Pushpa C. Varma, Kolkata V. DCIT, C ircle- 35, Kolkata, Kolkata

ITA 2126/KOL/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54753 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 26-11-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A K PRAMANICK
• Assessee Lawyers: A K BANERJEE
• Keywords: Gift; Depreciation; Corroborative evidences
• Section: 68

Judgement Text

, , , , , ,, , IN THE INCOME-TAX APPELLATE TRIBUNAL, C BENCH: K OLKATA [ . . , ! ! ! ! , ] [BEFORE SHRI S.V. MEHROTR A, AM & SHRI MAHAVIR SINGH, JM] ' ' ' ' / ITA NO. 2126/KOL/2010 !#$ %& !#$ %& !#$ %& !#$ %& / ASSESSMENT YEAR: 2006-07 PUSHPA C. VARMA -V- DY. COMMISSIONER OF INCOM E TAX KOLKATA. [PAN: ABSPV 5402 G] CIRCLE-35, KOLKATA. [ '( '( '( '( /APPELLANT ] ]] ] [ *+'( *+'( *+'( *+'(/ // / RESPONDENT ] ] ] ] '( '( '( '( / FOR THE APPELLANT: SHRI A. K. BANERJEE *+'( *+'( *+'( *+'( / FOR THE RESPONDENT: SHRI A. K. PRAMANICK -#. / 0 -#. / 0 -#. / 0 -#. / 0 /DATE OF HEARING: 21.12.2011 1% / 0 1% / 0 1% / 0 1% / 0 /DATE OF PRONOUNCEMENT: 29.12.2011 2 /ORDER ! ! ! ! , ,, , PER MAHAVIR SINGH, J M T HIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF C IT(A) IN APPEAL NO.309/CIT(A)- XX/CIR-35/08-09/KOL DATED 15.09.2010. ASSESSMENT WA S FRAMED BY DCIT, CIRCLE-35, KOLKATA FOR ASSESSMENT YEAR 2006-07 UNDER SECTION 1 43(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORD ER DATED 12.12.2008. 2. THE FIRST ISSUE IN THIS APPEAL OF ASSESSEE AGAIN ST THE ORDER OF CIT(A) CONFIRMING THE ADDITION OF UNEXPLAINED GIFTS UNDER SECTION 68 OF T HE ACT. FOR THIS ASSESSEE RAISED FOLLOWING GROUND NO.1:- (1) FOR THAT THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) SHOULD NOT HAVE ACTED ARBITRARILY AND CAPRICIOUSLY IN CONF IRMING THE ADDITION OF RS.80,000/- TO THE TOTAL INCOME OF THE APPELLANT AS CASH CREDIT U/S. 68 OF INCOME-TAX ACT, 1961 WITHOUT TAKING INTO CONS IDERATION OF THE EVIDENCES & ARGUMENTS ADDUCED TO HIM. [ITA NO. 2126/KOL/2010 ] 2 3. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT ASSESSING OFFICER DURING THE COU RSE OF APPELLATE PROCEEDINGS MADE ADDITION ON ACCOUNT OF RECEIPT OF UNEXPLAINED CASH GIFTS FROM FOLLOWING FOUR PERSONS:- SL.NO. NAME OF THE DONORS AMOUNT (RS.) 1. SMT. LAXMIBAI RUPEREL RS.20,000/- 2. SMT. RADHABHAI RAMDAS RS.20,000/- 3. ESTATE OF LATE HARAKH BAI THAKKAR RS.15,000/- 4. SMT. TEJASWINI VERMA RS.25,000/- 4. WE FIND FROM THE ORDERS OF THE LOWER AUTHORITIES AND ARGUMENTS OF LD. COUNSEL THAT FIRST THREE DONORS HAVE FILED COPIES OF BALANCE SHE ET AS ON 31.03.2005 WHEREIN THEY HAVE SUFFICIENT CASH BALANCES BUT THERE IS NO WITHDRAWAL FROM BALANCE SHEET OR THERE IS NO GIFT REFLECTED IN THEIR BALANCE SHEETS AS CLAIMED BY ASS ESSEE. IN THE CASE OF FOURTH DONOR, THERE IS NO SUPPORTING EVIDENCE WHATSOEVER ON THE REASON THA T SHE IS RESIDING ABROAD. IN VIEW OF THESE FACTS, ASSESSING OFFICER AS WELL AS CIT(A) CO NCLUDED THAT ASSESSEE FAILED TO ESTABLISH THE CREDITWORTHINESS OF THESE DONORS AND ALSO THE G ENUINENESS OF TRANSACTIONS, HENCE, ADDED THE GIFT AS UNEXPLAINED BY INVOKING PROVISIONS OF S ECTION 68 OF THE ACT. WE FIND THAT ALL THE GIFTS ARE RECEIVED IN CASH I.E. FROM ABOVE NAMED FO UR DONORS. EVEN NOW BEFORE US, LD. COUNSEL COULD NOT PRODUCE ANYTHING TO CONTRADICT TH AT THESE GIFTS ARE DECLARED IN THE BALANCE SHEET OR CASH QUA THAT AMOUNT HAS BEEN WITHDRAWN FR OM THE BALANCE SHEET OF THE RESPECTIVE DONORS. IN THE CASE OF FOURTH DONOR, SMT. TEJASWINI VERMA, EVEN THE IDENTITY IS NOT PROVED WHAT TO TALK OF CREDITWORTHINESS AND GENUINENESS OF TRANSACTIONS. BEFORE US, LD. COUNSEL FOR THE ASSESSEE STATED THAT THE REQUIREMENT OF LAW IS THAT NO CREDITWORTHINESS IS REQUIRED TO BE PROVED. WE CANNOT ACCEPT THE CONTENTIONS OF ASSESSE E THAT THE BASIC REQUIREMENT OF PROVISIONS OF SECTION 68 TO PROVE GENUINENESS OF GI FTS OR SOURCE OF CREDITWORTHINESS, GENUINENESS OF TRANSACTION AND IDENTITY OF DONOR OR CREDITOR. WHEN A CASH ENTRY APPEARS IN THE ACCOUNTS OF ASSESSEE, HE HAS A LEGAL OBLIGATION TO EXPLAIN THE NATURE AND SOURCE OF SUCH CREDIT, IF ASSESSEE OFFERS AN EXPLANATION ABOUT CAS H CREDIT, REVENUE CAN PUT ASSESSEE TO PROVE OF HIS EXPLANATION AND IF ASSESSEE FAILED TO TENDER EVIDENCE OR BURKS ENQUIRY, ASSESSING [ITA NO. 2126/KOL/2010 ] 3 OFFICER IS JUSTIFIED IN REJECTING THE EXPLANATION A ND HOLDING AS INCOME FROM UNEXPLAINED SOURCES. IN THE PRESENT CASE, ASSESSING OFFICER IS RIGHT IN TREATING THE GIFTS AS UNEXPLAINED AND RIGHTLY ADDED TO THE INCOME OF ASSESSEE, HENCE, WE CONFIRM THE ORDER OF CIT(A). THIS ISSUE OF ASSESSEES APPEAL IS DISMISSED. 5. THE NEXT ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST ORDER OF CIT(A) CONFIRMING THE ADDITION OF ESTABLISHMENT EXPENSES, MOTOR CAR EXPEN SES, DISALLOWANCES OF INTEREST ON LOAN, DISALLOWANCE OF DEPRECIATION. FOR THIS, ASSESSEE HA S RAISED FOLLOWING GROUND NOS. 2, 3, 4 & 5:- (2) FOR THAT THE LEARNED COMMISSIONER OF INCOME-TA X (APPEALS) WAS ERRONEOUS IN UPHOLDING THE ADDITION OF RS.60,686/- CLAIMED BY THE APPELLANT UNDER THE HEAD ESTABLISHMENT EXPENSES W ITHOUT TAKING INTO CONSIDERATION OF THE ARGUMENTS ADDUCED BY THE APPELLANT. (3) FOR THAT THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) WAS ERRONEOUS IN CONFIRMING THE ADDITION OF RS.7,191/- CLAIMED UNDER THE HEAD MOTOR CAR EXPENSES WITHOUT TAKING INTO CONSI DERATION OF THE FACTS THAT THE EXPENSES WAS EXCLUSIVELY INCURRED FO R THE PURPOSE OF EARNING INCOME FROM OTHER SOURCE. (4) FOR THAT THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) SHOULD NOT HAVE ACTED ARBITRARILY AND CAPRICIOUSLY IN CONF IRMING OF RS.19,400/- CLAIMED AS INTEREST ON LOAN WHICH WAS E XCLUSIVELY INCURRED FOR THE PURPOSE OF INCOME DERIVED FROM OTH ER SOURCE WITHOUT TAKING INTO CONSIDERATION OF THE ARGUMENTS ADDUCED BY THE APPELLANT. (5) FOR THAT THE LEARNED COMMISSIONER OF INCOME-TA X (APPEALS) WAS ERRONEOUS IN CONFIRMING THE ADDITION OF RS.21,380/- CLAIMED AS DEPRECIATION ON PRESUMPTION AND WITHOUT ANY BASIS W HATSOEVER. 6. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT ASSESSEE HAS DECLARED INTEREST I NCOME OF RS.2,44,541/- FROM BANK, LIC AND RBI BONDS AND CLAIMED ESTABLISHMENT EXPENSES OF RS.60,686/-, MOTOR CAR EXPENSES AT RS,7,191/-, DEPRECIATION ON MOTOR CAR AT RS.31,380/ -, PRINTING AND STATIONARY EXPENSES AT RS.209/- AND INTEREST ON BORROWED CAPITAL AT RS.19, 400/-. ASSESSING OFFICER DURING THE [ITA NO. 2126/KOL/2010 ] 4 COURSE OF ASSESSMENT PROCEEDINGS MADE DISALLOWANCES BY STATING THAT THE EXPENSES ARE NOT CONNECTED OR INCIDENTAL TO THE EARNINGS OF THIS INC OME. CIT(A) ALSO CONFIRMED THE FINDINGS EXACTLY ON THE SAME REASONING. BEFORE US, LD. COUNS EL STATED THAT ASSESSEE, BEING AN OLD LADY, DEPENDS UPON STAFF FOR OPERATION OF BANKS AND FINANCIAL INSTITUTIONS. FOR THIS, SHE HAS TO INCUR EXPENSES FOR VISITING BANKS AND OTHER FINANCI AL INSTITUTIONS. ON ENQUIRY FROM THE BENCH, LD. COUNSEL COULD NOT EXPLAIN HOW THESE ARE CONNECTED WITH EARNING OF THIS INCOME AND FALLING UNDER SECTION 57 OF THE ACT. HE COULD N OT REPLY ANYTHING OR COULD NOT SAY HOW THESE EXPENSES ARE FOR EARNING THIS INCOME. HENCE, WE HAVE NO HESITATION IN CONFIRMING THE ORDER OF CIT(A). THESE FOUR GROUNDS OF ASSESSEE ARE REJECTED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. 2 - 2 - 2 - 2 - 3 -# 4 5 3 -# 4 5 3 -# 4 5 3 -# 4 5 ORDER PRONOUNCED IN COURT ON 29.12.2011 SD/- SD/- [ . . , ] [ ! ! ! ! , ] [S. V. MEHROTRA] [MA HAVIR SINGH] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 29TH DECEMBER, 2011. COPY FORWARDED TO THE - 1. PUSHPA C. VARMA, 135, CANNING STREET, KOLKATA-70000 1. 2. DY.COMMISSIONEER OF INCOME TAX, CIRCLE-35, 18, RABI NDRA SARANI, KOLKATA-700 001. 3. CIT(A)- (4) CIT- 4. D.R., I.T.A.T., KOLKATA. [TRUE COPY] BY ORDER ASSISTANT REGISTRAR (KKC) I.T.A.T., KOLKATA.