Shankarsingh Chatarsingh Thakur, Aurangabad V. Income-tax Officer, Ward - 2(2), Aurangabad

ITA 1983/PUN/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3682 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 16-01-2019
• Assessment Year: 2010-2011
• Appeal Filed On: 21-08-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: ARISES OUT OF PASSED
• Keywords: Unexplained expenditure; Gift; Salary income; Tax effect
• Section: 69C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT . / ITA NO.1983/PUN/2017 / ASSESSMENT YEAR : 2010-11 SHANKARSINGH CHATARSINGH THAKUR, PLOT NO.154, VEER SAWAKAR NAGAR, DIST. AURANGABAD 431 003 PAN : ABRPT2717K VS. ITO, WARD -2(2), AURANGABAD (APPELLANT) (RESPONDENT) / ORDER PER R.S.SYAL, VP : THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDER PASSE D BY THE CIT(A)-2, AURANGABAD ON 08-06-2017 IN RELATION TO THE ASSESSMENT YEAR 2010-11. 2. THE FIRST GROUND IS AGAINST THE CONFIRMATION OF ADDITION OF RS.73,500/- MADE BY THE ASSESSING OFFICER (AO) ON A CCOUNT OF FAILURE OF THE ASSESSEE TO PROVE GENUINENESS OF LOAN TRANSACTIONS. APPELLANT BY SHRI PRAMOD S. SHINGTE RESPONDENT BY SHRI RAJESH GAWLI DATE OF HEARING 21-02-2019 DATE OF PRONOUNCEMENT 22-02-2019 ITA NO.1983/PUN/2017 SHANKARSINGH C. THAKUR 2 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESS EE IS A DEVELOPMENT OFFICER WITH LIC OF INDIA. AIR INFORMATION WAS RECEIVED AS PER WHICH THE ASSESSEE DEPOSITED A SUM O F RS.25.95 LAKH IN HIS SAVINGS BANK ACCOUNT MAINTAINED WITH AXIS BANK. THE AO OBSERVED THAT A SUM OF RS.29,08,650 /- WAS DEPOSITED IN THIS BANK ACCOUNT. ON BEING CALLED UPON TO EXPLAIN THE SOURCE OF DEPOSITS, THE ASSESSEE SUBMITTED CERTA IN DETAILS, CLAIMING THAT HE, INTER ALIA , RECEIVED CASH LOANS BELOW RS.20,000/- EACH FROM SEVERAL PERSONS TOTALLING RS.3,84,8 00/-. THE AO DID NOT ACCEPT THE GENUINENESS OF SUCH CASH LOAN S AND MADE AN ADDITION OF RS.3,84,800/-, WHICH GOT REDUCED IN THE FIRST APPEAL TO RS.73,500/- , CONSISTING OF RS.18,500/- C LAIMED TO HAVE BEEN RECEIVED FROM SH. PRAVEEN KUMAR CHABADA; RS.19,500/- EACH FROM SH. SANJAY RAMLAL DEVKAR AND SH. JAYANT GAJANAN JOSHI; AND RS.16,000/- FROM SH. SHIRISH DATTATRAY BAKSHI. THIS WAS DONE ON THE BASIS OF A REMAND REPORT CALLED FOR FROM THE AO. THE ASSESSEE IS AGGRIEVED BY THE SUSTENANCE OF ADDITION TO SUCH AN EXTENT. 4. I HAVE HEARD BOTH THE SIDES AND GONE THROUGH THE R ELEVANT MATERIAL ON RECORD. IT CAN BE SEEN THAT THE INSTANT ADDITION IS IN ITA NO.1983/PUN/2017 SHANKARSINGH C. THAKUR 3 RESPECT OF FOUR ITEMS OF UNSECURED LOANS CLAIMED TO HAV E BEEN RECEIVED BY THE ASSESSEE IN CASH FROM THE PERSONS NAMED ABOVE. IT CAN BE SEEN THAT THE ASSESSEE DID NOT FURNISH EVIDENCE TO THE SATISFACTION OF THE AO TO PROVE THE GENUINENESS OF THE TRANSACTIONS. SOME EVIDENCE WAS FILED BEFORE THE LD. CIT(A), WHO CALLED FOR THE COMMENTS OF THE AO. VIDE REMAND REPORT DATED 23-01-2017, A COPY PLACED ON P AGE 27 ONWARDS OF THE PAPER BOOK, THE AO RECORDED THAT HE ADDRESSED LETTERS TO THE CONCERNED PERSONS ON 24-08-2016 FOR VERIFYING THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE CLAIMED UNSECURED LOANS, WHICH WERE FOLLOWED BY REMINDERS FOR SUBMISSION OF CONFIRMATION AND PHOTO IDS ETC. AN ANNEXURE HAS BEEN GIVEN TO THE REMAND REPORT WHOSE COP Y IS AVAILABLE ON PAGES 31 TO 33 OF THE PAPER BOOK. AS AGAINS T SH. PRAVEEN KUMAR CHABADA FROM WHOM THE ASSESSEE CLAIMED TO HAVE GOT A LOAN OF RS.18,500/-, THE LD. AO HAS RECORDED IN SUCH ANNEXURE THAT THE NOTICE SENT TO HIM WAS RETURNED BY THE POS TAL AUTHORITIES WITH THE REMARKS INCOMPLETE ADDRESS. AS REGAR DS THE OTHER THREE PERSONS, NAMELY, SH. SANJAY RAMLAL DEVKAR, SH. JAYANT GAJANAN BAKSHI AND SH. SHIRISH DATTATRAY BAKSHI, THE AO HAS MENTIONED THAT ALL OF THEM HAVE DENIED TO HAVE ITA NO.1983/PUN/2017 SHANKARSINGH C. THAKUR 4 ADVANCED ANY LOAN TO THE ASSESSEE. ONCE THE ALLEGED LEND ERS HAVE DENIED TO HAVE LENT MONEY TO THE ASSESSEE OR LETTER SE NT AT THE GIVEN ADDRESS HAS BEEN RETURNED WITH THE POSTAL REMARKS INCOMPLETE ADDRESS, I FAIL TO UNDERSTAND AS TO HOW THE ASSESSEE CAN CLAIM THAT SUCH LOANS WERE GENUINELY RECEIVED, MORE SO WHEN THE LOANS WERE CLAIMED TO HAVE BEEN RECEIVE D IN CASH AND THERE IS NO EVIDENCE OF ACTUAL RECEIPT OF LOANS. IN SUPPORT OF THE GENUINENESS, THE LD. AR HAS RELIED ON CONFIRMATIONS GIVEN BY THE FOUR PERSONS. IT IS OBSERVED TH AT THE ENTIRE SUM OF RS.3,84,800/- WHICH WAS ADDED BY THE A O REPRESENTS UNSECURED LOANS CLAIMED TO HAVE RECEIVED FROM SEVERAL PERSONS IN CASH FOR A SUM OF LESS THAN RS.20,00 0/- EACH. COPIES OF CONFIRMATIONS IN RESPECT OF ALL THESE PERSO NS HAVE BEEN PLACED ON PAGES 42 TO 64 OF THE PAPER BOOK. A CURSORY LOOK AT THESE CONFIRMATIONS DECIPHERS THAT ALL OF THEM HAVE BEEN TYPED IN THE SAME FORMAT, FONT AND IN THE SAME LANGUAGE EXCEPT FOR CHANGE OF PARTICULARS. THE LD. AR IS CLAIMING GENUINENESS OF THE FOUR CREDITORS ON THE BASIS OF SUCH CONFIRMATIONS. THERE IS NO NOTHING TO SHOW THAT THE PERSONS WHO SIGNED THESE FOUR CONFIRMATIONS ARE THE REAL PERSONS F ROM WHOM THE ASSESSEE CLAIMED TO HAVE RECEIVED LOANS. ONCE TH REE ITA NO.1983/PUN/2017 SHANKARSINGH C. THAKUR 5 OF SUCH FOUR PERSONS HAVE DENIED TO HAVE GIVEN ANY LOAN TO THE ASSESSEE AND NOTICE HAS NOT BEEN SERVED ON THE FOURTH P ERSON BEING INCOMPLETE ADDRESS, THERE CAN BE NO RATIONALE IN ACCEPTING THE GENUINENESS OF THESE FOUR TRANSACTIONS ON TH E BASIS OF SO-CALLED CONFIRMATIONS. I, THEREFORE, HOLD THAT TH E LD. CIT(A) WAS JUSTIFIED IN SUSTAINING THE ADDITION TO THIS EXTENT. 5. THE NEXT GROUND IS AGAINST THE CONFIRMATION OF ADDITION OF RS.2,50,000/-. FACTS OF THIS GROUND ARE THAT THE ASSE SSEE CLAIMED TO HAVE RECEIVED GIFTS OF RS.4.00 LAKH (RS.1.50 LAKH FROM HIS MOTHER; RS.1.00 LAKH FROM MOTHER-IN-LAW ; AND RS.1.50 LAKH FROM BROTHER-IN-LAW). IN THE ABSENCE OF THE ASSESSEE PRODUCING SOURCE OF THE DONORS, GIFT DEEDS, THEIR CREDIT WORTHINESS AND BANK STATEMENTS ETC., COUPLED WITH OCCASION OF GIFT, THE AO MADE ADDITION OF RS.4.00 LAKH. TAKING A LIBERAL VIEW OF THE SITUATION, THE LD. CIT(A) SUSTAINE D THE ADDITION AT RS.2,50,000/- ON AN AD HOC BASIS. THE ASSESSEE IS AGGRIEVED BY THE CONFIRMATION OF ADDITION TO THIS EXTENT. THE LD. DR SUBMITTED THAT THE REVENUE HAS NOT PREFERRED A NY APPEAL BECAUSE OF LOW TAX EFFECT. ITA NO.1983/PUN/2017 SHANKARSINGH C. THAKUR 6 6. I HAVE GONE THROUGH THE RELEVANT MATERIAL ON RECORD. IT IS SEEN THAT THE ASSESSEE CLAIMED TO HAVE RECEIVED THREE GIFTS TOTALLING RS.4.00 LAKH FROM HIS MOTHER, MOTHER-IN-LAW AND BROTHER-IN-LAW FOR WHICH NO EVIDENCE WAS FILED BEFORE THE AO. THE ASSESSEE ARGUED BEFORE THE LD. CIT(A) THAT THE GIFTS W ERE RECEIVED FROM HIS THREE RELATIVES, SOURCES FOR WHICH WERE THE AMOUNTS WITHDRAWN FROM THE MONTHLY INCOME SCHEME AND SAVINGS OF MOTHER-IN-LAW AND AGRICULTURAL INCOME OF THE BROTHER-IN-LAW AND CASH IN HAND OUT OF SALE PROCEEDS OF AGRICULTURAL LAND AND PAST SAVINGS OF MOTHER. NO EVIDENCE IN RESPECT OF THESE SOURCES WAS ADDUCED BEFORE THE AO. SOME EVIDENCE WAS GIVEN BEFORE THE LD. CIT(A) ON WHICH HE CALLE D FOR REMAND REPORT. AS PER THE REMAND REPORT, THE AO ISS UED NOTICES U/S.133(6) TO THE THREE ALLEGED DONORS WHICH WERE DU LY SERVED. DESPITE THE NOTICES AND REMINDERS ON 24-08-16 & 20-09-16 RESPECTIVELY, NO RESPONSE WAS RECEIVED. WHEN THE LD. CIT(A) CONFRONTED THIS FACT TO THE ASSESSEE, A REQUEST WAS MADE FOR ONE MORE OPPORTUNITY. THE LD. CIT(A) AGAIN CALLE D FOR THE REMAND REPORT OF THE AO FOR THE SECOND TIME. THIS TIME, THE DONORS STATED THAT THEY HAD GIVEN GIFTS TO THE ASSE SSEE OUT OF THE AGRICULTURAL INCOME. THEY WERE REQUESTED TO FURN ISH ITA NO.1983/PUN/2017 SHANKARSINGH C. THAKUR 7 COPIES OF GIFT DEEDS AND DETAILS OF AGRICULTURAL INCOME AND TH E DETAILS OF LAND HOLDING ETC. AND COPY OF BANK ACCOUNT FOR THE RELEVANT PERIOD. NONE OF THE DETAILS AS REQUESTED BY THE AO WERE FURNISHED. THIS SHOWS THAT THE ASSESSEE COULD NOT PR OVE THE GENUINENESS OF GIFTS EITHER AT THE STAGE OF ASSESSMENT OR THROUGH TWO REMAND PROCEEDINGS. ONCE THE ASSESSEE FAILS TO PROVE THE GENUINENESS OF THE GIFTS, THE CONSEQUENCE WHICH FOLLOWS IS THAT THE ADDITION IS REQUIRED U/S.68 OF THE ACT. 7. THE LD. DR HAS APTLY RELIED ON THE JUDGMENT OF HONBLE GUJARAT HIGH COURT IN SITARAM RAMCHANDDAS PATEL VS. ITO (2018) 95 TAXMANN.COM 290 (GUJ.) IN WHICH THE AO FOUND THAT THE ASSESSEE HAD DEPOSITED CERTAIN CASH IN HIS BANK ACCOU NT WHICH REMAINED UNEXPLAINED. THE ASSESSEES CASE WAS THA T THE SAID AMOUNT REPRESENTED THE GIFTS RECEIVED FROM VARIOUS PARTIES. THE AO REJECTED SUCH EXPLANATION AND MADE THE ADDITION WHICH WAS COUNTENANCED BY THE TRIBUNAL. WHEN THE MATTER CAME UP BEFORE THE HONBLE HIGH COURT, IT APPROVED TH E VIEW TAKEN BY THE TRIBUNAL BY HOLDING THAT WHEN THE ASSESSEE FAILED TO PROVE THE CAPACITY OF THE CONCERNED PERSONS WHO ALLEGED TO HAVE GIVEN UNSECURED LOANS OR GIFTS, IT COULD NOT BE ITA NO.1983/PUN/2017 SHANKARSINGH C. THAKUR 8 CONCLUDED THAT THE TRIBUNAL HAD COMMITTED ANY ERROR IN CONFIRMING THE ADDITIONS MADE BY THE AO. THE FACTS AND CIRCUMSTANCES OF THE INSTANT CASE ARE MUTATIS MUTANDIS SIMILAR TO THE CASE OF SITARAM RAMCHANDDAS PATEL VS. ITO (SUPRA). I, THEREFORE, UPHOLD THE IMPUGNED ORDER ON THIS SCORE FOR TH E REASONS GIVEN ABOVE. 8. THE LAST GROUND IS AGAINST THE CONFIRMATION OF ADDITION OF RS.4,32,056/- ON ACCOUNT OF CONVEYANCE ALLOWANCE. THE FACTUAL MATRIX OF THIS GROUND IS THAT THE ASSESSEE CLAIMED EXEMPTION FOR CONVEYANCE ALLOWANCE OF RS.4,32,056/-. THE AO OBSERVED THAT THE EXEMPTION COULD BE ALLOWED ONLY AFTER THE SUBMISSION OF VOUCHERS OF ACTUAL INCURRING OF EXPENSES BEFORE THE DDO. THE ASSESSEE SPECIFICALLY ADMITTED BEFORE THE AO, VIDE HIS REPLY DATED 23-01-2013, THAT NO VOUCHERS W ERE MAINTAINED. THE AO FURTHER OBSERVED THAT THE ASSESSEE HAD SALARY INCOME OF MORE THAN RS.25.00 LAKH. AS AGAINST THAT, CASH WITHDRAWALS ONLY TO THE TUNE OF RS.66,300/- WERE SHOW N FOR WHOLE OF THE YEAR. SINCE THE ASSESSEE COULD NOT PROVE THE FACT OF HAVING INCURRED ANY EXPENDITURE OF CONVEYANCE ALLOWANCE, THE AO HELD THAT THE CLAIM OF THE ASSESSEE THAT HE ITA NO.1983/PUN/2017 SHANKARSINGH C. THAKUR 9 SPENT RS.4,32,056/-, WAS LIABLE TO BE DISALLOWED IN VIEW OF SECTION 69C OF THE ACT. THE LD. CIT(A) SUSTAINED THE ADDITION . 9. HAVING HEARD BOTH THE SIDES AND GONE THROUGH THE RELEVANT MATERIAL ON RECORD, IT IS SEEN THAT THE ASSESSEE CL AIMED EXEMPTION OF RS.4,32,056/- ON ACCOUNT OF CONVEYANCE ALLOWANCE. THE AO REQUIRED THE ASSESSEE TO FIRST ESTABLISH TH E FACT OF HAVING INCURRED THIS MUCH AMOUNT. FROM THE DETAILS OF WITHDRAWALS, IT TRANSPIRED THAT THE ASSESSEE WITHDREW ONLY RS.5,000/- PER MONTH EXCEPT FOR LITTLE HIGHER AMOUNTS IN TWO MONTHS AND TOTAL CASH WITHDRAWALS FOR WHOLE OF THE YEAR STOOD AT RS.66,300/-. IT IS AN ADMITTED POSITION THAT THE RECEIPT OF RS.4,32,056/- TOWARDS CONVEYANCE ALLOWANCE WAS INCLUDED IN THE ASSESSEES SALARY OF MORE THAN RS.25.00 LAKH. ONCE THE ASSESSEE FAILED TO PROVE THAT HE IN FACT WITHDREW ANY SUM FR OM HIS BANK ACCOUNT OR SHOW ANY OTHER SOURCE, WHAT TO TALK OF ITS USE FOR CONVEYANCE PURPOSES, THERE CAN BE NO DOUBT AB OUT THE INVOCATION OF THE PROVISIONS OF SECTION 69C, WHICH TALK OF UNEXPLAINED EXPENDITURE. I AM CONFRONTED WITH A SITUATION IN WHICH THE ASSESSEE IS CLAIMING THAT HE INCURRED RS.4.32 LAK H ON CONVEYANCE BUT THERE IS NO SOURCE OF INCURRING OF SUCH ITA NO.1983/PUN/2017 SHANKARSINGH C. THAKUR 10 EXPENSES. IN THE GIVEN CIRCUMSTANCES, I AM SATISFIED THAT N O EXCEPTION CAN BE TAKEN TO THE VIEW TAKEN BY THE AUTHORITIES BELOW ON THIS ISSUE. 10. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND FEBRUARY, 2019. SD/- (R.S.SYAL) / VICE PRESIDENT PUNE; DATED : 22 ND FEBRUARY, 2019 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. ( ) / THE CIT (APPEALS)-2, AURANGABAD 4. THE PR. CIT-2, AURANGABAD 5. , , SMC / DR SMC, ITAT, PUNE; 6. / GUARD FILE. // TRUE COPY // / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE ITA NO.1983/PUN/2017 SHANKARSINGH C. THAKUR 11 DATE 1. DRAFT DICTATED ON 21-02-2019 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 22-02-2019 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. DATE OF UPLOADING ORDER SR.PS 8. FILE SENT TO THE BENCH CLERK SR.PS 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK 10. DATE ON WHICH FILE GOES TO THE A.R. 11. DATE OF DISPATCH OF ORDER. *