Shri Madhusudan C.Thakkar, Ahmedabad V. The Income tax Officer,Ward-7(1), Ahmedabad

ITA 1023/AHD/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89779 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 24-06-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 10-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SONIA KUMAR
• Keywords: Unexplained cash credit; Gift; Additional evidence
• Section: 133(6)

Judgement Text

, D IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI G.D. AGRAWAL, VICE-PRESIDENT AND SHRI RAJPAL YADAV, JUDICIAL MEMBER ./ ITA NO.1023/AHD/2012 / ASSESSMENT YEAR: 2007-2008 MADHUSUDAN C. THAKKAR 301, NEHDEEP AVENU NR. PRIYADARSHINI TOWER JUDGES BUNGLOW ROAD BODAKDEV, AHMEDABAD. PAN : ACAPT 3474 F VS ITO, WARD - 7(1) AHMEDABAD. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI MANISH J. SHAH REVENUE BY : SMT.SONIA KUMAR, SR.DR / DATE OF HEARING : 24/06/2015 / DATE OF PRONOUNCEMENT: 24/07/2015 $%/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE OR DER OF LEARNED CIT(A)-XIV, AHMEDABAD DATED 21.3.2012 PASSED FOR TH E ASSTT.YEAR 2007-08. 2. THE SOLITARY SUBSTANTIAL GROUND OF APPEAL RAISED BY THE ASSESSEE IS THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING THE ADDI TION OF RS.14,88,000/-. 3. BRIEF FACTS OF THE CASE THAT THE ASSESSEE IS AN INDIVIDUAL. HE WAS TRADING IN SHARES AND WORKING AS COMMISSION AGENT A T THE RELEVANT TIME. HE HAS FILED HIS RETURN OF INCOME ON 6.8.200 8 SHOWING TOTAL INCOME OF RS.1,28,310/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR ITA NO.1023/AHD/2012 2 SCRUTINY ASSESSMENT AND NOTICE UNDER SECTION 143(2) WAS ISSUED ON 25.7.2009. DURING THE SCRUTINY OF THE ACCOUNTS, IT REVEALED TO THE AO THAT THE ASSESSEE HAS DEPOSITED A SUM OF RS.14,88,0 00/- IN CASH IN HIS SAVING BANK ACCOUNT WITH DEVELOPMENT CREDIT BANK LT D., VEJALPUR BRANCH. THIS INFORMATION WAS TRANSMITTED TO THE AO BY ANNUAL INFORMATION REPORT WING. THE AO HAS CONFRONTED THE ASSESSEE WITH REGARD TO THE DEPOSIT MADE IN CASH IN THE SAVING AC COUNT AND DIRECTED HIM TO DISCLOSE THE SOURCE OF DEPOSIT. IT APPEARS THAT THE AO HAS GRANTED NUMBER OF OPPORTUNITY TO THE ASSESSEE, BUT HE DID NOT AVAIL AND ULTIMATELY IN AN EX PARTE ORDER, THE LD. AO HAS MADE ADDITION OF RS.14,88,000/- IN THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF UNEXPLAINED CREDITS IN THE ACCOUNTS OF THE ASSESSEE . 4. ON APPEAL, THE ASSESSEE HAS FILED AN APPLICATION FOR PERMISSION TO LEAD ADDITIONAL EVIDENCE UNDER RULE 46A OF THE INCO ME TAX RULES, 1962. THE ASSESSEE CONTENDED THAT HE HAS RECEIVED GIFTS F ROM HIS SON, HITESH THAKKAR, WIFE LABHUBEN THAKKAR, BROTHER BHARATBHAI THAKKAR, AND BROTHER-IN-LAW, HARESHBHAI THAKKAR. HE KEPT THE MO NEY IN CASH WITH HIM, WHICH WAS DEPOSITED IN THE BANK ACCOUNT. THE LD.FIRST APPELLATE AUTHORITY HAS CALLED FOR A REMAND REPORT FROM THE A O UNDER SUB-RULE 2 OF RULE 46A. THE LEARNED AO HAS OBJECTED ADMISSION OF THE ADDITIONAL EVIDENCE ON THE GROUND THAT THE ASSESSEE WAS GIVEN SEVERAL OPPORTUNITIES IN THE ASSESSMENT PROCEEDINGS, AND TH ERE IS NO LAPSE ON THE PART OF THE AO TO DENY THE ASSESSEE ANY OPPORTU NITY TO LEAD ANY EVIDENCE. WE DO NOT DEEM IT NECESSARY TO HIGHLIGHT THIS ASPECT, BECAUSE, AFTER HEARING BOTH THE SIDES, THE LD.FIRST APPELLATE AUTHORITY HAS ADMITTED THIS ADDITIONAL EVIDENCE UNDER SUB-RUL E 2 OF RULE 46A OF THE INCOME TAX RULES. THE DEPARTMENT IS NOT IN APPE AL AGAINST THE ORDER OF THE CIT(A). THEREFORE, CHALLENGE TO THE A DMISSION OF ADDITIONAL EVIDENCE IS NOT BEFORE US. ITA NO.1023/AHD/2012 3 5. IN THE REMAND PROCEEDINGS, THE ASSESSEE FAILED T O PRODUCE DONORS BEFORE THE AO. ACCORDING TO THE AO GIFTS WERE GIVE N TO THE ASSESSEE IN PREVIOUS YEAR, WHICH WERE KEPT BY ASSESSEE IN CASH. ACCORDING TO THE LD. AO, IF SUCH A STEP IS VISUALIZED ON ACCOUNT OF HUMAN PROBABILITIES, THEN IT IS AGAINST THE HUMAN CONDUCT THAT SOMEBODY WOULD KEEP MORE THAN RS.12 LAKHS IN CASH WITH HIM. THE LD. FIRST A PPELLATE AUTHORITY HAS GONE THROUGH THE REMAND REPORT OF THE AO, AND AFTER ANALYZING THE CIRCUMSTANCES SURROUNDING TO THE EXPLANATION OF THE ASSESSEE, REJECTED HIS CONTENTIONS AND CONFIRMED THE ADDITION. 6. THE LEARNED COUNSEL FOR THE ASSESSEE, AT THE VER Y OUTSET, SUBMITTED THAT THE BASIC REASON FOR NOT ACCEPTING T HE GIFTS AS GENUINE IS THAT THE ASSESSEE FAILED TO PRODUCE THE DONORS BEFO RE THE AO IN THE REMAND REPORT. THE ASSESSEE IS READY TO PRODUCE TH E DONORS BEFORE THE AO IF THE ISSUE IS SET ASIDE TO THE AO. HE FURTHER CONTENDED THAT THE GIFTS WERE RECEIVED FROM HIS SON, WIFE, BROTHER AND BROTHER-IN-LAW. THUS, THE GIFTS WERE RECEIVED IN BLOOD-RELATIONS AN D THEIR GENUINENESS CANNOT BE DOUBTED. 7. ON THE OTHER HAND, THE LEARNED DR CONTENDED THAT RIGHT FROM THE ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS BEEN ADOPT ING A DILATORY STRATEGY. HE DID NOT COOPERATE WITH THE AO IN THE ORIGINAL ASSESSMENT PROCEEDING, AND THEN AGAIN DID NOT PRODUCE THE DONO RS IN THE REMAND PROCEEDINGS. THEREFORE, THE ASSESSEE IS NOT ENTITL ED FOR ANY SYMPATHY AT THIS STAGE. 8. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS. AS F AR AS THE NEGLIGENCE ATTRIBUTED TO THE ASSESSEE DURING THE CO URSE OF ASSESSMENT PROCEEDINGS IS CONCERNED, THAT HAS BEEN EXONERATED BY THE LD.FIRST APPELLATE AUTHORITY BY ADMITTING THE ADDITIONAL EVI DENCE. THIS PART HAS NOT BEEN CHALLENGED BY THE REVENUE AND BECOMES FINA L. BUT THE QUESTION IS WHY THE ASSESSEE HAS NOT PRODUCED THE D ONORS IN THE REMAND PROCEEDINGS WHEN THE AO DIRECTED HIM TO PROD UCE. THERE IS NO ITA NO.1023/AHD/2012 4 PLAUSIBLE EXPLANATION FOR THIS LAPSE. BUT AT THE O THER HAND, GIFTS HAVE BEEN RECEIVED FROM RELATIVES I.E. SON, WIFE, BROTHE R AND BROTHER-IN-LAW. IF THE DONORS ARE ASSESSED TO TAX AND HAVE SOURCE F OR DONATIONS, THEN THE GENUINENESS OF THE GIFTS PROBABLY WILL NOT BE I N DOUBT. THEREFORE, IF WE PUT BOTH THESE ACTS I.E. FAILURE OF THE ASSESSEE FOR NOT PRODUCING THE DONORS UNDER GARB OF RELATIONSHIP WOULD SPOIL VIS- -VIS THE GIFTS RECEIVED FROM THE RELATIVES, THEN PROBABLY, THE ALLEGED LAPS E ON THE PART OF THE ASSESSEE IS NOT OF THAT MAGNITUDE THAT HIS VERSION, IS TO BE KEPT ASIDE. TAKING INTO CONSIDERATION OVERALL FACTS AND CIRCUMS TANCES, WE ARE OF THE VIEW THAT ENDS OF JUSTICE WOULD MEET, IF WE GRANT O NE MORE OPPORTUNITY TO THE ASSESSEE TO EXPLAIN HIS GIFTS BEFORE THE AO. WE SET ASIDE THE ORDERS OF THE LD. REVENUE AUTHORITIES BELOW AND RES TORE THIS ISSUE TO THE FILE OF THE AO FOR RE-ADJUDICATION. THE ASSESSEE I S DIRECTED TO PRODUCE DONORS BEFORE THE AO AT HIS OWN RESPONSIBILITY. HE WILL NOT ASK FOR ISSUANCE OF ANY SUMMONS UNDER SECTION 133(6) OF THE INCOME TAX ACT. THE AO AFTER EXAMINATION OF THE DONORS SHALL RE-DEC IDE THE ISSUE IN ACCORDANCE WITH LAW. 9. THE OBSERVATIONS MADE BY US WILL NOT IMPAIR OR I NJURE THE CASE OF THE AO. IT WILL NOT CAUSE ANY PREJUDICE TO THE EXP LANATIONS/DEFENSE OF THE ASSESSEE. THE ASSESSEE WILL BE AT LIBERTY TO S UBMIT ANY OTHER DETAILS IN SUPPORT OF HIS EXPLANATION. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT ON 24 TH JULY, 2015 AT AHMEDABAD. SD/- SD/- (G.D. AGRAWAL) VICE-PRESIDENT (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 24/07/2015 VK*