Smt. Megha Jain, New Delhi V. ITO, New Delhi

ITA 287/DEL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4124 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 06-04-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 20-01-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PEEYUSH SONKAR
• Assessee Lawyers: P K MISHRA CAS
• Keywords: Gift; Income from undisclosed sources
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH E BENCH E BENCH E BENCH E : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI R.P.TOLANI, JM AND SHRI SHAMIM YAHYA, A M BEFORE SHRI R.P.TOLANI, JM AND SHRI SHAMIM YAHYA, A M BEFORE SHRI R.P.TOLANI, JM AND SHRI SHAMIM YAHYA, A M BEFORE SHRI R.P.TOLANI, JM AND SHRI SHAMIM YAHYA, A M ITA NO. ITA NO. ITA NO. ITA NO.287/DEL/2010 287/DEL/2010 287/DEL/2010 287/DEL/2010 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 2004 2004 2004 2004- -- -05 0505 05 SMT.MEGHA JAIN, SMT.MEGHA JAIN, SMT.MEGHA JAIN, SMT.MEGHA JAIN, 2605, CHATTA PRATAP SINGH, 2605, CHATTA PRATAP SINGH, 2605, CHATTA PRATAP SINGH, 2605, CHATTA PRATAP SINGH, KINARI BAZAR, KINARI BAZAR, KINARI BAZAR, KINARI BAZAR, DELHI DELHI DELHI DELHI 110 006. 110 006. 110 006. 110 006. PAN NO. PAN NO. PAN NO. PAN NO.AETPJ AETPJ AETPJ AETPJ2508R. 2508R. 2508R. 2508R. VS. VS. VS. VS. INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -29(4), 29(4), 29(4), 29(4), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI NIRAJ JAIN AND SHRI P.K.MISHRA, CAS. RESPONDENT BY : SHRI PEEYUSH SONKAR, SR.DR ORDER ORDER ORDER ORDER PER R.P.TOLANI, J PER R.P.TOLANI, J PER R.P.TOLANI, J PER R.P.TOLANI, JM : M : M : M : THIS IS ASSESSEES APPEAL. 2. GROUND NO.1 & 2 REGARDING REOPENING OF ASSESSMEN T U/S 147/148 ARE NOT PRESSED. HENCE, THE SAME ARE DISMISSED. 3. THE SOLE ISSUE WHICH REMAINS FOR ADJUDICATION IS RAISED IN THE FOLLOWING TWO GROUNDS:- 3. THAT THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN CONFIRMING THE FINDING OF AS SESSING OFFICER THAT THE APPELLANT FAILED TO ESTABLISH THE GENUINENESS AND CREDITWORTHINESS OF THE GIFT AS ENV ISAGED IN INTERPRETING OF PROVISION OF SECTION 68 OF THE I NCOME TAX ACT, 1961. 4. THAT THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN CONFIRMING THE ADDITION OF RS.2,00,000/- AS UNDISCLOSED INCOME OF THE APPELLAN T U/S 68 OF THE INCOME TAX ACT, 1961. ITA-287/DEL/2010 2 4. BRIEF FACTS ARE THAT THE ASSESSEE CLAIMED TO HAV E RECEIVED A GIFT OF `2 LAKHS FROM ONE FRIEND SMT. SHANTI DEVI GUPTA. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESSEE FILED HER AFFID AVIT, BANK STATEMENT SHOWING A TRANSACTION OF `2 LAKHS, COPIES OF INCOME TAX AND WEALTH TAX RETURNS FOR AY 2002-03 AND COPY OF RATIO N CARD. AO WAS NOT CONVINCED WITH THE ASSESSEES EXPLANATION IN RESPEC T OF GIFT OF `2 LAKHS BY A CHEQUE DRAWN ON THE RATNAKAR BANK LTD. GIVEN O N 8.8.2003 WHICH WAS CLEARED BY THE ASSESSEE ON 12.8.2003. THE BALA NCE AVAILABLE IN THIS BANK ACCOUNT FROM 1.8.2003 TILL 11.8.2003 WAS ONLY A PALTRY AMOUNT OF `1,430/-. AO ASKED THE ASSESSEE TO PRODU CE THE DONOR BUT SHE DID NOT APPEAR. THEREAFTER, A SUMMON WAS ISSUE D TO HER TO APPEAR ON 28.8.2008 WHICH WAS SENT AT THE TWO ADDRESSES GI VEN BY THE ASSESSEE. ONE CAME BACK AS NO SUCH ADDRESS AND ON THE OTHER, NONE APPEARED BEFORE THE AO. AO BY DETAILED REASONING H ELD THAT THE ASSESSEE HAS FAILED TO PROVE THE GENUINENESS, IDENT ITY AND CREDITWORTHINESS OF THE TRANSACTION. AGGRIEVED, TH E ASSESSEE PREFERRED FIRST APPEAL. DURING THE COURSE OF IT, A REMAND RE PORT WAS CALLED. ASSESSEE CONTENDED THAT SMT. SHANTI DEVI GUPTA WAS AN EXISTING PERSONS. SHE WAS ASSESSED TO INCOME TAX AND WEALTH TAX AND HAD CAPACITY TO MAKE THE GIFT WHICH WAS GIVEN BY WAY OF A VALID GIFT DEED. THE GIFT AMOUNT HAVING BEEN RECEIVED BY WAY OF BANK ACCOUNT, THE GIFT SHOULD BE ACCEPTED. 5. CIT(A) BY DETAILED FINDING IN PARA 4.4.1 TO 4.4. 8 UPHELD THE ADDITION BY FOLLOWING OBSERVATIONS:- 4.4.9 IN VIEW OF THE FACTS AND CIRCUMSTANCES, IT I S EVIDENT THAT THE DOCUMENTS FILED BY THE APPELLANT REMAINED UNSUBSTANTIATED PIECES OF PAPER WHICH COUL D NOT BE RELIED UPON. THE IDENTITY AND THE CREDIT WORTHI NESS OF THE PURPORTED DONOR REMAINED UNPROVEN AND THE GENUINENESS OF THE GIFT TRANSACTION COULD NOT BE ESTABLISHED. UNDER THE CIRCUMSTANCES, THE ASSESSIN G OFFICER WAS JUSTIFIED IN TREATING THE SUM OF RS.2 L AKHS AS ITA-287/DEL/2010 3 INCOME FROM UNDISCLOSED SOURCES U/S 68. THE ADDITI ON OF RS.2 LAKHS IS THEREFORE CONFIRMED AND GROUNDS 4 AND 5 ARE DISMISSED. 6. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE ARGUMENTS TAKEN BEFORE THE LOWER AUTHORITIES AND CONTENDS THA T (I) THE DONOR SMT.SHANTI DEVI GUPTA IS IDENTIFIED, SHE IS ASSESSE D TO INCOME TAX AND WEALTH TAX, COPIES OF HER RETURNS FOR AY 2002-03 WE RE FILED. IF THERE WAS ANY DOUBT, THEN AO SHOULD HAVE VERIFIED FROM TH E INCOME TAX RECORDS. WITHOUT DOING SO, THE ADDITION CANNOT BE MADE, (II) THAT THE GIFT HAS BEEN GIVEN BY WAY OF A GIFT DEED WHICH IS SUPPORTED BY AN AFFIDAVIT, (III) THE GIFT AMOUNT HAS BEEN GIVEN BY DONOR TO THE ASSESSEE BY WAY OF ACCOUNT PAYEE CHEQUE, THE COPIES WERE SUB MITTED ON RECORD, (IV) THE REPORT SUBMITTED BY THE INCOME TAX INSPECT OR REFERRED TO BY THE AO IN HIS REMAND REPORT HAS NOT BEEN FURNISHED TO THE ASSESSEE. THEREFORE, THE OPPORTUNITY TO REBUT THE REPORT AS R EFERRED TO IN PARA 4.4.6 OF THE CIT(A)S ORDER HAS NOT BEEN GIVEN. HE PLEADED THAT THE ADDITION BE DELETED. 7. LEARNED DR, ON THE OTHER HAND, RELIED ON THE JUD GMENT OF DELHI ITAT IN THE CASE OF RAJINDER KUMAR 126 ITD 191 (D EL). HE ALSO RELIED ON THE HON'BLE SUPREME COURT JUDGMENT IN THE CASE O F DURGA PRASAD MORE 82 ITR 540 AND HON'BLE SUPREME COURT JUDGMEN T IN THE CASE OF SUMATI DAYAL - 214 ITR 801 AND CONTENDS THAT NEITHE R THE DONOR WAS PRODUCED NOR THERE WAS SUFFICIENT AMOUNT IN THE BAN K ACCOUNT OF THE DONOR AS ON THE DATE OF THE GIFT I.E. 8.8.2003. TH E AMOUNT WAS DEPOSITED IN HER BANK ACCOUNT ONLY ON 12.8.2003 I.E . THE DATE OF CLEARANCE. THE GIFT EXECUTED CANNOT BE HELD AS GEN UINE INASMUCH AS DONOR WAS NOT HAVING THE AMOUNT IN THE BANK ACCOUNT FOR WHICH THE PHYSICAL DELIVERY OF CHEQUE WAS GIVEN. COPIES OF R ETURNS FOR AY 2002- 03 I.E. TWO YEARS EARLIER WERE FILED. THERE IS NEI THER ANY CAPITAL ACCOUNT NOR CASH FLOW STATEMENT TO SUPPORT THAT THE DONOR HAD THE SAID ITA-287/DEL/2010 4 AMOUNT OF `2 LAKHS IN HER POSSESSION. THE DONOR MA Y HAVE EARNED AS PER INCOME TAX RETURN BUT THE SAME CAN BE SPENT IN HOUSE HOLD PROPERTY. THE BURDEN WAS ON THE ASSESSEE. THE ASS ESSEE HAS FAILED TO DISCHARGE THE SAME. THE ORDERS OF LOWER AUTHORITIE S WERE RELIED UPON. 8. WE HAVE HEARD BOTH THE PARTIES AND HAVE CAREFULL Y GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. WE FIND MERIT IN THE ARGUMENT OF LEARNED DR. THE ASSESSEE HAS FAILED TO PRODUCE SMT .SHANTI DEVI GUPTA. MERE FILING OF PHOTOCOPIES OF INCOME TAX RE TURNS OR RATION CARD WILL ONLY SHOW THAT THE PERSON EXISTS. HOWEVER, TH E GENUINENESS OF THE TRANSACTION IS QUESTIONABLE INASMUCH AS ON THE DATE OF MAKING THE GIFT I.E. ON 8.8.2003, THE DONOR DID NOT HAVE A BALANCE OF `2 LAKHS WHICH IS PURPORTED TO BE GIFTED BY THE ASSESSEE BY AN ALLEGE D CHEQUE. THE GIFT OF MOVEABLE PROPERTY CANNOT BE ACCEPTED UNLESS THE DONOR HAD THE PHYSICAL POSSESSION OF THAT AMOUNT AT THE TIME AND DAY OF GIFT. AS FAR AS CREDITWORTHINESS IS CONCERNED, WE FIND THAT ASSE SSEE HAS FAILED TO DEMONSTRATE THAT ON THE DATE OF GIFT, THE DONOR HAD THIS AMOUNT IN HER POSSESSION TO GIFT AWAY. THE BURDEN TO ALL THESE F ACTS IS ON THE ASSESSEE WHICH HAS NOT BEEN COMPLIED WITH DESPITE S EVERAL OPPORTUNITIES. THE ASSESSEES PLEA THAT INCOME TAX RETURN WAS NOT GIVEN TO IT IS NOT WORTHY OF ACCEPTANCE AS ASSESSEE IS INDULGING IN FAULT FINDING AND EVEN IF INCOME TAX INSPECTORS REPORT I S NOT RELIED, THE ASSESSEE HAS NO CASE. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 29 TH APRIL, 2011. SD/- SD/- (SHAMIM YAHYA (SHAMIM YAHYA (SHAMIM YAHYA (SHAMIM YAHYA) )) ) (R.P.TOLANI (R.P.TOLANI (R.P.TOLANI (R.P.TOLANI) )) ) ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER DATED : 29.04.2011. VK. ITA-287/DEL/2010 5 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR