Shiv narayan choudhary, Ranchi V. DCIT CENTRAL CIRCLE-3, Ranchi

ITA 196/RAN/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 9616 (ITAT-RANCHI)
• Duration Of Justice: 2 year(s) 9 month(s) 15 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 05-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 20-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K MONDAL J
• Assessee Lawyers: RAJIV RANJAN MITTAL
• Keywords: Gift; Business income; Search and seizure
• Section: 153A; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RANCHI BENCH, RANCHI BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. A.L. SAINI, ACCOUNTANT MEMBER ITA NO. 193 - 199 / RAN / 201 6 ASSESSMENT YEARS :2004-05 TO 2010-11 SHIV NARAYAN CHOUDHARY DROLIA HOUSE, KANKE ROAD, RANCHI [ PAN NO.ACWPC 9113 E ] V/S . DCIT, CENTRAL CIRCLE- 3, RANCHI /APPELLANT .. / RESPONDENT /BY ASSESSEE SHRI RAJIV RANJAN MITTAL, CA /BY REVENUE SHRI P.K. MONDAL, JCIT-DR /DATE OF HEARING 10-01-2019 /DATE OF PRONOUNCEMENT 15-02-2019 / O R D E R PER BENCH:- THESE SEVEN ASSESSEES APPEALS FOR ASSESSMENT YE AR(S) 2004-05 TO 2010-11 ARISE AGAINST THE COMMISSIONER OF INCOME T AX (APPEALS)-3 PATNAS SEPARATE ORDERS ALL DATED 12.05.2016 PASSED IN CASE NOS.398-404/CIT(A)- 3/PAT/12-13 INVOLVING PROCEEDINGS U/S 153A R.W.S. 1 43(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH THE PARTIES. CASE FILES PERUSED 2. IT EMERGE AT THE OUTSET THAT FIRST IDENTICAL ISS UE INVOLVED IN ALL THESE APPEALS IS THAT OF CORRECTNESS OF ASSESSEES CASH G IFTS CLAIMED TO HAVE BEEN RECEIVED FROM HIS SON SHRI SUNIL SHEKHAR TO THE TUN E OF RS.5.42 LAC, RS1.41 ITA NO.193-199/RAN/2016 A.YS. 04 -05 TO 10-11 SHIV NARAYAN CHOUDHARY VS. DCIT CC-3, RANC HI PAGE 2 LAC, RS.1.24 LAC, RS.17,500/-, RS.2,82,000/-, RS.7, 06,000/- & RS.7,17,000/- (ASSESSMENT YEAR-WISE); RESPECTIVELY. THERE IS NO D ISPUTE BETWEEN THE PARTIES THAT BOTH FATHER-SON (DONEE-DONOR) HAD BEEN SEARCHE D AND THEY ARE RESIDING TOGETHER. THE CIT(A)S IDENTICAL LOWER APPELLATE DI SCUSSION AFFIRMING THE IMPUGNED ADDITION READS AS FOLLOWS:- APPELLATE FINDING AND DECISION: AFTER CONSIDERING THE ASSESSING OFFICER'S FINDING A ND SUBMISSION OF THE APPELLANT, I FIND THAT FOLLOWING FACTS EMERGED: 1. THERE WAS SEARCH AND SEIZURE ACTION IN THE CASE OF THE APPELLANT WHO WAS MEMBER (DISTRIBUTION) IN JHARKHAND STATE ELECTRICIT Y BOARD AND THIS SEARCH WAS IN CONNECTION WITH MADHU KORAH GROUP OF CASES. THE APPELLANT WAS THUS, ADMITTEDLY A SALARIED EMPLOYEE OF JHARKHAND S TATE ELECTRICITY BOARD. 2. DURING THE SEARCH AND SEIZURE ACTION, CASH DEPOS ITS IN THE BANK A/C TOTALLING TO RS.5,42,000/- WAS FOUND FOR WHICH THE APPELLANT STATED TO HAVE RECEIVED GIFTS FROM HIS SON SHRI SUNIL SHEKHAR ON T HE VARIOUS DATES ON WHICH THE DEPOSITS WERE MADE IN THE BANK ACCOUNT. 3. THE APPELLANT PROCURED COPY OF CAPITAL A/C AND C OMPUTATION OF TOTAL INCOME OF SHRI SUNIL SHEKHAR, FOR ASSESSMENT YEAR2004-05 T O SUPPORT THE CLAIM OF GIFTS. NO DOUBT, THESE EVIDENCES ARE PREPARED AFTER SEARCH AND SEIZURE ACTION. 4. THE COPY OF COMPUTATION OF TOTAL INCOME FILED AT THE TIME OF APPELLATE PROCEEDINGS INDICATE THAT THE INCOME OF APPELLANTS SON SHRI SUNIL SHEKHAR IS STATED TO BE INCOME FROM COAL TRADING AMOUNTING TO RS.6,50,000/- ON WHICH TAX IS CLAIMED TO HAVE BEEN PAID ON 31.03.201 0. THIS EVIDENCE CLEARLY INDICATES THAT THE APPELLANTS SON SHRI SUN IL SHEKHAR HAS NOT FILED ANY RETURN OF INCOME U/S. 139 OF THE ACT FOR AY 200 4-05. NO EVIDENCE PERTAINING TO EARNING OF ANY BUSINESS INCOME OF SHR I SUNIL SHEKHAR WAS FOUND AT THE PREMISES SEARCHED. THE ONLY PIECE OF E VIDENCE REGARDING THE EARNING OF INCOME OF SHRI SUNIL SHEKHAR IS THE STAT EMENT GIVEN U/S 132(4) OF THE ACT AT THE TIME OF SEARCH AND SEIZURE ACTION . APART FROM THIS STATEMENT, SHRI SUNIL SHEKHAR COULD NOT SUBSTANTIAT E ABOUT HIS BUSINESS ACTIVITIES AND INCOME THEREFROM. THUS, IT IS VERY W ELL APPARENT THAT THE STATEMENT U/S. 132(4) GIVEN BY SHRI SUNIL SHEKHAAR WAS ONLY TO COVER UP THE CASH DEPOSITS IN THE BANK A/C OF THE APPELLANT AS ALSO VARIOUS OTHER ASSETS IN THE NAME OF SHRI SUNIL SHEKHAR. COPIES O F CAPITAL A/C AND BALANCE SHEET OF SH. SUNIL SHEKHAR FOR AYRS. 2004-0 5 TO 2010-11 CLEARLY INDICATE A SIMPLE PATTERN WHEREIN SH. SUNIL SHEKHAR HAS DISCLOSED INCOME AS BEING EARNED FROM COAL TRADING SO AS TO SUFFICE SO-CALLED GIFTS MADE TO HIS FATHER AS WELL AS ASSETS IN THE FORM OF IMMOVAB LE PROPERTY, DEPOSITS IN VARIOUS BANK A/C ETC IN HIS OWN NAME. TAXES ON THES E SO-CALLED INCOME ARE ALSO PAID ON OR AFTER 31.03.2010 STRENGTHENING THE CONCLUSION THAT THE ITA NO.193-199/RAN/2016 A.YS. 04 -05 TO 10-11 SHIV NARAYAN CHOUDHARY VS. DCIT CC-3, RANC HI PAGE 3 INCOME DECLARED U/S. 132(4) BY SH SUSNIL SHEKHAR IS ONLY COVER UP EXPLANATION FOR THE GIFTS MADE AND ASSETS HELD BY H IM. 5. THE APPELLANT HAS CLAIMED TO HAVE RECEIVED THE G IFTS ON 10.04.2003 (RS.323,000/-), 02.09.2003 (RS.40,000/-), 08.01.200 4 (RS.20,000/-), 01.01.2004 (RS.2,00,000/-), 18.02.2004 ((RS.2,50,00 0/-). THESE DATES ARE NOTHING BUT THE DATES ON WHICH CASH DEPOSITS WERE F OUND TO HAVE BEEN MADE IN THE BANK ACCOUNTS OF THE APPELLANT. IT IS V ERY PECULIAR TO NOTE THAT THE APPELLANTS SON HAS GIVEN CASH GIFTS OF RS.2,00 ,000/- ON 01.01.2004 AND ANOTHER AMOUNT OF RS.20,000/- JUST A WEEK LATER I.E. ON 08.01.2004. THUS, THESE VARIOUS DATES OF THE SO-CALLED GIFTS BY APPELLANTS SON ARE TESTIMONY TO THE FACT THAT THESE TRANSACTIONS ARE N OT GIFTS BUT MERELY A COVER UP EXPLANATION FOR CASH DEPOSITS IN THE BANK A/C OF THE APPELLANT. THUS, THE GENUINENESS OF TRANSACTION OF GIFT IS NOT PROVED. IN VIEW OF THE ABOVE FACTS, I FULLY AGREE WITH THE AO THAT THE EXPLANATION OF GIFTS FROM APPELLANTS SON IS ONLY AN AFTERTHOUGHT. DURING THE COURSE OF APPELLATE PROCEEDING, THE APPELLANT HAD FURNISHED T HE SAME EXPLANATION AS WELL AS THE CASH BOOK AND CAPITAL A/C OF SHRI SUNIL SHEKHAR. THESE EVIDENCES ARE CERTAINLY NOT FOUND AT THE TIME OF SEARCH AND S EIZURE ACTION AND PREPARED ONLY AFTER FILING OF RETURN OF INCOME OF SHRI SUNIL SHEKHAR BASED ON STATEMENT GIVEN U/S. 132(4) OF THE ACT. THE APPELLANT BEING A SALARIED EMPLOYEE, A PATTERN OF WITHDRAWAL OF RS.8,000/- TO 10,000/- EVE RY MONTH IS SEEN FROM THE COPY OF BANK STATEMENT FILED. THUS, IT IS ALSO PROV ED THAT THE APPELLANT HAS NO EXPLAINABLE SOURCE OF INCOME FOR CASH DEPOSITS IN H IS BANK ACCOUNTS. THE APPELLANTS CLAIM FOR GIFTS FROM HIS SON IS ALSO SN OT PROVED BY ANY DOCUMENTARY EVIDENCES FOR ANY KIND OF BUSINESS INCOME OF HIS SO N. THE OCCASIONS FOR GIFTS ARE THE DATES OF CASH DEPOSITS IN THE APPELLANTS B ANK ACCOUNT WHICH SPEAK ITSELF FOR THE GENUINENESS OF THE GIFTS. HENCE, THE ADDITION OF RS.5,42,000/- MADE BY THE AO IS HEREBY CONFIRMED. 3. WE HEARD GIVEN OUR THOUGHTFUL CONSIDERATION TO R IVAL CONTENTIONS. THE RELEVANT ASSESSMENT ORDER IN HIS CASE DATED 17.08.2 012 FORMING PART OF RECORDS SUGGESTS THAT THE ASSESSING OFFICER HAD DUL Y TAKEN INTO ACCOUNT THE FACT OF IMPUGNED GIFTS COMING TO THE ASSESSEE FROM HIS SONS HAND. WE ARE OF THE VIEW THAT THE ASSESSING OFFICER SAID ACTION IN DONORS CASE ACCEPTING CORRECTNESS OF THE IMPUGNED GIFTS ITSELF FORMS CLIN CHING FACTOR FOR US TO HOLD THAT ASSESSEE HAS BEEN ABLE TO PROVE ALL THE RELEVA NT PARAMETERS OF THE IMPUGNED GIFTS TO HAVE BEEN RECEIVED FROM HIS SON. WE THEREFORE DIRECT THE ASSESSING OFFICE TO DELETE THESE IDENTICAL ADDITION (S) IN ALL ASSESSMENT YEARS. ITA NO.193-199/RAN/2016 A.YS. 04 -05 TO 10-11 SHIV NARAYAN CHOUDHARY VS. DCIT CC-3, RANC HI PAGE 4 4. NEXT COMES CASH DEPOSITS ADDITION ISSUE IN SOME OF THE ASSESSMENT YEARS. SUFFICE TO SAY, WE CAN SAFELY HOLD THAT THE IMPUGNED GIFTS SUM; IF THEY ARE GIVEN TELESCOPING EFFECT WOULD TAKE CARE OF THE ASSESSEES CASH DEPOSITS IN ISSUE AS WELL. IT FURTHER EMERGES THAT THE ASSES SEES CASH WITHDRAWAL ARE MUCH THAN THE IMPUGNED CASH DEPOSITS. WE TAKEN INTO ACCOUNT ALL THESE FACTS TO DELETE CASH DEPOSITS ADDITION(S) AS WELL. WE MAK E IT CLEAR WE HAVE NOT EXTRACTED THE RELEVANT FIGURE FOR THE SAKE OF BREVI TY ONLY. 5. THE ASSESSEES ALL SEVEN APPEALS ARE ALLOWED. ORDER PRONOUNCED IN ACCORDANCE WITH RULE 34(4) OF THE ITAT RULES BY PUTTING ON NOTICE BOARD ON 15/02/2019 SD/- SD/- ( ) ($% ) (DR. A.L. SAINI) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) RANCHI, *DKP SR.P.S &- 15 / 02 /2019 RANCHI / COPY OF ORDER FORWARDED TO:- 1. /ASSESSEE-SHIV NARAYAN CHOUDHARY DROLIA HOUSE, KAN KE ROAD, SHIVASHEE BUILDING , SHIVAM VIHAR,DEEPATOLI, RANCHI-834009 2. /REVENUE-DCIT, CENTRAL CIRCLE-3, RANCHI 3. 2 4 / CONCERNED CIT RANCHI 4. 4- / CIT (A) RANCHI 5. 7 %%2, 2, / DR, ITAT, RANCHI 6. = / GUARD FILE. BY ORDER/ , /TRUE COPY/ SR.PS, ITAT, RANCHI