Shri Mahendrabhai B.Shrivastav, Baroda V. The Income tax Officer,Ward-5(2), Baroda

ITA 1148/AHD/2010

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1219 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 year(s) 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 09-05-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 15-04-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SONIA KUMAR
• Assessee Lawyers: M K PATEL
• Keywords: Gift
• Section: 5(2); 68; 2

Judgement Text

, D IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ./ ITA NO.1148/AHD/2010 /BLOCK ASSTT. YEAR: 2004-05 SHRI MAHENDRABHAI B. SHRIVASTAV MADHU SHRIVASTAV-MLA(GUJARAT) 13-A, PRABHAT COLONY WAGHODIA ROAD VADODARA. PAN : ADPPS 0191 N VS ITO, WARD - 5(2) VADODARA. %& / (APPELLANT) '( %& / (RESPONDENT) ASSESSEE BY : SHRI M.K. PATEL, AR REVENUE BY : SMT.SONIA KUMAR, SR.DR / DATE OF HEARING : 09/05/2016 / DATE OF PRONOUNCEMENT: 04/07/2016 )*/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE OR DER OF THE LD.CIT(A)-V, BARODA DATED 16.02.2010 PASSED FOR THE ASSTT.YEAR 2004- 05. 2. SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT THE L D.CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.10,01,734/- WHICH WAS ADDED BY THE AO WITH THE AID OF SECTION 68 OF THE INCOME TAX ACT. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S FILED HIS RETURN OF INCOME ON 23.3.2006 DECLARING INCOME OF RS.1,22,751 /-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT A ND NOTICE UNDER ITA NO.1148/AHD/2010 2 SECTION 143(2) WAS ISSUED AND SERVED UPON THE ASSES SEE ON 19.5.2006. ON SCRUTINY OF THE ACCOUNTS, IT REVEALED TO THE AO THAT THE ASSESSEE HAS TAKEN UNSECURED LOAN OF RS.13,37,109/- FROM FOLLOWI NG 34 PERSONS: SR. NO. NAME OF THE DEPOSITORS AMOUNT OF DEPOSITS SHOWN 1. AKBARBHAI B BELIM RS. 18,000/- 2. AMRUT AMBALAL PATEL RS. 18,500/- 3. BAHELIM SHABBIRHUSEN KASAMBHAI RS. 17,500/- 4. CHAUHAN CHHATRASINGH G RS. 15, 584/- 5. CHAUHAN SANATBHAI K RS. 19,500/- 6. DELWAD AMBALAL CHIMANBHAI RS. 17,500/- 7. DODIA VAKHATSINGH KESHRISINGH RS.18,500/- 8. MAHADIK AVINASH B RS. 18,500/- 9. MALEK AHEMADBHAI RAHIMBHAI RS. 17,500/- 10. MEHTA MANILAL PANACHAND & SONS RS. 2,00,000/- 11. MR. MAHESH MUSALE RS. 3,00,000/- 12. MRS. VIJAYLAXMI RS. 3,00,000/- 13. PARMAR GANPATSINGH PARBAT SINGH RS. 15,000/- 14. PARMAR RAMSINGH GABESINGH RS. 17,500/- 15. PARMAR RATILAL FATEHSINGH RS. 17,500/- 16. PARMAR VAJESINGH SHNAKER RS.17,500/- 17. PATEL AMBALAL MAGANBHAI RS. 16,000/- 18. PATEL HARISHBHAI DAHYABHAI RS. 17, 500/- 19. PATEL HARISHBHAI RAMDAS RS. 18,500/- 20. PATEL HASMUKH MOHANBHAI RS. 18,900/- 21. PATEL JAYANTIBHAI CHHAGANBHAI RS. 10,375/- 22. PATEL MAHESHBHAI DESAIBHAI RS. 17,500/- 23. PATEL NATWARBHAI B RS.18,500/- 24. PATEL PARSHOTAMBHAI M RS. 16,000/- 25. PATEL SHANABHAI B RS. 18,500/- 26. PATHAN AYUBKHAN MEHBUBKHAN RS.16,000/- 27. PRABHATSINGH I PARMAR RS.18,000/- 28. PRABHATSINGH BHIMSINGH SINDHA RS.16,000/- 29. PRAVINSINGH P SINDHA RS.18,000/- 30. PURANI CHANDRAKANT RATILAL RS.18,500/- 31. RAJPUT BALWANTSINGH NATARSINGH RS.17,500/- 32. RATANSINGH MOHANSINGH SOLANKI RS. 17,5007- 33. SOLANKI KANAKSINGH RAHIMBHAI RS. 19,250/- 34. SOLANKI PRAVINSINGH A RS. 16,000/- TOTAL DEPOSITS RS. 13,37,109/- ITA NO.1148/AHD/2010 3 THE ASSESSEE HAS FILED CONFIRMATIONS AND ALSO PRODU CED THE CREDITORS BEFORE THE AO. THE LD.AO WAS NOT SATISFIED WITH TH E EXPLANATION OF THE ASSESSEE AND MADE ADDITION. 4. ON APPEAL, THE LD.CIT(A) HAS PARTLY DELETED THE ADDITION BY OBSERVING AS UNDER: 4.3. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, THE SUBMISSIONS OF THE ASSESSEE AND THE ASSESSMENT ORDER. IN THE CASE OF MRS. VIJAYALAKSHMI SHRIVASTAVA IN HER STATEMENT RECORDE D ON 21/120/2006, IT WAS STATED BY HER THAT SHE OWNS 16 BIGHAS OF LAND A ND THAT WHEAT AND CHANA IS CULTIVATED ON THE LAND AND THAT NO RECORD OF INCOME AND EXPENDITURE IS MAINTAINED AND THAT SHE EARNS RS. 50 ,000/- - RS. 60,000/- FROM AGRICULTURE AND THE SAVINGS ARE KEPT AT HO ME. DURING THE COURSE OF APPELLATE PROCEEDINGS, HOWEVER, 6 S ALES BILLS FOR THE PERIOD 27/04/2003 TO 04/05/2003 WAS SUBMITTED SHOWING SALE OF MUSTARD, MAIZE AMOUNTING TO RS.3,43,562/-. IN HER BANK ACCOUNT WITH BHARAT CO-OPERATIVE BANK, WADI THERE ARE NO MA JOR DEPOSITS DURING THE YEAR EXCEPT FOR CASH DEPOSIT OF RS. 3 LAKHS PRI OR TO ISSUANCE OF CHEQUE. HAD THERE BEEN REGULAR AGRICULTURAL INCOME THERE WOULD HAVE BEEN PATTERN OF SEASONAL DEPOSITS /WITHDRAWALS FROM THIS BANK ACCOUNT. ALTHOUGH NO BILLS ARE MAINTAINED THE YEARLY SAVINGS WAS CLAIMED TO BE AROUND RS. 50,000/- TO RS. 60,0007-, ON THE OTHER H AND, IN A PERIOD OF 7 DAYS THE RECEIPTS OF RS. 3.43 LAKH IS SHOWN BY WAY OF SALE BILLS FOR CROPS WHICH WERE NOT INDICATED TO BE CULTIVATED IN THE OR IGINAL STATEMENT. FROM THESE CONFLICTING FACTS THE CREDIT WORTHINESS OF TH E DEPOSITOR IS NOT PROVED AND ALL THE SUBSEQUENT DOCUMENTS APPEAR TO BE' MERE LY SELF SERVING IN NATURE. 4.3.1. IN REGARD TO DEPOSIT OF RS. 3 LAKHS FROM MAH ESH MUSALE, IT IS SEEN THAT THE SAME WAS CLAIMED TO BE RECEIVED BY THE LEN DER FROM THE BROTHER MR. RAJESH MUSALE AS GIFT IN MAY, 2003 WHEREAS THE BANK STATEMENT OF PARTNERSHIP CONCERN M/S. SHREE CORPORATION OF MR. R AJESH MUSALE REVEAL THAT HE HAD WITHDRAWN RS. 3 LAKHS FROM THE BANK ACC OUNT ONLY ON 31/03/2004 IN OTHER WORDS, THE WITHDRAWALS COULD NO T BE GIFTED IN MAY 2003. 4.3.2. IN RESPECT OF THE REMAINING 31 DEPOSITORS, A PERUSAL OF AFFIDAVITS FILED AND THE STATEMENTS RECORDED AND THE FACTS OF THE CA SE SUGGEST THAT MOST OF THE DEPOSITORS CLAIM TO HAVE GIVEN THE LOAN ON 31/0 5/2003 OR IN MAY 2003. FOR MOST OF THE LENDERS THIS WAS THE SOLITARY LOAN TRANSACTION AND NONE OF THESE AGRICULTURISTS HAD ANY EVIDENCE OF SALE OF AG RICULTURE PRODUCE, EXPENDITURE BILLS ETC. IT IS INDICATED BY THE AO TH AT THESE ARE PERSONS OF SMALL MEANS AND THAT MOST OF 7/12 AND 8A EXTRACT WE RE ISSUED ON SAME DATE I.E. 19/12/2006 BY TALATI. IT IS A WELL SETTLE D LAW THAT TAXING AUTHORITY CAN TAKE NOTE OF THE SURROUNDING CIRCUMSTANCES (CIT VS. DURGA PRASAD MORE- 82 ITR 540 (SC). GOING BY THE THEORY OF TOTAL ITY OF CIRCUMSTANCES AND ITA NO.1148/AHD/2010 4 DEEPER EXAMINATION OF THE STATEMENTS RECORDED, AFFI DAVITS AND CONSIDERING FACTORS SUCH AS LAND HOLDINGS, OTHER SOURCE OF INCO ME SUCH AS FROM SALE OF MILK ETC., FAMILY SIZE, SOCIAL OBLIGATIONS, SAVING POTENTIAL IN MY VIEW THE CREDIT WORTHINESS IN RESPECT OF THE FOLLOWING L ENDERS SEEMS SUBSTANTIATED: SR. NO. NAME OF THE DEPOSITORS AMOUNT OF DEPOSITS SHOWN 1. DELWAD AMBALAL CHIMANBHAI RS. 17, 500/- 2. MALEK AHEMADBHAI RAHIMBHAI RS.17,500/- 3. PARMAR RATILAL FATEHSINGH RS.17,500/- 4. PATEL HARISHBHAI RAMDAS RS. 18,5007- 5. PATEL JAYANTIBHAI CHHAGANBHAI RS. 10,3757- 6. PATEL MAHESHBHAI DESAIBHAI RS. 17,5007- 7. PRAVINSINGH P SINDHA RS. 18, 0007- 8. PURANI CHANDRAKANT RATILAL RS. 18, 500/- TOTAL RS. 1,35,3757- ACCORDINGLY, OUT OF THE TOTAL ADDITION U/S. 68 OF T HE IT. ACT IS SUSTAINED TO THE EXTENT OF RS.10,01,734/-(RS.11,37,109- RS. 1,35,375 ). 5. BEFORE US, THE LD.COUNSEL FOR THE ASSESSEE HAS R EITERATED CONTENTIONS AS WERE RAISED BEFORE THE REVENUE AUTHO RITIES. THE LD.COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TOWA RDS PAGE NO.27 OF THE PAPER BOOK AND CONTENDED THAT THE ASSESSEE HAS TAKEN LOAN OF RS.3.00 LAKHS FROM SHRI MAHESH MUSALE. THE CREDITO R HAS GIVEN CONFIRMATION. FOR REJECTING THE EXPLANATION OF THE ASSESSEE WITH REGARD TO THIS CREDITOR, IT WAS OBSERVED BY THE LD.CIT(A) THAT HE WITHDREW THE AMOUNT ON 31.3.2004 FROM THE BANK ACCOUNT. IF THAT BE SO, THEN HOW HE COULD MAKE GIFT IN MAY, 2003 ? TAKING US THOUGH THE PAGE NO.34 OF THE PAPER BOOK, THE LD.COUNSEL FOR THE ASSESSEE CON TENDED THAT 31.3.2004 IS A CREDIT ENTRY IN NUTAN SAHAKARI BANK LTD. IT WAS NOT A WITHDRAWAL BY THE CREDITOR. HE HAS WITHDRAWN IT ON EARLIER OCCASIONS. ITA NO.1148/AHD/2010 5 HE FURTHER CONTENDED THAT ALL THE CREDITORS HAVE GI VEN THEIR AFFIDAVITS. THEY HAVE CONFIRMED THE TRANSACTION DURING THE COUR SE OF THEIR STATEMENT, AND THEREFORE, THE AO OUGHT TO HAVE NOT DOUBTED THE EXPLANATION OF THE ASSESSEE. ON THE OTHER HAND, TH E LD.DR RELIED UPON THE ORDERS OF THE REVENUE AUTHORITIES BELOW. 6. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GO NE THROUGH THE RECORD. SECTION 68 OF THE INCOME TAX ACT CONTEMPLA TES THAT WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE, MAINTAINED FOR ANY PREVIOUS YEAR AND THE ASSESSEE OFFERS NO EXPLANATIO N ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY HI M IS NOT IN THE OPINION OF THE AO SATISFACTORY, THE SUM SO CREDITED MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THAT PREVIOUS YEAR. TH ERE IS NO DISPUTE THAT SUMS WERE FOUND CREDITED IN THE ACCOUNTS OF TH E ASSESSEE. IN ORDER TO DISCHARGE ONUS FOR GIVING AN EXPLANATION E XHIBITING THE NATURE OF TRANSACTION AND SOURCE OF TRANSACTION, THE ASSES SEE HAS FILED CONFIRMATION FROM THE CREDITORS. SOME OF THEM HAVE APPEARED BEFORE THE AO ALSO. THUS, AS FAR AS IDENTITY OF THE CREDI TOR IS CONCERNED, THAT HAS BEEN PROVED BY THE ASSESSEE. MONIES HAVE BEEN TAKEN IN CASH - THAT IS ALSO NOT IN DISPUTE. BUT ON AN ANALYSIS OF RECORD, WE ARE OF THE VIEW THAT ASSESSEE FAILED TO PROVE THE CREDIT-WORTH INESS OF THE CREDITORS. 7. WE HAVE GONE THROUGH THE STATEMENT AND THE AFFID AVITS. ALL THE AFFIDAVITS ARE ALMOST IDENTICAL. SOURCE OF LOAN HA S BEEN STATED TO BE AGRICULTURE INCOME. BUT WHEN WE PERUSE THE STATEME NT, IT WILL REVEAL THAT CREDITOR HAS MEAGER INCOME. IT IS HIGHLY IMPR OBABLE THAT ONE COULD KEEP SAVING IN CASH AT HOME FOR A LONG TIME. FOR E XAMPLE, SMT. VIJAYLAXMI SHRIVASTVA HAS GIVEN AN AMOUNT OF RS.3.0 0 LAKHS TO THE ASSESSEE ON 31.5.20093. SHE HAS BANK ACCOUNT WITH BHARAT CO-OP. BANK LTD. SHE HAS AGRICULTURE LAND OF 16 BIGHAS. H ER ANNUAL AGRICULTURE INCOME HAS ROUGHLY RS.50,000/- TO RS.60,000/-. SHE HAS STATED THAT SAVINGS WERE BEING DEPOSITED IN THE CO-OPERATIVE BA NK. IF WE ITA NO.1148/AHD/2010 6 APPRECIATE THE STATEMENT OF THIS CREDITOR, THEN, IT WOULD REVEAL THAT IT IS HIGHLY IMPROBABLE THAT AGRICULTURIST, HAVING MEAGER INCOME WOULD KEEP SAFE THE SALE PROCEEDS OF AGRICULTURE PRODUCE FOR F IVE TO SIX YEARS IN CASH AT HOME. HER STATEMENT IN ITSELF IS CONTRADIC TORY. IN REPLY TO QUESTION NO.5, SHE STATED THAT I KEEP ALL MY SAVIN GS AT BHARAT CO- OPERATIVE BANK. THEN, IN THE NEXT REPLY TO THE NE XT QUESTION, SHE DEPOSED THAT I KEEP FEW AMOUNTS OF SAVING AT HOME . IF THESE TWO QUESTIONS ARE COMPARED WITH QUESTION NO.9, WHERE TH E AO HAD ASKED PLACE OF KEEPING AGRICULTURE INCOME, SHE DEPOSED TH AT SUCH INCOME WAS KEPT AT HOME. SIMILARLY, WE HAVE PERUSED THE STATE MENT OF OTHER CREDITORS. ALL THAT STATEMENTS DID NOT INSPIRE CRE DENCE TO US. THE ASSESSEE HAS TAKEN ALLEGED UNSECURED LOAN IN SYSTEM ATIC MANNER. IN SOME OF THE CASES CASH WAS DEPOSITED ONE OR TWO DAY S BEFORE THE MONEY WAS GIVEN TO THE ASSESSEE, AND THE ASSESSEE I S MAN OF MEANS. HOW IT CAN BE EXPECTED THAT SMALL FARMERS NOT HAVIN G ANY REGULAR SOURCE OF INCOME WOULD GIVE LOAN IN THIS FASHION. 8. AS FAR AS DISCREPANCY POINTED BY THE LD.COUNSEL FOR THE ASSESSEE WITH REGARD TO MR.MAHESH SHRIVASTVA, IF THAT DISCRE PANCY IS TAKEN NOTE OF, HE WAS NOT CREDIT-WORTHY OF GIVING ANY LOAN TO THE ASSESSEE. THE LD.REVENUE AUTHORITIES HAVE APPRECIATED THE FACTS A ND CIRCUMSTANCES IN RIGHT PERSPECTIVE WHILE MAKING ADDITION. WE DO NOT SEE ANY REASONS TO INTERFERE WITH THE ORDER OF THE LD.CIT(A). ACCORDI NGLY, THE APPEAL OF THE ASSESSEE IS REJECTED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS REJ ECTED. ORDER PRONOUNCED IN THE COURT ON 4 TH JULY, 2016 AT AHMEDABAD. SD/- SD/- (N.K. BILLAIYA) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 04/07/2016