Nischal Anand, Delhi V. ITO, New Delhi

ITA 2451/DEL/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7237 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-02-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 24-11-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 26-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Gift; Source of fund
• Section: 131; 68

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E : NEW DELHI BEFORE SHRI H.S.SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI , ACCOUNTANT MEMBER I TA NO. 2451 /DEL/ 2013 (ASSESSMENT YEAR: 2008 - 09 ) NISCHAL ANAND, C/O. KAPIL GOEL, ADVOCATE, A - 1/25, SECTOR VS. ITO, WARD - 22(1), NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. KAPIL GOEL, ADV REVENUE B Y: SH.P. DAM KANUNJNA, SR. DR DATE OF HEARING 24.11.2015 DATE OF PRONOUNCEMENT 01.02 .2016 O R D E R PER PRASHANT MAHARISHI , A . M . 1 . THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF LEARNED CIT ( A) - XXIII DATED 26.02.2013 CONFIRMING THE ADDITION OF RS.19,50,000/ - PASSED U/S 68 OF THE INCOME TAX ACT, 1961 FOR THE ASSESSMENT YEAR 2008 - 09 . THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LEARNED CIT(A) ERRED IN UPHOLDING THE FOLLOWING ADDITIONS (TOTAL RS.19,50,000/ - MADE BY LD AO ON BASIS OF PERVERSE FINDING AND RESTING HER C ONCLUSION ON IRRELEVANT MATERIAL. I. GENUINE AND BONAFIDE GIFT FROM REAL MOTHER RS.600,000. II. GENUINE AND BONAFIDE GIFT FROM REAL FATHER RS.700,000. III. GENUINE LOAN FROM DAUGHTER AND SON (MINOR) RS.650,000 2. THAT ON THE FACTS AND IN THE CIRCUMSTANC ES OF THE CASE AND IN LAW, LEARNED CIT(A) ERRED IN UPHOLDING THE ADDITIONS MADE BY THE LD AO WITHOUT APPRECIATING THAT ASSESSEE HAS RECEIVED GIFTS AND LOANS FROM CLOSEST BLOOD RELATIVES WHO HAVE NEVER BEEN QUESTIONED U/S 131 AND WHOSE CAPACITY TO EARN THE GIFTED AND LOANED AMOUNT IS NOT IN QUESTION. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LEARNED CIT(A) ERRED IN UPHOLDING THE ADDITIONS WITHOUT APPRECIATING THAT ONUS U/S 68 OF THE ACT FOR STATED SUM IS FULLY AND COMPLETELY DISCH ARGED BY ASSESSEE BY FILING AFFIDAVITS, GIFT DEED, SOURCE OF DONOR/ LENDER. PAGE 2 OF 6 2 . DURING THE YEAR, THE ASSESSEE HAS RECEIVED GIFT OF RS. 6 LACS FROM H ER MOTHER AND RS.7 LACS FROM H ER FATHER. FURTHER RS.6,50,000/ - WAS RECEIVED AS LOAN FROM DAUGHTER AND MINOR CHILD OF THE ASSESSEE. TH ESE AMOUNT HAVE BEEN ADDED BY THE AO U/S 68 OF THE ACT AS UNDER: - A . REGARDING GIFT OF RS.6 LAC RECEIVED FROM MOTHER OF THE ASSESSEE , AO HAS MADE THE ADDITION REJECTING THE AGREEMENT DATED 09.03.2006 RELATED TO SOURCE OF MONEY WI TH THE MOTHER OF THE ASSESSEE AND AS ASSESSEE HAS FAILED TO PRODUCE COPY OF THE BANK ACCOUNT AND COPY OF INCOME TAX RETURNS OF H ER MOTHER. HE HELD THAT ASSESSEE COULD NOT PROVE THE CREDITWORTHINESS OF THE MOTHER OF THE ASSESSEE FOR THIS GIFT. B . SIMILARLY, THE AO ADDED RS.7 LACS RECEIVED FROM THE FATHER OF THE ASSESSEE AS GIFT SOURCE OF WHICH COULD NOT BE EXPLAINED BY THE ASSESSEE BY PRODUCING BANK ACCOUNT AND INCOME TAX RETURN OF H ER FATHER. HE HELD THAT ASSESSEE COULD NOT PROVE THE CREDITWORTHINESS OF TH E FATHER OF THE ASSESSEE FOR THIS GIFT. C . IT WAS ALSO CLAIMED THAT AN AMOUNT OF RS.2,70,000/ - AND RS.3,80,000/ - TOTALING TO RS.6,50,000/ - WAS RECEIVED FROM MINOR SON AND DAUGHTER OF THE ASSESSEE . IT WAS NOTED BY AO THAT BEFORE THE ISSUE OF CHEQUE CASH HAS B EEN DEPOSITED IN THE BANK ACCOUNT OF THE LENDERS. THE ASSESSEE HAS EXPLAINED THAT THIS SUM HAS BEEN GIVEN BY GRANDMOTHER OF THE CHILDREN OF THE ASSESSEE IN CASH OUT OF HER INCOME DERIVED FROM AGRICULTURAL LAND. AO ALSO DISBELIEVED IT BECAUSE OF DEPOSIT O F CASH PRIOR TO ISSUE OF CHEQUE IN THE ACCOUNT OF THE MINOR SON AND DAUGHTER OF THE ASSESSEE. AO HELD THAT ASSESSEE COULD NOT PROVE THE CREDITWORTHINESS OF THE CHILDREN OF THE ASSESSEE FOR THIS LOAN. FOR THIS THE ASSESSEE SUBMITTED THE PROOF OF HOLD ING OF AGRICULTURAL LAND OF THE DONOR AS WELL AS INCOME CERTIFICATE. AS THE ASSESSEE COULD NOT SUBSTANTIATE THE AMOUNT OF AGRICULTURAL INCOME, WHICH HAS BEEN ACCRUED TO THE DONOR THE ADDITION HAS BEEN MADE U/S 68 O F THIS SUM, AS ASSESSEE COULD NOT PROVE THE CREDITWORTHINESS OF THE CHILDREN OF THE ASSESSEE FOR THIS LOAN. 3 . THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS), WHO IN TURN CONFIRM ED THE ADDITION OF RS.19,50,000/ - IN PAGE 3 OF 6 THE HANDS OF THE ASSESSEE HOLDING THAT ASSESSEE COULD NOT PROVE THE CREDITWORTHINESS OF THE DONOR PARENTS OF THE ASSESSEE AS WELL AS THE LOANS FROM CHILDREN. CIT (A) WAS ALSO SWAYED BY THE FACTS THAT ASSESSEE IS STAYING IN MUMBAI AND SOURCES OF MONEY DEPOSITED IN HER MUMBAI ACCO UNT ARE IN ANOTHER TOWN. FURTHER HE WAS ALSO OF THE VIEW THAT THERE IS A SUBSTANTIAL TIME GAP BETWEEN SOURCES OF MONEY AND ITS RECEIPT BY ASSESSEE. THEREFORE, THE ASSESSEE IS IN APPEAL BEFORE US. 4 . WE HAVE HEARD THE RIVAL CONTENTION AS WELL AS THE DETAILS P RODUCED BEFORE US. THE LD AR OF THE ASSESSEE CONTENDED THAT A SUM OF RS.6 LACS AS GIFT RECEIVED FROM SMT . USHA BUDHKI WHO IS MOTHER OF THE ASSESSEE IN CASH AND SUBMITTED THAT THE ASSESSEE HAS PRODUCED GIFT DEED DATED 01.02.2008 , WHEREIN THE FACTUM OF GIFT IS CONFIRMED. A N AFFIDAVIT IS ALSO FURNISHED CLAIMING THAT SHE HAS SOLD AN IMMOVABLE PROPERTY ALONG WITH FOR RS.14 LACS ON 09.05.2006 WHEREFROM AN AMOUNT OF RS.4.66 LACS WERE RECEIVED BY HER. IT WAS FURTHER STATED THAT SHE HAS ALSO RECEIVED AN AMOUNT OF RS .80,000/ - FROM AGRICULTURAL PRODUCED SOLD WHICH WAS GROWN ON THE ABOVE SAID AGRICULTURAL LAND. HE FURTHER SUBMITTED THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS CONFIRMED THE ADDITION MERELY BECAUSE THE GIFT HAS NOT BEEN MADE THROUGH BANKING C HANNEL AND CASH WAS KEPT IDLE IN THE HANDS OF THE DONOR FOR A LONG TIME. REGARDING THE GIFT OF RS.7 LAC IN CASH FROM THE FATHER SHE CHUNI LAL B UDKI, THIS AMOUNT WAS RECEIVED FROM THE FATHER OF THE ASSESSEE WHO RETIRED AS SUPERINTENDENT FROM JAMMU AND KASHMIR ELECTRICITY BOARD AND WHO PASSED AWAY. FOR THIS HE SUBMITT ED A GIFT DEED DATED 01.02.2008/ - . REGARDING THE LOAN OF RS.6,50,000/ - FROM THE DAUGHTER AND MINOR SON OF THE ASSESSEE HE SUBMITTED THAT THIS AMOUNT WAS REC EIVED FROM RS. 2,70,000/ - MS. SE RENA ANAND I.E. DAUGHTER OF THE ASSESSEE FROM SMT. PREM KAUR WHO IS GRAND - MOTHER OF S ERENA ANAND. HE ALSO SUBMITTED THAT SMT. PREM KAUR WAS AN AGRICULTURIST AND ALSO A PE NSIONER WHO WAS EARNING TOTAL ANNUAL INCOME OF RS.1,60,000/ - . THEREFORE IT WAS CONTEND ED BY THE LD AR THAT HE HAS PROVE D THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION. IT WAS ALSO CONTENDED AS THE GIFT WAS NOT RECEIVED FROM THE STRANGER BUT FROM THE RELATIVES MERELY BECAUSE MONEY HAS NOT BEEN ROUTED THROUGH BANK ING CHANN EL WITH RESPECT TO GIFTS THE ADDITION HAS BEEN MADE PAGE 4 OF 6 AND CONFIRMED. DURING THE COURSE OF ASSESSMENT PROCEEDINGS AS WELL AS REMAND PROCEEDINGS HE CONTENDED THAT NO ENQUIRY WAS MADE BY AO. IT WAS FURTHER ARGUED THAT AS THE FATHER OF THE ASSESSEE HAS PASSED A WAY , SOURCE OF FUND OF THE DECEASED CANNOT BE ENQUIRED FROM LEGAL HEIRS AND FOR THIS HE RELIED ON THE DECISION OF THE PUNE BENCH OF ITAT IN THE CASE OF SMT. RAJABAI B. KADAM VS. ACIT REPORTED IN 83 ITD 229 AND OF COCHIN BENCH IN THE CASE OF C SELVA K UMAR VS. ITO, REPORTED IN 6 SOT 646. HE FURTHER RELIED ON DECISIONS OF VARIOUS BENCHES OF ITAT WHEREIN GIFT RECEIVED FROM THE RELATIVES ARE HELD TO BE EXPLAINED. 5 . THE LD DR ON THE OTHER HAND SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES AND SUBMITTED THAT AS ASSESSEE COULD NOT PROVE THE CREDITWORTHINESS OF THE DONORS AND LENDERS THE ADDITION HAS BEEN RIGHTLY MADE. 6 . WE HAVE CONSIDERED THE RIVAL CONTENTIONS. FOR THE GIFTS AND THE LOANS RECEIVED THERE IS NO DISPUTE ABOUT THE IDENTITY AND GENUINENESS OF THE TRANSAC TIONS BUT THE ONLY DISPUTE IS REGARDING CREDITWORTHINESS OF THE DONOR PARENTS AND LENDER CHILDREN OF THE ASSESSEE. WE PROCEED TO EXAMINE EACH OF THE CASH CREDIT AS UNDER : A . GIFT OF RS 6,00,000/ - FROM MOTHER OF THE ASSESSEE ON 1/2/2008 AN AMOUNT OF RS.6 LAC S HAS BEEN RECEIVED FROM THE MOTHER OF THE ASSESSE E ON 1/2/2008. FOR THIS ASSESSEE EXPLAINED THE SOURCES OF THE SUM AS COMPROMISE DEED DATED 9/5/2006 OF RS 14,00,000/ - . AO DID NOT BELIEVE THIS SOURCES AS THE ASSESSEE COULD NOT FURNISH THE BANK ACCOUNT AS W ELL AS THE COPY OF INCOME TAX RETURN OF HER MOTHER. REGARDING THE COMPROMISE DEED AO HAS PERHAPS WAS NOT SATISFIED BECAUSE OF THE TIME GAP BETWEEN THE COMPROMISE DEED AND DATE OF GIFT. THE GIFT IS SUPPORTED BY GIFT DEED AS WELL AS THE SOURCE OF THE FUN DS OF RS.4.66 LACS FROM THE SALE OF LAND AS WELL AS RS.80,000/ - PER ANNUM AS AGRICULTURE INCOME OF THE DONOR. THEREFORE, IN THIS CASE THE ASSESSEE HAS ESTABLISHED THE SOURCE OF THE SUM OF RS.6 LACS EXPLAINED. IN THIS CASE THE IDENTITY AND GENUINENESS OF TH E TRANSACTION WERE NOT AT ALL IN DISPUTE. THE CREDITWORTHINESS OF THE MOTHER OF THE ASSESSEE IS ESTABLISHED GIVING THE SOURCE OF MONEY FROM SALE OF LAND AS WELL AS AGRICULTURAL INCOME. HENCE WE REVERSE THE ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX PAGE 5 OF 6 (A PPEALS). SO FAR AS THE AMOUNT OF RS.6 LACS GIFT RECEIVED BY THE ASSESSEE FROM HER MOTHER SMT. CHUNILAL BUDIKI. B . GIFT OF RS 7,00,000/ - FROM FATHER OF THE ASSESSEE ON 1/2/2008 REGARDING AMOUNT OF RS.7 LAC RECEIVED FROM THE FATHER OF THE ASSESSEE WHO PASSED AWAY ON 31 ST JULY 2009 AND WHO WAS ALSO SUPERINTENDENT IN THE JAMMU AND KASHMIR ELECTRICITY BOARD. HOWEVER BEFORE US THE ASSESSEE HAS NOT SUBMITTED ANY EVIDENCE EXCEPT THE GIFT DEED. THE ASSESSEE HAS EXPLAINED HIS INABILITY TO BRING DOCUMENTS SUCH AS BANK ACCOUNT STATEMENT OR INCOME TAX RETURNS OR ANY OTHER EVIDENCE REGARDING THIS AMOUNT. HOWEVER THE ASSESSEE HAS SUBMITTED THAT A PLOT OF LAND IS SOLD IN JAMMU ON 31 ST DECEMBER 2001 FOR A SUM OF RS.3,70,000/ - . THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) HAS CONFIRMED THE FULL ADDITION OF RS.7 LACS MERELY BECAUSE OF THE REASON THAT SALE HAS TAKEN PLACE AT JAMMU AND CASH HAS BEEN DEPOSITED AT MUMBAI. AS SHRI CHUNI LAL BUDH K I HAS EXPIRED ON 31.07.2009 THE ASSESSEE COULD NOT PRODUCE THE CONFIRMATION AS WELL THE BANK STATEMENT OF HER DECEASED FATHER. MERELY BECAUSE THESE DOCUMENTS ARE NOT AVAILABLE THE EXPLANATION OFFERED BY THE ASSESSEE THAT HER FATHER WAS SERVING AS SUPERINTENDENT IN JAMMU AND KASHMIR ELECTRICITY BOARD CANNOT BE BRUSHED ASIDE LIKELY AND FURT HER AS THE SOURCE OF RS.3,70,000/ - IS ALREADY AVAILABLE. THEREFORE IRRESPECTIVE OF THE TIME GAP THE FATHER OF THE ASSESSEE HAS SOURCES OF GIFT TO THE EXTENT OF RS 3,70,000/ - THEREFORE CREDIT SHOULD BE GRANTED TO THE ASSESSEE IN ABSENCE OF THAT MONEY ALREADY USED BY THE DONOR. THEREFORE OUT OF GIFT OF RS 7,00,000/ - ASSESSEE COULD REASONABLY PROVE THE SOURCE OF FUND OF RS 3,70,000/ - AND CREDIT FOR THAT IS GRANTED TO THE ASSESSEE AND BALANCE AMOUNT OF RS 3,30,000/ - HAS RIGHTLY BEEN CONFIRMED BY CIT (A). THE AMOUNT OF RS.7 LACS BEING GIFT RECEIVED FROM FATHER OF THE ASSESSEE STANDS EXPLAINED TO THE EXTENT OF RS 3,70,000/ - AND ADDITION OF THE BALANCE AMOUNT OF RS 3,30,000/ - IS CONFIRMED. W E CONFIRM THE ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) TO THE EXTENT OF RS 3,30,000/ - IN THE HANDS OF THE ASSESSEE OUT OF RS.7 LACS U/S 68 OF THE ACT. PAGE 6 OF 6 C. LOAN OF RS 6 ,50,000/ - FROM CHILDREN OF THE ASSESSEE ON 23/02/2008 R EGARDING THE LOAN OF RS.2,70,000/ - FROM HER DAUGHTER MS. S ERENA ANAND AND RS.3,80,000/ - FROM HER SON HARSH NEET A NAND THROUGH ACCOUNT PAYEE CHEQUE. IT IS EXPLAINED THAT THIS AMOUNT HAS BEEN RECEIVED AS GIFT FROM SMT. PREM KAUR THE GRAND - MOTHER OF THE CHILDREN OF THE ASSESSEE. SMT. PREM KAUR HAS BEEN EXPLAINED AN AGRICULTURIST WAS IN POSSESSION OF AGRICULTURE LAND. SMT. PREM KAUR HAS CONFIRMED THE FACTUM OF GIFT BY GIFT DEED EXECUTED IN FAVOUR OF HER GRAND CHILDREN. THE AMOUNT OF LOAN OF RS 6,50,000/ - RECEIVED FROM THE CHILDREN OF THE ASSESSEE THOUGH GIFT FROM GRANDMOTHER IS NOT SUPPORTED BY ANY CONCRETE EVIDENCE . THEREFORE A S ASSESSEE HAS FAILED TO EXPLAIN THE SOURCE OF THE LOAN FROM HER CHILDREN THE ADDITION HAS RIGHTLY BEEN CONFIRMED BY CIT (A) . THEREFORE WE FIND NO INFIRMITY IN THE ORDER OF CIT (A) AND CONFIRM HIS FINDINGS REGARDING ADDITION OF RS. 2,70,000/ - AND RS.3,80,000/ - TOTALING TO RS. 6 ,50,000/ - RECEIVED FROM HER SON AND DAUGHTER. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 0 1 . 0 2 . 2016 . - S D / - - S D / - (H.S.SIDHU) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 0 1 / 0 2 / 2016 A K KEOT COPY FORWARDED TO 1 . APPLICANT 2 . RESPONDENT 3 . CIT 4 . CIT (A) 5 . DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI