BHOLARAM MALVIYA, MUMBAI V. ITO 16(1)(1), MUMBAI

ITA 2933/MUM/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0355 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 25-04-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N HEMALATHA
• Keywords: Gift
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC, MUMBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO.2933/MUM/2017 ASSESSMENT YEAR : 2012-13 BHOLARAM MALVIYA, EMBASSY 15X FLAT NO.605, NEAR XULFA DAIRY, SHASTRI NAGAR, LOKHANDWALA, ANDHERI (WEST) MUMBAI 400 053 PAN AAMPM7312D VS. ITO 16(1)(1) MUMBAI (APPELLANT) RESPONDENT) APPELLANT BY : SHRI NEERAJ MANGLA RESPONDENT BY : MS N HEMALATHA DATE OF HEARING : 09 . 11 .201 7 DATE OF PRONOUNCEMENT : 05 .0 2 . 201 8 O R D E R THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST ORDER OF LEARNED CIT(A)-4, MUMBAI, DATED 15.03.2016 AND PERTAINS TO ASSESSMENT YEAR 2012-13. 2. THE ISSUE RAISED IS THAT CIT(A) ERRED IN UPHOLDI NG THE ADDITION OF RS. 36,25,000/- BEING UNIDENTIFIED DEPOSIT IN THE BANK ACCOUNT CLAIMED TO BE GIFTS FROM THE RELATIVES. 3. THE ASSESSEE HAS ALSO RAISED ADDITIONAL GROUNDS WHICH READ AS UNDER: 1. THAT THE ADDITIONS OF RS 36,25,000/- MADE VIDE ORDER PASSED U/S. 143(3) OF THE INCOME TAX ACT, 1961, ON 28.01.2015 B Y THE ASSESSING OFFICER, IS PERVERSE TO THE FACTS OF THE CASE BECAU SE OF MAKING ADDITIONS ONLY ON THE BASIS OF AN AIR REPORT ALLEGING THAT CA SH AMOUNTING TO RS 51,00,000/- WAS DEPOSITED IN THE BANK ACCOUNT OF TH E APPELLANT WHEREAS CASH AGGREGATING TO RS 41,50,000/- ONLY WAS DEPOSIT ED IN THE BANK ACCOUNTS. ITA NO2933/MUM/2017 BHOLARAM MALVIYA 2 4. I HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RE CORDS. 5. AS REGARDS THE ADDITION GROUND, I FIND THE SAME PLEADS THAT THERE ARE DOUBLE ENTRIES IN THE BANK ACCOUNT WHICH HAS LED TO THE IN CREASE IN UNIDENTIFIED BANK DEPOSITS BY RS. 9, 50, 000/- 6. I FIND THAT THERE IS NO BASIS FOR SUCH AVERMENT. WHAT'S THE BASIS OF ASSESSEE SUBMISSION THAT ONE ENTRY HAS BEEN MADE TWICE IN TH E BANK ACCOUNT HAS NOT BEEN EXPLAINED. FURTHERMORE, I FIND THAT ASSESSEE HAD TR IED TO EXPLAIN THE UNIDENTIFIED BANK DEPOSIT AS GIFTS FROM RELATIVES. NOW AFTER THE SAME HAS NOT BEEN ACCEPTED BY THE AUTHORITIES BELOW, ASSESSEE HAS COME UP WITH AN EXPLANATION THAT THERE ARE DOUBLE ENTRIES OF DEPOSITS IN BANK ACCOUNT WITHOUT ANY BASIS. ACCORDINGLY, I DO NOT FIND ANY SUBSTANCE IN THE SUBMISSION OF THE ASSESSE E. HENCE, THE ADDITIONAL GROUND STANDS DISMISSED. 7. AS REGARDS THE MERITS OF THE CASE THE ASSESSING OFFICER HAS MENTIONED IN PARA 4 OF THE ASSESSMENT ORDER THAT THE ASSESSEE HAS DEP OSITED CASH OF RS.51 LACS IN HDFC BANK AND SARASWAT CO-OP. BANK. THEREFORE, THE AR OF THE ASSESSEE WAS ASKED ON 13.10.2014 TO EXPLAIN THE SOURCE OF SUCH C ASH DEPOSITS AND RECONCILE IT WITH RETURN OF INCOME. IN REPLY DATED 26.12.2014, T HE AR OF THE ASSESSEE HAS SUBMITTED THAT OUT OF RS.51 LACS DEPOSIT, AN AMOUNT OF RS.36,25,000/- IS FROM RELATIVES WHO HAD GIVEN CASH GIFT. DURING THE YEAR, THE ASSESSEE HAS PURCHASED 2 FLATS NO.713 & 714 IN RAHEJA CREST-LL, ANDHERI(W), MUMBAI. THE EXPLANATION OF THE ASSESSEE HAS NOT BEEN FOUND SATISFACTORY BY THE ASS ESSING OFFICER ON THE GROUND THAT ASSESSEE IS NOT ABLE TO PROVE THE CREDITWORTHI NESS AND IDENTITY OF SUCH DONOR. MOST OF THE RELATIVE DO NOT FILE ANY RETURN OF INCO ME. THESE CASH DEPOSITS HAVE BEEN MADE SUDDENLY IN THE MONTH OF MAY & NOVEMBER, WHERE AS, THE LAST PAYMENT MADE ITA NO2933/MUM/2017 BHOLARAM MALVIYA 3 FOR THE PURCHASE OF FLAT IS ON 22.10.2011. THUS, TH E ASSESSING OFFICER HAS HELD THAT AN AMOUNT OF RS.36,25,000/- IS THE ASSESSEE'S OWN U NEXPLAINED INCOME WHICH HAS BEEN UTILIZED FOR PURCHASE OF FLATS. THUS, SHE HAS MADE THE ADDITION OF RS.36,25,000/- AS UNEXPLAINED INCOME OF THE ASSESSE E. 8. ON ASSESSEE'S APPEAL, LEARNED CIT(A) CONFIRMED T HE ADDITION BY OBSERVING AS UNDER: 3.2. I HAVE CONSIDERED THE FINDINGS OF THE ASSESSI NG OFFICER AND RIVAL SUBMISSION OF THE APPELLANT, CAREFULLY. I FIND THAT APPELLANT HAS FAILED TO PROVE BEYOND DOUBT THE GENUINENESS OF GIFT CLAIMED TO BE RECEIVED FROM 11 PERSONS. MERELY BY FILING CONFIRMATION LETTER TH AT TOO IN A CYCLOSTYLE MANNER CANNOT BE PRESUMED TO BE A PROPER EXPLANATIO N OF CASH DEPOSITS OF RS.36,25,000/-. IT EARN BE SEEN FROM SO-CALLED G IFT DEED THAT IT HAS NOT BEEN PREPARED ON ANY STAMP PAPER, BUT IT HAS BEEN T YPED ON A PLAIN PAPER AND IT CART BE SEEN FROM THESE GIFT DEED THAT IT HAS BEEN PREPARED LATER ON ONLY WITH A VIEW TO JUSTIFY THE CASH DEPOS IT. IT CAN BE SEEN FROM THE SIGN 'X' THAT SIGNATURE HAS BEEN OBTAINED. SIMI LARLY, ADDRESSES HAVE BEEN MENTIONED IN A IDENTICAL HANDWRITING. FURTHER, IT IS VERY IMPORTANT TO NOTE THAT CASH HAS BEEN DEPOSITED ON 07.04,2011, 21 .04.2011, 29.04.2011, 02.05.2011, 09.05.011 AND SO MANY OTHER DATES WHEREAS GIFT DEED HAS BEEN PREPARED OR GOT SIGNED ON 31.03. 2012, 06.03.2015. FURTHER, FALSITY OF THE CLAIM CAN BE POINTED OUT BY REFERRING THE FACT THAT IN BALANCE SHEET, THERE IS NO MENTIONED OF ANY SUCH GIFT OF RS.36,25,000/-. FOR READY REFERENCE, COPY OF BALANC E SHEET IS REPRODUCED HERE AS UNDER:- BHOLARAM MALVIYA BALANCE SHEET AS ON MARCH 31, 2012, ASST. YEAR 2012-13 LIABILITIES AMOUNT (RS) ASSETS AMOUNT (RS.) AMOUNT (RS.) BHOTARAM MALVIYA CAPITAL A/C. (AS PER SCHEDULE 1) LOANS (SCHEDULE 2) 5,633,60789 20,569,65799 FIXED ASSETS (AS PET SCHEDULE 3) LIFE INSURANCE (AS PEL SCHEDULE 4} CASH IN HAND BANK BALANCE WITH FDR WITH SARASWAT BANK 74,409.00 7,014.03 -------------- 23,574,664.75 2,541924.00 5,254.00 81,423.13 HDFC BANK SB A/C SARASWAT CO-OP BANK LTD. A/C NO.9077 ITA NO2933/MUM/2017 BHOLARAM MALVIYA 4 TOTAL RS. 26,203,265.88 TOTAL RS. 26,203,265.88 FURTHER, IT IS IMPORTANT TO POINT OUT THAT IN CAPIT AL ACCOUNT, THE ASSESSEE HAS SHOWN ENTRY AS UNDER :- BHOLARAM MALVIYA SCHEDULE TO BALANCE SHEET & PROFIT & LOSS ACCOUNT A S ON MARCH 31, 2012, ASST. YEAR 2012-13 AS PER SCHEDULE 1 AMOUNT RS BHOLARAM MALVIYA CAPITAL ACCOUNT OPENING BALANCE 3,099,957.38 ADD: INCOME AS PER INCOME & EXPENDITURE ACCOUNT 1 ,260,159.23 ADD: INTEREST ON SARASWAT CO-OP BANK SB A/C. 1,759.00 ADD: INTEREST ON HDFC BANK SB A/C. 23,292.3 1 ADD: RENTAL INCOME FROM MIRA ROAD PROPERTY 42 ,000.00 ADD: LONG TERM CAPITAL GAIN ON SALE OF FLAT 3,60 0,001.00 ADD: GIFTS RECEIVED FROM RELATIVES 25,000.0 0 8,052,168.92 3.3. THUS, THE ABOVE NARRATED FACTS REVEAL THAT IN REALITY THERE WAS NO GIFT AND WHEN APPELLANT FOUND HIMSELF UNABLE TO EXP LAIN THE CASH DEPOSIT IN TWO BANKS, THEN ONLY HE HAD COME WITH 'COOKED UP STORY' THAT CASH GIFTS WERE RECEIVED FROM RELATIVES. THE APPELLANT H AS NEVER ESTABLISHED THE CREDITWORTHINESS OF SUCH DONOR. FURTHER GENUINE NESS HAS ALSO NOT BEEN ESTABLISHED, FT CAN BE SEEN FROM THE GIFT DEED THAT AN AMOUNT OF RS.6,25,000/- HAS BEEN SHOWN FROM SMT. SHEETAL MALV IYA, WHO IS WIFE, BUT, HER SOURCE OF INCOME HAS NOT BEEN DISCLOSED. T HEREFORE, GENUINENESS OF CLAIM OF GIFT IS NOT ESTABLISHED. TH EREFORE, IN THE FACTS & CIRCUMSTANCES OF THE CASE, I ALSO REACH TO THE CONC LUSION THAT THE APPELLANT HAS INTRODUCED HIS OWN UNACCOUNTED MONEY WHILE DEPOSITING IN TWO BANK, HENCE, AN AMOUNT OF RS 36,25,000/-ADDED B Y ASSESSING OFFICER IS SUSTAINED. AGAINST ABOVE ORDER ASSESSEE IS IN APPEAL BEFORE TH E ITAT. 9. I HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RE CORDS. I FIND THAT WHEN UNIDENTIFIED ENTRIES OF DEPOSITS HAVE BEEN FOUND IN THE ASSEESSEE'S BANK ACCOUNT ASSESSEE HAS COME UP WITH AN EXPLANATION THAT THE S AME ARE GIFT FROM 11 RELATIVES. AUTHORITIES BELOW HAVE GIVEN A CLEAR FINDING THAT T HESE ARE SELF SERVING DOCUMENTS ITA NO2933/MUM/2017 BHOLARAM MALVIYA 5 AND AN AFTERTHOUGHT. IT IS FOUND THAT EXCEPT FOR CO NFIRMATION THERE IS NO COGENT EVIDENCE OF THE GIFTS. PROPER DOCUMENT SUPPORTING T HE CREDITWORTHINESS OF THE SO- CALLED RELATIVES ARE NOT AVAILABLE ON RECORD. FURTH ERMORE FACTS AND CIRCUMSTANCES CLEARLY INDICATE THAT ASSESSEE HAS PURCHASED A FLAT AND TO MAKE THE NECESSARY PAYMENTS HAS MADE UNIDENTIFIED CASH DEPOSITS IN THE BANK ACCOUNT. WHEN THE REVENUE HAD DETECTED THE SAME THROUGH AIR INFORMATI ON THE ASSESSEE CAME UP WITH THE EXPLANATION OF THE DEPOSITS BEING GIFTS FROM 11 RELATIVES. IT IS CLEARLY AN AFTERTHOUGHT, NO SUCH DETAIL/EXPLANATION IS/CLAIM W AS MADE IN THE ORIGINAL RETURN OF INCOME AND IT IS FILED BY THE ASSESSEE. FURTHERMORE THE CREDITWORTHINESS OF THESE RELATIVES HAVE NOT AT ALL BEEN ESTABLISHED. IN THES E CIRCUMSTANCES IT IS SETTLED LAW THAT REVENUE AUTHORITIES ARE NOT SUPPOSED TO PUT UP ON BLINKERS BUT THEY ARE ALSO TO LOOK INTO THE SURROUNDING CIRCUMSTANCES. ACCORDINGL Y, I DO NOT FIND ANY INFIRMITY IN THE ORDER'S OF AUTHORITIES BELOW. THE CASE LAW REFE RRED BY THE LEARNED COUNSEL OF THE ASSESSEE HAS BEEN RENDERED IN A DIFFERENT CONTEXT I N THE CASE OF SHARE PREMIUM BY CORPORATE ENTITY AND THE SAME DOES NOT SUPPORT THE ASSESSEE. ACCORDINGLY, I UPHOLD THE ORDER OF THE AUTHORITIES BELOW. 10. IN THE RESULT, THIS APPEAL BY THE ASSESSEE STA NDS DISMISSED ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 5 TH FEBRUARY, 2018. SD/- (SHAMIM YAHYA) ACCOUNTANT MEMBER MUMBAI, DATED :5 TH FEBRUARY, 2018. SA ITA NO2933/MUM/2017 BHOLARAM MALVIYA 6 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE C I T(A), 4. THE C I T 5. THE DR, SMC BENCH BY ORDER //TRUE COPY// (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, MUMBAI