Smt. Sunil Chhabra, New Delhi V. ITO, New Delhi

ITA 1547/DEL/2010

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86552 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 25-11-2014
• Assessment Year: 2000-2001
• Appeal Filed On: 08-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARE AS UNDER THAT OF
• Keywords: Unexplained cash credit; Gift
• Section: 68; 148

Judgement Text

DELHI BENCH G : NEW DELHI BEFORE SHRI N.K.SAINI, ACCOUNTANT MEMBER AND SHRI A. T. VARKEY, JUDICIAL MEMBER ITA NO. 1547 /DEL/ 2010 (ASSESSMENT YEAR: 2000 - 01 ) SUNIL CHHABRA, P/O. M/S. RAJ STORE, 3/5/156, KRISHAN NAGAR, KAROL BAGH, NEW DELHI PAN:AADPC0004F VS. ITO, WARD - 33(4) NEW DELHI (APPELLANT) (RESPONDENT) O R D E R PER A. T. VARKEY, JUDICIAL MEMBER THIS APPEAL IS PREFERRED BY THE ASSESSEE AND ARISES FROM THE ORDER OF THE LD CIT(A), XXV I , NEW DELHI DATED 12.02.2010 RELATES TO ASSESSMENT YEAR 2000 - 01 . 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AS UNDER: - 1. THAT THE ORDER OF THE CIT(APPEALS) - XXVI, NEW DELHI, IS CONTRARY TO LAW AND FACTS ON RECORDS. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD CIT(APPEALS), XXVI WAS JUSTIFIED IN REJECTING THE APPEAL OF THE ASSESSEE AND CONFIRMING THE ORDER OF THE LD INCOME - TAX OFFICER, WARD NO.3 2(4) AND CONFIRMING THE ADDITION OF RS.2,00,000/ - AS GIFT FROM SH. SANJAY MOHAN AGGARWAL? 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD CIT(APPEALS) - XXVI WAS JUSTIFIED IN REJECTING THE PLEA OF THE ASSESSEE REGARDING GENUINENESS OF THE PERSON , CREDITWORTHINESS OF THE PERSON, AFFIDAVIT, GIFT DEED, BANK STATEMENT OF THE DONOR IN WHICH HE HAS HIMSELF ADMITTED THAT THE DONOR AS A CAPITAL OF RS.32,47,90,367/ - AND THIS CASE IS COVERED BY HONBLE SUPREME COURT DECISION IN THE CASE OF LOVELY EXPORT PV T. LTD. 4. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD CIT(APPEALS) - XVI WAS JUSTIFIED IN CONFIRMING THE ADDITION OF RS.4,000/ - BEING COMMISSION ALLEGED TO HAVE BEEN PAID BY THE ASSESSEE FOR PROCU RING THE GIFT. APPELLANT BY : P.N. CHAWLA, ADV RESPONDENT BY : B.R.R. KUMAR, SR. DR P A G E | 2 3. BRIEF FACTS OF THE CASE A RE THAT IN THIS CASE NOTICE U/S 148 WAS ISSUED ON 30 TH MARCH, 2007 BY THE ITO, WARD - 33(4) AFTER RECORDING THE REASON THAT INCOME HAS ESCAPE S ASSESSMENT TO THE TUNE OF RS.2,00,000/ - AS ON E NQUIRY BY THE INVESTIGATION WING OF THE INCOME TAX DEPARTMENT REVEALED THAT THE APPELLANT HAD RECEIVED AN ACCOMMODATION ENTRY OF RS.2,00,000/ - ON 04.03.2000 FROM ONE ENTRY OPERATOR SHRI SANJAY MOHAN AGARWAL, VIDE CHEQUE NO. 333142 DRAWN ON VIJAYA BANK, ANS ARI ROAD, NEW DELHI. THE SAID ENTRY WAS SHOWN AS GIFT FROM SHRI SANJAY MOHAN AGARWAL. IN RESPONSE, THE APPELLANT FILED RETURN OF INCOME ON 19.04.2007 DECLARING INCOME OF RS.1,00,625/ - . DURING THE ASSESSMENT PROCEEDINGS, THE APPELLANT FURNISHED A COPY OF TH E GIFT DEED, AN AFFIDAVIT DATED 02.03.2000 SIGN BY SANJAY MOHAN AGARWAL AS ALSO A COPY OF THE ASSESSMENT ORDER OF SHRI AGARWAL FOR ASSESSMENT YEAR 1994 - 95 IN SUPPORT OF HIS CAPACITY TO MAKE SUCH A GIFT. THE LD AO ASKED FOR A COPY OF THE RETURN FOR ASSESSME NT YEAR 1999 - 2000 AND ASSESSMENT YEAR 2000 - 01 AND ALSO A COPY OF THE DEATH CERTIFICATE OF THE DONOR, SHRI AGARW AL, WHICH WAS NOT PRODUCED. THE AO INSISTED ON THE PERSONAL ATTENDANCE OF THE APPELLANT, IN RESPONSE TO WHICH THE APPELLANT FURNISHED AN AFFIDAVI T DATED 18.12.2007 IN SUPPORT OF THE GIFT RECEIVED BY HER. IN THE ABSENCE OF PERSONAL APPEARANCE OF THE APPELLANT, THE AO DISREGARDED THE EVIDENTIARY VALUE OF THE AFFIDAVIT. ON THE SAME GROUND, THE AFFIDAVIT FILED BY THE DONOR SHRI AGARWAL WAS ALSO DISREGA RDED. THE AO THEREFORE, TREATED THE AFORESAID GIFT OF RS.2,00,000/ - AS UNEXPLAINED CASH CREDIT U/S 68 OF THE INCOME TAX ACT, 1961 (HEREIN AFTER THE ACT) AND TAXED IT AS INCOME FROM OTHER SOURCES. IN ADDITION, AN AMOUNT OF RS.4,000/ - WAS ALSO ADDED AS U NACCOUNTED COMMISSION @2% THE AMOUNT OF THE GIFT, THA T THE APPELLANT MAY HAVE PAID. THE LD CIT(A) UPHELD THE ADDITION BY CONCLUDING AS UNDER: - ON BASIS OF THE ABOVE, I HOLD THAT ON THE FACE OF IT EVEN THOUGH RELEVANT DOCUMENTS IN SUPPORT OF GIFT SUCH AS G IFT DEED WERE GOT SIGNED, AND THE GIFT WAS MADE THROUGH BANKING CHANNEL, HOWEVER, ON LIFTING THE VEIL, THE GENUINENESS OF THE GIFT DOES NOT STAND PROVED. DURING THE PERIOD RELATING TO ASSESSMENT YEAR 2000 - 01, SHRI SANJAY MOHAN AGARWAL HAD MADE GIFT TO SEVE RAL PERSONS RUNNING IN A FEW CRORES. HOWEVER, IN HIS OWN BALANCE SHEET FOR 2000 - 01, NO AMOUNT HAS BEEN REDUCED OUT OF HIS CAPITAL, WHICH OUGHT TO HAVE BEEN DONE IN CASE OF GENUINE GIFT. THE CORRESPONDING P A G E | 3 REDUCTION OF RS 2 LACS ON ACCOUNT OF GIFT TO APPELLA NT HAS ALSO NOT BEEN REDUCED IN THE SAID BALANCE - SHEET. SHRI AGARWAL, WHEN INVESTIGATED BY THE INVESTIGATION, WING - GHAZIABAD HAD ADMITTED TO HAVE RUN A SEAM OF PROVIDING BOGUS ENTRIES AND HAD HIMSELF INFORMED ABOUT THE BOOK ACCOUNTS THROUGH WHICH SUCH A SC AM WAS RUN. THE APPELLANT IS ALSO ONE OF THE BENEFICIARIES OF SUCH A BOGUS GIFT FROM THE DONOR ACCOUNT WITH VIJAYA BANK, ANSARI ROAD NEW DELHI. IN THE ABSENCE OF SHRI SANJAY MOHAN AGARWAL, WHO HAD EXPIRED IN 2005, HIS HIS EVIDENCE CANNOT BE CROSS - EXAMINED BY THE APPELLANT. HOWEVER, THE REPORT OF THE INVESTIGATION WING REGARDING BOGUS GIFTS IS FURTHER CORROBORATED BY ENTRIES IN HIS BALANCE SHEET AS ON 31/3/2000, WHICH SHOWS THAT NO CORRESPONDING REDUCTION OUT OF CAPITAL WAS MADE FOR THE GIFT. KEEPING IN VIEW TOTALITY OF FACTS AND CIRCUMSTANCES, I THEREFORE, HOLD THAT THE APPELLANT COULD NOT PROVE GENUINENESS OF THE GIFT. 6. IN VIEW OF THE ABOVE, I HOLD THAT THE GIFT OF RS.2 LACS FROM SHRI SANJAY MOHAN AGARWAL TO THE APPELLANT ON 04/03/2000 WAS NOT A GENUINE ONE AND THEREFORE THE LEARNED AO WAS JUSTIFIED IN MAKING ADDITION U/S. 68 IN RESPECT THEREOF. 4. HAVING CONSIDERED THE RIVAL SUBMISSION, WE FIND FORCE IN THE CONTENTION OF THE APPELLANT, THAT THE MATTER BE RESTORED TO THE FILE OF THE AO, TO ASCERTAIN THE TAXABILITY OF THE RECEIPT IN THE HANDS OF THE DONOR, SHRI SANJAY AGARWAL. WE T HEREFORE RESTORE THE ADDITION BA CK TO THE FILE OF AO, WITH A DIRECTION THAT ASSESSEE SHALL LEAD EVIDENCE BEFORE THE AO THAT THE SAID GIFT HAS BEEN T AXED IN THE HANDS OF THE DONOR; AND IF THE ASSESSEE IS ABLE TO PLACE ON RECORD NECESSARY EVIDENCE TO THE AFORESAID EFFECT, THE AO SHALL DELETE TH E ADDITION AFTER MAKING POSSIBLE NECESSARY ENQUIRIES. HOWEVER, IF THE ASSESSEE FAILS IN THIS REGARD THEN ADDITION SHALL REMAIN. 5. IN THE RESULT THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 16 . 0 1.2015 . - SD/ - - SD/ - ( N.K.SAINI ) (A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 16 / 01 / 2015 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT P A G E | 4 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELH I