Munni Tayal, New Delhi V. ITO, New Delhi

ITA 2030/DEL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4223 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 30-03-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 03-05-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PEEYUSH SONKAR SENIOR
• Assessee Lawyers: S K GOYAL
• Keywords: Gift; TDS
• Section: 68; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.2030/DEL./2010 (ASSESSMENT YEAR : 2006-07) SMT. MUNNI TAYAL, VS. ITO, WARD 45 (3), 4647/15, JAI MATA MARKET, TRI NAGAR, NEW DELHI. NEW DELHI 110 035. (PAN : ACSPT5768N) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S.K. GOYAL, CA REVENUE BY : SHRI PEEYUSH SONKAR, SENIOR DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF CIT (APPEALS)-XXX, NEW DELHI DATED 9.3.2010. 2. THE ASSESSEE IS AN INDIVIDUAL FILED THE RETURN O F INCOME ON 29.7.2006 FOR ASSESSMENT YEAR 2006-07 DECLARING INCOME AT RS. 1,34,520/-. THE ASSESSEE IS A MCD SCHOOL TEACHER. THE ASSESSMENT WAS MADE A T THE INCOME OF RS.13,13,680/- BY MAKING THE ADDITION OF RS.11,95,5 47/-. IN THE APPEAL, THE CIT (A) DELETED THE OTHER ADDITIONS EXCEPT CONFIRMI NG THE ADDITION OF RS.3 LACS OUT OF THE ADDITION OF RS.6 LACS MADE U/S 69 O F THE INCOME-TAX ACT AND ITA NO.2030/DEL/2010 2 THE ADDITION OF RS.34,405/- MADE ON ACCOUNT OF INTE REST RECEIVED ON FDR AND FROM SAVING BANK ACCOUNT. 3. THE GROUNDS OF APPEAL READ AS UNDER :- 1. THAT THE ORDER OF THE LEARNED CIT APPEAL-XXX IN CONFIRMING ADDITION OF RS.3,00,000/- OUT OF RS.6,00 ,000.00 DEPOSITED IN THE A/C OF THE ASSESSEE IS TOTALLY WRO NG, BAD IN LAW AND NEEDS TO BE QUASHED. 2. THAT THE ORDER OF THE LEARNED C.I.T. APPEAL-XXX IN CONFIRMING ADDITION OF RS.34,405.00 ON A/C OF INTER EST INCOME FROM BANK IS WRONG, BAD IN LAW AND NEEDS TO BE QUAS HED. 3. THAT THE ABOVE GROUNDS OF APPEAL ARE WITHOUT PRE JUDICE TO AN ANOTHER. 4. THAT THE ASSESSEE PRAYS PERMISSION TO ADD, DELET E OR AMEND ONE OR MORE GROUNDS OF APPEAL. 5. THAT THE ASSESSEE ASSURES UNSTINTED CO-OPERATION IN ALL PROCEEDINGS BEFORE YOUR GOODSELF. 6. THAT THE APPELLATE ORDER IS BAD, ILLEGAL AND UNJ USTIFIED ON THE MERITS OF THE CASE AND MUST BE QUASHED. 4. IN THE GROUND NO.1, THE ASSESSEE HAS OBJECTED TO THE CONFIRMATION OF THE ADDITION OF RS.3 LACS OUT OF THE CASH DEPOSITED IN THE JOINT ACCOUNT WITH HER HUSBAND AT PUNJAB & NATIONAL BANK, TRI NAGAR, DELHI . THERE WAS A CASH DEPOSIT ON THREE DIFFERENT DATES OF RS.2 LACS EACH TOTALING TO RS.6 LACS. IT IS A JOINT ACCOUNT WITH SHRI G.S. TAYAL, HUSBAND OF THE ASSESSEE, WHO RETIRED AS ASSISTANT REGISTRAR FROM JAWAHARLAL NEHRU UNIVERSIT Y ON 31.10.2004. IT IS CLAIMED THAT SHE AND HER HUSBAND DECIDED TO CELEBRA TE THE PEACEFUL AND HAPPY ITA NO.2030/DEL/2010 3 RETIREMENT AND 35 TH MARRIAGE ANNIVERSARY. ON THAT OCCASION, MANY CLOS E FRIENDS AND ACQUAINTANCES MADE GIFTS TO THE ASSESSE E AS WELL AS TO HER HUSBAND. THE ASSESSEE RECEIVED GIFT OF RS.1,93,700 /- AND HER HUSBAND RECEIVED GIFT OF RS.3,15,900/-. ASSESSEE TOOK LOA N OF RS.38,000/- FROM TWO PERSONS AND THE ASSESSEES HUSBAND ALSO RECEIVED LO AN OF RS.57,000/- FROM THREE PERSONS. THE CASH DEPOSITED IN BANK OF RS.6 LACS WAS EXPLAINED FROM THESE AMOUNT OF GIFT AND LOAN RECEIVED. ASSESSING OFFICER ADDED WHOLE OF RS.6 LACS TO ASSESSEES INCOME, HOWEVER THE CIT (A) GRANTED THE PART RELIEF BY HOLDING THAT SINCE THE HUSBAND AND WIFE ARE HAVING INDEPENDENT SOURCE OF EARNING AND THEY ARE SEPARATE INCOME-TAX ASSESSEES, HENCE HE TREATED 50% OF THE DEPOSIT AS UNDISCLOSED INCOME OF THE ASSESSEE. 5. WHILE PLEADING ON BEHALF OF THE ASSESSEE, THE LE ARNED AR SUBMITTED THAT THE ASSESSEE RECEIVED THE GIFTS FROM NEAR AND DEAR OF RS.1,93,700/- WHEREAS THE ADDITION HAS BEEN CONFIRMED OF RS.3 LACS. HE F URTHER PLEADED THAT TWO OF THE DONORS WERE NRI WHERE THEIR CAPACITY, IDENTITY AND GENUINENESS OF TRANSACTION IS NOT AT ALL IN DOUBT. DR. NITIN MAH ESHWARI AND DR. PREETI JAIN, BOTH WERE NRIS FROM WHOM THE ASSESSEE RECEIVED GIFT TOTALING TO RS.50,000/-. COPIES OF PASSPORT WERE ALSO FILED. THE CONFIRMATI ON WITH FULL ADDRESS WAS SUBMITTED BEFORE ASSESSING OFFICER. THE CONFIRMATI ONS WITH FULL ADDRESS FROM TWO CREDITORS OF RS.19,000/- EACH (PREETI GARG AND PRAVEEN KUMAR JAIN) WERE ITA NO.2030/DEL/2010 4 FILED. THEIR FULL ADDRESSES WITH MOBILE NUMBERS WE RE ALSO PROVIDED. THEY ALSO CONFIRMED THE RETURN OF LOAN IN THEIR DECLARAT ION. EVEN INCOME TAX PAN WAS ALSO PROVIDED TO ASSESSING OFFICER OF PREETI GA RG. THE BANK STATEMENT WHERE CREDIT LIMIT IS GIVEN IS ALSO PROVIDED. FURT HER HE ALSO PLEADED THAT THE DONOR, HIRA MANI JAIN WAS PRODUCED BEFORE THE ASSES SING OFFICER AND SHE HAS CONFIRMED THE GIFT BEFORE THE ASSESSING OFFICER. S HE HAD ALSO STATED THAT SHE WAS HAVING CLOSE FAMILY RELATIONSHIP WITH ASSESSEE S FAMILY. HER SISTER IS MARRIED TO ASSESSEES SON. SHRI S.C. JAIN, OTHER D ONOR IS ALSO RELATIVE AND HE IS FATHER OF HIRA MANI JAIN. HE WAS FATHER-IN-LAW OF ASSESSEES SON. HE VEHEMENTLY PLEADED THAT THE ASSESSEE HAS DISCHARGED THE ONUS BY WAY OF FILING THE CONFIRMATION, GIVING THE ADDRESS AND ALSO BY WA Y OF PRODUCING PERSONS BEFORE THE ASSESSING AUTHORITY. HE ALSO PLEADED TH AT THE ASSESSEE PRODUCED FIVE PERSONS BEFORE ASSESSING OFFICER FOR EXAMINATI ON WITHIN A SPAN OF 2 3 DAYS. THE ASSESSING OFFICER HAS NOT ISSUED THE SUM MONS TO THE REMAINING PERSONS. IF HE WAS NOT SATISFIED WITH THE CONFIRMA TIONS FILED BEFORE HIM IN RESPECT OF OTHER DONORS AND CREDITORS THEN HE SHOUL D HAVE SUMMONED THEM. THE ADDITION CANNOT BE SUSTAINED IN SUCH A SITUATIO N WHERE THE ASSESSING OFFICER HAS NOT ISSUED THE SUMMONS AND IGNORING THE CONFIRMATIONS FILED BY THE CREDITORS/DONORS. FOR THIS PROPOSITION, HE REL IED ON THE DECISION OF NIRANJANLAL RAMBALLABH VS. CIT 29 ITR 459 (NAG.). HE ALSO PLEADED THAT ITA NO.2030/DEL/2010 5 ONCE THE IDENTITY OF THE CREDITOR/DONOR HAS BEEN PR OVED THEN THE ADDITION CANNOT BE SUSTAINED. FOR THIS PROPOSITION, HE RELI ED ON THE DECISIONS OF SONU AGGARWAL VS. ITO (2009) 29 SOT 478 (LUCK.) AND CIT VS. BAISHNAB CHARAN MOHANTY (1995) 78 TAXMAN 183. HE ALSO RELIED ON TH E FOLLOWING DECISIONS : 1. CIT VS. SHREE GOPAL & CO. (1993) 2004 ITR 285. 2. ROOP CHAND MANOJ KUMAR VS. CIT (1999) 235 ITR 46 1 (GUJ) 3. KHANDELWAL CONSTRUCTIONS VS. CIT (1997) 227 ITR 900 4. MURLIDHAR LAHORIMAL VS. CIT (2006) 280 ITR 512 5. CIT VS. RAM DEV KUMAR CHITLANGIA (2009) 315 ITR 435 6. CIT VS. R.N. KUMAR (2008) 170 TAXMAN 475 7. CIT VS. HEERALAL CHAGANLAL TANK (2002) 257 ITR 2 81 (RAJ) 8. CIT VS. PADAM SINGH CHAUHAN (2009) 315 ITR 433 9. LABH CHAND BOHRA VS. ITO (2008) 219 CTR (RAJ) 57 1 10. ARAVALI TRADING CO. VS. ITO (2008) 220 CTR (RAJ ) 622 11. TRILOCHAN SINGH VS. ITO (2008) 116 TTJ (DEL) 14 9 12. AVNISH KUMAR SINGH VS. ITO (2009) 27 DTR 241 13. JAIKISHAN DADLANI VS. ITO (2005) 4 SOT 138 (MUM BAI) 14. BHAGAWANDAS SHARDA VS. ACIT (2004) 82 TTJ (HYD) 982 15. ACIT VS. MRS. SUNITA VACHANI (1990) 84 CTR (DEL ) 18 16. ITO VS. SANJAY KUMAR GOEL (2007) 108 TTJ (DEL) 823 17. S.K. JAIN VS. ITO (2004) 2 SOT 579 (AGRA) 18. ANIL KUMAR MIDHA (HUF) VS. ITO (2006) 100 TTJ ( JD) 644 HE FURTHER PLEADED THAT THE ASSESSEE HAS RECEIVED G IFT OF RS.1,93,700/- ONLY AND THE LOAN OF RS.38,000/- WAS RECEIVED. IN SUCH A SITUATION, MAKING THE ITA NO.2030/DEL/2010 6 ADDITION OF 50% OF CASH DEPOSIT BY TAKING AN AVERAG E GENERAL RULE IS NOT JUSTIFIED. HE ALSO PLEADED THAT THE LOAN TAKEN WAS REFUNDED BY THE ASSESSEE IN LATER YEARS. IN SUCH SITUATION, THERE WAS NO JUSTI FICATION OF SUSTAINING THE ADDITION OF RS.3 LACS IN THE HANDS OF THE ASSESSEE. SINCE ALL THE PERSONS FROM WHOM THE GIFTS WERE RECEIVED HAD CONFIRMED THE GIFT S. THERE SHOULD NOT BE ANY QUESTION FOR MAKING SUCH ADDITIONS. THE HUSBAN D OF THE ASSESSEE HAS CONFIRMED THAT HE RECEIVED THE GIFTS OF RS.3,72,900 /- AND DEPOSITED IN BANK ACCOUNT, THEN THE CIT (A) IS COMPLETELY UNJUSTIFIED BY CONFIRMING THE ADDITION TO THE EXTENT OF RS.3 LACS IN THE HANDS OF THE ASSESSEE. FURTHER, HE ALSO PLEADED THAT THE ASSESSING OFFICER HAS MADE TH E ADDITION U/S 69 WHICH IS ALSO BAD IN LAW AND ON THAT ACCOUNT ALSO, THE ORDER NEEDS TO BE QUASHED IN VIEW OF THE JUDGEMENT IN THE CASE OF ACIT VS. MEERA DEVI (2007) 14 SOT 190 (ALLAHABAD) AND SITA RAM VIJAY KUMAR VS. CIT (1 995) 216 ITTR 526. 6. ON THE OTHER HAND, LEARNED DR RELIED ON THE ORDE R OF AUTHORITIES BELOW. 7. AFTER HEARING BOTH THE SIDES ON THE ISSUE, WE NO TE THAT SOURCES OF CASH DEPOSIT ON THESE DATES IN THE JOINT BANK ACCOUNT OF ASSESSEE WITH HER HUSBAND AT PUNJAB NATIONAL BANK, TRINAGAR, DELHI HAS BEEN E XPLAINED BY WAY OF GIFTS RECEIVED OF RS.1,93,700/- BY THE ASSESSEE AND RS.3, 15,900/- BY HER HUSBAND RESPECTIVELY ON THE OCCASION OF 35 TH WEDDING CEREMONY AND RETIREMENT FUNCTION AND FROM THE LOAN RAISED OF RS.38,000/- AN D RS.57,000/- BY HER AND ITA NO.2030/DEL/2010 7 HER HUSBAND RESPECTIVELY. THE HUSBAND OF THE ASSES SEE HAS CONFIRMED THAT HE HAS RECEIVED A GIFTS OF RS.3,15,900/-. HE HAD ALSO CONFIRMED THAT HE RECEIVED LOAN OF RS.57,000/-. ONCE THE PERSON WHOSE IDENTIT Y IS NOT IN QUESTION AND HE HAPPENS TO BE THE HUSBAND OF THE ASSESSEE AND JOINT ACCOUNT HOLDER, THEN WE HOLD THAT TO THAT EXTENT, THE ASSESSEE SHOULD NOT B E ASKED TO EXPLAIN THE SOURCE. IN SUCH A SITUATION, THE CIT (A) WAS NOT JUSTIFIED IN CONFIRMING THE 50% OF CASH DEPOSIT AS ADDITION IN HER HAND. THE HUSBAND OF THE ASSESSEE HAD CONFIRMED THAT HE HAD RECEIVED GIFTS AND LOAN THEN IT SHALL NOT BE FAIR TO SUSTAIN ADDITION IN HER HANDS. THE REVENUE IS FREE TO ASK OR INVESTIGATE THE SOURCE IN THE HANDS OF HUSBAND OF ASSESSEE, SHRI G. S. TAYAL. ASSESSEE CAN BE ASKED ONLY TO EXPLAIN THE AMOUNT OF GIFT RECEIVED A ND LOAN RAISED. IN RESPECT OF THE LOAN RAISED BY THE ASSESSEE OF RS.38,000/-, THE CONFIRMATIONS ALONG WITH PAN NUMBERS AND ADDRESSES OF THESE CREDITORS WERE S UBMITTED BEFORE THE AUTHORITIES BELOW, EVEN THE MOBILE NUMBERS OF THESE CREDITORS WERE PROVIDED TO THE AUTHORITIES BELOW. THE LOANS HAVE BEEN RET URNED BY CHEQUE IN LATER YEARS. THEREFORE, WE HOLD THAT THE ASSESSEE WAS A BLE TO DISCHARGE THE ONUS PLACED UPON HER U/S 68 OF THE INCOME-TAX ACT BY WAY OF PROVING THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF TRANSACTION. I N RESPECT OF LOAN AMOUNT, ASSESSEE HAD DISCHARGED ONUS, HENCE TO THAT EXTENT, THE SOURCE IS EXPLAINED. NOW, WE WILL SEE THE GIFTS RECEIVED OF RS.1,93,500/ -. TWO GIFTS WERE RECEIVED ITA NO.2030/DEL/2010 8 FROM THE NRIS WHO WERE DOCTORS AND COPY OF THEIR CR EDIT LIMIT WITH BANK WAS FILED, THEREFORE, THE IDENTITY AND THE CAPACITY OF THE DONORS ARE NOT IN DOUBT. THESE TWO NRI DONORS HAVE CONFIRMED THE TRANSACTION , HENCE GENUINENESS IS PROVED. THEREFORE, THE AMOUNT OF THESE TWO GIFTS I S ACCEPTABLE AS GENUINE SOURCE OF CASH DEPOSITED WITH BANK ACCOUNT. OTHE R TWO DONORS, I.E. HIRA MANI JAIN AND S.C. JAIN ARE CLOSE RELATIVE BEING SI STER AND FATHER OF WIFE OF ASSESSEES SON. IN SUCH RELATIONS, GIFTS ARE NORMA L SOCIAL TRADITION. ONE OF THE DONORS PRODUCED BEFORE THE ASSESSING OFFICER AND SH E CONFIRMED THE GIFTS. THEREFORE, LOOKING TO THE NATURE OF RELATIONSHIP AN D CONFORMATIONS, THE GIFTS ARE CONSIDERED AS GENUINE. BY HOLDING SO, WE TREAT THESE TWO GIFTS AS GENUINE SOURCE TO EXPLAIN THE CASH DEPOSIT IN BANK TO THAT EXTENT. IN THESE FACTS AND CIRCUMSTANCES, THE AUTHORITIES BELOW ARE NOT JUSTIF IED IN DISBELIEVING THE EXPLANATION IN RESPECT OF THE FOUR DONORS REFERRED ABOVE AND TWO CREDITORS. TO THAT EXTENT, THE EXPLANATION OF THE ASSESSEE REGARD ING CASH DEPOSIT IS ACCEPTABLE. IN RESPECT OF REMAINING FOUR GIFTS FRO M RAJEEV KUMAR GUPTA, MRS. MANU VERMA, ROBIN VERMA AND ANUJ KUMAR, WE HOL D THAT THE ASSESSEE WAS NOT ABLE TO DISCHARGE THE ONUS AND TO PROVE THE CREDITWORTHINESS AND GENUINENESS OF TRANSACTIONS. THE RELATIONSHIP AND ANY RECIPROCITY WERE ALSO NOT ESTABLISHED. THE TEST OF PROBABILITY WAS ALSO AGAINST THE ASSESSEE. IN VIEW OF THE ABOVE, THIS GROUND OF ASSESSEES APPEAL IS PARTLY ALLOWED. ITA NO.2030/DEL/2010 9 8. IN THE GROUND NO.2, THE ASSESSEE HAS OBJECTED TO THE ADDITION OF RS.34,405/- ON ACCOUNT OF INTEREST INCOME. 9. LEARNED AR SUBMITTED THAT BANK HAD DEDUCTED TDS BUT THIS FACT WAS NOT IN THE KNOWLEDGE OF ASSESSEE. IN THE LATEST BO ARDS CIRCULAR NO.03/2010 DATED 2 ND MARCH, 2010 WHEREIN THE BOARD HAS DIRECTED THAT TH E TDS ON THE INTEREST ACCRUAL ON THE FDR AT THE BANK MAY BE DEDU CTED AS PER THE DEPOSITORS/PAYEES REQUIREMENT OR ON MATURITY OR O N ENCASHMENT OF TIME DEPOSITS. IN VIEW OF THIS, ASSESSEE SHOULD BE ALLO WED RELIEF. ON THE OTHER HAND, THE LEARNED DR SUBMITTED THAT THIS CIRCULAR H AS NO RELEVANCE IN RESPECT OF THE ASSESSEES CASE. THE ASSESSEE WAS HAVING FD R SINCE AUGUST, 2004 FOR A PERIOD OF THREE YEARS WITH PUNJAB NATIONAL BANK, TRINAGAR, DELHI AND THE INTEREST ACCRUED AND TDS WAS DEDUCTED. SIMILARLY, INTEREST WAS ALSO ACCRUED AND PAID TO THE ASSESSEE IN THE SAVING BANK ACCOUNT . THEREFORE, THE BOARD CIRCULAR IS NOT RELEVANT TO THE FACTS OF THE ASSESS EES CASE AND HE PLEADED TO SUSTAIN THE ORDER OF THE CIT (A). 10. WE HAVE HEARD BOTH THE PARTIES AND WE FIND THAT THE ASSESSEE WAS HAVING A FDR OF RS.4 LACS WITH THE PUNJAB NATIONAL BANK, TRINAGAR, DELHI. THE BANK DEDUCTED THE TAX ON THE INTEREST PAYABLE T O THE ASSESSEE ON THE FDR. THE ASSESSEE ALSO RECEIVED INTEREST ON SAVING BANK ACCOUNT TOTALING OF RS.7,845/-. THE TDS DEDUCTED BY PUNJAB NATIONAL BA NK, TRINAGAR, DELHI ON ITA NO.2030/DEL/2010 10 THE INTEREST ACCRUED ON THE FDR WAS RS.2,109/-. TH E FACTS OF ASSESSEES CASE HAS NO RELEVANCE TO THE BOARD CIRCULAR. THE CIRCUL AR ISSUED ON 3 RD MARCH, 2010 IS REGARDING TAX DEDUCTION AT SOURCE ON PAYMEN T OF INTEREST ON TIME DEPOSITS. IN THE CASE OF THE ASSESSEE, THE TDS HAD ALREADY BEEN DEDUCTED AND INCOME ALREADY ACCRUED AND EARNED, THEREFORE, WE FI ND NO FAULT IN ORDER OF CIT (A) IN CONFIRMING THE ADDITION. ACCORDINGLY, T HE ORDER OF CIT (A) ON THIS ISSUE IS UPHELD AND THE SECOND GROUND OF ASSESSEES APPEAL IS DISMISSED. 11. GROUND NOS.3 TO 6 ARE GENERAL IN NATURE AND DO NOT REQUIRE ANY ADJUDICATION. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 21 ST DAY OF APRIL, 2011. SD/- SD/- (RAJPAL YADAV) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : THE 21 ST DAY OF APRIL, 2011 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT (A)-XXX, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.