SHRI RAJ KUMAR JAIN, Ajmer V. ITO, Kishangarh

ITA 335/JPR/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7823 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 04-04-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MRS NEENA JEPH
• Assessee Lawyers: K L MOOLCHANDAN I
• Keywords: Gift; Opportunity of being heard; Retrospective amendment; Onus to prove
• Section: 131; 68

Judgement Text

IN THE INCOMETAX APPELLATE TRIBUNAL JAIPUR BENCH: JAIPUR (BEFORE SHRI R.P. TOLANI AND SHRI T.R. MEENA) I.T.A. NO. 335/JP/2012 ASSTT. YEAR- 2005-06 PAN NO. AAOPJ 8380 Q RAJ KUMAR JAIN, THE I.T.O., MAHESHWARI COLONY, VRS. WARD, KISHANGARH. MADANGANJ, KISHANGARH, DISTRICT- AJMER. (APPELLANT) (RESPONDENT) ASSESSEE BY :- SHRI K.L. MOOLCHANDANI. DEPARTMENT BY :- MRS. NEENA JEPH. DATE OF HEARING : 21/10/2014 DATE OF PRONOUNCEMENT : 05/12/2014 O R D E R PER: T.R. MEENA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 17/01/2012 OF THE LEARNED CIT(A), AJMER FOR THE A.Y. 2005-06. THE EFFECTIVE GROUND OF APPEAL IS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LEARNED A.O. AND CIT(A) HAVE FACTUALLY AND LEGALLY ERRED IN MAKING AND CONFIRMING ADDITION OF RS. 5,00,000/- U/S 68 OF THE ACT MADE ON ACCOUNT OF ALLEGED BOGUS GIFT FROM SVS. PAWAN KUMAR JAIN AND SURESH KUMAR JAIN OF RS. 2,2,5,000/- EACH WITHOUT AP PRECIATING ITA 335/JP/2012 RAJKUMAR JAIN VS. ITO 2 THE FACTS OF THE CASE IN ITS RIGHT PERSPECTIVE. ACC ORDINGLY, THE ADDITION SO MADE AND CONFIRMED DESERVES TO BE DELET ED. 2. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD RECEIVED GIFT DURING THE YEAR FROM SHRI SURESH KUMAR JAIN AND SHR I PAWAN KUMAR JAIN FOR RS. 2.50 LACS EACH. THE ASSESSING OFFICER GAVE R EASONABLE OPPORTUNITY OF BEING HEARD ON THIS ISSUE, WHICH WAS REPLIED BY T HE ASSESSEE VIDE LETTER DATED 08/10/2010 AND FURNISHED THE COPY OF G IFT DEED. THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAD RECEI VED GIFT FROM SHRI PAWAN KUMAR JAIN, S/O- SHRI RAM SWAROOP JAIN, R/O- 22 44, IIND FLOOR, GALI RAGHU NANDAN, NAYA BAZAR, DELHI-06 AND SHRI SU RESH KUMAR JAIN, S/O- SHRI KISHAN LAL JAIN, R/O- 2244, IIND FLOOR, G ALI RAGHU NANDAN, NAYA BAZAR, DELHI-06. THE LEARNED ASSESSING OFFICER ASKE D FROM THE ASSESSEE TO FURNISH COPY OF BANK ACCOUNT OF DONORS AND ALSO SENT A LETTER TO THE DONORS AT GIVEN ADDRESS THROUGH REGISTERED POST. THE SE LETTERS HAD RETURNED BACK ON 26/11/2010 BY THE FOLLOWING OBSERVA TION OF POSTAL AUTHORITIES NO SUCH PERSON ARE LIVING AT THIS ADDR ESS. A SHOW CAUSE NOTICE WAS AGAIN GIVEN ON 13/12/2010 AND ASKED TO FU RNISH THE COPY OF THE STATEMENT OF BANK ACCOUNT OF DONORS FROM WHERE G IFTS WERE GIVEN. FURTHER THE LEARNED ASSESSING OFFICER ASKED TO FIL E COPY OF BALANCE SHEET OF DONORS FOR THE YEAR UNDER CONSIDERATION. THE ASSE SSEE COULD NOT ITA 335/JP/2012 RAJKUMAR JAIN VS. ITO 3 FURNISH THE COPY OF BANK ACCOUNT AND BALANCE SHEET TILL 11/11/2010. ON 12/11/2010, AGAIN LETTERS HAD BEEN SENT TO DONORS, WHICH WERE RETURNED BACK WITH THE REMARKS OF THE POST AUTHORITIES NO S UCH PERSON IS LIVING AT THE GIVEN NUMBER. AGAIN THE ASSESSEE WAS GIVEN REAS ONABLE OPPORTUNITY OF BEING HEARD SPECIFICALLY ASKING THE COPY OF BANK ACCOUNT AND BALANCE SHEET OF THE DONORS VIDE LETTER DATED 12/11/2010 BU T NO REPLY WAS FILED BY THE ASSESSEE. EVEN NO FRESH ADDRESS OF DONORS WER E SUPPLIED, WHICH WAS ASKED TO FURNISH DURING THE COURSE OF ASSESSMENT PROCEEDINGS BY THE ASSESSING OFFICER. NO WRITTEN REPLY WAS FILED ON 27/1 2/2010 AND NON- ATTENDED. ON 28/12/2010, THE LEARNED AR FILED COPY OF PAN AND RATION CARD. THE PHOTOS ON PAN AND RATION CARD WERE NOT IDEN TIFIABLE. NO FRESH ADDRESS OF THE DONORS WAS SUPPLIED. DONORS HAD NOT B EEN PRODUCED AND ALSO NO COPY OF BANK STATEMENT FURNISHED. FINALLY H E CONCLUDED THAT BOTH THE GIFTS WERE BOGUS AND ADDED IN THE INCOME OF THE ASSESSEE U/S 68 OF THE ACT. 3. BEING AGGRIEVED BY THE ORDER OF THE LEARNED ASS ESSING OFFICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LEARNED CIT(A ), WHO HAD CONFIRMED THE ADDITION BY OBSERVING AS UNDER:- 6.3 ARGUMENT OF APPELLANT HAVE BEEN CAREFULLY CONS IDERED BUT THE SAME ARE NOT ACCEPTABLE FOR THE FOLLOWING REASON S. ITA 335/JP/2012 RAJKUMAR JAIN VS. ITO 4 A. A.O. ASKED THE APPELLANT VIDE ORDER SHEET ENTRY DATED 22/12/2010 TO PRODUCE THESE PERSONS FOR VERIFICATIO N, BUT THEY WERE NOT PRODUCED BEFORE A.O. B. IN THE DETAILS FILED BEFORE A.O. REGARDING DECLA RATION OF GIFTS, BOGUS ADDRESSES WITH RETROSPECTIVE EFFECT FURNISHED, THEREFORE, IT WAS NOT POSSIBLE FOR A.O. TO ISSUE SUM MONS U/S 131 FOR NECESSARY VERIFICATION. C. IN TODAYS SELFISH WORLD, WHERE GIFTS ARE GIVEN S TRICTLY ON RECIPROCAL BASIS AND NOT WITHOUT ANY SELFISH MOTIVE, IT IS UNBELIEVABLE THAT DIFFERENT PERSONS WILL GIVE GIFTS TO THE APPELLANT, WHO ARE COMPLETE STRANGERS. D. FROM PERUSAL OF COPIES OF RETURNS OF THESE TWO PE RSONS IT IS FOUND THAT SH. SURESH KUMAR JAIN HAS DECLARED NOMIN AL INCOME OF RS. 1,25,240/- ONLY FOR A.Y. 2003-04. SH. PAWAN KUMAR JAIN HAS DECLARED INCOME OF RS. 1,14,562/- FO R A.Y. 2003-04. IT IS NOT POSSIBLE FOR A PERSON TO MAKE GI FT OF RS. 2,50,000/- IF HIS ANNUAL INCOME IS LESS THAN 1,50,0 00/-. E. THE TWO PERSONS WERE NOT FOUND AT THE ADDRESSES GIV EN IN THE RETURN. IT IS CLEAR THAT BOGUS ADDRESSES HAVE B EEN FURNISHED IN THE RETURNS. F. FROM THE BALANCE SHEET OF SH. SURESH KUMAR JAIN IT IS OBSERVED THAT HE IS HAVING CASH AND BANK BALANCE OF ONLY 32,256/-. SUM OF RS. 4,55,000/- IS SHOWN AS LOAN AND ADVANCES. IT APPEARS THAT HIS ACCOUNT IS BEING USED FOR PROVIDING BOGUS ENTRIES OF LOANS AND GIFTS. G. FROM THE BALANCE SHEET OF SH. PAWAN KUMAR JAIN, I T IS FOUND THAT HIS CASH AND BANK BALANCE AS ON 31/3/2003 IS O NLY RS. ITA 335/JP/2012 RAJKUMAR JAIN VS. ITO 5 22,162. SUN OF RS. 5,15,500/- IS SHOWN AS LOAN AND ADVANCES. HE ALSO APPEARS TO BE A PROFESSIONAL DONO R. H. ADDRESS OF SH. SURESH KUMAR JAIN AND SH. PAWAN KU MAR JAIN FURNISHED IN THEIR RETURN IS THE SAME I.E. 2244, IIND FLOOR, NAYA BAZAR, DELHI-06. THUS, THEY APPEAR TO BE MEMBER S OF SAME FAMILY. IT IS HIGHLY IMPROBABLE FOR A FAMILY T O MAKE GIFT OF RS. 5,00,000/- ON ONE PARTICULAR OCCASION TO COM PLETE STRANGERS, SPECIALLY WHEN THE FAMILY MEMBERS ARE BAR ELY EARNING ENOUGH FOR THEIR NEEDS. I. IT HAS BEEN HELD IN FOLLOWING CASES THAT GIFTS RE CEIVED FROM STRANGERS WHO ARE LESS WEALTHIER THAN DONE CAN BE TR EATED AS NON GENUINE. CIT VS. P. MOHANAKALA (SC) 294 ITR 278 LALL CHAND KALRA VS. CIT (P&H) 22 CTR 135 HARISH KUMAR SINGAL VS. ACIT (P&H) 276 ITR 355 ITO VS. DR. A.K. SHARMA (ITAT, AMRITSAR) 63 TTJ 380. D.C. RASTOGI (HUF) VS. ACIT (ITAT, DELHI) 57 ITD 295. JYOTSNA SURI VS. DCIT (ITAT, DELHI) 61 ITD 139 SANJEEV BATRA VS. ACIT (ITAT, DELHI) 69 ITD 23. RENU GUPTA VS. DCIT (ITAT, MUM) 72 ITD 306. DEEPAK KUMAR AGARWAL (ITAT, JAB) 110 TAXMAN 233 (MAG) . MAHESH KUMAR SINGAL VS. ACIT (P&H) 193 CTR 271 SUNIL BHASEEN VS. CIT (P&H) 18 DTR 201. P.P. KOYA VS. DCIT (KER) 175 TAXMAN 4. GIFT OF CHEQUE FROM STRANGERS-NO OCCASION TO MAKE GIFTS- DONOR LESS WEALTHIER- INCOME FROM UNDISCLOSED SOURCE S EVEN THOUGH DONORS CONFIRMED GIFTS. ITO VS. DR. JAGDISH J KANSAGARA (ITAT, AHD) 66 ITD 3 81 ITA 335/JP/2012 RAJKUMAR JAIN VS. ITO 6 BURDEN OF PROOF ON ASSESSEE TO ESTABLISH THAT DONO R HAD MEANS AND GIFT WAS GENUINE, FOR NATURAL LOVE AND AFF ECTION. JASPAL SINGH VS. CIT (P&H) 290 ITR 306. TIRATH RAM GUPTA VS. CIT (P&H) 304 ITR 145. 4. NOW THE ASSESSEE IS IN APPEAL BEFORE US. 5. THE LEARNED A.R. FOR THE ASSESSEE ARGUED THAT THE ASSESSEE HAD FURNISHED COPY OF AFFIDAVITS, COPY OF PAN CARD, COP Y OF IT RETURNS FOR A.Y. 2003-04 AND 2005-06, COPY OF WEALTH TAX RETURN, COPY OF BALANCE SHEET AND COPY OF RATION CARD DURING THE COURSE OF ASSESS MENT PROCEEDINGS, WHICH WAS ALSO FILED BEFORE THE LEARNED CIT(A). THE AS SESSEE HAS DISCHARGED HIS ONUS AS ENVISAGED IN SECTION 68 OF T HE ACT. HE FURTHER RELIED UPON THE DECISION IN THE CASES OF CIT VS. ARU N KUMAR KOTHARI, (2012) 254 CTR (RAJ.) 648, KANCHAN SINGH VS. CIT (200 9) 221 CTR (ALL) 456 AND CIT VS. DR. KODELA SIVA PRASAD RAO (2013) 2 63 CTR (AP) 703 AND PRAYED TO DELETE THE ADDITION CONFIRMED BY THE LEARNED CIT(A). 6. AT THE OUTSET, THE LEARNED D.R. VEHEMENTLY SUPPO RTED THE ORDER OF THE LEARNED CIT(A) AND ARGUED THAT THESE GIFTS ARE A RRANGED GIFTS. THE DONORS HAD NOT BEEN PRODUCED BEFORE THE ASSESSING O FFICER FOR VERIFICATION. EVEN ALL EVIDENCES AS PRODUCED BEFORE THE LEARNED CIT(A) HAD NOT PRODUCED BEFORE THE ASSESSING OFFICER. THE L EARNED ASSESSING ITA 335/JP/2012 RAJKUMAR JAIN VS. ITO 7 OFFICER HAD SENT TWO QUERY LETTERS ON GIVEN ADDRESS WHICH WAS RETURNED BACK UNSERVED WITH THE REMARKS THAT NO SUCH PERSON I S LIVING THERE. ACCORDINGLY, IT IS PRAYED TO CONFIRM THE ORDER OF T HE LEARNED CIT(A). 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE AS SESSEE IS RESIDENT OF AJMER AND GIFTS WERE GIVEN BY THE DELHI PARTIES. TWO Q UERY LETTERS ISSUED BY THE ASSESSING OFFICER WAS RETURNED BACK UNSERVED WITH REMARK NO SUCH PERSON IS FOUND ON GIVEN ADDRESS. FURTHER COPY OF RETURN SHOWS THAT BOTH THE DONORS HAVE MEAGRE INCOME AND THERE IS NO CASH BALANCE ON CLOSING DATE. THEY HAVE TAKEN LOANS FROM THE OTHER P ARTIES EVEN THEY ARE GIFTING 2.50 LACS EACH TO THE ASSESSEE, WHICH IS NOT POSSIBLE IN THE PRACTICAL LIFE OF THE HUMAN BEING I.E. THEY MADE GI FTS BUT NOT PAYING THEIR OUTSTANDING. THE CASE LAW CITED BY THE ASSESSEE DOES NOT HELP TO THE ASSESSEE AS IN CASE OF CIT VS. ARUN KUMAR KOTHARI (S UPRA), THE IDENTITY AND CREDITWORTHINESS HAD BEEN PROVED. IN CASE OF KAN CHAN SINGH VS. CIT (SUPRA), THE DONOR WAS NRI AND GIFT WAS IN FORM OF B ONDS, WHICH WERE PURCHASED IN THE YEAR 1998 AGAINST US DOLLARS. IN C ASE OF CIT VS. DR. KODELA SIVA PRASAD RAO (SUPRA), IT WAS A CONFIRMATIO N LETTER FROM THE NRI DONOR, WHO WAS THE PERSON OF MEANS AND ADMITTING GIFT . THE COPY OF RETURN FILED IN USA ALSO PRODUCED BEFORE THE ASSESS ING OFFICER EVEN THE ITA 335/JP/2012 RAJKUMAR JAIN VS. ITO 8 LEARNED ASSESSING OFFICER HAD NOT VERIFIED FROM THE DONOR WHEN HE WAS IN INDIA. THE LEARNED CIT(A) HAS GIVEN SPECIFIC FINDING S ON ISSUE WISE, WHICH HAS NOT BEEN CONTROVERTED BY THE AR OF THE ASSESSEE , THEREFORE, WE CONFIRM THE ORDER OF THE LEARNED CIT(A). 8. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 05/12/2014. SD/- SD/- (R.P. TOLANI) (T.R. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER JAIPUR, DATED : 05 TH DECEMBER, 2014 * RANJAN COPY FORWARDED TO :- 1. SHRI RAJ KUMAR JAIN, MADANGANJ, KISHANGARH, AJME R. 2. THE ITO, WARD, KISHANGARH. 3. THE CIT (A) 4. THE CIT 5. THE D/R GUARD FILE (I.T.A. NO. 335/JP/2012) BY ORDER, AR ITAT JAIPUR.