Shri Kapil Khullar, Mandi Gobindgarh V. Addl. CIT, Mandi Gobindgarh

ITA 334/CHANDI/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5409 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 19-05-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 30-03-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JAI SHREE SHARMA
• Keywords: Gift; Principle of natural justice; Additional evidence
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES SMC CHANDIGARH BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.334/CHD/2011 ASSESSMENT YEAR: 2007-08 SHRI KAPIL KHULLAR, VS. THE ADDL CIT, PROP. M/S NEERAJ INPATA UDYOG, MANDI GOBINDGARH RA NGE, MANDI GOBINDGARH MANDI GOBINDGARH PAN NO. ALUPK6033G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI TEJ MOHAN SINGH RESPONDENT BY: SMT. JAISHREE SHARMA ORDER PER SUSHMA CHOWLA, JM THE APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF CIT(A), PATIALA DATED 24.1.2011 RELATING TO ASSESSMENT YEAR 2007-08 AGAINST THE ORDER PASSED UNDER SECTION 143(3) OF THE I.T. ACT, 1961. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN UPHOLDING THE ADDITION OF RS. 2.5 LACS TREATING THE GIFT RECEIVED FROM THE FATHER-IN-LAW O F THE ASSESSEE TO BE INGENUINE WHICH IS ARBITRARY AND UNJUSTIFIED. 2 THAT THE LD. CIT(A) HAS BRUSHED ASIDE THE EXPLANATION RENDERED IN THIS REGARD WITHOUT ANY COGENT REASONING WHICH IS ARBITRARY AND UNJUSTIFIED. 2 3. THE ASSESSEE IS AGGRIEVED BY THE ORDER OF CIT(A) DATED 24.1.2011. THE CLAIM OF THE ASSESSEE IS THAT THE ADDITION OF R S. 2,50,000/- HAS BEEN MADE AGAINST THE FACTS AND CIRCUMSTANCES OF THE CAS E. THE ASSESSEE CLAIMS TO HAVE RECEIVED SAID SUM OF RS. 2,50,000/- FROM H IS FATHER-IN-LAW WHO IN TURN HAD GIFTED THE SAME TO THE ASSESSEE OUT OF HIS PENSIONARY BENEFITS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS EXPLAINED BY THE ASSESSEE THAT HIS FATHER-IN-LAW EXPIRED IN 2006 AFT ER HIS MARRIAGE IN 2005. WHILE EXPLAINING THE SOURCE OF THE SAID GIFT, THE A SSESSEE IN HIS STATEMENT STATED THAT HIS FATHER RETIRED FROM RAILWAYS IN 200 1. THE ASSESSING OFFICER ON EXAMINATION OF THE PASS BOOK OF THE FATH ER-IN-LAW AND CASH DEPOSITS PRIOR TO THE ISSUE OF THE PRESENT CHEQUE A ND THE FACTUM OF THE MARRIAGE OF THE ASSESSEE TAKING PLACE IN 2005 I.E. BEFORE THE DATE OF THE GIFT MADE ON 8.4.2006, WAS OF THE VIEW THAT IT WAS A MAKE SHIFT STORY. THE ASSESSING OFFICER HELD THAT THE ASSESSEE HAD FAILED TO DISCHARGE HIS ONUS TO ESTABLISH THE GENUINENESS OF THE TRANSACTION AND ADDED THE SUM OF RS. 2,50,000/- AS INCOME OF THE ASSESSEE. THE CIT(A) C ONFIRMED THE ORDER OF ASSESSING OFFICER. 4. THE LD. AR FOR THE ASSESSEE MOVED AN APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE UNDER RULE 29 OF THE ITAT RULES UNDER WHICH EVIDENCE WAS SOUGHT TO BE PLACED ON RECORD I..E TH E DOCUMENTS RELATING TO THE RETIREMENT OF THE DONOR, WHO IN FACT RETIRED ON 31.8.2004 AND NOT IN 2001 AS PROJECTED BEFORE THE ASSESSING OFFICER. TH E ASSESSEE PLACED ON RECORD THE DOCUMENTS OF SHRI BALBIR KUMAR ISSUED BY NORTHERN RAILWAY, FEROZEPUR DIVISION WHICH ARE ENCLOSED AT PAGES 1 T O 7 OF THE SAID APPLICATION. FURTHER, THE COPY OF THE PASS BOOK WI TH PUNJAB NATIONAL BANK HAS BEEN PLACED ON RECORD IN WHICH THE SAID AM OUNT WAS DEPOSITED AND THEREAFTER WITHDRAWN. AN AFFIDAVIT HAS BEEN FIL ED IN RESPECT OF THE AVERMENTS MADE IN THE STATEMENT RECORDED DURING THE COURSE OF HIS 3 ASSESSMENT PROCEEDINGS. THE ASSESSEE CLAIMS THAT TH ERE WAS SOME CONFUSION IN HIS MIND IN MENTIONING THE ORDER OF RE TIREMENT OF HIS FATHER- IN-LAW AND ALSO GIFT OF RS. 2,50,000/- MADE BY DRAF T. IN THE STATEMENT, HE HAD STATED THAT AMOUNT OF RS. 2 LACS WAS RECEIVED B Y CHEQUE AND RS. 50,000/- WAS RECEIVED IN CASH, WHICH FACTS WERE LAT ER CLARIFIED VIDE REPLY DATED 2.12.2009. BUT THE YEAR OF RETIREMENT WAS OM ITTED TO BE RECTIFIED AS 2004 AS AGAINST 2001. THE LD. DR FOR THE REVENUE P LACED RELIANCE ON THE ORDERS OF THE AUTHORITIES BELOW. 5. I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED T HE RECORDS. THE BASIS FOR ADDITION IN THE PRESENT CASE IS THE INABI LITY OF THE ASSESSEE TO ESTABLISH THE CREDITWORTHINESS AND GENUINENESS OF T HE TRANSACTIONS I.E. GIFT OF RS. 2,50,000/- RECEIVED FROM HIS FATHER-IN-LAW. THE CLAIM OF THE ASSESSEE WAS FOUND TO BE INCORRECT IN VIEW OF THE F ACT THAT THE GIFT WAS MADE IN APRIL 2006, WHICH WAS CLAIMED TO BE OUT OF THE PENSIONARY BENEFITS OF HIS FATHER IN LAW. IN THE STATEMENT RE CORDED DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE CLAIMS THAT HIS FATHER-IN-LAW RETIRED IN 2001 AND MONEY WAS OUT OF HIS RETIREMENT BENEFITS, WHICH WAS FOUND TO BE UNBELIEVABLE AS THE MARRIAGE OF ASSESSE E TOOK PLACE IN 2005. THE ASSESSEE HAS PLACED ON RECORD ADDITIONAL EVIDEN CE IN THE FORM OF CERTIFICATE ISSUED BY NORTHERN RAILWAY WITH RESPECT TO THE PENSIONARY BENEFITS ISSUED TO HIS FATHER-IN-LAW WHERE THE DATE OF RETIREMENT IS 31.8.2004. THE ASSESSEE HAS FILED AN AFFIDAVIT, W HICH READS AS UNDER: - AFFIDAVIT I, KAPIL KHULLAR S/O SH.SHIV KUMAR KHULLAR PROPRIETOR OF M/S NEERAJ ISPAT UDYOG, JASSRAN RAOD, MANDI GOBINDGARH DO HEREBY SOLEMNLY DECLARE THAT :- 1. THAT I AM AN INCOME TAX ASSESSEE AND MY RETURN WAS SCRUTINIZED FOR THE A.Y.2007-08. 2. THAT I GOT MARRIED IN 2005 TO SMT.RESHMA SAGGAR D/O SH.BALBIR KUMAR SAGGAR. 4 3. THAT I APPEARED BEFORE THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND MY STATEMENT WAS RECORDED. THIS WAS MY FIRST EVER APPEARANCE BEFORE THE ASSESSING OFFICER IN MY LIFE. 4. THAT I WAS ASKED QUESTIONS IN RESPECT OF THE GIFT OF RS.2,50,000/- RECEIVED BY ME FROM MY FATHER-IN-LAW LATE SH.BALBIR SAGGAR WHO EXPIRED IN 2006. 5. THAT WHILE RECORDING OF THE STATEMENT, I GOT PUZZLED AND CONFUSED AND AS SUCH INADVERTENTLY MENTIONED THE YEAR OF RETIREMENT OF MY FATHER-IN-LAW SH.BALBIR SAGGAR AS 2001 AS AGAINST 2004 WHICH WAS BEFORE MY MARRIAGE. 6. THAT I WAS NOT IN CORRECT FRAME OF MIND IS ALSO EVIDENT FROM THE FACT THAT THE GIFT WAS RECEIVED BY WAY OF DEMAND DRAFTS OF RS.2,50,000/- MADE FROM TWO SAVING ACCOUNTS, WHILE DURING THE COURSE OF RECORDING OF STATEMENT IT WAS STATED THAT RS.50,000/- WAS RECEIVED IN CASH. 7. THAT THE FACT OF HAVING RECEIVED THE GIFT BY DRAFT AND NOT IN CASH WAS CLARIFIED BY A WRITTEN REPLY DATED 02.12.2009 BUT CORRECT YEAR OF RETIREMENT WAS OMITTED TO BE RECTIFIED AS 2004 AS AGAINST 2001 MENTIONED IN THE STATEMENT COPY OF WHICH HAS NOT BEEN GIVEN TO ME TILL DATE. 8. THAT IT WAS ONLY ON READING THE ORDERS OF THE ASSESSING OFFICER AND COMMISSIONER OF INCOME-TAX (APPEALS) I REALIZED THE FACTUAL ERROR OF THE DATE OF RETIREMENT. 9. THAT DOCUMENTARY EVIDENCE IN RESPECT OF DATE OF RETIREMENT AND BANK PASSBOOK OF MY FATHER- IN-LAW FOR THE PERIOD PRIOR TO MY MARRIAGE HAS NOT BEEN OBTAINED FOR BRINGING ON RECORD THE CORRECT FACTS. 6. THE ADDITIONAL EVIDENCE FURNISHED BY THE ASSESSE E GOES TO THE ROOT TO THE ISSUE RAISED IN THE PRESENT APPEAL AND IN TH E INTEREST OF NATURAL JUSTICE, THE SAME IS ADMITTED. HOWEVER, THE SAID DO CUMENTS WERE NOT BEFORE THE ASSESSING OFFICER WHILE ADJUDICATING THE PRESENT ISSUE AND THEREFORE, IT IS DEEMED FIT TO RESTORE THE ISSUE B ACK TO THE FILE OF ASSESSING OFFICER TO DECIDE THE ISSUE IN THE PRESEN T CASE DE NOVO AFTER TAKING COGNIZANCE OF THE ADDITIONAL EVIDENCE SOUGHT TO BE ADMITTED BY THE 5 ASSESSEE. A REASONABLE OPPORTUNITY OF HEARING SHAL L BE AFFORDED TO THE ASSESSEE AND THE ISSUE SHALL BE ADDRESSED BY THE AS SESSING OFFICER. THE GROUND OF APPEAL RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, A PENALTY OF THE ASSESSEE IS PART LY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 31 ST DAY OF MAY, 2011. SD/- (SUSHMA CHOWLA) JUDICIAL MEMBER DATED : 31 ST MAY, 2011 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR