ITO, Chandigarh V. Smt. Daljit Kaur Bains, Chandigarh

ITA 15/CHANDI/2009

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60935 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 05-07-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 12-01-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N K SAINI
• Keywords: Unexplained cash credit; Gift

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A CHANDIGARH BEFORE SHRI H.L. KARWA, VP AND SHRI T.R. SOOD, AM ITA NO. 15/CHD/2009 ASSESSMENT YEAR: 2005-06 I.T.O. WARD 4(1) V SMT. DALJIT KAUR BAINS CHANDIGARH H NO. 520, SECTOR 36, CHANDIGARH ACZPB 9910 F ITA NO. 16/CHD/2009 ASSESSMENT YEAR: 2005-06 SMT. DALJIT KAUR BAINS V I.T.O. WARD 5(1) H NO. 520, SECTOR 36, CHANDIGARH CHANDIGARH (APPELLANT) (RESPONDENT) DEPARTMENT BY: SHRI N.K. SAINI RESPONDENT BY: SHRI HARRY RIKHY DATE OF HEARING: 5.07.2012 DATE OF PRONOUNCEMENT: 10 .07.2012 ORDER PER T.R. SOOD, A.M THESE ARE CROSS-APPEALS FILED BY THE REVENUE AS WE LL AS THE ASSESSEE AND THE COMMON ISSUES ARE RAISED, THEREFORE, THESE APPEALS ARE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. ITA NO. 15/CHD/2009 REVENUES APPEAL - IN THIS APPEAL THE REVENUE HAS RAISED THE FOLLOWING GROUND: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS RIGHT IN ALLOWING RELIEF OF UNEXPLAINED CASH CREDITS WORTH RS. 30,07,000/- ON THE GROUND THAT DEPOSITS MADE WERE O UT OF EARLIER WITHDRAWALS WITHOUT ANY DOCUMENTARY EVIDENCES. 3. ITA NO. 16/CHD/2009 ASSESSEES APPEAL - IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLOWING GROUND: THAT THE LD. CIT(A) CHANDIGARH IS UNJUSTIFIED IN U PHOLDING THE ADDITION OF RS. 1,39,93,000/- MADE BY THE ASSESSING OFFICER. 4. BRIEF FACTS OF THE CASE ARE THAT DURING ASSESSME NT PROCEEDINGS THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE IS HAVI NG TWO BANK ACCOUNTS NO. 4134 AND SAVING BANK ACCOUNT NO. 7957 OF PUNJAB SIN D BANK, SECTOR 15, CHANDIGARH. IN THESE ACCOUNTS CERTAIN DEPOSITS AMO UNTING TO RS. 1,41,33,000/- 2 WERE MADE IN ACCOUNT NO. 4134 AND RS. 58,46,543/- WAS MADE IN ACCOUNT NO. 7957. THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF DEPOSIT. THE SOURCE WAS EXPLAINED BY WAY OF A GIFT OF US DOLLAR 1,50,000 EQUIVALENT TO RS. 67,50,000/- (CONVERTED @ RS. 45 P ER DOLLAR) FROM HER SISTER, SMT. JASMEET KAUR. IT WAS FURTHER SUBMITTED THAT T HE ASSESSEE SOLD HOUSE FOR RS. 46.00 LAKHS AGAINST WHICH COPY OF THE SALE DEE D FOR RS. 28.00 LAKHS WAS FURNISHED. THE ASSESSEE HAS FURTHER FURNISHED BANK ACCOUNTS IN THE NAME OF HER BROTHER AND HIS SISTER SHOWING CREDIT ENTRIES O F RS. 51.00 LAKHS. IT WAS FURTHER STATED THAT SHE IS HAVING TWO APARTMENTS IN U.K FROM WHICH RENTAL INCOME OF 16,000 POUNDS I.E. ABOUT RS. 1,50,000 WAS BEING RECEIVED. THE ASSESSEE HAD ALSO STATED THAT HER SISTER IS HAVING A RESTAURANT IN AMERICA AND SHE HAS SENT A SUM OF RS. 67,50,000/- AS MENTIONED ABOVE. THE ASSESSEE COULD FURNISH ONLY COPY OF THE PASSPORT AND THE POW ER OF ATTORNEY BY HER SISTER FOR PURCHASE OF PROPERTY BEARING SCO NO. 265, SECTO R 44, CHANDIGARH. NO OTHER EVIDENCE WAS FILED. THE ASSESSING OFFICER CO NCLUDED THAT THE ASSESSEE HAS NO EVIDENCE FOR RENTAL INCOME IN U.K. AND IN TH E ABSENCE OF ANY EVIDENCE EVEN THE GIFT FROM SISTER WAS ALSO NOT ACCEPTED. H OWEVER, A SUM OF RS. 28.00 LAKHS RECEIVED FROM SALE OF HOUSE WAS ACCEPTED AND ADDITION OF RS. 1,70,00,000 WAS MADE TO THE INCOME OF THE ASSESSEE. 5. BEFORE THE LD. CIT(A) INITIALLY MANY ADJOURNMENT S WERE SOUGHT AND ON A FEW HEARINGS SOME DETAILS WERE FILED WHICH HAS BEEN SUMMARIZED BY THE LD. CIT(A) AT PAGE 3 & 4 OF THE ORDER WHICH IS AS UNDER : S NO DATE REMARKS 1 27.2.2008 SHRI P.C. JAWAL, ADVOCATE ATTENDED THE OFFICE. ASKED FOR ADJOURNMENT AND CASE WAS ADJOURNED TO 26.3.2008. 2 26.3.2008 SHRI P.C. JAWAL, ADVOCATE ATTENDED THE OFFICE. ASKED FOR ADJOURNMENT AS SOME INFORMATION IS REQUIRED FROM ABROAD. ASKED FOR LONGER TIME AND CASE WAS ADJOURNED TO 24.4.2008. 3 4.4.2008 SHRI P.C. JAWAL, ADVOCATE ATTENDED. ASKE D FOR SOME LONGER TIME AS THE IN TO BE CALLED FROM ABROAD. ADJOURNED FOR 18.6.2008. 4 18.6.2008 SHRI P.C. JAWAL, ADVOCATE ATTENDED AND SEEKS ADJOURNMENT. CASE ADJOURNED TO 4.7.2008. THIS IS A LAST OPPORTUNITY. 5 4.7.2008 SHRI HARRY RIKHY, ADVOCATE ATTENDED AND SEEKS 3 ADJOURNMENT. CASE ADJOURNED TO 21.7.2008. 6 21.7.2008 SHRI HARRY RIKHY, ADVOCATE ATTENDED THE OFFICE AND ASKED FOR ADJOURNMENT. CASE ADJOURNED TO 8.8.2008. 7 8.8.2008 SHRI HARRY RIKHY, ADVOCATE ATTENDED AND FILED PART REPLY VIDE LETTER DATED 8.8.2008 . THE LD. COUNSEL WANTS SOME MORE TIME AS THE INFORMATION IS TO BE PROCURED FROM USA. CASE ADJOURNED TO 3.9.2008. 8 3.9.2008 NONE ATTENDED. 9 8.9.2008 CASE FIXED FOR HEARING ON 22.9.2008. 10 18.9.2008 NOTICE RECEIVED BACK UNSERVED 11 10.10.2008 SHRI HARRY RIKHY, ADVOCATE ATTENDED. IT WAS ARGUED THAT THERE WERE CERTAIN WITHDRAWALS FROM THE BANK AND THE SAME AMOUNTS WERE REDEPOSITED. ASKED TO GIVE REPLY TO THE LETTER DATED 10.10.2008. ASKED WHETHER DEPOSITS MADE IN THE BANK ACCOUNT OF SMT. JASNEET KAUR HAVE BEEN SHOWN AS INCOME IN THEIR RESPECTIVE RETURN IN USA. THIS IS ESSENTIAL TO KNOW THE GENUINENESS OF TRANSACTION AS NORMALLY THE CREDITS IN THE BANK STATEMENT ARE NOT EXCEEDING $500. THIS IS ALSO ESSENTIAL TO KNOW THE CAPACITY OF SMT. JASPREET KAUR. NEXT DATE OF HEARING 17.10.2008. 12 17.10.2008 SHRI HARRY RIKHY, ADVOCATE ATTENDED. EXPLAIEND THAT SOME MORE INFORMATION IS REQUIRED TO BE GIVEN. REQUESTED ONE MORE LAST OPPORTUNITY. CASE ADJOURNED TO 24.10.2008. 13 24.10.2008 SHRI HARRY RIKHY, ADVOCATE ATTENDED. ASKED FOR A TIME OF FEW DAYS. CASE ADJOURNED TO 30.10.2008. 14 30.10.2008 SHRI HARRY RIKHY, ADVOCATE ATTENDED. THE LD. COUNSEL COULD NOT FURNISH ANY EVIDENCE IN RESPONSE TO THIS OFFICE LETTER DATED 10.10.2008 EXCEPT A CHART SHOWING DEPOSIT OF CASH OUT OF WITHDRAWALS. SOME WRITTEN SUBMISSIONS WERE FILED LATER ON ALONG WITH AFFIDAVIT. 6. BEFORE US, THE LD. COUNSEL OF THE ASSESSEE MAINL Y RELIED ON THE GROUND OF APPEAL AND VARIOUS DOCUMENTS FILED BEFORE THE LD. C IT(A) AND THE PAPER BOOK FILED BEFORE US. 7. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE M AINLY RELIED ON THE ORDER OF THE ASSESSING OFFICER AND SUBMITTED THAT THE LD. CIT(A) HAS CORRECTLY REJECTED THE SOURCE OF GIFTS, SOURCES FROM SALE OF PLOT AND RENTAL INCOME FROM U.K FLATS. HE FURTHER SUBMITTED THAT THE LD. CIT(A) HAS GONE W RONG FOR ACCEPTING THE SOURCE FOR CASH DEPOSITS. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS CAREFULLY. WE REPRODUCE THE RELEVANT OBSERVATIONS OF THE LD. CIT(A) AS UNDER: 4 (I) THE LD. CIT(A) AFTER CONSIDERING THE WRITTEN SU BMISSIONS AND AFFIDAVIT ETC. OBSERVED AS UNDER: AFFIDAVIT OF SMT. JASMEET KAUR (PLACED AS ANNEXUR E 1) THE PERUSAL OF THE AFFIDAVIT SHOWS THAT SMT. JASMEE T KAUR COULD NOT GIVE ANY EVIDENCE OF HAVING ANY CAPACITY TO GIVE SUCH LA RGE AMOUNTS. A SIMPLE STATEMENT THAT SHE IS PAYING INCOME TAX AND HER HUSBAND ALSO OWNS CHAIN OF RESTAURANTS DOES NOT PROVE THE CAPACI TY OF THE DONOR AND ALSO GENUINENESS OF TRANSACTION. THE ASSESSEE HAS ATTACHED A COPY OF DOCUMENT (PLACED AS ANNEXURE 2) OF EMPLOYEES SOCIAL SECURITY NUMBER 595-29-6316). THE PERUSAL OF THIS DOCUMENT FURTHER SHOWS THAT SMT. JASMEET KAUR IS THE EMPLOYEE OF HER HUSBANDS RESTA URANT. THIS DOCUMENT IS FOR THE YEAR 2003 AND SMT. JASMEET KAUR IS PERHAPS RECEIVING WAGES OF $47,400/- AND TAX OF $7840.13 HA S BEEN WITHHELD. IT APPEARS THAT SMT. JASMEET KAUR IS GETTING $ 39.560. THE ASSESSEE HAS ALSO FILED A COPY OF USA INCOME TAX RETURN OF M/S M ONTIS PIZZERIA RESTAURANT INC. (PLACED AS ANNEXURE-3) AND ALSO A C OPY OF BALANCE SHEET AS ON 31.12.2004 (PLACED AS ANNEXURE 4). THE PERUSAL OF BALANCE SHEET SHOWS THAT THE TOTAL A SSETS A RE $225269.97. THE NET FIXED ASSETS INVESTMENT IS $27 5344.19. THAT MEANS THERE ARE NO LIQUID FUNDS WITH M/S MONTIS PI ZZERIA RESTAURANT INC. THE CURRENT ASSETS ARE IN FACT NEGATIVE. THE ASSES SEE COULD NOT LINK FROM THE ABOVE BALANCE SHEET THAT ANY MONEY HAS BEE N PAID BY M/S MONTIS PIZZERIA RESTAURANT INC. THEREFORE, THE EV IDENCE IN THE SHAPE OF BALANCE SHEET OF M/S MONTIS PIZZERIA RESTAURANT IN C. DOES NOT COME TO RESCUE OF THE ASSESSEE OR THE CREDITOR. THE STAND OF THE CREDITOR IS THAT THEY ARE HAVING CAPACITY TO SEND THE FUNDS AS THE H USBAND OF THE CREDITOR IS RUNNING M/S MONTIS PIZZERIA RESTAURANT INC., A RESTAURANT BUT THE ABOVE FACTS SHOW THAT THERE IS NO ENTRY OF ANY KIND OF HAVING SEND MONEY FROM THE BOOKS OF M/S MONTIS PIZZERIA RESTAURANT I NC. (II) THE ASSESSEE WAS AGAIN ASKED ON 10.10.2008 TO LINK THE PARTICULAR INVESTMENT WITH THE PARTICULAR WITHDRAWAL. THE ASS ESSEE FILED CERTAIN DETAILS AND RELIED ON SOME CASE LAWS. (III) THE LD. CIT(A) AFTER CONSIDERING THIS REPLIES OBSERVED AT PARA 13 AS UNDER: THE PERUSAL OF THE REPLY SHOWS THAT THE ASSESSEE C OULD NOT LINK A PARTICULAR WITHDRAWAL WITH A PARTICULAR INVESTMENT. VIDE THIS OFFICE LETTER DATED 10.10.2008, THE ASSESSEE WAS SPECIFICALLY ASK ED THAT MERE GIVING A STATEMENT THAT SMT. JASMEET KAUR IS WORKING IN US AND ALSO PAYING INCOME TAX IS NOT SUFFICIENT TO DISCHARGE THE ONUS. AT THE SAME TIME THE ASSESSEE HAS TO PROVE THE GENUINENESS OF THE TRANSA CTION. THE PERUSAL OF THE BANK STATEMENT AND BALANCE SHEET OF M/S MONT IS PIZZERIA RESTAURANT INC. SHOWS THAT SMT. JASMEET KAUR AND HE R HUSBAND DOES NOT HAVE CAPACITY TO SEND THE AMOUNTS AS GIFTS/LOAN S. SMT. JASMEET KAUR IS STATED TO HAVE RECEIVED SALARY OF $40,000 F OR THE WHOLE YEAR WHICH WOULD BE JUST SUFFICIENT TO MEET THERE DAY TO DAY EXPENSE. EVEN THE BALANCE SHEET OF M/S MONTIS PIZZERIA RESTAURAN T INC. DOES NOT INDICATE ANY FLOW OF MONEY FROM USA TO INDIA AND MO REOVER THERE ARE NEGATIVE LIQUID ASSETS. 5 (IV) SOME MORE TIME WAS GIVEN TO THE ASSESSEE BUT T HE ASSESSEE COULD NOT GIVE LINK ENTRIES AND THE LD. CIT(A) MADE THE FOLLO WING OBSERVATIONS AT PARA 14 WHICH ARE AS UNDER: THE ASSESSEE HAD ASKED A FEW DAYS TIME ON 24.10.20 08. THE CASE WAS ADJOURNED TO 30.10.2008 AND THE LD. COUNSEL OF THE ASSESSEE COULD NOT FURNISH ANY FURTHER EVIDENCE. IT IS ALSO WORTHWHIL E TO MENTION THAT THE ASSESSEE WAS INFORMED VIDE PARA 4 OF THE LETTER DAT ED 10.10.2008 THAT THE ASSESSEE HAS GOT EFFECTIVELY 2 YEARS I.E. FROM THE DATE OF QUESTIONNAIRE ISSUED BY THE ASSESSING OFFICER IN SE P 2006 TO EXPLAIN HIS CASE. THE ASSESSEE HAS TO SIMPLY EXPLAIN THE SOURC E OF THE CREDITS. EVEN AFTER 2 YEARS THE ASSESSEE COULD NOT DISCHARGE HIS ONUS. THE ASSESSEE SHOULD NOT HAVE ANY GRIEVANCE THAT NO PROP ER OPPORTUNITY WAS GIVEN TO THE ASSESSEE. (V) THEREAFTER THE LD. CIT(A) REFERRED TO THE DECIS ION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN CASE OF M/S BLOWELL AUTO PVT LTD, ITA NO. 430 OF 2007 AND ALSO RELIED ON THE FOLLOWING DECISIONS: CIT V. P. MOHANAKALA, 291 ITR 278 SUMATI DAYAL V CIT, 214 ITR 801 JASPAL SSINGH V. CIT, 290 ITR 306 LAL CHAND KALRA V CIT, 22 CTR 135 AFTER CONSIDERING THE ABOVE DECISIONS THE LD. CIT(A ) CONFIRMED THE ACTION OF THE ASSESSING OFFICER REGARDING REJECTION OF RECEIPT OF GIFT. REGARDING THE SALE PROFITS FROM H NO. 230, SECTOR 36A, CHANDIGARH THE FOLLOWING DETAILS WERE EXTRACTED BY THE LD. CIT(A): S NO DATE AMOUNT (RS.) 1 14.9.2003 (CASH PAID) 25,000 2 CHEQUE NO. 369610 DATED 14.9.2003 IN FAVOUR OF SMT. DALJIT KAUR DRAWN ON ICICI BANK SECTOR 34, CHANDIGARH 75,000 3 CHEQUE NO. 0066934 DATED 26.9.2003 IN FAVOUR OF SMT. DALJIT KAUR DRAWN ON UNION BANK OF INDIA, SECT OR 40, CHANDIGARH ACCOUNT NO. 2220. 1,00,000 4 THROUGH BANK CHEQUE NO. 432173 FOR RS. 12,00,000 DATED 2.2.2004 DRAWN ON STATE BANK OF INDIA, SECTOR 22, CHANDIGARH 12,00,000 THE SOURCE OF RS. 14.00 WAS ALSO REJECTED VIDE PARA 21 WHICH IS AS UNDER: THE ASSESSEE COULD NOT LINK THESE AMOUNT W.R.T. AN Y BANK ACCOUNT. MOREOVER, THESE AMOUNT PERTAIN TO FINANCIAL YEAR 20 03-04 I.E. ASSESSMENT YEAR 2004-05. THE ASSESSEE COULD NOT LI NK ANY OF THE CREDITS IN THE BANK ACCOUNT NO. 1434 AND ACCOUNT NO . 7197 IN PUNJAB AND SIND BANK. THEREFORE, NO CREDIT IS BEING GIVE N TO THE AMOUNT OF RS. 14.00 LACS STATED TO BE OUT OF SALE PROCEEDINGS OF H NO. 230, SECTOR 36- A, CHANDIGARH. 6 (VI) THE LD. CIT(A) ACCEPTED THE SOURCE OF CASH DEP OSITS AMOUNTING TO RS. 30,07,000/- BECAUSE OF THE FOLLOWING DETAILS: CASH DEPOSITED IN SAVING BANK ACCOUNT NO. 4134 S NO. DATE AMOUNT (RS) NARRATION 1 8.9.2004 1,50,000 DEPOSITED OUT OF WITHDRAWAL ON 4.8.2004 2 24.9.2004 1,50,000 DEPOSITED OUT OF WESTERN UNION TRANSFER 3 27.9.2004 1,50,000 DEPOSITED OUT OF EARLIER WITHD RAWALS 4 16.11.2004 6,80,000 DEPOSITED OUT OF EARLIER WITHDRAWALS ON 12.10.2004, 18.10.2004 AND 4.11.2004 5 17.11.2004 1,50,000 DEPOSITED OUT OF EARLIER WITHDRAWALS ON 12.10.2004, 18.10.2004 & 4.11.2004 6 17.11.2004 3,07,000 DEPOSITED OUT OF EARLIER WITHDRAWALS 7 3.12.2004 2,50,000 DEPOSITED OUT OF EARLIER WITHD RAWALS 8 14.1.2005 2,00,000 DEPOSITED OUT OF EARLIER WITHD RAWALS ON 12.01.2005 9 3.2.2005 2,30,000 DEPOSITED OUT OF WESTERN UNION TRANSFER TOTAL 22,67,700 CASH DEPOSITED IN SAVING BANK ACCOUNT NO. 7957 S NO DATE AMOUNT NARRATION 1 10.12.2004 6,50,000 DEPOSITED OUT OF EARLIER WITHDRAWALS 2 8.1.2004 90,000 DEPOSITED OUT OF EARLIER WITH DRAWALS TOTAL 7,40,000 9. THE LD. COUNSEL OF THE ASSESSEE HAS NOT BEEN ABL E TO IMPROVE HIS CASE BEFORE US BECAUSE PRACTICALLY NO ARGUMENTS WERE MAD E TO SHOW HOW THE OBSERVATIONS AND THE CONCLUSION MADE BY THE LD. CIT (A) ARE INCORRECT. AT THE SAME TIME WE DO NOT FIND FORCE IN THE SUBMISSIONS O F HE LD. DR FOR THE REVENUE 7 THAT THE LD. CIT(A) HAS GONE WRONG FOR ACCEPTING TH E SOURCE FOR CASH DEPOSITS. THE LD. CIT(A) HAS CORRECTLY ACCEPTED THE SOURCE OF CASH DEPOSITS BECAUSE THE SAME SHOULD HAVE BEEN WITHDRAWN FROM ANOTHER ACCOUN T GENERALLY DURING THE PERIOD OF ONE YEAR BEFORE THE DATE OF DEPOSIT. THE REFORE, HE HAS CORRECTLY GIVEN THE RELIEF. WE FURTHER FIND THAT THE LD. CIT( A) HAS SHOWN ALL THE PATIENCE AND IT SEEMS THAT THE ASSESSEE WAS NOT FULLY COOPER ATING BY ADDUCING ANY EVIDENCE FOR THE SOURCE AGAINST THE DEPOSITS AS THE LD. CIT(A) HAS GIVEN OPPORTUNITY ON VARIOUS DATES AND CASE DRAGGED BEFOR E HIM FOR TWO YEARS. EVEN BEFORE US NOTHING NEW HAS BEEN BROUGHT TO OUR NOTIC E. THEREFORE, IN THE FACTS AND CIRCUMSTANCES OF THE CASE WE ARE OF THE OPINION THAT THE LD. CIT(A) HAS CORRECTLY ADJUDICATED THE ISSUE. ACCORDINGLY WE C ONFIRM HIS ORDER. 10. IN THE RESULT, CROSS-APPEALS FILED BY THE REVEN UE AND THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED ON 10.07.2012 SD/- SD/- (H.L. KARWA) (T.R. SOOD) VICE PRESIDENT ACCOUNTANT MEMBER DATED: 10.07.2012 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/ THE DR 8