Ajay Kumar Sharma, Prop. Sresh Laboratory, Varanasi V. ITO, Varanasi

ITA 108/ALLD/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89810 (ITAT-ALLAHABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 17-05-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: UMESH PATHAK
• Assessee Lawyers: N N TANDON
• Keywords: Gift
• Section: 147; 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, ALLAHABAD BENCH, ALLAHABAD BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AN D SHRI C. N. PRASAD, JUDICIAL MEMBER ITA NO. 108/ALLD/2012 ASSESSMENT YEARS: 2004-05 AJAY KUMAR SHARMA PROP: SURESH LABORATORY, CK 60/57 KARAN GHANTA, VARANASI PAN:AEXPS 7183 K VS. ITO RANGE-1(2) VARANASI (APPELLANT) (RESPO NDENT) ASSESSEE BY : SHRI N. N. TANDON REVENUE BY : SHRI UMESH PATHAK DATE OF HEARING : 21.04.2015 DATE OF PRONOUNCEMENT : 24 .04.2015 O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER O F THE LD. CIT(A) VARANASI DATED 30.03.2012 FOR THE A.Y. 2004-05, THE GROUNDS OF THE APPEAL ARE REPRODUCED AS UNDER:- 1. BECAUSE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS UNJUSTIFIED IN CONFIRMING THE PROCEEDING TAKEN BY THE ASSESSING AUTHORITY U/S 147 AS REASONABLE AND JUSTIFIED WITH THE PLEA THAT ELABORATE REASON HAS BEEN RECORDED BY THE ASSESSING AUTHORITY IN THE ORDER SH EET FOR TAKING ACTION IS CORRECT AS PER LAW. 2. BECAUSE THE LEARNED COMMISSIONER OF INCOME TAX ( APPEALS) IS UNJUSTIFIED IS CONFIRMING THE ADDITION OF RS.2,00,0 00/- IN THE CONSTRUCTION OF THE PROPERTY ON THE BASIS OF D.V.O. REPORT WITHOUT ACCEPTING THE WRITTEN REPLY. 3. BECAUSE THE LEARNED COMMISSIONER OF INCOME TAX ( APPEALS) IS UNJUSTIFIED IN NOT CONSIDERING THE FACT THAT IN A.Y . 2005-06 THE WHOLE OF THE DIFFERENCE OF INVESTMENT MADE BY APPROVED VALUER AN D BY BOOKS OF ACCOUNT HAS BEEN ADDED AND HENCE ADDITION AGAIN IN A.Y. 200 4-05 IS A DOUBLE ADDITION. ITA NO. 108/ALLD/2012 ASSESSMENT YEARS: 2004-05 2 4. BECAUSE THE LEARNED COMMISSIONER OF INCOME TAX ( APPEALS) IS UNJUSTIFIED IN CONFIRMING THE ADDITION OF RS.1,50,0 00/- OUT OF GIFT RECEIVED BY THE ASSESSEE WITHOUT ANY PROPER BASIS. 5. BECAUSE THE LEARNED COMMISSIONER OF INCOME TAX ( APPEALS) IS UNJUSTIFIED IN CONFIRMING THE ADDITION OF RS.20,000 /- WHICH WAS AGRICULTURE INCOME, WHEN THE ASSESSING AUTHORITY HAD TREATED IT AS INCOME FROM OTHER SOURCES. 6. BECAUSE THE LEARNED COMMISSIONER OF INCOME TAX ( APPEALS) IS UNJUSTIFIED IN NOT PAYING ATTENTION TO THE DIRECTIO N OF THE ITAT. BEFORE US, LEARNED COUNSEL SUBMITTED THAT THE GROUN D NO. 1 RELATING TO VALIDITY OF THE REASSESSMENT IS NOT PRESSED. ACCORDINGLY, THE GROUN D NO. 1 IS DISMISSED AS NOT PRESSED. 2. REGARDING, GROUND NO. 2 AND 3, LEARNED COUNSEL S UBMITTED THAT THE ASSESSEE OWNS A BUILDING AND THE SAME WAS REFERRED TO THE DE PARTMENT VALUERS FOR VALUATION AND THE SAID BUILDING WAS STILL UNDER CONSIDERATION AT THE TIME OF INSPECTION IN MARCH, 2005. AS PER THE ASSESSEE THE A TOTAL INVESTMENT IN THE CONSTRUCTION OF THE SAID BUILDING DURING THE YEAR WAS RS.48,97,200/-. 3. ON THE OTHER HAND, AS PER THE D.V.O. REPORT, THE RE IS A DIFFERENCE OF RS. 2 LAKHS. CONSIDERING THE FACT THAT THERE WAS NO EXPLA NATION WAS FORTHCOMING ABOUT THIS EXCESS SUM AMOUNT OF RS. 2 LAKHS, AO MADE ADDITION OF RS. 2 LAKHS AND THE SAME IS CONFIRMED BY THE LD. CIT(A). IN CONNECTION WITH THE SAID ADDITION, LEARNED COUNSEL FOR THE ASSESSEE MENTIONED THAT THE SAID AMOUNT WAS ALSO ADDED IN THE SUBSEQUENT A.Y. 2005-06. ASSESSEE FURNISHED RELEVANT ORDERS IN THIS REGARD. THEREFORE, THIS AMOUNT CONSTITUTES DOUBLE ADDITION LD. COUNSEL ALSO SUBMITTED THAT THIS ISSUE MAY BE REFERRED TO THE FILE OF THE AO FOR WANT OF FRESH DECISION IN THE MATTER AND PLEADED FOR NOT MAKING DOUBLE ADDITIONS ON THE SAME INCOME IN TWO A.Y. AS DONE. 4. AFTER HEARING THE LD. DR AND PERUSING THE RELEVA NT PAPERS/ORDERS WE FIND THAT THIS ISSUE SHOULD BE REMANDED TO THE FILE OF THE AO FOR FRESH ADJUDICATION CONSIDERING THE ABOVE SPECIFIED ARGUMENTS OF THE LEARNED COUNSE L. AO CANNOT ASSESS THE SAME INCOME OF RS. 2 LAKHS TWICE I.E. IN A.YS. 2004-05 A ND 2005-06. IN THE REMAND PROCEEDINGS, AO SHALL GRANT REASONABLE OPPORTUNITY TO THE ASSESSEE TO REPRESENT. ACCORDINGLY, GROUND NO. 2 AND 3 AS ALLOWED FOR STAT ISTICAL PURPOSES. ITA NO. 108/ALLD/2012 ASSESSMENT YEARS: 2004-05 3 5. GROUND NO. 4 RELATES TO CONFIRMING THE ADDITION OF RS. 1.5 LAKHS ON ACCOUNT OF GIFT FROM AN UNRELATED DONOR. THE RELEVANT FACTS AR E SUMMARILY NARRATED ON PAGE 3 OF THE ASSESSMENT ORDER AS WELL AS IN PARA 9 OF THE IMPUGNED ORDER. BRIEFLY STATED, THE ASSESSEE RECEIVED A GIFT OF RS. 1.5 LAKHS FROM SHRUTI KAPOOR, THE DONOR, DAUGHTER OF SHRI GOPAL LAL KAPOOR, WHO IS THE FRIEND OF THE ASSESSEES FATHER. IN THIS REGARD, ASSESSEE FILED AN AFFIDAVIT DATED 18.08.2004 AND TH E COPY OF THE SAME IS PLACED IN PAGE 25 OF THE PAPER BOOK. THIS IS A PART OF THE GI FTS OF 13.52 LAKHS RECEIVED BY THE ASSESSEE FROM THE VARIOUS DONORS. ASSESSEE SURRENDE RED SOME OF THE GIFTS TOO. 6. ON FINDING THE SAID GIFT OF RS. 1.5 LAKH IS RECE IVED FROM THE DAUGHTER OF HER FATHERS FRIEND AND THE SAME IS NOT GIVEN DURING AN Y SPECIAL OCCASIONS, AO MADE ADDITION. DURING THE FIRST APPELLATE PROCEEDINGS, T HE LD. CIT(A) EXAMINING THE FACTS RELATES TO THE SAID GIFT AND CONFIRMED THE ADDITION MADE BY THE AO. PARA 9 OF THE IMPUGNED ORDER IS RELEVANT IN THIS REGARD. DURING T HE PROCEEDINGS BEFORE US, LEARNED COUNSEL REITERATED THE SUBMISSIONS MADE BEFORE THE AO AND THE LD. CIT(A). 7. ON THE OTHER HAND, LD. DR FOR THE REVENUE ARGUED VEHEMENTLY BY STATING THE DONOR IS UNRELATED PERSON BIOLOGICALLY. THE GIFT IS NOT GIVEN ON ANY SPECIAL OCCASIONS SUCH AS BIRTHDAY PARTY, MARRIAGE ANNIVERSARY ETC. I T IS UNLIKELY THE SAID GIFT IS GENUINE. IN SUCH CIRCUMSTANCES, THE LD. CIT(A) SHOU LD BE CONFIRMED. 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE O RDERS OF THE REVENUE IN GENERAL AND THE PARA 9 OF THE LD. CIT(A) IS PARTICU LAR. CONSIDERING THE AMOUNTS OF THE SAME WE ARE REPRODUCE THE SAID PARA 9 AS UNDER: - 9. NEXT ISSUE RELATES TO GIFT TREATED AS NON GENU INE, SUMMONS U/S 131 WERE ISSUED TO THE DONORS IN THIS RESPECT AND RECOR DED THEIR STATEMENTS ON OATH IN WHICH THE PERSONS WHO GAVE THE GIFT ACCEPTE D THAT THEY ARE ASSESSED TO TAX AND THEY GIFTED THE AMOUNTS TO THE ASSESSEE AND SHOWN IN THEIR ACCOUNTS. BUT LOOKING TO THE MODE OF TRANSFER OF GI FTED AMOUNTS IT NOTICED THAT SOME OF THE DONORS HAVE GIFTED THE AMOUNTS BY CHEQUES AND SOME OF THEM GAVE THE GIFTS IN CASH AND IN SOME OF THE CASE S THEIR CAPACITIES TO GIFT OF THE QUANTUM OF SUMS ALSO CREATES DOUBTS ON GENUINEN ESS OF THE GIFTED AMOUNTS. SO CONSIDERING AND LOOKING TO THE GENUINEN ESS AND CAPACITIES OF ETC. OF THE DONORS A PART OF GIFTS IS TREATED UNBEL IEVABLE AND UNPROVED. IT IS ALSO FINDS STRENGTH FROM THE LOOKING OF THE PROFIT AND LOSS ACCOUNT OF THE ASSESSEE IN WHICH APART FROM THESE GIFTS HE HAS SUR RENDERED THE AMOUNT OF GIFTS TAKEN FROM SOME OTHER PERSONS THAT THE FOURTE EN PERSONS IN WHICH CASES AFFIDAVITS AND CONFIRMATION FURNISHED RELATING TO T HE GIFTS. SO LOOKING ALL THESE FACTORS AND AFTER GOING THROUGH THE PAPERS AND REPL IED FURNISHED BY THE ASSESSEE IN SUPPORT OF IT, I FIND NO REASON TO INTE RFERE IN ASSESSING OFFICER ITA NO. 108/ALLD/2012 ASSESSMENT YEARS: 2004-05 4 CONTENTION. HENCE RS.1,50,000/- UNDER PAR AMOUNT OF GIFT TREATED AS NOT GENUINE IS HEREBY CONFIRMED. CONSIDERING THE ABOVE FACTS AND DISCUSSION GIVEN BY THE LD. CIT(A) ON THIS ISSUE, WE ARE OF THE OPINION THE ORDER OF THE LD. CIT(A) IS F AIR AND REASONABLE ON THIS ISSUE. ACCORDINGLY, GROUND NO. 4 IS DISMISSED. 9. GROUND NO. 5 RELATED TO ADDITION OF RS.20,000/- IN THE ASSESSMENT. AO FOUND THAT THE ASSESSEE CLAIMED AN AGRICULTURAL INCOME OF AMOUNTING TO RS.1.85 LAKHS. ASSESSEE SUBMITTED THAT HE OWNS LARGE TRACKS OF THE AGRICULTURAL LAND IN BIHAR. HOWEVER, AO FOUND THAT ASSESSEE FAILED TO FURNISH R EQUISITE KHASRAS THAT REFLECTS DETAILS OF CROPS GROWN IN THE SAID LANDS. AFTER CON SIDERING THE SAID FACTS, ASSESSING OFFICER CAME TO A CONCLUSION THAT AGRICULTURAL INCO ME TO RS.1,65,000/- IS REASONABLE. CONSEQUENTLY, SUM OF RS.20,000/- WAS DISALLOWED AS NON-AGRICULTURAL INCOME AND TREATED THE SAME AS INCOME FROM OTHER SOURCES. DU RING THE FIRST APPELLATE PROCEEDINGS, ASSESSEE COULD NOT IMPROVED HIS POSITI ON. HE COULD NOT FURNISH THE KHASRAS. ACCORDINGLY, LD. CIT(A) CONFIRMED THE SAME . DURING THE PROCEEDINGS BEFORE US, ALSO, NO IMPROVEMENT IS MADE BY THE ASSESSEE RE GARDING THE EVIDENCES ABOUT EXTENT OF AGRICULTURAL INCOME. CONSIDERING THE FACT AVAILABLE ON RECORD AND IN THE ABSENCE OF KHASRAS, WE ARE OF THE OPINION OR FROM T HE LD. CIT(A) IS FAIR AND REASONABLE ON THIS ISSUE AND SAME DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, THE GROUND NO. 5 IS DISMISSED. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 24 TH DAY OF APRIL, 2015. SD/- SD/- (C. N. PRASAD) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER ALLAHABAD, DATED: 24.04.2015 *SRIVASTAVA COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, ALLAHABAD THE CIT(A) CONCERNED, ALLAHABAD THE DR BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, ALLAHABAD.