Ram Phal Sharma, New Delhi V. ACIT, New Delhi

ITA 1775/DEL/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 4754 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2011-2012
• Appeal Filed On: 30-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVIKANT GUPTA
• Assessee Lawyers: JAYANT BOTHRA; RAVNEET KAUR CAS
• Keywords: Gift; Additional evidence
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : F : NEW DELHI BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SMT. BEENA A. PILLAI, JUDICIAL MEMBER ITA NO.1775/DEL/2015 ASSESSMENT YEAR: 2011-12 RAM PHAL SHARMA, 259, CYCLE MARKET, DDA OFFICE COMPLEX, JHANDEWALAN ETN., NEW DELHI. PAN : AAAPS8214N VS. ACIT, CIRCLE 62(1), NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI JAYANT BOTHRA & MS RAVNEET KAUR, CAS RESPONDENT BY: SHRI RAVI KANT GUPTA, SR.DR DATE OF HEARING : 09.08.2018 DATE OF PRONOUNCEMENT: 10.08.2018 ORDER PER R.S. SYAL, VP: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) ON 01.01.2015 IN RELATION TO THE ASSESSMENT YEAR 2011-12. ITA NO.1775/DEL/2015 2 2. THE FIRST GROUND IS AGAINST THE CONFIRMATION OF DISALLOWANCE OF RS.10 LAC MADE BY THE ASSESSING OFFICER U/S 68 OF THE ACT . 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS AN INDIVIDUAL, RETIRED PERSONNEL OF THE INDIAN ARMY, E NGAGED IN PROPRIETARY BUSINESS OF SECURITY, HOUSEKEEPING, ETC. A RETURN WAS FILED DECLARING TOTAL INCOME OF RS.48,36,820/-. DURING THE COURSE OF ASS ESSMENT PROCEEDINGS, IT WAS OBSERVED BY THE AO THAT A SUM OF RS.10 LAC WAS DEPOSITED IN THE ASSESSEES BANK ACCOUNT MAINTAINED WITH STATE BANK OF BIKANER & JAIPUR. ON BEING CALLED UPON TO EXPLAIN THE SOURCE OF SUCH CASH DEPOSIT, THE ASSESSEE SUBMITTED THAT THE CASH OF RS.10 LAC WAS D EPOSITED OUT OF CASH WITHDRAWALS OF RS.15 LAC MADE TWO MONTHS AGO. ON P ERUSAL OF BANK STATEMENT, THE ASSESSING OFFICER OBSERVED THAT THE CASH OF RS.15 LAC STATED TO HAVE BEEN WITHDRAWN BY THE ASSESSEE TWO MONTHS A GO, IN FACT, REPRESENTED CHEQUES ISSUED IN THE NAME OF MUDIT AND VIKASH. HE, THEREFORE, MADE AN ADDITION OF RS.10 LAC. DURING T HE COURSE OF FIRST APPELLATE PROCEEDINGS, THE ASSESSEE FILED ADDITIONA L EVIDENCE IN THE SHAPE OF BANK CERTIFICATE STATING THAT THE TWO CHEQUES WERE SELF PAID. THE LD. CIT(A) ITA NO.1775/DEL/2015 3 REFUSED TO ADMIT THE ADDITIONAL EVIDENCE AND CONFIR MED THE ADDITION, AGAINST WHICH THE ASSESSEE HAS COME UP IN APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE REL EVANT MATERIAL ON RECORD. IT IS SEEN THAT THE ASSESSEE WITHDREW A SU M OF RS.10 LAC ON 18.03.2010 AND A FURTHER SUM OF RS.5 LAC ON 25.03.2 010 THROUGH ITS EMPLOYEES, NAMELY, S/SHRI MUDIT AND VIKASH. THE CA SH DEPOSITS OF RS.5 LAC EACH WERE MADE ON 27.05.2010 AND 28.05.2010. W E HAVE GONE THROUGH THE COPY OF CASH BOOK FROM 15.03.2010 ONWARDS, WHI CH EVIDENCES THAT THE AMOUNTS WITHDRAWN WERE TAKEN TO THE BOOKS OF ACCOUN TS, OUT OF WHICH A SUM OF RS.12,50,000/- WAS TAKEN BY THE PROPRIETOR A S DRAWINGS. A SUM OF RS.5 LAC WAS RE-DEPOSITED ON 27.05.2010 BY THE PROP RIETOR. A CLOSE SCRUTINY OF SUCH DETAILS INDICATES THAT THE ASSESSEE HAD CAS H OF RS.10 LAC FROM THE WITHDRAWALS MADE, WHICH AMOUNT WAS RE-DEPOSITED IN THE BANK ACCOUNT ON 27/28.05.2010. THUS, THE SOURCE OF DEPOSITS IN THE BANK ACCOUNT IS EXPLAINED. WE, THEREFORE, ORDER TO DELETE THE ADDIT ION OF RS.10 LAC. 5. THE SECOND GROUND IS AGAINST THE CONFIRMATION OF ADDITION OF RS.65,29,238/- U/S 28(IV) OF THE ACT. THE FACTS AP ROPOS THIS ISSUE ARE THAT THE ASSESSEE MADE AN ADDITION OF RS.1,25,82,605/- T O HIS CAPITAL ACCOUNT. ITA NO.1775/DEL/2015 4 FROM THE LEDGER, IT WAS OBSERVED THAT THE ASSESSEE WAS SHOWN TO HAVE RECEIVED A GIFT OF RS.27 LAC FROM HIS WIFE SMT. LAX MI DEVI, RS.16 LAC FROM HIS DAUGHTER-IN-LAW, MRS. MEENA SHARMA AND RS.22,29 ,238 FROM HIS SON, SHRI SUNIL SHARMA. ON BEING CALLED UPON TO SUBSTANT IATE THE GENUINENESS OF THE GIFTS, THE ASSESSEE FILED HIS LEDGER ACCOUNTS F OR TWO YEARS ALONG WITH BALANCE SHEETS AND AUDIT REPORTS FOR THE ASSESSMENT YEAR 2009-10 AND 2010-11, WHICH INDICATED OUTSTANDING UNSECURED LOAN S TAKEN BY THE ASSESSEE FROM THESE PERSONS WHICH WERE ACCEPTED AS GIFTS IN THE YEAR IN QUESTION. THE ASSESSING OFFICER INVOKED SECTION 27( IV) AND MADE AN ADDITION OF RS.65,29,238/-. THE LD. CIT(A) UPHELD THE ADDITION BY TREATING THE AMOUNT AS COVERED U/S 41(1) OF THE ACT. 6. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE REL EVANT MATERIAL ON RECORD. THERE IS NO QUARREL ON THE FACT THAT THE A MOUNT CREDITED TO THE ASSESSEES CAPITAL ACCOUNT AS GIFTS WAS THROUGH JOU RNAL ENTRIES REPRESENTING CONVERSION OF THE CREDIT OF THE AMOUNTS APPEARING I N THE ASSESSEES BOOKS OF ACCOUNT FROM EARLIER YEARS AS UNSECURED LOANS RECEI VED FROM HIS WIFE, SON AND DAUGHTER-IN-LAW. IT IS AN ADMITTED POSITION THA T THE ASSESSEE DID NOT PAY ANY INTEREST ON SUCH UNSECURED LOANS IN THE PRECEDI NG OR IN THE CURRENT YEAR. ITA NO.1775/DEL/2015 5 UNDER SUCH CIRCUMSTANCES, THE PROVISIONS OF SECTION 41(1) CANT BE ATTRACTED. IT IS FURTHER CLEAR THAT THE RECEIPT OF GIFTS CANNOT BE CONSTRUED AS THE VALUE OF ANY BENEFIT OR PERQUISITE, WHETHER CON VERTIBLE INTO MONEY OR NOT, ARISING FROM BUSINESS OR THE EXERCISE OF A PRO FESSION IN TERMS OF SECTION 28(IV) OF THE ACT. WE, THEREFORE, ORDER TO DELETE T HE ADDITION AS THE SOURCE OF CREDIT TO CAPITAL ACCOUNT IS DULY PROVED AND THE SA ME IS NOT IN THE NATURE OF INCOME. 7. IN THE RESULT, THE APPEAL FILED BY THE ASS ESSEE IS ALLOWED. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 1 0.08.2018. SD/- SD/- [BEENA A. PILLAI] [R.S. SYAL] JUDICIAL MEMBER VICE PRESIDENT DATED: 10.08.2018 DK COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR DY. REGISTRAR, ITAT, NEW DELHI