Shri Jiteshkumar D. Bharad, RAJKOT-GUJARAT V. The Income Tax Officer, Ward-4(1), RAJKOT-GUJARAT

ITA 338/RJT/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 85413 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 17-09-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AVINESH KUMAR
• Keywords: Unexplained investment; Gift; Opportunity of being heard
• Section: 69

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL AT RAJKOT . . , , , BEFORE S/SHRI G.C. GUPTA, VICE - PRESIDENT AND ANIL CHATURVEDI, ACCOUNTANT MEMBER) ITA NO . 338 / RJT /20 1 3 [ASSTT.YEAR : 200 9 - 20 1 0 ] SHRI JITESHKUMAR D. BHARAD C/O. KALPESH S. DOSHI & CO. CHARTERED ACCOUNTANTS 411, COSMO COMPLEX MAHILA COLLEGE CIRCLE RAJKOT 360 001. / VS. ITO, WARD - 4(1) RAJKOT. ( / APPELLANT) ( / RESPONDENT) / ASSESSEE BY : SHRI KALPESH DOSHI, CA / REVENUE BY : SHRI AVINESH KUMAR, DR / DATE OF HEARING : 24 TH NOVEMBER, 2014 / DATE OF PRONOUNCEMENT : 25 TH NOVEMBER, 2014 / O R D E R PER G.C. GUPTA, VICE - PRESIDENT : TH IS APPEAL BY THE ASSESSEE FOR THE ASSTT.YEAR 2009 - 10 IS DIRECTED AGAINST THE ORDER OF THE CIT(A). 2. THE GROUNDS OF THE APPEAL OF THE ASSESSEE ARE AS UNDER: 1. THAT THE LD.AO AND CIT(A) HAVE WRONGLY MADE/CONFIRMED THE ADDITIONS WITHOUT AFFORDING PROPER OPPORTUNITY OF BEING HEARD. ITA NO. 338 / RJT /20 1 3 - 2 - 2. THAT THE LD.AO AND THE CIT(A) HAVE WRONGLY MADE/CONFIRMED ADDITIONS WITHOUT APPRECIATING EVIDENCES SUBMITTED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 3. THAT THE LD.CIT(A) HAS WRONGLY CONFIRMED ADDITION OF RS.17,06,230/ - ON ACCOUNT OF CASH DEPOSITS IN BANK ACCOUNT U/S.69 OF THE IT ACT. 4. THAT, THE FINDINGS OF THE LD.CIT(A) ARE UNJUSTIFIED AND REQUIRED TO BE DELETED. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS PROVED THE SOURCE OF DEPOSITS IN ITS BANK ACCOUNT AND HAS GONE A STEP FURTHER BY PROVING THE SOURCE OF SOURCE OF GIFTS RECEIVED BY THE ASSESSEE. HE SUBMITTED THAT THE ASSESSEE, WHO IS R ETIRED GOVERNMENT OFFICIAL AND HAS INVESTED HIS ACCUMULATION OF SAVINGS TO START A RETAIL BUSINESS. THE LEARNED DR HAS RELIED ON THE ORDERS OF THE AO AND THE CIT(A). 4. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE AO AND THE CIT(A) , AND ALSO THE COPIES OF VARIOUS DETAILS AND DOCUMENTS FILED BY THE ASSESSEE IN COMPILATION BEFORE US. WE FIND THAT THE ADDITION WAS MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT UNDER SECTION 69 OF THE ACT OF DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE. WE FIND THAT THE ASSESSEE HAS CLAIMED THE OPENING CASH IN HAND AT RS.1,47,000/ - OUT OF HIS PAST ACCUMULATION OF SAVINGS, AND CONSIDERING THE AGE OF THE ASSESSEE, AND THE FACTS OF THE CASE, WE ARE OF THE VIEW T HAT THE OPENING CASH BALANCE SHOWN AT RS.1,47,000/ - COULD NOT BE SAID TO BE EXCESSIVE, AND ACCORDINGLY, THE ADDITION THEREOF IS DELETED. 5. NEXT ADDITION IS REGARDING GIFT RECEIVED FROM SPOUSE AMOUNTING TO RS.7,21,000/ - . THE ASSESSEE HAS CLAIMED THAT WIF E OF THE ASSESSEE HAS GIFTED THIS AMOUNT TO THE ASSESSEE, AND IN TURN, THE WIFE OF THE ASSESSEE HAS RECEIVED THE GIFT FROM HER UNCLE, SHRI LALJIBHAI MANDIR, WHO HAPPENS TO BE ITA NO. 338 / RJT /20 1 3 - 3 - AN AGRICULTURIST. COPIES OF AFFIDAVITS OF WIFE OF THE ASSESSEE AND SHRI LALJIBH AI AND PHOTO COPIES OF DOCUMENTARY EVIDENCES OF LAND HOLDINGS OF LALJIBHAI WERE FURNISHED BEFORE THE AO . WE FIND THAT THE CIT(A) HAS PASSED A WELL REASONED SPEAKING ORDER ON THIS ISSUE WHILE HOLDING THAT THE ASSESSEE COULD NOT PROVE THE SOURCE OF DEPOSITS IN THE BANK ACCOUNT BY WAY OF GIFTS RECEIVED FROM SPOUSE, WHO IN TURN, HAS RECEIVED THE GIFT FROM HER UNCLE. WE FIND THAT THERE WAS NO OCCASION FOR THE U NCLE OF THE WIFE OF THE ASSESSEE TO HAVE THE GIFTED THE AMOUNT TO HIS NIECE. WE FIND THAT THE CIT(A) HAS GIVEN A FINDING THAT THE EXISTENCE OF CA S H DEPOSITS IN THE BANK ACCOUNT WAS DISCOVERED BY THE DEPARTMENT ONLY AFTER THE CASE WAS TAKEN UP FOR SCRUTINY. THE CIT(A) HAS OBSERVED THAT FILING OF THE AFFIDAVITS BY THE WIFE OF THE ASSESSEE AND HER UNCLE IS AN AFTER - THOUGHT TO EXPLAIN THE SOURCE OF CASH DEPOSITS TO THE TUNE OF RS.7,21,000/ - . DEPONENTS WERE NOT PRODUCED BEFORE THE AO FOR CROSS - EXAMINATION. THE CLAIM OF THE ASSESSEE THAT THE WIFE OF THE ASSESSEE RECEIVED CASH GIFTS FROM HER UNCLE ON SIX DIFF ERENT OCCASIONS DURING THE YEAR UNDER CONSIDERATIONS, DOES NOT SEEMS TO BE CONVINCING. IN OUR CONSIDERED VIEW, THE PREPONDERANCE OF PROBABILITIES IS AGAINST THE ASSESSEE. THE CIT(A) HAS ALSO NOT ACCEPTED THAT SHRI LALJIBHAI EARNED AGRICULTURE INCOME OF R S.7,50,000/ - PER ANNUM AND AVERAGE NET INCOME IS TAKEN AT RS.20,000/ - PER ACRE, THEN INCOME COMES TO RS.1,60,000/ - FOR THE ENTIRE YEAR AND AFTER DEDUCTING THE HOUSEHOLD EXPENSES, HARDLY ANY SURPLUS INCOME WAS LEFT TO MAKE SUCH CASH GIFTS TO HIS NIECE. I N THESE FACTS OF THE CASE, ALTHOUGH, THERE IS NO CONCRETE EVIDENCE EITHER WITH THE ASSESSEE OR WITH THE DEPARTMENT, WE , ON THE BASIS OF PREPONDERANCE OF PROBABILITY, HOLD THA T THE ASSESSEE COULD NOT PROVE THE SOURCE OF RS.7,21,000/ - CLAIMED TO HAVE RECEIVE D FROM THE SPOUSE, AND ACCORDINGLY , ADDITION TO THAT EXTENT IS CONFIRMED. ITA NO. 338 / RJT /20 1 3 - 4 - 6 . REGARDING NEXT ADDITION OF RS.7,89,230/ - , THE ASSESSEE CLAIMED THAT IT REPRESENTS THE SALE PROCEEDS IN THE RETAIL BUSINESS OF THE ASSESSEE AND HAS FILED THE DETAILS OF SALE S OF R ETAIL BUSINESS IN COMPILATION FILED BEFORE US. WE FIND THAT THE ASSESSEE HAS CLAIMED THE BENEFIT OF ENTIRE SALES FIGURE TO EXPLAIN THE CASH DEPOSITS IN BANK ACCOUNT OF THE ASSESSEE, AND HAS NOT DEDUCTED THE PURCHASE PRICE OF THE COMMODITIES ETC. OUT OF TH E SALE PROCEEDS. THE ASSESSEE, AT THE MOST, SHOULD HAVE CLAIMED THE PROFIT ELEMENTS OUT OF THE RETAI L SALE CLAIMED BY IT, AND WE ACCORDINGLY, ALLOW BENEFIT OF RS.1,50,000/ - ON ACCOUNT OF ESTIMATED PROFIT OUT OF THE RETAIL SALES CLAIMED BY THE ASSESSEE, AN D THE BALANCE ADDITION ON THIS COUNT OF RS.6,39,230/ - IS CONFIRMED. 7 . THIS LEAVES US TO THE ADDITION OF RS.49,000/ - ON ACCOUNT OF CASH DEPOSITS IN ANOTHER SAHAKARI BANK ON ACCOUNT BY THE ASSESSE E , FOR WHICH THE ASSESSEE HAS TRIED TO EXPLAIN AS HIS ACCUMU LATED ACCUMULATION. CONSIDERING TH E SMALLNESS OF THE AMOUNT, AND THE AGE OF THE ASSESSEE, AND ALSO THAT HE IS A RETIRED GOVERNMENT OFFICIAL, WE DELETE THIS ADDITION OF RS.49,000/ - ON ACCOUNT OF DEPOSIT IN SAHAKARI BANK BY THE ASSESSEE, AND THE GROUNDS OF THE APPEAL OF THE ASSESSEE ARE PARTLY ALLOWED. 8 . IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONED HEREINABOVE. SD/ - SD/ - ( / ANIL CHATURVEDI) /ACCOUNTANT MEMBER ( . . /G.C. GUPTA) /VICE - PRESIDENT ITA NO. 338 / RJT /20 1 3 - 5 - C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER AR, ITAT, RAJKOT