ITO 24(3)(4), MUMBAI V. RENU RANJIT SINGH, MUMBAI

ITA 3515/MUM/2010

• Counselvise Citation: 351519914 RSA 2010
• Duration Of Justice: 3 year(s) 10 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 01-08-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 05-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B P K
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D , MUMBAI [ , [ , BEFORE SHRI RAJENDRA , ACCOUNTANT MEMBER AND SHRI SANJAY GARG , JUDIC IAL MEMBER ./ ITA NO. 3515/ M/ 2010 ( [ [ / ASSESSMENT YEAR: 2006 - 07 ) SMT. RENU RANJIT SINGH, A/3, GAGAN ROW HOUSE, SAI ROAD, A.K. VAIDHYA MARG, GOKULDHAM, GOREGAON (EAST) MUMBAI 400 063 PAN: ALKPS3434L / VS. ITO - 24(3)(4), ROOM N O.706, C - 11, 7 TH FLOOR, B.K.C., BANDRA (E) MUMBAI 51 ( / APPELLANT) ( / RESPONDENT) ASSESSEE BY : SHRI VIPUL JOSHI & SHRI NISHIT GA NDHI REVENUE BY : SHRI B.P.K. PANDA, D.R. / DATE OF HEARING : 26.02.2014 / DATE OF PRONOUNCEMENT : 14.03.2014 / O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS ) [(HEREINAFTER REFERRED TO AS CIT(A)] DATED 15.03.10. THE ONLY ISSUE TAKEN BY THE REVENUE IN ITS SOLE GROUND OF APPEAL IS RELATING TO THE DELETION OF THE ADDITION OF RS.19,03,813/ - MADE BY THE ASSESSING OFFICER (HEREINAFTER REFERRED TO AS AO) UNDER SECTI ON 68 OF THE INCOME TAX ACT (HEREINAFTER REFERRED TO AS THE ACT) ON ACCOUNT OF UNEXPLAINED CASH CREDIT. ITA NO . 3515/M/2010 SMT. RENU RANJIT SINGH 2 2. DURING THE ASSESSMENT PROCEEDINGS THE AO NOTICED THAT THE ASSESSEE HAD SHOWN LONG TERM CAPITAL GAINS OF RS.17 , 42 , 013/ - ON ACCOUNT OF SALE OF SHARES OF MARCHON TEXTILES PVT. LTD. THE SAID INCOME HAD BEEN CLAIMED EXEMPT BY THE ASSESSEE UNDER SECTION 54EC OF THE ACT. THE AO CALLED FOR THE NECESSARY DETAILS FROM THE ASSESSEE RELATING TO THE SHARE TRANSACTIONS IN QUESTION AND THE WORKING OF CAPITAL GAIN ETC. THE ASSESSEE SUBMITTED BEFORE HIM THAT THE SHARES WERE RECEIVED BY HER BY WAY OF A WILL OF THE FATHER OF THE ASSESSEE. THE SAID SHARES, FOR THE SAKE OF CONVENIENCE, WERE TRANSFERRED IN THE NAMES OF THE BROTHERS OF THE ASSESSEE, WHICH WERE THEREAFTER SOLD BY THEM. THE 1/6 TH SHARE OUT OF THE PROCEEDS OF THE SALE WAS PAID BY THE BROTHERS OF THE ASSESSEE TO HER BY WAY OF CHEQUES. HOWEVER, THE AO OBSERVED THAT THE ASSESSEE HAD NOT EXPLAINED AS TO WHOM THE SHARES WERE SOLD BY THE ASSESSEE OR HER BROTHERS AND THAT THE SHARES WERE NEVER TRANSFERRED IN THE NAME OF THE ASSESSEE. HE THEREFORE TREATED THE RECEIPTS AS UNEXPLAINED CASH CREDIT AND ADDED BACK THE SAME INTO THE INCOME OF THE ASSESSEE. 3. THE LD. CIT(A) VIDE IMPUGNED ORDER OBSERVED THAT AS PER TH E WILL OF THE FATHER OF THE ASSESSEE, THE ASSESSEE WAS ENTITLED TO 1/6 TH SHARE IN THE PROPERTY OF THE FATHER INCLUDING THE SHARES IN QUESTION. THE SAID SHARES WERE SOLD BY THE BROTHERS OF THE ASSESSEE AND 1/6 TH OF THE SALE PROCEEDS WAS TRANSFERRED BY THEM TO THE ASSESSEE THROUGH CHEQUES. THE ASSESSEE HAD FILED THE COPY OF BANK STATEMENT AS WELL AS CONFIRMATIONS IN SUPPORT OF THE SAID RECEIPT. HE THEREFORE HELD THAT THE RECEIPTS WERE DULY EXPLAINED BY THE ASSESSEE AND THE ADDITION MADE BY THE AO AS UNEXPL AINED CASH WAS NOT JUSTIFIED AND HE ACCORDINGLY DELETED THE SAME. THE REVENUE IS THUS IN APPEAL BEFORE US. 4. WE HAVE HEARD THE LD. REPRESENTATIVES OF BOTH THE PARTIES AND ALSO HAVE GONE THROUGH THE RECORDS. THE AO HAS MADE THE ADDITION TREATING THE RE CEIPTS AS UNEXPLAINED CASH CREDITS UNDER SECTION 68 OF THE ACT. THE ADDITIONS UNDER ITA NO . 3515/M/2010 SMT. RENU RANJIT SINGH 3 SECTION 68 OF THE ACT CAN BE MADE BY THE AO WHERE THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE OF THE RECEIPTS OR THE EXPLANATION OFFERED BY HER IS NOT I N THE OPINION OF THE AO SATISFACTORILY. HOWEVER, IN THE CASE IN HAND , THE ASSESSEE HAS NOT ONLY OFFERED THE EXPLANATION BUT HAS ALSO PROVED THE SOURCE OF THE RECEIPTS. THE MONEY IN QUESTION HAS BEEN CREDITED INTO THE ACCOUNT OF THE ASSESSEE THROUGH BANKI NG CHANNEL BY WAY OF CHEQUES BY HER BROTHERS. THE ASSESSEE HAS ALSO EXPLAINED THAT THE SAID MONEY WAS PAID TO HER BY HER BROTHERS IN LIEU OF HER 1/6 TH SHARE IN THE SHARES OF THE COMPANY MARCHON TEXTILES PVT. LTD. AS PER THE WILL OF HER FATHER. THOUGH THE ASSESSEE MAY NOT BE ABLE TO PRODUCE THE DETAILS OF THE TRANSACTIONS RELATING TO THE SALE OF THE SHARES BY HER BROTHERS BUT SHE HAS SATISFACTORILY EXPLAINED THE SOURCE OF THE RECEIPTS. THE RECEIPTS IN THE HANDS OF ASSESSEE CANNOT , BY ANY STRETCH OF IMAGIN ATION , BE SAID TO BE UNEXPLAINED CASH CREDITS. IN VIEW OF OUR ABOVE OBSERVATIONS, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) AND THE SAME IS HEREBY UPHELD. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS HEREBY DISMISSED. ORDER PRONO UNCED IN THE OPEN COURT ON 14.03. 201 4 . 14.03.2014 SD/ - SD/ - ( / RAJENDRA ) ( [ / SANJAY GARG) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / MUMBAI ; / DATED 14.03. 2014 * KISHORE / COPY OF THE ORDER FORWARDED TO : 1 . / THE APPELLANT 2. / THE RESPONDENT. ITA NO . 3515/M/2010 SMT. RENU RANJIT SINGH 4 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. [ / GUARD FILE. / B Y ORDER, //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI