ITO, Ward - 2(4), Midnapore, Paschim Medinipur V. Shri Tarak Kumar Roy, Paschim Medinipur

ITA 1631/KOL/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70446 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 28-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V N PUROHIT
• Keywords: Gift; Source of fund
• Section: 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO. 1631 / KOL / 2011 ASSESSMENT YEAR :2005-06 INCOME TAX OFFICER, WARD-2(4), MIDNAPORE, KSHUDIRAM NAGAR PASCHIM MIDNAPORE V/S . SRI TARAK KUMAR ROY DEBRA BAZER, DEBRA, PASCHIM MIDNAPORE, PIN- 721126 [ PAN NO.ACWPR 0944 A ] / APPELLANT .. / RESPONDENT) /BY APPELLANT NONE /BY RESPONDENT SRI V.N.PUROHIT, A.R /DATE OF HEARING 26-12-2013 /DATE OF PRONOUNCEMENT 26-12-2013 / // / O R D E R PER SHAMIM YAHYA, ACCOUNTANT MEMBER:- THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-XXXVI, KOLKATA DATED 13-09-2011 AND PERTAINS TO ASSESSMENT YEAR 2005-06. 2. AT THE OUTSET, IT IS NOTED THAT LD. DR IN THIS C ASE HAS SOUGHT ADJOURNMENT FOR THE REASON THAT HE IS ON C.L. HOW EVER, WE ARE NOT INCLINED TO ACCEPT THE REVENUES ADJOURNMENT REQUEST AS NECESSA RY ALTERNATIVE ARRANGEMENT SHOULD HAVE BEEN DONE. ACCORDINGLY, WE REJECT THE SAME. ITA NO.1631/KOL/2011 A.Y 2005 -06 ITO WD-2(4) MID V. SH. TARAK KR. ROY PAGE 2 3. THE FIRST ISSUE RAISED IS THAT CIT(A) ERRED IN D ELETING THE ADDITION OF RS.5,21,150/- ON ACCOUNT OF LOAN CREDITORS. 4. IN THIS CASE, ASSESSEE ACCEPTED CASH LOANS FROM 29 PERSONS, BELOW RS.20,000/- EACH, TOTALING TO RS.5,58,940-. THE ASS ESSEE FILED LOAN CONFIRMATION OF THE LENDERS DURING THE ASSESSMENT P ROCEEDINGS. THE ASSESSING OFFICER ISSUED SUMMON U/S 131 OF THE ACT TO 12 LENDERS OUT OF WHICH ONE SUMMON (DIPESH ROY) CAME BACK UNSERVED. F ROM THE BALANCE 11 LENDERS, ONLY SHRI RANAJIT MAITY APPEARED BEFORE TH E AO AND DENIED TO HAVE GIVEN ANY LOAN TO THE ASSESSEE. ON THE BASIS OF STA TEMENT OF SHRI RANAJIT MAITY, THE AO HELD THE ENTIRE LOAN AS NON GENUINE A ND BOGUS. 5. BEFORE CIT(A) THE AR EXPLAINED THAT THE ASSESSEE AND HIS FATHER WERE IN THE BUSINESS OF BUYING AND SELLING OF PADDY AND THEY WERE HAVING GRINDING MACHINE ALSO. IN THE PROCESS, THE ASSESSEE BUILT UP CONNECTION WITH THE CULTIVATORS FROM WHOM SMALL CASH LOANS RANGING FROM RS.16,000/- TO 19,900/- WERE ACCEPTED. THE AR SUBMITTED THAT CONFIRMATIONS OF THE LENDERS WERE FILED WITH THE AO AND BARRING ONE, AOS SUMMON WAS DULY S ERVED ON OTHERS, PROVING GENUINE IDENTITY OF THE LENDERS. THE ASSESS EE ALSO FILED AFFIDAVIT OF 27 NUMBERS LENDERS CONFIRMING THE LOANS. THE CIT(A) SO UGHT REMAND REPORT FROM THE AO. 6. CONSIDERING THE ASSESSEES SUBMISSION AND THE AO S REMAND REPORT CIT(A) HELD THAT EXCEPTING SHRI RANJIT MAITY WHO DE NIED TO HAVE GIVEN LOAN OF RS.17,800/- TO THE ASSESSEE AND SHRI SUDARSHN MAITY (THE OTHER ONE) WHO HAS NOT CONFIRMED GIVING LOAN OF RS.19,900- TO THE ASSE SSEE, ALL OTHER LOANS CANNOT BE TREATED AS BOGUS AS HELD BY THE AO. LOAN RECEIVED FROM SHRI DINESH ROY CANNOT BE CONSIDERED BOGUS AS FATHERS N AME AND ADDRESS WAS SAME. FURTHER, AFFIRMATION OF SRI BITAN DE AND SHRI SHAKTI SEN THAT THEY DID NOT RECEIVE NOTICE IS NOT CONSIDERED AS RELEVANT ISSUE FOR TREATING THEIR LOANS AS NOT GENUINE, AS THEY HAVE OTHERWISE CONFIRMED THEIR RESPECTIVE LOANS. IN VIEW ITA NO.1631/KOL/2011 A.Y 2005 -06 ITO WD-2(4) MID V. SH. TARAK KR. ROY PAGE 3 OF SUCH ADDITION TO THE EXTENT OF RS.37,790/- (RS.1 7,890/- + RS.19,900/-) WAS UPHELD. AGAINST THE ABOVE ORDER REVENUE IS IN APPEA L BEFORE US. 7. WE HAVE HEARD LD. COUNSEL FOR THE ASSESSEE AND P ERUSED THE RECORDS. WE FIND THAT ASSESSEE HAS EXPLAINED BEFORE CIT(A) T HAT ASSESSEE HAS OBTAINED SMALL AMOUNT OF LOANS FROM CULTIVATORS. IN THIS REGARD CONFIRMATIONS WERE ALSO SUBMITTED. WHEREVER THERE WAS DISCREPANCY FOUND CIT(A) HAS SUSTAINED THE ADDITION. OTHER LOANS HAVE BEEN ACCEP TED BY THE CIT(A) AS GENUINE ON THE BASIS OF THE CONFIRMATION GIVEN BY T HE LENDERS. UNDER THE CIRCUMSTANCES, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A). ACCORDINGLY, WE CONFIRM THE SAME. 8. NEXT ISSUE RAISED IS THAT CIT(A) ERRED IN DELETI NG THE ADDITION OF RS.7,67,985/- ON ACCOUNT OF GIFT RECEIPT FROM ASSES SEES FATHER. 9. ON THIS ISSUE, THE ASSESSEE HAD RECEIVED A GIFT OF RS.7,67,,987/- FROM HIS FATHER. IN THIS REGARD, CONFIRMATION OF THE SAM E WAS ALSO SUBMITTED BEFORE THE ASSESSING OFFICER. HOWEVER, AO DID NOT ACCEPT T HE SAID CONFIRMATION ON THE GROUND THAT FATHER FAILED TO EXPLAIN THE SOURCE OF THE FUND. BEFORE CIT(A) THE AR EXPLAINED THAT SHRI RAMESH CH. ROY, FATHER O F THE ASSESSEE WAS ENGAGED IN SMALL BUSINESS AS WELL AS AGRICULTURAL A CTIVITIES FOR LAST MANY YEARS AND USED TO KEEP HIS SMALL SAVINGS IN THE FORM OF F IXED DEPOSIT WITH DIFFERENT BANKS, ALL OPENED IN THE NAME OF HIS SON I.E., ASSE SSEE. BESIDES, SHRI ROY ALSO HAD KEPT THE PROCEEDS FROM SALE OF HIS AGRICUL TURAL LAND IN THE FIXED DEPOSITS ALSO OPENED IN THE NAME OF THE ASSESSEE. S HRI ROY WAS AN INCOME TAX PAYEE AND FILED HIS LAST RETURN FOR THE A Y 200 4-05. SHRI ROY KEPT ON RENEWING THOSE FIXED DEPOSITS IN THE NAME OF THE AS SESSEE AND THE TOTAL BALANCE CAME AT RS.7,67,985/- INCLUSIVE OF INTEREST IN THE FINANCIAL YEAR 2004- 05. THE ASSESSEE DISCLOSED THE SAID FIXED DEPOSITS AS GIFT FROM HIS FATHER IN THE A.Y 2005-06 AS THOSE FIXED DEPOSITS WERE MAINTA INED IN THE NAME OF THE ASSESSEE AND PAID TAX ON ACCRUED INTEREST INCOME OF RS.50,242-.. CONSIDERING ITA NO.1631/KOL/2011 A.Y 2005 -06 ITO WD-2(4) MID V. SH. TARAK KR. ROY PAGE 4 THE ABOVE, CIT(A) ALSO OBTAINED THE REMAND REPORT F ROM THE AO AND CIT(A) OBSERVED THAT FATHER OF ASSESSEE HAS MADE A GIFT TO HIS SON BY WAY OF BANK FIXED DEPOSIT AND FILED CONFIRMATION LETTER AS WELL . THEREFORE CIT(A) HELD THAT IT CANNOT BE SAID THAT FATHER OF ASSESSEE IS A SAME LE NDER. UNDER THE CIRCUMSTANCES, CIT(A) DELETED THE ADDITION OF RS.7, 67,985-. AGAINST THE ABOVE ORDER, REVENUE IS IN APPEAL BEFOR E US. 10. WE HAVE HEARD LD. COUNSEL FOR THE ASSESSEE AND PERUSED THE RECORDS. WE FIND THAT IN THIS CASE, ASSESSEES FATHER HAS MA DE A GIFT TO HIS SON AND THE GIFT EMANATED OUT OF FIXED DEPOSIT MADE BY ASSESSEE S FATHER IN THE NAME OF ASSESSEE IN EARLIER PERIODS. IN THESE CIRCUMSTANCES , WE FIND THAT CIT(A) HAS CORRECTLY HELD THAT ASSESSEE HAS FURNISHED NECESSAR Y EVIDENCES REGARDING THE VERACITY OF THE SAID GIFT. THE CONFIRMATION IS THER E AS WELL AS THE DETAIL OF THE SOURCE OF FUNDS. IN ANY CASE, FIXED DEPOSIT MADE IN EARLIER PERIODS CANNOT BE ADDED AS INCOME OF THE ASSESSEE FOR THE CURRENT YEA R. UNDER THE CIRCUMSTANCES, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A). ACCORDINGLY, WE UPHOLD THE SAME. 11. IN THE RESULT, THIS APPEAL FILED BY THE REVENUE STA NDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 /12/2013 SD/- SD/- (MAHAVIR SINGH) (SHAMIM YAHYA) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP !- 26/12/2013 , , , , -, -, -, -, / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. 1 / CONCERNED CIT 4. 1- / CIT (A) ITA NO.1631/KOL/2011 A.Y 2005 -06 ITO WD-2(4) MID V. SH. TARAK KR. ROY PAGE 5 5. , , , / DR, ITAT, KOLKATA 6. 8 / GUARD FILE. BY ORDER/ , /TRUE COPY/ / ,