Shri Krishan Gopal Chhabra, New Delhi V. ITO, New Delhi

ITA 1548/DEL/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65267 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 30-07-2012
• Assessment Year: 2000-2001
• Appeal Filed On: 08-04-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR B R R KUMAR
• Assessee Lawyers: R S ADLAKHA
• Keywords: Unexplained cash credit; Gift

Judgement Text

I.T.A. NO. 1548/DEL/2010 1 IN THE INCOME TAX APPELATE TRIBUNAL DELHI BENCH SMC: NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO. 1548/DEL/2010 A.Y. : 2000-01 KRISHAN GOPAL CHHABRA, VS. ITO, WARD-33(4), P/O M/S RAJ STORES, NEW DELHI 3/5156, KRISHAN NAGAR, KAROL BAGH, NEW DELHI (PAN : AADPC0006H) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. R.S. ADLAKHA, ADV. DEPARTMENT BY : DR. B.R.R. KUMAR, SR. D.R. O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XXVI, NEW D ELHI DATED 12.2.2010 PERTAINING TO ASSESSMENT YEAR 2000-01. 2. THE GROUNDS OF APPEAL READ AS UNDER:- I) THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX- XXVI, NEW DELHI IS CONTRARY TO LAW AND FACTS ON RECO RD. II) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE THE LD. COMMISSIONER OF INCOME TAX (A) WAS JUSTIFIE D IN REJECTING THE APPEAL OF THE ASSESSEE AND CONFIRMI NG THE ORDER OF THE ITO, WARD 32(3) AND CONFIRMING THE ADDITION OF ` 3,00,000/- AS GIFT FROM SH. SANJAY MOH AN AGGARWAL? I.T.A. NO. 1548/DEL/2010 2 III) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. COMMISSIONER OF INCOME TAX (A) 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 DON OR AS A CAPITAL OF ` 32,47,90,367/- AND THIS CASE IS COVERED BY HONBLE SUPREME COURT DECISION IN THE CASE OF LOVELY EXPORTS PVT. LTD., IV) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE THE LD. COMMISSIONER OF INCOME TAX (A) WAS JUSTIFIED IN CONFIRMING THE ADDITION OF ` 6,00,000/- BEING COMMISSION ALLEGED TO HAVE BEEN PAID BY THE ASSESSEE FOR PROCURING THE GIFT. 3. IN THIS CASE ON AN ENQUIRY BY THE INVESTIGATION WING, IT TRANSPIRED THAT ASSESSEE HAS RECEIVED AN ACCOMMODATION ENTRY OF ` 3 LACS ON 4.3.2000 FROM ONE ENTRY OPERATOR SH. SANJAY MOHAN AGA RWAL. THE SAID ENTRY WAS SHOWN AS GIFT FROM SH. SANJAY MOHAN AGARWAL . DURING THE ASSESSMENT PROCEEDINGS ASSESSEE FURNISHED A COPY OF THE GIFT DEED AND AFFIDAVIT SIGNED BY SH. SANJAY MOHAN AGARWAL AS A LSO A COPY OF THE ASSESSMENT ORDER OF SH. AGARWAL FOR A.Y. 1994-9 5 IN SUPPORT OF HIS CAPACITY TO MAKE SUCH A GIFT. THE ASSESSING OFFI CER ALSO ASKED FOR COPY OF RETURN FOR ASSESSMENT YEAR 1999-2000 AND 20 00-01 AND ALSO A COPY OF DEATH CERTIFICATE OF THE DONOR SH. SANJAY AG ARWAL WHICH WAS I.T.A. NO. 1548/DEL/2010 3 NOT PRODUCED. THE ASSESSING OFFICER ASKED FOR TH E PERSONAL ATTENDANCE OF THE ASSESSEE, IN RESPONSE TO WHICH TH E ASSESSEE FURNISHED AN AFFIDAVIT DATED 18.12.2007 IN SUPPORT OF THE GIFT RECEIVED BY HER. IN THE ABSENCE OF PERSONAL APPEARANCE OF T HE ASSESSEE, THE ASSESSING OFFICER DISREGARDED THE EVIDENTIARY VALU E OF THE AFFIDAVIT. ON THE SAME GROUND, THE AFFIDAVIT FILED BY THE DONO R OF AFORESAID GIFT OF ` 3,00,000/- AS UNEXPLAINED CASH CREDIT U/S. 68 AND TAXED IT AS INCOME FROM OTHER SOURCES. IN ADDITION, AN AMO UNT OF ` 6000/- WAS ALSO ADDED AS UNACCOUNTED COMMISSION @ 2% OF THE AMO UNT OF THE GIFT, THAT THE ASSESSEE MAY HAVE PAID. 4. UPON ASSESSEES APPEAL, LD. COMMISSIONER OF INCOME TAX (A) CONSIDERED THE SUBMISSIONS OF THE ASSESSEE AND HELD AS UNDER:- ON THE BASIS OF THE ABOVE, I HOLD THAT ON THE FACE OF IT EVEN THOUGH RELEVANT DOCUMENTS IN SUPPORT OF GIFT SUCH AS GIFT DEED WERE GOT SIGNED, AND THE GIFT WAS MADE THROUGH BANKING CHANNEL, HOWEVER, ON LIFTING TH E VEIL, THE GENUINENESS OF THE GIFT DOES NOT STAND PROVED. DURING THE PERIOD RELATING TO ASSESSMENT YE AR 2000-01, SHRI SANJAY MOHAN AGARWAL HAD MADE GIFT TO SEVERAL PERSONS RUNNING IN A FEW CRORES. HOWEV ER, IN HIS OWN BALANCE SHEET FOR 2000-01, NO AMOUNT HAS BEEN REDUCED OUT OF HIS CAPITAL, WHICH OUGHT TO HAV E BEEN DONE IN CASE OF GENUINE GIFT. THE CORRESPOND ING I.T.A. NO. 1548/DEL/2010 4 REDUCTION OF ` 3 LACS ON ACCOUNT OF GIFT TO APPELLA NT HAS ALSO NOT BEEN REDUCED IN THE SAID BALANCE SHEET. S HRI AGARWAL, WHEN INVESTIGATED BY THE INVESTIGATION WING- GHAZIABAD HAD ADMITTED TO HAVE RUN A SCAM OF PROVIDING BOGUS ENTRIES AND HAD HIMSELF INFORMED ABOUT THE BANK ACCOUNTS THROUGH WHICH SUCH A SCAM WAS RUN. THE APPELLANT IS ALSO ONE OF THE BENEFICIARIES OF SUCH AS 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 EVIDENCE CANNOT BE CROSS EXAMINED BY THE APPELLANT. HOWEVER, THE REPORT OF THE INVESTIGATION WING REGARDING BOGUS GIFTS IS FUR THER 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. IN VIEW OF THE ABOVE, I HOLD THAT THE GIFT OF ` 3 LACS FROM SH. SANJAY MOHAN AGARWAL TO THE APPELLANT ON 4.3.2000 WAS NOT A GENUINE ONE AND THEREFORE TH E ASSESSING OFFICER WAS JUSTIFIED IN MAKING ADDITIO N U/S. 68 IN RESPECT THEREOF. ON THE SECOND GROUND OF ADDITION, ONCE THE GIFT HAS BEEN PROVED AS BOGUS, IT IS REASONABLE TO ESTIMA TE CERTAIN AMOUNT OF COMMISSION, WHICH MAY HAVE BEEN I.T.A. NO. 1548/DEL/2010 5 PAID BY THE APPELLANT IN ORDER TO CONVERT CASH OF ` 3,00,000/- TO CHEQUE THROUGH THE BOGUS GIFT ENTRY F ROM THE DONOR. I FIND THAT THE ASSESSING OFFICER WAS REASONABLE IN ESTIMATING THE SAME @2%. THEREFORE, THE ADDITION ON THIS GROUND IS ALSO SUSTAINED. 5. I HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF T HE MATERIAL PRODUCED AND PRECEDENT RELIED UPON. ASSESSEE IN THIS CASE HAS RECEIVED A GIFT FROM A PERSON WITH WHOM ASSESSEE HAS NO RELATIONSHIP. THE OCCASION FOR GIVING OF GIFT IS ALSO NOT SPECI FIED AND ALSO THERE IS NO RECIPROCITY. 6. I FIND THAT HONBLE DELHI HIGH COURT IN THE CAS E OF RAJIV TONDON VS. ACIT 294 ITR 488 HAS HELD THAT IN A CASE WHERE TWO DONORS HAD ABSOLUTELY NO CONNECTION WITH THE ASSESSEE AND THE Y MADE GIFTS TO THE ASSESSEE ONLY BECAUSE HE NEEDED MONEY TO BUY A HOUS E AND THEY WANTED TO HELP HIM. IT WAS HELD THAT THIS WAS NOT ONLY QUITE UNUSUAL BUT ALSO QUITE UNNATURAL. IT WAS INCREDIBLE THAT A COMPLETE STRANGER WOULD WANT TO GIFT LAKHS OF RUPEES TO A PERSON ONL Y BECAUSE THAT PERSON WANTED THE AMOUNT FOR PURCHASING A HOUSE. T HE TAXING AUTHORITIES WERE ENTITLED TO LOOK INTO THE SURROUND ING CIRCUMSTANCES, WHICH THEY DID, AND COME TO THE CONCLUSION THAT THE GIFTS COULD NOT BE SAID TO BE GENUINE. THE REASON OFFERED BY THE AS SESSEE DID NOT I.T.A. NO. 1548/DEL/2010 6 APPEAR TO BE REASONABLE, MUCH LESS ACCEPTABLE. TH EREFORE, THERE WAS NO ERROR IN THE VIEW TAKEN BY THE TRIBUNAL. 7. I ALSO FIND THAT ON THE TOUCHSTONE OF THE AFORES AID JUDGEMENT ASSESSEES CASE IS SQUARELY COVERED. HERE ALSO THE RE IS NO RELATIONSHIP OF THE DONOR WITH THE ASSESSEE. THERE IS ALSO NO OCCASION FOR THIS GIFT. THE TAXING AUTHORITIES HAVE RIGHTLY LOOKED INTO TH E SURROUNDING CIRCUMSTANCES AND DRAWN THE CONCLUSION THAT GIFT IN THIS CASE WAS NOT GENUINE. 8. ACCORDINGLY, IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND PRECEDENT, I DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (A), HENCE, I AFFIRM THE S AME. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSE E STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 08/8/2012. SD/- [SHAMIM YAHYA] ACCOUNTANT MEMBER DATE: 08/8/2012 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4.CIT (A) 5. D R, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES