Mrs. Usha Krishnan, CHENNAI V. ITO, CHENNAI

ITA 2780/CHNY/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5598 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 26-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S NATARAJA
• Assessee Lawyers: N QUADIR HOSEYN; DR L NATARAJAN
• Keywords: Gift; Salary income
• Section: 131; 68

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 ./ ITA NO.2780/MDS/2016 ' (' / ASSESSMENT YEAR : 2012-13 MRS. USHA KRISHNAN, NO.9/1, EIGHTH STREET, NANGANALLUR, CHENNAI - 600 061. PAN : AAHPU 1864 D V. THE INCOME TAX OFFICER, NON CORPORATE WARD - 18(3), CHENNAI - 600 034. (*+/ APPELLANT) (,-*+/ RESPONDENT) *+ . / / APPELLANT BY : SHRI N. QUADIR HOSEYN, ADVOCATE & DR. L. NATARAJAN, CA ,-*+ . / / RESPONDENT BY : SHRI S. NATARAJA, JCIT 0 . 1$ / DATE OF HEARING : 19.12.2017 2!( . 1$ / DATE OF PRONOUNCEMENT : 28.12.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) 15, CHEN NAI, DATED 30.08.2016 AND PERTAINS TO ASSESSMENT YEAR 2012-13. 2. SHRI N. QUADIR HOSEYN, THE LD.COUNSEL FOR THE AS SESSEE, SUBMITTED THAT THE ONLY ISSUE ARISES FOR CONSIDERAT ION IS ADDITION OF ` 43,35,870/- MADE UNDER SECTION 68 OF THE INCOME-TA X ACT, 1961 2 I.T.A. NO.2780/MDS/16 (IN SHORT 'THE ACT'). ACCORDING TO THE LD. COUNSEL , THE ASSESSEE HAS RECEIVED GIFTS FROM HER HUSBAND AND OTHER CLOSE REL ATIVES. ALL THE RELATIVES WHO GIFTED MONEY TO THE ASSESSEE WERE SUM MONED BY THE ASSESSING OFFICER UNDER SECTION 131 OF THE ACT AND ON EXAMINATION, THEY ADMITTED THE FACT OF GIFT GIVEN TO THE ASSESSE E. HOWEVER, ACCORDING TO THE LD. COUNSEL, THE ASSESSING OFFICER REJECTED THE CLAIM OF THE ASSESSEE AND MADE ADDITION UNDER SECTI ON 68 OF THE ACT. ACCORDING TO THE LD. COUNSEL, FOR THE PURPOSE OF MAKING ADDITION UNDER SECTION 68 OF THE ACT, THERE SHOULD BE CREDIT IN THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE IN THE REGULAR COURSE. THE ASSESSEE IS ADMITTEDLY WORKING AS FINANCE MANAG ER IN AMNET SYSTEMS PVT. LTD. THE ASSESSEE IS NOT MAINTAINING ANY BOOKS OF ACCOUNT, THEREFORE, THERE CANNOT BE ANY ADDITION UN DER SECTION 68 OF THE ACT. REFERRING TO THE DECISION OF DELHI BENCH OF THIS TRIBUNAL IN ITO V. OM PRAKASH SHARMA IN I.T.A. NO.2256/DEL/2009 DATED 13.05.2011, THE LD.COUNSEL SUBMITTED THAT ON IDENTI CAL SET OF FACTS, WHEN THE ASSESSEE WAS NOT MAINTAINING BOOKS OF ACCO UNT, THE DELHI BENCH DELETED THE ADDITION MADE UNDER SECTION 68 OF THE ACT. 3. SHRI N. QUADIR HOSEYN, THE LD.COUNSEL FOR THE AS SESSEE, FURTHER SUBMITTED THAT OTHER THAN THE SALARY INCOME , THE ASSESSEE 3 I.T.A. NO.2780/MDS/16 HAS NO OTHER SOURCE. MERELY BECAUSE THE ASSESSING OFFICER DOUBTED THE CREDITWORTHINESS OF DONORS, THAT CANNOT BE A REASON FOR MAKING ANY ADDITION. PLACING RELIANCE ON THE JUDGM ENT OF MADRAS HIGH COURT IN S. HASTIMAL V. CIT (1963) 49 ITR 273, THE LD.COUNSEL SUBMITTED THAT ASSESSING OFFICER CANNOT MAKE ANY EN QUIRY REGARDING SOURCE OF SOURCES. IF AT ALL THERE WAS A NY DOUBT REGARDING THE SOURCE OF THE DONORS, ACCORDING TO THE LD. COUN SEL, THE ADDITION CAN AT THE BEST BE MADE IN THE HANDS OF THE DONORS AND NOT IN THE HANDS OF THE ASSESSEE. THE LD.COUNSEL HAS ALSO PLA CED HIS RELIANCE ON THE DECISION OF AMRITSAR BENCH OF THIS TRIBUNAL IN YADWINDER SINGH V. ITO (2016) 48 ITR (TRIB) 328. 4. REFERRING TO SECTION 68 OF THE ACT, THE LD.COUNS EL FOR THE ASSESSEE SUBMITTED THAT IN CASE THE ASSESSEE COULD NOT OFFER ANY EXPLANATION IN RESPECT OF THE SUM FOUND CREDITED IN THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE, AN ADDITION CAN BE MADE UNDER SECTION 68 OF THE ACT. ACCORDING TO THE LD. COUNSEL, IN THE CASE BEFORE US, THE ASSESSEE HAS EXPLAINED THE SOUR CE OF THE GIFT. SINCE THE ASSESSEE WAS NOT MAINTAINING BOOKS OF ACC OUNT AND THE ASSESSEE HAS ALSO EXPLAINED THE SOURCE AND NATURE O F THE DEPOSITS 4 I.T.A. NO.2780/MDS/16 IN THE BANK ACCOUNT, ACCORDING TO THE LD. COUNSEL, THERE CANNOT BE ANY ADDITION UNDER SECTION 68 OF THE ACT. 5. REFERRING TO THE ORDER OF THE CIT(APPEALS), THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT IF THE ASSESSEES HUSBA ND COULD NOT PRODUCE NECESSARY DETAILS FOR EARNING INCOME, THE A DDITION CAN AT THE BEST BE MADE ONLY IN THE HANDS OF THE ASSESSEE S HUSBAND AND NOT IN THE HANDS OF THE ASSESSEE. ACCORDING TO THE LD. COUNSEL, THE CIT(APPEALS) HAS MAINLY CONFIRMED THE ORDER OF THE ASSESSING OFFICER ON THE GROUND THAT THE ASSESSEES HUSBAND S HRI V. KRISHNAN HAS NOT FILED ANY RETURN OF INCOME NOR DISCLOSED TH E CASH RECEIPTS. THIS CANNOT BE A REASON, ACCORDING TO THE LD. COUNS EL, FOR MAKING ADDITION IN THE HANDS OF THE ASSESSEE. 6. ON THE CONTRARY, SHRI S. NATARAJA, THE LD. DEPAR TMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE IS AN E MPLOYEE OF AMNET SYSTEMS PVT. LTD. FOR THE ASSESSMENT YEAR 20 12-13, THE ASSESSEE HAS DISCLOSED A TOTAL INCOME OF ` 6,06,237/-. ACCORDING TO THE LD. D.R., THE ASSESSING OFFICER FOUND CASH DEPO SIT OF ` 43,35,870/- IN THE BANK ACCOUNT OF THE ASSESSEE. T HE ASSESSEE EXPLAINED BEFORE THE ASSESSING OFFICER THAT A SUM O F ` 19,50,000/- 5 I.T.A. NO.2780/MDS/16 WAS RECEIVED FROM CLOSE RELATIVES AND ANOTHER SUM O F ` 23,85,870/- WAS RECEIVED FROM THE ASSESSEES HUSBAND SHRI V. KR ISHNAN. ACCORDING TO THE LD. D.R., THE ASSESSING OFFICER FO UND THAT ALL THE PERSONS, WHO WERE SAID TO HAVE GIFTED MONEY TO THE ASSESSEE, HAD PERMANENT ACCOUNT NUMBER AND THEY HAVE ALSO CONFIRM ED THE FACT OF GIVING GIFT TO THE ASSESSEE. HOWEVER, NONE OF T HEM FILED ANY RETURN OF INCOME. THERE WAS NO MATERIAL EVIDENCE F ILED TO SUBSTANTIATE THE SOURCE OF CASH FOR THEM TO GIVE GI FT TO THE ASSESSEE. 7. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED TH AT ON EXAMINATION BY THE ASSESSING OFFICER UNDER SECTION 131 OF THE ACT, THE DONORS FAILED TO EXPLAIN THE SOURCE FOR MAKING THE SO-CALLED GIFT TO THE ASSESSEE, THEREFORE, THE CIT(APPEALS) HAS RI GHTLY CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. ON A Q UERY FROM THE BENCH WHETHER THE ASSESSEE HAS ANY OTHER SOURCE OF INCOME OTHER THAN SALARY? THE LD. D.R. HAS FAIRLY SUBMITTED THA T THE ASSESSEE HAS NO OTHER SOURCE OF INCOME OTHER THAN SALARY REC EIVED FROM M/S AMNET SYSTEMS PVT. LTD. WHERE SHE IS EMPLOYED. WHE N THE ATTENTION OF THE LD. D.R. WAS DRAWN TO THE ASSESSME NT ORDER, MORE PARTICULARLY AT PARA 1 PAGE 3, WHEREIN THE ASSESSIN G OFFICER OBSERVED THAT THE ASSESSEE HAD ADMITTED INCOME FROM BUSINESS FOR 6 I.T.A. NO.2780/MDS/16 ASSESSMENT YEAR 2012-13 AND THE STATEMENT OF INCOME FOR THE ASSESSMENT YEAR 2013-14 WAS CALLED FOR BUT NOT FURN ISHED, THE LD. D.R. CLARIFIED THAT THE ASSESSEE IS NOT DOING ANY B USINESS. THIS STATEMENT RECORDED BY THE ASSESSING OFFICER MAY BE A TYPOGRAPHICAL ERROR. THE LD. D.R. FURTHER CLARIFIE D THAT THE ASSESSEES HUSBAND SHRI V. KRISHNAN ADMITTED BUSINE SS INCOME FOR THE ASSESSMENT YEAR 2013-14 AND HE HAD FAILED TO FU RNISH THE STATEMENT OF INCOME CALLED FOR BY THE ASSESSING OFF ICER. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ADMITTED SOURCE OF INCOME BY THE ASSESSEE IS SALARY FROM M/S AMNET SYSTEMS PVT. LTD. IT IS NOT IN DISPUTE THAT THE ASS ESSEE IS WORKING AS FINANCE MANAGER IN M/S AMNET SYSTEMS PVT. LTD. THE RE IS NO OTHER SOURCE OF INCOME FOR THE ASSESSEE. IF THE ASSESSEE HAD ANY BUSINESS, THEN WE MAY CONCLUDE THAT THE INCOME WAS GENERATED OUT OF UNACCOUNTED BUSINESS. IN THIS CASE, IT IS NOBOD YS CASE THAT THE ASSESSEE WAS DOING ANY BUSINESS. IT IS ALSO NOBODY S CASE THAT THE ASSESSEE WAS RECEIVING ANY BENEFIT OVER AND ABOVE T HE SALARY FROM HER EMPLOYER. IN SUCH CIRCUMSTANCES, THIS TRIBUNAL IS OF THE 7 I.T.A. NO.2780/MDS/16 CONSIDERED OPINION THAT THE ASSESSEE HAS NO OTHER S OURCE FOR MAKING CASH DEPOSIT IN THE BANK ACCOUNT OTHER THAN SALARY. 9. MOREOVER, A SUM OF ` 19,50,000/- WAS CLAIMED TO HAVE RECEIVED AS GIFT FROM HER BROTHERS AND SISTERS. TH E CONFIRMATION LETTERS WERE FILED AND THEY WERE ALSO EXAMINED BY T HE ASSESSING OFFICER. THE ASSESSING OFFICER DISALLOWED THE CLAI M OF THE ASSESSEE ON THE GROUND THAT THE DONORS HAVE NOT FILED ANY RE TURN OF INCOME AND THE SOURCE OF THEIR INCOME WAS NOT ESTABLISHED. SIMILARLY, THE CLAIM OF THE ASSESSEE THAT SHE RECEIVED ` 23,85,870/- AS GIFT FROM HER HUSBAND SHRI V. KRISHNAN WAS ALSO REJECTED BY T HE ASSESSING OFFICER ON THE GROUND THAT SHRI V. KRISHNAN FAILED TO FILE RETURN OF INCOME FOR ASSESSMENT YEAR 2012-13. THE FACT REMAI NS THAT THE ASSESSEES HUSBAND IS DOING BUSINESS. THEREFORE, T HE MONEY GENERATED OUT OF HIS BUSINESS WAS GIFTED TO THE ASS ESSEE. MERELY BECAUSE THE ASSESSEES HUSBAND HAS NOT FILED THE RE TURN OF INCOME OR FILED THE STATEMENT OF INCOME, THAT CANNOT BE A REASON TO PRESUME THAT THE ASSESSEES MONEY WAS CREDITED INTO BANK ACCOUNT. MOREOVER, THE ASSESSEE IS NOT MAINTAINING ANY BOOKS OF ACCOUNT. AS RIGHTLY SUBMITTED BY THE LD.COUNSEL FO R THE ASSESSEE, BANK PASSBOOK CANNOT BE CONSIDERED AS BOOKS OF ACCO UNT FOR 8 I.T.A. NO.2780/MDS/16 MAKING ADDITION UNDER SECTION 68 OF THE ACT. AS RI GHTLY SUBMITTED BY THE LD.COUNSEL FOR THE ASSESSEE, MERELY BECAUSE THE DONORS COULD NOT ESTABLISH THEIR CREDITWORTHINESS OR SOURC E FOR MAKING GIFT TO THE ASSESSEE, THAT CANNOT BE A REASON FOR MAKING AD DITION IN THE HANDS OF THE PRESENT ASSESSEE ESPECIALLY WHEN THE A SSESSEE HAS NO OTHER SOURCE OF INCOME. THEREFORE, WE ARE UNABL E TO UPHOLD THE ORDERS OF THE LOWER AUTHORITIES AND ACCORDINGLY, TH E ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE ADDITION OF ` 43,35,870/- IS DELETED. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 28 TH DECEMBER, 2017 AT CHENNAI. SD/- SD/- (. !' ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 28 TH DECEMBER, 2017. KRI. . ,156 76(1 /COPY TO: 1. *+ /APPELLANT 2. ,-*+ /RESPONDENT 3. 0 81 () /CIT(A)-15, CHENNAI 4. PRINCIPAL CIT- 6, CHENNAI 5. 69 ,1 /DR 6. :' ; /GF.