Rahim Abbasbhai Aelachiya, Pune V. Income-tax Officer, Ward - 3(2), Pune

ITA 1053/PUN/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6975 (ITAT-PUNE)
• Duration Of Justice: 8 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-03-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 11-06-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M K VERMA
• Keywords: Gift; Business income
• Section: 69A

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE . , BEFORE SHRI D. KARUNAKARA RAO, AM . / ITA NO.1053/PUN/2018 / ASSESSMENT YEAR : 2008-09 RAHIM ABBASBHAI AELACHIYA SHOP NO.2, BUSINESS SQUARE, TILAK ROAD, 1676, SADHASHIV PETH, PUNE 411030 PAN : AHCPA5282H . /APPELLANT VS. ITO, WARD-3(2), PUNE. . / RESPONDENT / APPELLANT BY : SHRI SARVESH KHANDELWAL / RESPONDENT BY : SHRI M. K. VERMA / DATE OF HEARING : 14.02.2019 / DATE OF PRONOUNCEMENT: 01.03.2019 / ORDER PER D. KARUNAKARA RAO, AM : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)-8, PUNE DATED 25.04.2018 FOR THE ASSESSMENT YEAR 2008-09. 2. THE GROUND RAISED BY THE ASSESSEE IS AS UNDER :- 1. ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE AND AS PER PROVISIONS & SCHEME OF THE ACT IT BE HELD THAT, THE ADDITION MADE & SUSTAINED U/S 69A OF THE INCOME TAX ACT PERTAINING TO AMOUNTS RECEIVED FROM RELATIVES OF RS.3 LAKHS & RS.2,50,000/- RESPECTIVELY, IS NOT IN ACCORDANCE WITH THE PROVISIONS OF THE ACT & WITHOUT PROPERLY APPRECIATING THE FACTS PREVAILING IN THE CASE. THE ADDITIONS SO MADE BE DELETED. ITA NO.1053/PUN/2018 - 2 - 3. BRIEFLY STATED RELEVANT FACTS INCLUDE THAT THE ASSESSEE REPORTED BUSINESS INCOME AND FILED RETURN OF INCOME DECLARING INCOME OF RS.2,57,780/-. IN THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THE CHEQUE DEPOSITS INTO THE BANK ACCOUNT OF THE ASSESSEE. FOR WANT OF EVIDENCES, THE ASSESSING OFFICER MADE AN ADDITION OF RS.7,11,965/- AND DETERMINED THE ASSESSED INCOME AT RS.9,69,745/-. THE ADDITION ON ACCOUNT OF CHEQUE DEPOSIT AMOUNTING TO RS.5.5 LAKHS INVOLVING TWO CREDITORS IS THE CORE ISSUE THAT TRAVELLED TO THE CIT(A). 4. IN THE FIRST APPELLATE PROCEEDINGS, THE ASSESSEE FILED EVIDENCES IN THE FORM OF BANK STATEMENTS, 7/12 EXTRACTS OF THE CREDITORS, ETC. TO ESTABLISH THEIR CREDITWORTHINESS. THE CIT(A) CALLED FOR REMAND REPORT ON THESE PAPERS AND REJECTED THE SAME CONFIRMING THE SAID ADDITION OF RS.5.5 LAKHS. IT INVOLVES TWO CREDITS; RS.3 LAKHS RECEIVED FROM MOTHER AND RS.2.5 LAKHS RECEIVED FROM ASSESSEES UNCLE . 5. IN PARA 9 OF THE ORDER OF CIT(A), THE ISSUE RELATED TO THE ADDITION OF RS.3 LAKHS WAS DISCUSSED AND MENTIONED THAT, ON THE DATE OF CREDIT OF RS.3 LAKHS RECEIVED FROM THE MOTHER , A SUM OF RS.3 LAKHS OF CASH WAS FOUND DEPOSITED IN THE MOTHERS BANK ACCOUNT ON 17.07.2007. OTHERWISE, HER BANK ACCOUNT WAS WITH MEAGER AMOUNTS WITH MINIMUM BALANCES. CONSIDERING THE SUSPICIOUS NATURE OF CREDIT, THE ASSESSING OFFICER AND THE CIT(A) HELD THAT SHE DOES NOT HAVE CREDITWORTHINESS AND TRANSACTIONS ARE FOUND TO BE NOT GENUINE. FURTHER, ASSESSEES MOTHER IS NOT ASSESSED TO TAX AND THEREFORE, NOT REPORTED ANY AGRICULTURAL INCOME OR ANY OTHER SOURCE OF INCOME IN HER RETURNS. COMING TO THE CREDIT FROM THE UNCLE OF ASSESSEE ITA NO.1053/PUN/2018 - 3 - AMOUNTING TO RS.2.5 LAKHS, THE CASE OF ASSESSEE IS THAT UNCLE IS AN AGRICULTURIST AND FILED COPIES OF 7/12 EXTRACTS EVIDENCING THE FACT OF SUBSTANTIAL AGRICULTURAL INCOME. HOWEVER, THE CIT(A) DID NOT ACCEPT THE SAME GIVING REASON THAT UNCLE IS RESIDENT OF GUJARAT AND DEPOSITED THE AGRICULTURAL INCOME IN THE BANK ACCOUNT MAINTAINED IN PUNE, WHERE THE ASSESSEE HAS ALSO AN ACCOUNT. HE ACCORDINGLY, CONFIRMED THE ADDITION OF RS.2.5 LAKHS. 6. BEFORE THE TRIBUNAL, THE LD. COUNSEL FOR THE ASSESSEE EXPLAINED THE ABOVE FACTS OF TWO TRANSACTIONS AND SUBMITTED THAT THE ADDITION OF RS.5.5 LAKHS IS MADE ON THE GROUND OF SUSPICION AND SURMISES, THEREFORE, THE SAID ORDERS SHOULD BE REVERSED. 7. AFTER HEARING BOTH THE PARTIES OF THE LITIGATION, I PROCEED TO ADJUDICATE EACH OF THE CREDIT IN THE FOLLOWING PARAGRAPHS. 8. REGARDING CREDIT OF RS.3 LAKHS, IT IS UNDISPUTED FACT THAT CASH OF RS.3 LAKHS WAS CREDITED IN THE ACCOUNT OF MOTHER ON 17.07.2007 AND CHEQUE WAS ISSUED BY HER TO THE ASSESSEE. NO EVIDENCE HAS COME FORWARD TO THE FILES TO DEMONSTRATE HER INCOME STATUS, CREDITWORTHINESS AND GENUINENESS OF TRANSACTIONS. I PERUSED PARA 9 OF THE ORDER OF CIT(A) AND FIND THE DECISION TAKEN BY THE CIT(A) IS FAIR AND REASONABLE. FOR THE COMPLETENESS, THE SAID PARA IS EXTRACTED HEREUNDER:- 9. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT AS WELL AS THE REMAND REPORT OF THE AO. IT IS PERTINENT TO MENTION THAT IN THE SUBMISSIONS MADE, THE APPELLANT HAS FILED A COPY OF THE BANK ACCOUNT OF HIS MOTHER AS WELL AS HIS UNCLE FROM WHOM THE GIFTS ARE CLAIMED TO HAVE BEEN RECEIVED. A PERUSAL OF THE BANK ACCOUNT OF THE MOTHER SHOWS THAT A SUM OF RS.3,00,000/- HAS BEEN DEPOSITED IN CASH ON 17/07/2007 AND ON THE SAME ITA NO.1053/PUN/2018 - 4 - DAY IT HAS BEEN WITHDRAWN BY THE APPELLANT. THIS GOES AGAINST THE CONTENTION OF THE APPELLANT THAT WHEN THE APPELLANT HAD ESTABLISHED & SET UP HIMSELF IN PUNE, HIS MOTHER STARTED VISITING PUNE, OFF & ON, AND BECAUSE OF THIS, OPENED A BANK ACCOUNT IN PUNE ALONG WITH HER SON, SO THAT WHEN MONEY ARE BROUGHT FROM THE VILLAGE, THESE COULD BE SAFELY & CONVENIENTLY BE DEPOSITED IN THE BANK ACCOUNT. GOING BY THIS VERSION, HER BANK ACCOUNT SHOULD HAVE REFLECTED INTERMITTENT CASH DEPOSITS OUT OF CASH BROUGHT BY HER FROM THE VILLAGE FROM TIME TO TIME. BUT ON THE CONTRARY, HER BANK ACCOUNT SHOWS THAT ON 11/04/2007 HER BANK BALANCE WAS ONLY RS.5,200/- AND THERE WERE NO FURTHER DEPOSITS UPTO 16/07/2007. THE ONLY DEPOSIT WAS THE CASH DEPOSIT OF RS.3,00,000/- ON 17/07/2007 DISCUSSED ABOVE, WHICH HAS BEEN IMMEDIATELY WITHDRAWN BY THE APPELLANT ON THE SAME DAY. IT IS NOT UNDERSTOOD THAT IF THE MOTHER HAD TO GIVE A GIFT OF RS.3,00,000/- TO HER SON WHY WOULD SHE DEPOSIT IT IN THE BANK, FOR HER SON TO WITHDRAW IT ON THE SAME DAY. SHE COULD HAVE GIVEN THE CASH GIFT TO HIM DIRECTLY. MOREOVER, OTHER THAN THIS ENTRY, THERE ARE NO FURTHER CASH DEPOSITS BY THE MOTHER IN THIS BANK ACCOUNT RIGHT UPTO 01/04/2011. THIS CLEARLY REFUTES THE LOGIC PROVIDED BY THE APPELLANT THAT HIS MOTHER OPENED A BANK ACCOUNT IN PUNE TO DEPOSIT CASH BROUGHT FROM THE VILLAGE FROM TIME TO TIME. LASTLY AND MOST IMPORTANTLY, THE APPELLANT HAS NOT EXPLAINED THE SOURCE OF CASH OF RS.3,00,000/- IN THE HANDS OF THE MOTHER. HIS MOTHER IS NOT AN INCOME TAX ASSESSEE AND NEITHER HAS SHE BEEN SHOWN TO HAVE INCOME FROM ANY SOURCE. IN THIS ABSENCE OF THE SAME HER CREDITWORTHINESS REMAINS UNSUBSTANTIATED AND THE GENUINENESS OF THE TRANSACTION IS NOT PROVED. HENCE, TWO IMPORTANT INGREDIENTS ARE MISSING FROM THE SAID TRANSACTION. IT IS SETTLED LAW NOW THAT A TRANSACTION THROUGH BANKING CHANNEL/ BY CHEQUE, BY ITSELF, WILL NOT PROVE THE GENUINENESS OF THE TRANSACTION. ACCORDINGLY, THE ORDER OF THE AO IN TREATING GIFT OF RS.3,00,000/- AS UNEXPLAINED CASH U/S. 69A IS UPHELD. 9. THE FACTS GATHERED BY THE ASSESSING OFFICER AND REASONING GIVEN BY THE CIT(A) AGAINST THE ASSESSEE APPEARS EXTREMELY IN LOGICAL TO ANY MIND. THEREFORE, I FIND NO REASON TO INTERFERE WITH THE FINDING OF THE CIT(A). THEREFORE, THE SAID ADDITION OF RS.3 LAKHS IS ACCORDINGLY CONFIRMED. 10. REGARDING CREDIT OF RS.2.5 LAKHS, IT IS UNDISPUTED FACT THAT THE UNCLE OF ASSESSEE IS AN AGRICULTURIST AND OWNS AGRICULTURAL LANDS, WHICH GAVE RISE TO AGRICULTURAL INCOME, WHICH IS THE SOURCE OF CREDIT OF RS.2.5 LAKHS GIVEN TO THE ASSESSEE. THE TRANSACTION IS VERY MUCH THROUGH BANKING CHANNEL. THE REASONING GIVEN BY THE CIT(A) THAT THE UNCLE OF ASSESSEE SHOULD NOT HAVE BANK ACCOUNT IN THE BANK BRANCH WHERE THE ASSESSEE HAS AN ACCOUNT, IS UNSUSTAINABLE. ONE CAN HAVE ACCOUNT IN ANY BANK BRANCHES ANYWHERE IN ITA NO.1053/PUN/2018 - 5 - INDIA. THEREFORE, THE LOGIC GIVEN BY THE CIT(A) IN MY VIEW IS NOT SUSTAINABLE. ACCORDINGLY, GROUND RAISED BY THE ASSESSEE ON THIS ASPECT OF RS.2.5 LAKHS CREDIT IS ALLOWED. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON THIS 01 ST DAY OF MARCH, 2019. SD/- (D. KARUNAKARA RAO) / ACCOUNTANT MEMBER / PUNE; DATED : 01 ST MARCH, 2019. GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. THE CIT(A)-8, PUNE; 4. THE PR.CIT-4, PUNE; 5. , , - / DR SMC, ITAT, PUNE; 6. / GUARD FILE. / BY ORDER, //TRUE COPY// SENIOR PRIVATE SECRETARY , / ITAT, PUNE