ITO, Nashik V. Shri Sunil Madhav Khode, Nashik

ITA 1492/PUN/2012

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9264 (ITAT-PUNE)
• Duration Of Justice: 5 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-07-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 15-06-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 06-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MAZHAR AKRAM
• Keywords: Gift; Source of fund
• Section: 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE . , , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO . 1492 /PUN/201 2 / ASSESSMENT YEAR : 20 09 - 10 INCOME TAX OFFICER, WARD 1(3), NASHIK ....... / APPELLANT / V S. SHRI SUNIL MADHAV KHODE, SURVEY NO. 17/3, KHODE MALA, PAKHAL ROAD, WADALAGAON, NASHIK PAN : ARMPK2872R / RESPONDENT ASSESSEE BY : SHRI NIKHIL PATHAK REVENUE BY : S HRI MAZHAR AKRAM / DATE OF HEARING : 29 - 05 - 2017 / DATE OF PRONOUNCEMENT : 07 - 0 7 - 2017 / ORDER PER VIKAS AWASTHY, JM : TH IS APPEAL HAS BEEN FILED BY THE DEPARTMENT A GAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - I, NASHIK, DATED 25 - 04 - 2012 FOR THE ASSESSMENT YEAR 2009 - 10 . THE REVENUE IN APPEAL HAS ASSAILED THE 2 ITA NO . 1492/PUN/2012, A.Y. 2009 - 10 FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN DELETING THE ADDITION S OF RS. 48,75,000/ - . 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORDS ARE: THE ASSESSEE IS A LAND BROKER. THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR ON 31 - 03 - 2010 DECLARING TOTAL TAXABLE INCOME OF RS.2,46,400/ - . T HE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND ACCORDINGLY, STATUTORY NOTICE U/S. 143(2) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS ISSUED TO THE ASSESSEE ON 17 - 08 - 2010. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDI NGS, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS RECEIVED GIFTS IN CASH FROM HIS RELATIVES TO THE TUNE OF RS.18,75,000/ - AND CASH ADVANCES OF RS.30,00,000/ - FROM HIS BROTHERS. THE ASSESSING OFFICER DISBELIEVED THE STATEMENTS OF THE CREDITORS /RELATIVES AND THE DOCUMENTS FURNISHED BY THE ASSESSEE AND MADE ADDITION OF RS.48,75,000/ - ON ACCOUNT OF UNDISCLOSED INCOME. AGGRIEVED BY THE ASSESSMENT ORDER DATED 26 - 12 - 2011, THE ASSESSEE FILED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) ACCEPTED THE CONTENTION OF THE ASSESSEE AND THE STATEMENTS OF THE CREDITORS/RELATIVES AND DELETED THE ADDITION. NOW, THE DEPARTMENT IS IN APPEAL BEFORE THE TRIBUNAL ASSAILING THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS). 3. SHRI MAZHAR AKRAM REPRESENTING THE DEPARTMENT SUBMITTED THAT THE ASSESSEE HAS ALLEGEDLY RECEIVED CASH GIFTS FROM FAMILY MEMBERS /RELATIVES TO 3 ITA NO . 1492/PUN/2012, A.Y. 2009 - 10 THE TUNE OF RS.18,75,000/ - AND HAS ALSO RECEIVED ADVANCES TO THE TUNE OF RS.30,00,000/ - FROM H IS BROTHERS. IT HAS BEEN ALLEGED THAT THE ASSESSEE HAS RECEIVED ADVANCES FOR PURCHASE OF LAND AT DINDORI. HOWEVER, ON CLOSE SCRUTINY IT WAS FOUND THAT THE ADVANCE RECEIVED FROM THE BROTHERS AND THE FAMILY MEMBERS OF THE DECEASED BROTHERS WAS DEPOSITED BY THE ASSESSEE IN BANK IN THE FORM OF FDRS. SUBSEQUENTLY, THE AMOUNTS WERE WITHDRAWN PREMATURELY FROM THE FDRS FOR MAKING PAYMENTS FOR PURCHASE OF LAND. THE ASSESSING OFFICER SUMMONED THE FAMILY MEMBERS AND RECORDED THEIR STATEMENTS U/S. 131 OF THE ACT. ALL THE FAMILY MEMBERS EXCEPT SMT. RANJANA P. KHODE APPEARED BEFORE THE ASSESSING OFFICER. A PERUSAL OF THE SAID STATEMENTS SHOW THAT THERE ARE DISCREPANCIES AND CONTRADICTIONS. THE FAMILY MEMBERS COULD NOT SPECIFY THE AMOUNTS ADVANCED AND THE PRUPOSE OF ADVANCE GIVEN TO THE ASSESSEE . THE COMMISSIONER OF INCOME TAX (APPEALS) BRUSHED ASIDE ALL THE DISCREPANCIES IN THE STATEMENTS AND GRANTED RELIEF TO THE ASSESSEE. THE RELATIVES FROM WHOM THE ASSESSEE HAS ALLEGEDLY RECEIVED GIFTS AND ADVANCES ARE STATED T O BE LAND OWNERS AND AGRICULTURALISTS. EXCEPT FOR 7/12 EXTRACTS NO OTHER PROOF OF AGRICULTURAL INCOME WAS FURNISHED BY THE ASSESSEE OR HIS RELATIVES, THEREFORE, THE ASSESSING OFFICER RAISED DOUBT OVER THE CREDITWORTHINESS OF THE RELATIVES MAKING ADVANCES/ GIFTS. THE LD. DR FURTHER SUBMITTED THAT IT IS SURPRISING THAT ALL THE RELATIVES GAVE CASH AMOUNT TO THE ASSESSEE AROUND THE SAME TIME TO INVEST IN FDRS. THE ASSESSEE INVESTED IN THE FDRS ON 08 TH AND 11 TH DECEMBER. HOWEVER, ALL THESE FDRS WERE EN CASHED PREMATURE LY WITHIN A SPAN OF 3 MONTHS AND THE AMOUNT WAS INVESTED FOR PURCHASE OF LAND. THE 4 ITA NO . 1492/PUN/2012, A.Y. 2009 - 10 LD. DR PRAYED FOR SETTING ASIDE THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) AND RESTORING THE FINDINGS OF ASSESSING OFFICER. 4. SHRI NIKHIL PATHAK APPEAR ING ON BEHALF OF THE ASSESSEE STRONGLY DEFENDED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN DELETING THE ADDITIONS. THE LD. AR SUBMITTED THAT THE DETAILS OF PERSONS MAKINGS GIFTS AND ADVANCES IS GIVEN AT PAGE 1 OF THE PAPER BOOK. THE ASSESSIN G OFFICER HAD SUMMONED ALL THE RELATIVES OF THE ASSESSEE WHO HAD GIVEN ADVANCES/GIFTS. EXCEPT FOR SMT. RANJANA P. KHODE ALL THE PERSONS APPEARED AND THE IR STATEMENTS WERE RECORDED. SMT. RANJANA P. KHODE COULD NOT APPEAR BUT SHE FILED HER AFFIDAVIT. ALL THE RELATIVES OF THE ASSESSEE CONFIRMED THAT THEY HAVE GIVEN ADVANCES/GIFTS TO THE ASSESSEE IN CASH. THE RELATIVES OF THE ASSESSEE ARE AGRICULTURALISTS AND OWN AGRICULTURAL LAND. ALL OF THEM FILED 7/12 EXTRACTS INDICATING THE EXTENT OF LAND OWNED BY THEM . ALL THE PERSONS AGREED/ACCEPTED THE FACT THAT THEY HAD GIVEN GIFTS/ ADVANCES TO THE ASSESSEE. THERE ARE MINOR DISCREPANCIES IN THEIR STATEMENT THAT COULD BE DUE TO ELAPSE OF MORE THAN 3 YEARS IN RECORDING THE STATEMENT FROM THE DATE OF TRANSACTION. ALL THE PERSONS WHO HAD GIVEN ADVANCES OR GIFTS TO THE ASSESSEE ARE NOT WE LL EDUCATED AND ARE FROM RURAL BACKGROUND. THEREFORE, THEY MAY NOT HAVE ANSWERED THE QUERIES RAISED BY THE ASSESSING OFFICER IN THE MANNER THE ASSESSING OFFICER WANTS. HOWEVER, NONE O F THE RELATIVES DENIED THE TRANSACTIONS AND HAVE SUPPORTED THE CASE OF THE ASSESSEE. ONCE, THE ASSESSEE HAS ESTABLISHED THE SOURCE OF ADVANCES AND THE GIFTS AND THE GIVERS OF ADVANCES/GIFTS HAVING ADMITTED/CONFIRMING SUCH ADVANCES/GIFTS , T HE ASSESSEE HAS DISCHARGED HIS 5 ITA NO . 1492/PUN/2012, A.Y. 2009 - 10 BURDEN. FURTHER, THE ASSESSEE HAS ALSO PROVED CREDITWORTHINESS OF THE RELATIVES MAKING ADVANCES/GIFTS AND THE PURPOSE OF ADVANCES . THE ASSESSING OFFICER OUGHT TO HAVE ACCEPTED THE CONTENTIONS OF THE ASSESSEE AFTER APPRECIATING ALL THE DOCU MENTS ON RECORD. THE LD. AR PRAYED FOR CONFIRMING THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) AND DISMISSING THE APPEAL OF THE DEPARTMENT. 5. W E HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW . THE ONLY ISSUE RAISED IN THE APPEAL BY THE REVENUE IS DELETING OF RS.48,75,000/ - RECEIVED BY THE ASSESSEE AS ADVANCES/GIFTS FROM HIS RELATIVES. THE DETAILS OF GIFTS/ADVANCES RECEIVED BY THE ASSESSEE FROM HIS RELATIVES/FAMILY MEMBER S ARE AS UNDER : NAME OF THE FAMILY MEMBER GIFT (RS.) ADVANCE (RS.) TOTAL (RS.) RELATION SHRI RATAN M. KHODE 4,75,000 - 4,75,000 BROTHER SHRI SUBHASH M. KHODE 5,25,000 5,00,000 10,25,000 BROTHER SMT. LAXMIBAI V. KHODE 2,50,000 - 2,50,000 SISTER SHRI BHASKAR M. KHODE 2,75,000 5,00,000 7,75,000 BROTHER SHRI TRIMBAK M. KHODE 3,50,000 - 3,50,000 BROTHER SHRI NIVRUTTI M. KHODE - 5,00,000 5,00,000 BROTHER SHRI KHANDU M. KHODE - 5,00,000 5,00,000 BROTHER SMT. SAVITA P. KHODE 5,00,000 5,00,000 WIFE OF LATE BROTHER SMT. RANJANA P. KHODE 5,00,000 5,00,000 WIFE OF LATE BROTHER TOTAL 18,75,000 30,00,000 48,75,000 - 6 ITA NO . 1492/PUN/2012, A.Y. 2009 - 10 6. THE ASSESSING OFFICER SUMMONED ALL THE ABOVE SAID RELATIVES OF THE ASSESSEE AND THEIR STATEMENTS WERE RECORDED U/S. 131 OF THE ACT. ALL THE RELATIVES OF THE ASSESSEE ADMITTED TO HAVE GIVEN GIFTS/ADVANCES IN CASH TO THE ASSESSEE . AS FAR AS SOURCE OF FUNDING IS CONCERNED THE RELATIVES HAVE STATED THAT THEY ARE AGRICULTURALISTS AND OWN AGRICULTURAL LAND. TO SUPPORT THEIR CONTENTIONS ALL THE PERSONS FILE D 7/12 EXTRACTS OF THE LAND OWNED BY THEM. THESE FACTS HAVE NOT BEEN DISPUTED BY THE DEPARTMENT. THE PRIMA RY OBJECTION RAISED BY THE LD. DR IS THAT THE ASSESSEE AFTER HAVING RECEIVED ADVANCES , DEPOSITED THE SAME IN BANK IN THE FORM OF FDRS. THEREAFTER, IN SHORT SPAN OF 3 MONTHS THE FDRS WERE PREMATURE LY EN CASHED AND THE AMOUNT WAS UTILIZED FOR PURCHASE OF LAND. THE CONTENTION OF THE ASSESSEE IS THAT AMOUNT RECEIVED AS ADVANCE WAS IN FACT FOR MAKING INVESTMENT IN LAND. THE AMOUNT WAS DEPOSITED IN THE BANK IN THE FORM OF FDRS FOR THE INTERVENING PERIOD TILL SUI TABLE OPPORTUNITY FOR MAKING INVESTMENT IS AVAILABLE. SO FAR AS THE DISCREPANCIES IN THE STATEMENTS OF RELATIVES RECORDED BY THE ASSESS ING OFFICER IS CONCERNED , WE ARE OF THE VIEW THAT ONCE THE RELATIVES OF THE ASSESSEE HAVE ADMITTED THE FACT OF GIVING ADVANCES/GIFTS AND HAVE ALSO FURNISHED THE DETAILS OF SOURCE OF FUNDS I.E. AGRICULTURAL INCOME , T HE ASSESSEE HAS DISCHARGED HIS BURDEN. T HE MINOR DISCREPANCIES IN THE STATEMENT CAN BE FACTORED FOR ELAPSE OF MORE THAN 3 YEARS BETWEEN THE TRANSACTION AND RECORDING OF THE STATEMENTS COUPLED WITH THE FACT THAT THE RELATIVES WERE FROM RURAL BACKGROUND WITH LIMITED LITERACY. 7. THUS, IN VIEW O F OUR ABOVE OBSERVATIONS, WE DO NOT FIND ANY ERROR IN THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN DELETING THE 7 ITA NO . 1492/PUN/2012, A.Y. 2009 - 10 ADDITIONS. ACCORDINGLY, THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) IS UPHELD AND THE APPEAL OF THE REVENUE IS DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON FRIDAY, THE 07 TH DAY OF JU LY, 201 7 . SD/ - SD/ - ( . /D. KARUNAKARA RAO ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 07 TH JULY, 2017 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 1, NASHIK 4. / THE CIT - I, NASHIK 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. / / // TRUE COPY// / BY ORDER, / ASSISTANT REGISTRAR , , / ITAT, PUNE