Shri Rajesh M.Dhir, Ahmedabad V. The Income tax Officer,Ward-6(2), Ahmedabad

ITA 1327/AHD/2011

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1465 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 01-03-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 03-05-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: LALA PHILIPS
• Keywords: Unexplained cash credit; Gift
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH BEFORE: S H RI PRAMOD KUMAR , ACCOUNTANT MEMBER AND SHR I S. S. GODARA , JUDICIAL MEMBER SHRI RAJESH M. DHIR, 3, SANGIT SARITA RAW HOUSE, OPP. SUN POWER FLATS, MEMNAGAR, AHMEDABAD PAN: AAOPD7905P (APPELLANT) VS THE ITO, WARD - 6(2), AHMEDABAD (RESPONDENT) REVENUE BY : S H RI LALA PHILIPS , SR. D . R. ASSESSEE BY: S H RI ASEEM THAKKAR , A.R. DATE OF HEARING : 01 - 03 - 2 016 DATE OF PRONOUNCEMENT : 31 - 05 - 2 016 / ORDER P ER : S. S. GODARA , JUDICIAL MEMBER : - THIS ASSESSEE S APPEAL FOR A.Y. 20 06 - 07 , AR ISES FROM ORDER OF THE CIT(A) - XVI, AHMEDABAD DATED 31 - 03 - 2011 IN APPEAL NO. CIT(A) - XVI/WD. 6(2)/ 7 63 - A/08 - 09 , IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . I T A NO . 1327 / A HD/20 11 A SSESSMENT YEAR 200 6 - 07 I.T.A NO. 1327 /AHD/20 11 A.Y. 2006 - 07 PAGE NO SHRI RAJESH M. DHIR VS. ITO 2 2. THE ASSESSEE RAISES THE FOLLOWING SUBSTANTIVE GROUNDS IN THE INSTANT APPEAL: - 5. THE LEARNED CIT (A) HAS ERRED IN COMPARING PERSONAL BALANCE SHEET AND BALANCE SHEET OF BUSINESS, AND THERE BY MAKING WRONG ADDITION OF RS. 92, 096/ - LEARNED OFFICER SHOULD HAVE APPRECIATED THE FACT OF HING TWO BALANCE SHEETS. 6. THE LEARNED CIT (A) HAS GROSSLY ERRED IN MAKING ADDITION OF 7, 61,000/ - BEING VARIOUS GIFTS RECEIVED FROM CLOSE RELATIVES. HE HAS FAILED IN LAW AND FACT BY NOT TAKING IN TO CONSIDERATION. DECLARATIONS AND CONFIRMATIONS OF ALL THE RELATIVES. MR. SHYAMKUMAR JAIRATH ONE OF THE DONERS APPEARED IN PERSON AND CONFIRMED HAVING GIVEN GIFT OF F 5, 00,000/ - IN THE STATEMENT RECORDED BY A.O. AND HE HAS GIVEN THE SOURCE OF MONEY AND ITS SUPPORTING DETAILS AND EVIDENCE, WHICH, ESTABL ISH HIS IDENTITY AND AS WELL AS CROSS SOURCING OF AVAILABILITY OF FUND AT THE TIME OF GIVING THE GIFT, THE DONOR ALSO GIVEN AFFIDAVIT AND HIS PERSONAL PRESENCE AS REQUIRED BY THE A.O. THE SAME WAY HE HAS REPRESENTED THE GIFT GIVEN BY HIS WIFE SMT. ANJU JAI RATH WITH ALL SUPPORTING AND EVIDENCE. HE SHOULD HAVE SUMMON THE OTHER DONERS AS WELL ALSO. THE ACTION OF DISBELIEVING EVIDENCE IS TOTALLY 'BAYS' AND ARBITRARY FOR MAKING ADDITION OF RS. 7, 61,000/ - . 7. THE LEARNED CIT (A) HAS ERRED IN REJECT ING RE - IMBURSEMENT OF EXPENSES FROM 'POLITICAL PARTY' FOR WHOM CREDIT CARDS WERE USED AND LATER PAYMENTS MADE IN CREDIT CARD ACCOUNT OF ICICI BANK AND STANDARD CHARTERED BANK, RELEVANT REQUIRED EXPLANATION AND ARGUMENTS WERE GI VEN AT THE TIME OF HEARING. IN VIEW OF ABOVE AND OTHERS THAT MAY BE ARGUED AT THE TIME OF HEARING THE APPELLANT PREYS THAT FOLLOWING ADDITIONS MADE BE DELETED. I. OUT OF CASH DEPOSIT WITH IDBI BANK RS 11,61,3867 - II. PAYMENT MADE TO HDFC CREDIT CARD A CCOUNT RS. 1, 91,490/ - 3. WE NOTICE AT THE OUTSET THAT ASSESSEE S GROUNDS NO. 5 & 7 ASSAIL CORRECTNESS OF THE ADDITIONS AMOUNTING TO RS. 92,096/ - AND THE ONE UNDER THE HEAD REIMBURSEMENT FROM A POLITICAL PARTY; I.T.A NO. 1327 /AHD/20 11 A.Y. 2006 - 07 PAGE NO SHRI RAJESH M. DHIR VS. ITO 3 RESPECTIVELY. IT IS TO BE SEEN THAT BOTH THE LOWER AUTHORITIES HAVE REJECTED THESE TWO EXPLANATIONS FOR WANT OF COGENT EVIDENCE AT ASSESSEE S BEHEST TO BE PRODUCED IN COURSE OF SCRUTINY, LOWER AP PELLATE AND REMAND PROCEEDINGS. WE AFFORDED SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO PRODUCE THE RELE VANT DETAILS. NO SUCH EVIDENCE IS QUOTED BEFORE US IN ORDER TO MAKE THESE TWO PLEAS SUCCEED. WE FIND NO REASON TO INTERFERE ON THESE TWO ISSUES ACCORDINGLY. THE CORRESPONDING SUBSTANTIVE GROUNDS ARE THEREFORE REJECTED. 4. THIS LEAVES US WITH THE REMAIN ING ISSUE OF CORRECTNESS OF THE ASSESSEE S GIFT CLAIM AMOUNTING TO RS. 7,61,000/ - . HE DERIVES INCOME FROM BUSINESS, INSURANCE COMMISSION AND OTHER SOURCES. THE ASSESSEE RAISED THE IMPUGNED GIFT CLAIM OF RS. 7,61,000/ - TO HAVE RECEIVED FROM HIS TWELVE REL ATIVES AS FOLLOWS: - NAME RELATION AMOUNT (RS.) SH. ARUNKUMAR JAIRATH MAMA 51000 MS. ANJU JAIRATH MAMA 51000 MRS. SUMAN WALIA MAUSI 51000 SH. SHANJAY TANDON BROTHER IN LAW 2 1000 SH. RAJESH TANSON BROTHER IN LAW 11000 MS. SUMAN TANDON SISTER 11000 MS . MINU TANDON SISTER 11000 SH. GOVIND JAIRATH MAMA 21000 MS. SHIVANI JAIRATH MAMI 11000 SH. NARENDRA GORWER MAUSA 11000 MS. MANJU GROWER MAUSI 11000 SH. SHAYAM JAIRATH MAMA 250000 MS. ANJANA JAIRATH MAMI 250000 TOTAL 7,61,000 5. THE ASSESSING OFFICER SOUGHT FOR THE NECESSARY DETAILS OF THE ABOVE STATED DONO RS. THE ASSESSEE FILED ORIGINAL COPY OF THE I.T.A NO. 1327 /AHD/20 11 A.Y. 2006 - 07 PAGE NO SHRI RAJESH M. DHIR VS. ITO 4 CORRESPONDING DECLARATION SHOWING RELATIONSHIP IN NOVEMBER, 2008. THE REASONS STATED IN THE G IFT WAS THAT THE ASSESSEE S BIR TH DAY FELL ON 06 - 05 - 2005 AND THE OTHER OCCASION WAS HIS APPOINTMENT AS SECRETARY IN YOUTH WING OF A POLITICAL PARTY. THE ASSESSING OFFICER WAS OF THE VIEW THAT THIS GIFT CLAIM HAD NEVER BEEN RAISED IN RETURN. HE INFERRED FABRICATION OF EVIDENCE. HE OPINED THAT NEITHER THE ASSESSEE HAD FILED THE RELEVANT FAMILY TREE NOR DID HE SHOW ANY RELATIONSHIP WITH THE DONORS. THE ASSESSEE PRODUCED ONE OF THE DONORS SHRI SHYAM KUMAR JAIRATH CLAIMING HIMSELF TO BE HIS MATERNAL UNCLE. THIS DONOR STATED ABOUT HIS FINANCIAL STATUS, BUSIN ESS ACTIVITY, FAMILY DETAILS AND CONFIRMED GIFT SUM OF RS. 5 LACS MADE BY HIMSELF AND HIS WIFE. HE ATTRIBUTED SOURCE THEREOF TO LAND SALE ADVANCE NOT DEPOSITED IN THE BANK. THE ASSESSING OFFICER INTER ALIA OBSERVED THAT THIS DONOR HAD TWO UNMARRIED DAUGH TERS AND GIVING OF SUCH GIFT TO THE ASSESSEE WAS BEYOND IMAGINATION. HE WAS OF THE VIEW THAT THE ASSESSEE HAD NEVER RECEIVED ANY SUCH GIFT IN THE PAST. HE ALLEGED THE ASSESSEE AS NOT HAVING PROVED IDENTITY, GENUINE AND CREDITWORTHINESS OF THE DONORS BY W AY OF PROVING RELATIONSHIP U/S. 56(2)(V) OF THE ACT. THIS RESULTED IN THE IMPUGNED ADDITION OF RS. 7,61,000/ - 6. THE CIT(A) CONFIRMS ASSESSING OFFICER S ACTION AS UNDER: - COMING TO THE ISSUE OF GIFTS, IT IS SEEN THAT THE MAJOR GIFT OF R S . 5 LAKH HAS BEE N GIVEN BY SHYAM KUMAR JAIRATH, AND HIS WIFE. MR. JAIRATH HAS ATTENDED BEFORE THE AO DURING THE ASSESSMENT PROCEEDING. STATEMENT OF MR. JAIRATH WAS RECORDED AND THE SAME HAS BEEN DISCUSSED BY THE AO ON PAGE 5/6 OF THE ASSESSMENT ORDER. IT IS SEEN THAT MR. JAIRATH, AND HIS WIFE DOES NOT HAVE THE CA PACITY TO GIVE A GIFT OF RS. 5 LAKH TO HIS NEPHEW FROM HIS SISTER SIDE. ALTH OUGH THE ASSESSEE IS SUPPOSED TO HAVE TAKEN THESE GIFTS IN MAY 2005 AT I.T.A NO. 1327 /AHD/20 11 A.Y. 2006 - 07 PAGE NO SHRI RAJESH M. DHIR VS. ITO 5 THE TIME OF HIS BIRTHDAY ON 6 1H OF MAY 2005, BUT THE AFFIDAVITS FIL ED ARE DATED 20/11/2008. THE ANNUAL INCOME OF MR. JAIRATH IS RS. 102570/ - . A PERSON WHO IS HAVING TWO UNMARRIED DAUGHTERS AND ONE SON CAN NOT AFFORD TO GIVE A GIFT OF RS. 5 LAKH WHEN THE PERSON DOES NOT HAVE GREAT MEANS OF INCOME. THEREFORE, THE GIFT OF RS. 5 LAKH IS TREATED TO BE NON - GENUINE AND UNEXPLAINED CASH CREDIT UNDER SECTION 68. THE ADDITION OF RS. 5 LAKH IS THEREFORE CONFIRMED. 7. WE HAVE HEARD BOTH TH E PARTIES ARGUING IN SUPPORT AND AGAINST OF THE ABOVE STATED GIFT CLAIM. THERE IS NO DISPUTE THAT THE ASSESSING OFFICER CALLED ONLY ONE DONOR QUA RS. 5 LACS GIFT SUM. MEANING THEREBY THAT HE DID NOT CHOOSE SOMEONE OTHER DONOR DESPITE THE FACT THAT THE ASSESSEE HAD FILED THEIR CONFIRMATIONS, RELATIONSHIP AND ADDRESSES. WE ACCORDINGLY ALLOW THE AS SESSEE S CLAIM QUA REMAI NI NG GIFT SUM OF RS. 2,61,000/ - . WE REVERT BACK TO THE SOLE DONOR SUMMONED BY THE ASSESSING OFFICER. HE CONFIRMED IN ASSESSEE S FAVOUR. HE ATTRIBUTED SOURCE OF GIFT SUM TO LAND ADVANCE. THE REVENUE AUTHORITY DID NOT ASK HIM TO PR ODUCE ABOUT DETAILS OF THE LAND IN QUESTION OR ITS OWNERSHIP. BOTH THE LOWER AUTHORITIES RATHER PROCEED ON A PRESUMPTION THAT THERE HAS BEEN NO GIFT INSTANCE EARLIER AND THE DONORS HAVE FILED POST DATED AFFIDAVIT S . WE OBSERVE IN THESE FACTS AND CIRCUMSTANC ES THAT THE ASSESSING OFFICER AS WELL AS CIT(A) PROCEED ON MERE ASSUMPTIONS AND PRESUMPTIONS WITHOUT ANY MATERIAL ON RECORD. THERE IS NO EMBARGO IN A GIFT CASE THAT THE DONORS MUST HAVE BEEN GIVING SIMILAR GIFTS TO THE DONE E IN THE PAST OR NO AFFIDAVIT CAN B E FILED FOR ACKNOWLEDGING ANY GIFT INCIDENT ALREADY MADE. WE ACCEPT ASESSEE S ARGUMENTS ON THIS GIFT ISSUE BY HOLDING THAT HE HAS DISCHARGED HIS PRIMARY ONUS OF FILING ABOUT IDENTITY OF THE DO NOR I.T.A NO. 1327 /AHD/20 11 A.Y. 2006 - 07 PAGE NO SHRI RAJESH M. DHIR VS. ITO 6 FOLLOWED BY GENUINENESS AND CREDITWORTHINE SS. THIS GIFT AM OUNT ADDITION OF RS. 7.61 LACS IS DELETED. 8. THIS ASSESSEE S APPEAL IS PARTLY ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 31 - 0 5 - 201 6 SD/ - SD/ - ( PRAMOD KUMAR ) ( S. S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 31 /0 5 /2016 AK / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,