Mr. Naveen Kumar Dixit, New Delhi V. ITO, New Delhi

ITA 1631/DEL/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6462 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 22-11-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 21-03-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Gift; Additional evidence
• Section: 56(2); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH E NEW DELHI BEFORE : SHRI L.P. SAHU, ACCOUNTANT MEMBER & SMT. BEENA PILLAI , JUDICIAL MEMBER ITA NO. 1631/DEL./2013 ASSTT. YEAR : 2005 - 06 NAVEEN KUMAR DIXIT, VS. INCOME - TAX OFFICER, C - 21, 1 ST FLOOR, HAUZ KHAS, WARD 3(2), NEW DELHI. NEW DELHI. (PAN: AEPPD 6730H) (APPELLANT) (RESPONDENT) APPELLANT BY : SH. SATISH AGGARWAL, C.A. RESPONDENT BY : SH. RAJESH KUMAR, SR. DR DATE OF HEARING : 01.12.20 16 DATE OF PRONOUNCEMENT : 16 .12.201 6 ORDER PER L.P. SAHU, ACCOUNTANT MEMBER: THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A) - V, NEW DELHI DATED 06.07.2012 FOR THE ASSESSMENT YEAR 2005 - 06 ON THE FOLLOWING GROUNDS : 1. THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (A) - V IS ARBITRARY, BIASED, BAD IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE CASE. 2. THAT THE LEARNED CIT(A) HAS GROSSLY ERRED IN CONFIRMING THE ADDITION OF RS.900965/ - U/S. 56(2) OF THE ACT. ITA NO. 1631/DEL./2013 2 3. THAT THE LEARNED CIT(A) HAS GROSSLY ERRED IN CONFIRMING THE ADDITION OF RS.309533/ - BY TREATING THE GIFT RECEIVED FROM SH.SAURABH DIXIT BROTHER OF THE APPELLANT AS NON - GENUINE. 4. THAT THE LEARNED CIT(A) HAS GROSSLY ERRED IN CONFIRMING THE ADDITION OF RS.120000/ - MADE BY THE ASSESSING OFFICER FOR ALLEGED LOW WITHDRAWALS. 5. THAT THE LEARNED CIT(A) HAS GROSSLY ERRED IN CONFIRMING THE ADDITION OF RS.70,000/ - FOR ALLEGED NON FURNISHING OF SOURCE OF CASH DEPOSIT OF RS.70,000/ - IN BANK. 6. THAT THE LEARNED CIT(A) HAS GROSSLY ERRED IN NOT PROVIDING SUFFICIENT AND ADEQUATE OPPORTUNITY TO THE APPELLANT TO PRESENT ITS CASE AND HAS SUMMARILY BRUSHED ASIDE THE SUBMISSION MADE DURING THE COURSE OF APPELLATE PROCEEDINGS. 2. THE APPELLANT IS A WHOLE TIME DIRECTOR OF M/S. CALL INA CARE OVERSEAS PVT. LTD. W.E.F. 01.04.200 AND DRAWING SALARY. RENTAL INCOME WAS ALSO EARNED FROM LETTING OUT HIS PROPERTY SITUATED AT FIRST FLOOR HAUZ KHAS NEW DELHI AND SHOWING INCOME FROM OTHER SOURCES IN A SUM OF RS.15,000/ - . THE TOTAL INCOME WAS DEC LARED IN THE RETURN OF INCOME OF RS.1,52,890/ - . THE RETURN WAS PROCESSED U/S. 143(1). LATER ON, THE CASE WAS SELECTED FOR SCRUTINY AND STATUTORY NOTICES WERE ISSUED AND SERVED UPON THE ASSESSEE. THE ASSESSEE SUBMITTED BANK PASSBOOK, ON PERUSAL OF WHICH THE AO NOTED THAT THERE IS DEPOSIT OF RS.10,000/ - ON 29.07.2004 AND RS.60,000/ - ON 08.09.2004.THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF DEPOSIT. BUT HE DID NOT APPEAR BEFORE THE AO. ULTIMATELY, THE AO ISSUED SHOW CAUSE NOTICE ON 3 0.11.2007. ITA NO. 1631/DEL./2013 3 THEN THE ASSESSEE SUBMITTED REPLY THAT SUM OF RS.15,000/ - HAS BEEN DEPOSITED OUT OF OTHER SOURCE INCOME AND REST AMOUNT HAS BEEN DEPOSITED OUT OF PAST SAVINGS. THE AO DID NOT ACCEPT THE SUBMISSION OF THE ASSESSEE AND ADDED THE AMOUNT TO THE INCO ME OF THE ASSESSEE. 3. FURTHER ON PERUSAL OF THE BANK ACCOUNT, THE ASSESSING OFFICER NOTED THAT A SUM OF RS.3,09,533/ - HAS BEEN RECEIVED FROM SHRI SAURABH DIXIT, THE YOUNGER BROTHER OF THE ASSESSEE. AT THE TIME OF MONEY RECEIVED, SAURABH DIXIT WAS STUDYI NG ABROAD (AUSTRALIA). INITIALLY, THE ASSESSEE DID NOT SUBMIT ANY DOCUMENTS BEFORE THE ASSESSING OFFICER. ULTIMATELY, THE AO ISSUED SHOW CAUSE NOTICE ON 30.11.2007. IN THIS RESPECT THE ASSESSEE SUBMITTED BY LETTER DATED 11.12.2007 THAT SAURABH DIXIT IS PRE SENTLY RESIDING IN INDIA AND HE CAN BE PRODUCED FOR CONFIRMATION IF NECESSARY. BUT ON THE APPOINTED DATE, THE ASSESSEE COULD NEITHER PRODUCE SHRI SAURABH DIXIT NOR FILED ANY CONFIRMATION. SINCE THE ASSESSEE DID NOT COMPLY WITH THE PROVISIONS OF SECTION 68 OF THE ACT, THE ASSESSING OFFICER ADDED A SUM OF RS.3,09,533/ - IN THE INCOME OF THE ASSESSEE AS UNEXPLAINED CASH CREDIT. 4. ON FURTHER SCRUTINY OF BANK PASSBOOK, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS RECEIVED A SUM OF RS.9,09,965/ - FROM SANJ EEV KUMAR, WHO ITA NO. 1631/DEL./2013 4 WAS RESIDING AT RUSSIA AND DRAWING SALARY OF 2000 USD PER MONTH. SHOW CAUSE NOTICE WAS ISSUED ON 30.11.2007. THEN THE ASSESSEE SUBMITTED VIDE LETTER DATED 11.12.2007 VARIOUS DETAILS IN RESPECT OF SHRI SANJEEV KUMAR. THE ASSESSEE SUBMITTED TH AT THE AMOUNT WAS RECEIVED AS LOAN. HE ALSO SUBMITTED A TELEGRAPHIC TRANSFER MESSAGE SENT BY THE BANKER OF SHRI SANJEEV KUMAR. THE TELEGRAPHIC MESSAGE CLEARLY INDICATED THE PURPOSE OF TRANSFER AS GIFT AND THE FIRC ISSUED BY PUNJAB NATIONAL BANK ALSO SHOWS THE PURPOSE OF TRANSFER AS GIFT. THE ASSESSEE WAS ASKED TO SUBMIT THE DETAILS OF LOAN/GIFT AS PER ORDER SHEET ENTRY DATED 26.09.2007, BUT THE APPELLANT COULD NOT SUBMIT ANY DETAILS. THEREFORE, THE AO ADDED THE ABOVE AMOUNT OF RS.9,09,965/ - U/S. 56(2)(V) OF THE ACT TO THE INCOME OF THE ASSESSEE. 5. ON FURTHER SCRUTINY, THE AO FOUND THAT THERE IS NO WITHDRAWAL FROM THE BANK ACCOUNT TOWARDS DAY - TO - DAY EXPENSES LIKE TELEPHONE, ELECTRICITY, CAR EXPENSES. THE ASSESSEE WAS ASKED TO JUSTIFY THEIR RUNNING EXPENSES AS TO HOW IT IS MET OUT. THE ASSESSEE REPLIED THAT HIS WIFE IS RESIDING AT MOSCOW (RUSSIA) AND EMPLOYED THERE AND HIS FATHER IS A REPUTED ADVOCATE AT BIKANER. THE ASSESSEE OBSERVED FROM THE SUBMISSIONS OF THE ASSESSEE THAT ALL ARE RESIDING SEPARATELY AT D I FFERENT PLACES AND THE ASSESSEE COULD NOT SUBSTANTIATE THE RECEIPT OF ANY MONEY FROM HIS FATHER AND HIS WIFE. THEREFORE, THE AO ASSUMED ITA NO. 1631/DEL./2013 5 THAT RS.10,000/ - PER MONTH WILL BE SUFFICIENT TO MEET OUT THE PERSONAL EXPENSES AND ACCORDING ADDED RS.1,20,000/ - AS P ERSONAL DRAWING EXPENSES. 6. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE APPEALED BEFORE THE FIRST APPELLATE AUTHORITY AND SUBMITTED ADDITIONAL EVIDENCE BEFORE HIM WHICH WERE SENT FOR COMMENTS OF THE AO WHO VEHEMENTLY OBJECTED FOR ADMISSION OF ADDITION AL EVIDENCE BECAUSE THE ASSESSEE WAS GRANTED AMPLE OPPORTUNITY FOR COMPLYING WITH THE NOTICES. THE AO SUBMITTED HIS REMAND REPORT AND HE COMMENTED ON MERITS ALSO BY HIS LETTER DATED 03.08.2011. THE SUBMISSION OF THE ASSESSING OFFICER WAS MADE AVAILABLE TO THE ASSESSEE ON 18.10.2011. EVEN AT THE APPELLATE STAGE, THE APPELLANT WAS GRANTED REASONABLE OPPORTUNITY BUT HE DID NOT REPEL THE CONTENTIONS OF THE AO. RATHER HE DID NOT FURNISH ANY REPLY. THE CIT(A) AFTER CONSIDERING THE COMMENTS OF THE AO AND THE SUBMI SSIONS OF THE ASSESSEE ACCEPTED THE ADDITIONAL EVIDENCE U/R. 46A AND UPHELD THE ACTION OF THE ASSESSING OFFICER. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 7. THE LEARNED AR OF THE ASSESSEE SUBMITTED IN RESPECT OF GROUND NO. 1 THAT SANJEEV KUMAR HAD SENT MONEY TO THE ASSESSEE AS GIFT. HE WAS RESIDING ABROAD AND HAD SUFFICIENT SOURCE OF INCOME. HE HAD SUBMITTED HIS AFFIDAVIT, WHICH WAS ITA NO. 1631/DEL./2013 6 DRAFTED AT MOSCOW ON 24.01.2011 BEFORE THE APPROPRIATE AUTHORITY OF MOSCOW (RUS SIA) IN WHICH HE HAS SPECIFICALLY REITERATED THAT THE EARLIER CONFIRMATION WAS SENT FOR LOAN WHEREAS IT WAS A GIFT. HE REFERRED TO SECTION 56(2)(V), WHICH IS NOT APPLICABLE TO THE PRESENT CASE BECAUSE THE AMOUNT WAS SENT THROUGH TELEGRAPHIC TRANSFER BY RE FERENCE NO. 040810005179 DATED 10.08.2004. AS PER AFFIDAVIT OF SANJEEV KUMAR, THEY ARE KNOWN TO EACH OTHER. THERE IS NO ANY RESTRICTION TO MAKE GIFT TO ANYBODY. IN SUPPORT , THE LD. AR HAS PLACED RELIANCE ON THE JUDGMENT OF KERALA HIGH COURT IN THE CASE OF AJ GOMES VS. CGT, 187 ITR 320. 8. IN RESPECT OF GROUND NO. 2, THE LD. AR SUBMITTED THAT SHRI SUARABH DIXIT, THE BROTHER OF THE APPELLANT WAS DOING PART TIME JOB AT AUSTRALIA AND REMITTED MONEY OUT OF HIS SALARY RECEIVED. THE EXPENSES OF SAURABH DIXIT AR E BORNE BY HIS FATHER WHO IS A REPUTED ADVOCATE. HIS BROTHER HAS SUBMITTED AFFIDAVIT WHICH IS ON PAPER BOOK PAGE - 5 IN WHICH HE SPECIFICALLY DECLARED THAT IT WAS NOT POSSIBLE TO APPEAR BEFORE THE ASSESSING OFFICER ON A PARTICULAR DATE DUE TO HIS EMPLOYMENT. THEREFORE, THE ALLEGATION MADE BY THE ASSESSING OFFICER AS TO HIS CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION IS NOT JUSTIFIED. ITA NO. 1631/DEL./2013 7 9. THE LD. AR FURTHER SUBMITTED THAT THE APPELLANT BELONGS TO A REPUTED FAMILY AND HIS WIFE IS EMPLOYED ABROAD AND REC EIVING SALARY PER MONTH AND HIS FATHER IS A REPUTED ADVOCATE. HIS FATHER AND WIFE BOTH ARE GIVING FINANCIAL HELP TO THE APPELLANT, AS THE APPELLANT IS LIVING ALONE AT DELHI. HE FURTHER SUBMITTED THAT RS.70,000/ - WAS DEPOSITED BY APPELLANT OUT OF HIS PAST S AVINGS. HE HAS EARNED RS.15000/ - WHICH HAS BEEN OFFERED TO TAX UNDER THE HEAD INCOME FROM OTHER SOURCES. 10. ON THE OTHER HAND, THE LD. DR RELIED ON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE MONEY WAS RECEIVED IN INDIA ON 14.09.2004 AND THEREFORE, THE PROVISIONS OF SECTION 56(2)(V) ARE SQUARELY APPLICABLE IN RESPECT OF THE GIFT RECEIVED FROM SHRI SANJEEV KUMAR. THE LD. DR ALSO SUBMITTED THAT THERE WAS DOUBT ON THE CREDITWORTHINESS OF THE PERSON GIVING THE GIFT/LOAN. SHRI SAURABH DIXIT, BR OTHER OF THE ASSESSEE WHO MADE GIFT OF RS.3,09,533/ - WAS A STUDENT AND WAS DOING PART TIME JOB IS ALSO NOT ACCEPTABLE BECAUSE AS PER PASSPORT OF SAURABH DIXIT, HE WAS ON STUDENT VISA AND THEREFORE PART TIME JOB IS NOT ACCEPTABLE. THE APPELLANT DID NOT PROV E CREDITWORTHINESS OF SAURABH DIXT. EVEN HE DID NOT SUBMIT HIS BANK STATEMENT. THE LD. DR ALSO SUBMITTED THAT THERE IS NO ANY PROOF FOR GIVING FINANCIAL HELP BY HIS FATHER AND HIS WIFE. IN RESPECT OF RS.70,000/ - DEPOSITED BY APPELLANT, ITA NO. 1631/DEL./2013 8 THERE IS NO CREDIBLE EVIDENCE PRODUCED BY THE APPELLANT BEFORE THE LOWER AUTHORITIES. 11. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL AVAILABLE ON RECORD, WE FIND THAT THE APPELLANT HAD RECEIVED THE ALLEGED GIFT FROM NRI SHRI SANJEEV KUMAR WHO SENT MONEY WHICH HAS BEEN RECEIVED ON 14.09.2004. PUNJAB NATIONAL BANK HAS ISSUED A CERTIFICATE OF FOREIGN INWARD REMITTANCE WHERE IN PARA (A), THERE IS SPECIFIC MENTION OF MONEY RECEIVED ON 14.09.2004 FOR THE PURPOSE OF GIFT. SECTION 56(2)(V) IS APPLICABLE FROM 01.09.2004 . FOR THE SAKE OF CONVENIENCE WE REPRODUCE SECTION 56(2)(V) AS UNDER : 56. (1) (2) IN PARTICULAR, AND WITHOUT PREJUDICE TO THE GENERALITY OF THE PROVISIONS OF SUB - SECTION (1), THE FOLLOWING INCOMES, SHALL BE CHARGEABLE TO INCOME - TAX UNDER THE HEA D 'INCOME FROM OTHER SOURCES', NAMELY : .. .. (V) WHERE ANY SUM OF MONEY EXCEEDING TWENTY - FIVE THOUSAND RUPEES IS RECEIVED WITHOUT CONSIDERATION BY AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY FROM ANY PERSON ON OR AFTER THE 1ST DAY OF SEPTEMBER, 2004 BUT BEFORE THE 1ST DAY OF APRIL, 2006, THE WHOLE OF SUCH SUM: IT IS CLEAR FROM THE ABOVE SECTION THAT THE LOWER AUTHORITIES HAVE APPLIED SECTION 56(2)(V) CORRECTLY. EARLIER, SHRI SANJEEV KUMAR HAD SUBMITTED A CONFIRMATION IN WHICH HE STATED THAT HE HAS GIVEN A LOAN , BUT HE HAS SUBMITTED ITA NO. 1631/DEL./2013 9 AN AFFIDAVIT DATED 24.01.2011 WHICH HAS BEEN NOTARIZED AT MOSCOW, RUSSIA IN WHICH HE HAS STATED IN PARA 7 AS UNDER : (7). THAT I HAD SENT A CONFIRMATION IN WHICH IT WASINADV3RTENTLY STATED THE ABOVE AMOUNT WAS LOAN GIVEN TO MR. NAVEEN KUMAR DIXIT. I WISH TO REITERATE THAT THE AFORESAID AMOUNT SENT WAS A GIFT. IT IS ALSO STATED THAT HE IS EARNING 2000 USD. THEREFORE, GROUND NO. 2 IS DISALLOWED. 12. IN RESPECT OF GROUND NO. 3, THE APPELLANT HAD SUBMITTED THAT HE HAD RECE IVED THE MONEY FROM HIS BROTHER SAURABH DIXIT . IT IS NOTABLE THAT THE ASSESSEE HAS TAKEN TWO CONTRADICTORY STANDS BEFORE BOTH THE AUTHORITIES BELOW INASMUCH AS BEFORE AO THE IMPUGNED AMOUNT WAS CLAIMED AS LOAN WHILE IN APPEAL PROCEEDINGS BEFORE CIT(A) HE S TATED IT TO BE A GIFT. THE BROTHER OF ASSESSEE WAS STUDENT AT THE TIME OF MAKING A GIFT OF RS.3,09,533/ - AND WAS STUDYING IN AUSTRALIA ON STUDENT VISA . THE APPELLANT COULD NOT SUBMIT ANY CREDIBLE EVIDENCE FOR SUPPORTING HIS CLAIM OF GIFT RECEIVED FROM HIS BROTHER. MERELY SUBMISSION OF AFFIDAVIT FROM SAURABH DIXIT EXPRESSING HIS UNWILLINGNESS TO APPEAR BEFORE THE ASSESSING OFFICER, IS NOT ACCEPTABLE PARTICULARLY WHEN THERE IS NO EVIDENCE TO JUSTIFY THAT SHRI SAURABH DIXIT WAS EARNING MONEY OR DOING PART TIME JOB OUTSIDE INDIA ON STUDENT VISA . THE IMPUGNED ORDER SHOWS THAT DURING THE REMAND PROCEEDINGS, THE ALLEGED DONOR ITA NO. 1631/DEL./2013 10 WAS PRODUCED, BUT NO EVIDENCE TO PROVE HIS CREDITWORTHINESS OR GENUINENESS OF TRANSACTION WAS FILED BY SHRI SAURABH DIXIT. NO EVIDENCE WAS M ADE AVAILABLE TO JUSTIFY HIS PART TIME JOB AT AUSTRALIA NOR WAS THERE ANY BANK STATEMENT FILED BEFORE THE AO. THEREFORE, HIS CREDITWORTHINESS HAS BEEN RIGHTLY DOUBTED. THEREFORE, GROUND NO. 3 IS DISALLOWED. 13. IN RESPECT OF GROUND NO. 4 & 5, THE ASSESSI NG OFFICER MADE ADDITION ON ACCOUNT OF LOW WITHDRAWALS AND RS.70,000/ - DEPOSITED IN THE BANK. THE APPELLANT WAS A DIRECTOR IN M/S. CALLINA CARE OVERSEAS PVT. LTD. SINCE 01.04.2000. HIS FATHER IS A REPUTED ADVOCATE AT BIKANER AND HIS WIFE IS ALSO EMPLOYED A BROAD. HE IS LIVING ALONE, BUT THE ASSESSING OFFICER HAS ADDED RS.10,000/ - PER MONTH FOR LOW HOUSEHOLD WITHDRAWALS AND DOUBTED THE DEPOSIT OF RS.70,000/ - INTO HIS BANK BUT THE LD. AO HAS NO ANY CREDIBLE EVIDENCE. HE HAS ADDED THE ABOVE AMOUNT ONLY ON PRESU MPTION, WHICH IS NOT TENABLE IN LAW. THEREFORE, GROUND NO. 4 & 5 ARE ALLOWED. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16.12.2016 . SD/ - SD/ - ( BEENA PILLAI ) (L.P. SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 16.12.2016 *AKS/ -