DCIT, Circle - 2, Siliguri V. Sunil Kumar Roy, Siliguri

ITA 109/KOL/2009

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8116 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 8 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2012
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 27-04-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 29-01-2009
• Court: TRIBUNAL
• Department Lawyers: D K RAKSHIT
• Assessee Lawyers: S K TULSIYAN
• Keywords: Gift
• Section: 131; 68

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BEN CH A, KOLKATA () BEFORE , ,, , , SHRI MAHAVIR SINGH, JUDICIAL MEMBER. /AND . .. . ! ! ! !. .. . , '# SHRI C.D.RAO, ACCOUNTANT MEMBER $ $ $ $ / ITA NO . 109/KOL/2009 %& '(/ ASSESSMENT YEAR : 2005-06 (*+ / APPELLANT ) D.C.I.T., CIRCLE-2, SILIGURI (,-*+/ RESPONDENT ) SUNIL KUMAR ROY, SILIGURI. (PAN:ACLPR 2167 E) *+ . / '/ FOR THE APPELLANT: SHRI D.K.RAKSHIT, JCIT (SR.DR) ,-*+ . / '/ FOR THE RESPONDENT: SHRI S.K.TULSIYAN 0%1 . !# /DATE OF HEARING : 09.10.2012. 2' . !# /DATE OF PRONOUNCEMENT : 09.10.2012. '3 / ORDER . .. . ! ! ! !. .. . , '# PER SHRI C.D.RAO, AM THE ABOVE APPEAL IS FILED BY THE REVENUE AGAINST OR DER DATED 17.10.2008 OF THE LD. CIT-(A)-SILIGURI PERTAINING TO A.YR. 2005-06. 2 IN THIS APPEAL THE ONLY GROUND RAISED BY THE REV ENUE IS RELATING TO THE DELETION OF ADDITION OF RS.10,00,000/- ON ACCOUNT OF BOGUS G IFTS BY THE LD. CIT(A). 3. THE BRIEF FACTS OF THIS ISSUE ARE THAT WHILE DO ING THE SCRUTINY ASSESSMENT THE AO HAS DISALLOWED A SUM OF RS.10,00,000/- BY OBSERVING AS UNDER :- 3. DURING. THE YEAR UNDER CONSIDERATION THE ASSESS EE DERIVES INCOME FROM BUSINESS, INCOME FROM HOUSE PROPERTY AND INCOME FROM. OTHER S OURCES. THE ASSESSEE HAS RECEIVED GIFT OF RS. 14,50,000/ FROM 11 (ELEVEN) PERSONS. O UT OF THE TOTAL GIFT SO RECEIVED A SUM OF RS. 4,50,000/ WAS RECEIVED FROM HIS SON SRI DEB ARATA ROY. IN SUPPORT OF THE GIFT SO 2 RECEIVED COPY OF THE RETURN WITH STATEMENT OF ACCOU NT, GIFT CONFIRMATION IN RESPECT OF THE DONORS HAVE FILED. IN THIS CONNECTION THE A/R WAS A SKED TO PRODUCE IN PERSON ALL THE REMAINING DONORS FOR PERSONAL APPEARANCE IN ORDER T O PROVE THE IDENTITY OF THE PERSON, GENUINENESS OF THE GIFT AND CAPABILITY OF THE DONOR MAKING SUCH GIFT. THE A/R IN TURN SUBMITTED THAT HE IS NOT IN A POSITION TO PRODUCE T HE DONORS IN ABSENCE OF ASSESSES PRESENCE. SHRI S.K. ROY, THE ASSESSEE IS PRESENTLY OUT OF STATION. IN ABSENCE OF IDENTITY OF THE DONOR, THE GENUINENESS OF THE GIFT CAN NOT BE P ROVED. MERE FILING GIFT CONFIRMATION AND RETURN OF INCOME DOES NOT PROVE THAT THE GIFTS SO RECEIVED ARE GENUINE. I THEREFORE, TREAT THE ENTIRE AMOUNT (RS. 10,00,000/-) OF GIFTS EXCLUDING THE GIFT MADE BY HIS SON IS BEING UNDISCLOSED CASH CREDIT OF ASSESSEE U/S 68 OF THE I.T.ACT, 1961 AND SAME IS ADDED IN THE TOTAL INCOME OF THE ASSESSEE, SUBJECT TO THE PENALTY PROCEEDING U/S 271(1)(C) OF THE L.T. ACT, 1961. 3.1. ON APPEAL THE LD. CIT(A) HAS DELETED THE SAME BY OBSERVING AS UNDER :- I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE LD AR AID ALSO PERUSED THE ASSESSMENT ORDER, IN THIS CASE, WITHOUT CONDUCTING ANY ENQUIRY. THE AO HAS SIMPLY REJECTED THE SUBMISSION OF THE ASSESSEE ON THE GROU ND THAT THE DONORS WERE NOT PRODUCED BY THE AR FOR VERIFICATION OF THEIR IDENTITY. IT IS A UNIQUE PIECE OF ASSESSMENT ORDER WHERE THE ADDITION WAS MADE FOR THE SAKE OF ADDITIO N ONLY WITHOUT DOING ANY EXERCISE BY THE LD.AO. HE HAS NOT EVEN MENTIONED THE MODE OF TRANSACTION OF MONEY (WHETHER IN CASH OR BY CHEQUE). NAME OF THE INDIVIDUAL DONORS, NATURE AND QUANTUM OF THEIR INCOME AND GIFT MADE BY EACH PERSON WHETHER ANY FUND WAS A VAILABLE IN THEIR BALANCE SHEET FOR MAKING THE GIFT,. THEIR PERSONAL DRAWINGS, NATURE O F ASSETS & LIABILITIES, MAINTENANCE OF BANK ACCOUNT AND BALANCE SHOWN IN THE BANK ETC. THE RELEVANT PART OF THE ORDER HAVE BEEN PRODUCED HEREIN BEFORE WILL SHOW THE CASUAL AP PROACH OF THE LD AO. HOW MANY TIMES HE HAD ASKED THE ASSESSEE TO PRODUCE DONORS, WHETHER ANY ACTION HAS BEEN INITIATED AGAINST THE ASSESSEE FOR NON PRODUCTION OF THE DONO RS, WHY NO SUMMONS U/S.13L WAS ISSUED TO THE DONORS IN THIS CASE HAS NOT BEEN MENT IONED IN THE ASSESSMENT ORDER. FROM THE ASSESSMENT ORDER, IT IS ALSO CLEAR THAT NO PENA LTY PROCEEDINGS U/S.271(L)(B) HAVE BEEN INITIATED AGAINST THE ASSESSEE. APPARENTLY, NO SHOW - CAUSE LETTER WAS ISSUED PROPOSING TO REJECT THE SUBMISSION OF THE ASSESSEE BEFORE MAKING THE ADDITION U/S 68 OF THE ACT. IN CIT VS ORISSA CORPORATION PVT LTD. [1986] 159 IT R 78 (SC), THE BOOKS OF ACCOUNTS OF THE ASSESSEE CONTAINED THREE CASH CREDI TS AGGREGATING RS. 1,50,000/- ALLEGEDLY RECEIVED AS LOANS FROM THREE INDIVIDUAL C REDITORS UNDER HUNDIS. LETTERS OF CONFIRMATION AS WELL AS THE DISCHARGED HUNDIS WERE PRODUCED BEFORE THE AO BUT NOTICES/SUMMONS SENT TO THEM REMAINED UNSERVED BECA USE THEY HAD REPORTEDLY LEFT THAT ADDRESS. THE VIEW OF THE TRIBUNAL WAS THAT MERELY B ECAUSE THE ASSESSEE COULD NOT PRODUCE THESE THREE PARTIES. THERE WAS NEVERTHELESS NO JUSTIFICATION TO DRAW AN ADVERSE INFERENCE. THIS APPROACH AS ACCORDED APPROVAL BY TH E SUPREME COURT IN THESE WORDS : IN THIS CASE, THE ASSESSEE HAD GIVEN THE NAMES AND ADD RESS OF THE ALLEGED CREDITORS. IT WAS IN THE KNOWLEDGE OF THE REVENUE THAT THE SAID CREDITOR S WERE INCOME-TAX ASSESSEES THEIR INDEX NUMBERS WERE IN THE FILE OF THE REVENUE. THE REVENUE APART FROM ISSUING NOTICES UNDER SECTION 131 AT THE INSTANCES OF THE ASSESSEE DID NOT PURSUE THE MATTER FURTHER. THE REVENUE DID NOT EXAMINE THE SOURCE OF INCOME OF THE SAID ALLEGED CREDITORS TO FIND OUT WHETHER THEY WERE CREDITWORTHY OR WERE SUCH WHO COU LD ADVANCE THE ALLEGED. LOANS. THERE WAS NO EFFORT MADE TO PURSUE THE SO-CALLED AL LEGED CREDITORS. IN THOSE CIRCUMSTANCES, THE ASSESSEE COULD NOT DO ANYTHING F URTHER. IN THE PREMISES, IF THE TRIBUNAL CAME TO THE CONCLUSION THAT THE ASSESSEE H AS DISCHARGED THE BURDEN THAT LAY ON 3 HIM, THEN IT COULD NOT BE SAID THAT SUCH A CONCLUSI ON WAS UNREASONABLE OR PERVERSE OR BASED ON NO EVIDENCE. 3.2. AGGRIEVED BY THIS, NOW THE REVENUE IS IN APPEA L BEFORE US. 4. AT THE TIME OF HEARING BEFORE US, THE LD. DR APP EARING ON BEHALF OF THE REVENUE HAS SUBMITTED THAT THOUGH THE ASSESSEE HAS FILED CO PIES OF GIFT CERTIFICATES FROM 10 DONORS COPY OF THE STATEMENTS OF ACCOUNTS AND COPY OF INCOME TAX RETURNS OF THE DONORS ARE HAVING VERY NOMINAL INCOME. THEREFORE TH EY ARE NOT HAVING CREDITWORTHINESS TO MAKE THE GIFT TO THE ASSESSEE. THEREFORE, HE REQUESTED TO SET ASIDE THE ORDERS OF LD. CIT(A) AND RESTORE THAT OF AO. 5. ON THE OTHER HAND, THE LD. COUNSEL APPEARING ON BEHALF OF ASSESSEE BY FILING DOCUMENTS IN RESPECT OF 10 DONORS RELATING TO THE G IFT CERTIFICATES, STATEMENT OF ACCOUNTS AND COPY OF INCOME TAX RETURNS SUBMITTED T HAT THE AO HAS NOT MADE ANY FURTHER ENQUIRIES AS RIGHTLY POINTED OUT BY LD. CIT (A) BEFORE MAKING THE ADDITION CONSIDERING THE GIFT AS BOGUS. THE LD. CIT(A) HAS R IGHTLY DELETED THE SAME. THEREFORE, HE REQUESTED TO UPHELD THE ACTION OF LD. CIT(A). 6. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREF UL PERUSAL OF OBSERVATIONS MADE BY AO AS WELL AS LD. CIT(A) WHICH ARE INCORPOR ATED IN THE PRECEDING PARAGRAPHS WE FIND NO INFIRMITY IN THE ORDER OF LD. CIT(A). SI NCE IN THIS CASE THE ASSESSEE HAS DISCHARGED HIS ONUS BY FILING THE CERTIFICATES OF G IFTS, STATEMENT OF ACCOUNTS OF THE DONORS AS WELL AS INCOME TAX RETURNS AND THE LD. CI T(A) HAS RIGHTLY POINTED OUT THAT THE AO HAS NOT ISSUED ANY SUMMONS U/S 131 TO THE DO NORS IN THIS CASE. THE AO HAS NOT EVEN MENTIONED THE MODE OF TRANSACTIONS OF MONE Y WHETHER IN CASH OR BY CHEQUE., NAME OF THE INDIVIDUAL DONORS, NATURE AND QUANTUM O F THEIR INCOME AND GIFTS MADE BY EACH PERSON. UNDER THESE CIRCUMSTANCES, WE FIND NO INFIRMITY IN THE ORDER OF LD. CIT(A) TO BE INTERFERED WITH. THEREFORE, WE CONFIRM THE SAME AND DISMISS THE APPEAL OF REVENUE. 4 7. IN THE RESULT THE APPEAL OF REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 09.10.2012. SD/- SD/- , , , , MAHAVIR SINGH, JUDICIAL MEMBER . .. . ! ! ! !. .. . , , , , '# '# '# '# , C.D.RAO, ACCOUNTANT MEMBER. ( (( (!# !# !# !#) )) ) DATE: 09.10.2012 R.G.(P.S.) '3 . ,4 5'4'6- COPY OF THE ORDER FORWARDED TO: 1. SUNIL KUMAR ROY, RAI BHAWAN, S.S.MARKET, SILIGURI. 2 D.C.I.T., CIRCLE-2, SILIGURI. 3. THE C.I.T. 4. CIT(A)-SILIGURI. 5. THE CIT(DR), KOLKATA BENCHES, KOLKATA -4 ,/ TRUE COPY, '3%0/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES 5