DCIT, CC - VIII, Kolkata, Kolkata V. Ram Chandra Agarwal, Kolkata

ITA 1902/KOL/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3072 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2013
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 08-10-2010
• Court: TRIBUNAL
• Department Lawyers: SWNEHOTPAL DATTA
• Assessee Lawyers: K K CHHAPARIA
• Keywords: Unexplained cash credit; Gift; Reassessment proceedings
• Section: 143(3); 142(1); 147; 68; 148

Judgement Text

, C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA () BEFORE . . . . . . . . , !' /AND #! $'# , ) [BEFORE SHRI K. K. GUPTA, AM & SHRI MAHAVIR SINGH, JM] '% '% '% '% / I.T.A NO. 1902/KOL/2010 $&' !() $&' !() $&' !() $&' !()/ // / ASSESSMENT YEAR: 200 5- 0 6 DEPUTY COMMISSIONER OF INCOME-TAX, VS. RAM CHANDR A AGARWAL CENTRAL CIRCLE-VIII, KOLKATA (PAN:ACZPA8989R) (+, /APPELLANT ) (-.+,/ RESPONDENT ) DATE OF HEARING: 12.04.2013 DATE OF PRONOUNCEMENT: 19.04.2013 FOR THE APPELLANT: SHRI SWNEHOTPAL DATTA, SR . DR FOR THE RESPONDENT: SHRI K. K. CHHAPARIA, FCA / / ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF C IT(A), CENTRAL-1, KOLKATA IN APPEAL NO. 126/CIT(A),C-1/CC-VIII/09-10 DATED 16.07.2010. ASSESSMENT WAS FRAMED BY ACIT, C.C.VIII, KOLKATA U/S. 143(3)/147 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2005-06 VIDE HIS ORDER DA TED 21.12.2009. 2. THE ONLY ISSUE IN THIS APPEAL OF REVENUE IS AGA INST THE ORDER OF CIT(A) DELETING THE ADDITION MADE BY AO ON ACCOUNT OF UNEXPLAINED GIFT OF SHARES AMOUNTING TO RS.36.80 LAKH. FOR THIS, REVENUE HAS RAISED FOLLOWING TWO GROUNDS: 1.THAT THE LD. CIT(A) HAS ERRED IN DELETING THE AD DITION MADE ON ACCOUNT OF UNEXPLAINED CASH CREDIT OF RS.36,80,000/-. II. THAT THE LD. CIT(A) HAS FAILED TO APPRECIATE TH AT THE GIFT SHOWN BY THE ASSESSEE AS RECEIVED FROM HIS MOTHER HAS NOT BEEN REFLECTED IN THE DONORS BALANCE SHEET FOR THE SAME PERIOD. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. BRIEF FACTS ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME AND ASSESSMENT WAS FRAMED U/S. 143(3) OF THE ACT VIDE ORDER DATED 10.02.208 BY THE AO. SUBSEQUENTLY, THE AO NOTICED THAT THE ASSESSEE IN HIS BALANCE SHEET AS ON 31.03.2005 REFL ECTED AS GIFT RECEIVED FROM HIS MOTHER SHANTA AGARWAL AMOUNTING TO RS.36.80 LAKH I.E. 3,68 ,000 SHARES OF VISHAL RETAIL PVT. LTD. BUT NO SUCH GIFT WAS DISCLOSED IN THE BALANCE SHEET OF SM. SHANTA AGARWAL AS PER HER ASSESSMENT 2 ITA NO.1902/K/2010 RAM CHANDRA AGARWAL AY: 2005-06 RECORDS. BOTH MOTHER AND SON WERE ASSESSED WITH TH E SAME AO. ACCORDINGLY, THE AO ISSUED NOTICE U/S. 148 OF THE ACT DATED 13.10.2008 AND ACC ORDINGLY, AO ISSUED NOTICE U/S. 143(2) OF THE ACT READ WITH SECTION 142(1) OF THE ACT. THE A SSESSEE BEFORE AO CLARIFIED THAT IN THE RETURN OF SMT. SHANTA AGARWAL DUE TO INADVERTENCE SHE HAS NOT REFLECTED GIFT OF 3,68,000 SHARES. HENCE, ACCORDING TO HER, SHE HAS FILED REVISED FINA L ACCOUNTS DULY SIGNED BY HER ALONG WITH A COPY OF LETTER TO THE AO. SHE ALSO FILED BALANCE S HEET CONFIRMING THE SAME AND THE RELEVANT AFFIDAVIT READS AS UNDER: I, SANTA AGARWAL WIFE OF KISHAN GOPAL AGARWAL, AG ED ABOUT 66 YEARS AT PRESENT RESIDING AT MOUZA KOUCHUPUKUR, P. O. HATGACHIA, P .S. BHANGORE, DO SOLEMNLY AFFIRM AND DECLARE AS FOLLOWS: 1. THAT I AM AN ASSESSEE OF INCOME TAX UNDER INCOME TA X PAN-ACYPA1818N. 2. THAT I AM THE OWNER OF 3,68,000 EQUILY SHARES OF TH E FACE VALUE OF RS 10/- OF VISHAL RETAIL PRIVATE LIMITED BEARING THE DISTINCTIVE NUMB ERS 5969501 TO 6337500. 3. THAT OUT OF NATURAL LOVE AND AFFECTION TOWARDS MY S ON RAM CHANDRA AGARWAL, I HAVE MADE AN ABSOLUTE AND IRREVOCABLE GIFT OF THE A BOVE SHARES TO HIM ON 31 ST MARCH 2005. 4. THAT THE AFORESAID GIFT OF SHARES OF VISHAL RETAIL PRIVATE LIMITED WAS MADE BY ME FREELY AND VOLUNTARILY. 5. THAT THE SAID GIFT HAS BEEN ACCEPTED ON THE DAY THE GIFT WAS MADE, BY MY SON RAM CHANDRA AGARWAL. 6. THAT FROM THE SAID 31-03-2005, I HAVE CEASED TO HAV E ANY RIGHT, TITLE, INTEREST OR CLAIMS AND DEMANDS WHATSOEVER ON OR ANY PART OF THE AFORESAID SHARES AND FROM THAT DATE THE DONE HAS BECOME THE ABSOLUTE OWNER OF THE SAID SHARES. 7. THAT I PROMISE TO SIGN RELEVANT DOCUMENTS TO ENSURE THAT MY SON IS RECORDED AS LEGAL OWNER OF THE AFORESAID SHARES IN THE BOOKS OF VISHA L RETAIL PRIVATE LIMITED. 8. THAT THE STATEMENTS MADE IN THE FORGOING PARAGRAPHS ARE TRUE TO THE BEST OF MY KNOWLEDGE AND BELIEF. THE AO WAS OF THE VIEW THAT THE REVISED ACCOUNTS AS WELL AS THE AFFIDAVIT GIVEN BY SM. SHANTA AGARWAL DOES NOT MAKE THE GIFT AS GENUINE RATHER IT IS A FICTITIOUS GIFT. HENCE, HE MADE ADDITION BY INVOKING THE PROVISION OF SECTION 68 OF THE ACT. 4. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT( A), WHO DELETED THE ADDITION VIDE PARA 4.1 OF HIS ORDER AS UNDER: 4.1. I HAVE CAREFULLY CONSIDERED THE SUBMISSION O F THE LD. A.R . THE ONLY REASON FOR NOT ACCEPTING THE CLAIM OF THE ASSESSEE THAT HE HAS REC EIVED GIFT N FORM OF 3,68,000 SHARES OF VISHAL RETAIL PRVATE LIMITED FROM HIS MOTHER SM T. SANTA AGARWAL AS THE SAME WAS NOT REFLECTED IN HER CAPITAL ACCOUNTS FILED ALONG W ITH HER RETURN. HOWEVER SUBSEQUENTLY 3 ITA NO.1902/K/2010 RAM CHANDRA AGARWAL AY: 2005-06 THE DONOR SMT. SANTA AGARWAL HAS CLARIFIED BY FILIN G LETTER TO THE A.O THAT SHE HAS GFTED 3,68,000 SHARES TO SRI RAN CHANDRA AGARWAL AND DUE TO INADVERTENCE THE SAME WAS NOT REFLECTED IN HER BALANCE SHEET AS ON 31.03.2005. F URTHER REVISED BALANCE SHEET ALONG WITH THE AFFIDAVIT DATED 31.03.2005 IN PROOF OF THE SHARE GIFTED TO HIS SON WAS FILED IN SUPPORT OF THE CLAIM. THE A O HAS NOT GIVEN ANY REA SON FOR REJECTING THE DOCUMENTARY EVIDENCE FILED. MOREOVER THE SHARES IN QUESTION HA S ALSO BEEN TRANSFERRED IN THE NAME OF THE APPELLANT ASSESSEE. CONSIDERING ABOVE, THE ADDITION OF RS.36,80,000 MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED GIFT RECEIVED IN THE FORM OF SHARES IS DELETED. AGGRIEVED, NOW ASSESSEE IS IN APPEAL BEFORE US. 5. WE FIND THAT THE ASSESSEE HAS CLARIFIED THE POSI TION THAT DUE TO INADVERTENCE SMT. SHANTA AGARWAL IN HER FINANCIAL STATEMENT HAS NOT REDUCED THE GIFT I.E. EQUITY SHARES OF VISHAL RETAIL PVT. LTD. TO THE EXTENT OF 3,68,000 BUT IN HER REVI SED FINANCIAL STATEMENT, SHE HAS REDUCED THE SAME AND TO CONFIRM THE SAME, AN AFFIDAVIT WAS FILE D BY HER, WHICH IS REPRODUCED ABOVE. THESE DOCUMENTS WERE FILED BEFORE THE AO DURING THE COURS E OF REASSESSMENT PROCEEDINGS TAKEN U/S. 147 R.W.S. 143(3) OF THE ACT. ON QUERY FROM THE BE NCH, LD. SR. DR COULD NOT CONTROVERT THE AFFIDAVIT OR THE REVISED FINAL ACCOUNTS AND EVEN TH E AO HAS NOT POINTED OUT ANY DEFECT IN THE FINAL ACCOUNTS OR THE AFFIDAVIT. IN SUCH CIRCUMSTAN CES, WE HAVE NO OTHER OPTION EXCEPT TO CONFIRM THE ORDER OF CIT(A). APPEAL OF REVENUE IS DISMISSED. 6. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. 7. ORDER PRONOUNCED IN THE OPEN COURT ON 19.04.2013 SD/- SD/- . . . . . . . . , #! #! #! #! $'# $'# $'# $'# , (K. K. GUPTA) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( 0 0 0 0) )) ) DATED : 19TH APRIL, 2013 !12 $&34 $5! JD.(SR.P.S.) 4 ITA NO.1902/K/2010 RAM CHANDRA AGARWAL AY: 2005-06 / 6 -$$7 87(9- COPY OF THE ORDER FORWARDED TO: 1 . +, / APPELLANT DCIT, CC-VIII, KOLKATA. 2 -.+, / RESPONDENT SHRI RAM CHANDRA AGARWAL MOUZA KUNCH PUKUR, P.S. BHANGAR, KOLKTA-700 059 3 . $/& ( )/ THE CIT(A), KOLKATA 4. 5. $/& / CIT KOLKATA 7!>$ -$& / DR, KOLKATA BENCHES, KOLKATA .7 -$/ TRUE COPY, /&?/ BY ORDER, # '4 /ASSTT. REGISTRAR .