R.Velusamy, Namakkal V. DCIT, Salem

ITA 257/CHNY/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 95819 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2015
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 08-06-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 03-02-2014
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNANJCIT
• Assessee Lawyers: G BASKAR
• Keywords: Gift; Retraction
• Section: 131

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI ... , . , , BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.257 /MDS./2014 ( ! '! / ASSESSMENT YEAR :2010-11) MR.R.VELLUSAMY , 85.SALEM ROAD, NAMAKKAL 637 001. VS. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-II, NO.3 GANDHI ROAD, SALEM 636 007. PAN AAKPV 8062 H ( / APPELLANT ) ( / RESPONDENT ) #$ % & / APPELLANT BY : MR.G.BASKAR,ADVOCATE '(#$ % & / RESPONDENT BY : MR.P.RADHAKRISHNAN,JCIT, D.R ) * % +, / DATE OF HEARING : 08.06.2015 -' % +, /DATE OF PRONOUNCEMENT : 05.08.2015 / O R D E R PER A.MOHAN ALANKAMONY , ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE, AGGRIEVED B Y THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A), SALEM DA TED ITA NO.257 /MDS/2014 2 31.12.2013 IN ITA NO.42/2012-13 PASSED UNDER SEC.1 43(3) READ WITH SECTION SEC. 250 OF THE ACT. 2. THE ASSESSEE HAS RAISED SIX ELABORATE GROUNDS I N HIS APPEAL; HOWEVER THE CRUX OF THE ISSUE IS THAT THE LD. CIT ( A) IS NOT JUSTIFIED IN CONFIRMING THE ORDER OF THE LD.A.O, WHO HAD ADDED T HE GIFT RECEIVED FROM THE MEMBERS OF THE ASSESSEES FAMILY AMOUNTING TO ` 23 LAKHS TO THE INCOME OF THE ASSESSEE UNDER THE HEAD INCOME F ROM UNEXPLAINED SOURCE. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS AN INDIVIDUAL, ENGAGED IN THE BUSINESS OF TRANSPORT, F ILED HIS RETURN OF INCOME ON 08.11.2010 ADMITTING HIS INCOME AS ` 29,54,278/-. SUBSEQUENTLY, THE CASE WAS TAKEN UP FOR SCRUTINY AN D THE ASSESSMENT U/S.143(3) WAS COMPLETED ON 08.03.2013 W HEREIN THE LD. ASSESSING OFFICER MADE ADDITION OF ` 23/- LAKHS AS HIS INCOME FROM UNEXPLAINED SOURCES. IN THE STATEMENT RECORDED U/S .131 OF THE ACT ON 23.9.2009 DURING THE COURSE OF SURVEY THE ASSES SEE HAD ADMITTED UNDISCLOSED INVESTMENTS TO THE EXTENT OF ` 61,38,000/-, HOWEVER, WHILE ITA NO.257 /MDS/2014 3 FILING THE RETURN OF INCOME ON 08.11.2011 THE ASSES SEE HAD ADMITTED ONLY ` 26,50,000/- AS HIS UNDISCLOSED INCOME IN HIS RETURN OF INCOME. THEREFORE THE LD. ASSESSING OFFICER ASKED THE ASSES SEE TO EXPLAIN THE REASONS FOR THE SHORTFALL OF ` 34,88,000/- FROM BEING DISCLOSED AS UNDISCLOSED INCOME. THE LD. A.R. FURNISHED CERTAIN DETAILS CONSISTING OF CASH FLOW STATEMENTS, BANK STATEMENTS, GIFT DEED S FROM SMT. R.RAMYA & SMT. JOTHI, VEHICLE SALE AGREEMENT AND DE TAILS OF LOAN FROM M/S.BALAJI JEWELLERS. THE LD. ASSESSING OFFICE R ON EXAMINING THE SAME REJECTED THE DETAILS FURNISHED BY THE ASSE SSEE FOR THE FOLLOWING REASONS:- I) THE GIFT DEED WHEREIN IN PLAIN PAPERS AND UND ATED WHICH HAD NO EVIDENTIARY VALUE. II) THE CASH FLOW STATEMENT OF THE DONORS ANNEXED T O THE INCOME TAX RETURN WAS FILED ON 8.11.10 I.E. 14 MONTHS AFTE R THE ADMISSION OF UNDISCLOSED INCOME BY MEANS OF AFFIDAV IT. II) THE LOAN FROM M/S.BALAJI JEWELERS IS OBTAINED O N 19.03.2010 I.E., SIX MONTHS AFTER THE ADMISSION OF THE UNDISCL OSED INCOME BY MEANS OF AFFIDAVIT. ITA NO.257 /MDS/2014 4 III) THE PHOTOCOPY OF THE VEHICLE SALE AGREEMENT WA S NOT DATED, AND MADE ON NON-JUDICIAL STAMP PAPER DATED 12.02.20 03 WHICH IS MUCH EARLIER THAN THE DATE OF ADMISSION OF UNDISCLOSED INCOME. IT WAS FURTHER OBSERVED FROM T HE RECORDS OF THE RTO THAT THE VEHICLE WAS STILL IN THE ASSESS EES NAME. IV) IN THE RETURN OF INCOME FILED ON 08.11.2010 TW O DONORS WERE SHOWN TO HAVE GIVEN GIFTS TO THE ASSESSEE IN ORDER TO CREATE SOURCE WHICH APPEARS TO BE SHAM. V) THE CASH FLOW STATEMENT FILED IN THE CASE OF ASS ESSEE AND THE TWO DONORS APPEARS TO BE AFTER THOUGHT. THE LD.A.O FURTHER OBSERVED AS FOLLOWS IN HIS ORDER :- 1. THE STATEMENT U/S 131 OF THE IT ACT WAS GIVEN O N 23.09.2009 WHICH WAS CONFIRMED THREE WEEKS LATER BY AN AFFIDAVIT DATED 1 6.10.2009. EVEN ASSUMING THAT THE ASSESSEE WAS NOT IN A PROPER FRAM E OF MIND ON THE DATE OF RECORDING OF THE STATEMENT U/S.131 OF THE IT ACT , THE VERY FACT THAT STATEMENTS MADE IN THE SWORN STATEMENT WAS CONFIRME D BY AN AFFIDAVIT FILED AFTER ABOUT 23 DAYS SHOW THAT THE ASSESSEE WAS FULL Y AWARE OF THE FACTS BEING STATED IN THE STATEMENT. 2. EVEN IF THERE IS A POSSIBILITY THAT THE ASSESSEE HAD OMITTED TO TAKE INTO ACCOUNT THE AMOUNTS AVAILABLE IN THE RUNNING ACCOUN TS FROM SRI V. RAJASEKAR AND SAVERA FARMS, THESE BEING NORMAL BUSI NESS TRANSACTIONS, THERE IS ABSOLUTELY NO POSSIBILITY THAT THE ASSESSE E CAN FORGET GIFTS RECEIVED ITA NO.257 /MDS/2014 5 FROM HIS WIFE AND DAUGHTER-IN-LAW TO THE TUNE OF RS .23,00,000/- AND THAT TOO ON A SAME DAY, VIZ. 10-07-2009. IT IS BEYOND THE HU MAN PROBABILITIES TO ASSUME THAT A PERSON, NO MATTER HOW BIG A BUSINESSM AN HE IS, DOES NOT REMEMBER GIFTS GIVEN OUT OF AFFECTION BY A NEAR REL ATIVE, HOWEVER SMALL IT MAY BE, LET ALONE A GIFT OF RS.23,00,000/- GIVEN IN CASH ON ONE DAY AND INCIDENTALLY BY HIS OWN WIFE AND DAUGHTER-IN-LAW. 3. THE GIFTS ARE SUPPOSED TO HAVE BEEN GIVEN IN CAS H AND EVIDENCED BY AN ALLEGED GIFT DEED ON A PLAIN SHEET OF PAPER, A PHOT OCOPY OF WHICH WAS FILED BEFORE THE ASSESSING OFFICER. THERE IS NO OTHER MAT ERIAL EVIDENCE TO SHOW THAT THE GIFTS HAVE BEEN GIVEN IN THE MANNER AND ON THE DATE ON WHICH THEY ARE SUPPOSED TO HAVE BEEN GIVEN. 4. THE RETURN OF INCOME FOR THE AY 2010-11 WAS FILE D BY THE ASSESSEE ON 08-11-2010 VIDE RECEIPT NO.104277. THE RETURNS OF S MT V. JOTHI AND SMT. R RAMYA FOR THE AY 2010-11 WERE ALSO FILED ON 08-11 -2010 VIDE RECEIPT NOS. 104276 AND 104275 RESPECTIVELY. THIS SHOWS THA T A CONCENTRATED EFFORT WAS PUT IN TO MATCH THE FIGURES OF GIFTS IN ALL THE THREE CASES. 5. IN THE INCOME COMPUTATION STATEMENTS OF SMT. V. JOTHI AND SMT. R. RAMYA, OTHER INCOME OF RS.4,50,000/- AND RS.2,00, 000/- RESPECTIVELY HAS BEEN OFFERED, FOR WHICH NO DETAILS ARE AVAILABLE. N O SUCH INCOME HAS BEEN OFFERED IN THE EARLIER YEARS. AFTER TAKING INTO ACC OUNT THIS OTHER INCOME, THE CLOSING BALANCES IN THE CASH FLOW STATEMENTS IS RS. 63,461/- AND RS.5,487/-RESPECTIVELY. THIS ESTABLISHES THAT THE A FFAIRS HAVE BEEN SO MANAGED AS TO FACILITATE THE ARRANGEMENT OF GIFTS T O THE ASSESSEE, AND CLEARLY SHOWS THAT THE METHOD OF GIFTS HAS BEEN ADO PTED AS AN AFTER- THOUGHT. ITA NO.257 /MDS/2014 6 6. FROM THE BANK STATEMENTS FURNISHED BY THE ASSESS EE, IT IS SEEN THAT THE ASSESSEE HAS DEPOSITED AN AMOUNT OF RS.10,00,000/- BY CASH IN A/C NO. 129100050301970 ON 20-08-2009 AND PAID AN EQUAL AMO UNT TO SMT. JOTHI BY CHEQUE NO.640151. NO EXPLANATIONS HAVE BEEN OFFE RED FOR THESE TRANSACTIONS. HENCE IT IS TO BE INFERRED THAT THIS IS A QUID-PRO-QUO FOR THE ALLEGED GIFT SUPPOSED TO HAVE BEEN RECEIVED ON 10-0 7-2009. 7. AS STATED EARLIER, THE CLOSING CASH BALANCES IN THE CASH FLOW STATEMENTS OF SMT.VJOTHI ARID SMT. R. RAMYA ARE RS.63,461/- AN D RS.5,487/- RESPECTIVELY. THIS CLOSING BALANCE HAS BEEN ARRIVED AT AFTER TAKING INTO ACCOUNT NOT ONLY THE OTHER INCOME MENTIONED IN PA RA 5 ABOVE, BUT ALSO AFTER TAKING CREDIT FOR GIFTS OF RESPECTIVELY, RS.1 ,50,000/- AND RS.5,50,000/-, RECEIVED FROM THE ASSESSEE, SRI R. VELUSAMY, AFTER THE DATE OF RECORDING OF HIS SWORN STATEMENT. THIS AGAIN EMPHASIZES THE POIN T MADE IN PARA 5 THAT THE AFFAIRS HAVE BEEN SO MANAGED SO AS TO FACILITAT E THE ARRANGEMENT OF GIFTS. WITH THE ABOVE OBSERVATIONS THE LD. ASSESSING OFFIC ER REJECTED THE CLAIM OF GIFT RECEIVED BY THE ASSESSEE FROM HIS WIF E SMT JOTHI AND DAUGHTER IN LAW R.RAMYA AGGREGATING TO ` 23 LAKHS AND ADDED TO THE INCOME OF THE ASSESSEE AS INCOME FROM UNEXPLAINED S OURCE. 4. WHEN THE MATTER CROPPED UP BEFORE THE LD. CIT ( A), THE LD. CIT (A) ALSO AGREED WITH THE VIEW OF THE LD. ASSESSING OFFICER AND CONFIRMED HIS ORDER BY OBSERVING AS UNDER:- ITA NO.257 /MDS/2014 7 6.2 GROUND NO.22 TO 2.4 AND 2.6 PERTAINS TO THE APP ELLANTS CLAIM THAT HE IS ENTITLED TO RETRACT THE STATEMENT TAKEN U/S.131 AT ANY TIME. AS DISCUSSED EARLIER, THE ASSESSING OFFICER BY PROCEEDING FROM T HE CASH FLOW STATEMENT FURNISHED DURING THE ASSESSMENT PROCEEDINGS HAS ACC EPTED THE RETRACTION AND PROCEEDED WITH THE FRESH CLAIM. 6.3 GROUND NO.2.5 PERTAINS TO THE ARGUMENT THAT THE DONORS WERE REGULAR ASSESSEES AND WITH VERIFIABLE SOURCE OF INCOME AND THAT THEY WERE NOT BROUGHT IN AS AN AFTERTHOUGHT. THIS GROUND IS NOT A CCEPTED ON THE SIMPLE REASON THAT, WHATEVER BE THE CASE, THE FACT THAT SU CH A HUGE AMOUNT OF GIFT WAS NOT KEPT TRACK OF AND THE NATURE OF GIFT, MAKE IT A CLEAR CASE OF AFTERTHOUGHT. 6.4 GROUND NO.2.7 STATES THAT THE ASSESSING OFFICER WAS NOT FACTUALLY CORRECT AND EVEN IF THE GIFTS WERE NOT RELIABLE THE SOURCE WAS AVAILABLE. THE SAME IS NOT ACCEPTED AS THE ASSESSING OFFICER HAS DILIGE NTLY ANALYSED THE REASONS FOR REJECTION OF THE ARGUMENT. I AM IN AGRE EMENT THAT THE ENTIRE GIFT CONCEPT WAS A CLEAR CASE OF AFTERTHOUGHT. 6.5 GROUND NO2.8 PERTAINS TO THE RIGHT TO RETRACT T HE ASSESSING OFFICER HAS ALSO ACCEPTED THE RETRACTION BY PROCEEDING FROM THE CASH FLOW STATEMENT FURNISHED. IN VIEW OF THIS THE GROUND IS NOT RELEVA NT. 6.6 GROUND NO2.9 PERTAINS TO THE FILING OF RETURNS ON THE SAME DATE DOES NOT MEAN AN ATTEMPT TO CREATE EVIDENCE TO MATCH FIGURE. THE SAME IS NOT ACCEPTED AS THE ASSESSING OFFICER HAS CREATED A VER Y LOGICAL SERIES OF EVENTS TO CONCLUDE THAT IT IS AN EFFORT TO MATCH TH E FIGURE. THE SUDDEN INCREASE IN INCOME FROM OTHER SOURCES IS CLINCHIN G EVIDENCE TO THIS CONCLUSION. ITA NO.257 /MDS/2014 8 6.7 GROUND NO.2.10 STATES THAT THE FUNDS OF THE FAM ILY WERE MIXED AND UTILIZED BY HIM, SEGREGATING THE SAME CORRECTLY AS GIFTS FRO M AND TO THEN. THERE WAS NO QUESTION OF NON-REMEMBRANCE OF GIFTS ON DATE OF SURVEY. THE APPELLANTS CLAIM ITSELF IS AN ACCEPTANCE OF AN AFT ERTHOUGHT, AFTER THE STATEMENT. A PERUSAL OF THE STATEMENT SHOWS THAT TH ERE IS NO MENTION, EVEN OF MIXED CASE OF FUNDS, LET ALONE GIFTS. THERE IS NO MENTION OF ANY FINANCIAL TRANSACTION BETWEEN FAMILY MEMBERS. THIS CLEARLY LENDS CREDENCE TO THE CONCLUSION THAT THE GIFT THEORY IS AN AFTERT HOUGHT. IN FACT, THE APPELLANTS CLAIM SEEMS TO BE ACTUALLY ACCEPTING TH AT THE RECEIPT OF GIFT IS AN AFTERTHOUGHT, WITH AN EFFORT TO MATCH THE FIGURE . 6.8 GROUND NO.2.11 PERTAINS TO THE CLAIM THAT THE S OURCE BEING EXPLAINED, THE SOURCES OF SOURCE SHOULD NOT BE ADDED. THE APPELLAN T STATES THAT AT BEST THE AMOUNT SHOWN AS OTHER SOURCES ALONE SHOULD HAVE BEEN ADDED IN THE HANDS OF THE APPELLANT. THIS GROUND IS NOT ACCEPTED IN VIEW OF THE FACT THAT THE ENTIRE CONCEPT OF GIFT IS AN AFTERTHOUGHT. 6.9 GROUND NO.2.12 PERTAINS TO THE PAYMENT MADE INT O BANK ACCOUNT OF THE APPELLANTS WIFE AND CHEQUES ISSUED TO DAUGHTER-IN- LAW DO NOT NEED ANY EXPLANATION. IT IS TO BE NOTED THAT ESSENTIALLY SUC H TRANSACTION ARE ALSO ONE OF THE BASIS OF CONCLUSION THAT THE GIFTS ARE CLEAR LY AN AFTER THOUGHT. 6.10 GROUND NO2.13 PERTAINS TO THE CLAIM THAT SUSPI CION, EVEN IF STRONG, CANNOT BE THE BASIS OF ADDITION. THE SAME IS NOT AC CEPTED AS THE ASSESSMENT ORDER CLEARLY DENOTES THE ATTEMPT TO CRE ATE EVIDENCE BY WAY OF GIFT FROM WIFE AND DAUGHTER-IN-LAW. 5. BEFORE US, LD. A.R. SUBMITTED THAT THE REVENUE H AD NOT EXAMINED THE DONORS OF GIFT BUT HAD SIMPLY ARRIVED AT A CONCLUSION ITA NO.257 /MDS/2014 9 THAT THE GIFT AMOUNT OF RS.23LAKHS RECEIVED BY THE ASSESSEE IS ACTUALLY THE ASSESSEES INCOME FROM UNDISCLOSED SOU RCES BASED ON SURMISES AND CONJECTURES. IT WAS THEREFORE PLEADED THAT THE ADDITION MADE FOR ` 23 LAKHS MAY BE DELETED. THE DR ON THE OTHER HAND R ELIED ON THE ORDERS OF THE LD. ASSESSING OFFICER AND THE LD. CIT (A). 6. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PER USED THE MATERIALS AVAILABLE ON RECORD. FROM THE FACTS OF T HE CASE IT IS APPARENT THAT THE ASSESSEE HAD SUBMITTED CASH FLOW STATEMENTS, BANK STATEMENTS AND AFFIDAVITS FROM HIS WIFE AND DA UGHTER IN LAW FOR HAVING RECEIVED ` 23 LAKHS. WHEN THE ASSESSEE HAD MADE SUCH SUBMISSIONS, IT IS THE DUTY OF THE REVENUE TO EXAMI NE THE VERACITY OF THE CLAIM OF THE ASSESSEE BY EXAMINING THE SOURCE O F THE DONEE EITHER BY SUMMONING THEM OR BY VERIFYING THE DOCUME NTS FURNISHED BY THE ASSESSEE/DONEE. WE DO NOT FIND ANY SUCH ATTEMP T MADE BY THE REVENUE IN THE CASE BEFORE US. MOREOVER, THOUGH THE REASONS STATED BY THE LD. ASSESSING OFFICER AND THE LD. CIT (A) AP PEARS TO HAVE SOME MERITS, A DETAIL FINDING ON THE SUBMISSIONS OF THE ASSESSEE WITH RESPECT TO THE GIFT RECEIVED FROM DONORS IS LACKING . THEREFORE IN THE ITA NO.257 /MDS/2014 10 INTEREST OF JUSTICE WE REMIT THE MATTER BACK TO THE FILE OF THE LD. ASSESSING OFFICER FOR DENOVO CONSIDERATION. WE ALS O MAKE IT CLEAR THAT THE ASSESSEE WILL BE AT LIBERTY TO SUBMIT ANY FRESH DOCUMENTS TO JUSTIFY HIS CLAIM BEFORE THE REVENUE AND AT THE SAM E TIME WE ALSO DIRECT THE ASSESSEE TO CO-OPERATE WITH THE REVENUE IN THEIR PROCEEDINGS TO EXPEDITE THEIR ORDERS. 7. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 5 TH AUGUST, 2015 AT CHENNAI. SD/- SD/- ( . . . ) ( N.R.S.GANESAN ) ( . '#$ %' ) (A.MOHAN ALANKAMONY) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 5 TH AUGUST, 2015. K S SUNDARAM. % '+./ 0 /'+ /COPY TO: 1. #$ /APPELLANT 2. '(#$ /RESPONDENT 3. ) 1+ () /CIT(A) 4. ) 1+ /CIT 5. /4 '+5 /DR 6. 6! 7* /GF