Sh. Puneet Kumar, Barnala V. ITO, Barnala

ITA 1047/CHANDI/2014

• Counselvise Citation: 104721514 RSA 2014
• Duration Of Justice: 1 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 21-05-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 25-11-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained investment; Gift; Business income
• Section: 143(3); 142(1); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES SMC CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT ITA NOS. 1046 TO 1048/CHD/2014 ASSESSMENT YEARS: 2008-09 TO 2010-11 SH. PUNEET KUMAR, VS. THE ITO, S/O SH. SUSHIL KUMAR, BARNALA DISTT. BARNALA PAN NO. CUBPS2977M (APPELLANT) (RESPONDENT) APPELLANT BY : SH. TEJ MOHAN SINGH RESPONDENT BY : NONE DATE OF HEARING : 04.12.2015 DATE OF PRONOUNCEMENT : 31.12.2015 ORDER PER H.L.KARWA, VP THESE THREE APPEALS BY THE SAME ASSESSEE ARE DIRECT ED AGAINST THE SEPARATE ORDERS OF CIT(A), PATIALA ALL DATED 25.9.2014 RELAT ING TO ASSESSMENT YEARS 2008- 09, 2009-10 AND 2010-11. THESE APPEALS WERE HEARD T OGETHER AND ARE BEING DISPOSED OFF BY THIS COMMON ORDER FOR THE SAKE OF C ONVENIENCE. ITA NO. 1046/CHD/2014 :- 2. GROUND NO. 1 OF THE APPEAL IS AS UNDER:- 1 THAT THE LD. CIT(A) HAS ERRED IN LAW IN UPHOLDING T HE ISSUANCE OF NOTICE U/S 148 OF THE ACT AND FRAMING THE ASSES SMENT THEREAFTER IN A MUCH AS THERE HAS BEEN NO ESCAPEMEN T OF INCOME 2 WARRANTING ISSUANCE OF NOTICE U/S 148 OF THE ACT A ND AS SUCH THE ASSESSMENT FRAMED IS ILLEGAL, ARBITRARY AND UNJUSTI FIED. 3. AT THE TIME OF HEARING OF THE APPEAL, SHRI TEJ M OHAN SINGH, LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS FOR GROUND NO.1 OF T HE APPEAL AND ACCORDINGLY, I DISMISS THE SAME AS NOT PRESSED. 4 GROUND NO. 2 OF THE APPEAL READS AS UNDER:- 2. THAT WITHOUT PREJUDICE TO THE ABOVE, THE LD. CIT(A) HAS FURTHER ERRED IN UPHOLDING THE ADDITION OF RS. 1,46 ,400/- ON ACCOUNT OF ALLEGED UNEXPLAINED INVESTMENT IN BAN K WHICH IS ARBITRARY AND UNJUSTIFIED. 5. IN THIS CASE NO RETURN WAS SUBMITTED BY THE ASSE SSEE. THE TAX EVASION PETITION WAS RECEIVED BY THE ASSESSING OFFICER ALLE GING THAT THE ASSESSEE ALONGWITH HIS FAMILY MEMBER HAD MADE HUGE INVESTMEN T IN PROPERTY AT BHADUAR. THE BANK STATEMENT OF ASSESSEE WAS CALLED FOR BY TH E ASSESSING OFFICER. THE BANK STATEMENT REVEALED THAT ASSESSEE HAD DEPOSITED RS. 3,40,000/- IN HIS SAVING BANK ACCOUNT WITH STATE BANK OF PATIALA DURING THE FINANCIAL YEAR 2007-08 RELEVANT TO ASSESSMENT YEAR UNDER CONSIDERATION. S INCE NO RETURN OF INCOME WAS FILED BY THE ASSESSEE, THE ASSESSING OFFICER ISSUED NOTICE U/S 148 OF THE ACT. SUBSEQUENTLY, NOTICES U/S 143(3) AND 142(1) WERE I SSUED TO THE ASSESSEE. THE ASSESSING OFFICER ASKED THE ASSESSEE TO PROVE THE S OURCE OF DEPOSIT IN HIS SAVING ACCOUNT. THE ASSESSEE SUBMITTED HIS REPLY ON 22.6.2 011. THE ASSESSING OFFICER OBSERVED THAT AS PER BALANCE SHEET THE ASSESSEE HAD SHOWN AS CASH IN HAND AT RS. 92,625/-. FURTHER, THE ASSESSEE HAD SHOWN INCOME FR OM PLUMBER WORK. THE ASSESSEE HAD SHOWN A CASH GIFT OF RS. 70,000/- FROM HIS FATHER TO PROVE THE SOURCE OF CASH DEPOSITS IN HIS BANK ACCOUNT. THE AS SESSING OFFICER OBSERVED THAT 3 ASSESSEE HAD ADMITTED THAT BOOKS OF ACCOUNT WERE PR EPARED AFTER FILING ORIGINAL LETTER. THE ASSESSING OFFICER DID NOT ACCEPT THE BO OKS OF ACCOUNT AS EVIDENCE. ACCORDINGLY, THE ASSESSING OFFICER REJECTED THE PLE A OF THE ASSESSEE SAFEGUARDING OPENING CASH IN HAND A RS. 92,625/-. HE HAS ALSO R EJECTED HIS PLEA REGARDING THE CASH GIFT OF RS. 70,000/- ALLEGEDLY RECEIVED FROM H IS FATHER SHRI SUSHIL KUMAR. THE ASSESSING OFFICER NOTED THAT THE PEAK OF CASH D EPOTS IN THE BANK ACCOUNT OF THE ASSESSEE COMES TO RS. 2,32,300/- - AS ON 15.2.2 006. THE ASSESSEE HAD SHOWN BUSINESS INCOME AT RS. 98,200/-, THEREFORE, PROPORT IONATE BENEFIT OF INCOME WAS ALLOWED BY THE ASSESSING OFFICER. 6. ON APPEAL, THE CIT(A) CONFIRMED THE ADDITION AND , HENCE, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 7. I HAVE HEARD SHRI TEJ MOHAN SINGH, LD. COUNSEL F OR THE ASSESSEE AT LENGTH AND HAVE ALSO PERUSED THE MATERIALS AVAILABLE ON RE CORD. SHRI TEJ MOHAN SINGH, LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISS IONS MADE BEFORE THE AUTHORITIES BELOW. HE FURTHER POINTED OUT THAT GIFT OF RS. 70,000/- RECEIVED BY THE ASSESSEE FROM HIS FATHER MAY BE ACCEPTED. I DO NOT FIND ANY MERIT IN THE SUBMISSIONS MADE BY SHRI LD. COUNSEL FOR THE ASSESS EE. THE AUTHORITIES BELOW HAVE CATEGORICALLY OBSERVED THAT THE BANK STATEMENT OF SHRI SUSHIL KUMAR REVEALED THAT HE HAD NOT WITHDRAWN ANY CASH FROM HI S BANK ACCOUNT DURING FINANCIAL YEAR 2007-08. ON THE CONTRARY, HE HAD DEP OSITED RS. 3 LAKHS IN HIS BANK ACCOUNT DURING FINANCIAL YEAR 2007-08. THERE IS NO MATERIAL ON RECORD TO SPECIFY THE EXACT DATE OF GIFT. IT IS ALSO APPARENT FROM THE RECORDS THAT THE PAST SAVINGS OF SHRI SUSHIL KUMAR WAS BELOW TAXABLE LIMI T. THE ASSESSEE FAILED TO PROVE THE GENUINENESS OF THE GIFTS AND CAPACITY OF THE DONOR, THEREFORE, THE AUTHORITIES BELOW HAVE CORRECTLY OBSERVED THAT THE ALLEGED CASH GIFT CANNOT BE ACCEPTED AS GENUINE. IT IS ALSO EVIDENT FROM THE RE CORD THAT NO RETURN OF INCOME 4 WAS FILED BY THE DONOR BEFORE MAKING ALLEGED GIFT. THE DONOR AS WELL AS THE ASSESSEE HAS PREPARED THE BOOKS OF ACCOUNT AFTER F ILING THE RETURN IN RESPONSE TO NOTICE U/S 148 OF THE ACT. IN MY OPINION, THE ORD ER OF CIT(A) ON THIS ISSUE DESERVES TO BE UPHELD. CONSEQUENTLY, I DISMISS GROU ND NO.2 OF THE APPEAL. 8. GROUND NO.3 OF THE APPEAL READS AS UNDER:- THAT THE LD. CIT(A) HAS FURTHER ERRED IN UPHOLDING THE CHARGING OF INTEREST U/S 234A AND B WHICH IS NOT C HARGEABLE IN THE FACTS OF THE CASE. 9. IT IS CLAIMED THAT THIS GROUND OF APPEAL IS CONS EQUENTIAL IN NATURE AND I HOLD ACCORDINGLY. THE ASSESSING OFFICER IS DIRECTED TO DECIDE THE SAME IN ACCORDANCE WITH LAW. 10. IN THE RESULT, THE APPEAL IS DISMISSED. ITA NO. 1047/CHD/2014 11. GROUND NO. 1 OF THE APPEAL IS AS UNDER:- 1 THAT THE LD. CIT(A) HAS ERRED IN LAW IN UPHOLDING T HE ISSUANCE OF NOTICE U/S 148 OF THE ACT AND FRAMING THE ASSESSMENT THEREAFTER IN A MUCH AS THERE HAS BEEN NO ESCAPEMENT OF INCOME WARRANTING ISSUANCE OF NOTICE U/S 148 OF THE ACT AND AS SUCH THE ASSESSMENT FRAMED IS ILL EGAL, ARBITRARY AND UNJUSTIFIED. AT THE TIME OF HEARING OF THE APPEAL, SHRI TEJ MOHA N SINGH, LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS FOR GROUND NO.1 OF THE APPEA L AND ACCORDINGLY I DISMISS THE SAME AS NOT PRESSED. 12. GROUND NO.2 OF THE APPEAL READS AS UNDER:- 5 2. THAT WITHOUT PREJUDICE TO THE ABOVE, THE LD. CIT(A) HAS FURTHER ERRED IN TREATING THE GIFT RECEIVED OF RS. 8,00,000/- FROM FATHER TO BE UNDISCLOSED INVESTMENT OF THE ASSESSEE WHICH IS ARBITRARY AND UNJUSTIFIED. 13. THE ASSESSEE HAD DEPOSITED RS. 10,59,040/- IN H IS ACCOUNT ON DIFFERENT DATES DURING THE RELEVANT ASSESSMENT YEAR UNDER CO NSIDERATION. THE ASSESSING OFFICER ASKED THE ASSESSEE TO PROVE THE SOURCE OF D EPOSITS IN HIS SAVING ACCOUNT. IN RESPONSE TO THE AFORESAID QUERY, THE ASSESSEE SU BMITTED TWO REPLIES I.E 26.6.2011 AND 27.10.011 AND ALSO SUBMITTED PROFIT A ND LOSS ACCOUNT, CASH ACCOUNT AND BALANCE SHEET BEFORE THE ASSESSING OFFI CER. ACCORDING TO ASSESSING OFFICER, THE ASSESSEE HAD SHOWN A CASH GIFT OF RS. 8 LAKHS FROM HIS FATHER SHRI SUSHIL KUMAR, TO PROVE THE SOURCE OF CASH DEPOSIT I N HIS BANK ACCOUNT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER RECORDED THE STATEMENT OF SHRI SUSHIL KUMAR, FATHER OF THE ASSES SEE, WHO STATED THAT THE GIFT WAS MADE OUT OF CASH AVAILABLE WITH HIM IN HIS BOOK S OF ACCOUNT. ACCORDING TO ASSESSING OFFICER, SHRI SUSHIL KUMAR FILED HIS RETU RN OF ASSESSMENT YEAR 2008- 09 IN FEBRUARY 2011 IN RESPONSE TO NOTICE U/S 148. THE ASSESSING OFFICER FURTHER NOTED THAT THE BOOKS OF ACCOUNT WERE PREPARED AFTER RECEIPT OF THE NOTICE U/S 148 OF THE ACT. THE ASSESSING OFFICER FURTHER POINTED O UT THAT SHRI SUSHIL KUMAR HAS NOT WITHDRAWN ANY CASH FROM HIS BANK ACCOUNT DURING THE YEAR AND HAS ALSO DEPOSITED RS. 3 LAKHS IN HIS BANK ACCOUNT DURING TH E FINANCIAL YEAR 2007-08. THE ASSESSING OFFICER CAME TO THE CONCLUSION THAT ASSES SEE HAD FAILED TO PROVE THE GENUINENESS OF THE TRANSACTIONS AND THE CAPACITY OF THE DONOR TO MAKE A GIFT OF RS. 8 LAKHS. ACCORDINGLY, THE ASSESSING OFFICER ADD ED A SUM OF RS. 8 LAKHS TO THE TOTAL INCOME OF THE ASSESSEE. 14. ON APPEAL, THE CIT(A) CONFIRMED THE ADDITION AN D, HENCE, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 6 15. I HAVE HEARD THE LD. COUNSEL FOR THE ASSESSEE A ND HAVE PERUSED THE MATERIALS AVAILABLE ON RECORD. SHRI TEJ MOHAN SINGH , LD. COUNSEL FOR THE ASSESSEE POINTED OUT THAT THE AUTHORITIES BELOW HAV E NOT APPRECIATED AND CONSIDERED THE EVIDENCE PRODUCED BY THE ASSESSEE DU RING THE COURSE OF ASSESSMENT PROCEEDINGS TO PROVE THE GENUINENESS OF THE TRANSACTIONS AND THE CAPACITY OF THE DONOR TO MAKE THE GIFTS IN FAVOUR O F THE ASSESSEE. SHRI TEJ MOHAN SINGH, LD. COUNSEL FOR THE ASSESSEE INVITED M Y ATTENTION TO THE WRITTEN SUBMISSIONS SUBMITTED BEFORE THE CIT(A), WHICH READ S AS UNDER:- 3.2 AS STATED EARLIER ASSESSEE MADE A CASH DEPOSI T OF RS.1059040.00 IN HIS SB A/C WITH STATE BANK OF PATIALA.BHADAUR.TH E ASSESSEE DULY EXPLAINED THE SOURCE OF CASH DEPOSIT IN THE COURSE OF ASSESSMENT PROCEEDINGS VIDE HIS LETTER DT. 22.06.2011 AND 27.1 0.2011 WHICH HAS BEEN REPRODUCED AT PAGE NO. 2 OF THE IMPUGNED ORDER .LN SHORT CASH DEPOSITED HAS BEEN DULY REFLECTED IN THE BOOKS OF A CCOUNT WHICH WERE PRODUCED IN THE COURSE OF ASSESSMENT PROCEEDINGS. 3.3 AS REGARDS VARIATION IN ORIGINAL RETURN FILED O N 04.08.2010 AND RETURN FILED ON 24.02.2011 IN COMPLIANCE OF NOTICE 48, THE DIFFERENCE HAS BEEN DULY EXPLAINED VIDE LETTER DT. 22.06.2011 REFERRED ABOVE. THE FIGURES FURNISHED IN ORIGINAL RETURN ARE ON ESTIMAT ED BASIS. ON THE OTHER HAND ITR FILED IN RESPONSE TO NOTICE U/S 148 ARE BASED ON ACTUAL FIGURES AS PER THE BOOKS OF ACCOUNT. LD. A.O. HAS REASONED THAT SINCE THE BOOKS WERE NOT MAINTAINED IN REGULAR COURSE OF BUSINESS BY ASSESSEE THEREFORE TH ESE CAN NOT BE ACCEPTED. IT IS UNDENIED THAT ASSESSEE HAS NOT MAINTAINED BOO KS OF ACCOUNT IN THE REGULAR COURSE OF BUSINESS. HE HAS BEEN MAINTAIN RO UGH DAY BOOK(BAHI) TO RECORD DAY TO DAY TRANSACTIONS. AS A MATTER OF FACT, THE ASSESSEE IS NOT REQUIRED TO MAINTAIN REGULAR BOOKS OF ACCOUNT AS HIS TURNOVER/INCOME IS BELOW THE LIMIT PRESCRIBED U/S44 AA(2) OF THE IT ACT,1961 IN THE PRECEDING YEARS AS WELL AS IN SUBJE CT YEAR. AFTER THE RECEIPT OF NOTICE U/S 148,ASSESSEE GOT HIS DAY BOOK DATA COMPUTERIZED ON ACCOUNTING SOFTWARE AND GOT PREPARED CASH BOOK(C ASFLOW STATEMENT) AND BALANCE SHEET(STATEMENT OF AFFAIRS) IN ORDER TO SUBSTANTIATE HIS INCOME AND INVESTMENTS BEFORE THE ASSESSING OFFICER. IN THE SUBJECT YEAR, ASSESSEE RECEIVED GIFT OF RS. 800000. 00 FROM HIS FATHER SH.SUSHIL KUMAR(PAN NO. BPZPK7900L ). 7 3.4 A PERUSAL OF ASSESSMENT ORDER REVEALS THAT TH E FOLLOWING FACTS ARE NOT IN DISPUTE W.R.T GIFT RECEIVED:- (A) THE IDENTITY OF THE DONOR IS NOT IN DOUBT AS DO NOR TO BE FATHER OF ASSESSE; (B) THE DONOR HAS GIVEN AN AFFIDAVIT AFFIRMING GIFT TO ASSESEE; (C) AFFIRMATION OF DONOR IN EXAMINATION ON OATH REC ORDED BY A,O. (H) DONOR HAVE REGULAR SOURCE OF INCOME SINCE 1972. G) THE ASSESSING OFFICER IS COMMON FOR DONOR AND AS SESSEE. 3.5. THE STATEMENT SH. SUSHIL KUMAR WERE RECORDED O N 04.11.2011 BY ASSESSING OFFICER. IN HIS STATEMENT, DONOR HAS DULY CONFIRMED THE GIFT OF RS. 800000. 00 . TO FURTHER SUBSTANTIATE THE GENUINESS OF GIFT, ASSE SSEE PLACED FOLLOWING DOCUMENTS/DETAILS ON RECORD:- A) AFFIDAVIT DT. 22.10.2011 OF SH. SUSHIL KUMAR B) BALANCE SHEET, PROFIT & LOSS A/C,CAPITAL A/C FO R THE F.YS. 2007-08 OF SH. SUSHIL KUMAR PREPARED AS PER THE BOOKS OF AC COUNT. THE AMOUNT OF GIFT HAS BEEN DULY REFLECTED IN CAPITAL A/C.THE SAME ARE PLACED AT PAGE NO. 10-13 OF THE PAPER BOOK. 3.6 IN THE CASE OF SH. SUHIL KUMAR(DONOR) ALSOJLD . A.O. HAS OBSERVED THAT SINCE THE BOOKS WERE NOT MAINTAINED IN REGULAR COURSE OF BUSINESS BY DONOR, THEREFORE THESE CAN NOT BE ACCEPTED. SH. SUHIL KUMAR HAS BEEN MAINTAIN ROUGH DAY BOOK(BA HI) TO RECORD DAY TO DAY TRANSACTIONS. AS A MATTER OF FACT, THE HE IS NOT REQUIRED TO MAINTAIN REGULAR BOOKS OF ACCOUNT AS HIS TURNOVER/I NCOME IS BELOW THE LIMIT PRESCRIBED U/S44AA(2) OF THE IT ACT, 1961 IN THE PRECEDING YEARS AS WELL AS IN SUBJECT YEAR. AFTER THE RECEIPT OF NOTICE U/S 148, DONOR GOT HIS DAY BOOK DATA COMPUTERIZED ON ACCOUNTING SOFTWARE AND GOT PREPARE D CASH BOOKFCASFLOW STATEMENT) AND BALANCE SHEET(STATEMENT OF AFFAIRS) IN ORDER TO SUBSTANTIATE HIS INCOME AND GIFTS BEFORE T HE ASSESSING OFFICER. CUMULATIVE CASH BALANCE AS PER BOOKS OF ACCOUNT WAS SAVED BY ASSESSEE OVER A PERIOD OF TIME OUT OF WHICH GIFT OF RS.800000.00 WAS GIVEN TO ASSESSEE. CASH IN HAND IS SUPPORTED BY BOO KS OF ACCOUNT OF ASSESSEE. IT IS NOT THE CASE OF ID. A.O. THAT SH.SU SHIL KUMAR WAS NOT DOING ANY BUSINESS OR DATA IS NOT CREDIBLE, THE REASON FOR NOT FILING HER ITRS IS ATTRIBUTED TO THE FACT THAT INCOME OF THE ASSESSEE HAS BEEN BELOW TAXABLE LIMITS IN TH E PRECEDING YEARS. THE ASSESSEE HAS BEEN HAVING INCOME FROM BUSINESS S INCE 1984. WITH REGARD TO THE CREDITWORTHINESS OF DONORS, THE ASSES SEE HAS BEEN ABLE TO DISCHARGE THE ONUS CAST UPON HIM BY FURNISHING THE FINANCIAL STATEMENTS 8 OF DONORS AS ALSO THEIR CONFIRMATION(AFFIDAVIT) W.R .T GIFTS OF RS.600000.00 AND RS. 120000.OO.THE ID. A.O. HAS FAI LED TO APPRECIATE THE DOCUMENTS FILED AS PER S.NO.3.3 ABOVE IN THE CO URSE OF ASSESSMENT PROCEEDINGS. IF ID. A.O. WAS NOT SATISFIED WITH EXPLANATIONS OFF ERED BY ASSESSEE, IT WAS INCUMBENT UPON THE HIM TO PROVE ON THE BASIS OF A COGENT EVIDENCE THAT THE TRANSACTION WAS NOT GENUINE. THERE IS NO S UCH EVIDENCE BROUGHT ON RECORD. IT IS SEEN THAT THE CONCLUSIONS OF THE ASSESSING OFFICER WITH REGARD TO THE GENUINENESS OF THE TRANS ACTIONS ARE MERELY CONJECTURAL AND ARE BASED ON SURMISES AND ASSUMPTIO NS. SUCH CONJECTURES AND ASSUMPTIONS CANNOT TAKE THE PLACE O F PROOF, ONCE THE ASSESSEE HAS DISCHARGED THE PRIMARY BURDEN WHICH HA D BEEN CAST UPON HIM. IT IS A TRITE LAW THAT THE ADDITIONS COULD NOT BE MADE MERELY ON GENERALIZED OBSERVATIONS OR ON SUSPICION. SHRI TEJ MOHAN SINGH, LD. COUNSEL FOR THE ASSESSEE ALSO POINTED OUT THAT THE DECISIONS RELIED UPON BY THE ASSESSEE ARE AS UNDER: - I) A.K. SACHDEVA V CIT (ITA 251/2009) OF P&H HIGH COUR T II) SURESH KAKAR V CIT 324 ITR 231 (DELHI HIGH COURT ) III) AMITA DEVI V CIT GAUHATI (ITAT THIRD MEMBER) 53 DTR 214/521 IV) CIT V RAM NARIAN GOEL 224 ITR 180(P&H) V) CIT VS. KAMDHENU STEEL AND ALLOYS LTD V CIT 206 TAX MAN 254 16. ACCORDING TO LD. COUNSEL FOR THE ASSESSEE, THE LD. CIT(A) HAS NOT CONSIDERED THE SUBMISSIONS OF THE ASSESSEE SUBMITTE D BEFORE HIM. HE FURTHER POINTED OUT THAT THE AUTHORITIES BELOW HAVE CONCLUD ED THAT THE ASSESSEE FAILED TO PROVE THE GENUINENESS OF GIFTS / TRANSACTIONS AND T HE CAPACITY OF THE DONOR TO MAKE GIFTS. HOWEVER, THE AUTHORITIES BELOW HAVE FAI LED TO APPRECIATE THE EXPLANATION AND THE EVIDENCE GIVEN BY THE ASSESSEE IN ORDER TO PROVE THE GENUINENESS OF THE TRANSACTIONS AND CAPACITY OF THE DONORS TO MAKE GIFT IN FAVOUR OF THE ASSESSEE. IN MY OPINION, THERE IS A SUBSTANC E IN THE SUBMISSIONS MADE BY SHRI TEJ MOHAN SINGH, LD. COUNSEL FOR THE ASSESSEE. CONSIDERING THE ENTIRE FACTS OF THE PRESENT CASE, AND ALSO THE SETTLED LEGAL POS ITION, I THINK IT APPROPRIATE TO SET ASIDE THE ORDER OF THE CIT(A) ON BOTH THE ISSUE S AND REMAND THE MATTER TO 9 ASSESSING OFFICER WITH THE DIRECTION TO DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER AFFORDING DUE AND REASONABLE OPPORTU NITY OF BEING HEARD TO THE ASSESSEE. THUS, GROUND NOS. 2 & 3 OF THE APPEAL ALL OWED FOR STATISTICAL PURPOSES. 17. GROUND NO .3 OF THE APPEAL READS AS UNDER:- THAT THE LD. CIT(A) HAS FURTHER ERRED IN UPHOLDING THE CHARGING OF INTEREST U/S 234A AND B WHICH IS NOT C HARGEABLE IN THE FACTS OF THE CASE. 18 IT IS CLAIMED THAT THIS GROUND OF APPEAL IS CONS EQUENTIAL IN NATURE AND I HOLD ACCORDINGLY. THE ASSESSING OFFICER IS DIRECTED TO DECIDE THE SAME IN ACCORDANCE WITH LAW. 19. NO OTHER POINT WAS RAISED OR ARGUED BEFORE ME. 20. FOR STATISTICAL PURPOSES, THE APPEAL IS ALLOWED PARTLY,. ITA NO. 1048/CHD/2014 21. GROUND NO. 1 OF THE APPEAL IS AS UNDER:- 1. THAT THE LD. CIT(A) HAS ERRED IN LAW IN UPHOLDING T HE ISSUANCE OF NOTICE U/S 148 OF THE ACT AND FRAMING THE ASSESSMENT THEREAFTER IN A MUCH AS THERE HAS BEEN NO ESCAPEMENT OF INCOME WARRANTING ISSUANCE OF NOTICE USS 148 OF THE ACT AND AS SUCH THE ASSESSMENT FRAMED IS ILLEGAL, ARBITRARY AND UNJUSTIFIED. 22. AT THE TIME OF HEARING OF THE APPEAL, SHRI TEJ MOHAN SINGH, LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS FOR GROUND NO.1 OF T HE APPEAL AND ACCORDINGLY, I DISMISS THE SAME AS NOT PRESSED. 10 23. GROUND NO.2 OF THE APPEAL READS AS UNDER:- 2. THAT WITHOUT PREJUDICE TO THE ABOVE, THE LD. CIT(A) HAS FURTHER ERRED IN UPHOLDING THE ADDITION OF RS. 1,50 ,000/- FROM BROTHER ON ACCOUNT OF ALLEGED UNEXPLAINED INVE STMENT IN BANK WHICH IS ARBITRARY AND UNJUSTIFIED. 24. DURING THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE HAD DEPOSIT RS. 11,55,000/- IN HIS ACCOUNT ON DIFFERENT DATES. THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO PROVE THE SOURCE OF DEPOSIT IN HIS SAVING BANK ACCOUNT. THE ASSESSEE SUBMITTED TWO RELIED DATED 26.6.2011 AND 2 7.10.2011. THE ASSESSEE HAD SHOWN A CASH GIFT OF RS. 4 LAKHS FORM HIS BROTHER S HRI AMIT KUMAR TO PROVE THE CASH DEPOSIT IN HIS BANK ACCOUNT. THE ASSESSING OF FICER HAS ACCEPTED THE GIFT TO THE EXTENT OF RS. 2,50,000/-. HOWEVER, THE BALANCE DIFFERENCE OF RS. 1,50,000/- WAS ADDED TO THE INCOME OF THE ASSESSEE AS UNEXPLAI NED INVESTMENT IN THE BANK. THE ASSESSING OFFICER OBSERVED THAT AS PER BANK STA TEMENT OF SH. AMIT KUMR, HE HAD WITHDRAWN RS. 12 LAKHS FORM HIS BANK ACCOUNT ON 9.9.2009, OUT OF WHICH CASH GIFT OF RS. 9,50,000/- WAS MADE TO SHRI SUSHIL KUMAR, HIS FATHER, WHICH WAS ACCEPTED BY THE ASSESSING OFFICER WHILE ASSESS ING THE CASE OF SHRI SUSHIL KUMAR FOR ASSESSMENT YEAR 2010-11. ACCORDING TO ASS ESSING OFFICER, SHRI ASHOK KUMAR WAS LEFT WITH A SUM OF RS. 2,50,000/- IN CASH , THEREFORE, THE GIFT TO THE EXTENT OF RS. 2,50,000/- HAS BEEN ACCEPTED BY THE A SSESSING OFFICER. 25. ON APPEAL THE CIT(A) CONFIRMED THE ADDITION OF RS. 1,50,000/- AND HENCE THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 26. I HAVE HEARD SHRI TEJ MOHAN SINGH, LD. COUNSEL FOR THE ASSESSEE AND HAVE ALSO PERUSED THE MATERIALS AVAILABLE ON RECORD. SHR I TEJ MOHAN SINGH, LD. 11 COUNSEL FOR THE ASSESSEE SUBMITTED THE FOLLOWING FA CTS ARE NOT IN DISPUTE WITH RESPECT TO THE GIFT RECEIVED:- A) THE IDENTITY OF THE DONOR IS NOT IN DOUBT AS DON OR HAPPENS TO BE BROTHER OF ASSESSEE; B) THE DONOR HAS GIVEN AN AFFIDAVIT AFFIRMING GIFT TO ASSESSEE. C) AFFIRMATION OF DONOR IN EXAMINATION ON OATH RECO RDED BY ASSESSING OFFICER H) DONOR HAVE REGULAR SOURCE OF INCOME G) THE ASSESSING OFFICER IS COMMON FOR DONOR AND AS SESSEE. A, B C G G PAGE 13 HAD WRITTEN LD. COUNSEL FOR THE ASSESSEE FURTHER POINTED OUT TH AT IN HIS STATEMENT SHRI AMIT KUMAR RECORDED ON 4.11.2011 BY THE ASSESSING OFFICE R, HAS CONFIRMED GIFT OF RS. 4 LAKHS. SHRI AMIT KUMAR ALSO SUBMITTED HIS AFF IDAVIT DATED 22.10.2011 BEFORE THE ASSESSING OFFICER WHEREIN HE HAS DULY CO NFIRMED THE GIFT IN QUESTION. IT IS EVIDENT FROM THE RECORDS THAT SHRI AMIT WAS R UNNING A CHEMIST SHOP. IT IS FURTHER CLAIMED THAT CULUMITAIVE CASH BALANCE AS PE R BOOKS OF ACCOUNT WAS SAVED BY SHRI AMIT KUMR (DONOR) OVER A PERIOD OF TIME OUT OF WHICH GIFT OF RS. 4 LAKHS WAS GIVEN TO THE ASSESSEE. THE ASSESSING OFFI CER HIMSELF HAS ACCEPTED THE GIFT TO THE EXTENT OF RS. 2,50,000/- AND THERE IS N O JUSTIFICATION IN NOT ACCEPTING THE BALANCE AMOUNT OF CASH GIFT OF RS. 1,50,000/-. IN OTHER WORDS, THE ASSESSING OFFICER HAS ACCEPTED THE GENUINENESS OF THE TRANSAC TION OF RS. 2,50,000/- ALSO, THE CAPACITY OF DONOR TO GIFT A SUM OF RS. 2,50,000 /-. IN MY OPINION, THE ACTION OF THE ASSESSING OFFICER CANNOT BE HELD JUSTIFIABL E BY ANY STRETCH OF IMAGINATION. ACCORDINGLY, I DELETE THE ADDITION OF RS. 1,50,000/- MADE BY THE ASSESSING OFFICER AND CONFIRMED BY CIT(A). 27. GROUND NO.2 OF THE APPEAL STANDS ALLOWED. 28. GROUND NO.3 OF THE APPEAL READS AS UNDER;- 12 3. THAT THE CIT(A) HAS FURTHER ERRED IN UPHOLDING T HE ADDITION OF RS. 1,61,000/- ON ACCOUNT OF ALLEGED UNEXPLAINED INVESTMENT IN BANK WHICH IS ARBITRARY AND UNJUSTIFI ED . 29. THE ASSESSING OFFICER OBSERVED THAT THE PEAK OF THE CASH DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE CAME TO RS. 6,23,400/- AS ON 28.12.2009. AFTER CONSIDERING THE GIFT OF RS. 4 LAKHS, THE BALANCE UN EXPLAINED AMOUNT REMAINS AT RS. 2,23,400/-. ACCORDING TO ASSESSING OFFICER THE ASSESSEE HAD DECLARED BUSINESS INCOME AT RS. 83,070/-, THEREFORE, PROPORT IONATE BENEFIT OF RS. 62,300/- WAS GIVEN TO THE ASSESSEE. THE BALANCE AMO UNT OF RS. 1,61,100/- WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 30. ON APPEAL, THE CIT(A) CONFIRMED THE ADDITION, H ENCE THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 31. I HAVE HEARD SHRI TEJ MOHAN SIGH, LD. COUNSEL F OR THE ASSESSEE. IN THIS CASE, RETURN OF INCOME FOR THE ASSESSMENT YEARS 200 7-08 &, 2008-09 WERE FILED IN RESPONSE TO THE NOTICE U/S 148 OF THE ACT. ADMIT TEDLY, THE BOOKS OF ACCOUNT WERE PREPARED AFTER RECEIPT OF THE ABOVE NOTICE. I T IS ALSO AN ADMITTED POSITION THAT THE PEAK OF CASH DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE CAME TO RS. 6,23,400/-. AFTER SETTING OFF OF RS. 4 LAKHS, THE B ALANCE CAME TO RS. 2,23,400/-. THE ASSESSEE FAILED TO PROVE THE SOURCE OF DEPOSIT TO THE EXTENT OF RS. 1,61,100/- AFTER ALLOWING PROPORTIONATE BENEFIT OF INCOME EARN ED DURING HE EAR. CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF T HE PRESENT CASE, I DO NOT SEE ANY MERIT IN THIS GROUND OF APPEAL AND ACCORDINGLY THE SAME IS DISMISSED. 32. GROUND NO.4 OF THE APPEAL, READS AS UNDER:- 13 THAT THE LD. CIT(A) HAS FURTHER ERRED IN UPHOLDING THE CHARGING OF INTEREST U/S 234A AND B WHICH IS NOT C HARGEABLE IN THE FACTS OF THE CASE. 33 IT IS CLAIMED THAT THIS GROUND OF APPEAL IS CONS EQUENTIAL IN NATURE AND I HOLD ACCORDINGLY. THE ASSESSING OFFICER IS DIRECTED TO DECIDE THE SAME IN ACCORDANCE WITH LAW. 34 NO OTHER POINT WAS RAISED OR ARGUED BEFORE ME. 35. IN THE RESULT, THE APPEAL IS ALLOWED PARTLY. ORDER PRONOUNCED IN THE OPEN COURT ON 31.12.2015. SD/- (H.L.KARWA) VICE PRESIDENT DATED : 31 ST DECEMBER, 2015 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR