S.Raman, Gummidipoondi V. DCIT, CHENNAI

ITA 2573/CHNY/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7925 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 04-10-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 09-10-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Assessee Lawyers: G BASKAR
• Keywords: Gift
• Section: 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . ! , ' # BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.2573/MDS/2014 $ %$ /ASSESSMENT YEAR : 2010-11 SHRI. S.RAMAN, M/S.MABEL ENGINEERS PVT.LTD., PLOT NO.66-69, EPIP SIPCOT INDUSTRIAL COMPLEX, GUMMIDIPONNDI- 601 201. PAN: AAFPR 1944 M V. THE DEPUTY COMMISSIONER OF IT, COMPANY CIRCLE IV (1), CHENNAI 600 034. ( &' /APPELLANT) ( ()&' /RESPONDENT) P&' + , / APPELLANT BY : SHRI G.BASKAR, ADVOCATE ()&'+, /RESPONDENT BY : SHRI SUPRIYO PAL, JCIT - +.' /DATE OF HEARING : 04.10.2016 / % +.' /DATE OF PRONOUNCEMENT : 30.11.2016 /O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A) IV, CHENNAI DATED 10.04.2014 AND PERTAINS TO ASSESSMENT YEAR 2010-11. 2 I.T.A. NO.2573/MDS/2014 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IS ADDIT ION OF RS.24,63,000/- UNDER SECTION 68 OF THE INCOME TAX A CT. 3. SHRI G.BASKAR, THE LEARNED COUNSEL FOR THE ASSES SEE SUBMITTED THAT THE ASSESSEE HAS RECEIVED RS.24,63,000/- FROM CLOSE RELATIVES. REFERRING TO RECEIPT OF RS.5,00,000/- EACH FROM MR. VENKATATHRI AND MRS.V.RUKMANI, THE LEARNED COUNSEL SUBMITTED THAT T HE SAID MR.VENKATATHRI IS THE FATHER IN LAW OF THE ASSESSEE . HE HAS AGRICULTURAL INCOME AND ALSO SAVINGS FROM HIS TEMPLE SERVICES. O UT OF THE SAVINGS FROM TEMPLE SERVICES AND AGRICULTURAL INCOME, SHRI VENKATATHRI DONATED A SUM OF RS.5,00,000/- TO THE ASSESSEE. SHRI VENKATAT HRI EXECUTING A GIFT DEED ON 19.03.2010. A COPY OF THE GIFT SAID TO BE E XECUTED BY MR.K.VENKATATHRI IS AVAILABLE AT PAGE 65 OF THE PAP ER BOOK. SIMILARLY, SMT. RUKMANI, THE MOTHER IN LAW OF THE ASSESSEE HAS ALSO DONATED RS.5,00,000/-. REFERRING TO RECEIPT OF RS.2,49,630/ - FROM MR.S.KRISHNAMOORTHY, THE LEARNED COUNSEL SUBMITTED THAT THE SAID MR.KRISHNAMOORTHY, IS NONE OTHER THAN THE BROTHER O F THE ASSESSEE. AN EQUAL AMOUNT WAS RECEIVED FROM THE OTHER BROTHERS N AMELY MR.S.MUTHUKRISHNAN AND MR.S.SRINIVASAN. THE RECEIPT OF THE MONEY FROM THE ASSESSEES BROTHER AND THE WRITTEN OFF THE SAME REFLECTED IN THE BALANCE SHEET, A COPY OF WHICH IS AVAILABLE AT PAGE 3 OF THE PAPER BOOK. 3 I.T.A. NO.2573/MDS/2014 ALL THE THREE BROTHERS WERE SUMMONED BY THE ASSESSI NG OFFICER AND THEY WERE ALSO EXAMINED. 4. REFERRING TO THE AMOUNT RECEIVED FROM MS.VARSHIN I RAMAN AND MS.DIVYA RAMAN, THE ASSESSEES DAUGHTERS, THE LEARN ED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS RECEIVED R S.2,30,000/- FROM MS.VARSHINI RAMAN AND RS.2,40,000/- FROM MS.DIVYA R AMAN RESPECTIVELY. THE AMOUNT WAS GIFTED BY THEM FROM THEIR PAST SAVIN GS. BOTH OF THEM WERE SHOWN SUNDRY DEBTORS IN THE BALANCE SHEET. SIM ILARLY, THE ASSESSEE HAS ALSO RECEIVED A SUM OF RS.2,28,370/- FROM M/S.M ABEL ENGINEERS PVT.LTD. THIS AMOUNT WAS NOT CONSIDERED BY THE CIT( A). REFERRING TO PARAGRAPH 10.1 OF THE ASSESSMENT ORDER, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LEDGER EXTRACT OF THE C OMPANY WHICH IS AVAILABLE AT PAGE 32 OF THE PAPER BOOK DISCLOSES TH E PAYMENT OF RS.2,28,370/-. SIMILARLY, A SUM OF RS.1,15,000/- WA S ALSO REIMBURSED BY M/S.MABEL ENGINEERS PVT.LTD. TOWARDS EXPENSES. HENC E, THE ADDITION MADE BY THE ASSESSING OFFICER IS NOT JUSTIFIED. 5. ON THE CONTRARY, SHRI SUPRIYO PAL, THE LEARNED R EPRESENTATIVE FOR THE DEPARTMENT SUBMITTED THAT THE ASSESSING OFFICER FOUND THAT THERE ARE CASH DEPOSIT IN THE BANK ACCOUNT TO THE EXTENT OF R S.30,83,000/-. IN FACT, 4 I.T.A. NO.2573/MDS/2014 THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 1 33(6) OF THE INCOME TAX ACT TO THE SO CALLED RELATIVES OF THE ASSESSEE AND AN OPPORTUNITY WAS ALSO PROVIDED TO THE ASSESSEE TO ESTABLISH THE IDEN TITY, CREDIT WORTHINESS AND GENUINENESS OF THE TRANSACTION. OUT OF RS.30,83 ,000/-, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS NOT ESTABLISHED THE GENUINENESS OF THE TRANSACTION OF RS.24,63,000/-. REFERRING TO THE CLAIM OF THE ASSESSEE ABOUT THE RECEIPT OF RS.5,00,000/- FROM MR.VENKATAT HRI AND MRS.V.RUKMANI, THE FATHER IN LAW AND MOTHER IN LAW OF THE ASSESSEE RESPECTIVELY, THE LEARNED REPRESENTATIVE FOR THE RE VENUE SUBMITTED THAT THE CREDIT WORTHINESS AND GENUINENESS OF THE TRANSA CTION WAS NOT PROVED. REFERRING TO THE CLAIM OF THE ASSESSEE WITH REGARD TO RECEIPT OF AMOUNT FROM MR.KRISHNAMOORTHY, MR.S.MUTHUKRISHNAN AND MR.S .SRINIVASAN, THE BROTHERS OF THE ASSESSEE, THE LEARNED REPRESENTATIV E FOR THE ASSESSEE SUBMITTED THAT SHRI SRINIVASAN IS WORKING AS PROHIT AND HE PAID RS.2,00,000/- TOWARDS REPAYMENT OF LOAN TAKEN BY TH E ASSESSEE ON EARLIER OCCASIONS. THE ASSESSING OFFICER FOUND THAT SHRI SRINIVASAN HAS A VERY MEAGER INCOME AND HE HAS NO SOURCE FOR PAYING A SUM OF RS.2,00,000/- TO THE ASSESSEE. SIMILARLY, SHRI MUTH UKRISHNAN, ANOTHER BROTHER OF THE ASSESSEE, THE ASSESSING OFFICER FOUN D THAT HE WAS WORKING FOR A SALARY OF RS.17,000/- PER MONTH. SHRI MUTHUKR ISHNANS SON SHRI SESHAN ALSO RECEIVING SALARY RANGING FROM RS.20,000 /- TO RS.25,000/- PER 5 I.T.A. NO.2573/MDS/2014 MONTH. THE WITHDRAWAL FROM THE BANK ACCOUNT WAS ONL Y RS.200/- TO RS.2,000/-. THEREFORE, THE ASSESSING OFFICER FOUND THAT THE WITHDRAWALS MADE BY THE ASSESSEE OR HIS SON WOULD NOT BE SUFFIC IENT TO REPAY THE LOAN OF RS.2,00,000/- IN CASH. THE ASSESSING OFFICE R HAS ALSO DISBELIEVED THE CLAIM OF RS.2,49,630/- FROM ANOTHER BROTHER SHR I KRISHNAMOORTHY. 6. REFERRING TO THE AMOUNT RECEIVED FROM MS.VARSHIN I RAMAN AND MS.DIVYA RAMAN, WHO ARE THE DAUGHTERS OF THE ASSESS EE, THE LEARNED DEPARTMENT REPRESENTATIVE SUBMITTED THAT BOTH OF TH EM WERE STUDENTS AT THE RELEVANT POINT OF TIME. THEREFORE, THEY HAVE NO SOURCE TO MAKE THE PAYMENT TO THE ASSESSEE. IN VIEW OF THE ABOVE FACTS AND SITUATION, THE LEARNED DEPARTMENT REPRESENTATIVE SUBMITTED THAT TH E CIT(A) HAS RIGHTLY CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ASSESSING OFFICER MADE AN ADDITION OF RS.24,63,000/- UNDER SECTION 68 OF THE INCOME TAX ACT. THE TOTAL DEPOSIT IN THE BANK ACCOUNT WAS TO T HE EXTENT OF RS.30,83,000/-. THE ASSESSEE CLAIMED BEFORE THE AUT HORITIES BELOW THAT HE RECEIVED A SUM OF RS.5,00,000/- EACH FROM MR.VEN KATATHRI AND MRS.V.RUKMANI, FATHER IN LAW AND MOTHER IN LAW OF T HE ASSESSEE RESPECTIVELY. THE ASSESSEE CLAIMS THAT HIS FATHER I N LAW MR.VENKATATHRI 6 I.T.A. NO.2573/MDS/2014 WAS A RETIRED EMPLOYEE FROM TEMPLE SERVICE AND HE I S ALSO HAVING AGRICULTURAL INCOME. THE ASSESSEE HAS FILED A GIFT DEED FROM MR.VENKATATHRI AND MRS.V.RUKMANI. IT IS WELL SETTLE D PRINCIPLES OF LAW THAT WHEN THE ASSESSEE CLAIMS RECEIPT OF MONEY FROM OTHE RS, IT IS OBLIGATORY ON THE PART OF THE ASSESSEE TO ESTABLISH THE IDENTI TY OF THE PARTIES, CREDIT WORTHINESS OF THE CREDITORS AND ALSO THE GENUINENES S OF THE TRANSACTION. IN THE CASE BEFORE US, THE IDENTITY OF THE PARTIES ARE NOT IN DISPUTE. WHAT IS DISPUTED IS CREDIT WORTHINESS OF THE CREDITORS T O ADVANCE MONEY TO THE ASSESSEE AND ALSO THE GENUINENESS OF THE TRANSACTIO N. THOUGH THE ASSESSEE CLAIMS THAT HE RECEIVED MONEY FROM HIS MOT HER IN LAW AND FATHER IN LAW, THE MATERIAL AVAILABLE ON RECORD, HA S NOT INDICATE THE AVAILABLE SOURCE FOR MAKING THE SO CALLED GIFT TO T HE ASSESSEE. 8. WE HAVE ALSO CAREFULLY GONE THROUGH THE GIFT DEE D FILED BY THE ASSESSSEE. A COPY OF WHICH IS AVAILABLE IS AT PAGES 65 TO 68 OF THE PAPER BOOK. THE GIFT DEED INDICATES THE DONATION / GIFT S AID TO BE MADE BY MR.VENKATATHRI. HOWEVER, IT IS NOT DISCLOSED AS ANY SOURCE OF INCOME FOR MAKING SUCH A GIFT. THE GIFT DEED DOES NOT DISCLOSE THE ACTUAL DATE OF GIFT RECEIVED BY THE ASSESSEE. THEREFORE, THIS DOCUMENT OF GIFT DOES NOT ESTABLISH THE CREDIT WORTHINESS OF THE CREDITOR NAM ELY, THE SO CALLED DONOR. SIMILARLY, NO MATERIAL WAS AVAILABLE ON RECO RD TO SUBSTANTIATE THE 7 I.T.A. NO.2573/MDS/2014 CREDIT WORTHINESS AND GENUINENESS IN THE CASE OF MR S.V.RUKMANI. NOW, COMING TO THE CLAIM OF THE ASSESSEE ABOUT RECEIPT O F THE MONEY FROM MR.KRISHNAMOORTHY, MR.S.MUTHUKRISHNAN AND MR.S.SRIN IVASAN, THE BROTHERS OF THE ASSESSEE, THE CLAIM OF THE ASSESSEE IS THAT THE PAYMENTS WERE REFLECTED IN THE BALANCE SHEET. WE HAVE CAREFU LLY GONE THROUGH THE COPY OF THE STATEMENT OF AFFAIRS WHICH IS AVAILABLE AT PAGE 3 OF THE PAPER BOOK. FROM THE STATEMENT OF AFFAIRS, THE SALARY REC EIVED WAS RS.5,30,000/- WHICH IS DISCLOSED ON THE LIABILITY S IDE OF THE STATEMENT OF AFFAIRS. ON THE ASSET SIDE, A SUM OF RS.1,04,552.45 AND ANOTHER SUM OF RS.1,29,437/- DISCLOSED. THERE IS NO CLEAR INDICATI ON OF CASH DEPOSIT FROM M/S.MABEL ENGINEERS PVT.LTD., SINCE THE ASSESSEE CL AIMS THAT THE DEPOSIT WAS RECEIVED FROM PRIVATE LIMITED COMPANY. THIS TRI BUNAL IS OF THE CONSIDERED OPINION THAT THE AVAILABILITY OF THE FUN DS WITH PRIVATE LIMITED COMPANY NEEDS TO BE EXAMINED. COPIES OF THE STATEME NT OF AFFAIRS OR THE BALANCE SHEET OF M/S.MABEL ENGINEERS PVT.LTD. IS NO T AVAILABLE ON RECORD. 9. IN THE ABSENCE OF ANY MATERIAL, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE AVAILABILITY OF THE FUNDS WITH MAB LE ENGINEERS PVT.LTD. FOR TRANSFERRING THE FUNDS TO THE ASSESSEE CANNOT BE AS CERTAINED. THEREFORE, IN THE ABSENCE OF ANY MATERIAL, THE CIT(A) HAS RIGH TLY CONFIRMED THE ORDER OF THE ASSESSING OFFICER. HENCE, THIS TRIBUNA L DO NOT FIND ANY REASON 8 I.T.A. NO.2573/MDS/2014 TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITIE S AND ACCORDINGLY, THE SAME IS CONFIRMED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. ORDER PRONOUNCED ON 30 TH NOVEMBER, 2016 AT CHENNAI. SD/- SD/- ( . ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) ' /ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 0 /DATED, THE 30 TH NOVEMBER, 2016. SP. + (.12 32%. /COPY TO: 1. &' /APPELLANT 2. ()&' /RESPONDENT 3. - 4. ( )/CIT(A) 4. - 4. /CIT, 5. 25 (. /DR 6. 6$ 7 /GF.