GAURAV VORA, MUMBAI V. I.T.O. 16(3)(2), MUMBAI

ITA 1750/MUM/2011

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 2137 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-10-2015
• Appeal Filed By: Assessee
• Bench Allotted: G
• Next Hearing Date: 10-09-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 03-03-2011
• Court: TRIBUNAL
• Department Lawyers: S S KUMARAN
• Keywords: Unexplained cash credit; Gift
• Section: 143(3); 68

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES G, MUMBAI , , , BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.1750/MUM/2011 ASSESSMENT YEAR: 2005-06 GAURAV VORA, ISWAR NIWAS, 18/32, KHETWADI, 5 TH LANE, JUNCTION,252, S.V. RD. MUMBAI -400004 / VS. ITO 16(3)(2) MUMBAI- ( ASSESSEE ) ( REVENUE ) P.A. NO. ABWPV7562R / ASSESSEE BY NONE / REVENUE BY SHRI S. S. KUMARAN ( D R) ! ' # / DATE OF HEARING : 10/09/2015 ' # / DATE OF ORDER: 13/10/2015 / O R D E R PER ASHWANI TANEJA (ACCOUNTANT MEMBER): THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS) - 27, MUMBAI {(IN SHORT LD. CIT(A)} DATED 26.11.2010 FOR THE GAURAV VORA 2 ASSESSMENT YEAR 2005-06, DECIDED AGAINST THE ASSESS MENT ORDER PASSED BY THE ASSESSING OFFICER (IN SHORT AO ) U/S 143(3) OF THE ACT. THE ASSESSEE HAS RAISED FOLLOWING GROUN DS OF APPEAL: THE HONOURABLE COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN NOT ACCEPTING THE GIFTS RECEIVED FROM THE 'CLOSE RELATIVES' AS DEFINED IN THE PROVISO OF SECTION 56( 2)(VI) OF THE 1. T. ACT, DURING THE PREVIOUS YEAR RELEVANT TO THE ASST. YEAR UNDER CONSIDERATION WITHOUT CONSIDERING THE FA CT AND MERITS OF THE CASE. THE HONOURABLE COMMISSIONER OF INCOME TAX (APPEALS) HAS ALSO ERRED IN NOT UNDERSTANDING THE BUSINESS RE LATED BOOKS OF ACCOUNTS SUBMITTED DURING ASSESSMENT PROCEEDINGS, LOOKING THE PERSONAL NON-TAXABLE TRANS ACTION INTO THE SAME WITH A FINDING OF THE SAID GIFTS THAT HAVE NOT BEEN REFLECTED IN THE BOOKS OF ACCOUNTS WITHOUT CONSIDERING THE FACT AND MERITS OF THE CASE. THE HONOURABLE COMMISSIONER OF INCOME TAX (APPEALS) HAS ALSO ERRED IN NOT GIVING OPPORTUNITY TO SUBMIT FAMILY TREE EXPLAINING THE FAMILY TREE WITHOUT CONSIDERING THE FACT AND MERITS OF THE CASE. THE HONOURABLE COMMISSIONER OF INCOME TAX (APPEALS) HAS ALSO ERRED IN TAKING OWN VIEW TOWARDS CONVERSIO N OF DOLLARS IN RUPEES OTHER THAN BANKS WITHOUT CONSIDER ING THE FACT AND MERITS OF THE CASE. THE APPELLANT CRAVES LEAVE TO SUBMIT AT THE TIME OF HEARING SUCH FURTHER FACTS, INFORMATION, CLARIFICATION, DOC UMENTS ETC. AS MAY BE NECESSARY FOR THE PURPOSE OF DECIDIN G THE ISSUES IN THE APPEAL. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER, AMEND OR MODIFY THE AFORESAID GROUNDS OF APPEAL. . 2 . DURING THE CASE OF HEARING NONE HAS APPEARED ON B EHALF OF THE ASSESSEE. IT IS SEEN FROM THE HISTORY OF THI S CASE THAT ASSESSEE HAS NOT BEEN APPEARING IN THIS CASE, FOR S OME LONG GAURAV VORA 3 TIME. IT IS FURTHER SEEN BY US THAT THE NOTICE HAS BEEN SENT TO THE ASSESSE BY REGISTERED POST, EVERY TIME. HOWEVER , WRITTEN SUBMISSIONS HAVE BEEN FILED IN THIS CASE BY THE ASS ESSEE. IT APPEARS THAT ASSESSEE WANTS THAT HIS CASE SHOULD BE DECIDED ON THE BASIS OF WRITTEN SUBMISSIONS FILED BEFORE TH E BENCH. IN VIEW OF THESE FACTS WE PROCEED TO HEAR THE APPEAL O N THE BASIS OF WRITTEN SUBMISSIONS FILED BY THE ASSESSEE AND SU BMISSIONS MADE BY THE LEARNED DEPARTMENTAL REPRESENTATIVE (IN SHORT LD. DR), ON THE BEHALF OF THE REVENUE. 3 . THE SOLITARY ISSUE INVOLVED IN THIS APPEAL IS WIT H RESPECT TO THE ADDITION MADE BY THE AO AMOUNTING TO RS.13,5 4,000/- BEING THE AMOUNT OF CASH GIFT RECEIVED BY THE ASSES SEE IN FOREIGN CURRENCY, AS UNEXPLAINED CASH CREDIT U/S 68 OF THE INCOME TAX ACT 1961. 4. DURING THE ASSESSMENT PROCEEDINGS, IT WAS FOUND BY THE AO THAT ASSESSEE HAS MADE CASH DEPOSITS TO THE TUNE OF RS.13,54,000/- IN HIS BANK ACCOUNT, DURING THE YEAR UNDER CONSIDERATION. ON INQUIRY WITH THE ASSESSEE, IT WAS REPLIED THAT THE BANK ACCOUNT OF THE ASSESSEE WAS BEING OPE RATED BY THE WIFE OF THE ASSESSEE AND HIS WIFE HAD RECEIVED GIFTS, IN DOLLARS, FROM THEIR CLOSE RELATIVES, WHO ARE RESIDE NTS OF ABU DHABI AND THE SAME AMOUNT WAS DEPOSITED IN THE BANK ACCOUNT. IT WAS FURTHER SUBMITTED THAT GIFTS WERE R ECEIVED FROM THE CLOSE RELATIVES AND THEREFORE, THESE WERE EXEMP T IN VIEW OF PROVISIONS OF SECTION 56(2)(VI) OF THE INCOME TAX A CT. IT WAS FURTHER SUBMITTED BY THE ASSESSEE THAT GIFTS WERE R ECEIVED FROM MS GUL SADANI (AUNT) AND RESIDENT OF ABU DHABI , MR GAURAV VORA 4 VISHNU SADANI (UNCLE) AND RESIDENT OF ABU DHABI AND MS SOMA JHAM (AUNT) AND RESIDENT OF DUBAI. THE ASSESSE E SUBMITTED COPIES OF DECLARATION OF GIFT IN THE NAME OF ASSESSEE AND HIS WIFE AND ALSO COPIES OF THEIR PASSPORT AND VISA. THE AO HELD IN THE ASSESSMENT ORDER THAT THE ASSESSEE HAD KEPT SILENT ABOUT THE MAINTENANCE OF JOINT SAVING BANK ACCOUNT AND ONLY BECAUSE OF AIR REPORT THIS ACCOUNT CAME TO THE KNOW LEDGE OF THE DEPARTMENT, THUS, THIS INDICATES THAT THE ASSES SEE WAS MAINTAINING THIS ACCOUNT SECRETLY AND HAD NOT DISCL OSED THE SAME TO THE DEPARTMENT. IT WAS FURTHER OBSERVED BY THE AO THAT SAID BANK ACCOUNT WAS OPENED AND CLOSED FOR SH ORT PERIOD. THE AO MADE DETAILED DISCUSSION IN THE ASSE SSMENT ORDER FOR HOLDING CLAIM OF THE ASSESSEE AS SHAM AND BOGUS AND THAT, IN FACT NO GIFT HAS BEEN RECEIVED BY THE ASSESSEE, THAT THE ASSESSEE HAS NOT FOLLOWED PROPER LAW IN CO NVERTING US DOLLARS INTO INDIAN RUPEES, THAT NO PROPER RESPONSE HAS BEEN GIVEN BY THE ASSESSEE AND THAT THE ASSESSEE COULD N OT PROVE THE GENUINENESS OF THE GIFT, CREDITWORTHINESS OF TH E DONOR AND AUTHENTICITY OF THE TRANSACTIONS. KEEPING IN VIEW A LL THESE FACTS, THE AO HELD THE GIFT TRANSACTIONS AS NON-GEN UINE AND ADDED THE SAME UNDER SECTION 68 OF THE ACT. 5. THE ASSESSEE CARRIED THE MATTER IN FIRST APPEAL BEFORE THE LD. CIT(A) AND FILED FURTHER SUBMISSIONS BEFORE HIM . IT WAS, INTER ALIA, SUBMITTED BY THE ASSESSEE BEFORE THE LD . CIT(A) THAT INTEREST INCOME OF RS.12,570/- RAISED DURING THE RE LEVANT PERIOD FROM THE IMPUGNED BANK ACCOUNT WAS INCLUDED IN COMPUTATION OF INCOME OF THE ASSESSEES WIFE SINCE THIS GAURAV VORA 5 ACCOUNT WAS PRIMARILY OPERATED BY HER. AFTER CONSID ERING THE SUBMISSIONS OF THE ASSESSEE, LD. CIT(A) REJECTED TH E SAME AND CONFIRMED THE ADDITION MADE BY THE AO. 6 . BEFORE US, LD. DR HAS ARGUED THE MATTER, RELYING UPON THE ORDERS OF THE LOWERS AUTHORITIES AND REQUESTED FOR CONFIRMING THE ADDITION MADE BY THE AO. ON THE OTHE R HAND, ASSESSEE HAS PLACED ON RECORD HIS WRITTEN SUBMISSIO NS. 7. WE HAVE GONE THROUGH THE ORDERS OF LOWER AUTHORITI ES AND WRITTEN SUBMISSIONS FILED BY THE ASSESSEE. THE AO H AD PASSED A DETAILED ORDER WHILE MAKING THE IMPUGNED ADDITION , HOLDING THAT THE IMPUGNED GIFTS ARE UNSUBSTANTIATED. THE LD CIT(A) CONFIRMED THE FINDINGS OF THE AO BY GIVING DETAILED REASONING, THESE ARE REPRODUCED HERE UNDER: AT THE OUTSET, THE DECLARATION OF GIFTS FILED BY THE APPELLANT DOES NOT EXPLAIN THE RELATIONSHIP OF THE DONOR WITH THE APPELLANT. PASSPORT COPY WAS NOT FILED IN THE CASE OF MS.SHOBA JHAM AND THE PASSPORT COPY IN THE CASE OF MR. VISHNU SADAM DOES NOT SHOW HIS TRAVEL TO INDIA AT THE MATERIAL POINT OF TIME. FURTHER, I DO NOT FIND ANY PAPERS ON RECORD TO SHOW THAT THE DONORS ARE CLOSE RELATIVES OF THE APPELLANT COVERED IN PROVISO TO SECTION 56(2)(VI). THE FAMILY TREE EXPLAINING THE RELATIONSHIP IS NOT PLACED ON R ECORD EXCEPT STATING THAT THE APPELLANT AND HIS WIFE ARE NEPHEW/NIECE TO THE DONORS. THUS, THE CLAIM OF THE APPELLANT THAT THE DONORS ARE REAL UNCLE AND AUNT O F THE APPELLANT ARE NOT PROVED ANYWHERE ON RECORD. SECOND LY, GAURAV VORA 6 THE APPELLANT HAS NOT GIVEN ANY VALID EXPLANATION A S TO WHY THE SAID GIFTS IN FOREIGN EXCHANGE WERE NOT ROU TED THROUGH THE NORMAL BANKING CHANNELS, ESPECIALLY WHE N THE AMOUNTS INVOLVED ARE HUGE. IT IS ALSO BEYOND COMMON SENSE THAT THE GIFTS RECEIVED IN CASH DOLLARS WERE KEPT IDLE FOR MORE THAN 9 MONTHS WITHOUT DEPOSITING THEM IN T HE BANK ACCOUNTS. THE APPELLANT'S CONDUCT IN NOT FURNI SHING THE DETAILS OF THE SAID BANK ACCOUNT TILL THE ISSUE WAS RAISED BY THE AO WOULD GO TO SHOW THAT APPELLANT NE VER HAD ANY INTENTION TO DISCLOSE PROPER FACTS FOR THE PURPOSE OF ASSESSMENT. THE AO HAS RIGHTLY TAKEN COGNIZANCE OF THE FACT THAT THE SO CALLED GIFTS WERE NEVER CREDITED T O THE CAPITAL ACCOUNT OF THE APPELLANT. NO DOUBT THE APPE LLANT HAS BEEN RUNNING PROPRIETARY BUSINESS IN THE NAME O F MIG TRAVELS BUT IT DOES NOT PRECLUDE THE APPELLANT FROM FURNISHING RELEVANT PARTICULARS OF INCOME WHILE FIL ING THE RETURN BY INCLUDING ALL THE PERSONAL TRANSACTIONS A LSO. EVEN FOR A MOMENT IT IS ACCEPTED THAT THE APPELLANT HAS RECEIVED GIFTS FROM NRI RELATIVES IN FOREIGN EXCHAN GE, THE CRUCIAL LINK AS TO HOW THE, SAID DOLLARS WERE CONVE RTED INTO INDIAN RUPEES IS MISSING IN THE GIVEN SET OF FACTS. THE APPELLANT IS NOT LEGALLY AUTHORIZED TO CONVERT THE FOREIGN EXCHANGE IN A CHANNEL OTHER THAN A BANK/AUTHORIZED FOREIGN EXCHANGE DEALER. THE VERY FACT THAT THE APP ELLANT FAILED TO PROVIDE INFORMATION AS TO HOW THE SO CALL ED GIFTS RECEIVED IN FOREIGN EXCHANGE WERE CONVERTED INTO IN DIAN RUPEES WOULD GO TO SHOW THAT THERE IS NO PROPER EXPLANATION AS TO THE CASH DEPOSITS IN THE IMPUGNED BANK GAURAV VORA 7 ACCOUNT OF THE APPELLANT. AS STATED ALREADY, THE IS SUE UNDER CONSIDERATION IS CASH DEPOSITS IN THE SAVING BANK ACCOUNT OF THE APPELLANT AND AS LONG AS THERE IS NO PROPER EXPLANATION AS TO HOW THE SAID CASH IS AVAILABLE TO THE APPELLANT, THE AO IS PERFECTLY WITHIN HIS POWERS TO INVOKE THE PROVISIONS OF SECTION 68 OF THE ACT. IN VIEW OF THE ABOVE DISCUSSION, I DO NOT FIND ANY MERIT IN THE SUBMISSI ONS MADE BY THE APPELLANT. ACCORDINGLY, I UPHOLD THE AD DITION MADE BY THE AO IN THIS REGARD AND THEREFORE THE APP ELLANT FAILS ON THIS GROUND OF APPEAL AND THE SAME IS DISM ISSED. 7.1. IT IS NOTED THAT IN HIS WRITTEN SUBMISSIONS, THE A SSESSEE HAS NOT BROUGHT OUT ANY NEW FACTS OR SUBMISSIONS ON RECORD, NO DOCUMENTARY EVIDENCES HAVE BEEN REFERRED IN THES E WRITTEN SUBMISSIONS, AND NO PROPER BOOK HAS BEEN FILED BEFO RE US TO NEGATE THE AFORESAID FINDINGS OF LD CIT(A), AND TO SUBSTANTIATE THE CLAIM MADE BY THE ASSESSEE. NO REASONING HAS BE EN GIVEN IN THE WRITTEN SUBMISSIONS TO ASSAIL THE DETAILED F INDINGS GIVEN BY THE LD. CIT(A) AGAINST THE GENUINENESS OF IMPUGN ED GIFTS. IT IS NOTED, GENERAL AND VAGUE SUBMISSIONS HAVE BEEN M ADE IN THESE WRITTEN SUBMISSIONS, BUT ON THE OTHER HAND, T HE AO HAS MADE DETAILED DISCUSSION AND HAS GIVEN DETAILED FIN DINGS AND REASONING IN THE ASSESSMENT ORDER WHILE MAKING ADDI TIONS, WHICH HAVE BEEN FURTHER ELABORATED BY LD. CIT(A) AN D HE HAS GIVEN CATEGORICAL FINDINGS TO ESTABLISH THAT THE AL LEGED GIFTS WERE NOT GENUINE. THESE FINDINGS REMAIN UNCONTROVER TED, NO INTERFERENCE IS CALLED FOR THEREIN, AND THEREFORE T HESE ARE CONFIRMED. GROUND RAISED BY THE ASSESSEE IS REJECTE D. GAURAV VORA 8 8 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH OCTOBER, 2015. SD/- (AMIT SHUKLA ) SD/- (ASHWANI TANEJA) '# / JUDICIAL MEMBER $# / ACCOUNTANT MEMBER ! MUMBAI; & DATED ;13/10/2015 CTX? P.S/. .. %'&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. ( )* / THE APPELLANT 2. +,)* / THE RESPONDENT. 3. - - ( ( ) / THE CIT, MUMBAI. 4. - - / CIT(A)- , MUMBAI 5. 01 2 +3 , - ( # 3 4 , ! / DR, ITAT, MUMBAI 6. 2 5 6 ! / GUARD FILE. / BY ORDER, , 0( + //TRUE COPY// / (DY./ASSTT. REGISTRAR) , ! / ITAT, MUMBAI