N. Palanivel, Bangalore V. Asst.C.I.T., Bangalore

ITA 1289/BANG/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9473 (ITAT-BANGALORE)
• Duration Of Justice: 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 1998-1999
• Appeal Filed On: 21-10-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: INDER SOLANKI
• Assessee Lawyers: H N KHINCHA
• Keywords: Gift; Cost of acquisition
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRI BUNAL BANGALORE BENCH SMC, BANGALORE BEFORE SHRI A.K.GARODIA, ACCOUNANT MEMBER ITA NOS.1289(BANG) 2015 (ASSESSMENT YEARS : 1998 99 ) SHRI N. PALANIVEL, PROP. : METAL TRADERS, NO. 4-A, P.V.R. ROAD, RANA SINGH PET, BANGALORE -560 053 TAN NO. AANPP0275D APPELLANT VS THE ACIT, CIRCLE 1 (1), BANGALORE RESPONDENT ASSESSEE BY : SHRI H. N. KHINCHA, C. A. REVENUE BY : SHRI INDER SOLANKI, JCIT DATE OF HEARING : 25-07-2016 DATE OF PRONOUNCEMENT : 12-08-2016 O R D E R PER A. K. GARODIA, A. M.: THIS APPEAL IS FILED BY THE ASSESSEE FOR THE ASSES SMENT YEARS 1998-99. THIS IS SECOND ROUND OF APPEAL. IN THE FIRST ROUND, THE TRIBUNAL RESTORED THE ISSUE BACK TO THE A.O. FOR EXAMINATION OF THE LETTE R OF CONFIRMATION ISSUED BY THE ASSESSEES FATHER REGARDING GIFT OF A PROPERTY TO THE ASSESSEE. IN THE SECOND ROUND, THE A.O. STATED IN THE ASSESSMENT ORD ER THAT THIS LETTER DOES NOT GIVE DETAILS SUCH AS THE DATE AND MODE OF PAYME NT OR ANY OTHER PARTICULARS TO PROVE THE GENUINENESS OF THE INVESTM ENT. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE CIT (A) BUT WITHOUT SUC CESS AND NOW, THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 2. THE ASSESSEE HAS RAISED AS ANY AS SIX GROUNDS BU T THE ONLY GRIEVANCE IS ABOUT ADDITION MADE BY THE A.O. U/S 69 OF RS. 10 ,89,000/- BEING PURCHASE COST OF THE SITE. 3. LEARNED AR OF THE ASSESSEE SUBMITTED THAT ON PAG E 18 OF THE PAPER BOOK IS THE CONFIRMATION OF THE MATERNAL GRANDFATHE R OF THE ASSESSEE IN RESPECT OF GIFT BY HIM TO THE ASSESSEE AND ON PAGE 40 OF THE PAPER BOOK IS HIS ITA NOS.1289(BANG)2015 2 AFFIDAVIT IN THIS REGARD. HE SUBMITTED THAT SINCE A FFIDAVIT IS FILED AND NO ENQUIRY WAS MADE BY THE AO BY CALLING THE MATERNAL GRANDFATHER OF THE ASSESSEE, ADDITION CANNOT BE MADE. HE PLACED RELIAN CE ON THE JUDGMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF CIT VS. P. K. NOORJAHAN AS REPORTED IN 237 ITR 570. LEARNED DR OF THE REVENUE SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. FIRST O F ALL, I TAKE NOTE OF THE DIRECTIONS OF THE TRIBUNAL IN THE FIRST ROUND. AS P ER THE SAME, THE A.O. WAS DIRECTED BY THE TRIBUNAL TO EXAMINE THE CLAIM OF TH E ASSESSEE IN DETAIL AFTER GIVING REASONABLE AND ADEQUATE OPPORTUNITY TO THE A SSESSEE OF SUBSTANTIATING HIS CLAIM. HENCE, IT IS SEEN THAT TH E A.O. WAS REQUIRED TO PROVIDE REASONABLE AND ADEQUATE OPPORTUNITY TO THE ASSESSEE OF SUBSTANTIATING HIS CLAIM. THIS IS NOT THE CASE OF T HE ASSESSEE THAT REASONABLE AND ADEQUATE OPPORTUNITY TO THE ASSESSEE OF SUBSTAN TIATING HIS CLAIM WAS NOT PROVIDED BY THE A.O. AS PER PAGE 3 OF THE ASSES SMENT ORDER, THE A.O. ASKED THE COUNSEL OF THE ASSESSEE A PERTINENT QUEST ION THAT HOW THE AGRICULTURAL LAND WHICH FETCHED ONLY RS. 77,220/- A S SALE CONSIDERATION IN THE YEARS 2006, 2008 AND 2009 CAN YIELD THE INCOME OF RS. 10 LACS OR MORE IN THE YEAR 1997 WHICH HELPED SRI VELLAISAMY TO PUR CHASE THE PROPERTY IN THE NAME OF HIS GRANDSON. HE HAS GIVEN A CATEGORICA L FINDING THAT THE ASSESSEE FAILED TO PRODUCE ANY SUBSTANTIAL PROOF WH ICH CAN PROVE THE SOURCE OF RS. 10,89,000/- IN THE HANDS OF THE GRANDFATHER ALSO. THIS CATEGORICAL FINDING OF THE A.O. COULD NOT BE CONTROVERTD BY THE LEARNED AR OF THE ASSESSEE BEFORE CIT (A) OR BEFORE ME BY BRINGING AN Y COGENT MATERIAL ON ITA NOS.1289(BANG)2015 3 RECORD. THIS IS BY NOW A SETTLED POSITION OF LAW TH AT FOR SECTION 68, THE ASSESSEE HAS TO ESTABLISH CREDIT WORTHINESS OF THE CREDITOR ALSO. IF THE PROPERTY IS PURCHASED BY THE GRANDFATHER OF THE ASS ESSEE IN THE NAME OF THE ASSESSEE, THEN WHETHER IT IS A GIFT OR LOAN BY HIM, THE ASSESSEE HAS TO ESTABLISH HIS CREDIT WORTHINESS AND SINCE THE ASSES SEE HAS FAILED TO DO SO, THE ADDITION CANNOT BE DELETED ON THE BASIS OF ONLY CONFIRMATION AND AFFIDAVIT OF THE GRANDFATHER OF THE ASSESSEE. REGAR DING THIS CONTENTION THAT SINCE AFFIDAVIT OF THE GRANDFATHER OF THE ASSESSEE WAS FILED, HE SHOULD HAVE BEEN CALLED AND EXAMINED BEFORE REJECTING THE AFFID AVIT, I FIND THAT THE A.O. HAS NOT REJECTED THE AFFIDAVIT BUT SINCE THE ASSESS EE FAILED TO PROVE HIS CREDIT WORTHINESS, RELIEF WAS NOT ALLOWED SIMPLY ON THE BA SIS OF AFFIDAVIT AND I FIND NO INFIRMITY IN THE ORDERS OF THE AUTHORITIES BELOW ON THIS ASPECT. 5. NOW I EXAMINE THE APPLICABILITY OF THE JUDGMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF CIT VS. P. K. NOORJAHAN (S UPRA). THE RATIO OF THIS JUDGMENT IS THIS THAT THE QUESTION WHETHER THE SOUR CE OF THE INVESTMENT WOULD BE TREATED AS INCOME OR NOT U/S 69 HAS TO BE CONSIDERED IN THE LIGHT OF THE FACTS OF EACH CASE. HENCE EVEN AS PER THIS JUDG MENT, FACTS OF EACH CASE HAS TO BE LOOKED INTO AND IT CANNOT BE SAID THAT BY SIMPLY FOLLOWING THIS JUDGMENT, ANY ADDITION MADE U/S 69 CAN BE DELETED. IN THAT CASE, THE EXPLANATION WAS THAT THE PURCHASE OF PROPERTY OF RS . 25,902/- WAS OUT OF SAVINGS FROM THE INCOME OF THE PROPERTIES WHICH WER E LEFT BY HER MOTHERS FIRST HUSBAND. IN THE FACTS OF THAT CASE, THE TRIBU NAL HELD THAT ALTHOUGH THE EXPLANATION ABOUT THE NATURE AND SOURCE OF THE PURC HASE MONEY WAS NOT ITA NOS.1289(BANG)2015 4 SATISFACTORY BUT IN THE FACTS AND CIRCUMSTANCES OF THAT CASE, IT WAS NOT POSSIBLE FOR THE ASSESSEE TO EARN THE AMOUNT OF INV ESTMENT IN THAT YEAR OR EVEN IN A DECADE. IN THE PRESENT CASE, THE ASSESSEE HIMSELF HAS DECLARED AN INCOME OF RS. 148,510/- IN THE PRESENT YEAR. THE A. O. HAS ALSO NOTED THAT THE OPENING BALANCE IN THE P/L ACCOUNT SHOWS THAT T HE ASSESSEE WAS RUNNING THE BUSINESS IN THE EARLIER YEAR ALSO AND T HE CLAIM OF THE ASSESSEE THAT HE HAD NO SOURCE TO EARN THE ALLEGED INCOME IS NOT ACCEPTABLE. UNDER THESE FACTS, THIS JUDGMENT OF HONBLE APEX COURT RE NDERS NO HELP TO THE ASSESSEE IN THE PRESENT CASE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/ - (A.K. GARODIA) ACCOUNTANT MEMBER BANGALORE: D A T E D : 12.08.2016 AM* COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A)-II BANGALORE 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER, AR, ITAT, BANGALORE ITA NOS.1289(BANG)2015 5 1. DATE OF DICTATION .. 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P. S. .. 4 DATE ON WHICH THE ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT .. 5. DATE ON WHICH THE ORDER COMES BACK TO THE SR. P.S. .. 6. DATE OF UPLOADING THE ORDER ON WEBSITE .. 7. IF NOT UPLOADED, FURNISH THE REASON FOR DOING SO. 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. DATE ON WHICH ORDER DOES FOR XEROX & ENDORSEMENT . 10. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK. 11 THE DATE ON WHICH THE FILE GOES TO THE ASSIST ANT REGISTRAR FOR SIGNATURE ON THE ORDER. 12 THE DATE ON WHICH THE FILE GOES TO THE DISPATCH SEC TION FOR DISPATCH OF THE TRIBUNAL ORDER 13 DATE OF DISPATCH OF ORDER