Sh. Yashodanandan Aggarwal, Haldwani V. ACIT, Uttrakhand

ITA 1650/DEL/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6251 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 11 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 16-02-2016
• Assessment Year: 2003-2004
• Appeal Filed On: 09-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMIT MOHAN GOVIL
• Assessee Lawyers: VIDUR PURI
• Keywords: Gift; Income from undisclosed sources; Opportunity of being heard; Additional evidence
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: H NEW DELHI BEFORE SHRI H. S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER I.T.A. NO. 1650/DEL/2012 ASSESSMENT YEAR: 2003-04 SH. YASHODANANDAN AGGARWAL, VS. ACIT, HALDWANI SADAR BAZAR, UTTRANCHAL HALDWANI, UTTRANCHAL (PAN: ACKPA0577C) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VIDUR PURI, CA REVENUE BY : SHRI AMIT MOHAN GOVIL, CIT(DR) DATE OF HEARING ON : 16/02/2016 ORDER PRONOUNCED ON : 30/3/201 6 ORDER PER H.S. SIDHU, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER DATED 16.12.2011 PASSED BY THE LD. CIT(A)-II, DEHRADUN RELATING TO A SSESSMENT YEAR 2003-04 ON THE FOLLOWING GROUND:- LD. CIT(A) ERRED IN FACT AND IN CONFIRMING THE P ENALTY OF RS. 4,75,000/- WHICH IS NOT ONLY BAD IN LAW BUT ALSO AG AINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE HA S FILED HIS RETURN OF INCOME ON 28.11.2003 DECLARING TOTAL INCOME OF RS.2,18,783 /-. THE ASSESSEE IS AN INDIVIDUAL RUNS PROPRIETORSHIP FIRM IN THE NAME OF YASHODANANDAN NAVAL ITA NO. 1650/DEL/2012 (AY 2003-04) 2 KISHORE AND ENGAGED IN THE BUSINESS OF WHOLESALE TR ADING OF FOOD GRAINS AND TRUCK PLYING HAVING OFFICE AT SADAR BAZAR, HALDWANI , DISTT. NAINITAL. DURING THE YEAR, ASSESSEE HAS CLAIMED TO HAVE RECEIVED THREE G IFTS OF RS.5 LACS EACH FROM THREE PERSONS. THE ASSESSING OFFICER HAS INVESTIGAT ED THE ISSUE AND MADE THE ADDITION OF RS. 15 LACS TO THE INCOME OF THE ASSESS EE AS INCOME FROM UNDISCLOSED SOURCE AND COMPLETED THE ASSESSMENT U/S . 143(3) OF THE I.T. ACT, 1961 ON 30.3.2006. AGGRIEVED WITH THE ASSESSMENT ORDER DATED 30.3.2006, ASSESSEE FILED THE APPEAL BEFORE THE LD. CIT(A) WHO HAS REJECTED THE APPEAL OF THE ASSESSEE BY GIVING THE FINDING VIDE PARA NO. 6. 7 WHICH IS REPRODUCED AS UNDER:- 6.7 I HAVE CONSIDERED THE ABOVE SUBMISSIONS OF THE COUNSEL OF THE APPELLANT AND THE FACTS ELABORATELY STATED IN THE A SSESSMENT BY THE AO. IT IS OBSERVED THAT THE APPELLANT HAS CLAIMED T O HAVE RECEIVED GIFTS OF RS.5 LAKHS EACH, FROM SHRI SHIV KUMAR AGAR WAL, SHRI HARI LAL GUPTA AND SHRI RAM DEV AGARWAL ALL HAVING THEIR RESIDENTIAL ADDRESSES AT KOLKATA WHICH HAVE BEEN MENTIONED IN T HE ASSESSMENT ORDER. THE AO HAS ISSUED LETTERS TO THE DECLARED AD DRESSES OF THE DONORS AND SUCH LETTERS IN THE CASE OF TWO DONORS C AME BACK UNSERVED AND IN THE CASE OF THE THIRD DONOR EVEN TH OUGH THE LETTER WAS NOT UNSERVED, NO REPLY CAME FROM SUCH DONOR. TH E AO HAS ANALYZED FROM THE INCOME TAX RETURNS OF THE DONORS THAT THEY HAD MEAGRE INCOME AND THEY WERE NOT IN A POSITION TO MA KE SUCH SUBSTANTIAL AMOUNT OF GIFTS OUT OF THEIR OWN SOURCE S. IN REALITY, THE DONORS HAVE RECEIVED GIFTS FOR THE PURPOSE OF MAKIN G GIFTS WHICH INDICATE THAT THE GIFTS WERE ACTUALLY ORGANIZED OUT OF THE OWN FUNDS OF THE APPELLANT OR HIS ACCORI1PLISHES. INCIDENTALL Y, THE AO HAS ITA NO. 1650/DEL/2012 (AY 2003-04) 3 POINTED OUT THAT DRAFTS FOR GIFTS BY TWO SEPARATE P ERSONS WERE FOUND TO BE MADE FROM THE SAME BANK BRANCH BEARING CONSEQ UENT NUMBERS WHICH CAST REASONABLE DOUBT ABOUT THE GENUI NENESS OF SUCH DONORS TO BE IN A POSITION TO MAKE SUCH GIFTS TO THE APPELLANT. THE SURROUNDING CIRCUMSTANCES WHICH HAVE BEEN PLACE D ON RECORD DO NOT FIT INTO PROBABILITIES OF THE ACTUAL TRANSAC TION OF THE IMPUGNED GIFTS FUND SO I AM IN AGREEMENT WITH THE A CTION OF THE AO IN TREATING SUCH AGGREGATE GIFTED AMOUNT OF RS.15 L AKHS AS INCOME FROM UNDISCLOSED SOURCES AND NO INTERFERENCE IS CAL LED FOR IN THIS RESPECT. HENCE GROUND NOS. (II), (III) AND (IV) ARE REJECTED. 3. AGAINST THE ORDER OF THE LD. CIT(A), THE ASSESSE E FILED THE APPEAL BEFORE THE TRIBUNAL VIDE ITA NO. 21/DEL/2009. THE TRIBUNA L VIDE ITS ORDER DATED 27.8.2013 REMANDED THE MATTER TO THE FILE OF THE LD . CIT(A) TO DECIDE THE ISSUE DENOVO BY GIVING THE FOLLOWING DIRECTIONS:- 6. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE. WE H AVE ALSO PERUSED THE ORDERS OF THE AUTHORITIES BELOW. AFTER HEARING BOTH THE SIDES, WE ARE OF THE VIEW THAT CIT (A) SHOULD HAVE ADMITTED THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE. ASSESSE E SUBMITTED RECONFIRMATION FROM THE DONORS AS ADDITIONAL EVIDEN CE. CIT (A) NEITHER RECORDED REASONS FOR REJECTION OF ADDITIONA L EVIDENCE NOR REMAND REPORT WAS CALLED FOR FROM THE ASSESSING OFF ICER. IN OUR CONSIDERED VIEW, CIT (A) COULD HAVE BEEN FORWARDED THESE ADDITIONAL EVIDENCES FOR VERIFICATION TO THE ASSESS ING OFFICER FOR CALLING HIS VIEW IN THE REMAND REPORT. THE CIT (A) HAS ALSO NOT DISMISSED THE ASSESSEES APPLICATION FILED UNDER RU LE 46A OF THE INCOME-TAX RULES, 1962 WITH A SPEAKING ORDER. THERE FORE, IN THE INTEREST OF JUSTICE AND EQUITY, WE FIND IT APPROPRI ATE TO REMAND THE ITA NO. 1650/DEL/2012 (AY 2003-04) 4 MATTER TO THE FILE OF THE CIT (A) TO DECIDE THE ISS UE DE NOVO, AFTER PROVIDING AN OPPORTUNITY OF BEING HEARD. WE ORDER A CCORDINGLY. 4. IN COMPLIANCE OF THE AFORESAID ORDER DATED 27.8. 2013 THE LD. CIT(A) ADMITTED THE ADDITIONAL EVIDENCE, AFTER SEEKING THE REMAND REPORT FROM THE AO AND FINALLY DELETED THE ADDITION OF RS. 15 LACS VIDE HIS ORDER DATED 20.3.2015. IN THE MEANTIME AO VIDE ORDER DATED 30. 3.2010 PASSED THE PENALTY ORDER U/S. 271(1)(C) OF THE I.T. ACT AND IMPOSED TH E PENALTY OF RS. 4,75,000/- ON THE 3 GIFTS AMOUNTING TO RS. 15 LACS WHICH HE FOUN D THAT ASSESSEE COULD NOT PROVE THE IDENTITY AND CREDITWORTHINESS OF THE DONO RS AND ALSO THE EXISTENCE OF LOVE AND AFFECTION OR ANY SOCIAL OR FAMILIAL RELAT IONSHIP, AGAINST WHICH THE ASSESSEE FILED THE APPEAL BEFORE THE LD. CIT(A) WHO VIDE IMPUGNED ORDER DATED 16.12.2011 DISMISSED THE APPEAL OF THE ASSEES SEE AND AGGRIEVED WITH THE ORDER DATED 16.12.2011 THE ASSEESSEE HAS FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 5. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RELEVANT RECORDS SPECIALLY THE FACTS NARRATED BY US IN THE PRECEDING PARAGRAPH S, WE ARE OF THE VIEW THAT IN COMPLIANCE OF THE ORDER DATED 27.8.2013 PASSED BY T HE TRIBUNAL IN ITA NO. 21/DEL/2009 FOR THE ASSESSMENT YEAR IN DISPUTE IN T HE CASE OF THE ASSESSEE THE LD. CIT(A) HAS ADMITTED THE ADDITIONAL EVIDENCE AFT ER VERIFYING AND SEEKING REMAND REPORT FROM THE AO AND DELETED THE ADDITION OF RS. 15 LACS ON WHICH PENALTY IN DISPUTE HAS BEEN IMPOSED. THEREFORE, IN OUR CONSIDERED OPINION, PENALTY OF RS. 4,75,000/- IN THIS CASE IS NOT SUSTA INABLE IN THE EYES OF LAW, WHEN ITA NO. 1650/DEL/2012 (AY 2003-04) 5 THE ADDITION IN DISPUTE HAS ALREADY BEEN DELETED B Y THE LD. CIT(A). THEREFORE, WE DELETE THE PENALTY IN DISPUTE AND ALLOW THE APPE AL OF THE ASSESSEE ACCORDINGLY. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30/3/2016. SD/- SD/- [O.P. KANT] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 30/3/2016 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES