Smt. Rinky Gupta, Mohali V. ITO, W-6(2), Mohali

ITA 1329/CHANDI/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8786 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 22-10-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGHCIT
• Assessee Lawyers: PARIKSHIT AGGA RWALCA
• Keywords: Gift; Principle of natural justice; Source of fund
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, SMC, CHANDIGARH BEFORE SHRI N.K. SAINI, VICE PRESIDENT ITA NO.1329/CHD/2018 ASSESSMENT YEAR: 2010-11 SMT. RINKY GUPTA VS. THE ITO H.NO. 15, PHASE -6 WARD-6(2) MOHALI MOHALI PAN NO. ALAPG0418K (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. PARIKSHIT AGGARWAL,CA REVENUE BY : SH. MANJIT SINGH,CIT DR DATE OF HEARING : 19/03/2019 DATE OF PRONOUNCEMENT : 05/04/2019 ORDER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DT. 21/08/2018 OF LD. CIT(A)-2, CHANDIGARH. 2. IN THE PRESENT APPEAL ASSESSEE HAS RAISED THE FO LLOWING GROUNDS: 1. THAT ON THE FACTS, CIRCUMSTANCES AND LEGAL POSITION OF THE CASE, THE WORTHY CIT(A) IN APPEAL NO. 10121/2/17-18 DATED 21.08.2018 HAS ERRED IN PASSING THAT ORDER IN CONTRAVENTION OF THE PROVISIONS OF S. 250( 6) OF THE INCOME TAX ACT, 1961. 2. THAT ON LAW, FACTS AND CIRCUMSTANCES OF THE CASE, T HE WORTHY CIT(A) HAS ERRED IN PARTIALLY CONFIRMING THE ACTION OF LD. AO IN MAKING ADDITION OF RS. 3,00,000/- ON ACCOUNT ALLEGED UNEXPLAINED SOURCE OF FUNDS FOR INVESTMENT IN PURCHASE OF PROPERTY EVEN WHEN SUCH FUNDS WERE RECE IVED AS GIFTS AND WERE FROM DECLARED SOURCES. 3. THAT ON LAW, FACTS AND CIRCUMSTANCES OF THE CASE, T HE WORTHY CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF LD. AO IN MAKING ADDITION OF RS. 1,50,000/- ON ACCOUNT ALLEGED UNEXPLAINED SOURCE OF FUNDS FOR INV ESTMENT IN PURCHASE OF PROPERTY EVEN WHEN SUCH INVESTMENT WAS MADE FROM DE CLARED SOURCES OF INCOME I.E. PAST SAVINGS AND ISTRIDHAN. 4. THAT THE APPELLANT CRAVES LEAVE FOR ANY ADDITION, D ELETION OR AMENDMENT IN THE GROUNDS OF APPEAL ON OR BEFORE THE DISPOSAL OF THE SAME. 3. GRIEVANCE OF THE ASSESSEE RELATES TO THE SUSTENA NCE OF ADDITION OF RS. 3,00,000/- CLAIMED TO BE RECEIVED AS GIFTS AND RS. 1,50,000/- OUT OF THE PAST SAVINGS AND ISTRIDHAN. 4. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 31/03/2011 DECLARING AN INCOME OF RS. 2,04,300/- . 2 5. THE ASSESSING OFFICER ON THE BASIS OF INFORMATIO N THAT THE ASSESSEE HAD MADE INVESTMENT OF RS. 9,00,000/- IN PURCHASE OF IM MOVABLE PROPERTY INITIATED THE PROCEEDINGS UNDER SECTION 147 R.W.S 148 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT) ON 31/03/2017. IN RESPONSE THE ASSESSEE SUBMITTED THAT THE RETURN HAS ALREADY BEEN FILED AN D THE SAME MAY BE TREATED AS FILED IN RESPONSE TO THE NOTICE UNDER SECTION 14 8 OF THE ACT. 6. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD MADE INVESTMENTS OF R S. 9,45,000/- FOR PURCHASE OF HOUSE NO. 439/B-2, SHIV COLONY, BITNA ROAD, PINJ ORE, TEHSIL KALKA. HE ASKED THE ASSESSEE TO EXPLAIN ABOUT THE SOURCE OF CASH FOR TH E PURCHASE OF HOUSE. IN RESPONSE THE ASSESSEE SUBMITTED THAT ASSESSEE HAD D EPOSITED CASH OF RS. 6,00,000/- AFTER RECEIVING CASH GIFTS OF RS. 2,00,0 00/- EACH FROM HER HUSBAND, FATHER, AND FATHER IN LAW AND THAT THE REMAINING IN VESTMENT WAS MADE FROM HER PAST SAVINGS. THE AFFIDAVIT OF SHRI. SHYAM SUNDER G UPTA(HUSBAND OF ASSESSEE), SH. RADHEY SHYAM (FATHER OF THE ASSESSEE) AND SHRI GAYA PARSAD GUPTA (FATHER IN LAW OF THE ASSESSEE) WERE FURNISHED WHEREIN IT W AS MENTIONED THAT THEY HAD GIVEN CASH OF RS. 2,00,000/- EACH TO THE ASSESSEE. THE ASSESSING OFFICER ALSO ASKED THE CREDIT WORTHINESS OF ALL THE RELATIVES WH O HAD GIVEN THE CASH GIFTS OF RS. 2,00,000/- EACH TO THE ASSESSEE. ACCORDING TO THE A SSESSING OFFICER, NO DOCUMENTARY EVIDENCE TO PROVE THE SOURCE OF CASH GI FTS WAS GIVEN. AS REGARDS TO THE REMAINING INVESTMENTS OF RS. 3,50,000/- IT W AS STATED THAT THE SAME WAS OUT OF THE PAST SAVINGS AND ISTRIDHAN. IT WAS ALSO EXPLAINED THAT THE ASSESSEE WAS DOING STITCHING WORK AT HOME AND HAD KEPT HER ISTRI DHAN AT HOME WHICH WAS SHOWN IN HER RETURNED INCOME FOR THE PREVIOUS YEARS . THE ASSESSING OFFICER HOWEVER ACCEPTED ONLY RS. 2,00,000/- FROM THE PAST SAVINGS & ISTRIDHAN AND CONSIDERED THE REMAINING AMOUNT OF RS. 7,50,000/- A S AN INVESTMENT OUT OF UNDISCLOSED SOURCES. ACCORDINGLY ADDITION OF RS. 7, 50,000/- WAS MADE. 7. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED AS UNDER : THE ASSESSEE HAD FILED RETURN VIDE ACKNOWLEDGEMENT NO. 000349 ON 02/07/2010 DECLARING INCOME OF RS. 2,03,880/- FROM STITCHING & TAILORING. THE ASSESSEE RECEIVED THREE CASH GIFTS OF RS. 2 LAC EACH FROM FA THER I.E. SH. RADHEY SHYAM, FATHER IN LAW I.E. SH. GAYA PARSAD GUPTA AND HUSBAN D I.E. SH. SHAM SUNDER GUPTA. AFFIDAVITS FROM DONORS WERE FURNISHED TO LD. AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS ALONG WITH THE COPIES OF RET URN OF INCOME OF SH. SHAM SUNDAR GUPTA. IDENTITY AND ADDRESS PROOFS OF DONORS WERE ALSO GIVEN TO LD. AO. BANK STATEMENT OF SH. SHAM SUNDAR GUPTA WAS ALSO FU RNISHED TO LD. AO. DESPITE THESE DOCUMENTS, THE LD. AO DID NOT CONSIDER THE AB OVE SAID DOCUMENTS AS PROOF OF GIFTS RECEIVED BY THE ASSESSEE. SOURCE OF CASH GIFTS WERE DULY EXPLAINED TO THE LD. AO. HE CONSIDERED RS. 7.50 LAC INVESTM ENT IN PURCHASE OF PROPERTY AS FROM UNDISCLOSED SOURCES BEST KNOWN TO THE ASSESSEE . THE ASSESSEE HAS BEEN 3 FILING INCOME TAX RETURN SINCE LONG BACK BEFORE THE YEAR UNDER CONSIDERATION, COPIES OF OLD INCOME TAX RETURNS WERE ALSO SUBMITTE D TO LD. AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS BUT LD. AO ALSO DISREGARD ED THE SAME. ADDITION MADE IS WITHOUT ANY BASIS AND DEVOID OF PRINCIPLES OF NATURAL JUSTICE. THE LD. AO ARBITRARY DISALLOWED CREDIT OF PAST SAVI NGS AND ISTRIDHAN . AMOUNTING TO RS. 1.50 LACS DESPITE THE FACT THAT ASSESSEE WAS HAVING CASH IN HAND. THE ABOVE FACTS CAN BE RELATED TO THE FOLLOWING CASE LA W: IN THE LTAT CHANDIGARH BENCH, NIRMAL RANI V. DY. COMMISSIONER OF INCOME TA X, AMBALA CITY. & ITAT AHMEDABAD BENCH 'C DEEM ROLL TECH LTD. V DEPUTY COM MISSIONER OF INCOME TAX.' 8. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE OBSERVED THAT THE HUSBAND OF THE ASSESSEE SH. SHYAM SUNDER GUPTA IS A REGULAR INCOME TAX ASSESSEE DECLARING INCOME OF RS. 3,00,000/- PER ANNUM AND AFTER CONSIDERING THE HOUSE HOLD EXPENSES, POSSIBILITY OF SOME SAVING S COULD NOT BE RULED OUT. HE ALSO OBSERVED THAT SINCE NO SOURCE AS IN TERMS OF WITHDRAWALS FROM BANK ACCOUNT ETC. HAD BEEN PROVED THE CLAIM OF GIFTS OF RS. 2,00,000/- COULD NOT BE BELIEVED IN TOTALITY. HOWEVER BY CONSIDERING THE AN NUAL INCOME OF RS. 3,00,000/- THE LD. CIT(A) ACCEPTED THE SOURCE OF RS. 1,50,000/ - AS EXPLAINED AND REMAINING AMOUNT OF RS. 50,000/- WAS TREATED AS UNEXPLAINED. AS REGARDS TO THE GIFTS OF RS. 2,00,000/- EACH FROM FATHER AND FATHER IN LAW, THE LD. CIT(A) OBSERVED THAT NO DOCUMENT HAD BEEN PROVIDED TO EXPLAIN THE CREDIT WO RTHINESS OF THOSE PARTIES AND THAT THE BANK ACCOUNT DID NOT HAVE SUFFICIENT D EPOSITS OR WITHDRAWALS THEREFORE THE CLAIM OF THE ASSESSEE COULD NOT HAVE BEEN ACCEPTED IN TOTALITY. ACCORDING TO THE LD. CIT(A) THERE WAS POSSIBILITY O F SOME CONTRIBUTION FROM FATHER AND FATHER IN LAW AT THE TIME OF PURCHASE OF THE PROPERTY, HE CONSIDERED RS. 75,000/- FROM EACH OF THEM TOTALING TO RS. 1,50 ,000/- AS EXPLAINED AND THE BALANCE AMOUNT OF RS. 2,50,000/- WAS TREATED AS UNE XPLAINED. AS REGARDS TO THE CONTRIBUTION OF THE ASSESSEE AMOUNTING TO RS. 3,50, 000/-, LD. CIT(A)WAS OF THE VIEW THAT THE ASSESSING OFFICER WAS FAIR IN TREATIN G THE AMOUNT OF RS. 2,00,000/- AS EXPLAINED AND THE REMAINING AMOUNT OF RS. 1,50,000/ - AS UNEXPLAINED. HE ACCORDINGLY ALLOWED THE RELIEF OF RS. 3,00,000/- AN D SUSTAINED THE ADDITION OF RS. 4,50,000/-. 9. NOW THE ASSESSEE IS IN APPEAL. 10. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT TH E HUSBAND OF THE ASSESSEE WAS REGULARLY FILING THE INCOME TAX RETURN DECLARIN G THE INCOME OF RS. 3,00,000/- SO HE WAS IN A POSITION TO MAKE THE GIFTS OF RS. 2, 00,000/- TO THE ASSESSEE. IT WAS FURTHER SUBMITTED THAT THE FATHER IN LAW OF THE ASS ESSEE FURNISHED THE AFFIDAVIT 4 STATING THEREIN THAT HE HAD GIVEN GIFTS OF RS. 2,00 ,000/- TO HIS DAUGHTER IN LAW FROM HIS PAST SAVINGS, REFERENCE WAS MADE TO PAGE N O. 14 TO 17 OF THE ASESSEES PAPER BOOK. HE ALSO REFERRED TO PAGE NO. 17 OF THE ASSESSEES COMPILATION WHICH IS THE COPY OF THE BANK ACCOUNT ISSUED BY PUN JAB NATIONAL BANK WHEREIN IT HAS BEEN MENTIONED THAT THE SAID PERSON SHRI GAY A PARSAD GUPTA (FATHER IN LAW OF THE ASSESSEE) WAS HAVING EFFECTIVE AVAILABLE BALANCE OF RS. 4,46,405.59. IT WAS FURTHER SUBMITTED THAT THE FATHER OF THE ASSESS EE SH. RADHEY SHYAM GUPTA HAD ALSO GIVEN AN AFFIDAVIT FOR GIVING THE CASH GIF TS OF RS. 2,00,000/- TO THE ASSESSEE OUT OF HIS PAST SAVINGS. IT WAS CONTENDED THAT FATHER AND FATHER IN LAW OF THE ASSESSEE HELPED THE ASSESSEE FOR THE PURCHAS E OF HOUSE AND GAVE CASH GIFTS FROM OUT OF THEIR PAST SAVINGS. IT WAS ALSO S TATED THAT THE ASSESSEE WAS REGULARLY SHOWING HER INCOME FROM STITCHING WORK WH ICH HAD NOT BEEN DOUBTED, THEREFORE THERE WAS NO REASON TO DISBELIEVE HER PAS T SAVINGS AMOUNTING TO RS. 3,50,000/-. 11. IN HIS RIVAL SUBMISSIONS THE LD. CIT(A) STRONGL Y SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 12. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CA SE IT IS AN ADMITTED FACT THAT THE HUSBAND OF THE ASSESSEE WAS ASSESSED TO TAX AND HAD SHOWN INCOME OF RS. 3,00,000/- PER ANNUM THEREFORE THE CASH GIFTS OF RS . 2,00,000/- CANNOT BE DOUBTED. IN THAT VIEW OF THE MATTER THE ADDITION OF RS. 50,000/- SUSTAINED BY THE LD. CIT(A) OUT OF THE CASH GIFTS OF RS. 2,00,000/- RECEIVED FROM THE HUSBAND BY THE ASSESSEE IS DELETED. 13. AS REGARDS TO THE ADDITION OF RS. 1,50,000/- OU T OF THE CONTRIBUTION BY THE ASSESSEE FROM HER PAST SAVINGS AND ISTRIDHAN AMOUNT ING TO RS. 3,50,000/- IS CONCERNED, IT IS NOTICED THAT THE ASSESSING OFFICER HAS NOT DOUBTED THIS CONTENTION OF THE ASSESSEE THAT SHE WAS EARNING INC OME FROM STITCHING WORK AND WAS FILING HER RETURN OF INCOME REGULARLY. THEREFOR E THE ADDITION MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE LD. CIT(A) F OR RS. 2,00,000/- WAS ALSO NOT JUSTIFIED. ACCORDINGLY THE SAME IS DELETED. 14. AS REGARDS TO THE BALANCE AMOUNT OF RS. 2,50,00 0/- IS CONCERNED IT IS NOTICED THAT THE LD. CIT(A) ACCEPTED PAST SAVINGS O F THE FATHER AS WELL AS FATHER IN LAW OF THE ASSESSEE AT RS. 75,000/- EACH. IN MY OPINION THE SAID AMOUNT APPEARS TO BE ON LOWER SIDE. THEREFORE TO MEET THE ENDS OF JUSTICE IT WILL BE FAIR 5 AND REASONABLE TO CONSIDER THE PAST SAVINGS OF THE FATHER AS WELL AS FATHER IN LAW OF THE ASSESSEE FOR MAKING GIFTS, AT RS. 1,00,0 00/- EACH INSTEAD OF RS. 75,000/- EACH CONSIDERED BY THE LD. CIT(A) THEREFORE THE ADD ITION IS SUSTAINED TO THE EXTENT OF RS. 2,00,000/- INSTEAD OF RS. 2,50,000/- CONSIDERED BY THE LD. CIT(A) OUT OF THE GIFTS RECEIVED FROM THE FATHER AND FATHER IN LAW. IN VIEW OF THE ABOVE DISCUSSION THE ASSESSEE WILL GET A TOTAL RELIEF OF RS. 2,50,000/- I.E; (RS. 50,000/- + RS. 1,50,000/- + RS. 50,000/-). 16. IN THE RESULT APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 05/04/20 19 ) SD/- (N.K. SAINI) VICE PRESIDENT PLACE: CHANDIGARH DATED : 05/04/2019 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR