Sunil Kumar, Hansi V. ITO, Hisar

ITA 1661/DEL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3870 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 24-08-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 13-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SRUJANI MOHANTY
• Assessee Lawyers: S K JAIN
• Keywords: Gift; Peak credit; Capital receipt
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G NEW DELHI) BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI K.G. BANSAL, ACCOUNTANT MEMBER I.T.A. NO.1661/DEL/2010 ASSESSMENT YEAR : 2003-04 SUNIL KUMAR, PROP. M/S VS. INCOME TAX OFFICER, SHREE TIRUPATI BALAJI OIL WARD-4, MILLS, RAM SINGH COLONY, HISAR BHIWANI ROAD, HANSI (HARYANA) PAN NO.AIUPK 6867 F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.K. JAIN, ADVOCATE RESPONDENT BY : SHRI SRUJANI MOHANTY, SR. DR. ORDER PER K.G. BANSAL, AM: THIS MATTER HAS COME UP BEFORE THE TRIBUNAL FOR THE SECON D TIME. THE TRIBUNAL HAD PASSED THE FIRST ORDER ON 11.04.2008, IN WHICH IT WAS INTER ALIA MENTIONED THAT THE ASSESSEE HAS BEEN UNABLE TO PROVE CREDITWOR THINESS OF THE DONORS AND GENUINENESS OF THE GIFTS RECEIVED BY THE ASSESSEE. IN THE LIGHT OF THE ALTERNATE PLEA OF THE ASSESSEE, IT WAS FURTHER MENTIONED THAT .THE CLAIM REGARDING ADDITION OF PEAK CREDIT SEEMS REASONABLE. THEREFORE, THE MAT TER WAS RESTORED TO THE FILE OF THE ASSESSING OFFICER TO QUANTIFY THE PEAK CRED IT AND BRING IT TO TAX IN PLACE OF THE TOTAL OF ALL THE CREDITS. FOR THE SAKE OF R EADY REFERENCE, THE RELEVANT PORTION OF THE ORDER OF THE TRIBUNAL IS REPRODUCED BELOW: - 2 IT IS TO BE UNDERSTOOD HERE THAT THE LOANS HAVING NOT B EEN VERIFIED DURING THE RELEVANT ASSESSMENT YEARS CANNOT BE SAID THAT T HE LOANS HAVE BEEN ACCEPTED AS GENUINE. IT CAN ONLY BE PRESUMED TO BE GENUINE, IN THE ABSENCE OF VERIFICATION. THE VERIFICATION ACTUALLY TOOK PLACE WHEN THE GIFTS WERE RECEIVED AND THE EVIDENCES ON RECORD DO NOT PROVE THE GENUINENESS OF THE GIFT. IN THE CIRCUMSTAN CES, WE ARE OF THE VIEW THAT THE ASSESSEE HAS BEEN UNABLE TO PROVE THE CREDITWORTHINESS AND GENUINENESS OF THE GIFT RECEIVED BY TH E ASSESSEE. CONSEQUENTLY, THE ACTION OF THE ASSESSING OFFICER IN INVO KING THE PROVISIONS OF SECTION 68 AND BRING TO TAX THE GIFTS R ECEIVED BY THE ASSESSEE AND THE ACTION OF THE LEARNED CIT(A) IN CONFIRMIN G THE ADDITIONS IS ON SOUND FOOTING AND NEED NO DISTURBANCE. THIS ISSUE IS HELD AGAINST THE ASSESSEE. THE ALTERNATE PLEA OF THE ASSESSEE THAT THE ONLY PEAK CREDITS IS LIABLE TO BE ADDED SEEMS REASONABLE. B UT THE SAME HAS NOT BEEN CONSIDERED BY THE LOWER AUTHORITIES AND / THE ALTERNATE PLEA THAT ONLY THE PEAK CREDITS IS LIABLE TO BE A DDED AND NOT THE TOTAL CREDIT IS SEND BACK TO THE ASSESSING OFFICER TO VERIFY THE PEAK CREDITS AND BRINGING TO TAX ONLY SUCH PEAK CREDIT AND NOT THE TOTAL CREDITS IN REGARD TO THE GIFTS RECEIVED BY THE ASSESSEE FROM SHRI BHARAT BHUSHAN AND SMT. ANITA RAM. 2. IN CONSEQUENCE OF THE AFORESAID DIRECTION OF THE TRIBUN AL, THE ASSESSING OFFICER WORKED OUT THE PEAK AT `8,90,000/- AS UNDER:- AS PER INFORMATION AVAILABLE WITH THIS OFFICE, THE ASS ESSEE RECEIVED GIFTS OF `8,90,000/-. IN THE CAPITAL ACCOUNT, THE OP ENING CAPITAL WAS `2,42,018/- AND AFTER CONSIDERING THE PROFIT OF THE YEA R UNDER CONSIDERATION OF `11,760/-, THE CLOSING CAPITAL BALAN CE OF THE ASSESSEE WAS `11,24,279/- AFTER DRAWING OF `19,500/-. THUS, THE PEAK IS LIABLE TO BE ADDED AS A WHOLE, BEING THE GIFTS RECEI VED OF `8,90,000/- IS THE CAPITAL RECEIPT. 2.1 THE MATTER WAS AGITATED BEFORE THE LEARNED CIT(A), WHO WORKED OUT /THE PEAK AT `4,33,483/- BY CONSIDERING ALL THE CREDITS IN THE BANK ACCOUNT. HIS FINDINGS ARE AS UNDER:- 3 (II) IN VIEW OF THE FACTS NOTED ABOVE AT (I) THE UNDERSI GNED HAS NO ALTERNATIVE IN WORKING OUT THE PEAK CREDIT ON THE BASIS OF WHAT EVER INFORMATION HAS BEEN SUPPLIED BY THE APPELLANT. PEAK CRED IT IS THE HIGHEST AMOUNT ON A PARTICULAR DATE DURING THE PREVIOUS YEAR LYING AS BALANCE. A PERUSAL OF THE COPY OF BANK STATEMENT FOR TH E PERIOD FROM 25.05.2002 TO 08.02.2003 SHOWS THAT THE APPELLANT WA S HAVING PEAK CREDIT OF `4,33,483/- AS ON 26.06.2002. AS PER T HE DIRECTIONS OF THE HONBLE ITAT, THE INCOME OF THE APPELLANT IS ASSES SABLE AT `4,33,483/-. THE SAME IS ACCORDINGLY ASSESSED AT `4,3 3,483/- AS AGAINST `8,90,000/- ASSESSED BY THE ASSESSING OFFICER. 3. THE LIMITED ARGUMENT MADE BY THE LEARNED COUNSEL IS THAT THE TRIBUNAL HAD DIRECTED THE ASSESSING OFFICER TO ADD THE PEAK OF THE CREDI TS IN RESPECT OF THE GIFTS ONLY, AND NOT THE PEAK OF ALL THE CREDITS IN THE BANK A CCOUNT. SUCH PEAK WORKS OUT TO `1.50 LACS ONLY. A COPY OF THE WORKING FURNISHED TO THE LEARNED CIT(A) HAS BEEN PLACED IN THE PAPER BOOK ON PAGE 28, WHICH READS AS UNDER :- 16.12.2002 1,40,000 21.12.2002 1,75,000 35,000 24.12.2002 2,00,000 28.12.2002 2,40,000 40,000 30.12.2002 80,000 30.12.2002 1,60,000 03.01.2003 2,75,000 35,000 05.02.2003 1,60,000 07.02.2003 2,00,000 40,000 TOTAL: - 7,40 ,000 8,90,000 1,50,000 3.1 THEREFORE, IT IS ARGUED THAT THE ADDITION MAY BE REDUC ED TO `1.50 LACS. 4 3.2 IN REPLY, THE LEARNED DR SUBMITTED THAT THE THEORY OF PEAK DOES NOT APPLY IN RELATION TO GIFTS FOR THE REASONS THAT ALL THE AMOUNTS INVOLVED IN THE GIFT HAVE BEEN CREDITED TO THE BANK ACCOUNT. 4. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSION S MADE BEFORE US. AS MENTIONED EARLIER, THIS APPEAL HAS COME UP IN RELATION TO AN ASSESSMENT, WHICH WAS MADE AS A CONSEQUENCE OF THE ORDER OF THE TRIBUNAL. I N THE ORDER IT IS CLEARLY MENTIONED THAT ONLY PEAK CREDIT IS LIABLE TO BE ADDED AN D NOT THE TOTAL CREDIT. THE LD. COUNSEL HAS NOW FURNISHED THE WORKING OF THE PEAK. HOWEVER, THE WORKING HAS NOT BEEN CONSIDERED BY THE LOWER AUTHORITIES. THEREFORE, TH E MATTER IS SENT BACK TO THE ASSESSING OFFICER TO VERIFY THE PEAK CREDIT AND BRING TO TAX ONLY THE PEAK AND NOT THE TOTAL CREDIT IN RESPECT OF THE GIFTS RECEIVED BY THE A SSESSEE FROM SHRI BHARAT BHUSHAN AND SMT. ANITA RANI. WE MAY MENTION THAT AT PRESENT, WE ARE NOT SITTING IN APPEAL OVER THE DECISION OF THE TRIBUNAL. IF REVENUE HAS A NY GRIEVANCE IN THIS MATTER, IT CAN APPROACH THE HONBLE HIGH COURT. WHAT WE ARE DEALING WITH IS THE ORDER OF THE ASSESSING OFFICER AND THE LEARNED CIT(A) GI VING EFFECT TO THE ORDER OF THE TRIBUNAL. THE LEARNED CIT(A) HAS ADDED THE PEAK OF AL L THE CREDITS IN THE BANK ACCOUNT AS AGAINST THE PEAK OF THE CREDITS BY WAY OF GI FTS. THEREFORE, WE ARE NOT ABLE TO ACCEPT THE SUBMISSION OF THE LEARNED DR. AS MENTI ONED EARLIER, THE PEAK WORKED OUT BY THE ASSESSEE AT `1.50 LACS HAS NOT BEEN VERIF IED BY THE ASSESSING OFFICER OR THE LEARNED CIT(A). THEREFORE, WE REMIT THE MATTER TO THE ASSESSING OFFICER FOR THE LIMITED PURPOSE OF VERIFYING THE PEAK OF T HE CREDIT IN RESPECT OF GIFTS AND BRING SUCH PEAK TO TAX. 5. IN RESULT, THE APPEAL IS TREATED AS ALLOWED FOR STAT ISTICAL PURPOSES AS DISCUSSED ABOVE. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT ON 27.05.20 11. 5 SD/- SD/- ( RAJPAL YADAV ) ( K.G. BANSAL ) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 27.05.2011. NS COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. TRUE COPY. BY ORDER (ITAT, NEW DELHI).