Sri Krishna Kumar Agrawal, Patna V. ACIT, Patna

ITA 251/PAT/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1184 (ITAT-PATNA)
• Duration Of Justice: 2 year(s) 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 06-12-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR MISHRA
• Assessee Lawyers: ASHISH AGRAWAL
• Keywords: Unexplained cash credit; Gift; Salary income
• Section: 68; 6

Judgement Text

1 ITA NO. 251/PAT/2013. IN THE INCOME TAX APPELLATE TRIBUNAL, PATNA BENCH, PATNA. BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. (S.M.C.) I.T.A. NO. 251 /PAT/ 2013. ASSESSMENT YEAR : 2007. SHRI KRISHNA KUMAR AGRAWAL, ASSTT. COMMISSIONER OF INCOME - TAX, PATNA. VS. CIRCLE - 4, PATNA. APPELLANT. RESPONDENT. APPELLANT BY : SHRI ASHISH AGRAWAL. RESPONDENT BY : SHRI RAJESH KUMAR MISHRA. DATE OF HEARING : 01 - 08 - 2016 DATE OF PRONOUNCEMENT : 7 TH SEPT., 2016 O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(APPEALS) DATED 13 - 09 - 2013 AND PERTAINS TO ASSESSMENT YEAR 2006 - 07. 2. THE ISSUE RAISED IS THAT THE LEARNED CIT(APPEALS) HAS ERRED IN SUSTAINING ADDITION OF RS.5,25,000/ - MADE U/S 68 OF THE INCOME - TAX ACT ON ACCOUNT OF GIFTS RECEIVED FROM FAMILY MEMBERS. 3. FACTS OF THE CASE ARE THAT IN THE BALANCE SHEET FILED, THE ASSESSEE DISCLOSED THE FOLLO WING AMOUNTS AS UNSECURED LOANS : A. VINEET AGARWAL RS. 2,00,000/ - B. SULOCHANA AGARWAL RS. 1,25,000/ - C. SAURABH AGARWAL RS. 2,00,000/ - WHEN THE AO REQUIRED THE CONFIRMATIONS OF THE SAME , CONFIRM ATIONS WERE FILED WITHOUT MENTIONING ANY DATE OR MODE OF PAYMENT. ON BEING ASKED ABOUT THE 2 ITA NO. 251/PAT/2013. MODE OF PAYMENT, THE ASSESSEE CHANGED HIS STANCE AND SUBMITTED THAT THE ABOVE THREE AMOUNTS REPRESENTED CASH GIFTS TAKEN FROM TIME TO TIME FROM THE ABOVE THREE PERSO NS. IT WAS SUBMITTED THAT SMT. SULOCHANA AGRAWAL WAS THE MOTHER OF THE ASSESSE AND THE OTHER TWO CREDITO R S WERE BROTHERS. GIFTS HAD BEEN GIVEN BY THEM FOR INVESTMENT IN RESIDENTIAL FLAT PURCHASED DURING THE YEAR. THE EXPLANATION SUBMITTED BY THE ASSESSEE W AS NOT FOUND ACCEPTABLE BY THE AO AND THE ADDITION OF THE ABOVE AMOUNT WAS MADE. 4. UPON ASSESSEES APPEAL, LEARNED CIT(APPEALS) CONFIRMED THE ADDITION OBSERVING AS UNDER : I HAVE CONSIDERED THE FACTS OF THE CASE. THESE AMOUNTS WERE SHOWN AS UNSECURED LOANS IN THE AUDITED BALANCE SHEET. HOWEVER, WHEN THE AO ENQUIRED ABOUT THE SAME IN DEPTH, THE SAME WERE CLAIMED TO BE GIFTS IN CASH FROM RELATIVES AS ABOVE. IN THE CASE OF THE SHRI VINEET AGRAWAL, HE WAS WORKING AT KOLKATA AND MAINTAINING BAN K ACCOUNT ALSO. THE APPELLANT IS RESIDING AT PATNA. NO CLEAR CUT SOURCES OF THE CASH GIFTS HAVE BEEN SHOWN. THE APPELLANT WAS ALSO DULY HAVING BANK ACCOUNTS AND DOING SUBSTA N TIAL BUSINESS THROUGH SUCH ACCOUNTS AS A SUB - BROKER. WHAT PREVENTED THE AMOUNT COMING THROUGH THE BANKING CHANNEL? ON CONSIDERATION OF THE FACTS, IT APPEARS THAT THERE WAS NO REASONABLE PROBABILITY OF SUCH CREDITOR GIVING CASH GIFTS SO MANY TIMES TO THE APPELLANT. SOURCE OF THE CASH IN THE HANDS OF THE MOTHER IS ALSO NOT CLEAR APA RT FROM GENERAL SUBMISSIONS AS ABOVE. IN THE CASE OF THE SHRI SAURABH AGRAWAL, IT WAS SUBMITTED THAT HE WAS HAVING A CASH - IN - HAND OF RS. 3,05,763/ - AS ON THE CLOSING OF THE PRECEDING PREVIOUS YEAR I.E. 31.03.2005. HOWEVER, NO EVIDENCE IN THE SHAPE OF R ETURN AND BALANCE SHEET OF THE ASSESSMEN T YEAR 2006 - 07 HAS BEEN FILED WHICH COULD SHOW THAT THE ABOVE CASH WAS USED FOR GIVING GIFT AS ABOVE IN THE NEXT F.Y. THEREFORE, THE GENUINENESS OF TRANSACTIONS HAS NOT BEEN ESTABLISHED. THE CREDITS WERE DISCLOSED AS UNSECURED LOANS IN THE AUDITED BALANCE SHEET AND LATER, THE SAME WERE CLAIMED TO BE CASH GIFTS. I AM UNABLE TO PERSUADE MYSELF TO ACCEPT THE CLAIM OF THE APPELLANT THAT THE ABOVE AMOUNTS WERE SHOWN AS UNSECURED LOANS IN THE BALANCE SHEET ON ACCOUNT OF MISTAKE OF THE ACCOUNTANT. IT IS SEEN THAT THE BALANCE SHEET FILED IS AUDITED. HAD THERE BEEN SUCH AN OBVIOUS MISTAKE, IT WOULD NOT HAVE BEEN MISSED BY THE AUDITORS AS WELL AS BY THE APPELLANT HIMSELF WHO IS A LEARNED MAN OF ACCOUNTS BEING A SUB - BRO KER OF M/ S ICI CI. ACCORDINGLY, THE ADDITION MADE BY THE AO IS CONSIDERED SUSTAINABLE AND THE SAME IS UPHE LD. 5. I HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS RECEIVED THE GIFTS FR OM MOTHER AND BROTHERS. THE CONFIRMATIONS HAVE BEEN FILED AND NECESSARY OTHER EVIDENCES HAVE 3 ITA NO. 251/PAT/2013. BEEN FILED. HENCE HE SUBMITTED THAT THERE IS NO REASON WHY THE GIFTS SHOULD BE DISBELIEVED. 6. PER CONTRA LEARNED D.R. SUBMITTED THAT IN THE ASSESSEES BALANCE SHE ET A SUM OF RS.5,25,000/ - WAS SHOWN AS UNSECURED LOAN. WHEN THE AO ASKED DETAILS AND CORROBORATION OF THE SAME, THE ASSESSEE CHANGED ITS STANCE AND CLAIMED IT TO BE GIFT FROM MOTHER AND BROTHERS AS UNDER : NAME OF DONOR RELATIONSHIP AMOUNT. SULOCHANA A GRAWAL MOTHER 125000 SAURABH AGRAWAL BROTHER 200000 VINEET AGRAWAL BROTHER 200000 7. WITH REGARD TO THE CREDIT WORTHINESS OF THE AFORESAID PERSONS, LEARNED D.R. HAS MADE THE FOLLOWING SUBMISSIONS : I N THE CASE OF SH. VINEET AGRAWAL, IT CAN BE SEEN THAT SH. VINEET AGRAWAL HAS RECEIVED A NET SALARY OF RS. 2,76,690 DURING THE YEAR. HE HAS SHOWN DRAWINGS DURING THE YEAR OF RS. 15,000. IT CAN BE SEEN THAT THE INCOME OF SH. VINEET AGRAWAL IS OF BARELY SUBSISTENCE LEVEL. I LEAVE IT TO THE WISDOM OF THIS TRIBUNAL TO DECIDE WHETHER A PERSON WITH AN ANNUAL INCOME OF RS. 2.77 LAKH AND WITH ANNUAL DRAWING OF RS. 15,000 MAKE A GIFT OF RS. 2 LAKH DURING THE YEAR AND THAT TOO TO A BROTHER WHO EARNS SUBSTANTIALLY MORE THAN HIM. IT MAY ALSO BE NOTED THAT EVEN THOUGH SH. VINEET AGRAWAL EARNS SALARY INCOME, NOT A SINGLE PAYMENT OF SO CALLED GIFT HAS BEEN MADE BY HIM THROUGH CHEQUE. ALL THE PAYMENTS HAVE PRESUMA BLY BEEN MADE IN CASH. SO DID SH. VINEET AGRAWAL SAVE THIS SUM OUT OF HIS MEAGRE DRAWINGS AND THEN DECIDED TO GIVE AWAY 72.3% OF HIS ANNUAL INCOME AS GIFT? IN THE CASE OF SMT. SULOCHANA AGRAWAL, THE ONLY SOURCE OF INCOME AS PER THE SUBMISSION OF THE APP ELLANT IS INCOME FROM HOUSE PROPERTY FROM WHICH SHE WAS PRESUMABLY EARNING RS. 5 TO 6 THOUSAND A MONTH. WITH SUCH INCOME, EVEN BARE LIVELIHOOD WOULD BE RENDERED DIFFICULT. BUT THE APPELLANT MAKES THE PREPOSTEROUS CLAIM THAT FROM THIS INCOME, SHE WAS ABLE TO SAVE RS. 1.25 LAKH WHICH SHE THEN GAVE AS GIFT TO HER SON DURING THE IMPUGNED ASSESSMENT YEAR. IN THE CASE OF SH. SAURABH AGRAWAL, THE APPELLANT HAS STATED THAT HE IS A BUSINESS MAN AND 4 ITA NO. 251/PAT/2013. CARRIES CASH IN HAND WHICH IS ESTABLISHED THROUGH THE BALANCE S HEET SUBMITTED BEFORE THE ASSESSING OFFICER. HOWEVER, IT WAS SEEN FROM THE COPY OF BALANCE SHEET AND ITR FILED BY THE APPELLANT BEFORE THE ASSESSING OFFICER THAT THE SAME HAD ALSO BEEN FILED BY THE APPELLANT BEFORE THE HON'BLE TRIBUNAL AS PAGES 15 - 16 OF HIS PAPER BOOK. IT CAN BE SEEN THAT THE ITR AS WELL AS THE BALANCE SHEET SUBMITTED ARE FOR A.Y. 2005 - 06 AND THEREFORE, NOT RELEVANT TO THE FACTS OF THE CASE. THE APPELLANT'S ARGUMENT THAT GIFT WAS EXTENDED OUT OF OPENING CASH BALANCE FOR AY 2006 - 07 DOES NOT HOLD WATER AS FOR THIS YEAR NO ITR OR BALANCE SHEET OF SH. SAURABH .AGRAWAL HAS BEEN SUBMITTED. IT WAS FURTHER SEEN THAT CONTRARY TO THE CLAIM MADE BY THE APPELLANT BEFORE THE HON'BLE TRIBUNAL THAT SH. SAURABH AGRAWAL WAS A BUSINESSMAN, HIS ITR S UBMITTED BY THE APPELLANT HIMSELF SHOWS IL INCOME FROM BUSINESS. THE HON'BLE TRIBUNAL MAY LIKE TO ENQUIRE WHY FACTS HAVE BEEN MISREPRESENTED BEFORE IT. FURTHER, THE ITR OF SH. SAURABH AGRAWAL FOR A.Y. 2005 - 06 SHOWS MERELY RS. 42,000 AS INCOME FROM SALAR Y AND RS. 50,818 AS INCOME FROM OTHER SOURCES ADDING UP TO A TOTAL INCOME OF RS. 92.820. IT CAN THUS BE SEEN THAT THE INCOME OF SH. SAURABH AGRAWAL IS TOO MEAGRE TO AGAIN OF A SUBSISTENCE LEVEL AND HIS GIVING GIFT OF RS. 2 LAKH WHICH IS MORE THAN 200% OF HIS ANNUAL INCOME CHALLENGES CREDULITY. IT CAN ALSO BE SEEN THAT WHILE THE INCOME OF SH. SAURABH AGRAWAL FOR A.Y. 2005 - 06 HAS BEEN SHOWN AS RS. 92,820 IN HIS ITR, IN HIS BALANCE SHEET FOR THE SAME YEAR, INCOME OF RS. 1,22,818 HAS BEEN ADDED. THE CAPITA L ACCUMULATION OF SH. SAURABH AGRAWAL CONSIDERING SUCH APPARENT BOGUS INFLATION IN INCOME AND HIS MEAGRE ANNUAL INCOME SHOULD THUS BE SEEN TO BE NOT RELIABLE. ON THE BASIS OF THE ABOVE, IT CAN BE SEEN THAT THE CREDITWORTHINESS OF LOAN/GIFT OF RS. 5.25 LAKH SHOWN BY THE APPELLANT IS NOT PROVED. REGARDING THE EXTENSION OF GIFT OR LOAN BY THE THREE IMPUGNED PERSONS TO THE APPELLANT, THERE IS NO ONE IOTA OF INDEPENDENTLY VERIFIABLE EVIDENCE WHICH HAS BEEN FURNISHED BY THE APPELLANT. THEREFORE, ITS GENUINENESS IS AGAIN NOT PROVED. THE ASSESSING OFFICER HAD THUS AMPLE REASON TO CONSIDER THE SUM OF RS. 5.25 LAKH CREDITED BY THE ASSESSEE IN ITS BALANCE SHEET AS UNACCOUNTED CASH CREDIT UNDER SECTION 6 8 OF THE INCOME TAX ACT . 8. UPON CAREFUL CONSIDERATION I FIND THAT IN VIEW OF THE FACTS REGARDING THE CREDIT WORTHINESS OF THE DONORS AS NARRATED ABOVE, IT IS CLEAR THAT THEY DID NOT HAVE THE CAPACITY TO GRANT THE GIFT TO THE ASSESSEE AS CLAIMED ABOVE. THE CLAIM BY THE ASSESSEE IS HENCE A SELF SERVING STATEMENT DEVOID OF COGENCY. AS HELD BY HONBLE APEX COURT, REVENUE AUTHORITIES ARE NOT SUPPOSED TO PUT ON BLINKERS AND CONSIDE R THE CIRCUMSTANCES IN PROPER PERSPECTIVE. IN THE BACKGROUND OF 5 ITA NO. 251/PAT/2013. AFORESAID DISCUSSION, I DO NOT FIND ANY INFIRMITY IN THE CONCURRENT FINDINGS OF THE AUTHORITIES BELOW THAT THE SAID GIFTS AS STATED BY THE ASSESSEE ARE DEVOID OF COGENCY. HENCE I AFFIRM THE O RDERS OF THE AUTHORITIES BELOW. 9. IN THE RESULT, THIS APPEAL BY THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 7 TH DAY OF SEPT., 2016. SD/ - ( SHAMIM YAHYA) ACCOUNTANT MEMBER. DATED: 7 TH SEPT., 2016. COPY FORWARDED TO : 1. SHRI KRISHNA KUMAR AGRAWAL , 306B, ASHIANA PLAZA, BUDH MARG, PATNA - 1. 2. A.C.I.T., CIRCLE - 4, PATNA. 3. C.I.T. - 4. CIT(APPEALS), 5. D.R., ITAT, PATNA. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, PATNA BENCH, PATNA. WAKODE.