Shri Ajit Chandrakant Sancheti, Pune V. ITO, Ward 3(4), Pune

ITA 2540/PUN/2012

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0391 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 11 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 03-10-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 24-12-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: HITENDRA NINAWE
• Keywords: Gift; Corroborative evidences; Onus to prove; Capital Gains
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 143(3); 92; 13

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO.2 540 /PN/201 2 / ASSESSMENT YEAR : 200 9 - 10 AJIT CHANDRAKANT SANCHETI, SR.NO.1/1B, LAUKIT APARTMENT, NEAR SHIVAJI STATUE, KOTHRUD, PUNE . APPELLANT PAN : ACEPS8090B VS. ITO, WARD 3(4) . RESPONDENT DEPARTMENT BY : SHRI HITENDRA NINAWE ASSESSEE BY : SHRI NIKHIL PATHAK / DATE OF HEARING : 19 - 1 0 - 2016 / DATE OF PRONOUNCEMENT : 30 - 11 - 2016 / ORDER PER ANIL CHATURVEDI, AM: THE PRESENT APPEA L FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY LD.CIT (A) PUNE DATED 06.09.2012 FOR AY 20 09 10 . 1. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER : ASSESSEE IS AN INDIVIDUAL STATED TO BE ENGAGED IN THE BUSINESS OF SELLING OF ELECTRIC AND ELECTRICAL HOME APPLIANCES IN THE NAME AND STYLE ITA NO.2540/PN/2012, A.Y: 2009 - 10 OF MEMORIX HOME APPLIANCES . ASSESSEE ELECTRONICALLY FILED HIS RETURN OF INCOME FOR ASSESSMENT YEAR 2009 10 ON 22.09.2009 DECLARING TOTAL INCOME AT RS.14,49,900/ - . THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER THE A SSESSMENT WAS FRAMED U/S 143(3) BY ORDER DATED 23.12.2011 AND THE TOTAL INCOME WAS DETERMINED AT RS.96,63,980/ - . AGGRIEVED BY THE OR DER OF ASSESSING OFFICER (AO) , ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A) - II WHO VIDE ORDER DATED 06. 09.2012 ( IN APPEAL NO. PN/CIT(A) - II/ITO.WD3(4)/341/2011 - 12 ) G RANTED PARTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT ( A), ASSESSEE IS NOW IN APPEAL BEFORE US & HAS RAISED VARIOUS GROUNDS. 2. AT THE TIME OF HEARING AND O N POINTING OUT THAT THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE NOT IN CONSONANCE WITH RULE 8 OF THE INCOME TAX (APPELLATE TRIBUNAL) RULE 1963 AS THEY ARE ARGUMENTATIVE & 2 DESCRIPTIVE IN NATURE, LD. AR SUBMITTED THAT IN THE PRESENT APPEAL THE ASSESSEE HAS MAINLY TWO GRIEVANCES NAMELY ADDITION OF RS.64,50,000 / - U/S 68 & ADDITION OF RS.15,00,000/ - CREDITED TO HIS BANK ACCOUNT. HE SUBMITTED THAT ASSESSEE DOES NOT WISH TO PRESS THE GROUND (I.E. GROUND NO.2 & 2.1) WITH REFERENCE TO ADDITION OF RS.15 LACS & THEREFORE THE SOLE ISSUE WHICH REMAINS TO BE DECIDED IS THE ADDITION OF RS64.50 LACS U/S 68 OF THE ACT. CONSIDERING THE AFORESAID SUBMISSION OF LD.AR GROUND NO.2 & 2.1 WITH RESPECT TO ADDITION OF RS.15LACS ARE DISMISSED AS NOT PRESSED . 3. WITH RESPECT TO THE OTHER GROUND I.E. WITH REFERENCE TO ADDITION OF RS.64.50 LACS , T HE RELEVANT FACTS ARE AS UNDER: DURING THE COURSE OF ASSESSMENT PROCEEDINGS & ON THE BASIS OF ITS DATA RECEIVED BY THE AO, IT WAS NOTICED BY HIM THAT DURING THE ITA NO.2540/PN/2012, A.Y: 2009 - 10 FINANCIAL YEAR 2008 09 , ASSESSEE HAD DEPOSITED CASH O F RS.42,11,500/ - IN HIS SAVING BANK ACCO UNT MAINTAINED WITH SEVA VIKAS CO - OPERATI VE BANK, KOTHRUD BRANCH, PUNE. IT WAS ALSO NOTICED BY HIM THAT ASSESSEE HAS INVESTED HUGE CASH IN HIS CAPITAL ACCOUNT OF VARIOUS DAYS. THE ASSESSEE WAS THEREFORE ASKED TO EXPLAIN THE SOURCE OF CASH. IN REPLY TO THE SHOW CAUSE NOTICE , ASSESSEE INTER - ALIA SUBMITTED THAT ASSESSEE HAD RECEIVED GIFT OF RS.42,50,000/ - IN CASH FROM HIS FATHER, SHRI CHANDRAKANTH SANCHETI AND RS.22,00,000/ - IN CASH FROM HIS WIFE MRS.SHIKHA SANCHETI ON VARIOUS DATES FOR MEETING HIS BUSIN ESS COMMITMENTS. ASSESSEE ALSO SUBMITTED THE COPY OF GIFT DEEDS. THE SUBMISSION OF THE ASSESSEE WAS NOT FOUND ACCEPTABLE TO AO, INTER - ALIA FOR THE REASON THAT THE GIFT DEEDS WERE EXECUTED O N ONE H UNDRED(100) RUPEES NON JUDICIAL STAMP PAPER WHICH WERE MAD E ON 08.09.2011 AND THAT THE GIFT DEEDS WERE EXECUTED AFTER A PERIOD OF ALMOST 3 YEARS FROM 3 THAT THE GIFT DEEDS WERE EXECUTED AFTER A PERIOD OF ALMOST 3 YEARS FROM THE DATE OF RECEIPT OF MONEY . IT WAS ALSO NOTICED BY AO THAT THE GIFT DEEDS DID NOT BEAR THE SIGNATURE OF ANY WITNESSES NOR ANY SUPPORTING EVIDENCE WERE FURNISHED BY ASSESSEE TO PROVE THAT THE CASH HAS BEEN ACTUALLY DELIVERED BY THE DONORS TO THE DONEE. THE AO ALSO NOTICED THAT SHRI CHANDRAKANT SANCHETI, FATHER OF THE ASSESSEE , HAD FILED HIS RETURN OF INCOME FOR AY 2009 10 ON 21.10.2011 I.E. MUCH AFTER THE CASE O F ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT, THOUGH HE WAS HAVING INCOME OF RS.37,13,650/ - AO WAS THEREFORE OF THE VIEW THAT THE RETURN OF INCOME THAT WAS FILED BY SHRI CHANDRAKANTH SANCHETI WAS FILED MERELY WITH THE INTENTION TO PROVE HIS CREDIT WORTHINESS. THE OTHER SUBMISSION OF THE ASSESSEE OF HAVING ACCEPTED THE GIFTS IN CASH TO CLEAR THE PAYMENTS OF SUPPLIERS WAS ALSO NOT FOUND ACCEPTABLE TO THE ASSESSING OFFICER. ASSESSING OFFICER, THEREFORE CONSIDERE D THE AGGREGATE ITA NO.2540/PN/2012, A.Y: 2009 - 10 CASH GIFTS OF RS.64,50,000/ - RECEIVED BY THE ASSESSEE FROM HIS FATHER AND WIFE AS CASH CREDIT AND MADE ADDITION U/S 68 OF ACT. AGGRIEVED BY THE ORDER OF A SSESSING O FFICER , ASSESSEE CARRIED THE MATTER BEFORE LD.CIT (A) WHO VIDE ORDER DATED 06/09/2012 ( IN A PPEAL N O . LD.CIT (A) II/ITO.WD3(4)/341/2011 - 12 ) UPHELD THE ORDER OF AO BY HOLDING AS UNDER. 3.5 THE APPELLANT HAS RECEIVED CASH GIFTS FROM HIS FATHER SHRI. CHANDRAKANT SANCHETI AND HIS WIFE MRS. SHIKHA SANCHETI, THE DETA ILS OF WHICH ARE AS UNDER: MR.CHANDRAKANT SANCHETI MRS. SHIKHA SANCHETI DATE OF GIFT AMOUNT DATE OF GIFT AMOUNT 19 - 04 - 2008 1,00,000 25 - 07 - 2008 2,00,000 21 - 05 - 2008 7,50,000 29 - 07 - 2008 5,00,000 11 - 09 - 2008 14,00,000 07 - 08 - 2008 4,00,000 13 - 09 - 2008 9,00,000 11 - 08 - 2008 1,50,000 15 - 09 - 2008 2,00,000 20 - 08 - 2008 5,00,000 4 THE APPELLANT HAS STATED THAT NO RETURN OF INCOME HAD BEEN FILED SINCE 2003 BECAUSE OF THE LOSSES IN THE BUSINESS AND AS A RESULT SEVERAL CREDITORS HAD COME UP WHOSE ACCOUNTS WERE TO BE CLEARED, HOWEVER, NO DETAILS OF THE CREDITORS WHOSE ACCOUNTS WERE TO BE CLEARED HAVE EITHER BEE N FURNISHED BEFORE THE ASSESSING OFFICER OR EVEN DURING THE APPELLATE PROCEEDINGS SO AS TO JUSTIFY THE RECEIPT OF GIFTS IN CASH. THE APPELLANT HAS ALSO STATED THAT SEVERAL CASES HAD BEEN FILED BY THE CREDITORS AGAINST HIM WITH RESPECT TO THE BOUNCING OF CH EQUES ISSUED IS ALSO NOT EVIDENCED BY ANY PROOF OR THE NAME OF SUCH PERSONS. THE APPELLANT HAS ALSO STATED THAT HIS BANK ACCOUNTS HAD BECOME NPA ACCOUNTS, THOUGH NO SUCH DETAILS OR ANY EVIDENCE IN THIS REGARD HAS BEEN FURNISHED. FURTHER, IT IS NOT UNDERSTANDABLE THAT AFTER BEING IN BUSINESS FOR NEARLY FIFTEEN YEARS THE APPELLANT CHOSE NOT TO FILE THE RETURNS OF INCOME AFTER THE LOSSES IN 200 3. MOREOVER , THE SALE OF LAND WHICH OCCURRED IN F.Y. 2007 - 08 AT MAHALUNGE, MULSHI DIST: PUNE FROM WHICH RS. 7 3,70,000 / - WAS RECEIVED HAD ALSO NOT BEEN SHOWN BY THE APPELLANT. IN FACT, AS NOTICED BY THE ASSESSING OFFICER NO DETAIL OF THE ENTIRE TRANSACTIONS WAS FURNISHED BY THE APPELLANT. THE AFORESAID FACT EMERGING FROM THE MATERIAL ON RECORD LEAD TO THE INFERENC E THAT THE VERSION OF THE APPELLANT IS NOT TOTALLY CORRECT AND THAT THE EXPLANATION FURNISHED WITH RESPECT TO THE CASH GIFTS RECEIVED PRIMA FACIE 15 - 09 - 2008 2,00,000 20 - 08 - 2008 5,00,000 16 - 09 - 2008 6,00,000 06 - 12 - 2008 3,00,000 04 - 10 - 2008 1,00,000 27 - 12 - 2008 1,50,000 14 - 11 - 2008 2,00,000 TOTAL RS.42,50,000 RS.22,00,000 ITA NO.2540/PN/2012, A.Y: 2009 - 10 APPEARS TO BE AN AFTERTHOUGHT. THE APPELLANT UNDER THE GARB OF THE CREDITORS HAS TRIED TO JUSTIFY THE RECEIPT OF CASH GIFTS WHICH WERE INTRODUCED TO THE CAPITAL ACCOUNTS WITHOUT IDENTIFYING THE QUANTUM OF THE AMOUNT OWED TO SUCH CREDITORS WHICH WERE TO BE CLEARED AND ALSO THE NAMES OF SUCH PERSONS. THE EXPLANATION THUS FURNISHED BY THE APPELLANT IS DIFFICULT TO BE BELIEVED. THE BANK ACCOUNT FURNISHED OF HIS WIFE, MRS. SHIKHA SANCHETI INDICATES 'CASH SELF WITHDRAWALS OF RS.1.21 CRORES OUT OF WHICH RS. 22,00,000 / - IS STATED TO HAVE BEEN PAID AS CASH DEPOSITS APART FROM OTHER CASH PAYMENTS. THE SAID CASH WITHDRAWALS A PPEARING IN THE PUNE PEOPLE CO - OP. BANK LTD, LAXMI ROAD BRANCH A / C NO. 00204559 IS ONLY FOR THE PERIOD 3 - 4 - 2008 TO 21 - 2 - 2009 AND NOT FOR THE FULL YEAR AS THE COPIES OF THE BANK STATEMENT HAS NOT BEEN SUBMITTED. THE APPELLANT HAS NOT BEEN ABLE TO FURNISH TH E REASONS AS TO WHY THE ONLY SELECTIVE AND SPECIFIC WITHDRAWALS WERE CHOSEN TO JUSTIFY THE CASH DEPOSITS FOR THE PURPOSE OF GIFT. THE APPELLANT HAS NOT FURNISHED HIS OWN BANK ACCOUNT AND OTHER RELATED DETAILS WHICH COULD JUSTIFY THE EXPLANATION FURNISHED S O AS TO LINK THE WITHDRAWAL WITH THAT OF THE DEPOSIT DURING THE APPELLATE PROCEEDINGS. THE APPELLANT HAS THUS NOT BEEN ABLE TO ESTABLISH THE NEXUS OF THE CASH WITHDRAWN WITH THAT OF THE CASH DEPOSITS. THE APPELLANT HAS NOT EVEN FILED THE DETAILS OF THE INC OME TAX RETURN AND THE COPIES OF THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT AND OTHER RELATED DOCUMENTS WITH RESPECT TO HIS WIFE MRS. SHIKHA SANCHETI. THE PART PERIOD OF THE BANK STATEMENT OF MRS. SHIKHA SANCHETI IN THE ACCOUNT AT PUNE PEOPLES COOP. BAN K LTD. INDICATES HUGE SUMS OF DEPOSITS OF MONEY AND WITHDRAWALS, WHICH APPARENTLY HAVE NOT BEEN EXAMINED BY THE ASSESSING OFFICER AS NO EXPLANATION OF THE APPELLANT IN THIS REGARD APPEARS TO HAVE FURNISHED DURING THE ASSESSMENT PROCEEDINGS BEFORE THE A.O. OR DURING THE APPELLATE PROCEEDINGS BEFORE THE UNDERSIGNED. THE CAPACITY OF THE DONOR AND GENUINENESS OF THE TRANSACTION HAS FAR REMAINED TO BE PROVED. THUS THE ONUS CAST UPON THE APPELLANT HAS NOT BEEN FULLY DISCHARGED AS NO MATERIAL IN THI S REGARD HAS BE EN BROUGHT ON RECORD. MERE FILING OF GIFT DEEDS AND I.T. RETURN 5 REGARD HAS BE EN BROUGHT ON RECORD. MERE FILING OF GIFT DEEDS AND I.T. RETURN OF THE FATHER DID NOT BY ITSELF DISCHARGE THE APPELLANT FROM THE PRELIMINARY BURDEN TO ESTABLISH GENUINENESS OF GIFTS. THE APPELLANT HAD NOT FILED THE RETURN OF INCOME OF SEVERAL YEARS AND EVE N FOR A.Y. 2008 - 09 WHEREIN THE APPELLANT HAD RECEIVED SUBSTANTIAL AMOUNT IN CASH AND EVEN THE RETURNS FILED BY HIS FATHER WHEREIN THE CAPITAL GAINS ARISING OUT OF THE DEVELOPMENT AGREEMENT FOR THE TRANSFER OF PROPERTY HAD ALSO NOT BEEN DISCLOSED WITHIN THE STIPULATED PERIOD OF FILING THE RETURN OF INCOME. MOREOVER, THE NATURE OF RECEIPTS RECEIVED BY THE APPELLANT PRIMA FACIE DO NOT INDICATE THE CLAIM OF THE AMOUNT TO HAVE BEEN RECEIVED OUT OF NATURAL AND PERSONAL REGARD AND RESPECT. THE NATURE OF RECEIPTS A RE MORE OUT OF THE COMPULSION OF THE BUSINESS NEEDS OF THE APPELLANT THAN OUT OF REGARD FOR LOVE AND AFFECTION WHICH IS BASICALLY THE PRIMARY REQUIREMENT OF A GIFT, WHICH IS UNDERSTOOD IN NORMAL PARLANCE. IN FACT , THE CREDIBILITY OF SUCH GIFT EXCEPT WHERE IT IS PROVED BEYOND DOUBT WOULD APPEAR TO BE RELEVANT. THE MATERIAL ON RECORD CLEARLY INDICATE THAT WHAT IS RECEIVED BY THE APPELLANT IS MORE IN THE NATURE OF A LOAN IF THE SAME AMOUNT IS HELD TO HAVE BEEN RECEIVE D FROM HIS FATHER AND WIFE, OTHER THAN A GIFT, AND I FULLY CONCUR WITH THE FINDING OF THE ASSESSING OFFICER IN THIS REGARD IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE. THE APPELLANT IN ANY CASE HAS NOT BEEN ABLE TO PROVIDE WITH COGENT PROOF AND EVIDEN CE THAT THE SAME AMOUNTS WHICH WERE WITHDRAWN BY THE WIFE AND FATHER HAD TRAVELLED TO HIS ACCOUNT. THUS, WHILE JUDGING THE REASONABLENESS OF THE APPELLANT'S EXPLANATION THE TAXING AUTHORITIES ARE INTENDED TO LOOK INTO THE SURROUNDING CIRCUMSTANCES TO FIND OUT THE REALITY AND THE MATTER HAS TO BE CONSIDERED, IF NECESSARY, BY APPLYING TEST OF HUMAN PROBABILITIES AS HELD IN THE CASE OF SUMATI DAYAL VS CIT (1995) 214 ITR 801 (SC). ITA NO.2540/PN/2012, A.Y: 2009 - 10 3.5 IN THE CASE OF CIT VS P. MOHANKALA (2007) 291 ITR 278 (SC) IT WAS HELD TH AT THE INFERENCE OF GENUINENESS OF GIFT DOES NOT READILY FOLLOW MERELY ON IDENTIFICATION OF THE DONOR ON RECEIPT OF MONEY THROUGH BANKING CHANNELS. HIS CAPACITY TO MAKE A GIFT IS EQUALLY RELEVANT. IN FACT, THE CREDIBILITY OF THE GIFT EXCEPT WHERE IT IS PRO VED BEYOND DOUBT, WOULD APPEAR TO BE RELEVANT. THE APPELLANT HAS SUBMITTED A GIFT DEED CONFIRMING THE FACT OF THE GIFT IN THE YEAR 2008 THOUGH THE GIFTS WERE MADE NEARLY THREE YEARS AGO. HOWEVER, THE GIFT DEED NOW FILED BY THE APPELLANT WITHOUT ANY EVIDENC E OR PROOF INDICATING THE GENUINENESS OF THE TRANSACTION IS DIFFICULT TO BE ACCEPTED. THE APPELLANT HAD BEEN GIVEN SUFFICIENT OPPORTUNITY AND TIME TO FURNISH THE NECESSARY PROOF IN SUPPORT OF THE CLAIM MADE BUT THE ONUS CAST UPON THE APPELLANT HAS NOT BEEN DISCHARGED AT ANY STAGE. 3.5.1 IN THE CASE OF SREELEKHA BANERJEE VS CIT (1963) 491 ITR 112 (SC) THE APEX COURT HAS HELD THAT IF THERE IS ANY ENTRY IN THE ACCOUNT BOOKS OF THE ASSESSEE WHICH SHOWS RECEIPT OF SUM, IT IS NECESSARY FOR THE ASSESSEE TO ESTABLISH THE SOURCE OF MONEY AND TO THAT IT DOES NOT BEAR THE NATURE OF INCOME . THE DEPARTMENT IS NOT AT THIS STAGE REQUIRED TO PROVE ANYTHING. IT CAN ASK THE ASSESSEE TO PRODUCE ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR EVIDENCE PERTAINING TO THE EXPLANATION AND IF THE EXPLANATION IS UNCONVINCING, THE SAME BE REJECTED, THE DEPARTM ENT CAN DRAW INFERENCE THAT THE AMOUNT REPRESENTS INCOME EITHER FROM THE SOURCES ALREADY DISCLOSED BY THE ASSESSEE OR FROM SOME UNDISCLOSED SOURCES THE VERY WORDS 'AN UNDISCLOSED SOURCE' SHOW THAT THE DISCLOSURE MUST COME FROM THE ASSESSEE AND NOT FROM THE DEPARTMENT. IN THE CASE OF TIRTH RAM GUPTA VS CIT 304 ITR 145 (P&H) IT WAS HELD THAT BURDEN OF PROOF IS ON THE ASSESSEE TO ESTABLISH THAT DONOR HAD MEANS AND GIFT WAS GENUINE, FOR NATURAL LOVE AND AFFECTION. THE APPELLANT IN THE PRESENT CASE HAS NOT BEEN ABLE TO JUSTLY PROVE THE CONTENTION RAISED AND THE MATERIALS BROUGHT ON RECORD PRIMA FACIE DO NOT 6 CONTENTION RAISED AND THE MATERIALS BROUGHT ON RECORD PRIMA FACIE DO NOT INDICATE THE CLAIM OF THE APPELLANT TO BE CREDIBLE. IN THE CASE OF RAJEEV TANDON VS ACIT (2007) 294 ITR 488 (DEL), ONLY REASON GIVEN FOR ALLEGED GIFT WAS THAT THE ASSESSEE NEEDED MONEY TO PURCHASE HOUSE AND DONOR WANTED TO HELP HIM, WHICH REASON WAS UNUSUAL AND UNNATURAL AND A.D. WAS JUSTIFIED IN CONSIDERING THE CIRCUMSTANCES AND CONCLUDING THAT THE GIFTS WERE NOT GENUINE AND MAKING ADDITION U/S 68 OF THE I.T. ACT. 3.6 IN VIEW OF THE ABOVE FACTS, THE ADDITION MADE BY THE ASSESSING OFFICER OF RS. 64,50,000 / - IN TAXING THE CASH GIFTS IS UPHELD AND THE GROUNDS OF APPEAL NO.2 AND 2A RAISED BY THE APPELLANT ARE LIABLE TO BE DISMISSED. 4 . AGGRIEVED BY THE ORDER OF LD.CIT (A) , ASSESSEE IS NOW IN APPEAL BEFORE US. 5 . BEFORE US LD.AR REITERATED THE SUBMISSIONS MADE BEFORE AO AND LD.CIT ( A). HE , FURTHER SUBMITTED THAT IN THE BUSINESS , ASSESSEE HAD INCURRED LOSSES SINCE 2003 AND ASSESSEE WAS FACING SEVERE FINANCIAL CRISIS AND WAS UNABLE TO PAY THE CREDITORS. HE FURTHER SUBMITTED THAT SOME OF THE CREDITORS HAD FILED CASES AGAINST HIM AS THE CHEQUES ISSUED ITA NO.2540/PN/2012, A.Y: 2009 - 10 BY HIM HAD BOUNCED BACK AND THAT THE BANK HAD ALSO CLASSIFIED THE ACCOUNT OF THE ASSESSEE AS NPA ACCOUNT . IT WAS FURTHER SUBMITTED THAT THE CASH DEPOSITS RECEIVED AS GIFTS WERE DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE, SO THAT THE CHEQUES ISSUED BY THE ASSESSEE GOT CLEARED. HE FURTHER SUBMITTE D THAT ASSESSEES FATHER WAS A TAX PAYER AND THE GIFTS THAT WERE GIVEN TO THE ASSESSEE WERE OUT OF THE WITHDRAWS MADE BY HIM FROM HIS SAVINGS BANK ACCOUNT AND ALSO BY OBTAINING LOAN AGAINST THE FIXED DEPOSIT RECEIPTS . HE FURTHER PLACED ON RECORD THE COPY OF HIS BANK STATEMENTS AND FROM THAT HE POINTED TO THE DEPOSIT OF GIFTS MADE IN THE BANK ACCOUNT AND THE SUBSEQUENT PAYMENTS MADE TO THE CREDITORS TO PROVE HIS CONTENTION THAT THE CASH WAS DEPOSITED, SO THAT THE CHEQ UES ISSUED BY HIM GOT HONOURED. HE ALSO MADE AN ATTEMPT TO CO - RELATE THE DEPOSITS IN HIS BANK ACCOUNT WITH THE WITHDRAWALS MADE BY THE DONOR FROM HIS BANK ACCOUNT . HE FURTHER SUBMITTED THAT THE 7 BY THE DONOR FROM HIS BANK ACCOUNT . HE FURTHER SUBMITTED THAT THE GIFTS HAVE BEEN RECEIVED BY THE ASSESSEE FROM THE IMMEDIATE FAMILY MEMBERS AND THE DONORS HAVE ALSO GIVEN THE CONFORMATION & THAT GIFT DEEDS ARE NOT REQUIRED TO BE MANDATORILY REGISTERED AND THE DEFAULT OF REGISTRATION OF GIFT DEED DOES NOT IMPLY THAT THE GIFTS ARE NOT GENUINE. WITH RESPECT TO THE AOS OBSERVATION THAT THE GIFT DEEDS WERE MADE MUCH AFTER THE ACTUAL RECEIPT OF GIFTS, HE SUBMITTED THAT THE GIFT DEEDS WERE MADE BY WAY OF CONFORMATIONS FOR SUBMISSION BEFORE AO DURING THE ASSESSMENT PROCEEDINGS AND JUST BECAUSE THE DE EDS ARE MADE LATE, IT DOES NOT MEAN THAT THE GIFTS ARE NOT GENUINE. HE FURTHER SUBMITTED ASSESSEE IS REQUIRED TO PROVE THE IDENTITY OF THE PERSON , THE CAPACITY AND THE GENUINENESS OF TRANSACTION U/S 68 & SINCE THE ASSESSEE HAS PROVED THE IDENTITY, CAPACIT Y AND THE GENUINENESS OF TRANSACTION , THERE CANNOT BE ADDITION U/S 68. LD.AR ALSO PLACED ON RECORD THE AFFIDAVIT OF ITA NO.2540/PN/2012, A.Y: 2009 - 10 HIS FATHER CHANDRAKANTH SANCHETI WHERE - IN IT IS STATED BY HIM THAT THE CASH WITHDRAWN BY HIM FROM BANK WAS USED FOR THE PURPOSE OF MAKING GIFT AND THE CASH WITHDRAWN HAVE NOT BEEN USED FOR ANY OTHER PURPOSE NOR AS HE ACQUIRED ANY PROPERTY OUT OF THOSE WITHDRAWALS. WITH RESPECT TO GIFTS RECEIVED BY ASSESSEE FROM HIS WIFE , IT WAS SUBMITTED THAT IT WAS MADE BY HER BY WITHDRAWING FROM HER CAPIT AL ACCOUNT OF THE FIRM IN WHICH SHE WAS A PARTNER. LD.AR THEREFORE, SUBMITTED THAT SINCE ASSESSEE HAS DISCHARGED THE ONUS CAST UPON HIM, THE ADDITION AS MADE BY AO & CONFIRMED BY LD.CIT(A) U/S 68 OF THE ACT BE DELETED. LD.DR ON THE OTHER HAND, SUPPORTED THE ORDER OF AO AND LD.CIT (A). 6 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL O N RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO ADDITION OF RS.64.50 LACS MADE U/S 68 OF THE ACT. IT IS AN U NDISPUTED FACT THAT 8 ASSESSEE HAS RECEIVED CASH GIFTS FROM HIS IMMEDIATE FAMILY MEMBERS I.E. HIS WIFE (RS.22 LACS) AND HIS FATHER (RS.42.50 LACS) & THE CASH GIFTS RECEIVED BY THE ASSESSEE HAVE BEEN DEPOSITED IN HIS BANK ACCOUNT. IT IS ASSESSEES CONSISTENT CONTENTION BEFORE THE LOWER AUTHORITIES AND ALSO BEFORE US THAT ASSESSEE WAS INCURRING LOSSES IN THE BUSINESS AND WAS FACING SEVERE F INANCIAL CRISIS AND THE BANK HAD CLASSIFIED THE ACCOUNT AS NON PERFORMING ASSET (NPA) . THE CASH GIFTS RECEIVED BY THE ASSESSEE WERE DEPOSITED IN THE BANK SO THAT THE CHEQUES ISSUED BY THE ASSESSEE TO THE CREDITORS GETS HONOURED. BEFORE US, ASSESSEE HAS ALSO PLACED THE COPY OF HIS BANK ACCOUNT AND HAS ALSO CO - RELATE D THE CASH DEPOSITS IN HIS BANK ACCOUNT WITH THE CASH WITHDRAWN BY THE DONORS AND THE DEPOSIT BEING USED FOR THE PURPOSE OF MAKING PAYMENT TO THE CREDITORS. THE FACT OF ASSESSEE FACING FINANCIAL CRISIS & OF FACING MANY CHEQUE BOUNCING CASES THAT ARE FILED AGAINST HIM BY THE CRE DITORS IS ALSO NOTED ITA NO.2540/PN/2012, A.Y: 2009 - 10 IN THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2008 09. IT IS ALSO A FACT THAT ASSESSEE S FATHER , SHRI CHANDRAKANTH SAN CHET I IS ASSESSED TO TAX AND H AS FILED HIS RETURN OF INCOME FOR AY 2009 10 ON 21.10 . 2011 SHOWING TAXABLE INCOME IN EXCESS OF RS.37,00,000/ - . BEFORE US, LD.AR HAS ALSO FILED AN AFFIDAVIT OF SHRI CHANDRAKANTH SAN CH ETI , THE FATHER OF ASSESSEE , WHEREIN IT HAS BEEN SUBMITTED THAT THE CASH THAT THE WITHDRAW N FROM HIS BANK ACCOUNT WERE USED FOR GIVING GIFT TO THE ASSESSEE AND THAT SHRI CHANDRAKANTH SANCHETI HAS NOT USED THE CASH WITHDRAWN FOR ACQUIRING ANY PROPERTY. IN SUCH A SITUATION, W E ARE OF THE VIEW THAT MERELY BELATEDLY FILING THE RETURN OF INCOME BY T HE FATHER OF ASSESSEE & WITHOUT ANY MATERIAL ON RECORD TO DEMONSTRATE THAT THE FATHER OF ASSESSEE DOES NOT HAS THE CAPACITY TO GIFT, THE ACTION OF GIVING GIFT BY THE FATHER TO HIS SON , THE ASSESSEE , CANNOT BE DOUBTED. F URTHER, IN CASE OF CASH GIFTS FROM FATHER , THE ASSESSEE HAS FILED THE 9 IN CASE OF CASH GIFTS FROM FATHER , THE ASSESSEE HAS FILED THE CONFIRMATION, COPY OF RETURN OF INCOME OF HIS FATHER & IN SUCH A SITUATION THE GIFT RECEIVED BY ASSESSEE FROM HIS FATHER, CANNOT BE DISCARDED FOR MAKING THE ADDITION U/S 68, MORE SO, WHEN REVENUE HAS NOT CONFRONTED HIS FA THER OR HAS PROCEEDED AGAINST HIM. AS FAR AS ADDITION ON ACCOUNT OF GIFTS RECEIVED BY THE ASSESSEE FROM HIS WIFE, SMT . SIKHA SANCHETI IS CONCERNED, WE FIND THE HIS WIFE IS A PARTNER IN A FIRM (ADITYA CONSTRUCTIONS) . AS PER THE COPY OF RETURN OF INCOME OF ADITYA CONSTRUCTION FILED FOR A.Y. 2009 10 WHICH WAS PLACED ON RECORD, THE GROSS TOTAL INCOME OF THE FIRM IS RS.122.40 CRORE AND THE ENTIRE PROFITS HAVE BEEN CLAIMED AS DEDUCTION UNDER CHAPTER VI - A OF THE ACT AND THE SHARE OF SMT.SHIKHA SANCHETI IN THE PROFITS IS OF 10% . ASSESSEE HAS FILED THE COPY OF THE CAPITAL ACCOUNT OF SMT.SHIKHA SANCHETI AS APPEARING IN THE BOOKS OF THE FIRM. THE PERUSAL OF CAPITAL ITA NO.2540/PN/2012, A.Y: 2009 - 10 ACCOUNT REVEALS THAT SHE HAS MADE WITHDRAWALS FROM THE FIRM AND WHICH ARE REFLECTED IN HER CAPITAL ACCOUNT AND THE MONEY WITHDRAWN WHICH ARE REFLECTED IN HER CAPITAL ACCOUNT AND THE MONEY WITHDRAWN FROM THE FIRM HAVE BEEN DEPOSITED IN HER BANK ACCOUNT. BEFORE US, LD.AR HAS CO - RELATED THE WITHDRAWALS MADE BY HER FROM THE BANK ACCOUNT TO THE BANK ACCOUNT OF THE ASSESSEE AND WHICH IN TURN HAVE BEEN USED BY THE ASSESSEE F OR MAKING THE PAYMENT TO HIS CREDITORS . FURTHER, THE GIFT TO ASSESSEE IS ALSO SUPPORTED BY TH E SWORN AFFIDAVIT OF THE DONOR , I.E. MRS . SHIKHA SANCHETI. BEFORE US, THE REVENUE HAS NOT THE DONOR , I.E. MRS . SHIKHA SANCHETI. BEFORE US, THE REVENUE HAS NOT PLACED ANY MATERIAL WHICH COULD DEMONSTRATE THAT THE AVERMENTS MADE BY T HE DONOR IN THE GIFT DEED ARE FALSE. FURTHER, REVENUE HAS NOT CONFRONTED THE DONOR NOR HAS PROCEEDED AGAINST HER. IN SUCH A SITUATION , CONSIDERING THE TOTALITY OF THE FACTS, WE ARE OF THE VIEW THAT NO ADDITION OF RECEIPT OF GIFT BY ASSESSEE FROM HIS WIFE COULD BE MADE IN THE PRESENT CASE AND THEREFORE THE ADDITION DESERVES TO BE DELETED. THUS, PRESENT CASE AND THEREFORE THE ADDITION DESERVES TO BE DELETED. THUS, THE GROUND OF ASSESSEE IS ALLOWED . 7. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THE 30 TH DAY OF NOVEMBER, 2016. SD/ - SD/ - ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE ; DATED : 30 TH NOVEMBER, 2016. S S G G R R 10 ITA NO.2540/PN/2012, A.Y: 2009 - 10 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE LD.CIT (A) - II , PUNE 4. THE LD.CIT - II , PUNE 5. , 1 , , / DR, ITAT, B BENCH, PUNE. 6 . / GUARD FILE. / BY ORDER, / / TRUE COPY / / . / SR. PRIVATE SECRETARY, , / ITAT, PUNE 11