Smt Jyotiben V. Mandali, L/R of Late Shri Vijay Motilal Mandali, RAJKOT-GUJARAT V. The Income Tax Officer, Ward-5(1), RAJKOT-GUJARAT

ITA 220/RJT/2011

• Counselvise Citation: 22024914 RSA 2011
• Duration Of Justice: 2 year(s) 7 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 09-01-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 11-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J B JHAVERI D R
• Assessee Lawyers: DR ADHIA
• Keywords: Gift; Principle of natural justice
• Section: 68

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT. BEFORE SHRI T. K. SHARMA JM AND SHRI B. R. JAIN AM ITA NO. 220/RJT/2011 / ASSESSMENT YEAR 2004-05. SMT. JYOTIBEN V. MANDALI, L/R OF LATE SHRI VIJAY MOTILAL MANDALI, PROP. OF M/S R.M. SILVER, 312 SHILP COMPLEX, MANDAVI CHOWK, RAJKOT. PAN : ACMPN5454G ( / APPELLANT V/S THE I.T.O., WARD- 5(1), RAKJOT. / RESPONDENT ! ' #$ / ASSESSEE BY SHRI D.R. ADHIA, C.A. % ! ' #$ / REVENUE BY SHRI J.B. JHAVERI, D.R. # & ' ! ( / DATE OF HEARING 09/01/2014 ) ! ( / DATE OF PRONOUNCEMENT 10/01/2014 / ORDER PER B. R. JAIN, A. M. : THIS APPEAL BY THE ASSESSEE AGAINST THE ORDER DATE D 03/01/2011 OF SHRI NANDLAL PARIHAR, LEARNED CIT(A)-XXI, AHMEDABAD RAISES THE FOLLOWING GROUNDS:- 1. THE LD. CIT)A) ERRED IN LAW AND FACTS IN CONFIR MING ASSESSMENT ORDER PASSED BY THE LD. A.O. THOUGH THE SAME IS BAD IN LAW AS WELL AS ON THE FACTS. THE SAM E NEEDS ANNULMENT. 2. THE LD. CIT(A) ERRED IN LAW AND FACTS IN CONFIRM ING ADDITION OF AN AMOUNT OF RS. 1,09,302/- MADE BY THE LD. A.O. TREATING THE SAME AS SUPPRESSED RECEIPT. THE ADDITION NEEDS DELETION. 3. THE LD. CIT(A) ERRED IN LAW AND FACTS IN CONFIRM ING ADDITION OF AN AMOUNT OF RS. 2,00,000/- MADE BY THE LD. A.O. TREATING THE SAME AS BOGUS GIFT. THE ADDITION NEEDS DELETION. 4. THE LD. CIT(A) ERRED IN LAW AND FACTS IN CONFIRM ING ADDITION OF AN AMOUNT OF RS. 3,74,500/- MADE BY THE LD. A.O. TREATING THE SAME AS UNEXPLAINED CASH CRED IT U/S 68. THE ADDITION NEEDS DELETION. ITA 220/RJT/2013 2 5. TAKING INTO CONSIDERATION THE LEGAL, STATUTORY A ND FACTUAL POSITION, NO ADDITION AMOUNTING TO RS. 1,09,302/-, RS. 2,00,000/- AND RS. 3,74,500/- OUGHT TO HAVE BEEN CONFIRMED/SUSTAINED. THE ADDITIONS NEED DELETION. 6. WITHOUT PREJUDICES, THE LD. CIT(A) HAS NOT PROVI DED ADEQUATE OPPORTUNITY IN VIOLATION OF THE STATUTORY POSITION AND PRINCIPLES OF NATURAL JUSTICE. 7. THE APPELLANT CRAVES LEAVE TO ADD/ALTER/AMEND AN D/OR SUBSTITUTE ANY/ALL GROUNDS OF APPEAL BEFORE THE ACT UAL HEARING TAKES PLACE. 2. GROUNDS NO. 5, 6 AND 7 IN APPEAL HAVE NOT SERIOU SLY BEEN PERSUADED AS THE ISSUES FOR SUSTENANCE OF ADDITIONS ARE SEPARATELY AGITATED IN GROUNDS NO. 2,3 AND 4. THE SAME ARE, TH EREFORE, TREATED AS DISPOSED OFF ALONGWITH OTHER RELEVANT GROUNDS IN AP PEAL. 3. IN GROUND NO. 2, THE ASSESSING OFFICER MADE ADDI TION OF RS. 1,09,302/- AS THE ASSESSEE HAS NOT DISCLOSED THE RE CEIPT OF LABOUR CHARGES FROM THE FOLLOWING PARTIES. SR. NO. NAME OF THE PERSON BILL NO. DATE AMOUNT 1 M/S V.K. ENTERPRISES 39 04.05.2003 11,383/- 2. M/S ABHISHEK ENTERPRISES 40 07.05.2003 34,276/- 3. M/S ABHISHEK ENTERPRISES 41 12.05.2003 43,103/- 4. M/S ABHISHEK ENTERPRISES 42 17.05.2003 20,619/- TOTAL RS. 1,09,302/- THE LD. CIT(A) CONFIRMED THE ADDITION. 4. THE ASSESSEES COUNSEL CONTENDS THAT THESE LABOU R CHARGES RECEIPTS ARE DULY ACCOUNTED FOR AND THIS FACT IS EVIDENT FRO M PARA 3.4 OF THE ASSESSMENT ORDER, WHICH IS REPRODUCED AS UNDER:- WE MAY DRAW YOUR KIND ATTENTION TO THE COPY OF KA RIGAR MAJURI A/C (WORKERS LABOUR EXP A/C), WHERE NORMALLY ONLY DEBI T ENTRIES APPEAR, BUT DUE TO SOME COMPUTER OPERATING LEVEL MISTAKE, T HE SILVER ORNAMENTS JOB WORK INCOME TOTALING TO RS. 1,09,302 /- REPRESENTED BY THE JOB WORK INCOME INVOICE/BILLS NO. 39, 40, 41 AND 42 HAS BEEN WRONGLY CREDITED TO THIS ACCOUNT. SIR, WE DO AGREE ABOUT THE FACT THAT THERE IS A MISTAKE OF ACCOUNTING PRINCIPLE OF NOT R EFLECTING APPROPRIATE ENTRY ONLY UNDER APPROPRIATE HEAD OF AC COUNT, BUT IT DOES NOT MEAN THAT THE JOB WORK INCOME TO THE EXTENT OF RS. 1,09,302/- HAS BEEN SUPPRESSED. THIS FACT IS EVIDENT FROM THE CLOSING BALANCE INN KARIGAR MAJURI A/C (EXP A/C) WHICH IS RS. 6,35,350/- I.E. BALANCE AFTE R NETTING OUT THE GROSS TOTAL OF EXPENSES/DEBIT SIDE OF RS. 7,44,731/ -, WITH THE GROSS ITA 220/RJT/2013 3 TOTAL OF INCOME/CREDIT SIDE OF RS. 1,09,302/- (THIS REFLECTS THE MISTAKEN ENTRIES OF CREDITS/RECEIPTS RELATING TO JO B WORK INCOME INVOICE/BILL NO. 39, 40, 41 AND 42). THE NETTED OUT BALANCE OF RS. 6,35,350/- IS VERY WELL CARRIED DOWN TO THE DEBIT S IDE OF FIND ACCOUNT CHANDI DDGINA MAJURI AAVAK A/C. (IN ADDITION TO T HE COPIES OF BOTH THE ACCOUNTS SUBMITTED EARLIER DURING THE ASSESSMEN T PROCEEDINGS, ONE MORE COPY EACH ACCOUNTS IS ENCLOSED TO YOUR REA DY REFERENCE). 5. ON THE OTHER HAND, THE LD. D.R. PLACED RELIANCE ON THE ORDERS OF THE AUTHORITIES BELOW. 6. WE HAVE HEARD PARTIES WITH REFERENCE TO MATERIAL ON RECORD. THE ASSESSEE HAS LAID ON RECORD THE COPY OF KARIGAR MA JURI A/C (WORKERS LABOUR EXP A/C) WHERE THE LABOUR CHARGES RECEIVED AGGREGATING TO RS. 1,09,302/- FROM THE AFORESAID FOUR PARTIES ARE SHO WN TO HAVE BEEN CREDITED IN THE EXPENSES ACCOUNT IN THE BOOKS OF ACCOUNT MA INTAINED BY THE ASSESSEE IN REGULAR COURSE OF BUSINESS. THIS FACT H AS NOT BEEN DISPUTED BY THE REVENUE. WE, THEREFORE, FIND NO JUSTIFICATION I N SUSTENANCE OF ADDITION. THE SAME IS, THEREFORE, DIRECTED TO BE DELETED. 7. IN GROUND NO. 3 IN APPEAL, THE A.O. TREATED THE AMOUNT OF GIFT OF RS. 2 LACS AS BOGUS. THE ASSESSEE HAD PRODUCED COPY OF GIFT DEED, AFFIDAVIT ETC. CONFIRMING THE GIFT MADE BY SHRI BHALSOD OUT O F SALE PROFITS OF HIS PROPERTY AS PER TWO SALE DEEDS NO. 1470 AND 1471 DA TED 14/5/2001, FOR WHICH CREDIT ENTRIES APPEARED IN HIS BANK ACCOUNT O N 19/5/2001 BEFORE MAKING GIFT TO THE ASSESSEE. BOTH THE AUTHORITIES B ELOW DID NOT ACCEPT THE GIFT TO BE GENUINE AS THE PATTERN OF TRANSACTION I N THE BANK ACCOUNT SHOWS THAT THE ASSESSEE IS MOTIVATED THE DONOR TO DEPOSIT THE CASH IN HIS BANK ACCOUNT DUE TO DIVERGENT. THE SAID FUND TO THE ASSE SSEES ACCOUNT BY WAY OF SO CALLED GIFT. 8. WE HAVE HEARD PARTIES WITH REFERENCE TO MATERIAL ON RECORD. THE ASSESSEE HAS LAID DOCUMENTARY EVIDENCE IN THE SHAPE OF GIFT DEED AND AFFIDAVIT CONFIRMING THE FACT THAT THE DONORS HAVE MADE GIFT OF RS. 2 LACS OUT OF SALE PROCEEDS OF HIS PROPERTY IN CASH. THE SALE PROCEEDS RECEVED IN ITA 220/RJT/2013 4 CASH WERE DEPOSITED IN HIS BANK ACCOUNT BEFORE ISS UING CHEQUE AS GIFT TO THE ASSESSEE. MERELY BECAUSE IN THE DONORS ACCOUNT , THE DEPOSITS WERE MADE IN CASH BEFORE ISSUING CHEQUE COULD NOT BE A R EASON ALONE TO DOUBT THE GENUINE TRANSACTION OF GIFT. HAVING REGARD TO T HE JUDGMENT BY RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. PADAM S INGH CHOUHAN 215 CTR 303 (RAJ.) AND CONSIDERING THE FACTS OF THIS CA SE, WE DO NOT FIND ANY JUSTIFICATION IN SUSTENANCE OF ADDITION. THE SAME I S DIRECTED TO BE DELETED. 9. IN THE LAST GROUND IN APPEAL, THE A.O. ADDED THE ENTIRE AMOUNT OF DEPOSITS OF RS. 3,74,500/- AS UNEXPLAINED CASH CRED IT U/S 68 OF THE ACT, EVEN THOUGH THE ASSESSEE HAS FILED AFFIDAVITS OF AL L THE 21 CREDITS FROM WHOM DEPOSITS RECEIVED WERE BELOW RS. 20,000/-. 10. THE ASSESSEES COUNSEL CONTENDS THAT THESE ENTI RE DEPOSITS FROM 21 PERSONS WHOSE AFFIDAVITS WERE FILED, ONLY FIVE OF T HEM WERE EXAMINED BY THE A.O. IT IS UNJUST ON THE PART OF THE AUTHORITIE S BELOW TO TREAT THE PETTY DEPOSITS AS CASH CREDIT AND ADDING THE SAME TO THE INCOME OF THE ASSESSEE. RELIANCE HAS BEEN PLACED ON THE JUDGMENT BY THE HONBLE DELHI HIGH COURT IN THE CASE AT 330 ITR 413 (DEL.). 11. ON THE OTHER HAND, THE LD. D.R. CONTENDS THAT T HE DEPOSITS WRE RECEIVED IN CASH IT WAS THE BURDEN OF THE ASSESSEE TO PROVE NATURE AND SOURCE OF DEPOSITS. THIS HAVE NOT BEEN DONE, THE AD DITION MADE REQUIRES TO BE SUSTAINED. 12. IN REJOINDER, THE LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT THE ASSESSEE HAS DISCHARGED THE BURDEN THAT LAY UPON HI M WITH RESPECT TO NATURE AND SOURCE OF RECEIPT, WHICH WAS GENUINE LOA N TAKEN BY HIM. 13. WE HAVE HEARD PARTIES AND HAVE ALSO PERUSED THE ENTIRE MATERIAL ON RECORD. THE ENTIRE DEPOSITS AGGREGATING TO RS. 3,74 ,500/- ARE FOUND TO HAVE BEEN TAKEN FROM 21 PERSONS, WHOSE AFFIDAVITS HAVE B EEN LAID ON RECORD OF THE AUTHORITIES BELOW. THE A.O. DID NOT BRING ANY A DVERSE MATERIAL NOR REQUIRED THE ASSESSEE TO BRING FURTHER EVIDENCE TO SUPPORT THE FACTS ITA 220/RJT/2013 5 CLAIMED IN THE AFFIDAVITS. THE ASSESSEE, THEREFORE, WAS JUSTIFIED IN PRESUMING THAT THE AFFIDAVITS HAVE BEEN ACCEPTED. E VEN OTHERWISE, DEPOSITS BEING PETTY AND MATTER BEING OLD RELATABLE TO ASSESSMENT YEAR 2004-05, WE FIND NO JUSTIFICATION IN SUSTAINING THE ADDITION. THAT APART DEPOSITS BEING NOT HUGE AMOUNT AND HAVING REGARD TO THE JUDGMENT BY THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. VAS HISH CHAY VAYAPAR LTD. 330 ITR 413 (DEL.), THE EXPLANATION OF THE ASS ESSEE OUGHT TO HAVE BEEN ACCEPTED. ACCORDINGLY, THE ADDITION MADE IS BE ING UNWARRANTED, THE SAME IS DIRECTED TO BE DELETED. ACCORDINGLY, THE GR OUNDS RAISED IN APPEAL STAND ALLOWED. 14. IN THE RESULT, APPEAL BY ASSESSEE STANDS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 10-01-2014. SD/- SD/- ( T. K. SHARMA ) ( B. R. JAI N ) #*% /JUDICIAL MEMBER $( #*% / ACCOUNTANT MEMBER *$+ ,*-/ ORDER DATE 10-01-2014 /RAJKOT *RANJAN / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT- SMT. JYOTIBEN V. MANDALI, RAJKOT. 2. /RESPONDENT- THE I.T.O., 5(1), RAKJOT. 3. #-2- & 3 / CIT-I, RAJKOT. 4. & 3 - / CIT (A)- XXI, AHMEDABAD. 5. 789 , , / DR, ITAT, RAJKOT 6. 9; <= / GUARD FILE. *$+ #$ / BY ORDER , TRUE COPY PRIVATE SECRETARY, , INCOME TAX APPELLATE TRIBUNAL, RAJKOT.