Shri Harimohan Agrawal, Ahmedabad V. The CIT, Range-III, Ahmedabad

ITA 2061/AHD/2005

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 7755 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 10 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2009
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 25-06-2009
• Assessment Year: 2001-2002
• Appeal Filed On: 14-09-2005
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJEEV AGARWAL
• Assessee Lawyers: URBASHI SODHAN
• Keywords: Unexplained cash credit; Gift; Difference of opinion; Capital receipt; Retraction; Change of opinion; Capital Gains
• Section: 68; 263

Judgement Text

IN THE INC O ME TAX APPELLATE TRIBUNAL, A - BENCH, AHMEDABAD . BEFORE : SHRI T.K.SHARMA, JUDICIAL MEMBER , AND SHRI D.C.AG RAWAL , ACCOU NTANT MEMBER. ITA NO. 2061/AHD/2005 (ASSESSMENT YEAR 2001 - 02) HARIMOHAN AGRAWAL, KUMAR AUTOMOBILES,NR. SUNRISE HOTEL, B AWALA ROAD, AHMEDABAD. PAN ABGPA 0603 G VERSUS THE COMMISSIONER OF INCOME TAX, RANGE III, AHMEDABAD (APPELLANT) (RESPONDENT) FOR THE APPELLANT: S MT. URBASHI SODHAN, AR FOR THE RESPONDENT SHRI RAJEEV AGARWAL, DR ORDER SHRI T.K.SHARMA, JUDICIAL MEM BER : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DT.7.6.2005 OF THE COMMISSIONER OF INCOME - TAX, AHMEDABAD III FOR THE ASSESSMENT YEAR 2001 - 02. 2. THIS APPEAL HAS BEEN FILED DELAYED BY 18 DAYS. THE ASSESSEE HAS FILED A PETITION DT.13.9.2005 U/S.263 OF THE I.T.ACT, 1961 SEEKING CONDONATION OF DELAY. THE REASON OF SUCH DELAY EXPLAINED THEREIN IS THAT THE ASSESSEE RECEIVED THE ORDER DT.7.6.2005 OF THE CIT ON 28.6.2005. SINCE THE ASSESSEE WAS UNDER MEDICAL TREATMENT FOR BILIARY COLIC, THE APPEAL COULD NOT BE F ILED IN TIME. IN SUPPORT OF IT, A MEDICAL CERTIFICATE HAS BEEN FILED. CONSIDERING THE EXPLANATION, WE CONDONE THE SMALL DELAY OF 18 DAYS AND ADMIT THE APPEAL. 3. THE ASSESSMENT U/S.143(3) IN THE PRESENT CASE WAS MADE ON 27.8.2003. THE CIT FOUND THAT THE AS SESSING OFFICER DID NOT EXAMINE THE ACCRETION TO ASSESSEES CAPITAL TO THE EXTENT OF RS.7,61,000 BEING GIFTS FROM A S MANY AS 18 PERSONS AS TABULATED IN THE SHOW CAUSE DT.31.3.2004 ISSUED BY THE LEARNED CIT, WHICH IS AS UNDER : SR.NO. NAME OF PERSON S AMOUNT (RS) 1. DINESHBHAI A AGRAWAL 70,000 2. RAJENDRA MANUBHAI PATEL 50,000 3. DINESHBHAI A. AGRAWAL 30,000 4. SHIVESHKUMRA SHIVKUMAR CHHATRAIA 35,000 5. RAMBABUSINH SINGER 50,000 6. K.V.CHAUHAN 35,000 7. BINDU SHANKER THAKER 40,000 ITA NO. 2061/AHD/2005 2 8. BHANUMATIBEN JAG JIVANBHAI 40,000 9. RAKESHBHAI MADANMOHAN TIVARI 50,000 10. P.T.PUROHIT 50,000 11. MUNNALAL V.KATHARIA 50,000 12. JOHN V.KANTHARIA 50,000 13. SRISING VARSING RAJPUT 25,000 14. O.B.AGRAWAL 25,000 15. OMPRAKASH B.AGRAWAL 25,000 16. OMPRAKASH B.AGRAWA L 37,000 17. RAMPRAKASH AGRAWAL 49,000 18. JYOTIBEN NAVINBHAI SHAH 50,000 THE LEARNED CIT NOTICED THAT N O ENQUIRY ABOUT THE DONORS IDENTITY AND GENUINENESS OF THE ABOVE GIFTS WAS MADE BY THE ASSESSING OFFICER . HE FURTHER NOTICED THAT THE CONFIRMATION S AVAILABLE ON RECORD SHOW THAT THOSE HAVE BEEN PREPARED BY ONE PERSON AS CONTENTS ARE SAME AS THE CONTENTS OF THE LETTERS CLEARLY SHOW THAT THE DONORS ARE FINANCIALLY WEAK AND APPARENTLY UNRELATED TO THE ASSESSEE. ON THIS BASIS, THE LEARNED CIT HELD THE ASSESSMENT ORDER TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. ACCORDINGLY HE ISSUED SHOW CAUSE NOTICE. THE ASSESSEE FILED A LETTER DT.25.6.2005 STATING THEREIN THAT THE ASSESSEE HAD RECEIVED GIFTS OF R S.7,61,000 THROUGH CHEQUES FROM HIS REL ATIVES AND FRIENDS DUE TO NATURAL LOVE AND AFFECTION. HE DID NOT WISH TO PRODUCE DONORS BEFORE THE CIT. THE ASSESSEE FURTHER STATED THAT HE IS READY TO PAY TAX TO AVOID EMBARRASSMENT TO HIS DONORS AND WITHOUT ADMITTING THE SAME AS BOGUS GIFTS. THE ASSESSEE FURTHER STATED THAT EVEN IF THIS GIFT AMOUNT IS TREATED AS HIS INCOME U/S.68 OF THE ACT, NO PENALTY PROCEEDINGS U/S.271(1)(C) SHOULD BE INITIATED. CONSIDERING THE ABOVE, THE LEARNED CIT WAS OF THE VIEW THAT THE AMOUNT SHOWN AS GIFTS SHOULD BE TREATED AS A SSESSEES INCOME U/S.68 OF THE ACT. ACCORDINGLY HE DIRECTED THE ASSESSING OFFICER TO MODIFY THE ORDER DT.27.8.2003 TO RECOMPUTE ASSESSEES INCOME TREATING THE AMOUNT OF GIFTS AS ASSESSEES INCOME U/S.68 OF THE I.T.ACT,1961. 4. AGGRIEVED AGAINST THE ORDER O F THE LEARNED CIT , THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL RAISING THE FOLLOWING GROUNDS OF APPEAL. 1 . THE LEARNED CIT, RANGE - ILL HAD NO SUFFICIENT REASON OR COGNIZANT MATERIAL TO JUSTIFY THAT THE ORDER OF A.O. WAS ERRONEOUS IN SO FAR AS IT ITA NO. 2061/AHD/2005 3 CANNOT BE PREJUDICIAL TO THE INTERESTS OF THE REVENUE AND THEREFORE THE SECTION 263 WRONGLY APPLIED. THE CIT HAD ACTED OUT OF JURISDICTION. 2. THE LEARNED CIT, RANGE - III, AHMEDABAD HAS ERRED IN LAW BY DIRECTING TO MODIFY THE ORDER DATED 27.08. 2003 TO RECOMPUTE ASSESSEES INCOME TREATING THE AMOUNT OF GIFTS (CAPITAL RECEIPT) AS ASSESSEES INCOME U/S 68 OF INCOME TAX ACT. 3. THE LEARNED CIT, RANGE - III, AHMEDABAD HAS ERRED BY REOPENING THE MATTER OF GIFT, WHICH HAD ALREADY CONSIDERED BY THE ASS ESSING OFFICER AT THE TIME OF ASSESSMENT U/S 143(3). THERE CANT BE TWO OPINION BY THE REVENUE FOR THE SAME FACT. 4. THE LEARNED CIT, RANGE - III, AHMEDABAD HAD ERRED FOR NOT CONSIDERING THE INFORMATION & EVIDENCES SUBMITTED PROOF OF CREDITWORTHINESS, IDE NTIFICATION AND GENUINENESS OF THE DONOR DURING THE ASSESSMENT PROCEEDING AS WELL AS REPLY TO LEARNED CIT. 5. THE LEARNED CIT, RANGE - III , AHMEDABAD HAS ERRED BY MISINTERPRETING THE MENTAL PRESSURE & LOGICAL ISSUE OF ASSESSEES SITUATION FOR CALLING DO NOR TO PRESENT AT THAT TIME BEFORE THE LEARNED COMMISSIONER INSPITE OF ALL EVIDENCES SUBMITTED. NO ASSESSEE WO ULD LIKE TO PUT THE WELL WISHER S UNDER THE INVESTIGATION OR ANY LITIGATION OR AT TROUBLE, WHO HAD ALW AYS SUPPORTED HIM. SINCE THERE B EING A SOCIAL & PERSONAL RELATION WITH THE DONORS, THE ASSESSEE WAS UNDER TRE MENDOUS MENTAL PRESSURE FOR DEM ISSION OF PERSONAL IMAGE IN SOCIETY & FRIEND CIRCLE. IT WOULD BE GUILTY CONSCIOUSNESS TO ASSESSEE FOR PUTTING DONORS (WELL WISHERS, WHO HAD ALWAYS HELPED HIM) ON THE OATH BEFORE ANY AUTHORITY UNDER INVESTIGATION AND REPLYING TO MULTIPLE QUESTIONS LIKE WHAT, WHY, HOW, WHYNT IN ORDINARY SENSE AND PRACTICE WITH NORMAL SET OF MIND. THEREFORE, THE ASSESSEE HAD SHOWN HIS EAGERNESS TO PAY TAX TO EMBARRASSMENT TO DONORS AND WITHOUT ADMITTING THE SAME AS BOGUS GIFTS. 6. THE LEARNED CIT, RANGE - III, AHMEDABAD HAD ERRED FOR PRESSING THE ASSESSEE TO CALL /PRESENT THE DONORS BEFORE HIM. THE ASSESSEE HAD PERFORMED HIS PRIMARY DUTY BY SUBMITTING THE REQUIRED EVIDENCES FOR IDEN TIFICATION, CREDITWORTHINESS & GENUINENESS OF GIFT, NOW ITS DUTY OF LEARNED CIT, WHO HAD RECOURSE TO VERIFY THEM BY ISSUING SUMMON TO DONORS FOR VERIFICATION / CONFIRMATION INSTEAD OF PRESSING THE ASSESSEE TO CALL/ PRESENT THE DONOR. THUS THE LEARNED CIT HA D MADE THE DIRECTION TO MAKE ADDITION IS TOTALLY PRE BIASED, PREJUDICIAL, ILLOGICAL & ERRONEOUS, WITHOUT MAKING ANY VERIFICATION FROM THE DONOR S. IT IS VERY SURPRISED TO ITA NO. 2061/AHD/2005 4 NOTE THAT NO LETTER ISSUED FOR CONFIRMATION / VERIFICATION OF GIFT OR ANY SUMMON TO DON ORS FOR PERSONAL PRESENCE BEFORE HIM FOR GETTING THE CONFIRMATION/VERIFICATION OF IDENTITY, GENUINENESS & CREDITWORTHINESS. 7. THE ORDER AS PASSED BY THE LEARNED CIT, RANGE III, AHMEDABAD IS NOT BASED ON THE ACTUAL FACTS OF THE CASE AND NOT JUSTIFIABLE IN LAW. 8. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ALL THE ABOVE GROUNDS OF APPEAL AT OR DURING THE COURSE OF HEARING. 5. IN RESPECT OF ABOVE GROUNDS, THE LEARNED AR OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS SUBMITTED CONFIRMATION LETTERS FROM ALL THE DONOR S AND RESPECTIVE AMOUNT OF GIFTS HAVE BEEN SHOWN IN SUCH LETTERS. THESE LETTERS WERE FILED BEFORE THE ASSESSING OFFICER. ALL THE GIFTS WERE RECEIVED BY CHEQUES AND MONEY IS PASSED THROUGH BANKING CHANNELS. FURTHER ALL THE PERSONS HAVE THE CAPACITY TO GIVE THE GIFT AND THEREFORE, THEIR CREDITWORTHINESS COULD NOT BE IN DOUBT. WHERE THE ASSESSEE HAS SUBMITTED ALL THE RELEVANT DOCUMENTS THEN IT HAS DISCHARGED ITS ONUS AND IT IS FOR THE ASSESSING OFFICER NOW TO SUMMON THE DONORS AND SHOW THAT G IFTS ARE NOT GENUINE. IF THE ASSESSING OFFICER FAILED TO DO SO , IT WOULD NOT LEAD TO INFERENCE THAT ORDER OF THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. IT IS NOT THE CASE WHERE THE ASSESSING OFFICER HAS NOT APPLIED HIS M IND OR COLLECTED MATERIAL BEFORE FORMING AN OPINION. ALL THE MATERIALS WERE SUBMITTED BY THE ASSESSEE TO THE ASSESSING OFFICER AND ON THAT BASIS HE HAD FORMED AN OPINION THAT GIFTS ARE GENUINE, THEN LEARNED CIT COULD NOT HELD THAT ASSESSMENT ORDER IS ERRON EOUS AND DIRECT THE ASSESSING OFFICER TO MAKE THE ADDITION. FURTHER THE LEARNED CIT HAS NO POWER TO REQUIRE THE PRESENCE OF THE DONORS, THEREFORE, HE COULD NOT DIRECT THE ASSESSEE TO PRODUCE THE DONORS. THE POWER TO CARRY OUT ENQUIRY WITH THE LEARNED CIT W OULD COME ONLY WHEN THE ORDER OF THE ASSESSING OFFICER IS PRIMAFACIE ERRONEOUS. IF AN ORDER OF THE ASSESSING OFFICER IS NOT ERRONEOUS, AS IN THE PRESENT CASE, THE CIT COULD NOT CARRY ANY ENQUIRY, THEREFORE, COULD NOT DIRECT THE ASSESSEE TO PRODUCE THE DONO RS BEFORE HIM. IN VIEW OF THESE, THE ORDER OF THE LEARNED CIT IS NOT SUSTAINABLE AND IT SHOULD BE QUASHED. ITA NO. 2061/AHD/2005 5 6. AGAINST THIS, LEARNED DR SUBMITTED THAT AS PER SECTION 263 , CIT IS FULLY EMPOWER ED TO CALL FOR ANY EVIDENCE OR TO CARRYOUT ANY ENQUIRY BEFORE HE PASSES AN ORDER U/S.263. ONCE HE ISSUES THE SHOW CAUSE NOTICE TO THE ASSESSEE THEN HIS JURISDICTION TO CARRY OUT ENQUIRY STARTS. THE CONCLUSION AS TO WHETHER THE ORDER OF THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE COULD N OT BE ARRIVE D AT UNLESS CIT CARRIES OUT ENQUIRIES. THE POWERS TO CARRY OUT ENQUIR IES ARE GIVEN TO HIM ONLY WITH THE SOLE PURPOSE FOR DETERMINING WHETHER THE ORDER OF THE ASSESSING OFFICER IS ERRONEOUS OR NOT. IN THE PRESENT CASE, THE LEARNED DR SUBMITTED T HE LEARNED CIT REQUIRED THE PRESENCE OF THE DONORS SO AS TO CONFIRM THEIR IDENTITY, CREDITWORTH INESS, GENUINENESS OF GIFTS, OCCASION OF GIFT S AND THE RELATION SHIP OF THE DONORS WITH THE DONEES. SINCE ISSUE BEFORE THE CIT WAS TO FIND OUT THE GIFTS ACCEPTED BY THE ASSESSEE ARE WHETHER GENUINENESS OR REAL SO HE HAD RIGHTLY REQUIRED THE ASSESSEE TO PRODUCE THE DONORS AND THAT IS WHY THE ASSESSEE HIMSELF CAME FORWARD TO ACCEPT THAT TAX MAY BE LEVIED ON THE AMOUNT OF THE GIFTS. IN THIS REGARD, THE LEARNED DR DREW OUR ATTENTION TO PAGES 2 AND 3 OF THE ORDER OF THE LEARNED CIT. HE ALSO DREW OUR ATTENTION TO THE LETTER OF THE ASSESSEE DT.20.5.2005 ADDRESSED BY HIM TO THE CIT, AHMEDABAD III, WHEREIN THE ASSESSEE HAS SHOWN HIS READINESS TO PAY TAX ON THE GIFTS TO AVOID EMBARRASSMENT TO HIS DONORS. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE SHORT QUESTION INVOLVED IN THIS APPEAL IS WHETHER THE LEARNED CIT IS JUSTIFIED N DIRECTING THE ASSESSING OFFICER TO MAKE THE ADDITION OF THE A MOUNT OF GIFTS CLAIMED TO HAVE BEEN RECEIVED FROM 18 PERSONS WHEN THE ASSESSING OFFICER HAD ACCEPTED THE CLAIM IN THE ASSESSMENT PROCEEDINGS. IN OUR CONSIDERED VIEW MERELY PLACING THE CONFIRMATORY LETTERS ON RECORD DOES NOT ABSOLVE THE ASSESSEE FROM THE ON US WHICH HEAVILY LAY ON HIM IN RESPECT OF GIFTS CLAIMED TO HAVE BEEN RECEIVED BY HIM . THE ONUS IN RESPECT OF GIFTS IS HEAVIER AS COMPARED TO THE CASH CREDIT. IN CASH CREDIT, A CREDITOR HAS ALWAYS A CLAIM OVER THE MONEY ADVANCED BY IT TO THE ASSESSEE AND TH EREFORE ESTABLISHING ONLY IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION HAVE BEEN HELD SUFF ICIENT IN DISCHARGING THE ONUS BY THE ASSESSEE . BUT IN RESPECT OF GIFTS , THE MONEY OF THE DONOR IS TRANSFERRED FOREVER I N FAVOUR OF THE ASSESSEE, THE REFORE, A ITA NO. 2061/AHD/2005 6 LINK BETWEEN THE ASSESSEE AND THE DONOR IS CUT OFF IN FUTURE. THEREFORE, THE ASSESSEE HAS TO PROVE NOT ONLY THE IDENTITY AND CREDITWORTHINESS OF THE DONORS BUT ALSO THE GENUINENESS OF THE GIFTS IN TERMS OF OCCASION , RELATIONSHIP AND HUMAN PROBABI LITIES. IF THERE IS NO RELATIONSHIP BETWEEN THE DONOR AND DONEE OR THERE IS NO OCCASION FOR GIVING GIFT THEN ONUS LYING ON THE ASSESSEE ARE THAT THE GIFTS ARE GENUINE CANNOT BE SAID TO HAVE BEEN DISCHARGED. HUMAN PROBABILITY IS VERY IMPORTANT INGREDIENT I N COMING TO TH E CONCLUSION THAT THE GIFT GIVEN BY THE DONOR TO TH E ASSESSEE IS GENUINE. IF THERE IS NO EVIDENCE THAT DONOR AND DONEE KNEW EACH OTHER ; OR THAT THEY HAVE NOT MET PRIOR TO THE DATE OF GIFT ; OR SUBSEQUENT TO THE DATE OF GIFT ; OR THAT FAMILY MEMB ERS OF THE DONOR S DO NOT KNOW THE FAMILY MEMBERS OF THE DONEE ; OR THAT DONORS ARE MEN OF HUMBLE MEANS WHEREAS THE DONEE IS MAN OF SUBSTANTIAL WORTH THEN IT IS NOT POSSIBLE TO BELIEVE THAT MONEY WOULD FLOW FROM RAG S TO RICHES. IN ANOTHER SITUATION DONORS AR E EMPLOYEES OF THE DONEE THEN TO ACCEPT EMPLOYEES GIFT TO THE EMPLOYER WOULD BE UNREASONABLE, UNLESS THE ASSESSEE (DONEE) IS ABLE TO ESTABLISH THAT IT HAS ACTUALLY HAPPENED. ALSO WHEN GIFTS ARE GIVEN ALMOST ON THE SAME DATE BY SEVERAL DONEES UNCONNECTED T O EACH OTHER THROUGH COMMON WORDED GIFT - DEED , DRAFTS HAVE BEEN PURCHASED FROM THE SAME BANK, THE DONEES LIVE IN DIFFERENT PLACES COMING TOGETHER ALMOST AT THE SAME TIME TO PURCHASE DRAFT TO GIVE GIFT TO THE ASSESSEE, THE CLAIM OF GIFT CANNOT BE ACCEPTED, U NLESS THE ASSESSEE IS ABLE TO SHOW COGENT EVIDENCE THAT IT H AS ACTUALLY HAPPENED. TO ESTABLISH HUMAN PROBABILITY, THE RELATIONSHIP AND OCCASION IT IS INCUMBENT ON THE AUTHORITIES TO ASK FOR THE ATTENDANCE OF THE DONOR S SO THAT THEY CAN BE SATISFIED ON THES E FACTORS. WHERE ASSESSEE DECLINES TO PRODUCE THE DONORS AND IN ADDITION HE C OMES FORWARD TO SHOW THAT HAS IS READY TO PAY TAX ON THIS AMOUNT TO AVOID EMBARRASSMENT TO THE DONORS THEN NO FAULT CAN BE FOUND IN THE DIRECT IONS OF THE CIT THAT THE GIFT AMOUNT SHOULD BE ADDED AS INCOME OF THE ASSESSEE. IN THIS REGARD WE MAY REFER TO THE LETTER DT.20.5.2005 OF THE ASSESSEE WHEREIN THE ASSESSEE HAS SHOWN HIS READINESS TO PAY TAX ON THE GIFTS TO AVOID EMBARRASSMENT TO HIS DONORS. ONCE THE ASSESSEE HAS COME FORWARD AND ACCEPTED TO PAY TAX ON THE AMOUNT INVOLVED IN GIFTS, WHICH THE ASSESSING OFFICER HAD ACCEPTED AS GENUINE WITHOUT CARRYING OUT ENQUIRIES, THEN THE ORDER OF THE ASSESSING OFFICER ITA NO. 2061/AHD/2005 7 IS CERTAINLY ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. WE ALSO DO NOT AGREE WITH THE LEARNED AR OF THE ASSESSEE THAT THIS IS A CASE OF CHANGE OF OPINION BECAUSE MERELY PLACEMENT OF DOCUMENTS ON RECORD DOES NOT SHOW THAT THE ASSESSING OFFICER HAS APPLIED HIS MIND. EVEN FOR THE SAKE OF ARGUMENT IF IT IS PRESUMED THAT T HE ASSESSING OFFICER HAS ACCEPTED THE CLAIM OF GIFT, THE LEARNED CIT IS NOT PRECLUDED TO EXAMINE WHETHER THE CLAIM OF GIFTS WAS GENUINE OR NOT AND IN THIS PROCESS HE IS WELL WITHIN HIS POWER TO DIRECT THE ASSESSEE TO PRODUCE THE DONORS. WE AGREE WITH THE L EARNED DR THAT THE CONCLUSION THAT WHE THER AN ORDER OF THE ASSESSING OFFICER IS ERRONEOUS NOT CANNOT BE ARRIVED AT UNLESS LEARNED CIT CARRY OUT NECESSARY ENQUIRY AND THAT IS WHY SUCH POWER HAVE BEEN GIVEN TO HIM IN THE ACT. IF PRIOR TO EXERCISE OF THE POWE R TO CARRY OUT ENQUIRY CIT ARRIVED AT A CONCLUSION THAT THE ASSESSMENT ORDER IS ERRONEOUS THEN THE POWERS SO GIVEN IN THE ACT WOULD BECOME MEANINGLESS AND INFRUCTUOUS . IN THIS REGARD WE MAY REFER TO THE CASE NOTE IN THE CASE OF DEPUTY COMMISSIONER OF INCOM E - TAX V. SMT. PHOOLWATI DEVI[2009] 314 ITR (AT) 1 (DELHI) , WHICH READS AS UNDER : SECTION 68 OF THE INCOME - TAX ACT, 1961, REFERS TO AMOUNTS CREDITED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE BUT IT IS NOT EXHAUSTIVE OF THE ADDITIONS THAT CAN BE MADE BY THE ASSESSING OFFICER. WHERE IT IS SEEN THAT THE ASSESSEE IS IN RECEIPT OF MONIES, THEN NOTWITHSTANDING THAT HE DOES NOT MAINTAIN BOOKS OF ACCOUNT IN WHICH SUCH MONIES ARE RECORDED, IT IS HIS BURDEN, WHEN CALLED UPON, TO POINT OUT THE NATURE AND SOURCE OF THE MONEY AND F HIS EXPLANATION IN THIS BEHALF IS NOT FOUND SATISFACTORY IT IS OPEN TO THE ASSESSING OFFICER TO ADD THE SAME AS HIS INCOME. FOR THIS PURPOSE, IT IS NOT NECESSARY FOR THE ASSESSING OFFICER TO RELY ON SECTION 68 OF THE ACT. THE ASSESSEE FILED A RETURN OF INCOME FOR THE ASSESSMENT YEAR 2001 - 02 DECLARING A TOTAL INCOME OF RS. 10,14,252 WHICH INCLUDED LONG - TERM CAPITAL GAINS OF RS. 10,06,817. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD INVESTED IN AGRICULTURAL LAND AND IN A SHOP AND HAD TAKE N LOANS FROM NINE PERSONS TO FINANCE THESE INVESTMENTS. THE ASSESSING OFFICER WAS OF THE OPINION THAT THE CREDITORS BEING AGRICULTURISTS COULD BARELY MAKE THEIR ENDS MEET AND COULD NOT HAVE BEEN IN A POSITION TO ADVANCE SUCH SUBSTANTIAL AMOUNTS TO THE ASSE SSEE. THEREFORE HE HELD THE AGGREGATE LOAN OF RUPEES TEN LAKHS OBTAINED FROM SEVEN PERSONS AS THE ASSESSEES INCOME UNDER SECTION 68, AS UNEXPLAINED CASH CREDIT. THE COMMISSIONER (APPEALS) HELD THAT THE ASSESSEE HAD PROVED THE IDENTITY AND CREDITWORTHINESS OF THE CREDITORS AS WELL AS THE GENUINENESS OF THE ITA NO. 2061/AHD/2005 8 TRANSACTION AND ACCORDINGLY DELETED THE ADDITION OF RS. 10 LAKHS. ON APPEAL: HELD, ALLOWING THE APPEAL, THAT DESPITE THE DOCUMENTATION SUPPORTING THE CLAIM OF THE ASSESSEE SUPERFICIALLY, THE EVIDENCE COUL D NOT BE ACCEPTED IN VIEW OF THE SURROUNDING CIRCUMSTANCES AND HUMAN PROBABILITIES. THERE WERE CERTAIN FEATURES OF THE CASE WHICH BELIE THE DOCUMENTARY EVIDENCE. FIRSTLY, THE LOANS WERE USED BY THE ASSES SEE FOR A PERIOD OF THREE AND HAL F YEARS BUT DID NOT CARRY ANY INTEREST. SECONDLY, IN ALL THE CASES, THE ISSUE OF DRAFT IN FAVOUR OF THE ASSESSEE FROM THE BANK ACCOUNTS OF THE CREDITORS WAS PRECEDED BY AN EQUIVALENT OR ALMOST EQUIVALENT AMOUNT OF CASH DEPOSIT IN THE BANK ACCOUNTS OF THE CREDITORS. THIRDLY, I N A FEW CASES, THE CASH DEPOSIT INCLUDED THE COMMISSION PAYABLE FOR THE DRAFTS. FOURTHLY, THE CLOSE PROXIMITY BETWEEN THE DATES OF THE CASH DEPOSIT AND THE ISSUE OF THE DRAFTS IN SOME CASES WERE ON THE SAME DATE. MOREOVER, THERE WAS NO EVIDENCE TO SHOW THA T THE CREDITORS HAD THE BANKING HABIT IN MOST OF THE CASES, THERE WERE VERY FEW TRANSACTIONS REFLECTED IN THE BANK STATEMENT. THE MERE FACT THAT THE HANDWRITING IN THE PAY - IN - SLIP WAS THAT OF THE CREDITORS DID NOT PROVE THAT THE MONIES ACTUALLY BELONGED TO THEM. THEREFORE, CONSIDERING THE CIRCUMSTANCES AND APPLYING THE TEST OF HUMAN PROBABILITIES IT COULD NOT BE HELD THAT THE ASSESSEE HAD TAKEN A GENUINE LOAN . 8. IN VIEW OF THE ABOVE, WE UPHOLD THE IMPUGNED ORDER OF THE LEARNED CIT AND DISMISS THE APPEAL OF THE ASSESSEE. 9 . BEFORE PARTING, IT IS WORTH MENTIONING HERE THAT IT WAS ARGUED BY THE LEARNED AR OF THE ASSESSEE THAT THE ASSESSEE HAS RETRACTED THE SURRENDER OF GIFT AMOUNT BY FILING AFFIDAVIT DT.11.6.2008. THIS AFFIDAVIT THROUGH THE LETTER DT.14.7.2 008 WAS FILED BEFORE THE TRIBUNAL. IT WAS CLAIMED IN THE SAID AFFIDAVIT THAT HIS ADVOCATE HAS PREPARED THE REPLY BEFORE THE CIT AND HE WAS ADVISED TO SIGN ON IT. IN OUR CONSIDERED VIEW RETRACTION, IF ANY, OUGHT TO HAVE BEEN FILED BEF ORE THE AUTHORITY BEFOR E WHOM A CONFESSION WAS MADE OR BEFORE THE HIGHER/S UPERIOR ADMINISTRATIVE AUTHORITIES . SUCH AN AUTHORITY SHOULD HAVE AN OCCASION TO EXAMINE THE CONFESSION IN THE LIGHT OF THE ALLEGED RETRACTION. FILING OF THE AFFIDAVIT BEFORE THE TRIBUNAL CONTAINING THE AL LEGED RETRACTION HAS NO MEANING BECA USE THE SO CALLED CONFESSION BY THE ASSESSEE BEFORE THE LEARNED CIT WAS BASED ON FACTS AND WAS MADE ONLY AFTER THE LEARNED CIT REQUIRED THE ASSESSEE TO PRODUCE THE DONORS. FURTHER NO IOTA OF ALLEGED RETRACTION HAS BEEN M ENTIONED IN THE GROUNDS OF APPEAL FILED BEFORE THE TRIBUNAL. IF THE GROUNDS OF APPEAL DO NOT CHALLENGE THE ALLEGED CONFESSION MADE BEFORE THE LEARNED CIT , ITA NO. 2061/AHD/2005 9 THE RETRACTION BECOMES ALIEN BEFORE THE TRIBUNA L AND THEREFORE BEYOND THE AREA OF CONSIDERATION. NOTW ITHSTANDING WE ARE OF THE VIEW THAT RETRACTION HAVING NOT BEEN FILED BEFORE THE CIT HIMSELF, FILING OF THE SAME BEFORE THE TRIBUNAL COULD NOT EFFECT TO THE FINAL OUTCOME OF THIS APPEAL. THEREFORE, WE REJECT THE ALLEGED RETRACTION IN THE AFFIDAVIT. 9. IN TH E RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. 24.07.09 SD/ - SD/ - ( D.C.AG RAWAL ) ACCOUNTANT MEMBER. (T.K.SHARMA) JUDICIAL MEMBER DATE: 24.07.09 (H.K.PADHEE) SENIOR PRIVATE SECRETA RY. COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE 2. THE ASSESSING OFFICER 3. THE CIT CONCERNED. 4. THE CIT(A) CONCERNED. 5. THE DR, AHMEDABAD 6. GUARD FILE (IN DUPLICATE) TRUE COPY, BY ORDER, DEPUTY.REGISTRAR.