Vinod Kumar, Haridwar V. ITO, Roorkee

ITA 2938/DEL/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7030 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 08-02-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 13-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K JAIN
• Assessee Lawyers: S K MONGA
• Keywords: Unexplained investment; Gift; Income from undisclosed sources; Corroborative evidences; Agreed addition

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH H NEW DELHI BEFORE : SHRI H.S. SIDHU , JUDICIAL MEMBER & SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 2938/DEL./2013 ASSTT. YEAR : 2009 - 10 VINOD KUMAR S/O SH. SURAT SINGH, VS. INCOME - TAX OFFICER, HARIDWAR, DIST. HARIDWAR. WARD 2, ROORKEE. [PAN: BDCPK 6316 F] (APPELLANT) (RESPONDENT) APPELLANT BY : SH. S.K. MONGA, ADVOCATE RESPONDENT BY : SH. S.K. JAIN, SR. DR DATE OF HEARING : 08.02.2016 DATE OF PRONOUNCEMENT : 17 .02.2016 ORDER PER L.P. SAHU, ACCOUNTANT MEMBER: THIS APPEAL BY THE ASSESSEE ARISES OUT OF ORDER DATED 27.02.2013 OF LD. CIT(A), DEHRADUN FOR THE ASSESSMENT YEAR 2009 - 10. 2. THE FIRST ISSUE CHALLENGED BY THE ASSESSEE IS SUSTENANCE OF ADDITION OF RS.75,000/ - ON ACCOUNT UNEXPLAINED INVESTMENT IN LIQUOR SHOP. THE BRIEF FACTS ARE THAT THE ASSESSEE CLAIMED TO HAVE MADE INITIAL INVESTMENT OF RS.1,75,000/ - IN ITS BUSINESS OUT OF THE OPENING BALANCE OF CAPITAL ACCUMULATED OVER TH E YEARS. THE AO REJECTED THE CLAIM OF ASSESSEE FOR WANT OF ANY SUPPORTING EVIDENCE AND TREAT ING THE ABOVE SUM AS UNEXPLAINED INVESTMENT , ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. THE LD. CIT(A) IN APPEAL RESTRICTED THE ADDITION TO RS.75,000/ - ASS UMING THAT THE ASSESSEE WOULD HAVE SOME PAST SAVINGS AND ALSO CITING SOME OTHER CASES OF LIQUOR DEALERS AS MENTIONED IN ITA NO. 2938/DEL./2013 2 PARA 1.1 OF THE IMPUGNED ORDER, WHEREIN SIMILAR CLAIM O N IDENTICAL FACTS WAS DISALLOWED. IT WAS ALSO OBSERVED THAT THE RETURN OF INCOME WAS FILED BY THE ASSESSEE SIMPLY TO BUILD UP THE CAPITAL. BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 3. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS SHOWN CAPITAL BALANCE OF RS.2,23,000/ - IN THE RETURN FOR THE A.Y. 2008 - 09, O UT OF WHICH THE ASSESSEE MADE INVESTMENT OF RS.1,75,000/ - IN THE YEAR UNDER CONSIDERATION. THE ASSESSEE HAS ALSO SUBMITTED CASH FLOW STATEMENT WHICH SHOWS OPENING CASH BALANCE AS ON 01.04.2007 OF RS.1,00,000/ - AND INCOME OF RS.1,83,000/ - CONSISTING OF BROK ERAGE INCOME AND AGRICULTURAL INCOME OF RS.85,000/ - AND AFTER SHOWING WITHDRAWALS OF RS.60,000/ - , THE ASSESSEE HAS SHOWN C LOSING BALANCE OF RS.2,23,000/ - , WHICH WAS SUFFICIENT TO INVEST RS.1,75,000/ - IN THE LIQUOR SHOP. 4. THE LD. DR, ON THE OTHER HAND, RE LIED ON THE ORDER OF THE AUTHORITY BELOW AND SUBMITTED THAT THE RETURNS WERE FILED BY THE ASSESSEE FOR THE PURPOSE OF CAPITAL BUILDING AND THEREFORE, THE EXPLANATION OF THE ASSESSEE IS NOT ACCEPTABLE. 5. HAVING CONSIDERED THE RIVAL SUBMISSIONS, WE DO NOT F IND ANY JUSTIFICATION TO SUSTAIN THE FINDINGS OF THE LD. CIT(A). THE ASSESSEE HAS FILED CASH FLOW STATEMENT WHICH SHOWS THE OPENING BALANCE OF HIS CAPITAL ACCOUNT AT RS.2,23,000/ - . IT IS AN ADMITTED FACT THAT THE INVESTMENT WAS MADE IN A.Y. 2009 - 10 AND THE RE IS NOTHING ON RECORD AGAINST THE FACT THAT THE AMOUNT INVESTED BY ASSESSEE REPRESENTS THE OPENING BALANCE OF HIS CAPITAL ACCOUNT. NO ENQUIRY OR INVESTIGATION RELATING TO ASSESSEE S PAST SAVING HAS BEEN MADE. THE APPELLANT IS HOLDING 30 BIGHAS OF AGRICUL TURAL LAND, OUT OF WHICH HE HAS SHOWN AGRICULTURAL INCOME . COUNTERING THE INSTANCES GIVEN BY CIT(A), THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE SAME CIT(A) IN THE IDENTICAL FACTS AND ITA NO. 2938/DEL./2013 3 CIRCUMSTANCES OF THE CASE IN THE CASE OF OTHER LIQUOR CONTRACTOR SMT. SUMITRA DEVI HAS DELETED SIMILAR ADDITION VIDE ORDER DATED 26.02.2013 (COPY PLACED ON RECORD). IN VIEW OF THESE FACTS, IN OUR OPINION, THE IMPUGNED ADDITION OF RS.75,000/ - IS LIABLE TO BE DELETED. 6. THE SECOND ISSUE REGARDING ISSUANCE OF PENALTY NOT ICE U/S. 271(1)(C) OF THE ACT ON THE BASIS OF AGREED ADDITION OFRS.5,61,077/ - U/S. 40A (3), HAS NOT BEEN PRESSED BY THE LD. COUNSEL. THEREFORE, THE SAME IS DISMISSED AS NOT PRESSED. 7. THE NEXT ISSUE UNDER CHALLENGE IS THAT THE ASSESSEE CLAIMED TO HAVE RECE IVED A SUM OF RS.2,65,100/ - AGAINST SALE OF TREES FROM ONE MR. KHALIL WHO APPEARED BEFORE THE AO AND CONFIRMED THE TRANSACTION IN HIS STATEMENT. MR. KHALIL ALSO DECLARED THAT HE RECEIVED THE AMOUNT FROM A COMMISSION AGENT OF TIMBER. THE AO DID NOT ACCEPT T HE EXPLANATION OF ASSESSEE AND TREATED THE SUM AS UNDISCLOSED INCOME OF ASSESSEE. THE CIT(A) CONFIRMED THE ADDITION. 8. HAVING CONSIDERED THE RIVAL SUBMISSIONS, WE FIND THAT THE ASSESSEE HAS EXPLAINED THE SOURCE OF THE SUM RECEIVED AS SALE CONSIDERATION OF TREES FROM MR. KHALIL. THE CREDITOR WAS PRODUCED BEFORE THE AO WHO CONFIRMED HAVING GIV EN THE MONEY TO THE ASSESSEE. HE ALSO DECLARED THE SOURCE OF MONEY RECEIVED BY HIM. HOWEVER, THE AUTHORITIES BELOW BEFORE REJECTING THE CLAIM OF ASSESSEE HAVE FAILED TO MAKE ANY ENQUIRY FROM THE PERSON WHO APPEARED BEFORE THE AO AND MADE THE STATEMENTS CONFIRMING THE TRANSACTION. WITHOUT BRINGING ANY CONTRARY MATERIAL ON RECORD, THE CLAIM OF THE ASSESSEE COULD NOT BE DISBELIEVED. WE ACCORDINGLY REVERSE THE FINDING OF THE LD. CIT(A) ON THIS COUNT AND DELETE THE ADDITION OF RS.2,65,100/ - . 9. THE LAST ISSUE RELATES TO ADDITION OF RS.2,36,000/ - CLAIMED BY THE ASSESSEE TO HAVE BEEN RECEIVED AS GIFTS FROM VARIOUS RELATIVES AND FRIENDS. THE AO NOTICED THAT THE ALLEGED DONORS WER E AGRICULTURISTS HAVING SMALL LAND ITA NO. 2938/DEL./2013 4 HOLDINGS. THEY DID NOT HAVE BANK ACCOUNT AND WERE ALSO NOT ASSESSED TO TAX. HE THEREFORE HELD THE TRANSACTION AS UNEXPLAINED AND TREATED THE AMOUNT AS ASSESSEE S INCOME FROM UNDISCLOSED SOURCES. THE LD. CIT(A) CONFIRMED T HE ADDITION. 10. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE GONE THROUGH THE ENTIRE RECORD ON THIS ISSUE AND WE FIND NO JUSTIFICATION TO INTERFERE WITH THE CONCLUSION REACHED BY THE LD. CIT(A). IT IS NOTABLE THAT THE ASSESSEE HAS FAILED TO PROVE THE CRED ITWORTHINESS OF THE ALLEGED DONORS OR AVAILABILITY OF CASH WITH THEM TO DONATE . MOREOVER, THE AMOUNTS OF GIFTS RECEIVED BY ASSESSEE WERE NOT FOUND CREDITED ANYWHERE IN THE BOOKS OF ACCOUNT OF ASSESSEE DESPITE THE FACT THAT THE AMOUNT RECEIVED BY ASSESSEE A S ALLEGED GIFT WAS CHARGEABLE TO TAX AS HIS INCOME FROM OTHER SOURCES. THE DONORS ARE NOT HAVING ANY BANK ACCOUNT AND THEY ARE NOT INCOME - TAX ASSESSEES. IN THE TOTALITY OF FACTS AND CIRCUMSTANCES, WE SUSTAIN THE ADDITION AND CONFIRM THE ORDER OF THE LD. CIT(A) ON THIS COUNT. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 17.02.2016 . SD/ - SD/ - ( H.S. SIDHU ) (L.P. SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 17.02.2016 *AKS/ - COPY OF ORDER FORWARDED TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) D EPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT. REGISTRAR INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES, NEW DELHI