Satish Kumar Jain & Sons (HUF), New Delhi V. ITO, New Delhi

ITA 1666/DEL/2009

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2670 (ITAT-DELHI)
• Duration Of Justice: 8 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 30-05-2017
• Assessment Year: 2004-2005
• Appeal Filed On: 23-04-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Assessee Lawyers: V K TULSIAN
• Keywords: Reopening of assessment; Gift
• Section: 68

Judgement Text

IN THE INCOME - TAX APPELLATE TRIBUNAL, DELHI BENCH G , NEW DELHI BEFORE : SHRI BHAVNESH SAINI , JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 1666/DEL./2009 ASSESSMENT YEAR: 2004 - 05 SATISH KUMAR JAIN & SONS (HUF) 2217, GALI HUNUMAN PRASAD, MASJID KHAJOOR, NEW DELHI PAN AALHS4491L (APPELLANT) VS. INCOME - TAX OFFICER, WARD 29(2), NEW DELHI. (RESPONDENT) APPELLANT BY SH. V.K. TULSIAN, ADVOCATE RESPONDENT BY SH. S.S. RANA, CIT/DR ORDER PER L.P. SAHU, A.M.: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 27.02.2009 OF LD. CIT(A) - XXV, NEW DELHI FOR THE ASSESSMENT YEAR 2009 - 10 ON THE FOLLOWING GROUND : 1. THAT THE LD. CIT(A) - XXV, NEW DELHI ERRED IN LAW AND ON FACTS IN UPHOLDING THE ADDITION OF RS.5,51,000/ - U/S. 68 OF THE ACT WHICH REPRESENTED GIFT RECEIVED BY THE APPELLANT AND ALSO THE ADDITION OF RS.27,550/ - ALLEGED TO BE PAID AS COMMISSION THEREON M4RELY ON SURMISES AND CONJECTURES AND WITHOUT BRINGING ANYTHING CONCRETE AGAINST THE APPELLANT ON RECORD REJECTING THEREBY THE EXPLANATION OF THE APPELLANT OTHERWISE REASONABLE AND PLAUSIBLE AND SUPPORTED BY EXTERNAL AND INDEPENDENT EVIDENCES. DATE OF HEARING 06.07.2017 DATE OF PRONOUNCEMENT 31 .07.2017 ITA NO. 1666/DEL./2009 2 2. THE APPELLANT HAS ALSO RAISED AN ADDITIONAL GROUND WHICH READS AS UNDER : - WHETHER THE LD. AO WAS JUSTIFIED IN INVOKING SEC. 147/148 JUST ON THE BASIS OF INCOMPLETE INFORMATION EVEN WITHOUT FULFILLING THE CONDITIONS ATTACHED, WHICH IS NEITHER REFLECTED IN ORDER NOR THE ADDITIONS BASED TH EREUPON, FOR MAKING ROVING ENQUIRIES, INSTEAD OF DEFINITE INFORMATION. 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE FILED ITS RETURN OF INCOME ON 10.09.2004 DECLARING INCOME OF RS.1,79,394/ - , WHICH WAS PROCESSED U/S. 143(1) AND THE ASSESSEE WAS GRANT ED REFUND OF RS.6,784/ - INCLUDING INTEREST, AS CLAIMED. SUBSEQUENTLY, ON THE BASIS OF INFORMATION RECEIVED BY THE AO THAT THE APPELLANT HAD RECEIVED A CHEQUE OF RS.5,51,000/ - AS GIFT FROM ONE SHRI NIRAJ JAIN AFTER PAYMENT OF COMMISSION @ 5%, THE CASE OF TH E ASSESSEE WAS REOPENED U/S. 148/147 OF THE ACT AFTER RECORDING REASONS. THE IMPUGNED CHEQUE WAS DEPOSITED BY APPELLANT IN ITS BANK ACCOUNT MAINTAINED WITH DENA BANK, CHAWRI BAZAR ON 24.07.2003. STATUTORY NOTICE WAS SERVED ON THE ASSESSEE TO EXPLAIN THE NA TURE AND SOURCE OF THE AMOUNT DEPOSITED IN THE BANK. IN REPLY, IT WAS STATED ON BEHALF OF THE ASSESSEE THAT THE IMPUGNED AMOUNT REPRESENTED A GIFT RECEIVED BY ASSESSEE FROM SHRI NIRAJ JAIN, 105, ANAND MARKET, KATRA SUBHASH, CHANDANI CHOWK, DELHI AND IN SUP PORT, THE ASSESSEE FILED BANK STATEMENT, PAN, GIFT LETTER, ACKNOWLEDGEMENT OF RETURN FILED BY THE DONOR FOR A.Y. 2002 - 03, COPY OF ITA NO. 1666/DEL./2009 3 RATION CARD OF THE DONOR ETC. THE ASSESSING OFFICER, IN ORDER TO VERIFY THE GENUINENESS OF THE GIFT TRANSACTION AND THE DOCUM E NTARY EVIDENCES FURNISHED, ISSUED SUMMONS TO THE DONOR AT THE GIVEN ADDRESS, BUT THE PROCESS SERVER REPORTED THAT THE DONOR SHRI NIRAJ JAIN WAS FOUND NOT AVAILABLE AT THE GIVEN ADDRESS. ON BEING CONFRONTED WITH THE ABOVE FACT, IT WAS SUBMITTED ON BEHALF OF THE APPELLANT THAT THEY ARE NOT AWARE OF THE DONOR S WHEREABOUTS AND HENCE, ARE NOT IN A POSITION TO PRODUCE HIM FOR EXAMINATION. THE AO ALSO ENQUIRED FROM THE BANK OF DONOR AND ON EXAMINATION OF TH E BANK STATEMENT OF THE DONOR, HE NOTICED THAT THE ISSUANCE OF CHEQUE OF RS. 5,51,000/ - ON 24.07.2003 WAS PRECEDED BY CASH DEPOSIT OF EQUIVALENT AMOUNT ON THE VERY DATE OF ISSUANCE OF CHEQUE. STATEMENTS OF THE APPELLANT WERE RECORDED WHEN ON BEING ASKED, THE ASSESSEE STATED THAT THE DONOR MET HIM AT A TEM PLE AND THE FRIENDSHIP DEVELOPED BY HIM WITH THE DONOR PROMPTED HIM TO GIVE A GIFT OF RS.5,51,000/ - TO THE APPELLANT. THE DONOR, HAVING BEEN NOT FOUND AT THE GIVEN ADDRESS, THE CHEQUE BEING PRECEDED BY CASH DEPOSIT OF EQUIVALENT AMOUNT, ASSESSEE S ADMITTAN CE NOT TO KNOW THE WHEREABOUTS OF DONOR AND INABILITY TO PRODUCE HIM FOR EXAMINATION, LED THE ASSESSING OFFICER TO REJECT THE CLAIM OF THE ASSESSEE AND TO MAKE ADDITION OF RS.5,51,000/ - AS BOGUS GIFT U/S. 68 OF THE IT ACT. ITA NO. 1666/DEL./2009 4 4. THE APPELLANT CARRIED THE MAT TER IN APPEAL BEFORE THE LD. CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND SEVERAL DECISIONS OF HON BLE HIGHER COURTS, DISMISSED THE APPEAL OF THE ASSESSEE VIDE IMPUGNED ORDER. AGGRIEVED BY THIS ORDER, THE APPELLANT IS IN APPEAL BEFORE THE TRIBUNAL. 5. THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE APPELLANT HAD SUBMITTED THAT THE REOPENING OF ASSESSMENT IS NOT JUSTIFIED, BEING BASED ON INCOMPLETE INFORMATION. MORE THAN SUFFICIENT DOCUMENTARY EVIDENCES, AS NOTED ABOVE, WERE FILED BEFORE THE AO TO DISCHARGE ITS ONUS CASTE UPON THE ASSESSEE U/S. 68 OF THE ACT. HE, THEREFORE, SUBMITTED THAT THE REOPENING OF ASSESSEE IS BAD IN LAW AND ADDITION MADE BY THE AO IS NOT SUSTAINABLE IN THE EYE OF LAW. RELIANCE IS PLACED ON THE ORDERS OF ITAT IN YOGESH GUPTA VS. ITO (ITA NO. 6370/DEL./2012 DATED 24.03.2017 AND SHRADHA JAIN VS. ITO (ITA NO. 3280/DEL./2015 - DATED 24.02.2016. 6. ON THE OTHER HAND, THE LD. DR RELIED ON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESSEE FAILED TO DISC HARGE THE ONUS THAT LAY ON HIM TO PROVE THE IDENTITY AND CREDITWORTHINESS OF THE DONOR AND ITA NO. 1666/DEL./2009 5 GENUINENESS OF THE TRANSACTION AS CONTEMPLATED U/S. 68. IT WAS SUBMITTED THAT THE LD. AUTHORITIES BELOW HAVE NARRATED THE ADVERSE FACTS FOUND AGAINST THE ASSESSEE TO HOLD THE IMPUGNED GIFT AS BOGUS. THEREFORE, THE IMPUGNED ORDER DOES NOT CALL FOR ANY INTERFERENCE. THE DECISIONS RELIED BY THE ASSESSEE DO NOT APPLY TO THE PRESENT CASE. 7. HAVING CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE ENTIRE MATERIAL ON RECORD , WE FIND NO JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE LD. CIT(A). IT IS NOTABLE THAT THE APPELLANT HAS ADMITTED THAT HE DOES NOT KNOW THE PRESENT WHEREABOUTS OF THE DONOR WHEN HE WAS CONFRONTED WITH THE FACT THAT THE DONOR WAS NOT FOUND AT THE GIV EN ADDRESS. IT IS QUITE UNIMAGINABLE THAT THE ASSESSEE HAVING RECEIVED ALLEGED GIFT OF RS.5,51,000/ - WOULD NOT KNOW THE WHEREABOUTS OF THE DONOR. THE EXPLANATION OF THE ASSESSEE THAT THE DONOR MET HIM AT A TEMPLE AND HIS FRIENDSHIP DEVELOPED WITH THE DONOR LED HIM TO GIFT A HUGE SUM OF RS.5,51,000/ - TO THE APPELLANT, ALSO APPEARS TO BE A CONCOCTED EXPLANATION NOT PRACTICALLY WORTHY OF CREDENCE, BEING UNUSUAL AND UNNATURAL, WHEN THE APPELLANT SPEAKS THAT HE DOES NOT KNOW THE WHEREABOUTS OF DONOR. FILING OF PAN CARD OR RATION CARD DO NOT GO TO PROVE THAT THE DONOR WAS CAPABLE TO ADVANCE THE GIFT OF RS.5,51,000/ - TO THE APPELLANT. THE LD. CIT(A) HAS ALSO OBSERVED THAT PAN IN ITA NO. 1666/DEL./2009 6 THE NAME OF DONOR DOES NOT INDICATE THAT THE DONOR WAS REGISTERED AS TAX PAY ER WITH THE I.T. DEPARTMENT. THE COPY OF ITR FILED PERTAINED TO ASSESSMENT YEAR 2002 - 03 WHEREIN THE DONOR HAS SHOWN THE INCOME OF ONLY RS.1,06,715/ - AND NO ITR FOR THE YEAR UNDER CONSIDERATION WAS FILED ON RECORD. BESIDES, THE CRUCIAL FEATURE OF ACCOMMODAT ION ENTRIES WERE ALSO FOUND EXISTING IN THE INSTANT CASE, INASMUCH AS, CASH EQUIVALENT TO THE GIFT AMOUNT WAS FOUND DEPOSITED IN THE BANK ACCOUNT OF DONOR ON THE VERY DATE WHEN THE CHEQUE WAS ISSUED IN FAVOUR OF THE ASSESSEE. SIMPLY BECAUSE THE AMOUNT WAS RECEIVED THROUGH CHEQUE DOES NOT GO TO SATISFY THE INGREDIENTS OF SECTION 68, I.E., IDENTITY AND CREDITWORTHINESS OF THE DONOR AND GENUINENESS OF THE GIFT TRANSACTION, WHICH IN VIEW OF ABOVE DISCUSSION DO NOT STAND SATISFIED ON BEHALF OF THE APPELLANT. NO PLAUSIBLE EVIDENCE WAS LAID ON RECORD TO JUSTIFY THE CREDITWORTHINESS OF THE DONOR. NO RELATION WITH THE DONOR AND OCCASION FOR GIFT WAS UNFOLDED BY THE ASSESSEE NOR WAS IT ESTABLISHED THAT THE ALLEGED GIFT WAS GIVEN OUT OF LOVE AND AFFECTION . IN THE TOTAL ITY OF FACTS AND CONSIDERING THE EXPLANATION OF THE ASSESSEE AND CIRCUMSTANCES SURROUNDING TO THE TRANSACTION, WE FIND THAT THE ASSESSEE HAS COMPLETELY FAILED TO DISCHARGE THE ONUS THAT LAY ON HIM U/S. 68 OF THE ACT AND THEREFORE, THE LD. CIT(A) HAS RIGHTL Y CONFIRMED THE ADDITION RELYING ON THE DECISION OF HON BLE DELHI HIGH COURT IN RAJEEV TANDON VS. ACIT, 294 ITR ITA NO. 1666/DEL./2009 7 488 (DEL.). WE, ACCORDINGLY, DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE IMPUGNED ORDER. THE APPEAL OF THE ASSESSEE, THEREFORE, DESERVES TO FAIL. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31.07.2017. SD/ - SD/ - ( BHAVNESH SAINI ) (L.P. SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 31.07.2017 *AKS* COPY OF ORDER FORWARDED TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES, NEW DELHI