DCIT, New Delhi V. Sh. Krishna Shriram, New Delhi

ITA 1417/DEL/2013

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0759 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 6 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 25-05-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 08-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY VERMA SH AMIT JAIN
• Assessee Lawyers: AJAY VOHRA SR SH DEEPESH JAIN
• Keywords: Unexplained investment; Capital asset; Gift; Business income; Salary income; Additional evidence
• Section: 234B; 68; 69; 263

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL, DELHI BENCH D, NEW DELHI BEFORE : SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 866/DEL/2013 ASSESSMENT YEAR: 2006-07 KRISHNA SHRIRAM, D - 46, MALCHA MARG, NEW DELHI. PAN- AABPS 4899L (APPELLANT) VS. ACIT, CIRCLE 32(1), NEW DELHI. (RESPONDENT) ITA NO. 1417/DEL/2013 ASSESSMENT YEAR: 2006-07 DCIT, CIRCLE 32(1), NEW DELHI. (APPELLANT) VS. KRISHNA SHRIRAM, D - 46, MALCHA MARG, NEW DELHI. (RESPONDENT) ASSESSEE BY SH. AJAY VOHRA, SR. ADVOCATE SH. DEEPESH JAIN, C.A. REVENUE BY SH. VIJAY VERMA, CIT/DR SH. AMIT JAIN, SR. DR ORDER PER L.P. SAHU, A.M.: THESE ARE CROSS APPEALS FILED BY THE ASSESSEE AND THE REVENUE AGAINST THE ORDER PASSED BY THE LD. CIT(A)-XXVI, NEW DELHI DATED 28.12.2012 FOR THE ASSESSMENT YEAR 2006-07. THE GROUNDS RAISED BY BOT H THE PARTIES IN THEIR RESPECTIVE APPEALS READ AS UNDER: DATE OF HEARING 16.08.2018 DATE OF PRONOUNCEMENT 13 .09.2018 ITA NO. 866 , 1417/DEL/2013 2 GROUNDS RAISED BY ASSESSEE IN ITA NO. 866/DEL/2013 : 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE A ND IN LAW, THE COMMISSIONER OF INCOME-TAX (APPEALS)-XXVI, NEW DELH I (THE CIT(A)) ERRED IN UPHOLDING ADDITION OF RS.7,92,00,000 MADE BY THE ASSESSING OFFICER UNDER SECTION 69 OF THE INCOME-TAX ACT, 1961 (THE ACT). 1.1. THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN FA ILING TO APPRECIATE THAT THE AFORESAID AMOUNT OF RS.7,92,00,000 WAS REC EIVED AS GIFT BY THE APPELLANT FROM HIS MOTHER OUT OF NATURAL LOVE AND A FFECTION WHICH WAS EXEMPT UNDER SECTION 56(VI) OF THE ACT. 1.2. THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN AL LEGING, MERELY ON THE BASIS OF CONJECTURES AND SURMISES, THAT THE APPELLA NT HAD CHANNELIZED HIS OWN FUNDS IN THE GUISE OF THE ABOVE GIFT RECEIVED F ROM THE DONOR. 1.3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) ERRED IN LAW IN CONCLUDING THAT THE APPELLANT COULD NOT DISCHARGE THE ONUS OF PROOF CAST UNDER SECTION 69 OF THE ACT, THEREBY FAILING TO APPRECIATE THAT THE APPELLANT HAD DULY FURNISHED REQUISITE EVIDENCE TO PROVE THE GENUINENESS OF THE TRANSACTION OF THE GIFT RECEIVED AS WELL AS CREDITWORTHINESS/ SOURCE OF THE DONOR OUT OF WHICH THE ABOVE GIFT WAS MADE. 1.4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) FAILED TO APPRECIATE THAT GIFT RECEIVED FROM DONOR, BEING OTHERWISE EXEMPT UNDER SECTION56(VI), THE SAME COULD NOT HAVE BEEN B ROUGHT TO TAX BY INVOKING PROVISIONS OF SECTION 69 OF THE ACT. 2. THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN UPHOL DING THE LEVY OF INTEREST UNDER SECTION 234B OF THE ACT. 2. IN THIS APPEAL, THE ASSESSEE HAS ALSO RAISED ADD ITIONAL GROUND OF APPEAL ON 17.11.2016 AS UNDER : THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE PROF IT EARNED ON SALE OF 6,79,000 SHARES OF MAWANA SUGARS LTD. INADVERTENTLY RETURNED AS SHGORT ITA NO. 866 , 1417/DEL/2013 3 TERM CAPITAL GAINS BY THE APPELLANT SHOULD BE TREA TED AS LONG TERM CAPITAL GAINS. 3. THE AR OF THE ASSESSEE SUBMITTED REGARDING ADDIT IONAL GROUND THAT THE SALE OF SHARES OF MAWANA SUGAR LTD. WERE INADVERTEN TLY RETURNED AS SHORT TERM CAPITAL GAINS INSTEAD OF LONG TERM CAPITAL GAINS. T HEREFORE, THE ADDITIONAL GROUND SHOULD BE ACCEPTED, WHICH GOES TO THE ROOT O F THE MATTER FOR DECIDING THIS ISSUE. HE ALSO RELIED ON THE JUDGMENT IN THE C ASE OF NATIONAL THERMAL POWER CO. VS. CIT, 229 ITR 383 AND K.C. KHAJANCHI V S. ITAT CW 2164/1999 (SC). 4. ON THE OTHER HAND, THE LD. DR OPPOSED THE ADDITI ONAL GROUND FILED BY THE ASSESSEE MUCH LATER AFTER 3 YEARS. THEREFORE, IT SHOULD NOT BE ACCEPTED. 5. AFTER HEARING BOTH THE SIDES ON ADMISSION OF ADD ITIONAL GROUND, WE FIND THAT THE ADDITIONAL GROUND IS ADMISSIBLE FOR CONSID ERATION IN VIEW OF THE DECISIONS RELIED BY THE ASSESSEE AS REFERRED TO ABO VE. ACCORDINGLY, THE ADDITIONAL GROUND IS ADMITTED ON RECORD. GROUNDS RAISED BY THE REVENUE IN ITA NO. 1417/DEL/ 2013: 1. THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF R S.67,37,94,898/- BY DIRECTING THE AO TO TREAT THE PROFIT ARISING FROM T HE SALE OF SHARES AS LONG TERM AND SHORT TERM CAPITAL GAINS. 2. THE CIT(A) HAS ERRED IN TREATING PROFIT FROM THE S ALE OF SHARES AS STCG/LTCG IN PLACE OF BUSINESS INCOME AS ASSESSED BY AO. ITA NO. 866 , 1417/DEL/2013 4 6. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN INDIVIDUAL DERIVING INCOME FROM SALARY, HOUSE PROPERTY, CAPITAL GAINS A ND INCOME FROM OTHER SOURCES. THE ASSESSEE FILED ITS RETURN OF INCOME ON 25.07.2006 DECLARING TOTAL INCOME AT RS.8,33,48,262/-. THE ASSESSMENT U/S. 143 (3) WAS COMPLETED ON 08.12.2008. LATER ON, LEARNED CIT-11, NEW DELHI ISS UED NOTICE ON 10.06.2009 AND INVOKED THE PROVISIONS OF SECTION 263 OF THE AC T ON THE GROUND THAT THE ASSESSMENT ORDER PASSED BY THE AO WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE, IN AS MUCH AS THE AO DURING TH E COURSE OF ORIGINAL PROCEEDINGS FAILED TO MAKE NECESSARY ENQUIRIES ABOU T THE PROFITS EARNED ON SALE OF SHARES DECLARED AS CAPITAL GAINS AND ALSO A BOUT THE GIFT OF RS.7.92 CRORES RECEIVED BY THE ASSESSEE FROM HIS MOTHER. THEREAFTE R, THE CIT PASSED ORDER U/S. 263 ON 17.02.2011 SETTING ASIDE THE ORIGINAL ASSESS MENT ORDER AND DIRECTED THE AO TO REEXAMINE THE MAJOR ISSUES INVOLVED IN THE CA SE. THE ASSESSEE CHALLENGED THE ORDER U/S. 263 BEFORE THE ITAT WHERE THE APPEAL STOOD DISMISSED ON 29.01.2014. AGAINST THIS ORDER OF TRIBUNAL, THE HON BLE HIGH COURT HAS ADMITTED THE APPEAL OF THE ASSESSEE IN ITA NO. 351/ 2014 VIDE ORER DATED 13.11.2014. THE AO COMPLETED THE ASSESSMENT U/S. 14 3(3)/263 OF THE ACT ON 19.12.2011 AND TREATED THE CAPITAL GAIN SHOWN BY TH E ASSESSEE AS PROFIT AND GAINS OF BUSINESS AND PROFESSION AND CALCULATED PRO FIT ON SALE OF MAWANA SUGARS LTD. SHARES AS UNDER : SALE CONSIDERATION OF 5094124 MAWANA SHARES RS.65, 94,94,608/- SALE CONSIDERATION OF 700000 MAWANA SHARES RS.8.43 .92.000/- RS.74,38,86,608/- LESS: I. COST OF PURCHASE OF 5094124 MAWANA SHARES RS.6,8 3,22,581/- II. COST OF PURCHASE OF 21000 MAWANA SHARES RS. 17, 69,129/- III. COST OF PURCHASE OF 679000 MAWANA SHARES (SINCE RECEIVED IN GIFT) NIL ITA NO. 866 , 1417/DEL/2013 5 ____________________ PROFIT ON SALE OF MAWANA SHARES RS.67,37,94,898/ - ____________________ 7. THE AO OBSERVED THAT IN THE ORIGINAL COMPUTATION OF INCOME FILED BY THE ASSESSEE REGARDING CAPITAL GAINS THE ASSESSEE HAS C ALCULATED THE CAPITAL GAINS AS UNDER : LONG TERM CAPITAL GAIN ON SALE OF SHARES ON WHICH STT IS PAID IS PAID ANNEXURE - B RS.59,11,72,027/ - LESS: EXEMPT U/S 10(38) RS.59 ,11.72,027/ - NI L SHORT TERM CAPITAL GAIN ON SALE OF SHARES ON WHICH STT IS PAID ANNEXURE - C RS.8,26,22,871/ - LESS: BROUGHT FORWARD LOSS OF 2002 - 03 (DETAILS ENCLOSED) RS.3,26,760/ - RS.8,22, 96,111 1 NAME OF THE SHARE DATE OF ACQUISITION NO. OF SHARES BOOK VALUE DATE OF SALE NO. OF SHARES NET SALE VALUE SECURITIES TRANSACT ION TAX CAPITAL GAIN/ (LOSS) MAWANA SUGAR LTD. 30.10.2003 3000000 30000000 25.07.2005 20000 1957011 1981 21.10.2004 1716624 18134926 04.08.2005 30000 2950718 2987 25.11.2004 55500 3243954 05.08.2005 17500 1695675 1717 24.12.2004 21000 1722000 12.08.2005 55000 6149242 6225 18.02.2005 1000 95398 31.08.2005 11946 1398897 1416 04.08.2004 300000 15126303 01.09.2005 8054 978997 991 05.09.2005 12976 1548403 1568 ----------------- 03.01.2006 15000 1999061 2006 25.01.2006 2100000 284163600 285600 30.01.2006 85000 11239728 11297 31.01.2006 215000 27422133 27561 10.02.2006 580000 75418357 75690 17.02.2006 800000 102835504 103200 20.02.2006 843648 103567926 103937 31.03.2006 300000 36169356 36300 TOTAL 5094124 68322581 5094124 659494608 662476 591172027 SHORT TERM CAPITAL GAIN ANNEXURE - C NAME OF THE SHARE NOS RATE PER UNIT COST PRICE DATE OF ACQUISITION DATE OF TRANSFER/SALE SALE VALUE PER UNIT (RS.) FULL VALUE OF CONSIDERATIO N CAPITAL GAIN / (LOSS) MAWANA SUGARS LTD. 11000 74.74 822181 16.06.2005 31.03.2006 120.56 84392000 ITA NO. 866 , 1417/DEL/2013 6 10000 94.69 946948 20.10.2005 679000 0.00 12.11.2005 TOTAL 700000 2.53 1769129 84392000 82622871 LESS: SET OFF OF BROUGHT FORWARD SHORT TERM LOSS - 2002 - 03 326760 82296111 FROM THE ABOVE ANNEXURES B AND C, THE AO OBSERVED THAT THE ASSESSEE HAD NOT PURCHASED THESE SHARES FOR THE PURPOSE OF INVESTMEN T. THEREFORE, HE ISSUED NOTICE TO THE ASSESSEE REGARDING THE DETAILS OF PUR CHASE AND SALES OF SHARES WHICH WAS SUBMITTED BEFORE THE ASSESSING OFFICER AS UNDER : PARTICULARS OPENING BALANCE ADDITIONS DELETION CLOSING BALANCE REMARKS NO. OF SHARES AMOUNT (RS.) NO. OF SHARES AMOUNT (RS.) NO. OF SHARES AMOUNT (RS.) NO. OF SHARES AMOUNT (RS.) DAURALA ORGANICS LTD. OF RS.10/- EACH FULLY PAID UP 2500 25000 2500 25000 AS PER SCHEME OF MERGER BETWEEN DAURALA ORGANICS LTD. (DOL) AND DCM SHRIRAM INDUSTRIAL LTD. (DSIL) ONE EQUITY SHARE OF DSIL ISSUED TO THE SHAREHOLDER OF DOL IN LIEN OF 10 (TEN) EQUITY SHARE OF DOL DCM SHRIRAM INDUSTRIAL LTD. OF RS.10/- EACH FULLY PAID UP 250 25000 250 25000 -DO- FUNKALSCIOUS HOSPITAL PVT. LTD. O 100 1000 100 1000 WRITTEN OFF DURING THE YEAR RS.10/- FULLY PAID UP ITA NO. 866 , 1417/DEL/2013 7 HURRYKNSHNA VENTURE PVT. LTD. OF RS.10/- EACH FULLY PAID UP 150000 1500000 270000 2700000 420000 4200000 PAID ON 14.11.2005 FROM HSBC LTD. NEW DELHI OUT OF SALE PROCEEDS OF MS LTD. SHARES INDIA INFRASTRUCTURE PUBLISHING OF 4181 3000000 4181 3000000 FINANCE TECHNOLOGIES INDIA LTD. OF 59 59 MAWANA SUGARS LTD. OF RS.10/- EACH FULLY PAID UP OF RS.10/- EACH FULLY PAID UP 3077500 35061352 3077500 21910382 13150970 BALANCE AMOUNTS IS IN BOOKS IS ON ACCOUNT OF SHORT ADJUSTMENT OF COST. THIS HAS NO IMPACT ON TAXABLE INCOME 11000 EQUITY SHARE PURCHASE ON FOR RS.8,22,185/- AND 10000 EQUITY SHARES PURCHASE ON FOR RS.948006/- PAYMENT FROM HSBC LTD. PURCHASED FROM MARKET 21000 1770191 21000 1770191 MAWANA SUGARS LTD. FOR RS.10/- EACH FULLY PAID UP OF RS.10/- EACH PARTLY PAID UP @ RS.6.50 PER SHARE 1716624 1216742 1716624 6008184 1716624 18134926 CALL MONEY PAID @ RS.3.50 PER SHARE ON 1716624 PARTLY PAID UP SHARE OF MSL LTD. ON 24.08.2005 FROM HSBC LTD. NEW DELHI MAWANA SUGARS LTD. OF RS.10/- EACH FULLY PAID UP OF RS.10/- EACH 300000 2100000 3231464 300000 679000 142100 0 323146 4 GIFT FROM ENTERPRISE TRUST GIFT FROM MRS. RAULA SHRIRAM (MOTHER) SIEL LTD. OF RS.10/- EACH FULLY PAID UP PURCHASE FROM THE MARKET 1000 34417 1000 34417 PURCHASE FROM MARKET ITA NO. 866 , 1417/DEL/2013 8 SIEL LTD. OF RS.10/- EACH FULLY PAID UP 690000 690000 GIFT FROM MRS. RAULA SHRIRAM (MOTHER) UNIT TRUST OF INDIA LTD. 573 573 SIEL HOLDINAS LTD. 152592 EQUITY SHARES OF RS.10/- EACH FULLY PAID UP AND 125925 EQUITY SHARES OF RS.10/- EACH PARTLY PAID @ RS.7.50 PER SHARE 152592 411998400 152592 411998400 PAID ON 05.12.2005 RS.103000000 AND ON 01.02.2006 RS.308998400/- FROM HSBC LTD., NEW DELHI 125925 255000000 125925 255000000 PAID ON 17.02.2006 RS.85000000 AND ON 23.02.2006 RS. 170000000 FROM HSCB LTD. NANGLAMAL SUGARS LTD. OF RS.10/- EACH FULLY PAID 2100000 21000000 2100000 21000000 SOLD TO SIEL HOLDINGS LTD. 2100000 EQUITY SHARES OF RS.10/- EACH FULLY PAID UP OF NANGLAMAL SUGARS LTD. ON SAME PRICE ON 08.07.2005 51714667 0 698536192 0 62841499 0 687409360 FROM THE DETAILS OF SHARES SUBMITTED BY THE ASSESSE E, THE AO OBSERVED THAT THE ASSESSEE HAS PURCHASED SHARES WORTH RS.69,85,36,192 /- AND SOLD SHARES WORTH RS.6,28,41,499. LIST OF SHARES ALSO INCLUDES THE SH ARES OF MAWANA SUGAR LTD., PART OF WHICH WAS RECEIVED BY THE ASSESSEE AS GIFT. ON PERUSAL OF THE STATEMENT OF AFFAIRS OF THE ASSESSEE AS ON 31.03.2005, THE AS SESSEE HAD SHARES WORTH RS.5,17,14,667/- AS ON 31.03.2005 AND SHARES WORTH RS.68,74,09,360/- AS ON 31.03.2006. ACCORDINGLY, THE AO CONCLUDED THAT THE ASSESSEE IS ENGAGED IN THE ITA NO. 866 , 1417/DEL/2013 9 TRADING ACTIVITY FOR THE PURCHASE AND SALE OF SHARE S. IN THIS REGARD THE ASSESSEE WAS ASKED AS TO WHY THE PROFIT ON SALE OF SHARES SH OWN AS LTCG/STCG MAY NOT BE ASSESSED AS INCOME FROM BUSINESS. IN THIS REGARD , THE ASSESSEE SUBMITTED EXPLANATIONS VIDE LATTER DATED 12.12.2011 AND ALSO RELIED ON MANY CASE LAWS. IN THE ORIGINAL ASSESSMENT PROCEEDINGS U/S. 143(3), TH E CONTENTION OF THE ASSESSEE, I.E., SALE OF SHARES WERE ACCEPTED AS LON G-TERM CAPITAL GAINS BY THE AO. THEREFORE, THE CIT SET ASIDE THE ORIGINAL ASSESSMEN T ORDER AND DIRECTED THE ASSESSING OFFICER U/S. 263 TO MAKE FRESH ASSESSMENT . IN THE ASSESSMENT PROCEEDINGS U/S. 143(3)/263, THE ASSESSING OFFICER AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND RELYING ON MANY CAS E LAWS, TREATED THE SALES OF SHARES OF MAWANA SUGAR AS BUSINESS INCOME AND MADE ADDITION ON PROFIT ON SALE OF SHARES AT RS. 67,37,94,898/-. 8. THE AO FURTHER OBSERVED THAT THE ASSESSEE HAD R ECEIVED GIFT OF RS.7.92 CRORES FROM HIS MOTHER MRS. ROULA SHRIRAM APART FRO M GIFT OF EQUITY SHARES OF MAWANA SUGAR LTD. WORTH RS.32,31,464/-. IN THIS REG ARD, THE FINDINGS OF THE AO ARE AS UNDER : 10. THE SUBMISSION OF THE ASSESSEE IS CONSIDERED IN LIGHT OF THE FACTS OF THE CASE AND EVIDENCES FURNISHED IN SUPPORT OF GENUINENESS O F TRANSACTION AND CREDITWORTHINESS OF THE DONOR. AT THE OUTSET, THE C LAIM OF ASSESSEE THAT THE SAID GIFT WAS ACCEPTED BY THE AO WHILE PASSING THE ASSES SMENT ORDER ON 08.12.2008, I WOULD LIKE TO RE-ITERATE THAT THE SAID ORDER STANDS SET ASIDE VIDE ORDER OF CIT DATED 17.02.2011 PASSED U/S 263 OF THE INCOME-TAX A CT, 1961 AND THE ISSUE OF GIFT IS TO BE EXAMINED AFRESH. IN VIEW OF THIS, THE CLAI M OF ASSESSEE ABOUT ACCEPTANCE OF THE GIFT BY MY PREDECESSOR IS REJECTED. I, THEREFOR E, CONCENTRATE ON THE STRENGTH OF EVIDENCES FURNISHED BY ASSESSEE IN SUPPORT OF GENUI NENESS OF THE TRANSACTION STATED TO BE GIFT OF RS.7,92,00,000/- AND CREDITWOR THINESS OF THE DONOR I.E. MS. ROULA SHRIRAM. ITA NO. 866 , 1417/DEL/2013 10 11. IN THE ORIGINAL AND ALSO DURING AFRESH ASSESSM ENT PROCEEDING, THE ASSESSEE HAS FURNISHED FOLLOWING EVIDENCES IN SUPPORT OF THE STATED GIFT. I. A COPY OF GIFT DEED STATED TO BE EXECUTED ON 12 .12.2008 (COPY ATTACHED AS ANNEXURE'1'). II. A COPY OF CERTIFICATE DATED 02.12.2008 (COPY A TTACHED AS ANNEXURE '2'). III. COPY OF AN ADVICE ISSUED BY HONG KONG AND SHA NGHAI BANKING CORPORATION DATED 10.11.2005 REGARDING TRANSFER OF AN AMOUNT OF GBP 1000000 (ONE MILLION ONLY) TO KRISHNA SHRIRAM (COPY ATTACHED AS ANNEXURE '3'). IV. A COPY OF BANK ACCOUNT OF SHRI KRISHNA SHRIRAM MAINTAINED WITH HSBC FOR THE PERIOD 30.10.2005 TO 30.11.2005 (COPY ATTACHED AS ANNEXURE '4'). 11(A) NOW, IF THE GENUINENESS OF TRANSACTION AND CR EDITWORTHINESS OF DONOR ARE EXAMINED IN LIGHT OF ABOVE EVIDENCES / DOCUMENTS, T HEN THE FOLLOWING POSITION EMERGES:- I. AS FAR AS THE COPIES OF GIFT DEED AND CERTIFICA TE IN RESPECT OF THE STATED GIFT, THESE ARE NOT EVIDENCE WHICH CAN SUPPO RT THE GENUINENESS OF TRANSACTION AND CREDITWORTHINESS OF THE DONOR. II. A COPY OF ADVICE ISSUED BY HONGKONG & SHANGHAI BANK ONLY STATES THAT AN AMOUNT OF GBP ONE MILLION HAS BEEN/WILL BE CREDITED IN THE BANK ACCOUNT OF ASSESSEE IN PURSUANCE TO THE DIRECTION I SSUED BY BARCLAYS PLC LONDON. THIS ADVICE ALSO DOES NOT SHOW AS TO WHO THE REMITTER IS AND WHAT THE SOURCE OF REMITTANCE IS! III. THE COPY OF BANK ACCOUNT OF SHRI KRISHNA SHRIRA M ONLY SHOWS THAT AN AMOUNT OF RS.7,92,00,000/- HAS BEEN CREDITED IN HIS BANK ACCOUNT. THE NARRATION GIVEN AGAINST THE ENTRY DATED 10.11.2005 IS CASH W/D 076855 PET313489313 CAMPBELL COOPER GIFT FROM MOTHER. THIS ENT RY ONLY SHOWS THAT A SUM OF RS.7,92,00,000/- HAS BEEN CREDI TED ON ACCOUNT OF TELEGRAPHIC TRANSFER BUT IT DOES NOT CONFIRM THE SO URCES. 12. THUS, THE EVIDENCES FURNISHED BY ASSESSEE ARE NO T CONVINCING AND PROVING HIS CASE BEYOND DOUBT THAT THE SOURCES OF THE AMOUN T OF ONE MILLION GBP JS ITA NO. 866 , 1417/DEL/2013 11 EXPLAINED AND ACTUALLY BELONGS TO THE DONOR. THE ASS ESSEE HAS NOT SUBMITTED ANY EVIDENCE WHICH COULD PROVE THAT THE DONOR MS. ROULA SHRIRAM IS OWNER OF THE FUND GIVEN TO HIM AS GIFT. THE COPY OF RELEVANT BANK A/C OF MS. ROULA SHRIRAM FROM WHICH THE FUND HAS BEEN TRANSFERRED, HAS NEITH ER BEEN FURNISHED IN ORIGINAL NOR IN AFRESH ASSESSMENT PROCEEDING. THE ASSESSEE HA S ALSO NOT FURNISHED COPY OF CERTIFICATE OF FOREIGN INWARD REMITTANCE WHICH GIVE S THE DETAILS OF BENEFICIARY, REMITTANCE AND ALSO PARTICULAR OF REMITTER INCLUDIN G HIS RESIDENTIAL ADDRESS & REMITTING BANK. EVEN THE GIFT DEED AND ALSO THE CER TIFICATE SIGNED BY MS. ROULA SHRIRAM, THE DONOR DOES NOT STATE OR GIVE DETAIL AB OUT THE BANK A/C FROM WHICH THE SAID REMITTANCE IS STATED TO BE MADE. IN THE BA NK STATEMENT OF THE ASSESSEE AND ALSO THE TELEGRAPHIC TRANSFER CREDIT ADVICE ISS UED BY HONG KONG SHANGHAI BANK, THE DETAIL OF REMITTER HAS BEEN MENTIONED AS CAMPBELL HOOPER. THIS AGAIN DOES NOT GIVE ANY DETAILS ABOUT THE BANK ACCO UNT FROM WHICH THE SAID AMOUNT HAS BEEN TRANSFERRED/REMITTED TO ASSESSEE. 13. AS FAR AS THE CREDITWORTHINESS OF THE DONOR I S CONCERNED, NO DOCUMENT HAVE BEEN SUBMITTED BY ASSESSEE TO PROVE THAT MS. R OULA SHRIRAM IS A MAN OF MEANS. MS. ROULA SHRIRAM IS HOLDING INDIAN PASSPORT AND ALSO ASSESSED TO TAX UNDER PAN AACPS3802N. THE DETAILS OF ASSESSABLE INCO ME RETURNED BY MS. ROULA SHRIRAM FOR THE RELEVANT A.Y. 2006-07 WERE RETRIEVE D FROM THE DEPARTMENTAL DATA WHICH GIVES THE FOLLOWING DETAILS OF TOTAL INCOME A S PER THE RETURN FILED BY HER IN FORM 2D IN WARD 32(2), NEW DELHI. A.Y. 2006-07 I. INCOME FROM SALARY NIL II. INCOME FROM HOUSE PROPERTY RS.7,35,500/- III. INCOME FROM BUSINESS/PROFESSION RS.3,30,065 /- IV. INCOME FROM OTHER SOURCES + INCOME OF ANY RS. 60.223/- OTHER PERSON GROSS TOTAL INCOME RS.4,65,658/- RETURNED INCOME RS.4,65,658/- TAX PAID RS.86,197/- 13(A) AN ABSTRACT OF FORM 2D OF MS. ROULA SHRIRAM I S ATTACHED TO THE ORDER AS ANNEXURE-'5'. THE ABOVE DETAILS GOES ON TO PROVE THA T THE FUND OF RS.7.92 CRORES DOES NOT BELONG TO THE DONOR AND IT IS THE ASSESSEE WHO HAS CHANNELISED/ROUTED HIS OWN FUNDS IN GUISE OF GIFT FROM MOTHER. MERE RE MITTANCE OF AMOUNT BY ASSESSEE'S MOTHER WILL NOT ABSOLVE HIM FROM DISCHAR GING THE ONUS CASTED UPON HIM U/S 69 OF THE INCOME-TAX ACT, 1961.1 PLACE RELI ANCE ON THE DECISION OF HON'BLE ITA NO. 866 , 1417/DEL/2013 12 JURISDICTIONAL HIGH COURT PRONOUNCED IN THE CASE OF CIT VS. ANIL KUMAR (2007) 292 ITR 552 WHICH IS ON SIMILAR FACTS. IN THIS CASE THE HON'BLE DELHI HIGH COURT HAS HELD THAT IN THE CASE OF GIFTS MERE INDICATION OF THE DONOR AND SHOWING THE MOVEMENT OF THE GIFT AMOUNT THROUGH BANKING CHANNEL S IS NOT SUFFICIENT TO PROVE THE GENUINENESS OF THE GIFT. SINCE THE CLAIM OF GIF T IS MADE BY THE ASSESSEE, THE ONUS LIES ON HIM NOT ONLY TO ESTABLISH THE IDENTITY OF THE PERSON MAKING THE GIFT BUT ALSO HIS CAPACITY TO MAKE SUCH A GIFT. IN VIEW OF THIS, THE ASSESSEE IS DUTY- BOUND TO EXPLAIN NOT ONLY TO ESTABLISH THE IDENTITY OF THE PERSON MAKING THE GIFT BUT ALSO HER CAPACITY TO MAKE SUCH GIFT. THUS, IN AL L RESPECT, THE ALLEGED GIFT OF RS.7,92,00,000/- IS NOT PROVED SATISFACTORILY AND A CCORDINGLY LIABLE TO BE ADDED IN THE INCOME OF ASSESSEE U/S 69 OF THE INCOME-TAX ACT , 1961 AS UNEXPLAINED DEPOSIT IN BANK ACCOUNT. 13(B) IN FACT WHAT IS APPEARING OR SHOWN/CLAIMED AS APPARENT IS NOT REAL IN THIS CASE. I QUOTE THE CASE OF SUMATI DAYAL VS COMMISSIO NER OF INCOME-TAX, 214 ITR 801(SC) WHEREIN THE HON'BLE SUPREME COURT HELD THAT (EMPHASIS SUPPLIED BY ME); 'IT IS NO DOUBT TRUE THAT IN ALL CASES IN WHICH A R ECEIPT IS SOUGHT TO BE TAXED AS INCOME, THE BURDEN LIES UPON THE DEPARTMENT TO P ROVE THAT IT IS WITHIN THE TAXING PROVISION AND IF A RECEIPT IS IN THE NAT URE OF INCOME, THE BURDEN OF PROVING THAT IT IS NOT TAXABLE BECAUSE IT FALLS WITHIN AN EXEMPTION PROVIDED BY THE ACT LIES UPON THE ASSESSEE. (SEE PA RIMISETTI SEETHARAMAMMA [1965] AT PAGE 536). BUT, IN VIEW OF SECTION 68 OF THE ACT, WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF THE ASSESSEE FOR ANY PREVIOUS YEAR, THE SAME MAY BE CHARGED TO INCOME-TA X AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR IF THE EXPLANATION O FFERED BY THE ASSESSEE ABOUT THE NATURE AND SOURCE THEREOF IS, IN THE OPIN ION OF THE ASSESSING OFFICER, NOT SATISFACTORY. IN SUCH A CASE THERE IS, PRIMA FACIE, EVIDENCE AGAINST THE ASSESSEE, VIZ., THE RECEIPT OF MONEY, A ND IF HE FAILS TO REBUT IT THE SAID EVIDENCE BEING UNREBUTTED, CAN BE USED AGAINST HIM BY HOLDING THAT IT WAS A RECEIPT OF AN INCOME NATURE. WHILE CONSIDERIN G THE EXPLANATION OF THE ASSESSEE THE DEPARTMENT CANNOT, HOWEVER, ACT UN REASONABLY. (SEE SREELEKHA BANERJEE'S CASE [1963] 49 ITR (SC) 112 AT PAGE 120). IN THE INSTANT CASE, THE AMOUNT IS CREDITED IN THE CAPITAL ACCOUNT IN THE BOOKS OF THE APPELLANT. THE APPELLANT HAS OFFERED HE R EXPLANATION ABOUT THE SAID RECEIPTS BEING HER WINNINGS FROM RACES. THE SAI D EXPLANATION HAS BEEN CONSIDERED IN THE TIGHT OF THE SWORN STATEMENT OF T HE APPELLANT DATED ITA NO. 866 , 1417/DEL/2013 13 JANUARY 6,1973, AND OTHER MATERIAL ON RECORD. THE IN COME- TAX OFFICER AND THE APPELLATE ASSISTANT COMMISSIONER HAVE NOT ACCEP TED THE EXPLANATION OFFERED BY THE APPELLANT. THE TWO MEMBERS CONSTITUTI NG THE MAJORITY IN THE SETTLEMENT COMMISSION HAVE ALSO TAKEN THE SAME VIEW . THERE IS NO DISPUTE THAT THE AMOUNTS WERE RECEIVED B Y THE APPELLANT FROM VARIOUS RACE DUBS ON THE BASIS OF WINNING TICKETS P RESENTED BY HER. WHAT IS DISPUTED IS THAT WERE THEY REALLY THE WINNINGS OF T HE APPELLANT FROM THE RACES. THIS RAISES THE QUESTION WHETHER THE APPARENT CAN BE CONSIDERED AS THE REAL. AS LAID DOWN BY THIS COURT THE APPARENT M UST BE CONSIDERED THE REAL UNTIL IT IS SHOWN THAT THERE ARE REASONS TO BE LIEVE THAT THE APPARENT IS NOT THE REAL AND THAT THE TAXING AUTHORITIES ARE EN TITLED TO LOOK INTO THE SURROUNDING CIRCUMSTANCES TO FIND OUT THE REALITY A ND THE MATTER HAS TO BE CONSIDERED BY APPLYING THE TEST OF HUMAN PROBABILIT IES. (SEE : CTT V. DURGA PRASAD MORE [1971] (SC), AT PAGES 545, 547).' 13(C) IN THE CASE OF ASSESSEE ALSO; WHAT IS APPAREN T IS NOT TRUE. THE ASSESSEE HAS NOT EITHER PROVED IT TO BE TRUE OR TO THE SATISFACT ION OF THE AO. IN VIEW OF THIS, THE REPLY OF ASSESSEE AND THE EVIDENCES FILED BY HIM AR E HELD UNSATISFACTORY AND UNACCEPTABLE. I, ACCORDINGLY REJECT THE SAME AND MA KE AN ADDITION OF RS.7,92,00,000/- IN THE INCOME OF ASSESSEE AS UNEXP LAINED DEPOSITS IN BANK A/C THROUGH FOREIGN REMITTANCE. I ALSO INITIATE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 FOR CONCEALMENT OF INCOME A S AFORESAID AND FURNISHING INACCURATE PARTICULARS WITHIN THE MEANING OF EXPLAN ATION 1 TO THE SUB-SECTION (1) OF THE SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 . 9. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE FILE D APPEAL BEFORE THE LD. CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS OF TH E ASSESSEE ALLOWED THE SALE OF SHARES AS LTCG/STCG INSTEAD OF BUSINESS INCOME A ND IN RESPECT OF THE GIFT OF RS.7.92 CRORES, HE UPHELD THE ACTION OF THE AO. AGG RIEVED BY THE IMPUGNED ORDER, BOTH THE PARTIES ARE IN APPEALS BEFORE THE T RIBUNAL. ITA NO. 866 , 1417/DEL/2013 14 10. THE LD. AR OF THE ASSESSEE REITERATED THE SUBMI SSIONS MADE BEFORE THE LD. CIT(A) AS WELL AS THE AO AND ALSO SUBMITTED A WRITT EN SYNOPSIS CONTAINING 17 PAGES IN HIS QUANTUM APPEAL AND COMPILATION OF VARI OUS CASE LAWS, WHICH ARE PLACED ON RECORD. ON THE DIRECTION OF THE BENCH, HE ALSO FILED CONTRACT NOTES CUM BILL REGARDING THE SALES OF SHARES, WHICH IS AL SO PLACED ON RECORD. 11. ON THE OTHER HAND, THE LD. DR SUBMITTED A SMALL WRITTEN SYNOPSIS WHICH READS AS UNDER : IN ADDITION TO ORAL ARGUMENTS, WHICH MAY BE MADE A T THE TIME OF HEARING, THE REVENUE WISHES TO SUBMIT AS UNDER : 1. THE ASSESSEE IS THE SON OF SHRI SIDDHRATH SHRIRA M, MD OF MAWANA SUGARS LTD. HE HAS BEEN DIRECTOR OF SIEL HOLDINGS L TD, SINCE 24.4.2007. HE HAS BEEN A DIRECTOR OF SIEL LTD EARLIER. IT NEEDS T O BE MENTIONED THAT SIEL LTD IS THE EARLIER NAME OF MAWANA SUGAR LTD. 2. THE APPEAL AGAINST THE ORDER U/S 263, IN PURSUAN CE TO WHICH THE ASSESSMENT ORDER IN THIS ROUND WAS PASSED, WAS DISM ISSED BY HONBLE ITAT VIDE ORDER DATED 29.01.2014, IN ITA 1649/DEL/2011. 3. DURING THE RELEVANT ASSESSMENT YEAR, THE ASSESS EE CLAIMED LTCG EXEMPT U/S 10(38) OF RS. 59, 11,72,027/- AND STCG [T AXABLE AT CONCESSIONAL RATE) OF RS. 8,26,22,871/-. THE LTCG IS IN RESPECT OF 50,94,124 SHARES OF MAWANA SUGAR LTD COSTING JUST RS. 683,22,581/-. THE SALE VALUE IS RS. 65;94,94,608/-. THE PURCHASE DATE OF SHARES WAS FROM 30.1.2003 TO 4.8.2004. THE STCG IS ALSO IN RESPECT OF THE 7,00,000 SHARES OF MAWANA SUGAR LTD, THE COST PRICE BEING RS. 17,69,129/- AND SALE PRICE BEING RS. 84,39,2000/-. 4. THE SHARES OF MAWANA SUGAR LTD HAVE BEEN SOLD FO R RS. 74.39 CRORES. THE COST IS RS. 7 CRORES ONLY. ONLY TWO OTHER SCRIPT S HAVE BEEN SOLD BY THE ASSESSEE DURING THE YEAR OF NEGLIGIBLE AMOUNTS. CLO SING BALANCE IN RESPECT SCRIPTS TRANSACTED DURING THE YEAR MAINLY CONSISTS OF SHARES OF SIEL HOLDINGS LTD AND MAWANA SUGARS LTD. THESE DETAILS ARE AVAILAB LE ON PAGE 2 AND 3 OF ITA NO. 866 , 1417/DEL/2013 15 THE ASSESSMENT ORDER, WHICH ESTABLISH THAT ASSESSEE IS NOT AN THAT THE TRANSACTIONS ARE NOT REGULAR INVESTMENT TRANSACTION S BUT AN ADVENTURE IN THE NATURE OF TRADE TO REAP PROFITS ON THE BASIS OF INSIDE INFORMATION REGARDING THESE SCRIPTS. SOME SHARES OF MAWANA SUGA R LTD WERE ALSO CLAIMED TO HAVE BEEN RECEIVED AS GIFT FROM MOTHER, JUST TO GIVE IT A COLOUR OF CAPITAL GAINS. THE AO ASSESSED THE PROFITS AS BU SINESS PROFITS. 4.1 THE FINDINGS OF CIT (A) ON PAGE 26 AND 27 OF THE APPELLATE ORDER ARE BASED ON HIS OBSERVATION THAT ASSESSEE WAS NOT CONN ECTED WITH THE MANAGEMENT OF M/S MAWANA SUGAR LTD OR IN SOME WAY R ELATED TO THE MANAGEMENT OF M/S MAWANA SUGAR LTD. THIS OBSERVATION IS NOT ONLY FACTUALLY IN CORRECT BUT ALSO REFLECTS TOO NARROW A PERSPECTIVE TO EXAMINE THE TRUE NATURE OF TRANSACTIONS. THOUGH CIT (A) ACCEP TED THAT THE INTENTION OF THE ASSESSEE IS THE FACTOR, WHICH SHOULD DETERMI NE THE TRUE NATURE OF TRANSACTIONS, BUT THE FACTUAL BASIS OF DETERMINING INTENTION ITSELF WAS WRONG. HIS OBSERVATIONS THAT THE ASSESSEE DID NOT I NDULGE IN FREQUENT TRANSACTIONS IN SHARES IS IRRELEVANT HERE AS THE IS SUE INVOLVED IN THIS CASE WAS WHETHER TRANSACTIONS IN SINGLE SCRIPT WERE WITH INTENTION TO MAKE PROFIT. AS OBSERVED BY HON'BLE ITAT IN ORDER IN RESP ECT OF APPEAL PERTAINING TO ORDER U/S 263 THE MAGNITUDE IS ALSO A DETERMININ G FACTOR TO DETERMINE THE TRUE NATURE OF TRANSACTIONS AND NOT JUST THE FR EQUENCY. 5. RELIANCE IS ALSO PLACED ON FOLLOWING DECISIONS A PART FROM DECISIONS RELIED UPON BY THE AO : 180 ITR 208 (CALCUTTA) - JAIPUR1A BROS LTD 100 ITR 706(SC) - SUTLEJ COTTON MILLS SUPPLY AGENCY LTD 33 CCH 650 (1TAT-DEL)- SAT SAHIB SECURITIES LTD IN THE ABOVE CASE, IT IS HUMBLY SUBMITTED THAT THE FOLLOWING DECISIONS MAY KINDLY BE CONSIDERED: 1 MANOJ KUMAR SAMDARIA VS CIT (F2014L 45 TAXMANN.CO M 394 (DELHI)/R2014] 223 TAXMAN 245 (DELHI)(MAG) (COPY ENC LOSED) WHERE HONBLE DELHI HIGH COURT HELD THAT WHERE ASSE SSEE WAS SELLING SHARES VERY FREQUENTLY, VOLUME AND MAGNITUDE WAS VE RY HIGH AND HE EARNED ONLY A MEAGRE AMOUNT OF DIVIDEND, INCOME ARI SING FROM SALES OF SHARES WAS ASSESSABLE AS BUSINESS INCOME. ITA NO. 866 , 1417/DEL/2013 16 2 MANOJ KUMAR SAMDARIA VS CIT (F20141 52 TAXMANN.CO M 247 (SC)/F20151 228 TAXMAN 63 (SC) (COPY ENCLOSED) WHERE HON BLE SUPREME COURT DISMISSED SLP AGAINST H IGH COURT'S RULING THAT WHERE ASSESSEE WAS SELLING SHARES VERY FREQUEN TLY, VOLUME AND MAGNITUDE WAS VERY HIGH AND HE EARNED ONLY A MEAGRE AMOUNT OF DIVIDEND INCOME ARISING FROM SALE OF SHARES WAS ASSESSABLE A S BUSINESS INCOME 3. SADHANA NABERA VS ACIT (ITA NO.2586/MUM/2009) (CO PY ENCLOSED} WHERE HONBLE MUMBAI HIGH COURT HELD THAT SALE & PU RCHASE OF SHARES IS BUSINESS INCOME. A COPY OF CIRCULAR NO.4 OF 2007 ON THE ISSUE IS ALS O ENCLOSED IN THE ABOVE CASE: (I) VOLUME OF TRANSACTIONS WAS HIGH SHARES WORTH RS.69.85 CRORES PURCHASED DURING THE YEAR & SHARES WORTH RS.6.28 CR ORES SOLD DURING THE YEAR (II) NUMBER OF TRANSACTIONS WAS HIGH (III) PERIOD OF HOLDING WAS LOW FROM OCTOBER 2003 TO MARCH 2006 (IV) IT WAS NOT DISCLOSED IN WEALTH TAX RETURNS (V) DIVIDEND RECEIVED IS NOT MENTIONED. IT WAS NEGL IGIBLE. THIS SHOWS THAT THE MOTIVE FOR PURCHASE OF SHARES WAS TO EARN A PROFIT. (VI) EARNED PROFIT OF RS.59.11 CRORES ON INVESTMEN T OF RS.6.83 CRORES WHICH IS ABNORMALLY HIGH. THIS IS NOT NORMAL INVESTM ENT ACTIVITY, PARTICULARLY WHEN THE ASSESSEE BELONGS TO THE SRI R AM GROUP AND MAWANA SUGARS LTD. IS ONE OF THE GROUP COMPANIES. IN VIEW OF THE ABOVE FACTS AND CASE LAWS, IT IS EST ABLISHED THAT THE ASSESSEE PURCHASED THE SHARES TO EARN PROFIT. - HENCE, THE A O WAS PERFECTLY JUSTIFIED IN ASSESSING INCOME FROM SALE OF THESE SHARES UNDER THE HEAD 'PROFIT & GAINS FROM BUSINESS OR PROFESSION'. ON THE ISSUE OF TREATMENT OF CAPITAL GAINS ON SALE OF SHARES AS BUSINESS INCOME, HE RELIED ON THE ORDER OF THE AO AND ON THE ISSUE O F GIFT, THE LD. DR SUPPORTED ITA NO. 866 , 1417/DEL/2013 17 THE ORDER OF THE LD. CIT(A). HE FURTHER SUBMITTED T HAT THE CASE LAWS RELIED BY THE AR ARE NOT APPLICABLE IN THE PRESENT CASE. THE SHARES OF MAWANA SUGARS LTD. WERE KEPT BY THE ASSESSEE FOR A VERY SHORT SPA N OF TIME AND THEREFORE, THEY CANNOT BE SAID TO HAVE BEEN PURCHASED FOR INVESTMEN T PURPOSES. THE CLASSIFICATION IN THE BALANCE SHEET UNDER THE HEAD INVESTMENT IS NOT CONCLUSIVE FACTOR TO ASSUME INVESTMENT IN SHARES. THE QUANTUM, FREQUENCY AND VALUE OF SHARES SHOULD BE KEPT IN MIND WHILE CHARGING THE SU RPLUS/LOSS AS BUSINESS INCOME OR BUSINESS LOSS IN THE HANDS OF THE ASSESSE E. 12. AFTER HEARING BOTH THE SIDES AND PERUSING THE E NTIRE MATERIALS AVAILABLE ON RECORD, WE OBSERVE THAT IN RESPECT OF SALE OF SH ARES, THE LD. CIT(A) HAS RIGHTLY HELD THAT THE ASSESSEE HAS EARNED CAPITAL G AINS ON THE SALES OF THESE SHARES. FOR THIS, HE HAS CONSIDERED THE SUBMISSIONS OF THE ASSESSEE ORDER OF THE ASSESSING OFFICER AND THE CASE LAWS RELIED BY BOTH THE PARTIES. THE FINDINGS OF THE LD. CIT(A) ARE AS UNDER : 7. I HAVE CONSIDERED THE WRITTEN SUBMISSIONS FILED BY THE APPELLANT IN THE COURSE OF THE APPEAL PROCEEDINGS AND PERUSED TH E DETAILS FILED, CITATIONS OF THE CASE LAWS AND ALSO THE ORDER DATED 29.12.201 1. AFTER CONSIDERING ALL THE FACTS, I FIND THAT THE APPELLANT SOLD CERTAIN S HARES OF M/S. MAWANA SUGARS LTD. AND DECLARED PROFITS EARNED THERE ON UN DER THE HEAD CAPITAL GAINS AS UNDER: LONG TERM CAPITAL GAINS RS. 59,11,72,027/- SHORT TERM CAPITAL GAINS RS. 8,26,22,871/- IN THE ORIGINAL ASSESSMENT, THE ASSESSING OFFICER A CCEPTED THE ABOVE PROFIT AS INCOME FROM CAPITAL GAINS AS DECLARED BY THE A PPELLANT. THE CIT, THEREAFTER INVOKED THE JURISDICTION UNDER SECTION 2 63 OF THE IT ACT AND SET ASIDE THE ORIGINAL ASSESSMENT TO ASSESS THE CASE DE NOVO TO RE-EXAMINE THE ITA NO. 866 , 1417/DEL/2013 18 MAJOR ISSUES. THEREAFTER VIDE ORDER DATED 29.12.2011 , THE ASSESSING OFFICER CHANGED THE CHARACTER OF THE PROFIT EARNED ON SALE OF THE ABOVE SHARES FROM CAPITAL GAINS TO 'BUSINESS INCOME ON THE GROUND THAT SUCH SHARES CONSTITUTED STOCK-IN-TRADE AND NOT AN INVESTMENT AS DECLARED BY THE APPELLANT. ON PERUSAL OF MATERIAL ON RECORD, IT IS NOTED THAT THE APPELLANT WAS HOLDING THE SHARES OF M/S. MAWANA SUGARS LTD. S INCE 2003 AND HAD ALSO PURCHASED CERTAIN SHARES OF THE SAME COMPANY I N JUNE, OCTOBER AND NOVEMBER 2005. HENCE IT IS EVIDENT THAT THE APPELLA NT DID NOT INDULGE IN FREQUENT AND REGULAR TRANSACTIONS PERTAINING TO THE SALE PURCHASE OF SHARES, BUT WAS HOLDING FOR A CONSIDERABLE PERIOD O F TIME. THESE SHARES WHICH WERE HELD BY THE APPELLANT SINCE 2003 WERE SO LD AFTER A PERIOD OF MORE THAN 2 YEARS AND 6 MONTHS RESPECTIVELY. FROM T HIS, IT IS EVIDENT THAT THE APPELLANT DID NOT INDULGE IN REGULAR AND R EQUENT SALE OF SHARES. THIS FACT ALSO DRAWS ITS SUPPORT FRO M THE CHARTS FURNISHED BY THE APPELLANT, WHICH THE ASSESSING OFFICER INCORPOR ATED IN HIS ORDER DATED 29.12.2011, WHICH CLEARLY SHOWS THE PERIOD OF HOLDI NG. 7.1 IT WAS FURTHER SUBMITTED BY THE APPELLANT THAT DURING THE PREVIOUS YEAR, RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDE RATION, THE APPELLANT SOLD THE SHARES OF ONLY ONE COMPANY I.E. M/S. MAWAN A SUGARS LTD, HELD AS INVESTMENT ON WHICH THE CAPITAL GAIN WAS EARNED AND DECLARED BY THE APPELLANT IN HIS RETURN. IT WAS ALSO SUBMITTED THAT THE APPELLANT ALSO SOLD THE SHARES OF NANGAMALMAL SUGARS LTD. DURING THE YE AR UNDER CONSIDERATION BUT NO PROFIT WAS EARNED ON SALE OF T HE SAID SHARES. HIND THAT THE ASSESSING OFFICER REJECTED THE CLAIM OF APPELLA NT AND HELD THAT THE PROFIT ON SALE OF SHARES OF M/S. MAWANA SUGARS LTD AS ' INCOME MAINLY ON THE GROUND THAT- 1. THE APPELLANT BEING A RELATED PARTY, WAS INVOLVED IN AN INSIDER TRADING IN SHARES OF M/S. MAWANA SUGARS LTD. 2. THAT THE APPELLANT DID NOT DISCLOSE THE ABOVE SHA RES AS PERSONAL ASSETS IN HIS WEALTH TAX RETURNS FOR THE ASSESSMENT YEARS 2005-06 TO 2007- 08. ON PERUSAL OF THE MATERIAL ON RECORD, IT IS SEEN TH AT THE APPELLANT WAS NOT CONNECTED WITH THE MANAGEMENT OF M/S. MAWANA SUGARS LTD. THE ASSESSING OFFICER DID NOT BRING ANY MATERIAL ON REC ORD TO SHOW THAT THE ITA NO. 866 , 1417/DEL/2013 19 APPELLANT WAS IN SOME WAY RELATED TO THE MANAGEMENT OF M/S. MAWANA SUGARS LTD. THEREFORE, THE ASSESSING OFFICERS OBSER VATION THAT THE APPELLANT WAS INVOLVED IN AN INSIDER TRADING IS WIT HOUT ANY BASIS AND BASED ON CONJECTURES AND SURMISES. AS PER THE PROVISIONS OF WEALTH TAX ACT 1957, WEALTH TAX IS LEVIABLE IN RESPECT OF ASSETS DEFINED UNDER SECTION 2 (EA) OF WT ACT 1957. ON PERUSAL OF THE SECTION 2 (EA) OF THE WT ACT, IT IS SEEN THAT SHARES HELD BY AN INDIVIDUAL ARE NOT INCLUDED AS AN ASSET. THEREFORE, THE APPELLANT RIGHTLY HAS NOT DISCLOSED THESE SHARES IN HIS WEALTH TAX RETURN. IT IS ALSO NOTED THAT THE APPELLANT DID NOT SHOW THESE SHARES IN HIS BALANCE SHEET AS STOCK-IN-TRADE. 7.2 FURTHER, THE ASSESSING OFFICER RELIED ON VARIO US CASE LAWS FOR THE PROPOSITION THAT THERE IS NO SINGLE FACTOR THAT COU LD DETERMINE WHETHER THE SHARES WERE HELD AS INVESTMENT OR STOCK-IN-TRADE . THE APPELLANT ALSO CITED A NUMBER OF CASES IN HIS FAVOUR WHEREIN, IT H AS BEEN HELD THAT THE INTENTION OF THE APPELLANT IS PARAMOUNT IN DETERM INING AS TO WHETHER THE IMPUGNED ASSET IS TO HELD AS A CAPITAL ASSET OR A B USINESS ASSET. THE APPELLANT ALSO REFERRED TO SEVERAL JUDICIAL PRECEDE NTS CULLED OUT OF CBDT CIRCULAR NO. 4 OF 2007 DATED 15.06.2007. THE JUDGMEN T OF BOMBAY HIGH COURT IN THE CASE OF CIT VS. GOPAL PUROHIT 336 ITR 28 7 AGAINST WHICH THE HON'BLE SUPREME COURT HAS DISMISSED THE DEPARTMENTA L SLP SUPPORTS THE CONTENTION OF THE APPELLANT. THE APPELLANT HAS ALSO CITED THE JUDGMENT OF DELHI HIGH COURT IN CASE OF ROHIT ANAND REPORTED IN 132 ITR 445 AND ALSO CIT VS. VINAY MITTAL ITA 1172 PAGE 26. THE JURISDICT IONAL HIGH COURT IN THE CASE OF VINAY MITTAL, HAS HELD THAT IT IS THE MATTE R OF INTENTION OF THE APPELLANT WHICH DETERMINES WHETHER THE SHARES PURCH ASED BY HIM IS TO BE TREATED AS INVESTMENT OR BUSINESS STOCK-IN-TRADE. 'WHETHER A PERSON DEALING WITH SHARES HAS MADE AN I NVESTMENT OR HAS TREATED THEM AS STOCK-IN-TRADE, HAS BEEN THE SUBJEC T MATTER OF CONSIDERABLE DEBATE. IT IS A MATTER OF INTENTION OF THE ASSESSEE , WHICH HAS TO BE GATHERED FROM HIS CONDUCT AND SURROUNDING CIRCUMSTANCES. VAR IOUS PARAMETER/CRITERIA HAVE BEEN ELUCIDATED AND EXPLAIN ED. A PRAGMATIC AND COMMON SENSE APPROACH HAS TO BE ADOPTED, WHEN WE DE TERMINE AND DECIDE THE QUESTION ALWAYS KEEPING IN MIND COMMERCIAL CONS IDERATION.' THE APPELLANT ALSO CITED A NUMBER OF DECISIONS OF VA RIOUS HIGH COURTS AND TRIBUNALS WHO STATED THAT THE INTENTION OF THE APPEL LANT IS PARAMOUNT TO ITA NO. 866 , 1417/DEL/2013 20 DETERMINE THE CHARACTER OF THE ASSET AS TO WHETHER IT IS CAPITAL ASSET OR BUSINESS ASSET (STOCK-IN-TRADE). THE APPELLANT HAS A LSO CITED THE JUDGEMENT OF BOMBAY, MADRAS, PUNJAB AND HARYANA HIGH COURT IN THE FOLLOWING CASES: 1) CIT VS. GIRISH MOHAN GANERIWALE 260 ITR 417(P & H) 2) CIT VS. RAMAAMIRTHAM 306 ITR 239 (MAD.) 3) CTR VS. GOPAL PUROHIT 228 ITR 582 (MUM) TO STATE THAT WHERE IT HAD BEEN ACCEPTED AS CAPITAL GAINS IN THE EARLIER YEARS, THE SAME CANNOT BE TREATED AS STOCK-IN-TRADE IN THE SUBSEQUENT YEARS. IN VIEW OF THE ABOVE DISCUSSION, THE DETAILE D FACTORS AND PAST HISTORY OF THE APPELLANT, IT IS SEEN THAT THE APPELLANTS I NTENTION WAS TO HOLD THE SHARES AS INVESTMENT AND NOT AS STOCK-IN-TRADE. THEREFORE, THE ADDITION MADE BY THE ASSESSING OFFICE R TREATING THE PROFIT ON SALE OF SHARES AS BUSINESS INCOME AMOUNTING TO RS.6 7,37,94,898/- IS DELETED AND DIRECT THE ASSESSING OFFICER TO TREAT THE PROFI T ARISING FROM THE SALE OF SHARES OF M/S. MAWANA SUGERS LTD. AS LONG TERM AND SHORT TERM CAPITAL GAINS AS THE CASE MAY BE DEPENDING UPON THE HOLDING PERIOD OF SHARES IN ACCORDANCE WITH LAW. THIS GROUND OF APPEAL IS ALLOWE D. 13. FROM THE ABOVE FINDINGS OF THE LD. CIT(A), IT IS CL EAR THAT THE ASSESSEE HAS FOLLOWED THE CIRCULARS ISSUED BY THE CBDT NO. 4/200 7 DATED 15.06.2007 AND ANOTHER CIRCULAR NO. 6/2016 DATED 29.02.2016. THE S ALE OF SHARES HAS BEEN CARRIED OUT THROUGH STOCK EXCHANGE WITH ASIT C. MEH TA INVESTMENT INTERMEDIARIES LTD., WHO IS REGISTERED WITH SEBI RE GISTRATION NO. INB:010607233. THE GUIDELINES GIVEN IN THE CIRCULAR DATED 29.02.2016 ARE AS UNDER : (A) WHERE THE ASSESSEE ITSELF, IRRESPECTIVE OF THE PERIOD OF HOLDING THE LISTED SHARES AND SECURITIES, OPTS TO TREAT THEM AS STOCK-IN-TRADE, THE INCOME ARISING FROM TRANSFER OF SUCH SHARES/SECURIT IES WOULD BE TREATED AS ITS BUSINESS INCOME, ITA NO. 866 , 1417/DEL/2013 21 (B) IN RESPECT OF LISTED SHARES AND SECURITIES HEL D FOR A PERIOD OF MORE THAN 12 MONTHS IMMEDIATELY PRECEDING THE DATE OF IT S TRANSFER, IF THE ASSESSEE DESIRES TO TREAT THE INCOME ARISING FROM T HE TRANSFER THEREOF AS CAPITAL GAIN, THE SAME SHALL NOT BE PUT TO DISPUTE BY THE ASSESSING OFFICER. HOWEVER, THIS STAND, ONCE TAKEN BY THE ASSESSEE IN A PARTICULAR ASSESSMENT YEAR, SHALL REMAIN APPLICABLE IN SUBSEQUENT ASSESSM ENT YEARS ALSO AND THE TAXPAYERS SHALL NOT BE ALLOWED TO ADOPT A DIFFERENT /CONTRARY STAND IN THIS REGARD IN SUBSEQUENT YEARS; (C) IN ALL OTHER CASES, THE NATURE OF TRANSACTION (I.E. WHETHER THE SAME IS IN THE NATURE OF CAPITAL GAIN OR BUSINESS INCOME) S HALL CONTINUE TO BE DECIDED KEEPING IN VIEW THE AFORESAID CIRCULARS ISS UED BY THE CBDT. 4. IT IS, HOWEVER, CLARIFIED THAT THE ABOVE SHALL NOT APPLY IN RESPECT OF SUCH TRANSACTIONS IN SHARES/SECURITIES WHERE THE GE NUINENESS OF THE TRANSACTION ITSELF IS QUESTIONABLE, SUCH AS BOGUS C LAIMS- OF LONG TERM CAPITAL GAIN/SHORT TERM CAPITAL LOSS OR ANY OTHER S HAM TRANSACTIONS. 5. IT IS REITERATED THAT THE ABOVE PRINCIPLES HAVE BEEN FORMULATED WITH THE SOLE OBJECTIVE OF REDUCING LITIGATION AND MAINT AINING CONSISTENCY IN APPROACH ON THE ISSUE OF TREATMENT OF INCOME DERIVE D FROM TRANSFER OF SHARES AND SECURITIES. ALL THE RELEVANT PROVISIONS OF THE ACT SHALL CONTINUE TO APPLY ON THE TRANSACTIONS INVOLVING TRANSFER OF SHA RES AND SECURITIES. IT IS CLEAR FROM THE BILL CUM CONTRACT NOTE SUBMITT ED BY THE ASSESSEE THAT THE TRANSACTION HAS BEEN DONE THROUGH THE STOCK EXCHANG E AND THE TRANSACTION HAS NOT BEEN QUESTION BY THE ASSESSING OFFICER. MERELY, HE HAS DISPUTED THE TAXABILITY UNDER THE HEAD CAPITAL GAIN OR BUSINESS INCOME. THE CIRCULARS CITED BY THE AR ARE APPLICABLE IN THE PRESENT CASE. IN VI EW OF THE ABOVE, THE LD. CIT(A) HAS RIGHTLY DELETED THE ADDITION MADE BY THE AO. TH EREFORE, THE APPEAL OF THE REVENUE IS DISMISSED. 14. FURTHER IN REGARD TO THE GIFT RECEIVED BY THE A SSESSEE OF RS.7.92 CRORES, THE FINDINGS REACHED BY THE LD. CIT(A) ARE AS UNDER : ITA NO. 866 , 1417/DEL/2013 22 10. I HAVE CONSIDERED THE WRITTEN SUBMISSIONS FILED BY THE APPELLANT AND PERUSED THE ASSESSMENT ORDER PASSED U/S 263/143(3) DATED 19.12.2011 AND NOTED THAT THE APPELLANT WAS IN RECEIPT OF RS.7 .92 CRORE FROM HIS MOTHER AS A GIFT OUT OF NATURAL LOVE AND AFFECTION. THIS GIFT WAS MADE BY THE APPELLANTS MOTHER SMT. ROULA SHRIRAM BY A TELEGRAP HIC TRANSFER TO HIS ACCOUNT MAINTAINED WITH HSBC. IN THE COURSE OF THE APPEAL PROCEEDINGS, THE APPELLANT SUBMITTED THAT IT HAD FURNISHED THE F OLLOWING DOCUMENTS: I. A COPY OF GIFT DEED STATED TO BE EXECUTED ON 12 .12.2008 (COPY ATTACHED AS ANNEXURE '1') II. A COPY OF CERTIFICATE DATED 2.12.2008 (COPY ATT ACHED AS ANNEXURE 2) III. COPY OF AN ADVICE ISSUED BY HONG KONG AND SHAN GHAI BANKING CORPORATION DATED 10.11.2005 REGARDING TRANSFER OF AN AMOUNT OF GBP 100000 (ONE MILLION ONLY) TO KRISHNA SHRIRAM (COPY ATTACHED AS ANNEXURE '3') IV. A COPY OF BANK ACCOUNT OF SH. KRISHNA SHRIRAM MAINTAINED WITH HSBC FOR THE PERIOD 30.10.2005 TO 30.11.2005 (COPY ATTACHED AS ANNEXURE '4').' IT IS SEEN THAT IN ORDER TO EXAMINE THE GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE DONOR, THE ASSESSING OFFICE R EXAMINED THE ABOVE DOCUMENTS AND FOUND THE FOLLOWING EMERGED POSITION: 1) ACCORDING TO THE ASSESSING OFFICER THE COPIES O F GIFT DEED AND CERTIFICATE DOES NOT CONSTRUE AN EVIDENCE THAT CAN SUPPORT THE GENUINENESS OF THE TRANSACTION, NOR CREDITWORTHINESS OF THE DON OR. 2) A COPY OF THE ADVICE ISSUED BY THE HONG KONG & S HANGHAI BANK ONLY STATED THAT AN AMOUNT OF 1 MILLION GBP WOULD BE CRE DITED IN THE BANK ACCOUNT OF THE APPELLANT IN PURSUANT TO THE DIRECTI ONS ISSUED BY BARCLAYS DLC LONDON. HOWEVER, IT IS SEEN THAT THIS ADVICE DI D NOT MENTION THE NAME OF THE REMITTER AND SOURCE OF REMITTANCE. 3) THE BANK STATEMENT OF THE APPELLANT SHOWED THAT AN AMOUNT OF RS.7.92 CRORE WAS CREDITED IN HIS ACCOUNT. THE NARRA TION AGAINST THIS ENTRY DATED 10.11.2005, WAS IN CASH WID 076855 PET 3134893 13 CAMPBELL HOOPER GIFT FROM MOTHER. IT ONLY REVEALED A TELEGRA PHIC TRANSFER BUT NOT SOURCE. ITA NO. 866 , 1417/DEL/2013 23 10.1 ON PERUSAL OF THE MATERIAL ON RECORD, I FIND THAT THE APPELLANT HAS NOT FURNISHED ANY EVIDENCE PERTAINING TO THE FUNDS OF THE DONOR, SMT. ROULA SHRIRAM. DESPITE OF SPECIFIC REQUIREMENT THE APPELL ANT FAILED TO FURNISH THE COPY OF THE BANK ACCOUNT OF SMT. ROULA SHRIRAM FROM WHERE THE GIFT WAS GIVEN TO THE APPELLANT. THE APPELLANT DID NOT FURNIS H A COPY OF THE INWARD REMITTANCE GIVING THE PARTICULARS OF THE REMITTER, RESIDENTIAL ADDRESS OF THE REMITTER, DETAILS OF THE BENEFICIARY ETC. THE DETAIL S OF THE REMITTER WAS MENTIONED AS CAMPBELL HOOPER, IN THE TELEGRAPHIC TR ANSFER ADVICE. CAMPBELL HOOPER SEEMS TO BE AN INTERMEDIARY. 10.2 THE APPELLANT DID NOT FILE ANY DOCUMENT TO SUB STANTIATE THE CREDITWORTHINESS OF SMT. ROULA SHRIRAM. THE ASSESSIN G OFFICER ALSO MENTIONED THAT MS. ROULA SHRIRAM IS HOLDING AN INDI AN PASSPORT AND ASSESSED TO TAX UNDER PAN AACPS3802W. THE ASSESSING OFFICER RETRIEVED THE DATA FROM THE DEPARTMENTAL DATABASE AND FOUND T HAT MS. ROULA SHRIRAM DID NOT HAVE THE CREDITWORTHINESS TO GIFT A N AMOUNT OF RS.7.92 CRORE. 10.3 IN THE SUBMISSION AND THE REBUTTAL FILED BY TH E APPELLANT DURING THE COURSE OF APPEAL T PROCEEDINGS BEFORE ME, THE APPEL LANT HAS NOT CHOSEN TO FILE ANY ADDITIONAL EVIDENCE TO EXPLAIN THE SOURCE OF THE GIFT FROM THE DONOR, AND HAS INSTEAD ARGUED ON TECHNICAL GROUND PERTAINI NG TO THE PROVISIONS OF SECTION 69A ITS APPLICABILITY BY THE ASSESSING OFFI CER IN THE PRESENT CASE. THE APPELLANT ALSO VEHEMENTLY ARGUED THAT A BANK PAS S BOOK IS NOT PART OF THE BOOKS OF ACCOUNTS OF THE APPELLANT. THE APPELLAN T HAS FAILED TO AVAIL THE OPPORTUNITY TO FURNISH REQUISITE DOCUMENTARY EVIDEN CE AS REQUIRED TO PROVE THE GENUINENESS OF THE GIFT RELIANCE IS PLAC ED ON THE HON'BLE DELHI TRIBUNAL JUDGMENT IN THE CASE OF ASSTT. COMMISSIONER OF INCOME-TAX VS. SANJEEV BATRA (1999) 69 ITD 23 DELHI WHERE IT WAS HE LD THAT NECESSARY EVIDENCE IN THE SHAPE OF INCOME EARNED BY THE DONOR AS ALSO THE FINANCIAL STATUS AT THE TIME OF MAKING THE GIFT IS NECESSARY TO PROVE THE GENUINENESS OF THE GIFT. IN THE PRESENT CASE DESPITE OF REPEATE D QUERIES THE STATEMENT OF THE BANK ACCOUNT OF THE DONOR MS. ROULA SHRIRAM WAS NOT FURNISHED BY THE APPELLANT AND THE INCOME TAX RETURNS FILED BY HER D ID NOT SUBSTANTIATE HER ITA NO. 866 , 1417/DEL/2013 24 CREDITWORTHINESS TO EXTENT AN AMOUNT OF RS.7.92 CRO RES AS A GIFT TO HER SON I.E. THE APPELLANT. IN THE ABSENCE OF DOCUMENTARY E VIDENCE TO PROVE THE SOURCE OF THE GIFT, THE CASE LAW MENTIONED ABOVE CL EARLY SUMS UP THE CASE OF THE ASSESSING OFFICER. IN VIEW OF THE ABOVE DISCUSSION, THERE IS NO JUSTIF ICATION OR REASON FOR ME TO INTERFERE IN THE ORDER PASSED BY THE ASSESSING OFFI CER U/S 143(2) DATED 19.12.2011. THEREFORE, THE DECISION OF THE ASSESSING OFFICER IS UPHELD AND THE ADDITION MADE BY HIM AMOUNTING TO RS.7.92 CRORE S IS HEREBY CONFIRMED. FROM THE ABOVE FINDINGS RECORDED BY THE CIT(A), IT IS CLEAR THAT CREDITWORTHINESS OF THE DONOR HAS NOT BEEN PROVED A S ALSO THE ORIGINAL SOURCE OF MONEY ADVANCED AS GIFT. THE ASSESSEE HAS SUBMITT ED ONLY INWARD REMITTANCE ISSUED BY HONGKONG SANGHAI BANK CORPORATION LTD., M UMBAI, WHICH IS ONLY TELEGRAPHIC TRANSFER CREDIT ADVICE BEARING REFERENC E NO. RGT610813083. ON PERUSAL OF THE BANK ACCOUNT OF THE ASSESSEE, WE OBS ERVE THAT ON 10.11.2005, A SUM OF RS.7.92 CRORES HAS BEEN DEPOSITED. THE ASSES SEE WAS UNABLE TO JUSTIFY THAT THE ALLEGED GIFT CAME FROM HIS MOTHERS ACCOUN T AND SHE WAS CAPABLE TO ADVANCE SUCH HUGE MONEY AS GIFT TO THE ASSESSEE SO AS TO CONSIDER THE DEPOSIT AS GIFT. 15. IN THE WRITTEN SYNOPSIS SUBMITTED BY THE LD. AR , IT IS STATED THAT EARLIER ALSO THE ASSESSEE HAD RECEIVED GIFT FROM HIS MOTHER WHICH HAS BEEN ACCEPTED BY THE REVENUE. BUT THIS CONTENTION OF THE ASSESSEE IS NOT ACCEPTABLE IN THE PRESENT CASE BECAUSE THE PRINCIPLE OF RE JUDICATA I S NOT APPLICABLE IN THE INCOME-TAX PROCEEDINGS AND EACH ASSESSMENT YEAR IS A SEPARATE UNIT. IN THE IMPUGNED ORDER, THE ASSESSING OFFICER HAS DOUBTED T HE CREDITWORTHINESS OF THE ITA NO. 866 , 1417/DEL/2013 25 DONOR AND IT WAS NOT PROVED BEYOND DOUBT AS TO FROM WHERE, THE IMPUGNED AMOUNT OF GIFT WAS REMITTED TO THE ASSESSEE. THE AR OF THE ASSESSEE HAS NOT REBUTTED THE OBJECTIONS RAISED BY THE ASSESSING OFF ICER IN THIS REGARD. THE AR ALSO OBJECTED THAT THE IMPUGNED ADDITION CAN NEITHE R BE MADE U/S. 68 OR SECTION 69. THE ASSESSING OFFICER OBSERVED THAT THE AMOUNT OF RS.7.92 CRORES HAS BEEN CREDITED INTO THE BANK ACCOUNT MAINTAINED BY THE ASSESSEE. IN GENERAL, THE BANK MAINTAINS LEDGER ACCOUNTS OF HIS CUSTOMERS. SECTION 2(12A) HAS DEFINED THE BOOKS OR BOOKS OF ACCOUNT AS UNDER : (12A) 'BOOKS OR BOOKS OF ACCOUNT' INCLUDES LEDGERS, DAY-BOOKS, CASH BOOKS, ACCOUNT-BOOKS AND OTHER BOOKS, WHETHER KEPT IN THE WRITTEN FORM OR AS PRINT-OUTS OF DATA STORED IN A FLOPPY, DISC, TAPE O R ANY OTHER FORM OF ELECTRO- MAGNETIC DATA STORAGE DEVICE; EVEN OTHERWISE, WRONG QUOTING OF SECTION DOES NOT V ITIATE THE WHOLE PROCEEDINGS AS HELD BY HONBLE SUPREME COURT IN THE CASE OF P.K. PALANISAMY V. N. ARUMUGHAM & ANR. DATED 23.07.2009, SHREE HARI CH EMICALS EXPORT LTD. V. UNION OF INDIA & ANR. DATED 16.12.2005 AND T. NAGAP PA V. Y.R. MURLIDHAR DATED 24.04.2008. 16. THE ASSESSEE HAS PREPARED STATEMENT OF AFFAIRS AS ON 31.03.2005 & 31.03.2006 AND THE OPENING AND CLOSING BALANCE OF A SSETS AND LIABILITIES HAVE BEEN SHOWN BY THE ASSESSEE. WITHOUT MAINTAINING THE BOOKS OF ACCOUNT, IT IS NOT POSSIBLE TO PREPARE STATEMENT OF AFFAIRS AND OP ENING AND CLOSING BALANCES ARE SHOWN OF THE ASSETS AND LIABILITY, WHICH IS PLA CED ON RECORD. THEREFORE, THE PLEA OF THE ASSESSEE THAT HE DOES NOT MAINTAIN ANY BOOKS OF ACCOUNT IS NOT CORRECT. MOREOVER, THE ASSESSEE WAS ALSO UNABLE TO PROVE THE BASIC REQUIREMENT THAT THE IMPUGNED AMOUNT OF THE ALLEGED GIFT WAS RECEIVED FROM ASSESSEES MOTHER, AS NO BANK STATEMENT OF HIS MOTH ER WAS FILED BY THE ITA NO. 866 , 1417/DEL/2013 26 ASSESSEE AT ANY STAGE TO JUSTIFY THE GENUINENESS OF THE GIFT. THEREFORE, THE LD. CIT(A) HAS RIGHTLY CONFIRMED THE ADDITION MADE BY T HE LD. ASSESSING OFFICER OF THE IMPUGNED AMOUNT AS UNEXPLAINED INVESTMENT. ACCO RDINGLY, THE IMPUGNED ORDER DOES NOT CALL FOR ANY INTERFERE ON THIS COUNT . 17. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE AND REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH SEPTEMBER, 2018. SD/- SD/- (AMIT SHUKLA) (L.P. S AHU) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 13 TH SEPTEMBER, 2018 *AKS* COPY OF ORDER FORWARDED TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES, NEW DELHI