SHRI LOKENDRA SINGH RAJPUT, Ujjain V. THE DCIT 2(1), Ujjain

ITA 266/IND/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5856 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 2 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 21-04-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJEEV JAIN
• Keywords: Gift; Salary income
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI (SINGLE MEMBER CASE) BEFORE SHRI N.S. SAINI, HONBLE ACCOUNTANT MEMBER ITA NO. 266/IND/2015 (ASST. YEAR : 2010-11) SHRI LOKENDRA SINGH RAJPUT, UJJAIN VS. DY. CIT, 2(1), UJJAIN PAN NO. AGWPR3681A (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ASHISH GOYAL, ADV. DEPARTMENT BY : SHRI RAJEEV JAIN, DR DATE OF HEARING : 11/07/2016. DATE OF PRONOUNCEMENT : 11/07/2016. O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), UJJAIN, DATED 28.01.2015. 2. GROUND NO. 1 OF THE APPEAL IS GENERAL IN NATURE AND HENCE REQUIRES NO SEPARATE ADJUDICATION BY ME. 3. INA GROUND NO.2 OF THE APPEAL, THE GRIEVANCE OF THE ASSESSEE IS THAT THE LD. CIT(A) HAS ERRED IN SUSTAINING ADDITIO N OF RS. 49,895/- FOR NON-DEDUCTION OF TDS ON INTEREST PAYMENT. 4. I HAVE HEARD THE RIVAL SUBMISSIONS AND I HAVE GO NE THROUGH ORDERS OF THE LOWER AUTHORITIES AND MATERIAL PLACED ON RECORD. IN THE - : 2:- SH LOKENDRA SINGH RAJPUT V. DY. CIT, UJJAIN I.T.A.NO. 266/IND/2015 INSTANT CASE, THE ASSESSEE PAID INTEREST OF RS. 49, 895/- TO M/S. TATA MOTORS. THE ASSESSEE DID NOT DEDUCT TDS FROM THE PA YMENT MADE. THEREFORE, THE AO DISALLOWED THE DEDUCTION U/S 40(A )(IA) OF THE INCOME- TAX ACT, 1961. 5. ON APPEAL, THE LD. CIT(A) CONFIRMED THE ACTION O F THE AO. 6. BEFORE ME, THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT AS AT THE END OF THE YEAR, THERE WAS NO AMOUNT PAYABLE TO M/S. TATA MOTORS AND, THEREFORE, IN VIEW OF THE DECISION OF HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. VECTOR SHIPPING SERVICE (P) LIMITED, (2013) 38 TAXMANN.COM 77 (ALL), NO DISALL OWANCE OF INTEREST PAYMENT COULD BE MADE. HE FURTHER RELIED ON THE DEC ISION OF CHENNAI BENCH OF THE TRIBUNAL IN THE CASE OF SRI NARAYANA M OORTHY TRAVELS VS. ITO, 61 TAXMANN.COM 341 (CHENNAI TRIB) AND SUBMITTE D THAT THE HON'BLE ALLAHABAD HIGH COURT IS IN FAVOUR OF THE AS SESSEE AND AT THE SAME TIME, THE HON'BLE KOLKATA HIGH COURT IN THE CA SE OF CIT VS. CRESCENT EXPORT SYNDICATES IN I.T.A.NO. 20 OF 2013 ORDER DATED 3 RD APRIL, 2013, AND HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. SIKANDARKHAN N. TUNVAR, (2013) 357 ITR 312 (GUJ) AR E AGAINST THE ASSESSEE. IN SUCH CIRCUMSTANCES, THE RULE OF JUDICI AL PRECEDENCE DEMANDS THAT THE VIEW FAVOURABLE TO THE ASSESSEE MU ST BE ADOPTED AS HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF CI T VS. VEGETABLE PRODUCTS LIMITED, (1973) 88 ITR 192 ( S.C.). FOLLOW ING THE ABOVE FUNDAMENTAL RULE DECLARED BY THE HON'BLE SUPREME C OURT, I HAVE TO FOLLOW THE JUDGEMENT OF HON'BLE ALLAHABAD HIGH COUR T, WHICH IS IN - : 3:- SH LOKENDRA SINGH RAJPUT V. DY. CIT, UJJAIN I.T.A.NO. 266/IND/2015 FAVOUR OF THE ASSESSEE. ACCORDINGLY, IT WAS HELD TH AT THE DISALLOWANCE U/S 40(A)(IA) APPLIES TO THOSE AMOUNTS PAYABLE AND NOT TO THOSE AMOUNTS PAID. RESPECTFULLY FOLLOWING THE SAME, I SE T-ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND VACATE THE DISALLOWANCE O F RS. 49,895/-. 7. IN GROUND NO.3 OF THE APPEAL, THE GRIEVANCE OF THE ASSESSEE IS THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMIN G THE ADDITION OF RS. 1,64,080/- FOR NON-DEDUCTION OF TDS ON TRANSPORT EX PENSES. 8. I HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PERU SED THE ORDERS OF THE LOWER AUTHORITIES AND HAVE ALSO PERUSED THE MAT ERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSEE MADE PA YMENT OF RS. 78,520/- TO M/S. SHEETAL TRANSPORT COMPANY AND RS. 1,71,120/- TO M/S. MAA BHAGWATI ROADLINES. THE AO DISALLOWED THE DEDUCTION FOR THE ABOVE TWO AMOUNTS AGGREGATING TO RS. 2,49,640/- ON THE GROUND OF NON-DEDUCTION OF TDS U/S 194C OF THE ACT BY INVOKIN G THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. 9. ON APPEAL, THE LD. CIT(A) CONFIRMED THE ACTION O F THE AO. 10. BEFORE ME, THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT NO DISALLOWANCE WAS CALLED FOR AS NO AMOUNT WAS OUTSTANDING PAYABLE TO THE TWO PARTIES AS AT THE EN D OF THE YEAR. 11. THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESS EE REPEATED THE SUBMISSIONS MADE FOR GROUND NO.2 ABOVE. 12. FOR THE REASONS GIVEN ABOVE WHILE DECIDING GROU ND NO.2 ABOVE, I VACATE THE DISALLOWANCE OF RS. 1,64,080/-. - : 4:- SH LOKENDRA SINGH RAJPUT V. DY. CIT, UJJAIN I.T.A.NO. 266/IND/2015 13. IN GROUND NO. 4 OF THE APPEAL OF THE ASSESSEE, THE GRIEVANCE OF THE ASSESSEE IS THAT THE LD. CIT(A) ERRED IN SUSTAI NING THE ADDITION OF RS. 17,50,000/- ON ACCOUNT OF GIFT RECEIVED BY THE ASSE SSEE. 14. I HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PER USED THE MATERIAL AVAILABLE ON RECORD. THE AO OBSERVED THAT DURING TH E YEAR UNDER CONSIDERATION, THE ASSESSEE HAS RECEIVED THE GIFTS FROM THREE PERSONS AS UNDER :- 1. SMT. RAMJILAL RAJPUT RS. 8,00,000/- 2. SMT. OCCHI BAI RAJPUT RS. 6,00,000/- 3. SMT. PUSHPA RAJPUT RS. 3,50,000/- RS. 17,50,000/- 15. THE AO OBSERVED THAT THE ASSESSEE RECEIVED TO H AVE GIFT OF RS. 8 LAKHS ON 25.3.2010 FROM SHRI RAMJILAL RAJPUT. ON TH E DATE OF GIVING THE GIFT, THE DONOR HAS DEPOSITED CASH OF RS. 8 LAKHS I N HIS ACCOUNT BEFORE ISSUING THE CHEQUE TO THE ASSESSEE. IT WAS ALSO OBS ERVED BY THE AO THAT SH RAMJILAL RAJPUT HAS MADE DRAWINGS OF RS. 15,000/ - DURING THE YEAR TILL 24.3.2010. SINCE THE ASSESSEE FAILED TO ESTABL ISH THE CREDITWORTHINESS OF THE DONOR TO GIVE THE GIFT TO T HE ASSESSEE, HE DISALLOWED THE GIFT AND ADDED THE SAME TO THE INCOM E OF THE ASSESSEE. FURTHER, THE ASSESSEE RECEIVED GIFT OF RS. 6 LAKHS FROM SMT. OCHHI BAI RAJPUT ON 29.3.2010. THE ASSESSEE SUBMITTED THAT SH E SOLD GOLD ORNAMENTS WORTH RS. 6,01,714/- ON 26.3.2010 AND HAD GIVEN GIFT TO THE ASSESSEE OUT OF THE SAID AMOUNT. THE ASSESSEE PRODU CED THE BILL FOR SALE OF GOLD JEWELLERY IN SUPPORT OF THE CLAIM. THE AO O BSERVED THAT THERE WAS NO DESCRIPTION OF GOLD ORNAMENTS IN THE BILLS A ND THAT THE ASSESSEE - : 5:- SH LOKENDRA SINGH RAJPUT V. DY. CIT, UJJAIN I.T.A.NO. 266/IND/2015 FAILED TO ESTABLISH THE OWNERSHIP OF THE GOLD ORNAM ENTS AND, THEREFORE, HE DISALLOWED THE GIFT AND MADE ADDITION TO THE INC OME OF THE ASSESSEE. 16. THE AO OBSERVED THAT THE ASSESSEE HAS RECEIVED GIFT OF RS. 3.50 LAKHS FROM SMT.PUSHPA RAJPUT ON 29.3.2010 AND THAT BEFORE THE DAY OF RECEIVING THE GIFT THERE WAS CASH DEPOSIT OF RS. 3. 50 LAKHS IN THE ACCOUNT OF SMT. PUSHPA RAJPUT ON 27.3.2010. THE AO FURTHER OBSERVED THAT THE DONOR WAS NOT HAVING ANY SOURCE OF INCOME. THE ASSESSEE FAILED TO ESTABLISH THE CREDITWORTHINESS OF THE DON OR AND HENCE, HE DISALLOWED THE GIFT AND ADDED THE SAME TO THE INCOM E OF THE ASSESSEE. 17. ON APPEAL, THE LD. CIT(A) CONFIRMED THE ACTION OF THE AO ON THE GROUND THAT THE ASSESSEE FAILED TO ESTABLISH THE GE NUINENESS OF THE TRANSACTION. 18. BEFORE ME, THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE COULD NOT FILE ANY EVIDENCE TO PROVE CREDITWORTHINE SS OF THE DONOR. THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE HAS N OT FILED COPY OF THE INCOME TAX RETURN, COMPUTATION OF INCOME AND BANK S TATEMENT OF THE DONOR TO SHOW THAT THE DONOR SHRI RAMJILAL RAJPUT H AD THE CREDITWORTHINESS TO GIVE THE SUBSTANTIAL AMOUNT OF LOAN OF RS.8 LAKHS TO THE ASSESSEE. ON A QUERY OF THE BENCH REGARDING NAT URE AND SOURCE OF INCOME OF SHRI RAMJILAL RAJPUT, THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT HE IS A RENOUNCED PROFESSOR IN GWALIOR AND DRAWING SALARY BETWEEN RS. 7 LAKHS TO 8 LAKHS IN A YEAR. FURTHER, ON A QUERY OF THE BENCH, WHAT IS THE RETURNED INCOME OF THE ASSESSEE, IN REPLY, THE LD. AUTHORIZED REPRESENTATIVE OF THE ASS ESSEE SUBMITTED THAT - : 6:- SH LOKENDRA SINGH RAJPUT V. DY. CIT, UJJAIN I.T.A.NO. 266/IND/2015 THE ASSESSEES RETURNED INCOME DURING THE YEAR WAS RS. 13,46,890/-. THIS FACT SHOWS THAT THE POOR MAN IS GIVING GIFT TO RICH, WHICH IS HIGHLY IMPROBABLE. FURTHER, IT COULD NOT BE ESTABLISHED BY FILING THE BALANCE SHEET AND BANK STATEMENT OF THE ASSESSEE THAT SHRI RAMJILAL RAJPUT WAS MAKING SUFFICIENT DRAWINGS FOR HIS OWN LIVING. FURT HER, IT IS HIGHLY IMPROPER THAT A PERSON WOULD DONATE HIS WHOLE YEARS SALARY INCOME TO ANY PERSON. IN THE GIVEN FACTS AND CIRCUMSTANCES, I HAVE NO HESITATION TO HOLD THAT A GIFT OF RS. 8 LAKHS TAKEN FROM SHRI RAMJILAL RAJPUT IS BOGUS AND HAS BEEN RIGHTLY ADDED TO THE INCOME OF T HE ASSESSEE. 19. REGARDING THE GIFT OF RS. 6 LAKHS RECEIVED FRO M SMT.OCHHI BAI RAJPUT, THE EXPLANATION OF THE ASSESSEE IS THAT SOU RCE OF GIVING SUCH GIFT WAS SALE OF GOLD ORNAMENTS WORTH RS. 6,01,714/- ON 26.03.2010. 20. I FIND THAT THE OBSERVATION OF THE AO IS THAT IN THE BILL PRODUCED FOR SALE OF ORNAMENTS, NO DESCRIPTION OF GOLD ORNAM ENTS IS GIVEN IN THE BILL. STILL FURTHER, THE ASSESSEE FAILED TO ESTABLI SH THE OWNERSHIP OF THE GOLD ORNAMENTS. BEFORE ME ALSO THE ASSESSEE FAILED MISERABLY TO MEET THE OBJECTIONS OF THE AO BY FILING ANY COGENT AND R ELEVANT MATERIALS ON RECORD. THEREFORE, I HAVE NO HESITATION IN HOLDING THAT THE GIFT OF RS. 6 LAKHS IS BOGUS AND THE LOWER AUTHORITIES WERE FULLY JUSTIFIED IN MAKING THE ADDITION IN THE HANDS OF THE ASSESSEE. 21. REGARDING THE GIFT OF RS. 3.50 LAKHS RECEIVED F ROM SMT. PUSHPA RAJPUT, THE AO FOUND THAT THERE WAS CASH DEPOSIT OF RS. 3.50 LAKHS IN THE ACCOUNT OF SMT. PUSHPA RAJPUT ON 27.3.2010 BEFO RE GIVING THE GIFT TO THE ASSESSEE. THE CREDITWORTHINESS OF SMT. PUSHP A RAJPUT COULD NOT - : 7:- SH LOKENDRA SINGH RAJPUT V. DY. CIT, UJJAIN I.T.A.NO. 266/IND/2015 BE PROVED BY FILING COPY OF INCOME TAX RETURN, BANK STATEMENT ETC. OF SMT. PUSHPA RAJPUT. 22. BEFORE ME ALSO, NO EVIDENCE OR MATERIAL HAS BE EN FILED TO PROVE THE CREDITWORTHINESS AND GENUINENESS OF THE TRANSAC TION OF GIFT. THEREFORE, I HOLD THAT THE GIFT OF RS.3.50 LAKHS SH OWN BY THE ASSESSEE HAVING BEEN RECEIVED FROM SMT. PUSHPA RAJPUT IS BOG US AND HAS BEEN RIGHTLY ADDED TO THE INCOME OF THE ASSESSEE BY THE AO AND CONFIRMED BY THE LD. CIT(A). 23. I DISMISS THIS GROUND OF APPEAL. 24. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE H EARING ON 11 TH DAY OF JULY, 2016 AT INDORE. SD/- (N.S.SAINI) ACCOUNTANT MEMBER DATED : 11TH JULY, 2016. CPU COPY TO: 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT 4. THE CIT(A) 5. THE D.R. 6. GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., INDORE - : 8:- SH LOKENDRA SINGH RAJPUT V. DY. CIT, UJJAIN I.T.A.NO. 266/IND/2015 - : 9:- SH LOKENDRA SINGH RAJPUT V. DY. CIT, UJJAIN I.T.A.NO. 266/IND/2015