Smt. Ushaben Yogeshchandra Gandhi, Navsari V. The Income tax Officer,Ward-4, Navsari

ITA 2149/AHD/2009

• Counselvise Citation: 214920514 RSA 2009
• Duration Of Justice: 2 year(s) 10 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 16-05-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 07-07-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DINESHCHANDRA SHARMASR D R
• Assessee Lawyers: N B SHAH
• Keywords: Unexplained cash credit; Gift
• Section: 68

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD , .. , '# ' $ BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEMBER ./ I.T.A. NO.2149/AHD/2009 ( & ' & ' & ' & ' / / / / ASSESSMENT YEAR : 2005-06) SMT.USHABEN YOGESHCHANDRA GANDHI PROP.USHA ACADEMY WARD NO.8, TAROTA BAZAR, NAVSARI & & & & / VS. THE INCOME TAX OFFICER WARD-4 NAVSARI ( '# ./)* ./ PAN/GIR NO. : ABDPG 4735 A ( (+ / // / APPELLANT ) .. ( ,-(+/ RESPONDENT ) (+ . '/ APPELLANT BY : SHRI N.B.SHAH, A.R. ,-(+ / . ' / RESPONDENT BY : SHRI DINESHCHANDRA SHARMA SR.D.R. &0 / #/ // / DATE OF HEARING : 16/5/2012 12' / # / DATE OF PRONOUNCEMENT : 25/5/12 '3/ O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE ARISING FR OM THE ORDER OF THE LD.CIT(A)-I, SURAT DATED 27/05/2009 AND THE GROUNDS RAISED ARE HEREBY DECIDED AS FOLLOWS. 2. GROUND NOS.1 & 2 ARE IN RESPECT OF AN ADDITION O F RS.80,000/- HELD AS UNEXPLAINED CASH CREDIT. ITA NO. 2149/AHD/2009 SMT.USHABEN YOGESHCHANDRA GANDHI VS. ITO ASST.YEAR - 2005-06 - 2 - 2.1. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDI NG ASSESSMENT ORDER PASSED U/S.143(3) OF THE I.T. ACT, 1961 DATED 31/1 1/2007 WERE THAT THE ASSESSEE IN INDIVIDUAL CAPACITY IS ENGAGED IN THE B USINESS OF VOCATIONAL PROFESSIONAL TRAINING INSTITUTE IN THE NAME AND STY LE OF USHAS ACADEMY. THERE WERE UNSECURED LOANS DISCLOSED BY THE ASSESSE E. THE ASSESSEE HAS TAKEN LOAN OF RS.20,000/- EACH FROM (I) CHINTAL H.G ANDHI, (II) KINCHAL R.GANDHI, (III) DIMPLE A.GANDHI AND (IV) JENISH P.G ANDHI. ABOUT THE SOURCE OF RECEIPT IN THE HANDS OF THOSE PERSONS, IT WAS EXPLAINED THAT ALL THOSE FOUR PERSONS HAVE TAKEN AN AMOUNT OF RS.20,00 0/- EACH FROM ONE MR.JAYANTILAL N.GANDHI. IT WAS EXPLAINED THAT SHRI JAYANTILAL N.GANDHI HAD SOLD AGRICULTURAL LAND AND OUT OF THE SALE PROC EEDS GIFTED THE IMPUGNED AMOUNT OF THOSE FOUR PERSONS. HOWEVER, T HE ASSESSING OFFICER HAS NOT ACCEPTED THIS EXPLANATION AND HELD THAT SALE-DEED WAS EXECUTED IN AUGUST-2004, HOWEVER, THE GIFT WAS GIVE N ON 19/4/2004. BEING AGGRIEVED, THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY. 3. THE LEARNED CIT(APPEALS) HAS AFFIRMED THE ACTION OF THE ASSESSING OFFICER IN THE FOLLOWING MANNER:- 2.3. I HAVE CONSIDERED THE SUBMISSION MADE BY THE APPELLANT AND THE OBSERVATION OF THE A.O. THE A.O. HAS ACCEPTED THE DEPOSIT RECEIVED FROM SHRI JAYANTILAL N.GANDHI. THE APPELL ANT HAS STATED THAT SHRI JAYANTILAL N.GANDHI HAD SOLD ANOTHER PIEC E OF LAND AND EARNEST MONEY RECEIVED ON 15.04.2006. HE GAVE THE GIFTS TO HIS GRANDCHILDREN ON 19.04.2004. IT IS SEEN THAT THE A PPELLANT HAS NOT FILED ANY DOCUMENTS REGARDING SALE OF THESE LANDS. FURTHER AS STATED BY THE A.O. THE EXECUTION OF THESE LANDS TOO K PLACE IN AUGUST 2004 SO IT IS NOT EXPLAINED HOW HE COULD HAVE BEEN GIVEN THE GIFT TO THE GRANDCHILDREN. THERE IS NO BANK BALANCE AVAILA BLE ON THE DATE ITA NO. 2149/AHD/2009 SMT.USHABEN YOGESHCHANDRA GANDHI VS. ITO ASST.YEAR - 2005-06 - 3 - OF GIFT. IN THE SUBMISSION MADE DURING THE APPELLA TE PROCEEDINGS THE APPELLANT HAS VERY CARELESSLY STATED THAT THIS LAND WAS SOLD ON 15.04.2006 TO SHRI RAMESHCHANDRA CHHOTUBHAI PATEL A ND ACCEPTED RS.90,000/- EARNEST MONEY FROM SHRI NAREND RAKUMAR CHHOTUBHAI PATIDAR AND NO EVIDENCES ARE GIVEN. THE APPELLANT SAYS THAT THE LAND WAS SOLD ON 15.04.2006, WHICH CO ULD NOT EXPLAIN HOW THE GIFTS WERE GIVEN IN APRIL 2004, HENCE THE E NTIRE TRANSACTION BEING DOUBTFUL. THE ADDITION MADE BY T HE A.O. IS, THEREFORE, CONFIRMED AND THIS GROUND OF APPEAL IS D ISMISSED. 4. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MAT ERIAL PLACED BEFORE US. AT THE OUTSET, IT IS WORTH TO MENTION T HAT THE AMOUNT IN QUESTION IS VERY SMALL AND SHOULD NOT HAVE BEEN MAD E THE CAUSE OF THIS MUCH LITIGATION. WE HAVE BEEN INFORMED THAT THE AS SESSEE HAS FURNISHED A REPLY TO THE ASSESSING OFFICER, WHEREIN IT WAS STAT ED AS UNDER:- IN THIS CONNECTION I HAVE TO SUBMIT THAT SHRI JAYA NTILAL NAGINDAS GANDHI IS A SENIOR CITIZEN. HE WAS DOING BUSINESS O F GRAIN GRASSORY AT & POST ABRAMA, TAL. JALALPORE, DIST. NAVSARI. HE WA S ALSO DOING AGRICULTURE ACTIVITIES AT ABRAME. HE HAS 3 SONS DOI NG DIFFERENT BUSINESS. THEY ARE DOING HOUSE HOLD EXPENSES OF SHRI JAYANTIL AL. HE HAS GIVEN LOAN TO ME OF RS.50,000/- BY ACCOUNT PAYEE'S CHEQUE OUT OF SALE AGRICULTURE LAND SITUATED AT ABRAMA. COPY OF SALE D EED OF THE SAID LAND IS ALSO ENCLOSED EARLIER. ACCORDING TO YOUR ABOVE N OTICE, HE HAS GIVEN RS.20,000 EACH TO FOUR PERSONS I.E. CHINTAI HEMANT KUMAR FANDHI, KINCHAL RAKESHKUMAR GABDHI, DIMPLE RAKESHKUMAR GAND HI & JENISH PRANODKUMAR GANDHI THOUGH THERE WAS BANK BALANCE OF RS.4,250/-. SHRI JAYANTILAL HAS GIVEN LOAN TO 4 PERSONS RS,20,0 00 EACH IN CASH HAS NOTHING TO DO WITH HIS BANK BALANCE OR MY ASSESSMEN T. I DO NOT KNOW YOU PRESUMED THAT SHRI JAYANTILAL HAS GIVEN OF RS.2 0,000 TO 4 PERSONS IS OUT OF MY INCOME OF THE CURRENT YEAR. IT IS BEING P RESUMPTION WITHOUT ANY EVIDENCE ON RECORD IT CANNOT BE ADDED AS MY INC OME U/S 68 OF THE INCOME TAX ACT 1961. AGAIN IT IS SUBMITTED THAT SHR I JAYANTILAL HAS GIVEN RS.20,000 TO 4 PERSONS OUT OF RS.90,000 RECEI VED FROM SHRI NARENDRA C. PATIDAR, P.O.A. OF SHRI RAMESHCHNADRA C HHOTUBHAI PATEL FOR AGREEMENT TO SALE AGRICULTURE LAND BEARING BLOC K NO. 2484/1 AND 2485/1 SITUATED AT ABRAMA, TAL. JALALPORE, DIST. NA VSARI. CONFIRMATION OF SHRI NARENDR C. PATIDAR P.O.A. OF SHRI RAMESHCHA NDRA CHHOTUBHAI PATEL IS ALSO SUBMITTED TO YOU. UNDER THE CIRCUMSTA NCES SOURCE OF RS.20,000 GIVEN BY SHRI JAYANTILAL TO 4 PERSONS IS FULLY EXPLAINED AND ITA NO. 2149/AHD/2009 SMT.USHABEN YOGESHCHANDRA GANDHI VS. ITO ASST.YEAR - 2005-06 - 4 - THE SAME CANNOT BE ADDED IN MY INCOME UNDER SECTION 68 OF THE INCOME TAX ACT 1961. 4.1. OUR ATTENTION HAS ALSO BEEN DRAWN THAT THE SOU RCE IN THE HANDS OF SHRI JAYANTILAL N.GANDHI WAS DULY ESTABLISHED BY PL ACING ON RECORD THE REQUISITE CONFIRMATIONS. KEEPING BREVITY IN MIND, WITHOUT DEVOTING MUCH TIME ON THIS TRIFLE ISSUE, WE HEREBY ACCEPT T HE EXPLANATION OF THE ASSESSEE. CONSIDERING THE PREPONDERANCE OF PROBABI LITIES, WE HEREBY GIVE THE BENEFIT OF DOUBT TO THIS ASSESSEE THAT SHRI JAY ANTILAL N.GANDHI MIGHT HAVE RECEIVED THE AMOUNT IN ADVANCE IN RESPECT OF T HE SALE OF AGRICULTURAL LAND. THAT AMOUNT MIGHT HAVE BEEN GIFTED TO THOSE FOUR PERSONS WHO IN TURN HAVE GIVEN THE AMOUNT TO ASSESSEE-LADY. RESUL TANTLY, WE HEREBY DIRECT TO REVOKE THE PROVISIONS OF SECTION 68 OF TH E I.T.ACT AND DELETE THE ADDITION. GROUND NOS.1 & 2 ARE ALLOWED. 5. GROUND NO.3 IS IN RESPECT OF PART DISALLOWANCE O F EXCESS INTEREST PAID. THIS GROUND IS NOT PRESSED BY THE LD.AR MR.N .B.SHAH, HENCE DISMISSED. 6. GROUND NO.4 IS IN RESPECT OF 1/3 RD DISALLOWANCE OF TELEPHONE EXPENSES. THE ASSESSEES CONTENTION IS THAT THE EN TIRE TELEPHONE EXPENDITURE WAS THE PURPOSE OF THE BUSINESS. THE T OTAL EXPEND WAS AT RS.1,12,179/- IN RESPECT OF THREE TELEPHONES GIVEN TO STAFF MEMBERS. BEFORE US, IT WAS SUBMITTED THAT THE EXPENDITURE WA S MADE FOR THE PURPOSE OF THE BUSINESS BEING INSTALLED AT THE BUS INESS PREMISES. CASE LAW RELIED UPON WAS AGARWAL TRADING CO. VS. ITO REP ORTED AT 111 TTJ 589 (SMC)[DELHI]. CONSIDERING THE TOTALITY OF THE CIRCUMSTANCES OF THE ITA NO. 2149/AHD/2009 SMT.USHABEN YOGESHCHANDRA GANDHI VS. ITO ASST.YEAR - 2005-06 - 5 - CASE AND THE NATURE OF BUSINESS OF THIS ASSESSEE, W E HEREBY RESTRICT THE DISALLOWANCE OF TELEPHONE EXPENSES AT RS.25,000/- O NLY. IN THIS MANNER, THIS GROUND IS HEREBY PARTLY ALLOWED. 7. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLO WED. SD/- SD/- ( .. ) ( ) '# ( T.R. MEENA ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL ME MBER AHMEDABAD; DATED 25/ 5 /2012 ..&, .&../ T.C. NAIR, SR. PS '3 / ,4 5'4' '3 / ,4 5'4' '3 / ,4 5'4' '3 / ,4 5'4'/ COPY OF THE ORDER FORWARDED TO : 1. (+ / THE APPELLANT 2. ,-(+ / THE RESPONDENT. 3. 6 / CONCERNED CIT 4. 6() / THE CIT(A)-I, SURAT 5. 49: ,& , , / DR, ITAT, AHMEDABAD 6. :; <0 / GUARD FILE. '3& '3& '3& '3& / BY ORDER, -4 , //TRUE COPY// = == =/ // / ) ) ) ) ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION..16.5.12 (DICTATION-PAD PGS 1 T O 7 ATTACHED) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S 25.5.12 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 25.5.12 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER