The ITO, Ward, Bhuj V. Shri Shashikant N. Patel, Bhuj

ITA 289/RJT/2012

• Counselvise Citation: 28924914 RSA 2012
• Duration Of Justice: 1 year(s) 1 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 06-06-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 04-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K C MA THEWS D R REI
• Assessee Lawyers: M J RANPURA CA I
• Keywords: Gift; Business income; Peak credit

Judgement Text

I , IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT. . . R . . BEFORE SHRI T. K. SHARMA JM AND SHRI D. K. SRIVASTAVA AM ITA NO. 289/RJT/2012 -R R / ASSESSMENT YEAR 200 5 - 06 THE INCOME - TAX OFFICER, WARD - 2, BHUJ . ( J / APPELLANT) SHRI SHASHIKANT N. PATEL, 7, PRAMUKH SWAMI NAGAR, BHUJ - KUTCH. 'HJ / RESPONDENT A I / REVENUE BY SHRI K. C. MA THEWS, D R. -REI / ASSESSEE BY SHRI M . J. RANPURA , CA. I / DATE OF HEARING 0 6 - 06 - 2013 I / DATE OF PRONOUNCEMENT 14 - 0 6 - 2013 / ORDER . . , R / T. K. SHARMA, J. M. : THIS A PPEAL BY THE REVENUE IS AGAINST THE ORDER DATED 08 - 0 2 - 201 2 OF CIT (A) - XX, AHMEDABAD DELETING THE ADDITION OF RS. 11,74,920/ - MADE BY AO ON ACCOUNT OF UNEXPLAINED DEPOSITS APPEARING IN ASSESSEES BANK ACCOUNT AND TREATED THE SAME AS INCOME FROM OTHER SOURCES FOR THE ASSESSMENT YEAR 200 5 - 06. 2. THE FACTS IN BRIEF, ARE THAT THE ASSESSEE IS AN INDIVIDUAL . HIS ONLY SOURCE OF INCOME IS AGRICULTURE. THE AO FOUND IN THE ASSES SMENT YEAR UNDER CONSIDERATION, THAT THE ASSESSEE MADE INVESTMENT OF RS.18,79,50,000/ - IN SA VINGS BANK ACCOUNT WITH RAJKOT SAHKARI BANK LTD. , HE ISSUED NOTICE UNDER SEC.148. THEREAFTER, ISSUED NOTICE U/S.142(1) ASKING THE ASSESSEE TO FILE THE RETURN OF INCOME WITHIN 30 DAYS. IN RESPONSE TO SAID NOTICE, ASSESSEE FILED THE RETURN OF INCOME ON 22 - 12 - 2008 DECLARING TOTAL INCOME OF RS.11,931/ - AND AGRICULTURE INCOME OF RS.2,02,337/ - . WITH REGARD TO DEPOSIT, BEFORE THE AO, ASSESSEE MADE THE FOLLOWING SUBMISSIONS: - I AM NOT HOLDING ANY PAN NO. AND I HAVE NOT APPLIED FOR THE SAME AS I AM A SOCIAL WORK ER AND AGRICULTURIST MAINLY . I HAVE NOT FILED ANY RETURN OF INCOME FROM LAST 10 YEARS AND I HAVE NOT MAINTAINED ANY BOOKS OF ACCOUNTS UP TO THIS DATE. SO THE QUESTION OF ITA 289 - 201 2 2 PRODUCE THE BOOKS OF ACCOUNTS DOES NOT ARISE EVEN, AS I AM PURELY AGRICULTURIST. R EGARDING REPLY OF SHOW CAUSE NOTICE AND EXPLANATION ASKED FOR DEPOSIT OF RS.1879500/ - IN BANK I HAVE NOT DEPOSITED RS.1879500/ - IN MY A/C. WITH RAJKOT NAGRIK SAHKARI BANK LTD. BUT TURNOVER IN MY ACCOUNT IS RS.1879500/ - BUT I HAVE MADE TRANSACTION IN MY AC COUNT DEBIT CREDIT FOR RS.12 LACS AND NOT 18 LACS. REGARDING SOURCE OF THIS 12 LACS, I HAVE RECEIVED GIFT OF RS.500000/ - FROM MY BROTHER ASHOK NANJI PATEL ON 20.04.2008 IN CASH AND ANOTHER RS.500000/ - RECEIVED AS GIFT FROM BROTHER MUKESH NANJI PATEL ON 08 .06.2004 IN CASH AND REMAINING AMOUNT OUT OF SAVINGS FROM AGRICULTURE INCOME. 3. AFTER CONSIDERING THE ABOVE, AO ASKED THE ASSESSEE TO FURNISH ADDRESS, COPIES OF ITR, PAN AND BANK STATEMENTS OF DONORS FROM WHOM GIFT OF RS.10,00,000/ - IS STATED TO HAVE B EEN RECEIVED BY THE ASSESSEE AS REFLECTED IN HIS CAPITAL ACCOUNT FILED WITH THE RETURN OF INCOME. THE ASSESSEE VIDE LETTER DATED 26 - 12 - 2008 FURTHER CLARIFIED THAT HE RECEIVED GIFT FROM TWO BROTHERS . THE SAID LETTER READS AS UNDER: - I AM NOT HOLDING PAN NO. OF INCOME TAX AS I HAVE NO ANY BUSINESS INCOME EXCEPT THIS AGRICULTURE INCOME. I HAVE NOT FILED ANY RETURN OF INCOME FOR ANY YEAR UP TO THIS DATE AS I HAVE NO OTHER SOURCE OF INCOME EXCEPT THIS AGRICULTURE INCOME. I AM PURELY AGRICULTURIST AND AGAIN I HAVE TO INFORM YOU THAT I HAVE PAID AS GIFT RS.5 LACS TO MY BROTHER SHASHIKANT NANJI PATEL AS MY FATHER WAS ON LAS STAGE OF DEAD AND ACCORDINGLY AS PER HIS WISH I HAVE GIVEN RS.5 LACS TO MY ELDER BROTHER SHRI SHASHIKANT NANJI PATEL AS GIFT ON 08.06.2004. T HIS GIFT HAS BEEN MADE OUT OF MY SAVING OF AGRICULTURE INCOME. I AM HOLDING 17 ACRES OF AGRI. LAND AND MY MAIN CROP IS GROUND NUT, CASTOR SEEDS, TIL AND COTTON MAINLY. 4. AFTER CONSIDERING THE ABOVE REPLY, AO NOTICED THAT BOTH THE DONORS ARE NOT ASSE SSED TO TAX. THEY DO NOT HAVE PAN AND THEY ARE NOT TAX PAYERS. THE ASSESSEE FURNISHED COPIES OF SALES BILLS AND COPIES OF 7/12 EXTRACTS. THE COPIES OF 7/12 EXTRACTS IN RESPECT OF ONE BROTHER NAMELY ASHOKBHAI, SHOW THAT HE WAS HOLDING LAND OF ABOUT 18 AC RES AND COPIES OF 7/12 EXTRACTS OF ANOTHER BROTHER, SHOW THAT HE WAS HOLDING ONLY 5 ACRES OF LAND. IN VIEW OF THE S E FACTS, AO HELD THAT CREDITWORTHINESS OF BOTH THE DONORS IS NOT ESTABLISHED. THE AO W ORKED OUT THE PEAK DEPOSIT IN THE BANK ACCOUNT AT RS.1 1,74,920/ - AND TREATED THE SAME AS INCOME OF THE ASSESSEE U/S.69 OF THE I.T. ACT, 1961. 5 . ON APPEAL BEFORE THE LD. CIT (A), ASSESSEE FURNISHED THE 7/12 EXTRACTS OF BOTH THE BROTHERS IN SUPPORT OF LAND HOLDING; FROM WHICH IT CAN BE SEEN THAT ITA 289 - 201 2 3 GROUND - NUT, O IL SEEDS, JEERA WERE CULTIVATED ON THE LAND. AN AFFIDAVIT DATED 17 - 12 - 2008 FROM THE DONORS WERE FURNISHED TO THE AO, REVENUE RECORDS IN THE FORM OF 8A, SALES BILLS OF THE DONORS WERE ALSO FURNISHED . IT WAS CONTENDED THAT AO WITHOUT CONDUCTING ANY INQUIRY OR BRINING ANY MATERIAL ON RECORD TO CONTROVERT THESE CONTENTIONS, SIMPLY HELD THAT THE CREDITWORTHINESS OF THE DONORS ARE NOT ESTABLISHED. 6 . AFTER CONSIDERING THE AFORESAID SUBMISSIONS, THE LD. CIT (A) DELETED THE ADDITION OF RS.11,74,920/ - FOR THE DET AILED REASONS GIVEN IN PARA - 3.3(II) WHICH READ AS UNDER: - 3.3(II). HAVING CONSIDERED THE FACTS OF THE CASE, I AM INCLINED TO ACCEPT THE CONTENTION OF THE LEARNED AR. AS SEEN FROM PAGE 6 OF THE ASSESSMENT ORDER, THE PEAK DEPOSIT IN THE BANK ACCOUNT WORKS OUT TO RS.11.79 LAKHS (AS AGAINST RS.11,74,920/ - WORKED OUT BY THE AO) . THE AO HIMSELF AT PARA - 7 OF THE ASSESSMENT ORDER ACCEPTED THAT THE DONORS HAD NO BANK ACCOUNT, THEY DID NOT HAVE PAN, THEY FURNISHED COPIES OF SALE BILLS OF AGRICULTURAL PRODUCE AND C OPIES OF 7/12 EXTRACTS. HE DID NOT SAY ANYTHING AGAINST THE AFFIDAVITS FILED BY THE DONOR S CONFIRMING THE GIFTS. BOTH THE DONORS ARE BROTHERS OF THE APPELLANT AND ARE AGRICULTURISTS HAVING CULTIVATED AGRICULTURAL LAND HOLDINGS OF OVER 15 ACRES EACH. THE RE WAS NO BASIS WHATSOEVER, IN THE ABSENCE OF ANY MATERIAL BEING BROUGHT ON RECORD TO CONTROVERT THE CONTENTIONS OF THE APPELLANT, FOR THE AO TO HOLD THAT THE DONORS WERE NOT CREDITWORTHY. THEREFORE, I HOLD THAT THE SOURCE OF DEPOSITS TO THE EXTENT OF RS. 10 LAKHS RECEIVED BY WAY OF GIFTS FROM APPELLANTS TWO BROTHERS STANDS EXPLAINED. AS REGARDS THE BALANCE AMOUNT OF RS.1.79 LAKHS, APPELLANT EXPLAINED IT TO BE OUT OF HIS SAVINGS FROM AGRICULTURAL PRODUCE. IN THIS CONNECTION, IT IS TO BE NOTED THAT IN THE RETURN OF INCOME FILED, THE APPELLANT ADMITTED INCOME OF RS.11,931/ - BESIDES AGRICULTURAL INCOME OF RS.2,02,337/ - . THE SAID AMOUNT OF AGRICULTURAL INCOME WAS ACCEPTED BY THE AO AT PARA - 10 OF THE ASSESSMENT ORDER. THEREFORE, I DO NOT SEE ANY INFIRMITY IN THE EXPLANATION OF THE APPELLANT THAT THE CASH DEPOSIT TO THE EXTENT OF RS.1.79 LAKHS WAS MADE BY THE APPELLANT OUT OF HIS SAVINGS FROM AGRICULTURAL INCOME ACCORDINGLY, IMPUGNED ADDITION MADE OF RS.11,74,920/ - IS DELETED. AGGRIEVED WITH THE ORDER OF L D. CIT (A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 7 . AT THE TIME OF HEARING BEFORE US , ON BEHALF OF REVENUE, SHRI K.C. MATHEWS, DR APPEARED AND CONTENDED THAT BEFORE THE AO, IT WAS CLAIMED THAT ASSESSEE RECEIVED GIFT FROM TWO BROTHERS WHO ARE AGRIC ULTURISTS BUT THEIR CREDITWORTHINESS COULD NOT BE PROVED. THEREFORE, ADDITION OF RS.11,74,920/ - BEING PEAK CREDIT OF DEPOSIT IN ASSESSEES BANK ACCOUNT WAS RIGHTLY MADE AND LD. CIT (A) IS NOT JUSTIFIED IN DELETING THE SAME. AS AGAINST THIS, SHRI M. J. RAN PURA, CA APPEARED ITA 289 - 201 2 4 ON BEHALF OF THE ASSESSEE VEHEMENTLY SUPPORTED THE ORDER OF LD. CIT (A). T HE COUNSEL OF THE ASSESSEE FURTHER MADE THE FOLLOWING SUBMISSIONS: - (I) THAT THE ASSESSEE AND HIS WIFE HELD APPROX. 19.44 AND 17.61ACRES OF AGRICULTURAL LAN D RESP ECTIVELY. (II) BEFORE THE AO, ASSESSEE HAS DISCHARGED THE PRIMARY ONUS OF PROVIDING IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS IN RESPECT OF GIFTS RECEIVED AND CREDITED IN THE BANK ACCOUNT IN THE FORM OF AFFIDAVITS OF THE DONORS. AO I GNORED THE SAME WITHOUT CONDUCTING ANY INQUIRY. THE LD. CIT (A) ACCEPTED THE EXPLANATION OF THE ASSESSEE AS HE HAS FURNISHED COPIES OF SALE BILLS OF AGRICULTURAL PRODUCES AND COPIES OF 7/12 EXTRACTS AND AFFIDAVIT S OF DONORS CONFIRMING THE GIFTS. BOTH THE DONORS ARE BROTHERS OF THE ASSESSEE AND AGRICULTURIST HAVING CULTIVATED LAND HOLDING OF OVER 15 ACRES EACH. (III) THE SOURCE OF RS.10 LAKHS DEPOSIT IS FROM GIFTS OF TWO DONORS AND REMAINING DEPOSIT OF RS.1.79 LAKHS IS OUT OF SAVINGS FROM AGRICULTURAL INC OME. (IV) IT WAS ALSO POINTED OUT THAT THE AO DID NOT RAISE ANY DOUBT REGARDING THE AFFIDAVITS NOR CONTRAVENED THE CONTENTS OF THE AFFIDAVITS BY CROSS EXAMINING THE DEPONENTS. WHEN THE DONORS MADE AFFIDAVITS, THE AO WAS DUTY BOUND EITHER TO ACCEPT THE CO NTENTS OF AFFIDAVIT OR REQUIRED TO CROSS EXAMINE THE DEPONENTS AS HELD BY HONBLE SUPREME COURT IN THE CASE OF MEHTA PARIKH & CO. VS. CIT 30 ITR 181 (SC) AS UNDER: - EVIDENCE MAY BE TENDERED ON AN AFFIDAVIT BEFORE THE ASSESSING OFFICER. SUCH EVIDENCE IS L EGAL AND CAN BE ACTED UPON BY THE ASSESSING/APPELLATE AUTHORITIES, IF THE ASSESSING OFFICER OR THE DY. CIT (APPEALS) OF THE APPELLATE TRIBUNAL REGARDED THE SAME AS NON - SUFFICIENT PROOF OF THE CONTENTS THEREOF, THEY SHOULD CROSS EXAMINE THE DEPONENT AND IF DISSATISFIED, CALL UPON THE ASSESSEE TO PRODUCE DOCUMENTARY EVIDENCE IN SUPPORT OF THE CONTENTS OF THE AFFIDAVITS. IF NO SUCH THING IS DONE, THE AFFIDAVIT BY ITSELF SHOULD B E REGARDED AS SUFFICIENT PROOF. (V) RELIANCE WAS ALSO PLACE ON THE DECISION OF (I ) HONBLE HIGH COURT OF GUJARAT IN THE CASE OF GLASS LINES EQUIPMENTS CO. LTD. VS. CIT 253 ITR 454 (GUJ), (II) HONBLE HIGH COURT OF BOMBA Y IN THE CASE OF DILIP KUMAR RO Y V S . CIT 94 ITR 1 (BOM.) AND (III) HONBLE ITAT, RAJKOT BENCH, RAJKOT IN THE CASE OF A CIT VS. VASANTAL C. MEHTA 77 ITD 76 (RAJKOT). 8. RIVAL SUBMISSIONS WERE CONSIDERED. IT IS PERTINENT TO NOTE THAT THE ASSESSING OFFICER ME RELY ON DOUBT AND SUSPICION REJECTED THE EXPLANATION OF THE ASSESSEE AND IGNORED THE VARIOUS EVIDENCES INCLUDING AFFI DAVITS OF DONORS WITHOUT CONDUCTING INQUIRY. THE CREDITWORTHY OF BOTH THE DONE R WHO ARE BROTHERS OF ASSESSEE IS ESTABLISHED BEYOND DOUBTS. THE SAVINGS OF RS.11,74,920/ - FORM ASSESSEES AGRICULTURE INCOME IS PLAUSIBLE EXPLANATION. THE WE ARE THEREFORE, O F THE VIEW THAT LD. CIT (A) IS LEGALLY AND FACTUALLY CORRECT IN DELETING THE ADDITION OF RS.11,74,920/ - MADE BY AO U/S.69 OF THE I.T. ACT, 1961 , THEREFORE WE INCLINED TO UPHELD THE ORDER OF LD. CIT(A). ITA 289 - 201 2 5 15. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. 16. THIS ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONED HEREINABOVE. SD/ - SD/ - ( . . A D. K. SRIVASTAVA ) ( . . R / T. K. SHARMA) / ACCOUNTANT MEMBER - A / JUDICIAL MEMBER / ORDER DATE 14 - 0 6 - 2013. /RAJKOT NVA/ - 4 RJO SO / COPY OF ORDER FORWARDED TO: - 1 . J / APPELLANT - THE INCOME - TAX OFFICER, WARD - 2, BHUJ . 2 . 'HJ / RESPONDENT - SHRI SHA SHIKANT N. PATEL, 7, PRAMUKH SWAMI NAGAR, BHUJ - KUTCH. 3 . I / CONCERNED CIT - I, RAJKOT. 4 . - / CIT (A) - XX , AHMEDABAD. 5 . '-I , I , / DR, ITAT, RAJKOT 6 . R / GUARD FILE. / BY ORDER TRUE COPY. SENIOR PRIVATE SECRETARY, ITAT, RAJKOT