN THE YEAR UNDER CONSIDE RATION THE ASSESSEE FOR THE FIRST TIME STARTED HIS BUSINESS. P RIOR TO STARTING THE SAID BUSINESS OF LIQUOR SHOP, THE ASSESSEE WAS ASSI STING HIS FATHER IN CARRYING OUT AGRICULTURE ACTIVITIES. IT IS A WEL L KNOWN FACT THAT WHEN A NEW BUSINESS IS SET UP THERE IS REQUIREMENT OF CAPITAL WHICH IS GENERALLY PROVIDED BY THE FATHER OUT OF HIS LOVE AND AFFECTION. IN THE PRESENT CASE ALSO, THE ASSESSEE'S FATHER GIFTED HIM A SUM OF RS. 6,31,450 SO AS TO HELP HIM TO SET UP HIS OWN NE W BUSINESS. 3.2. DURING THE ASSESSMENT PROCEEDINGS ELABORATE SU BMISSIONS ALONG WITH THE FOLLOWING EVIDENCES ESTABLISHING THE IDENT ITY, GENUINENESS AND CREDITWORTHINESS WERE MADE BEFORE ID. CIT(A): COPY OF JAMABANDI REPORT IN THE NAME OF ASSESSEE'S FATHER. COPY OF KHASRA GIRDAWARI REPORT I.E. STATEMENT OF CROPS CULTIVATED. COPY OF THREE LATEST PHOTOGRAPHS OF AGRICULTURE LAN D, TO SUBSTANTIATE THAT LAND IS ENGAGED IN AGRICULTURE AC TIVITIES EVEN AFTER HE GAVE GIFT. COPY OF AFFIDAVIT OF THE ASSESSEE' FATHER, ACCEPTIN G THE FACT THAT GIFT OF RS. 6,31,450 WAS GIVEN BY HIM TO THE ASSESS EE. COPY OF RECEIPT FROM NEWAI KRISHI UPAJ MANDI FOR A RECENT SALE TRANSACTION OF RS. 1,42,650. ITA NO. 1014/JP/2015 SHRI DEVI SINGH, JAIPUR VS. ITO, JAIPUR 9 CERTIFICATE FROM SARPANCH OF VILLAGE STATING THAT A LAND IS OWNED BY THE FATHER OF THE ASSESSEE ON WHICH CULTIVATION IS DONE. 3.3. IT IS SUBMITTED THAT ID. CIT(A) ERRED IN HOLDI NG THAT SINCE BANK STATEMENT OF THE ASSESSEE'S FATHER AND GIFT DEED EV IDENCING SUCH GIFT HAS NOT BEEN PRODUCED, THE TRANSACTION IS NOT GENUI NE AND THE CREDITWORTHINESS IS ALSO NOT ESTABLISHED. 3.4 IT IS SUBMITTED THAT THE ASSESSEE HAS PRODUCED ALL THE POSSIBLE EVIDENCES AS STATED ABOVE IN ORDER TO ESTABLISH CRE DITWORTHINESS OF HIS FATHER. IT IS A WELL KNOWN FACT THAT FARMERS GE NERALLY DO NOT MAINTAIN BANK ACCOUNTS AND DON'T EVEN KEEP BOOKS OF ACCOUNT SINCE THEIR INCOME IS EXEMPT FROM TAX. THE ASSESSEE'S FAT HER IS ALSO A FARMER AND FROM PAST MANY YEARS TILL DATE IS ENGAGE D IN CARRYING OUT AGRICULTURE ACTIVITIES ON HIS LAND. THE ASSESSEE BY PROVIDING JAMABANDI, GIRDAWARI REPORT, CERTIFICATE OF SARPANC H AND LATEST PHOTOGRAPHS OF HIS LAND HAS PROVED THE CREDITWORTHI NESS OF HIS FATHER. FURTHER, THE ASSESSEE HAS ALSO BOUGHT ON RECORD THA T ASSESSEES FATHER HAS MADE A RECENT SALE TO NEWAI KRISHI UPAJ MANDI OF RS. 1,42,650/-. IT IS SUBMITTED THAT WHEN ASSESSEES FA THER CAN RAISE MORE THAN RS. 1,00,000/- FROM A SINGLE SALE TRANSAC TION, THEN HE COULD HAVE SAVED RS. 6,31,450/- OVER YEARS AND GIFT ED THE SAME TO HIS SON FOR SETTING UP OF HIS FIRST BUSINESS. 3.5 THE ASSESSEE ALSO ESTABLISHED THE GENUINENESS O F THE TRANSACTION BY PROVIDING AN AFFIDAVIT CONFIRMING TH E GIFT AND AMOUNT OF GIFT WAS DULY SUBMITTED. FURTHER, BEFORE LD. CIT (A) THE ASSESSEE ITA NO. 1014/JP/2015 SHRI DEVI SINGH, JAIPUR VS. ITO, JAIPUR 10 ALSO SHOWED HIS WILLINGNESS TO PRODUCE HIS FATHER. IT IS SUBMITTED THAT LD. CIT(A) ONLY DUE TO NON FURNISHING OF GIFT DEED FORMED A BELIEF THAT GIFT IS NOT GENUINE. IN THIS REGARD IT IS SUBM ITTED THAT THE ASSESSEE BELONGS TO A RURAL BACKGROUND AND WAS NOT AWARE OF THE FACT THAT A GIFT DEED HAS TO BE EXECUTED IN SUCH CA SES. THEREFORE, BY PROVING AFFIDAVIT AND BY MAKING A REQUEST TO PRODUC E HIS FATHER THE ASSESSEE HAS DISCHARGED HIS ONUS. 3.6 THE LOWER AUTHORITIES HAVE ERRED IN MAKING/ CON FIRMING THE ADDITION WITHOUT BRINGING ANY EVIDENCE, DIRECT OR I NDIRECT, TO SHOW THAT THE MONEY SO RECEIVED ACTUALLY BELONGED TO THE ASSESSEE. NOWHERE THE ID. AO OR ID. CIT(A) HAS SUGGESTED THAT THE MONEY GIVEN BY THE FATHER HAS ACTUALLY FLOWN FROM THE ASS ESSEE. IN ABSENCE OF THIS FINDING, NO ADDITION CAN BE MADE TO THE INC OME OF THE ASSESSEE MERELY ON SUSPICION. SINCE THE IDENTITY OF THE ASSESSEE'S FATHER IS DULY ESTABLISHED BY THE ASSESSEE, THE ID. AO AT BEST COULD HAVE ASSESSED SUCH AMOUNT IN THE HANDS OF THE ASSES SEE'S FATHER. RELIANCE IS PLACED ON THE DECISION OF HON'BLE RAJAS THAN HIGH COURT IN THE CASE OF PCIT VS. SHUBH MINES PVT. LTD. APPEAL NO.M 96/15. THE RELEVANT EXTRACT IS AS UNDER:- '...IN THE CONSIDERED OPINION OF THIS COURT, IN ABS ENCE OF ANY COGENT EVIDENCE ON RECORD ESTABLISHING THAT THE MONEY SHOW N TO HAVE RECEIVED AS SHARE APPLICATION MONEY, WAS AS A MATTE R OF FACT, UNACCOUNTED MONEY BELONGING TO THE ASSESSEE COMPANY , THE FINDING ARRIVED AT BY THE AO, WHICH IS BASED ON SUSPICION, HAS RIGHTLY BEEN HELD NOT SUSTAINABLE IN THE EYES OF LAW. SUFFICE IT TO SAY THAT THE FINDING ARRIVED AT BY THE CIT (A), AFFIRMED BY THE ITAT, WHICH ITA NO. 1014/JP/2015 SHRI DEVI SINGH, JAIPUR VS. ITO, JAIPUR 11 REMAINS A FINDING OF FACT , CANNOT BE SAID TO BE CAPRICIOUS OR PERVERSE.. 8. PER CONTRA, THE LD. DR RELIED ON THE FINDINGS O F THE LOWER AUTHORITY AND TAKEN US THROUGH THE ORDER OF THE LD. CIT(A) AT PARA 3.3. 3.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASSE SSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. THE OPENING BALAN CE OF CAPITAL ACCOUNT OF RS. 6,31,450/- WAS SOUGHT TO BE EXPLAINE D BY THE ASSESSEE AS GIFT FROM THE ASSESSEE'S FATHER, WHO IS AN AGRIC ULTURIST. THE AUTHORIZED REPRESENTATIVE FURTHER SUBMITTED A COPY OF KHASRA GIRALAWARI REPORT, SOME PHOTOGRAPHS OF CROPS BEING CULTIVATED AND AN AFFIDAVIT FROM THE FATHER STATING THAT THE GIFT HA D BEEN GIVEN, CONFIRMATION OF SALE OF CROP OF MUSTARD AND A CERTIFICATE FROM THE SARPANCH OF VILLAGE GUNSHI, IN THE PRESENT PROCEEDING IN SUPPORT OF THE CREDITWORTHINESS OF TH E FATHER TO EXTEND THE GIFT REFERRED ABOVE. ALL EVIDENCE NOW FILED WERE FORWARDED TO AO FOR HI S COMMENTS ALSO. THE ASSESSEE HAS SUBMITTED AN AFFIDAVIT OF THE FATH ER AFFIRMING THAT HE OWNS AGRICULTURAL LAND AND AN AMO UNT OF RS. 6,00,000/- WAS GIVEN BY HIM TO HIS SON AS GIFT AND THE AMOUNT WAS PAID IN CASH. FURTHER AS NO GIFT DEED WAS EXECUTED, THIS AFFIDAVIT CAN AT BEST ACKNOWLEDGE THAT THE FATHER IS MAKING A CLAIM OF HAVING MADE THE GIFT AND ALSO REGARDING HIS LAND HOLDING, BUT THE IMPORTANT QUESTION OF CREDITWORTHINESS OF THE DONEE, THE GENU INENESS OF THE TRANSACTION ARE STILL NOT PROVED. FURTHER, NO BANK ACCOUNT STATEMENT AS EVIDENCE TO PROVE THE AVAILABILITY OF CASH HAS B EEN PRODUCED. THE AO DURING INITIAL PROCEEDING HAS GIVEN CREDIT F OR RS. 2 LAKHS IN ITA NO. 1014/JP/2015 SHRI DEVI SINGH, JAIPUR VS. ITO, JAIPUR 12 OPENING BALANCE TO THE ASSESSEE. IN MY VIEW AS THE GENUINENESS OF GIFT COULD NOT BE PROVED BY THE ASSESSEE AND A C REDIT OF RS. 2 LAKH HAS ALREADY BEEN GIVEN, THE BALANCE AMOU NT OF RS. 4,31,450/- IS CORRECTLY ADDED TO THE INCOME OF THE ASSESSEE. THUS, THIS ADDITION IS CONFIRMED AND THE GROUND OF APPEAL IS DISMISSED. 9. WE HAVE HEARD THE RIVAL CONTENTION AND PURSUED T HE MATERIAL AVAILABLE ON THE RECORD. THE ASSESSEE HAS CLAIMED THE OPENING CAPITAL OF RS 6,31,450 AS A GIFT FROM HIS FATHER. IN ABSEN CE OF GIFT DEED OR CONFIRMATION, THE AO FOUND IT REASONABLE TO RESTRIC T TO RESTRICT THE OPENING CAPITAL TO RS 2,00,000 AND ADDED AN AMOUNT OF RS 4,31,450. FIRSTLY, WE FIND IT DIFFICULT TO UNDERSTAND IF THE AO HAS DOUBTED THE GIFT TRANSACTION, WHAT MADE HIM TO RESTRICT THE ADDITION TO RS 4.31 LACS. EITHER THE TRANSACTION HAS TO BE ACCEPTED OR REJECT ED IN TOTALITY. TO OUR MIND, THIS ARBITRARINESS IN THE APPROACH OF THE AO IS A GOOD GROUND FOR US TO DELETE THE SUBJECT ADDITION. FURTHER, DURING THE APPELLATE PROCEEDINGS, THE ASSESSEE SUBMITTED THE AFFIDAVIT O F THE FATHER OF HAVING GIVEN THE GIFT TO THE ASSESSEE AND ALSO OTHE R SUPPORTING DOCUMENTATION IN SUPPORT OF CREDITWORTHINESS WHICH WE HAVE NOTED ABOVE. IN PECULIAR FACTS OF THE CASE, WHERE THE AS SESSEE HAS STARTED A NEW BUSINESS, IT WOULD BE REASONABLE TO BELIEVE THE CONTENTION OF THE ASSESSEE OF HAVING RECEIVED THE INITIAL FINANCE FRO M HIS FATHER BY WAY OF A GIFT. THEREFORE, THE GENUINENESS OF THE TRANSACTI ON AND ALSO THE CREDITWORTHINESS OF THE FATHER HAS BEEN ESTABLISHED WHICH HAS BEEN SUPPORTED BY LAND RECORDS/EARNINGS. IN LIGHT OF TH E SAME, THE ADDITION SO MADE BY THE AO IS HEREBY DELETED AND THE GROUND IS ALLOWED. ITA NO. 1014/JP/2015 SHRI DEVI SINGH, JAIPUR VS. ITO, JAIPUR 13 10. GROUND NO. 3 WAS NOT PRESSED DURING THE COURSE OF HEARING, HENCE THE SAME IS DISMISSED AS NOT PRESSED. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PART LY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 01/10/20 18 SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 01/10/2018. * GANESH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI DEVI SINGH, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- ITO, WARD-4(2), JAIPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 1014/JP/2015} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR