The Income-tax Officer, Jammu V. Smt. Indu Singh Pawar, Jammu

ITA 113/ASR/2013

• Counselvise Citation: 11320914 RSA 2013
• Duration Of Justice: 1 year(s) 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 03-09-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 26-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Gift; Income from undisclosed sources; Source of fund; Additional evidence
• Section: 68; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.113(ASR)/2013 ASSESSMENT YEAR:2005-06 PAN :AOAPP5771G INCOME TAX OFFICER, VS. SMT. INDU SINGH PAWAR, WARD 1(2), JAMMU. PROP. I.A. WINE TRADERS, JAMMU. (APPELLANT) (RESPONDENT) APPELLANT BY:SH.TARSEM LAL, DR RESPONDENT BY:SH. VINAMAR GUPTA, CA DATE OF HEARING: 03/09/2014 DATE OF PRONOUNCEMENT:11/09/2014 ORDER PER B.P.JAIN, AM ; THIS APPEAL OF THE REVENUE ARISES FROM THE ORDER OF THE CIT(A), JAMMU DATED 20.12.2012 FOR THE ASSESSMENT YEAR 200 5-06.THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) WAS RIGHT IN DELETING THE ADDITION OF RS.28,55,000/- MA DE ON ACCOUNT OF UNEXPLAINED CREDIT TO THE CAPITAL ACCOUNT U/S 68 OF THE INCOME TAX ACT, 1961 WHEN THE GIFTS WHICH THE ASSES SEE CLAIMED TO HAVE RECEIVED FROM TIME TO TIME ARE IN CASH ONLY ITA NO.113(ASR)/2013 2 AND THERE IS NO DIRECT DOCUMENTARY EVIDENCE WHICH C AN LEAD TO PROVE THAT THESE GIFTS WERE ACTUALLY RECEIVED BY TH E ASSESSEE IN THE ABSENCE OF ANY SUCH TRANSACTIONS HAVING BEEN RO UTED BY WAY OF ACCOUNT PAYEE CHEQUE, DEMAND DRAFT OR PAY ORDER. 2. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. C IT(A) WAS RIGHT IN DELETING THE ADDITION OF RS.28,55,000/- MA DE ON ACCOUNT OF UNEXPLAINED CREDIT TO THE CAPITAL ACCOUNT U/S 68 OF THE INCOME TAX ACT, 1961 WHEN THE GIFTS WHICH THE ASSES SEE CLAIMED TO HAVE RECEIVED FROM TIME TO TIME ARE IN CASH ONLY AND SAID CASH IS LYING WITH THE ASSESSEE FOR THE LA ST 6 TO 7 YEARS BEFORE INTRODUCING INTO CAPITAL ACCOUNT. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE AO OBSE RVED THAT THE ASSESSEE HAS INTRODUCED CERTAIN CAPITAL INTO BANK ACCOUNT. A CCORDINGLY, A SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE AND WAS AS KED TO EXPLAIN THE SOURCE OF AMOUNT OF RS.28.55 LAKHS INTRODUCED AS CAPITAL. SINCE THE ASSESSEE FAILED TO REPLY THE NOTICE OF THE ASSESSEE, ACCORDINGLY, THE AO WAS OF THE OPINION THAT THE ASSESSEE HAS NO EXPLANATION TO OFFER REGAR DING GENUINENESS OF CAPITAL INTRODUCED AND ACCORDINGLY, HE ADDED RS.28.55 LACS AS INCOME FROM UNDISCLOSED SOURCES. 3. THE LD. CIT(A) CONFIRMED THE ACTION OF THE ASSES SING OFFICER. THE ITAT, AMRITSAR BENCH, SET ASIDE THE MATTER TO THE L D. CIT(A) TO PROVIDE OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE ITS CLA IM AND TO DECIDE THE ISSUE IN DISPUTE WITH REGARD TO THE SAID ADDITION OF RS.28.5 5 LACS. ITA NO.113(ASR)/2013 3 4. THE ASSESSEE SUBMITTED THE ADDITIONAL EVIDENCES WITH REGARD TO THE SAID DEPOSIT OF RS.28.55 LACS AND THE LD. CIT(A) SO UGHT FOR THE REMAND REPORT FROM THE A.O. THE LD. CIT(A) WITH REGARD TO THE AD DITIONAL EVIDENCES AND THE REPORT OF THE AO OBSERVED VIDE PARA 2.11 TO 2.3 1, WHICH FOR THE SAKE OF CONVENIENCE IS REPRODUCED HEREIN BELOW: 2.11 UNDERSIGNED COUNSEL OF THE APPELLANT HAS BEEN APPEARING BEFORE THE LD. DCIT, FROM TIME TO TIME AND SUBMITTE D FOLLOWING INFORMATION IN REGARD TO THE ADDITION OF RS.28,55,0 00/-. A) THIRTEEN GIFT DEEDS OF THREE PERSONS NAMELY I) SH. GANDHARB SINGH FATHER OF THE ASSESSEE SMT. INDU SINGH PAWAR II).SMT. KRISHNA DEVI MOTHER OF THE ASSESSEE SMT. I NDU SINGH PAWAR III) PUSHAP SINGH CLOSELY ASSOCIATED WITH THE FATHE R OF THE ASSESSEE SMT. INDU SINGH PAWAR. THE DETAIL OF THE SAID GIFT DEEDS IS AS UUNDER: SH. GANDHARB SINGH (FATHER OF THE ASSESSEE) DATE AMOUNT 30.04.98 RS.2,21,000/- 30.04.2000 RS.2,25,000/- 30.04.2001 RS.1,70,000/- 03.01.2004 RS.4,20,000/- RS.10,36,000/- 03.01.2005 SMT. KRISHNA DEVI (MOTHER OF THE ASSESSEE) 08.01.1998 RS.1,05,000/- 30.04.1999 RS.2,10,000/- 29.04.2000 RS.2,35,000/- 25.01.2001 RS. 85,000/- RS.6,35,000/- SH.PUSHAP SINGH (UNCLE OF THE ASSESSEE ) DATE AMOUNT 30.04.1997 RS. 98,000/- 30.04.1998 RS. 81,000/- 30.04.2001 RS.1,55,000/- 30.04.2003 RS.1,17,000/- ITA NO.113(ASR)/2013 4 30.04.2005 RS.1,67,000/- RS.6,18,000/- GRAND TOTAL RS.22,89,000/- 2.12. THE GIFTS DEEDS WERE DULY ATTESTED BY NOTARY AND WE RE SUPPORTED BY CASH FLOW STATEMENTS SHOWING WITHDRAWA LS BY THE DONORS FROM THEIR RESPECTIVE BANK ACCOUNTS AND COPI ES OF BANK STATEMENTS WERE ALSO FURNISHED IN SUPPORT OF THE CA SH FLOW STATEMENT. 2.13. THE ASSESSEE ALSO SUBMITTED COPIES OF INCOME TAX RE TURNS FILED AND TAX PAID BY SH. GANDHARB SINGH, SH. PUSHAP SING H AND SMT. KRISHNA DEVI THE DETAILS ARE AS UNDER: 1. SH. GANDHARB SINGH NET INCOME TAX PAID ASSESSMENT YEAR RETURNED 1996-97 36,800 - 1997-98 95,267/- 14,133/- 1999-2000 206132/- 29848/- 2000-2001 167430/- 24229/- 2001-2002 175930/- 15000/- 2002-2003 195409/- 31423/- 2003-2004 2496743/- 30000/- 2. SH. PUSHAP SINGH SH. GANDHARB SINGH NET INCOME TAX PAID ASSESSMENT YEAR RETURNED 1991-92 40320 1140/- 1992-93 62580/- 131/- 1993-94 73190/- 1290/- & 2745/- 3. SMT. KRISHNA DEVI 4. SH. GANDHARB SINGH NET INCOME TAX PAID ASSESSMENT YEAR RETURNED 1999-2000 60000/- 1000 (CHALLAN NOT TRACEABLE) ITA NO.113(ASR)/2013 5 2.14. THE APPELLANT ALSO INVESTED A SUM OF RS.5,66, 000/- FROM HER OWN SOURCES FOLLOWING DETAILS OF THE SAME WERE ALSO FURNISHED TO THE LD. DCIT FROM CASH OF RS.1,14,500/- WITHDRAWN FROM RS.1,00,000/- HER CAPITAL ACCOUNT IN I.A. WINE TRADERS FROM INCO ME IN RETURNS FILED FOR THE ASSESSMENT YEARS 2001-02 TO A.Y. 2004-05 RS.3,06,198/- RS.2,66,000/- FROM CASH WITHDRAWN FROM J & K BANK NAI BASTI BRANC H RS.206287/- RS.2,00,000/- RS.5,66,000/- (RENTAL INCOME DEPOSITED IN THIS ACCOUNT) THE ASSESSEE ALSO SUBMITTED COPY OF CAPITAL ACCOUNT , COPIES OF INCOME TAX RETURNS FILED AND COPY OF SAVINGS ACCOUNT NO.20 57 IN J & K BANK LTD. NAI BASTI, JAMMU. 2.15. SH. GANDHARB SINGH FATHER OF APPELLANT WAS IN ARMY AND RETIRED FROM THERE THE YEAR 1978. HE RECEIVED PENSI ON, HAD RENTAL INCOME, EARNED SALARY IN VARIOUS CAPACITIES. SMT. K RISHNA DEVI MOTHER OF THE APPELLANT WAS MLC, HAD OPEN MAHILA SE WING CENTRE, HAD A DRIVING LICENSE, OPENED A FAIR PRICE SHOP FOR EDIBLE OILS, SH. PUSHAP SINGH WAS A CLOSE ASSOCIATE OF SH. GANDHARB SINGH FATHER OF THE APPELLANT AND CONSIDERED HERE AS HIS DAUGHTER. HE DID NOT HAVE ANY CHILD OF HIS OWN. HE ALSO RETIRED FROM ARMY AND HAVING PENSION AND AGRICULTURE INCOME. 2.16 IN REPLY TO A QUERY AS TO WHY THE ASSESSEE KEP T ALL THE MONEY IN CASH AND NOT DEPOSITED IN BANK ACCOUNT IT WAS EXPLA INED BY THE ASSESSEE THAT SHE HAD RECEIVED ALL THE MONEY FROM H ER PARENTS OF WHOM SHE WAS THE ONLY CHILD AND HER UNCLE SH. PUSHA P SINGH WHO WAS CLOSELY ASSOCIATED WITH THE APPELLANTS FATHER SH. GANDHARB SINGH. NO MONEY IN ANY FORM WAS RECEIVED BY THE ASSESSEE FROM HER HUSBAND OR THEIR RELATIVES. THEREFORE, THE APPELLANT WAS APPRE HENSIVE THAT THE MONEY WHICH WAS BEING RECEIVED FROM HER PARENTS AND UNCLE SH. PUSHAP SINGH MAY NOT BE USED/QUESTIONED BY HER HUSB AND AND THOUGH IT SAFE TO KEEP IT IN CASH WITHOUT DISCLOSING IT TO HER FAMILY. 2.17 IN REPLY TO A QUERY IT WAS FURTHER EXPLAINED T HAT HER PARENTS BEING OLD AND HAVING NO OTHER CHILD THEY DEPENDED U PON THE ASSESSEE FOR THEIR CARE AND USED TO STAY WITH THE APPELLANT AND THEREFORE, THE PARENTS OF THE APPELLANT HAD NOT TO INCUR MUCH EXPE NDITURE ON THEIR ITA NO.113(ASR)/2013 6 OWN MAINTENANCE AND WERE IN POSITION TO PART WITH M OST OF THEIR EARNINGS TO THE APPELLANT. 2.18 IT WAS ALSO EXPLAINED THAT THE POSITION OF SH. PUSHAP SINGH CLOSELY ASSOCIATED WITH THE FATHER OF THE APPELLANT WAS ALMOST THE SAME AS HE TOO HAD NO CHILD AND HIS WIFE EXPIRED IN THE YEAR 1987 AND BEING LONELY PREFERRED TO STAY WITH THE FAMILY OF T HE APPELLANT AND THUS WAS IN A POSITION TO PART WITH A SUBSTANTIAL PORTIO N OF HIS PENSION INCOME TO THE APPELLANT. 2.19 BASED UPON THE EVIDENCE SUBMITTED BY THE APPEL LANT THE AO SUBMITTED REMAND REPORT DATED 23.11.2010 IN WHICH H E ACCEPTED ALL THE EVIDENCE EXCEPT STATING IN PARA 10 OF THE SAID REPORT THAT THERE IS NO DIRECT DOCUMENTARY EVIDENCE WHICH COULD LEAD TO PROVE THAT THE GIFT WERE ACTUALLY RECEIVED BY THE APPELLANT IN ABS ENCE OF ANY SUCH TRANSACTION HAVING BEEN MADE BY WAY OF ACCOUNT PAYE ES CHEQUE, DEMAND DRAFT OR PAY ORDER ETC. 2.20 IN RESPONSE THERETO IT WAS SUBMITTED BY APPELL ANT THAT ACCORDING TO THE LD. DCIT ONLY GIFT GIVEN THROUGH P AYEES ACCOUNT CHEQUE, DEMAND DRAFT OR PAY ORDER CAN BE TREATED AS A VALID GIFT. HOWEVER, THERE IS NO SUCH LAW OR RULE AND WE HAVE N OT COME ACROSS ANY SUCH FINDING ANYWHERE. GIFTS CAN BE MADE BY WAY OF CASH ALSO. THE APPELLANT FROM THE EVIDENCE SUBMITTED HAS CONCL USIVELY PROVED THE RECEIPT OF GIFTS BY HER. THE APPELLANT HAS PROV ED HER RELATION WITH THE DONORS, PROVED THE SOURCE OF MONEY/INCOME OF TH E DONORS BY PRODUCING THEIR CASH FLOW STATEMENTS AND BANK PASSB OOKS, COPIES OF INCOME TAX RETURNS, PROOF OF TAX PAID, AND PRODUCED GIFTS DEEDS DULY EXECUTED ON STAMP PAPERS AND NOTARIZED BY ADVOCATE/ NOTARY WHO HAS IDENTIFIED THE GIFT DEEDS AND HAS ISSUED A CERTIFIC ATE TO THIS EFFECT. FURTHER, THE CIRCUMSTANTIAL EVIDENCE IS SUCH THAT EVEN VERBAL GIFTS SHOULD NOT BE REJECTED AS SH. GANDHARB SINGH WAS THE FATHER OF APPELLANT, SMT. KRISHAN DEVI APPELLANTS MOTHER AND THE APPELLANTS PARENTS HAVING BEEN NOT BLESSED WITH ANY OTHER CHIL D.THE APPELLANT WAS THEIR ONLY LEGAL HEIR AND THUS BEING ENTITLED T O RECEIVE THEIR ALL KINDS OF ASSETS DURING THEIR LIFE TIME AND THEREAFT ER AND THIS WAS ALSO THE REASON THAT THE APPELLANTS PARENTS ENTIRELY DEP ENDED UPON HER FOR THEIR CARE IN THE OLD AGE. ITA NO.113(ASR)/2013 7 THE POSITION OF THE OTHER DONOR SH. PUSHAP SINGH I S NOT MUCH DIFFERENT FROM THE OTHER DONORS AS HIS WIFE EXPIRED IN THE YEAR 1987 AND THEY WERE NOT BLESSED WITH ANY CHILD AND SH PUS HAP SINGH WAS ASSOCIATED WITH THE FATHER OF THE APPELLANT SINCE T HEY JOINED ARMY. UNDER THESE CIRCUMSTANCES, HE TOO DEPENDED UPON THE APPELLANTS FAMILY FOR HIS CARE IN THE OLD AGE. THUS, IN VIEW OF THE DOCUMENTARY EVIDENCE SUBMITTE D AND CIRCUMSTANCES EXPLAINED, THERE DOES NOT APPEAR TO B E ANY SCOPE FOR ANY DOUBT IN THE GENUINENESS OF THE GIFTS RECEIVED BY THE APPELLANT. 2.21. PARA 11 OF THE SAID REPORT RELATED TO THE SOU RCES WHERE FROM THE APPELLANT INVESTED A SUM OF RS.5,66,000/- IN IA WIN E TRADER IN THE A.Y. 2005-06 RELEVANT TO THE ACCOUNTING YEAR 2004-0 5 THE APPELLANT SUBMITTED EVIDENCE IN SUPPORT OF CASH WITHDRAWN BY HER AS STATED IN POINT NUMBER 14 ABOVE. HOWEVER, THE LD. DCIT HAS OB SERVED THAT SINCE THESE ARE CASH, TRANSACTIONS THEREFORE, THERE IS NO CONCLUSIVE PROOF THAT THE DEPOSIT OF RS.5,66,000/- BY THE APPE LLANT IN HER CAPITAL ACCOUNT IS FROM THE SOURCES OF MONEY AS EXPLAINED. IN THIS REGARD IT WAS SUBMITTED THAT THE PROOF OF S OURCE OF INCOME AND WITHDRAWALS BY THE APPELLANT HAS BEEN ACCEPTED BY T HE LD. DCIT, BUT HE IS DOUBTFUL ABOUT ITS INVESTMENT BY THE APPELLAN T IN HER CAPITAL ACCOUNT. IT WAS SUBMITTED THAT THE LD. DCIT CANNOT SUSPECT CONTENTION OF THE APPELLANT WITHOUT HAVING EVIDENCE TO THE CON TRARY WITH HIM. A DOUBT CANNOT NEGATE POSITIVE EVIDENCE. THEREFORE, T HERE IS NO REASON WHATSOEVER FOR NOT TREATING THE AMOUNT OF RS.5,66,0 00/- AS PART OF THE TOTAL INVESTMENT OF RS.28,55,000/-. 2.22. AGAIN SUBMISSION WAS MADE BY THE APPELLANT ON 20.12.2011 TO YOUR PREDECESSOR LD. CIT(A). A) IDENTITY OF EACH DONOR B) CREDITWORTHINESS OF EACH DONOR C) GENUINENESS OF THE TRANSACTION WITH EACH DONOR. TO ENTITLE THE DONEE FOR ITS ACCEPTANCE BY THE ASSE SSING AUTHORITY. 2.23 APPELLANT AGAIN SUBMITTED THE EVIDENCE OF SOUR CE OF INCOME OF DONORS AND FURTHER EXPLAINED THAT CIRCUMSTANCES WER E SUCH THAT ITA NO.113(ASR)/2013 8 APPELLANT BEING THE ONLY CHILD OF HER PARENTS IT WA S NATURAL FOR THEM TO PASS ON THE SURPLUS FUNDS TO HER FROM TIME TO TIME IN CASH. AFTER DEATH OF HIS WIFE IN THE YEAR 2001 SH. GANDHARB SINGH SHI FTED TO THE ASSESSEES RESIDENCE (18-A SHASTRI NAGAR JAMMU) WHI CH PROPERTY ALSO BELONGED TO THE ASSESSEE. THE ASSESSEE ALONGWI TH HER FAMILY IS LIVING IN THIS HOUSE SINCE 1990. SMT. KRISHAN DEVI MOTHER OF THE APPELLANT ALSO HAD A HOUSE WHICH ALSO DEVOLVED TO THE ASSESSEE WHO GAVE IT ON LEASE ( COPY OF RENT AGREEMENT WERE SUBMITTED) RENTAL INCOME FROM THIS P ROPERTY HAS BEEN SHOWN BY THE ASSESSEE IN HER INCOME TAX RETURNS FRO M THE ACCOUNTING YEAR 2002-03 ONWARD. COPIES OF HER RETURN FOR THE A .Y. 2003-04 AND 2004-05 WERE ALSO SUBMITTED. IT WAS EXPLAINED THAT SMT. KRISHNA DEVI DEPOSITED I N HER BANK ACCOUNT 2233/7 WITH J & K BANK A SUM OF RS.8,20,496.66 FROM HER SOURCES. OUT OF THIS RS.5,37,400/- WAS GIVEN TO THE ASSESSEE AND STILL THERE WAS A BALANCE OF RS.89,191.51 IN THE BANK AS ON 05.08.2 000. 2.24. IT WAS SUBMITTED THAT THE ASSESSEE HAS NOT O NLY RECEIVED GIFTS OF RS.10,36,000/- AND RS.6,35,000/- FROM HER PARENTS B UT ALSO RECEIVED HOUSE PROPERTY NO. 18-A, SHASTRI NAGAR, JAMMU (PRES ENT USED AS RESIDENCE BY THE ASSESSEE) AND ANOTHER HOUSE PROPER TY CONSTRUCTED BY HER MOTHER AT 43A, ASHOK NAGAR, JAMMU FROM WHICH TH E ASSESSEE IS GETTING RENT (EVIDENCE WAS SUBMITTED). 2.25. REGARDING SH. PUSHAP SINGH IT WAS SUBMITTED T HAT HE JOINED THE ARMY IN THE YEAR 1948 AND SINCE SH. GANDHARB SIGH F ATHER OF THE ASSESSEE WAS ALSO IN THE ARMY AND AS BOTH OF THEM B ELONGED TO J & K STATE THEY DEVELOPED CLOSE FRIENDSHIP IN DUE SOURCE . SH. PUSHAP SINGH CAME INTO CONTACT WITH SH. D.S. PAWAR HUSBAND OF TH E ASSESSEE THROUGH SH. GANDHARB SINGH. SH. PUSHAP SINGHS WIFE HAVING DIED IN THE YEAR 1987 AND HAVING NO CHILD SH. PUSHAP SINGH FREQUENTLY VISITED MR. GANDHARB SINGH AND ASSESSEES FAMILY AN D DUE TO GROWING AGE SH. PUSHAP SINGH SPENT MOST OF HIS TIME WITH TH EM. STATEMENT OF INCOME TAX, CIRCLE-1, JAMMU WHICH HAS BEE FORWARDED TO YOUR HONOUR. SH. PUSHAP SINGH HAS CONFIRMED HIS RELATION WITH THE FAMILIES OF SH. GANDHARB SINGH AND THE ASSESSEE. ITA NO.113(ASR)/2013 9 2.26 `REJOINDER DATED 03.08.2012 WAS SUBMITTED BY L D. AO IN WHICH NONE OF THE FUNDAMENTAL REQUIREMENTS FOR ACCEPTANCE OF GIFTS BY THE APPELLANT AT ANY STAGE HAVE BEEN DISPUTED, NAMELY I DENTIFICATION OF THE DONORS, CREDITWORTHINESS OF THE DONORS, GENUINENESS OF THE TRANSACTIONS, AS NECESSARY EVIDENCE WAS PRODUCED BE FORE THE LD. AO. THE GIFTS HAVE BEEN RECEIVED BY THE APPELLANT FROM HER PARENTS SH. GANDHARB SINGH, APPELLANTS FATHER, SMT. KRISHAN DE VI, MOTHER OF THE APPELLANT AND FROM A VERY CLOSE FAMILY FRIEND OF SH . GANDHARB SINGH, SH. PUSHAP SINGH WHO TREATED THE APPELLANT LIKE HER DAUGHTER, HE HIMSELF HAVING NO CHILD OF HIS OWN. DETAILED STATEM ENT OF SH. PUSHAP SINGH WAS RECORDED BY THE AO WHICH STATEMENT FORMED PART OF THE PREVIOUS REMAND REPORT DATED 23.11.2010. 2.2.7 THE AO HAS CONFIRMED THE IDENTITY AS WELL AS SOURCE OF FUNDS OF ALL THE DONORS ON THE BASIS OF EVIDENCE PRODUCED BE FORE HIM FROM TIME TO TIME IN THE FORM OF INCOME TAX RETURNS, RENT DEE DS, SALARY CERTIFICATES, BANK STATEMENTS, CASH FLOW STATEMENTS LINKING WITHDRAWALS WITH GIFTS ETC. 2.28 REJOINDER OF LD. DCIT DATED 03.08.2012 STATES THAT THERE APPEAR TO BE SUFFICIENT FUNDS WITH SH. GANDHARB SIN GH DECEASED FATHER OF THE ASSESSEE AND SMT. KRISHNA DEVI DECEAS ED MOTHER OF THE ASSESSEE. 2.29. FOR THE OTHER DONOR SH. PUSHAP SINGH (UNCLE O F THE APPELLANT) AND INTRODUCTION OF CAPITAL BY THE APPELLANT HERSEL F LD. AO HAS RELIED UPON HIS PREVIOUS REMAND REPORT DATED 23.11.2010 IN WHICH HE HAS NOT DISPUTED THE EVIDENCE FURNISHED BY THE APPELLAN T. 2.30. ALL THE TRANSACTIONS OF GIFTS ARE DULY SUPPOR TED BY GIFT DEEDS AND NOTARIZED BY THE NOTARY. IT IS WORTHWHILE TO NOTE T HAT LD. AO HAS NEITHER DISPUTED ANY GIFT DEED NOR HAS GIVEN ANY AD VERSE COMMENT THERETO. 2.31. THE ONLY RESERVATION EXPRESSED BY LD. DCIT IS THAT THE GIFTS HAVE BEEN MADE IN CASH FOR WHICH WE REITERATE AND S UBMIT THAT THERE IS NO LEGAL BAR IN MAKING GIFTS IN CASH. MAKING GIF TS IN CASH CANNOT MAKE THEM NON GENUINE. THE TEST OF ACCEPTING THE GI FTS AS GENUINE AS PER INCOME TAX LAW IS IDENTITY, CREDITWORTHINESS AN D GENUINENESS OF DONORS WHICH HAS BEEN EXPLAINED AND ACCEPTED BY THE AO, THEREFORE, JUST A RESERVATION OF MAKING GIFTS IN CASH IS MISPL ACED. GIFT BETWEEN ITA NO.113(ASR)/2013 10 CLOSE RELATIVES IS A TRANSACTION WITHIN A FAMILY NO T REQUIRING ANY FORMALITIES EXCEPT THAT THE PROOF OF IDENTIFICATION AND CREDITWORTHINESS OF THE DONOR BE PROVED. 5. THE LD. CIT(A) AFTER CONSIDERING THE ADDITIONAL EVIDENCES PRODUCED BY THE ASSESSEE AND THE REMAND REPORT OF THE AO VID E PARA 3 TO 3.5 DELETED THE ADDITION MADE BY THE A.O. AFTER ACCEPTING THE EXPLANATION OF THE ASSESSEE. 6. THE LD. DR, MR. TARSEM LAL, ARGUED THAT THE ASSE SSEE IS CLAIMED TO HAVE RECEIVED GIFT IN CASH IN PIECE MEAL FROM HIS P ARENTS, SH. GANDHARB SINGH THE FATHER, SMT. KRISHNA DEVI THE MOTHER AND UNCLE OF THE ASSESSEE SH. PUSHPA SINGH. HE ARGUED THAT GIVING OF GIFTS IN PIE CE MEALS IS BEYOND HUMAN PROBABILITY AND GIFTS NORMALLY SHOULD HAVE BEEN GIV E IN ONE GO AND THAT TOO SHOULD HAVE BEEN GIVEN ON CERTAIN OCCASION. NONE OF THE GIFTS, IN THE PRESENT CASE HAVE BEEN GIVEN ON ANY OCCASION AND THAT TOO H AVE BEEN GIVEN IN CASH. THE SAID CASH HAS BEEN KEPT FOR 6-7 YEARS BY THE AS SESSEE AND NO DEPOSITED IN THE BANK AND THEREFORE, IT CANNOT BE TREATED AS A GENUINE GIFT. THEREFORE, THERE IS EVERY POSSIBILITY THAT CASH MUST HAVE BEEN USED BY THE SAID DONORS FOR THEIR OWN NEEDS AND NO GIFT HAS BEEN MADE TO TH E ASSESSEE. THE LD. DR RELIED UPON THE DECISION OF HONBLE PUNJAB & HARYAN A HIGH COURT, IN THE CASE OF LALL CHAND KALRA VS. C.I.T. (1981) 22 CTR 1 35 IN THIS REGARD. ITA NO.113(ASR)/2013 11 7. THE LD. COUNSEL FOR THE ASSESSEE, RELIED UPON TH E ORDER OF THE LD. CIT(A). HE ARGUED THAT THE GIFTS RECEIVED FROM TIM E TO TIME IN CASH ARE CONFIRMED BY THE DONOR AS AND WHEN GIFTS WERE GIVEN TO THE ASSESSEE-DONEE. THE GIFTS WERE RECEIVED BY THE ASSESSEE DONEE FROM THREE DONORS FROM TIME TO TIME AND THERE ARE THIRTEEN CONFIRMATIONS IN THE FORM OF GIFT DEEDS, WHICH ARE PART OF RECORD AND WERE BEFORE THE LD. CIT(A). THE SAID GIFT DEEDS WERE DULY ATTESTED BY NOTARY AND ARE SUPPORTED BY CASH F LOW STATEMENTS SHOWING WITHDRAWALS BY THE DONORS FROM THEIR RESPECTIVE BAN K ACCOUNTS AND COPIES OF THEIR BANK ACCOUNTS WERE ALSO FURNISHED ALONGWIT H CASH FLOW STATEMENTS. THE COPIES OF INCOME TAX RETURNS AND TAXES PAID BY ALL THE DONORS WERE FILED BEFORE THE LD. CIT(A) PROVING THEIR SOURCES AND ARE PART OF RECORD. THE ASSESSEE HAS ALSO SUBMITTED SOURCES OF SUM OF RS.5, 66,000/- DEPOSITED FROM HER OWN ACCOUNT AND IS PART OF RECORD. AS REGARDS T HE ALLEGATION THAT THE ASSESSEE HAVING RECEIVED THE GIFT IN CASH, IT WAS S UBMITTED THERE IS NO BAR IN RECEIVING CASH GIFT AND THAT TOO FROM THE PARENTS A ND UNCLE. AS REGARDS THE CASH WAS NOT DEPOSITED IN THE BANK ACCOUNT OF THE A SSESSEE AND WAS KEPT FOR YEARS TOGETHER IN CASH, THE ASSESSEE HAD SUBMITTED THE EXPLANATION WHICH IS PART OF THE RECORD THAT NO MONEY IN ANY FORM WAS RE CEIVED BY THE ASSESSEE FROM HER HUSBAND OR THEIR RELATIVES AND ASSESSEE W AS APPREHENSIVE THAT THE MONEY WHICH WAS BEING RECEIVED FROM HER PARENTS AND UNCLE MAY NOT BE ITA NO.113(ASR)/2013 12 USED OR QUESTIONED BY HER HUSBAND AND THEREFORE, SH E THOUGHT IT CAN BE SAFE TO KEEP IT IN CASH WITHOUT DISCLOSING IT TO HER HUS BAND AND THE FAMILY. THE PARENTS OF THE ASSESSEE WERE STAYING WITH HER AND T HE ASSESSEE BEING THE ONLY CHILD WAS TAKING CARE OF HER PARENTS AND THEREFORE, WHATSOEVER MONEY WAS AVAILABLE WITH THE PARENTS OF THE ASSESSEE WAS PART ED WITH FROM TIME TO TIME TO THE ASSESSEE. THE UNCLE, SH. PUSHAP SINGH WAS A FRIEND OF THE FATHER OF THE ASSESSEE AND HE WAS NOT HAVING ANY CHILD AND WIFE H AVING EXPIRED IN THE YEAR 1987 AND BEING LONELY PREFERRED TO STAY WITH T HE FAMILY OF THE ASSESSEE AND WAS IN A POSITION TO PART WITH A SUBSTANTIAL PO RTION OF HIS PENSION TO THE ASSESSEE. IT WAS, THUS, ARGUED THAT THE ASSESSEE BE ING THE ONLY CHILD OF HER PARENTS NOT ONLY PARTED WITH THE MONEY AVAILABLE WI TH THEM BY WITHDRAWING THE SAME FROM THE BANK ACCOUNT BUT AFTER THE DEATH OF THE FATHER OF THE ASSESSEE, HOUSE NO. 18-A, SHASTRI NAGAR, JAMMU WAS ALSO DEVOLVED ON THE ASSESSEE, WHICH WAS VALUED MORE THAN ONE CRORE AND THE ASSESSEE ALONGWITH HER FAMILY HAS BEEN LIVING IN THE SAID HOUSE SINCE 1990. ON THE DEATH OF THE MOTHER OF THE ASSESSEE, THE ANOTHER HOUSE ALSO DEVO LVED TO THE ASSESSEE AND RENTAL INCOME WAS BEING DERIVED BY THE ASSESSEE, WH ICH HAD BEEN DECLARED IN THE INCOME TAX RETURN SINCE 2003-04 AND COPIES OF R ETURNS OF INCOME ARE ON RECORD. THE LD. COUNSEL FOR THE ASSESSEE ARGUED THA T THE DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT, IN THE CASE OF LALL CH AND KALRA VS. CIT ITA NO.113(ASR)/2013 13 (SUPRA) IS NOT APPLICABLE IN THE PRESENT CASE SINCE THE SAID CASE IS DIFFERENT ON FACTS. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THE ASSESSEE HAS DEPOSITED RS.28.55 LACS IN CASH IN HER BANK ACCOUNT. THE SOURCE OF THE SAID CASH DEPOSITED HAS BEEN EXPLAINE D BY THE ASSESSEE, AS GIFT RECEIVED OF RS.10,36,000/- FROM HER FATHER, RS.6,35 ,000/- RECEIVED FROM HER MOTHER AND RS.6,18,000/- RECEIVED FROM HER UNCLE, W HO ACTUALLY IS THE FRIEND OF THE FATHER OF THE ASSESSEE FROM TIME TO TIME. TH E ASSESSEE HAD EXECUTED GIFTS DEEDS DULY NOTIARISED AND WERE PART OF RECORD . THE ASSESSEE HAS ALSO SUBMITTED CASH FLOW STATEMENT SHOWING WITHDRAWALS B Y THE DONORS FROM THEIR RESPECTIVE BANK ACCOUNTS ALONGWITH COPIES OF BANK ACCOUNTS OF THE DONORS SHOWING SOURCES OF THE FUNDS AVAILABLE WITH THE DONORS. THE SAID AVAILABILITY OF FUNDS WITH THE DONORS IS NOT IN DIS PUTE. THE ASSESSEE HAS SUBMITTED THE COPIES OF THE INCOME TAX RETURNS FILE D BY THE RESPECTIVE DONORS WHICH ARE PART OF RECORD AND IS NOT IN DISPUTE. THE ASSESSEE HAS ALSO SUBMITTED THE SOURCES OF RS.5,66,000/- DEPOSITED FR OM HER SOURCES. 8.1. THE REVENUES CASE MAINLY IS ON THE HUMAN PRO BABILITY THAT THE CASH WITHDRAWN BY THE DONOR MUST HAVE BEEN USED ELSEWHER E FOR THEIR OWN NEEDS AND THERE WAS NO OCCASION TO MAKE SUCH GIFTS TO THE ASSESSE AND EVEN IF THE ITA NO.113(ASR)/2013 14 GIFTS HAVE TO BE GIVEN, THEY ARE NORMALLY GIVEN IN ONE GO AND NOT IN PIECE MEALS AND THE ASSESSEE HAS NOT DEPOSITED THE CASH S O RECEIVED FOR 6-7 YEARS IN HER BANK ACCOUNT. 8.2. REGARDING REVENUES CASE, THE ASSESSEE HAS SUB MITTED THE EXPLANATION THAT THE ASSESSEE WAS ONLY CHILD OF HER PARENTS. SH . GANDHARAB SINGH FATHER OF THE ASSESSEE WAS IN ARMY AND HAD RETIRED IN THE YEAR 1978 AND WAS RECEIVING PENSION AND RENTAL INCOME. SMT. KRISHNA D EVI MOTHER OF THE ASSESSEE WAS MLC AND WAS RUNNING MAHILA SEWING CEN TRE AND HAVING A FAIR PRICE SHOP FOR EDIBLE OILS. SH. PUSHAP SINGH W AS A CLOSE ASSOCIATE OF SH. GANDHARAB SINGH, FATHER OF THE ASSESSEE AND WAS NOT HAVING ANY CHILD AND CONSIDERED THE ASSESSEE AS HIS DAUGHTER. SH. PUSHAP SINGH HAD RETIRED FROM THE ARMY AND WAS HAVING PENSION AND AGRICULTURE INC OME. THE EXPLANATION OF THE ASSESSEE WAS THAT NO MONEY IN ANY FORM WAS R ECEIVED BY THE ASSESSEE FROM HER HUSBAND OR THEIR RELATIVES AND THE ASSESS EE WAS APPREHENSIVE THAT THE MONEY WHICH WAS BEING RECEIVED FROM HER PARENTS AND UNCLE SH. PUSHAP SINGH MAY NOT BE USED OR QUESTIONED BY HER HUSBAND AND THOUGHT IT SAFE TO KEEP IT IN CASH WITHOUT DISCLOSING IT TO HER HUSBA ND OR HER FAMILY. IT IS ALSO ON RECORD THAT THE PARENTS OF THE ASSESSEE WERE LIV ING WITH HER FOR THEIR CARE. THE HOUSE IN WHICH THE ASSESSEE WAS LIVING SINCE 19 90 HAD BEEN DEVOLVED ON THE ASSESSEE FROM HER FATHER SH. GANDHARAB SINGH AN D FURTHER ANOTHER HOUSE ITA NO.113(ASR)/2013 15 ALSO DEVOLVED ON THE ASSESSEE FROM HER MOTHER SMT. KRISHNA DEVI FROM WHICH THE ASSESSEE WAS EARNING RENTAL INCOME AND TH E SAME WAS DECLARED IN THE REGULAR RETURNS OF INCOME AND SAME IS ON RECO RD. SIMILARLY SH. PUSHAP SINGH, UNCLE OF THE ASSESSEE DID NOT HAVE ANY CHILD AND HIS WIFE EXPIRED IN THE YEAR 1987 AND HE BEING LONELY PREFERRED TO STAY WITH THE FAMILY OF THE ASSESSEE AND ACCORDINGLY PARTED WITH A SUBSTANTIAL PORTION OF HIS PENSION INCOME TO THE ASSESSEE. 8.3. FROM THE FACTS MENTIONED HEREINABOVE, THERE IS EVERY POSSIBILITY OF HUMAN PROBABILITY THAT THE PARENTS OF THE ASSESSEE AND UNCLE OF THE ASSESSEE HAD GIFTED CASH FROM TIME TO TIME TO THE ASSESSEE, AS PER GIFT DEEDS ON RECORD AND SOURCES AS EXPLAINED AS AGAINST ARGUMENT S MADE BY LD. DR. THE CASH HAVING BEEN KEPT BY THE ASSESSEE FOR 6-7 YEARS , HAS BEEN EXPLAINED AND NO DEFECT IN THE SAME HAS BEEN POINTED OUT BY THE A O AND NOTHING HAS BEEN BROUGHT ON RECORD THAT SUCH CASH HAS BEEN USED BY THE ASSESSEE ELSEWHERE OR BY THE DONORS ELSEWHERE. THEREFORE, THE ARGUMENTS M ADE BY THE LD. DR, CANNOT HELP THE REVENUE. 8.4. AS REGARDS THE CASE OF THE REVENUE, THERE WAS NO OCCASION OF THE GIFTS MADE AND THEREFORE, THE SAID GIFTS CANNOT BE TREATE D, AS GENUINE AND THE RELIANCE OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF LALL CHAND KALRA VS. CIT (SUPRA) IS UNFOUNDED. SINCE THE FACTS THEREIN ARE NOT IN ITA NO.113(ASR)/2013 16 PARITY WITH ONE BEFORE US, IT WAS HELD THEREIN INTE R-ALIA, ONE OF THE GIFTS BEING FROM A STRANGER AND THE OTHER FROM A RELATIVE WHO HAD OTHER MORE IMPORTANT LIABILITIES AND THE DONOR THEREIN WAS BROTHER OF TH E WIFE OF THE ASSESSEE BUT HE HAD FOUR SISTERS AND NO REASON WAS FORTHCOMING A S TO WHY HE GAVE A GIFT OF RS.10,000/- TO THE ASSESSEE PARTICULARLY WHEN T HERE WAS NO REASON TO DO SO. IT WAS ON THESE FACTS, THE GIFTS WERE NOT HELD TO BE GENUINE. THE FACTS IN THE PRESENT CASE HAVE NOT BEEN SHOWN IN PARI-MATERI A WITH THE FACTS IN THE CASE OF LALL CHAND KALRA VS. CIT (SUPRA). IN THE P RESENT CASE, THE GIFTS ARE FROM THE FATHER AND MOTHER OF THE ASSESSEE AND THE UNCLE, WHO IS VERY CLOSE FRIEND OF THE FATHER OF THE ASSESSEE. THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, IN WHICH THE GIFTS HAVE BEEN GIVEN TO THE ASSESSEE, HAVE BEEN DISCUSSED HEREINABOVE. THE RELIANCE HAS BEEN PLACED BY THE ASSESSEE, ON THE DECISION OF THE HONBLE DELHI HIGH COURT, IN THE CA SE OF CIT VS. SURESH KUMAR KAKKAR, REPORTED IN (2010) 324 ITR 231, WHERE IT HAS BEEN HELD THAT GIFTS ARE NORMALLY MADE BY PARENTS TO CHILDREN THRO UGH LOVE AND AFFECTION AND DO NOT NECESSARILY REQUIRE ANY PARTICULAR OCCAS ION. IN THE PRESENT CASE, AS WELL THE GIFTS HAD BEEN RECEIVED BY THE ASSESSEE OU T OF LOVE AND AFFECTION FROM HER PARENTS AND UNCLE OF THE ASSESSEE. IN THE PRESENT CASE, THE ASSESSEE HAVING ESTABLISHED IDENTITY, CREDITWORTHINESS AND G ENUINENESS OF THE GIFTS AND THEREFORE, THERE IS NO QUESTION OF MAKING ANY A DDITION U/S 68 OF THE ACT. ITA NO.113(ASR)/2013 17 ACCORDINGLY, WE FIND NO INFIRMITY IN THE ORDER OF T HE LD. CIT(A), WHO HAS RIGHTLY DELETED THE ADDITION SO MADE. ACCORDINGLY, THE APPEAL OF THE REVENUE IS DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IN ITA NO.113(ASR)/2013 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH SEPTEMBER, 2014. SD/- SD/- (A.D.JAIN) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 11 TH SEPTEMBER, 2014 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: SMT. INDU SINGH PAWAR PROP. M/S. I.A. WINES TRADERS, JAMMU. 2. THE ITO WARD 1(1), JAMMU 3. THE CIT(A), JAMMU. 4. THE CIT, JAMMU. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR