Ajay Gupta, New Delhi V. DCIT, New Delhi

ITA 2282/DEL/2010

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6624 (ITAT-DELHI)
• Duration Of Justice: 6 year(s) 6 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 02-06-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 14-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K K JAISWAL
• Keywords: Gift

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A NEW DELHI BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEM BER AND SMT SUCHITRA KAMBLE , JUDICIAL MEMBER I.T.A .NO. 2282/DEL/2010 (ASSESSM ENT YEAR-2004-05) AJAY GUPTA PROP. ETHIK ENTERPRISES BM-4, DILKHUS INDUSTRIAL ESTATE G. T. KARNAL ROAD NEW DELHI AALPG0624R (APPELLANT) VS DCIT CIRCLE 38(1) NEW DELHI (RESPONDENT) APPELLANT BY SH. R. S. SINGHVI, C.A & SH. SATYAJIT GOEL, CA RESPONDENT BY SH. K. K. JAISWAL, DR ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED AGAINST THE ORDER DATED 01/03/ 2010 PASSED BY CIT(A)-XXVIII, NEW DELHI, FOR ASSESSMENT YEAR 2004-05. 3. THE ASSESSEE, AN INDIVIDUAL HAD FILED RETURN ON 31/10/2004 DECLARING INCOME OF RS.12,71,490/-. DURING THE COU RSE OF THE DATE OF HEARING 07.10.2016 DATE OF PRONOUNCEMENT 08.12.2016 ASSESSMENT PROCEEDINGS IT WAS NOTICED THAT THE OPEN ING BALANCE OF THE CAPITAL ACCOUNT AS ON 1/4/2003 HAD BEEN TAKEN A S RS.77,52,208.56/- WHEREAS THE CLOSING BALANCE AS ON 31/3/2003, AS PER THE RETURN FILED FOR THE LAST YEAR, WAS RS.6 4,65,906/-. THUS, THERE WAS A DIFFERENCE OF RS.12,86,302/-. THE AFORE SAID DIFFERENCE WAS CONFRONTED TO THE ASSESSEE, WHO IN THE REPLY HA D SUBMITTED THAT THERE WAS A PRESENTATION ERROR AND THE OPENING BALANCE AND THE CAPITAL ACCOUNT AS ON 1/4/2004 SHOULD BE TAKEN AS RS.64,65,906/- AND NOT RS.77,52,208/-. THE ASSESSI NG OFFICER DID NOT AGREE THAT THIS DISCREPANCY WAS MERE A PRESENTA TION ERROR. HE HELD THAT THE ASSESSEE HAD TAKEN THE OPENING FIGURE OF CAPITAL ACCOUNT AS RS.77,52,208/- AND NOT RS.64,65,906/-, W HILE ARRIVING AT THE CLOSING BALANCE OF RS.82,02,789/-. HE OBSER VED THAT THE ASSESSEE WAS NOT ABLE TO EXPLAIN THE CORRESPONDING DEBIT ENTRIES WHICH HAD RESULTED IN INCREASE IN THE CAPITAL ACCOU NT BY RS.12,86,302/-. 3. THE COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE SAID ADDITION ACCEPTING THE VERSION GIVEN BY THE ASSESSE E THAT IT WAS A PRESENTATION ERROR. THE SAID ORDER REFERS TO THE C OMPUTATION MADE BY THE ASSESSEE TO JUSTIFY THE SAID PLEA AND MENTI ONS TWO ENTRIES; AMOUNT OF RS.26,38,696/- TRANSFERRED FROM ACCOUNT O F FAIR DEAL CORPORATION, SUPPLIER OF THE ASSESSEE, AND RS.3,50, 000/- RECEIVED FROM JAYANTA RAO IN CAPITAL ACCOUNT. 4. AGGRIEVED, REVENUE PREFERRED AN APPEAL BEFORE IT AT, WHICH WAS PARTLY ALLOWED, WITH THE DIRECTION THAT THE ISSUE B E REMANDED BACK TO THE ASSESSING OFFICER FOR FRESH ADJUDICATION. 5. THE REVENUE FILED APPEAL BEFORE THE HON'BLE HIGH COURT. THE HON'BLE HIGH COURT DIRECTED THE TRIBUNAL AS PER PAR A 10 AS FOLLOWS:- .. AT THIS STAGE, LEARNED COUNSEL FOR THE RESPOND ENT-ASSESSEE SUBMITS THAT THE ADDITIONS ON MERITS HAVE NOT BEEN EXAMINED BY THE TRIBUNAL. THIS IS FACTUALLY CORRECT. THE TRIBU NAL WILL NOW DISPOSE OF THE APPEAL FILED BY THE RESPONDENT-ASSES SEE ON MERITS IN RESPECT OF ADDITION OF RS.26,38,696/- AND RS.3,50,000/-. TO CURTAIL DELAY, PARTIES ARE DIREC TED TO APPEAR IN PERSON OR THROUGH AUTHORIZED REPRESENTATIVE BEFO RE THE TRIBUNAL ON 29 TH SEPTEMBER, 2014, WHEN A DATE OF HEARING WOULD BE FIXED. 6. THUS IN THE PRESENT APPEAL HAS TWO ISSUES TO BE ADJUDICATED AS TO ADDITION OF RS.26,38,696/- AND RS.3,50,000/-. 7. THE LD. AR SUBMITTED THAT THE ADDITION OF RS.26, 38,696/-WAS ON THE BASIS OF AMOUNT DUE TO M/S. FAIR DEAL CORPO RATION. THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS WAS CALL ED FOR TO ESTABLISH THE TRANSACTION BETWEEN M/S FAIR DEAL COR PORATION & THE ASSESSEE ANSWERED THAT THE CONFIRMATION WAS GIVEN B Y M/S FAIR DEAL CORPORATION BUT PRESENTLY THE SAME IS NOT TRAC EABLE. THE LD. DR SUBMITTED THAT THE ADDRESS WHICH WAS GIVEN BY TH E ASSESSEE IN RESPECT OF M/S FAIR DEAL CORPORATION WAS NOT CORREC T ADDRESS AND IT WAS NOT ESTABLISHED WHETHER THE CONFIRMATIONS ARE P ROPER OR NOT. THUS, THE ACTUAL EXISTENCES OF THE CREDITORS ARE DO UBTFUL. 8. AS RELATES TO GIFT RECEIVED FROM SHRI JAYANTA RA O FOR RS.3,50,000/-, THE LD. AR SUBMITTED THAT AMPLE OPPO RTUNITIES WERE GIVEN TO THE ASSESSEE, THEREFORE THE ASSESSING OFFI CER RIGHTLY MADE AN ADDITION OF THE SAID AMOUNT. THE LD. DR RELIED ON ASSESSING OFFICERS ORDER & SUBMITTED THAT THE ASSESSEE WAS N OT ABLE TO MAKE OUT RELATION BETWEEN SHRI JAYANTA RAO & THE ASSESSE E. 9. WE HAVE PERUSED ALL THE RECORDS AND HEARD BOTH T HE PARTIES. AS RELATES TO ADDITION FOR RS.26,38,696/- THE ASSES SEE SUBMITTED THE LEDGER ACCOUNT OF M/S FAIR DEAL CORPORATION TO THE ASSESSMENT YEAR 2004-05 & 2005-06. THE ASSESSEE ALSO SUBMITTE D CAPITAL AMOUNT FOR ASSESSMENT YEAR 2007-08 ALONG WITH CONFI RMATION. THERE IS BANK STATEMENT OBTAINED FROM THE BANK CLEA RLY SHOWING THE TRANSACTION. THUS, MERE NON-PRESENCE OF THE PA RTY WHO HAS GIVEN LOAN CANNOT BE OBTAINED TO HOLD THAT THE TRAN SACTION IS NOT GENUINE. THE OTHER TESTIMONIES OF CONFIRMATION AS WELL AS THE BOOKS OF ACCOUNTS AND BANK STATEMENT CLEARLY REVEAL THAT THERE IS A TRANSACTION AND THE SAME APPEARS TO BE GENUINE. TH US, THE ADDITION MADE IN RESPECT OF AMOUNT DUE TO M/S FAIR DEAL CORPORATION DOES NOT SUSTAIN. AS RELATES TO GIFTS RECEIVED FROM MR. JAYANTA RAO, THE ASSESSEE COULD NOT ESTABLISH THAT THE SAME PERSON WAS A RELATIVE OR THERE IS A GENUINE REASON FOR GIF TING SUCH A LARGE AMOUNT TO THE ASSESSEE. THE SAID LINK IS MISSING. HENCE, THE ADDITION OF RS.3,50,000/- MADE BY THE ASSESSING OFF ICER SUSTAINS. 9. IN THE RESULT, APPEAL IS PARTLY ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 08TH OF DECEMBER, 2016. SD/- SD/- (J. SUDHAKAR REDDY) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMB ER DATED: 08/12/2016 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE 1. DRAFT DICTATED ON 02/06/2016 PS 2. DRAFT PLACED BEFORE AUTHOR 03/06/2016 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2016 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE .12.2016 PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK .12.2016 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.