Shri Jayantkumar Parshottambhai Vadodariya, Gondal, Dist. Rajkot V. The ITO, Ward-2 (3) (5), Rajkot

ITA 25/RJT/2020

AI Insights

The case involves Jayantkumar Parshottambhai Vadodaria, who appealed against the order of the Commissioner of Income Tax (Appeals) regarding additions made to his income for the assessment year 2012-13. The additions were initially made by the Assessing Officer under section 69 of the Income Tax Act, 1961, concerning unexplained gifts and loans received by the assessee. The CIT(A) had partially relieved the assessee by estimating the agricultural income of the donors based on their land holdings, thus reducing the addition related to gifts. However, the addition related to loans was upheld due to insufficient evidence of the lenders' creditworthiness. The Tribunal dismissed the appeal, supporting the CIT(A)'s decision and the Assessing Officer's findings.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 133715 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 09-01-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 09-02-2020
• Other Referred Cases: Kajalben Gondaliya vs. ITA No.713/Rjt/2014, Manoj Kothari vs. ITA No.1053/Ahd/2014
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Gift; Revision of order; Set aside
• Section: 69; 263; 143(3); 22

Judgement Text

आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरणआयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण, राजकोट 瀈यायपीठ 瀈यायपीठ瀈यायपीठ 瀈यायपीठ, , , , राजकोट IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT (Conducted Through Virtual Court) ] ] BEFORE SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND SHRI T.R. SENTHIL KUMAR, JUDICIAL MEMBER ITA No.25/RJT/2020 Asstt.Year :2012-13 Jayantkumar Parshottambhai Vadodaria 9/11, Bhagvatpara Opp: RDC Bank Gondal, Rajkot. PAN : AAXPV 6758 P Vs ITO, Ward-2(3)(5) Rajkot. (Applicant) (Responent) Assesseeby : None Revenue by : Shri B.D. Gupta, Ld.Sr.DR स ु नवाई क तार ख/D a t e o f H e a r i n g : 1 0 / 0 1 / 2 0 2 3 घोषणा क तार ख /D a t e o f P r o n o u n c e m e n t : 1 8 / 0 1 / 2 0 2 3 आदेश/O R D E R PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER The present appeal has been filed by the assessee against order passed by the Commissioner of Income Tax(A)-2, Rajkot (in short referred to as ld.CIT(A) under section 250(6)of the Income Tax Act, 1961 ("the Act" for short), dated 17.1.2020 pertaining to the Asst.Year 2012-13. 2. At the time of hearing, neither the assessee nor anybody on his behalf remained presentin the Court despite service of notice. No application seeking adjournment has been filed. On several occasions in the past also the assessee has remained unrepresented ITA No.25/Rjt/2020 2 before us.On 08-09-2022 the appeal was noted to be argued by one Sh.Rajender Singhal but there is no power of attorney in his favour filed by the assessee before us. We also find that the assessee has filed a paper book containing certain materials which is not in consonance with Rule 18(3) of the Income Tax Appellate Tribunal Rules, 1963. As per sub-rules (3) of Rules 18 of the Income Tax Appellate Tribunal Rules stipulates that each paper/book filed should be certified as true copy by the party filing the same, or by his authorized representative. However, in the instant case, the assessee has filed simple copy of paper book without any certification thereof or counter signature to authenticate the same either by the assessee himself or by his authorized representative. Therefore, in the absence of the same, the paper book filed by the assessee cannot be taken on record, and in the absence of any participation by the assessee at the time of hearing, we proceed to decide the appeal of the assessee ex parte qua the assessee- appellant after hearing the ld.DR and considering the impugned orders passed by the ld.Revenue authorities. 3. The grounds of the appeal raised by the assessee are as under: 1. That the ld.CIT(A) was not justified in confirming the addition of Rs.6,90,000/- under section 69 of the Act on account of unsecured loans received by the appellant from brothers and sister-in-law, without considering the facts of the case and submissions; 2. That the ld.CIT(A) was not justified in confirming the addition of Rs.6,40,000/- u/s.69 of the Act on account of gifts received by the appellant from father and mother, without considering the facts of the case and submissions filed. 4. Facts in brief are that the original assessment order passed in the case of the assessee u/s 143(3) of the Act was found to be erroneous and prejudicial to the interest of the Revenue and accordingly vide order passed u/s 263 of the Act the assessment ITA No.25/Rjt/2020 3 order was set aside and restored to the file of the AO with a direction to make inquiries and verification regarding creditworthiness of donors who had made gifts/ loans and advances to the assessee purportedly out of their agricultural income. The gifts/ loans & advances under consideration were to the tune of Rs.26,90,000/-. The break-up of the same is as under: Name of the person Gifts Shri Parshottambhai K. Vadodariya, (Father of the assessee) Rs.8,00,000/- Smt.Kanchanben P. Vadodariya (Mother of the assessee. Rs.8,00,000/- Uncle of the assessee Rs.4,00,000/- Total Rs.20,00,000/- Name of the person Loans/ Advances Shri Maheshbhai P. Vadodariya (Brother of the assessee) Rs.4,90,000/- Smt.Kantaben M. Vadodariya (Sister- in-law of the assessee) Rs.2,00,000/- Total Rs.6,90,000/- 5. The assessee was asked to produce cogent documentary evidences to explain identity and creditworthiness of the persons from whom the assessee had claimed receipts of loans and gifts as well as genuineness of such transaction. The assessee was also ITA No.25/Rjt/2020 4 asked to produce all the persons from whom the assessee has taken loans/gifts. However, the assessee could not produce any documentary evidences in support of credit-worthiness of the lender/donors, nor could produce them before the AO for cross- verification. The assessee was also unable to explain the occasion on which the assessee had received gifts from the donors. Copies of acknowledgement of income returns of Shri Mahesh P. Vaodariya and his sister Smt.Kantaben M. Vadodariya showed only a meager income of Rs.1,27,790/- and Rs.1,59,240/- respectively for 2012-13. However, there was no evidence regarding their source of income and their savings or estate had been produced to demonstrate financial capacity and credit-worthiness of the said lenders/donors to make advances/gifts to the tune of Rs.20,00,000/- and Rs.6,90,000/-. Further, the documents in respect of land holding by the lenders/donors, the same did not pertain to the period and therefore were found not relevant for the period under consideration. The ld.AO further noted that even confirmation of gifts on stamp paper of Rs.20/- was issued to the assessee in December 2015 and January 2016 i.e. after lapse of more than three years from the receipt of gifts, which he held showed the entire impugned transactions were mala fide and after-thought. Even in the deed there was no mention of date of giving gift to the assessee by the donors. Thereafter, relying on various case laws, the ld.AO made total addition of Rs.26,90,000/- under section 69 of the Act. This addition was challenged before the ld.CIT(A). 6. Before the ld.CIT(A) reiterated submissions made during the assessment proceedings, and submitted all the relevant documents in support of identity, genuineness and credit-worthiness of the transactions. The ld.CIT(A) considered the submissions of the ITA No.25/Rjt/2020 5 assessee in the light of various details furnished by the assessee during assessment and appellate proceedings. The ld.CIT(A) also considered agriculture land holding documents particularly 7/12 and other record evidencing ownership of the land held by the donors, viz. Shri Purshotambhai Vadodaria (father of the assessee) and Smt. Kanchanaben Vadodaria (mother of the assessee). The ld.CIT(A) observed that both these donors are agriculturists and holding 32.3 bihas of land. Besides, assessee’s uncle Chhaganbhai, who also gifted an amount of Rs.4.00 lakhs was also holding agricultural land of 22 bighas. The ld.CIT(A) thereafter considered decision of the ITAT, Rajkot in the case of Kajalben Gondaliya, ITA No.713/Rjt/2014 dated 13.2.2019 and held that in the case of agriculturists who do not maintain any books of accounts, the agricultural income and the capacity of such persons should be judged with reference to the quantum of his land holdings. He further relied on the decision of ITAT, Ahmedabad Bench in the case of Manoj Kothari dated 6.1.2017 in ITA No.1053/Ahd/2014 wherein the Tribunal adopted yardstick of net agriculture income of Rs.30,000/- per bigha as reasonable. Basing these two decisions of the Tribunal, the ld.CIT(A) made an estimation of agricultural income that could be reasonably expected to be earned by the assessee, i.e. in the case of Purshotambhai Vadodara and Smt.Kanchanben Vadodara of Rs.4.80 lakhs each and Rs.4.00 lakhs in the hands of Chhagabhai (uncle of the assessee). Thus, the ld.CIT(A) restricted the total addition on account of gifts received by the assessee to the extent of Rs.6,40,000/- as unexplained and the balance amount of Rs.13,60,000/- was deleted as being held to be explained. ITA No.25/Rjt/2020 6 7. So far as loans/advances received by the assessee from Shri Maheshbhai of Rs.4.9 lakhs and Rs.2.00 from Kantaben, after going through the details submitted by the assessee, the ld.CIT(A) found that the assessee could not establish credit-worthiness of these two lenders, and their capacity to give interest free loans. Therefore, the ld.CIT(A) confirmed action of the AO in making addition of Rs.6.90lakhs (Rs.4.9 plus Rs.2.00). 8. The assessee, on being not satisfied with order of the ld.CIT(A) in not giving the entire relief under section 69 of the Act, has come in appeal before the Tribunal. 9. Before us none remained present behalf of the assessee. The ld.DR supported the order of the ld.CIT(A) by stating that the ld.CIT(A) has already given substantial relief to the assessee, and therefore, his order should be confirmed. 10. We have heard ld.DR and gone through impugned orders of the Revenue authorities. The factual appreciation of the facts and finding of the ld.CIT(A) on these issues are given at para-6 of the impugned order following manner: ITA No.25/Rjt/2020 7 ITA No.25/Rjt/2020 8 ITA No.25/Rjt/2020 9 11. On perusal of the above order, we find that the ld.CIT(A) based his decision on factual appreciation of the case after considering the documents placed by the assessee during the assessment and appellate proceedings. He has examined the issue in the right perspective, relying on the decisions of the ITAT cited (supra), and estimating the agricultural income that could be reasonably earned by the donors of gifts from their respective agricultural land holding, thereby given substantial relief to the assessee accepting gifts to the tune of Rs. 13.60 lacs as genuine out of total gifts of Rs.20 lacs received by the assessee from his parents and uncle. 12. So far as loans/advances received by the assessee from two lenders are concerned, the details submitted by the assessee did not establish or demonstrate the credit-worthiness or capacity of the lenders to give loans to the assessee as interest free, and therefore, the ld.CIT(A) confirmed the addition made by the assessee on this count. 13. Before us there is no contest on behalf of the assessee to controvert this finding of the ld.CIT(A). We find no reason therefore to depart from the conclusions arrived at by the ld.CIT(A) on this aspect, since no credible submissions have been made before us, ITA No.25/Rjt/2020 10 which would require our interference. We find nothing wrong with the action of the ld.CIT(A) in estimating the agriculture income that could be earned by the assessee, and confirmation of addition on account of loans received by the assessee. Thus, we confirm the order of the ld.CIT(A) and reject the grounds of appeal of the assessee. 14. In the result, appeal of the assessee is dismissed. Order pronounced in the Court on 18 th January, 2023 at Ahmedabad. Sd/- Sd/- (T.R. SENTHIL KUMAR) JUDICIAL MEMBER (ANNAPURNA GUPTA) ACCOUNTANT MEMBER Ahmedabad, dated 18/01/2023 vk*