ABDUL BUBIN, Jaipur V. ITO, Jaipur

ITA 354/JPR/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7548 (ITAT-JAIPUR)
• Duration Of Justice: 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 19-12-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 20-04-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D K MEENA
• Keywords: Gift; Principle of natural justice; Source of fund
• Section: 133(6); 69

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH A JAIPUR BEFORE SH. R.K. GUPTA, JUDICIAL MEMBER AND SH. N.L. KALRA, ACCOUNTANT MEMBER I.T.A. NO.354 /JP/2011 ASSESSMENT YEAR : 2004-05 PAN:AARPA5206F SH. ABDUL MUBIN VS. INCOME TAX OFFICER, JAIPUR. WARD 5(4, JAIPUR. (APPELLANT) (RESPONDENT) APPELLANT BY:ADJOURNMENT APPLICATION RESPONDENT BY :SH. D.K. MEENA, DR DATE OF HEARING :19.01.2012 DATE OF PRONOUNCEMENT:25.01.2012 ORDER PER N.L. KALRA, AM THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER OF THE CIT(A)-II, JAIPUR, DATED 25.02.2011 FOR THE ASSESSMENT YEAR 2 004-05. 2. THE APPEAL WAS FIXED FOR HEARING ON 17 TH AUGUST, 2011, 3 RD OCTOBER, 2011, 2 ND NOV., 201, 19 TH DEC., 2011 AND 19 TH JANUARY, 2012. IT IS NOTICED THAT THE ASSESSEE HAS SOUGHT ADJOURNEMNT ON THE DATES WHEN THE APPEAL WAS FIXED. THE REVENUE, 2 THEREFORE, REQUESTED THAT ADJOURNEMNT APPLICABLE FI LED BY THE ASSESSEE SHOULD NOT BE ACCEPTED. 2.1. AFTER CONSIDERING THE OBJECTION OF THE REVENUE AND LOOKING TO THE FACT THAT THE ASSESSEE HAS ALREADY BEEN ALLOWED ADJOURNEMNTS EARLIER ON FOUR DIFFERENT OCCASIONS, THEREFORE, THE ADJOURNMENT APPLICATION WAS REJECTED. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES, THE LD. CI T(A)-II, JAIPUR HAS ERRED: 1. IN CONFIRMING THE ADDITION OF RS.4,75,000/- MADE BY AO U/S 69 OF THE I.T. ACT. 2. IN HOLDNG THAT ONUS LAID UPON THE APPELLANT/ASSESS EEWAS NOT DISCHARGED ESPECIALLY WHEN APPELLANT/ASSESSEE HAS SUBMITTED (I ) BILL OF ORNAMENTS SOLD BY HIS WIFE (II) CONFIRMATION OF PURCHASER (II I) GIFT DEED IN SUPPOORT OF GIFT MADE BY HIS WIFE BEFORE THE LD. AO AND LD. CIT(A). 3. THE LD. CIT(A) EXERCISED HIS POWERS IN EXCESS & AL TERNATIVELY THE APPELLANT/ASSESSEE WAS PREVENTED BY SUFFICIENT CAUS E FROM NOT SUBMITTING HIS REPLY TO THE SHOW CAUSE NOTICE LETTER ISSUED BY CIT(A) & 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR DELETE ANY OF THE GROUNDS OF APPEAL BEFORE HEARING. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTICED THAT THE ASSESSEE HAS PURCHASED A HOUSE FOR RS.4,75,000/-. T HE ASSESSEE WAS, THEREFORE, ASKED TO EXPLAIN THE SOURCE OF FUNDS UTILISED FOR T HE PURCHASE OF THE HOUSE. THE ASSESSEE FILED AN AFFIDAVIT DATED 3 RD DEC.,2007 IN WHICH IT WAS STATED THAT HE HAS SOLD THE ORNAMENTS OF HIS WIFE FOR RS.4,76,250/- TO SH. SUBHASH JOHRI PROP. OF M/S. SUBHASH JEWELLERS, KAROL BAGH, NEW DELHI. THE ASSES SEE WAS ASKED TO PRODUCE SH. SUBHASH JEWELLERS SO THAT PURCHASE BILL MAY BE VERI FIED. THE ASSESSEE SHOWED HIS 3 INABILITY TO PRODUCE SH. SUBHASH JOHRI. THE AO MADE INQUIRIES AND NOTICED THAT THE ADDRESS OF SUBHASH JEWELLERS, AS GIVEN BY THE ASSES SEE WAS WRONG. ACCORDINGLY, THE AO MADE AN ADDITION OF RS. 4,75,000/-. 4. WHEN THE ASSESSEE FILED THE APPEAL BEFORE THE LD . CIT(A), THE LD. CIT(A) MADE INQUIRIES WITH THE ALLEGED BUYER AT NEW DELHI. THE RESULTS OF THE INQUIRY HAVE BEEN MENTIONED BY THE LD. CIT(A) IN HIS ORDER AS UN DER: A. THE INQUIRIES WERE CONDUCTED THROUGH INSPECTOR SH. SURJEET SINGH TANEJA. IN THE CONFIRMATION FURNISHED BY THE ASSESS EE.M/S. SUBHASH JEWELLERS WAS ALLEGEDLY OPERATING FROM GURUDWARA RO AD, NEAR OODLAND SHOP, KAROL BAGH, DELHI. IT WAS FOUND BY TH E INSPECTOR THAT THERE WAS NO CONCERN BY THE NAME OF M/S. SUBHASH JE WELLERS AT THE GIVEN ADDRESS. THERE WAS ONE PROPRIETORY CONCERN BY THE NAME OF M/S. SUBHASH JEWELLERS WHOSE PROPRIETOR WAS ONE SH. SUBH ASH ASHIT AND HE HAD CLOSED HIS BUINSESS IN MAY, 2001 WHEREAS THE WIFE OF THE ASSESSEE I.E. SMT. BISMILLA BEGUM HAD ALLEGEDLY SOL D JEWELLERY ON 25.04.2003 I.E. 2 YEARS AFTER CLOSURE OF BUSINESS B Y SH. SUBHASH ASHIT. B. IN THE ENTIRE PAN DATA AT NATIONAL COMPUTER CENT RE, THERE WAS ONLY ONE FIRM BY THE NAME OF M/S. SUBHASH JEWELLERS AT D ELHI AND ITS PAN WAS AATFS7114C. ITS ADDRESS WAS SHOWN AS NO.1, MAIN MARKET, WEST PATEL NAGAR, NEW DELHI-11008. THE INSPECTOR AL SO VISITED THE PREMISES OF SAID CONCERN M./S SUBHASH CHAND PROPRIE TOR OF M/S. SUBHASH JEWELLERS HAS CATEGORICALLY DENIED TO HAVE PURCHASED ANY JEWELLERY FROM SMT. BISMILLAH BEGUM. C. NOTICE U/S 133(6) WAS ALSO ISSUED TO SH. SUBHASH GUPTA S/O SH. RAJKUMAR GUPTA, J-7 NAVEEN SHAHDARA NEW DELHI 11005 1 BY RPAD WHOSE PAN WAS MENTIONED IN THE CONFIRMATION FILED BY THE ASSESSEE. HOWEVER, IT WAS RETURNED UNSERVED BY THE POSTAL DEP ARTMENT. 4.2. THE COPY OF INSPECTORS REPORT, OTICES U/S 133(6) O F THE ACT, STATEMENT OF SH. SUBHASH CHANDER AND PAN QUERY LETTERS WERE PROVIDED TO THE 4 ASSESSEE FOR HIS EXPLANATION VIDE MY SHOW CAUSE LET TER DATED 22.11.2010. THE HEARING WAS FIXED FOR 30.11.2010. HOWEVER, THERE WAS NO COMPLIANCE BY THE APPELLANT. FOLLOWING THE P RINCIPLES OF NATURAL JUSTICE, THE APPELLANT WAS PROVIDED ANOTHER OPPORTUNITY VIDE MY LETTER DATED 7.2.2011. THE HEARING WAS FIXED FOR 14.2.11. ON THE SAID DATE, THE COUNSEL OF THE APPELLANT I.E. SH. B. L. GUPTA, APPEARED AND REQUESTED FOR ADJOURNMENT UP TO 18.2.11. ON THE ADJOURNED DATE OF HEARING, THE COUNSEL OF THE ASSESSEE AGAIAN REQUEST ED FOR ADJOURNMENT UP TO 25.2.11. THE HEARING WAS ADJOURNED TO 25.2.11 AT THE REQUEST OF THE ASSESSEE. HOWEVER, THERE WAS AGAIN NO COMPLIANC E BY THE APPELLANT AND THE MATTER WAS ADJOURNED TWICE, I AM CONSTRAINED TO DECIDE THIS APPEAL ON THE BASIS OF INQUIRIES CONDUC TED BY THE UNDERSIGNED AND MATERIAL AVAILABLE ON RECORD. ON T HE BASIS OF INSPECTORS REPORT, THE ALLEGED CONFIRMATION OF M/S . SUBHASH JEWELLERS FURNISHED BY THE ASSESSEE AND TRANSACTION OF SALE O F JEWELLERY DO NOT APPEAR TO BE GENUINE. IN THE ENTIRE COMPUTER DATA OF PAN PERTAINING TO DELHI REGIO, THERE WAS ONLY ONE CONCERN BY THE N AME OF M/S. SUBHASH JEWLLERS WHOSE PROPRIETOR SH. SUBHASH CHAND ER HAS ALREADY DENIED TO HAVE PURCHASED ANY JEWELLERY FROM WIFE OF THE ASSESSEE I.E. SMT. BISMILLAH BEGUM. IN VIEW OF ABOVE FACTS, THE C LAIM OF SALE OF JEWELLERY BY SMT. BISMILLAH BEGUM ON 25.04.2003 REM AINS UNSUBSTANTIATED. 5. THE APPELLANT HAS ALSO FAILED TO CONNECT THE MIS SING LINKS IN THE UNBELIEVABLE STORY CONCOCTED BY HIM. THERE IS NO OS TENSIBLE REASON AS TO WHY THE WIFE OF THE APPELLANT HAD CHOSEN TO SELL HER JEWELLERY AT DELHI MORE PARTICULARLY IN CASH. IT WAS MORE HAZARD OUS TO BRING SUBSTANTIAL AMOUNT OF CASH FROM DELHI TO JAIPUR. EV EN THE SALE OF JEWELLERY AT JAIPUR WOULD HAVE BEEN FETCHED THE SAM E AMOUNT WITH SOME MINOR VARIATION BECAUSE NOW DAYS THE PRICES OF GOLD ARE DETERMINED WITH REFERENCE TO INTERNATIONAL MARKET A ND DOMESTIC MARKET HAS INSIGNIFICANT ROLE TO PLAY. SUBSEQUENTLY , THE IMPUGNED CASH WAS ALLEGEDLY GIFTED TO THE APPELLANT ON 2.5.2 003 BUT ALLEGEDLY NO GIFT DEED WAS MADE. NOW SUDDENLY AFTER BEING PROBED BY THE DEPARTMENT, THE APPELLANT REALIZED THE EXIGENCY AND NECESSITY OF GIFT DEED AFTER LAPSE OF ALMOST 4 YEARS. THE GIFT DEED ALLEGEDLY PREPARED BY THE APPELLANT HAS BEEN NOTARIZED ON 7.11.2007. W HEN THE ALLEGED SALE OF JEWELLERY REMAINS UNSUBSTANTIATED, THE TRAN SFER OF IMPUGNED CASH AND CONSEQUENTLLY THE GIFT DEED ALSO LOSE THEI R EVIDENTIARY VALUE IN THE EYES OF LAW. THERE IS NO PLAUSIBLE EXPLANATI ON AS TO WHY THE 5 WIFE OF THE APPELLANT HAD CHOSEN TO KEEP THE IMPUGN ED CASH WITH HER ALLEGEDLY RECEIVED ON 25.4.2003 TILL 20.05.2003 WH EN SHE SUDDENLY DECIDED TO GIFT THE CASH TO HER HUSBAND JUST 5 DAYS BEFORE HE PURCHASED THE PROPERTY AND WHY THE SAME WAS NOT DEPOSITED IN THE BANK. 5. THE LD. CIT(A) WAS, THEREFORE, OF THE OPI NION THAT THE ASSESSEE HAS NOT BEEN ABLE TO PRODUCE ANY COGENT EVIDENCE IN RES PECT OF SOURCE OF THE FUNDS UTILISED FOR ACQUIRING THE HOUSE. NO DOCUMENTARY EV IDENCE OF TRIP TO DELHI HAS BEEN FURNISHED. IT IS NOT BELIEVABLE AS TO WHY THE JEWE LLERY HAS BEEN SOLD AT DELHI, WHILE ASSESSEE IS RESIDING AT JAIPUR. THE LD. CIT(A) HAS REFERRED TO THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF H.N. LAKHA NI VS. CIT 147 ITR 552. AFTER DISCUSSING THE ISSUE IN DETAIL, THE LD. CIT(A ) CONFIRMED THE ADDITION. 6. WE HAVE HEARD BOTH THE PARTIES. FROM THE INQUIRIES MADE BY THE LD. CIT(A), IT IS CLEAR THAT THE ASSESSEE HAS NOT ACTUA LLY SOLD ANY GOLD JEWELLERY AT DELHI. THE ONUS WAS ON THE ASSESSEE TO ESTABLISH TH E SOURCE OF FUNDS. ONE HAS TO CONSIDER THE HUMAN PROBABILITIES WHILE DECIDING THE ISSUE. THE HONBLE APEX COURT, IN THE FOLLOWING CASES HAS HELD THAT TEST OF HUMAN PROBABILITIES COULD BE APPLIED TO EVALUATE EVIDENCES. NO PRUDENT PERSON WI LL LIKE TO GO TO DELHI FOR SELLING THE GOLD ORNAMENTS, WHEN THESE COULD HAVE BEEN EASI LY SOLD AT JAIPUR. 6.1. THE HONBLE APEX COURT IN THE CASE OF SREELEKHA BEN ERJEE & OTHERS V CIT 49 ITR 112 HAD AN OCCASION TO CONSIDER AS TO WHETHER A N ENTRY ON CONVERSION OF HIGH 6 DENOMINATION NOTES CAN BE CONSIDERED AN INCOME AFTE R CONSIDERING THE EXPLANATION OF THE ASSESSEE. IT WAS NECESSARY FOR THE ASSESSEE TO ESTABLISH, IF ASKED, TO EXPLAIN THE SOURCE OF MONEY AND TO PROVE THAT IT DOES NOT BEAR THE NATURE OF INCOME. THE DEPARTMENT AT THIS STAGE IS NOT REQUIRED TO PROVE ANYTHING. IT CAN ASK THE ASSESSEE TO BRING ANY BOOKS OF ACCO UNT OR OTHER DOCUMENTS OR EVIDENCE PERTINENT TO THE EXPLANATION, IF ONE IS FU RNISHED AND EXAMINE THE EVIDENCE AND EXPLANATION. IN CASE OF HIGH DENOMINA TION NOTES, WHERE THE BUSINESS AND THE STATE OF ACCOUNTS AND DEALINGS OF THE ASSESSEE JUSTIFY A REASONABLE INFERENCE THAT HE MIGHT HAVE FOR CONVENI ENCE KEPT THE WHOLE OR A PART OF A PARTICULAR SUM OF HIGH DENOMATION NOTES, THE A SSESSEE PRIMA-FACIE DISCHARGE HIS INITIAL BURDEN WHEN HE PROVES THE BALANCE AND T HAT IT MIGHT REASONABLE HAVE BEEN KEPT IN HIGH DENOMATION NOTES. BEFORE THE DEP ARTMENT REJECT SUCH EVIDENCE, IT MUST EITHER SHOW AN INHERENT WEAKNESS IN THE EXPLANATION OR REBUT IT BY PUTTING TO ASSESSEE SOME INFORMATION OR EVIDENCE WHICH IT HAS IN ITS POSSESSION. IN THE INSTANT CASE, INFORMATION IS TH ERE IN THE POSSESSION OF DEPARTMENT AND ON THAT BASIS, THE ASESSEE WAS REQUI RED TO PROVE THE IDENTITY OF THE PARTY AND GENUINENESS OF TRANSACTION. CERTAIN PURCHASES WERE ON CREDIT AND AMOUNT WERE STILL PAYABLE AT THE END OF YEAR. THE EVIDENCE IN RESPECT OF IDENTITY OF PERSON RESPONSIBLE FOR ISSUING PURCHASE BILL IS WITHIN THE KNOWLEDGE OF 7 ASSESSEE OR ITS EMPLOYEES AS SUBSEQUENTLY THE PAYME NTS MUST HAVE BEEN MADE AND IN CASE SUCH INFORMATION IS NOT MADE AVAILABLE THEN IT HAS TO BE PRESUMED THAT MAKING AVAILABLE SUCH INFORMATION/EVIDENCE IS GOING TO ADVERSELY AFFECT THE ASSESSEE. 6.2 THE HONBLE APEX COURT IN THE CASE OF CIT V DUR GA PRASAD MORE 82 ITR 540 HAD AN OCCASION TO CONSIDER AS TO WHETHER THE SUM O F RS.2 LAKH IN PURCHASING THE PROPERTY BELONGED TO HIS WIFE AS THE SAME WAS KEPT WITH HIS FATHER IN LAW IN CASH THROUGH NO APPARENT SOURCE OF INCOME OF WIFE OF ASS ESEE WAS THERE. THE HONBLE APEX COURT AT PAGE 545 OBSERVED. NOW COMING TO THE QUESTION OF ONUS, THE LAW DOES NOT PRESCRIBE ANY QUANTITATIVE TEST TO FIND OUT WHETHE R THE ONUS ON A PARTICULAR CASE HAS BEEN DISCHARGED OR NET. I T ALL DEPENDS ON THE FACTS AND CIRCUMSTANCES OF THE EACH CASE. I N SOME CASES, THE ONUS MAY BE HEAVY WHEREAS IN OTHERS, IT MAY BE NOMINAL. THERE IS NOTHING RIGID ABOUT IT. HEREIN THE ASSESSEE WAS RECEIVING SOME INCOME. HE SAYS THAT IT IS NOT HIS INCOME BUT HIS WIFES INCOME. HIS WIFE IS SUPPOSED TO HAVE HAD TWO LAKHS OF RUPEES NEITHER DEPOSITED IN BANKS NOR ADVA NCED TO OTHERS BUT SAFELY KEPT IN HER FATHERS SAFE. ASSES SEE IS UNABLE TO SAY FROM WHAT SOURCE SHE BUILT UP THAT AMOUNT. IT WAS SAID THAT THE SAID AMOUNT WAS JUST LEFT IN THE HANDS OF T HE FATHER IN 8 LAW OF THE ASSESSEE. THE TRIBUNAL DISBELIEVED THE STORY, WHICH IS PRIMA-FACIE A FANTASTIC STORY. IT IS STORY THA T DOES NOT ACCORD WITH HUMAN PROBABILITIES. 6.3 THE HONBLE APEX COURT IN THE CASE OF SUMATI DA YAL V CIT 214 ITR 801 HAD AN OCCASION TO CONSIDER AS TO WHETHER THE SETTLEMEN T COMMISSION HAS RIGHTLY INFERRED THAT AMOUNT SHOWN AS WINNINGS FROM HORSE R ACES IS CONTRIVED AND NOT GENUINE. FOR SUCH PROPOSITION THE SETTLEMENT COMMI SSION NOTICED THAT NO DRAWINGS ARE AVAILABLE EITHER IN THE DAY OF WINNING OR PRECEDING DAYS TO PURCHASE JACKPOT COMBINATION TICKETS. IT WAS NOTICED THAT AS SESSEE WON A NUMBER OF JACKPOT IN THREE OR FOUR REASONS NOT MERELY AT ONE P LACE BUT AT THREE DIFFERENT CENTRES NAMELY MADRAS, BANGALORE AND HYDERABAD AND SUCH WINNINGS ARE PRIMA- FACIE WILL AND CONTRARY TO STATISTICAL THEORIES AND EXPERIENCE OF THE FREQUENCIES AND PROBABILITIES CONSIDERING THE CONCLUSION DRAWN BY SETTLEMENT COMMISSION ON THE BASIS OF FACTS AS ABOVE, THE HONBLE APEX COURT OBSERVED :- IN OUR OPINION THE MAJORITY OPINION AFTER CONSIDERI NG THE SURROUNDING CIRCUMSTANCES AND APPLYING THE TEST OF HUMAN PROBABILITIES HAS RIGHTLY CONCLUDED THAT THE CLAIM ABOUT THE AMOUNT BEING WINNINGS FROM RACES IS NOT GENUINE. IT CAN N OT BE SAID THAT EXPLANATION OFFERED BY THE ASSESSEE IN RESPECT OF T HE SAID AMOUNTS HAS BEEN REJECTED UNREASONABLY AND THAT FINDING THAT THE SAID AMOUNTS ARE INCOME OF THE ASSESSEE FROM OTHER SOURC ES IS NOT BASED AN EVIDENCE. 9 7. IN VIEW OF THE ABOVE FACTUAL AND LEGAL DISCUSSIO NS, WE HOLD THAT THE LD. CIT(A) WAS JUSTIFIED IN CONFIRMING THE ADDITION. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 /01/20 12 SD/- SD/- (R.K. GUPTA) (N.L. KALRA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:25/01/2012 /SKR/ COPY OF THE ORDER IS FORWARDED TO: 1. THE ASSESSEE: ABDUL MUBIN, JAIPUR. 2. THE ITO WARD 5(4), JAIPUR. 3. THE CIT(A), JAIPUR. 4. THE CIT, JAIPUR. 5. THE SR DR, ITAT,JAIPUR. 6. GUARD FILE ITA NO.354/JP/2011