KAMLESH PARWANI, MUMBAI V. ITO 19(3)(2), MUMBAI

ITA 1737/MUM/2013

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0418 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 11 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 04-03-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SAURABH KUMAR RAI LD
• Keywords: Unexplained cash credit; Gift
• Section: 143(3); 68; 2

Judgement Text

ITA.NO.1737/MUM/2013 KAMLESH PARWANI ASSESSMENT YEAR 2005-06 IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI , , BEFORE SHRI MAHAVIR SINGH, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO. 1737/MUM/2013 ( / ASSESSMENT YEAR: 2005-06) KAMLESH PARWANI FLAT NO.4, CHINAR CHS 21 ST ROAD, BANDRA(W) MUMBAI-400 050 / VS. INCOME - TAX OFFICER 19(3)(2) 3 RD FLOOR, PIRAMAL CHAMBERS, LALBAUG, PAREL MUMBAI-400 012 ./ ./PAN/GIR NO. AAEPP-3727-F ( /APPELLANT ) : ( !' / RESPONDENT ) ASSESSEE BY : NONE REVENUE BY : SAURABH KUMAR RAI , LD. DR / DATE OF HEARING : 21/02/2018 / DATE OF PRONOUNCEMENT : 23/02/2018 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [AY] 2005-06 CONTEST THE ORDER OF LD. COMMISSIONER OF IN COME-TAX (APPEALS)-18 [CIT(A)], MUMBAI, APPEAL NO.CIT(A)-18/T-62/ITO 19(3)(2)/10-11 DATED 14/01/2013 QUA CONFIRMATION OF CERTAIN ADDITION ON ACCOUNT OF CASH CREDIT U/S 68 FOR RS.4 LACS. THE ASSESSMENT FOR IMPUGNED AY WAS FRAMED BY LD. INCOME-TAX OFFICER 19(3)(2), MUMBAI ITA.NO.1737/MUM/2013 KAMLESH PARWANI ASSESSMENT YEAR 2005-06 2 [AO] U/S 143(3) OF THE INCOME TAX ACT,1961 ON 28/12/2007. NONE HAS APPEARED FOR ASSESSEE AND NO ADJOURNMENT APPLICATIO N IS ON RECORD. LEFT WITH NO OPTION, WE PROCEED TO DISPOSE-OFF THE SAME ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND AFTER HEARING LD. DEPARTMENTAL REPRESENTATIVE [DR]. 2.1 FACTS IN BRIEF ARE THAT THE ASSESSEE BEING RESIDENT INDIVIDUAL ENGAGED IN MANUFACTURING AND TRADING OF CHAIRS WAS ASSESSED FOR IMPUGNED AY AT RS.14,27,570/- AS AGAINST RETURNED I NCOME OF RS.6,27,570/- FILED BY THE ASSESSEE ON 25/10/2005. THE SOLITARY ISSUE INVOLVED IN THE APPEAL IS ADDITION U/S 68 FOR RS. 4 LACS. 2.2 DURING ASSESSMENT PROCEEDINGS, IT WAS NOTED THA T THE ASSESSEE RECEIVED GIFTS AGGREGATING TO RS.28 LACS FROM FOUR PERSONS INCLUDING RS.2 LACS EACH FROM REENA DHANKANI & HARISH DHANKANI. IT WAS OBSERVED THAT SIMILAR GIFTS WERE RECEIVED BY THE AS SESSEE IN THE PAST IN AY 2001-02, 2002-03 & 2004-05 IN INDIVIDUAL CAPACIT Y AS WELL AS IN THE CAPACITY OF KARTA OF A HUF NAMELY KAMLESH R.PARWANI HUF. IT WAS FURTHER NOTED THAT SIMILAR GIFTS WERE RECEIVED BY O THER FAMILY MEMBERS OF THE ASSESSEE IN THE IMPUGNED AY AS ENUMERATED BY LD . AO ON PAGE NUMBERS 2 & 3 OF THE QUANTUM ASSESSMENT ORDER. IN N UTSHELL, LD. AO OBSERVED THAT ASSESSEE AND OTHER FAMILY MEMBERS REG ULARLY RECEIVED SUBSTANTIAL AMOUNT OF GIFTS OVER THE YEARS FROM FAM ILY MEMBERS AS WELL AS FROM OUTSIDERS. THE DISPUTE UNDER APPEAL BEFORE US IS WITH RESPECT TO GIFTS RECEIVED BY THE ASSESSEE FROM REENA DHANKANI & HARISH DHANKANI FOR RS. 2 LACS EACH. THE ASSESSEE, IN SUPPORT, FILE D COPIES OF AFFIDAVIT FROM EACH OF THESE TWO DONORS BUT FAILED TO FILE AN Y OTHER DOCUMENTARY EVIDENCES TO PROVE THE GENUINENESS OF THE GIFTS. TH E LD. AO, INTER-ALIA, ITA.NO.1737/MUM/2013 KAMLESH PARWANI ASSESSMENT YEAR 2005-06 3 NOTED THAT THE ASSESSEE FAILED TO DEMONSTRATE HIS R ELATIONSHIP WITH THE DONORS AND ALSO COULD NOT PROVE THE FINANCIAL CAPAC ITY OF THE DONORS TO MAKE SUCH GIFTS. IN OTHER WORDS, LD. AO OPINED THAT THE CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS COULD NOT BE ES TABLISHED BY THE ASSESSEE. FINALLY, THE AFORESAID GIFTS WERE ADDED A S UNEXPLAINED CASH CREDIT U/S 68 TO THE INCOME OF THE ASSESSEE. 3. AGGRIEVED, THE ASSESSEE CONTESTED THE SAME WITHO UT ANY SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 14/01/2 013 WHERE THE LD. CIT(A) NOTED THAT BOTH THE DONORS RESIDED AT UAE AND HAD NO RELATIONSHIP WITH THE ASSESSEE AND AFTER CONSIDERIN G ASSESSEES SUBMISSIONS, CONFIRMED THE STAND OF LD. AO BY MAKIN G FOLLOWING OBSERVATIONS:- 3.3 I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND FACTS OF THE CASE. IT IS NOTICED THAT THE ASSESSEE HAS RECEIVED GIFT OF RS.2 LAKHS FROM SHRI HARISH DHANKANI AND SMT. REENA DHANKANI. BOTH THE DONORS A RE RESIDING IN UAE AND HAS NO RELATIONSHIP WITH THE ASSESSEE. THE AO H AS CALLED FOR DETAILS IN RESPONSE TO THIS THE AR OF THE APPELLANT HAS SUBMIT TED COPY OF PASSPORT AND AFFIDAVIT OF BOTH THE PERSONS AND AUDIT REPORT OF M /S. DHANKANI FOODSTUFFS TRADING EST. AFTER EXAMINING THESE DOCUMENTS, THE A O HAS HELD THAT THE IDENTITY OF THE PERSONS IS PROVED BUT THE CREDITWOR THINESS AND GENUINENESS OF THE TRANSACTIONS IS NOT PROVED BECAUSE THE ASSESSEE HAS FAILED TO SUBMIT THE BANK STATEMENT AND BALANCE SHEET OF BOTH THE DONORS . THE ASSESSEE HAS ALSO FAILED TO SUBMIT THE RELEVANT BANK ACCOUNT IN WHICH THESE AMOUNTS WERE RECEIVED. THEREFORE, THE GENUINENESS OF THIS TRANSA CTION IS ALSO NOT PROVED. HENCE, HE MADE THE DISALLOWANCE. ON THE OTHER HAND, THE AR OF THE APPELLANT HAS SUBMITTED THAT AFFIDAVIT OF BOTH THE DONORS, PH OTOCOPY OF PASSPORT, COPY OF AUDITED FINANCIAL STATEMENT OF DHANKANI FOODSTUF FS TRADING EST, COPY OF DECLARATION FROM THE CONSULATE GENERAL OF INDIA AND DECLARATION OF GIFT WAS SUBMITTED BEFORE THE AO TO PROVE THE GENUINENESS OF THE TRANSACTION WHICH WAS NOT ACCEPTED. THE AR HAS ALSO RELIED ON THE DEC ISION OF HONBLE TRIBUNAL (SUPRA) TO STRENGTHEN ITS VIEW. 3.4 FROM THE PERUSAL OF THE SUBMISSIONS OF THE APP ELLANT AND FACTS OF THE CASE IT IS CLEAR THAT THE ASSESSEE HAS RECEIVED GIFT OF RS. 4 LAKHS FROM MR. AND MRS. DHANKANI I.E. RS.2 LAKHS EACH. IT IS UNDISPUTED THA T THE ASSESSEE HAS NO RELATION WITH THE DONORS. FURTHER IT IS ALSO UNDISP UTED THAT THERE WAS NO OCCASION OF GIFT. AS PER THE PROVISIONS OF SECTION 68 THE ONUS IS ALWAYS ON THE ASSESSEE TO PROVE THE IDENTITY, CREDITWORTHINESS AN D GENUINENESS OF THE ITA.NO.1737/MUM/2013 KAMLESH PARWANI ASSESSMENT YEAR 2005-06 4 TRANSACTION. BUT IN THE PRESENT CASE THE ASSESSEE H AS PROVED THE IDENTITY OF THE DONORS BUT HAS FAILED TO PROVE THE CREDITWORTHI NESS AND GENUINENESS OF TRANSACTION BY SUBMITTING THEIR BANK ACCOUNTS. TO S TRENGTHEN THE VIEWS OF THE AO RELIANCE IS PLACED ON THE FOLLOWING DECISIONS: DCIT VS. PHULWATI DEVI 314 ITR (AT) 1 ( DELHI) THE HONBLE TRIBUNAL HAS RELIED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. DURGAPRASAD P. MORE 82 ITR 540 AND SMT. SUMATI DAYAL VS. CIT 214 ITR 801 HAS HELD THAT DOCUMENTARY EVIDE NCE PRODUCED BY THE ASSESSEE PRIMA FACIE SUPPORTS CLAIM APPLICATION O F TEST OF HUMAN PROBABILITIES AND SURROUNDING CIRCUMSTANCES DOCUM ENTARY EVIDENCE CANNOT BE ACCEPTED ADDITION JUSTIFIED. IN THE CASE OF IT O VS. ALOK AGARWAL 52 SOT 127 (AGRA) HAS HELD THAT IN VIEW OF THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF MOHAN KELA 29 ITR 278, DURGA PRASAD MOR E 82 ITR 540, SAJJANDAS & SONS VS. CIT 264 ITR 535 AND JASPAL GOE L V . CIT 310 ITR 715 (P&H) THE GIFT RECEIVED IS NOT GENUINE AND ADDITION U/S.68 WAS CONFIRMED. IN CASE OF MANGILAL JAIN V. ITO 315 ITR 105 THE HONBL E MADRAS HIGH COURT HAS HELD THAT MERE PROVING OF IDENTITY OF THE CREDITOR OR THAT THE PAYMENT WAS MADE BY CHEQUE ARE NOT SUFFICIENT TO PROVE THE GENU INENESS OF THE TRANSACTION. IN VIEW OF THESE DECISIONS AND FACTS O F THE PRESENT CASE IT IS HELD THAT THE ASSESSEE HAS FAILED TO PROVE ANY RELATIONS HIP WITH THE DONOR. THERE WAS NO OCCASION OF GIFT. THE APPELLANT HAS FAILED T O SUBMIT THE BANK STATEMENT OF THE DONOR PROVING THE CREDITWORTHINESS AND ITS OWN BANK ACCOUNT WHERE THE GIFTS WERE RECORDED. THEREFORE, THE CONCE PT OF SURROUNDING CIRCUMSTANCES AND HUMAN PROBABILITY AS DECIDED BY T HE HONBLE SUPREME COURT IS NOT PROVED IN THIS CASE. THUS THE ADDITION MADE BY THE AO IS UPHELD AND GROUND OF APPEAL IS DISMISSED. AGGRIEVED, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 4. THE LD. DR SUBMITTED THAT THE COMPLETE ONUS TO P ROVE THE GENUINENESS OF GIFTS RESTED ON ASSESSEE AND HE HAS MISERABLY FAILED TO PROVE THE SAME AND THEREFORE, THE STAND OF LD. CIT( A) WAS QUITE JUSTIFIED. 5. WE HAVE CAREFULLY HEARD THE CONTENTIONS AND PERU SED RELEVANT MATERIAL ON RECORD. AFTER CONSIDERING THE SAME, WE CONCUR WITH THE STAND OF THE REVENUE THAT THE ASSESSEE MISERABLY FAILED T O PROVE THE GENUINENESS OF THE STATED GIFTS. IT IS EVIDENT FROM THE ORDER OF LOWER AUTHORITIES THAT THE ASSESSEE COULD ONLY PROVE THE IDENTITY OF THE DONOR BUT FAILED TO ESTABLISH THE CREDITWORTHINESS AND GE NUINENESS OF THE GIFTS WITH COGENT MATERIAL. THE DONORS HAD NO RELATIONSHI P WITH THE ASSESSEE ITA.NO.1737/MUM/2013 KAMLESH PARWANI ASSESSMENT YEAR 2005-06 5 AND DESPITE THAT HUGE GIFTS WERE RECEIVED BY THE AS SESSEE AS WELL AS HIS OTHER FAMILY MEMBERS DURING IMPUGNED AY. THEREFORE WE HAVE NO HESITATION IN CONFIRMING THE STAND OF LD. FIRST APP ELLATE AUTHORITY. 6. RESULTANTLY, THE ASSESSEES APPEAL STANDS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD FEBRUARY, 2018 SD/- SD/- (MAHAVIR SINGH) ( MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 23. 02.2018 SR.PS:- THIRUMALESH / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT 3. * ( ) / THE CIT(A) 4. * / CIT CONCERNED 5. !$- , - , / DR, ITAT, MUMBAI 6. ./ / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI