Garima Jain, Kanpur V. Astt. Commissioner of Income Tax-3, Kanpur

ITA 263/LKW/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100331 (ITAT-LUCKNOW)
• Duration Of Justice: 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 21-07-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 30-04-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: R K RAM
• Keywords: Unexplained cash credit; Gift; Source of fund; Onus to prove

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.263/LKW/2015 ASSESSMENT YEAR:2004 - 05 A.C.I.T. - 3, KANPUR. VS MS GARIMA JAIN, 14/77, PARADE, KANPUR. PAN:ADVPJ2604H (RESPONDENT) (APPELLANT) SHRI PRADEEP SETH, F.C.A. APPELLANT BY SHRI R. K. RAM, D. R. RESPONDENT BY 21/07/2015 DATE OF HEARING 28 /08/2015 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THIS IS AN ASSESSEES APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT(A) - I, KANPUR DATED 16/01/2015 FOR THE ASSESSMENT YEAR 2004 - 2005. 2. THE ASSESSEE HAS RAISED AS MANY AS SIX GROUNDS OF APPEAL BUT THE ASSESSEE IS HAVING ONLY TWO GRIEVANCES. ONE GRIEVANCE IS REGARDING CONFIRMING THE ADDITION OF RS.4 LAC S AS UNEXPLAINED CASH CREDIT ON THE GROUND THAT THE ASSESSEE FAILED TO DISCHARGE THE ONUS TO PROVE THE SOURCE OF THE SOURCE TO ESTABLISH THE GENUINENESS OF THE GIFT AND CREDITWORTHINESS OF THE DONOR . THE SECOND GRIEVANCE IS REGARDING CONFIRMING THE ADDITION OF RS.9,000/ - ON ACCOUNT OF LOW WITHDRAWALS FOR HOUSE HOLD EXPENSES. 2 3. LEARNED A.R. OF THE ASSESSEE REITERATED THE SAME CONTENTIONS, WHICH WERE RAISED BEFORE CIT(A) WHEREAS LEARNED D.R. OF THE REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT THE FIRST ISSUE IN DISPUTE REGARDING GIFT OF RS.4 LACS WAS DECIDED BY LEARNED CIT(A) AS PER PARA 4.1.1 AND 4.1.2 OF HIS ORDER, WHICH ARE REPR ODUCED BELOW FOR THE SAKE OF READY REFERENCE: - 4.1.1 THE GROUNDS NO. 2, 3 & 4 OF APPEAL ARE AGAINST THE ADDITION OF RS. 4,00,000/ - AS UNEXPLAINED CASH CREDIT. THE AO HAS OBSERVED THAT ASSESSEE HAS STATED RS.4,00,000/ - TO BE A GIFT RECEIVED BY HER FROM S HRI ASHOK KUMAR BINI DEVI (HUF) AND THAT NO PROOF OF GIFT OR IDENTITY OR CREDIT WORTHINESS OF THE DONOR WAS FURNISHED BY THE ASSESSEE, IN SPITE OF SUFFICIENT OPPORTUNITIES GIVEN. ON THE OTHER HAND APPELLANT HAS SUBMITTED THAT SHE RECEIVED GIFT OF RS. 4,00, 000/ - ON 11.09.2003 VIDE A CHEQUE FROM HER UNCLE AND GRANDMOTHER AND HAS FURNISHED GIFT DEED FOR THE SAME AND THAT SHE HAS DISCHARGED HER ONUS. 4.1.2 I HAVE CAREFULLY PERUSED THE SUBMISSIONS OF THE ASSESSEE AND THE MATERIAL ON RECORD. THE APPELLANT HAS A CCEPTED THAT SHE RECEIVED GIFT OF RS. 4,00,000/ - DURING THE YEAR. ALTHOUGH, SHE HAS FURNISHED PAN AND DETAILS OF RETURN OF INCOME AND CONFIRMATION OF THE DONORS, HOWEVER THESE DETAILS AT BEST PROVE THE IDENTITY OF DONORS AND NOT THE GENUINENESS OF THE GIFT S, IN VIEW OF THE HAND WRITTEN CONFIRMATION OF THE DONORS. IT IS SEEN FROM RECORDS THAT SUFFICIENT OPPORTUNITIES WERE GIVEN TO THE ASSESSEE TO PRODUCE THE DONORS AND ESTABLISH THEIR CREDIT WORTHINESS. THE BANK ACCOUNT DETAILS OF THE DONOR REVEAL CASH DEPOS ITS IN THEIR BANK ACCOUNT BEFORE ISSUING CHEQUES OF RS.4,00,000/ - . THERE IS NO EVIDENCE THAT SAID WITHDRAWAL OF RS.4,00,000/ - VIDE CHEQUE WAS GIVEN TO THE APPELLANT AND THERE IS NO EXPLANATION FOR THE DEPOSITS IN THE DONOR ACCOUNT. THE BALANCE SHEET OF DON OR SHOWS CAPITAL OF RS.11,66,228/ - WHILE THE SOURCES OF INCOME SHOWN AT RS. 66.172/ - BY THE APPELLANT ARE INTEREST INCOME AND LONG TERM CAPITAL GAINS. THE ONUS WAS ON THE APPELLANT TO PROVE THE SOURCES OF THE SOURCE IN ORDER TO ESTABLISH THAT THE GIFT IS G ENUINE AND THAT DONORS HAVE CREDITWORTHINESS. THE APPELLANT HAS FAILED TO DO SO. MERELY 3 RELYING ON THE FACT THAT CHEQUE WAS MADE FOR GIFT DOES NOT DISCHARGE THE ONUS OF THE APPELLANT. IN THIS REGARD RELIANCE IS PLACED ON THE DECISION IN THE CASE OF UMESH KRISHNANI VS INCOME - TAX OFFICER [2013] 35 TAXMANN. COM 598 (GUJARAT)/[2013] 217 TAXMANN 13 (GUJRAT) WHERE IT HAS BEEN HELD THAT ''IT WAS NOTED THAT YEARLY EARNINGS OF LENDERS WERE EITHER LESS OR ALMOST SIMILAR TO WHAT THEY LOANED TO ASSESSEE - IT WAS ALSO FOUND THAT SUBSTANTIAL AMOUNT OF CASH WAS DEPOSITED IN BANK ACCOUNTS OF LENDERS SHORTLY PRIOR TO ISSUANCE OF CHEQUES BY THEM TO ASSESSEE - WHETHER ON FACTS, ENTIRE TRANSACTIONS WAS A CIRCUITOUS ROUTE TO BRING ON BOOKS ASSESSEE'S OWN UNACCOUNTED MONEY AND, THUS, IMPUGNED ADDITION MADE BY AUTHORITIES BELOW WAS TO BE UPHELD - HELD, YES' THE GENUINENESS OF GIFT TO APPELLANT IS NOT PROVED AND SHE HAS NOT DISCHARGED HER ONUS OF PROVIDING GENUINENESS OF GIFTS AND CAPACITY OF THE DONOR FOR RS 4,00,000/ - . THIS AMOUNT IS RIGHTLY ASSESSED AS INCOME OF THE APPELLANT. RELIANCE IS ALSO PLACED IN THE CASE OF MUKESH SHAW VS. INCOME - TAX OFFICER [2012] 246 CTR 32 (JHARKHAND) WHEREIN IT HAS BEEN HELD THAT: WHETHER WHERE ONE CL AIMS THAT HE HAD REC EIVED CERTAIN AMOUNTS FROM A PE RSON AND SAID PERSON ADMITS AVAILABILITY OF FUNDS IN BANK AND ITS WITHDRAWAL FROM BANK , PRODUCES SUCH BANK DOCUMENT I N RESPECT OF HIS CRE DITWORTHINESS AND FROM SUCH DOCUMENTAR Y EVIDENCE ITSELF , IT IS PROVED , AS A MATTER OF FACT , THAT TRANSACTION COU LD NOT HAVE HAPPENED , THEN ADMISSION OF SA ID PERSON IS REQUIRE D TO - BE REJECTED . THE FACTS AND CIRCUMSTANCES OF THE INSTANT CASE ARE SIMILAR TO THE CASES AS CITED ABOVE. IT IS CLEAR THAT MERE USE OF BANKING CHANNEL IS NOT SUFFICIENT TO PROVE THE CREDITWORTHINESS. DURING THE APPELLATE PROCEEDINGS TOO, THE APPELLANT HAS NOT FURNISHED CONCRETE EVIDENCE TO ESTABLISH THE GENUINENESS OF THE GIFT AND CREDITWORTHINESS OF DONOR. THUS, THE ADDITION ON THIS ACCOUNT IS UPHELD. HENCE, NO INTERFERENCE IS CALLED FOR IN THE ASSES SMENT ORDER, IN THIS REGARD. GROUNDS OF APPEAL ARE DISMISSED. 5. FROM THE ABOVE PARAS FROM THE ORDER OF LEARNED CIT(A), WE FIND THAT IT IS NOTED BY CIT(A) THAT IT WAS THE SUBMISSION OF THE ASSESSEE BEFORE HIM THAT THE GIFT WAS RECEIVED BY THE ASSESSEE FR OM HER UNCLE AND GRANDMOTHER. IT IS 4 ALSO NOTED BY CIT(A) THAT THE ASSESSEE HAS FURNISHED GIFT DEED FOR THE SAME. HE HAS ALSO OBSERVED THAT THESE DETAILS AT BEST PROVE THE IDENTITY OF DONORS BUT NOT THE GENUINENESS OF THE GIFTS AND CREDITWORTHINESS OF THE DONORS. IN THIS REGARD, WE FIND THAT IT IS ALSO NOTED BY CIT (A) THAT THE BAN K ACCOUNT DETAILS OF THE DONOR REVEAL CASH DEPOSITS IN THEIR BANK ACCOUNT BEFORE ISSUING CHEQUES OF RS.4,00,000/ - TO THE ASSESSEE. THE COPY OF BANK STATEMENT OF THE DONOR IS AVAILABLE IN THE PAPER BOOK ON PAGES 9 & 10. FROM THE SAME, WE FIND THAT THE CHEQUE OF RS.4 LACS WAS CLEARED FROM THE BANK ACCOUNT OF THE DONOR ON 12/09/2003 AND NO DOUBT , THERE IS CASH DEPOSIT OF RS.50,000/ - IN THAT BANK ACCOUNT ON THE SAME DATE BUT BEFORE THAT CASH DEPOSIT, THERE ARE TWO DEPOSITS IN THE SAME BANK ACCOUNT ON 02/09/2003 OF RS.7,52,550/ - AND ON 17/05/2003 OF RS.20,150/ - AND BOTH THESE CREDITS ARE BY CLEARING. T HE OPENING BALANCE ON 12/09/2003 IN THE BANK ACCOUNT OF THE DONOR WAS RS.8.05 LACS , WHICH WAS MUCH MORE THAN THE AMOUNT OF CHEQUE ISSUED BY DONOR IN FAVOUR OF THE ASSESSEE AS GIFT. SIMPLY BECAUSE THERE IS A CASH DEPOSIT OF RS.50,000/ - ON 12/09/2003, CREDITWORTHINESS OF THE DONOR CANNOT BE DOUBTED WHEN THERE A RE SUFFICIENT BALANCE IN THE BANK ACCOUNT OF THE DONOR, WHICH HAS COME OUT OF CLEARING AND NOT OUT OF CASH DEPOSIT. HENCE, WE FIND THAT THE IDENTITY OF THE DONOR IS ADMITTEDLY ESTABLISHED EVEN AS PER CIT (A) AND SOURCE OF GIFT IS ALSO ESTABLISHED FROM THE BANK ACCOUNT OF THE DONOR IN WHICH THERE ARE SUFFICIENT DEPOSITS BY WAY OF CLEARING IN ADDITION TO A SMALL DEPOSIT OF RS.50,000/ - IN CASH. IT IS ALSO SEEN THAT THE DONOR IS HAVING RELATION WITH THE DONNEE BECAUSE IT IS OBSERVED BY LEARNED CIT(A) IN PARA 4.1.1 OF HIS ORDER THAT IT WAS SUBMITTED BEFORE HIM THAT THE GIFT WAS GIVEN BY UNCLE AND GRANDMOTHER OF THE ASSESSEE AND THIS CONTENTION OF THE ASSESSEE IS NOT CONTROVERTED BY LEARNED CIT(A) OR BY LEARNED D.R. OF THE REVENUE. UNDER THESE FACTS, WE ARE OF THE CONSIDERED OPINION THAT THE ADDITION MADE BY THE ASSESSING OFFICER AND CONFIRMED BY CIT(A) IS NOT JUSTIFIED. REGARDING TWO JUDGMENTS FOLLOWED BY CIT(A), AS HAS BEEN NOTED 5 BY HIM ON PAGES 8 & 9 OF HIS ORDER, WE ARE OF THE CONSIDERED OPINION THAT IN THE FACTS OF THE PRESENT CASE, THESE JUDGMENTS ARE NOT APPLICABLE AND HENCE, WE DELETE THE ADDITION OF RS.4 LACS . 6. REGARDING THE SECOND ADDITION OF RS.9,000/ - , WE FIND THAT IT IS NOTED BY CIT(A) IN PARA 4.4 OF HIS ORDER THAT THE HOUSE HOLD EXPENSES OF RS.3 ,000/ - I.E. RS.250/ - PER MONTH IS LOW, EVEN BY STANDARD OF POCKET MONEY DURING THE PERIOD. HE HAS ALSO NOTED THAT THE ASSESSEE HERSELF HAS DECLARED INCOME OF RS.6,20,689/ - DURING THE PRESENT YEAR. THE LEARNED CIT(A) HAS ESTIMATED THE ADDITIONAL HOUSE HOL D EXPENSES AT RS.9,000/ - AS AGAINST RS.12,000/ - ESTIMATED BY THE ASSESSING OFFICER. CONSIDERING THESE FACTS, WE ARE OF THE CONSIDERED OPINION THAT THERE IS NO INFIRMITY IN THE ORDER OF LEARNED CIT(A) ON THIS ISSUE. ACCORDINGLY, THIS ISSUE IS DECIDED AGAI NST THE ASSESSEE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS PARTLY ALLOWED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 28 /08/2015 *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR