Sh. Amit Aggarwal, New Delhi V. ITO, New Delhi

ITA 3627/DEL/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7491 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 03-08-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 04-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K JAIN
• Assessee Lawyers: SACHIN KUMAR F
• Keywords: Gift
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : SMC-I : NEW DELHI BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER ITA NO.3627/DEL/2015 ASSESSMENT YEAR : 2006-07 AMIT AGGARWAL, 37, BUNGLOW ROAD, KAMLA NAGAR, NEW DELHI PAN: ACJPA0242K VS. ITO, WARD 3 (1), NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SACHIN KUMAR, F.C.A. DEPARTMENT BY : SHRI S.K. JAIN, SR. DR DATE OF HEARING : 03.08.2016 DATE OF PRONOUNCEMENT : 03.08.2016 ORDER THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDER PASSED BY THE CIT(A) ON 27.02.2015 IN RELATION TO THE ASSE SSMENT YEAR 2010-11. 2. THE ASSESSEE HAS FILED REVISED GROUNDS, IN WHI CH THE IMPUGNED ORDER HAS BEEN ASSAILED ONLY ON THE SOLITA RY ISSUE OF SUSTENANCE OF DISALLOWANCE OF RS. 32,33,000/-. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE A.O. GOT A.I.R. INFORMATION ABOUT THE CASH DEPOSIT OF RS. 32 33000/- BY THE ASSESSEE IN HIS SAVING BANK ACCOUNT. THE ASSES SEE WAS CALLED UPON TO EXPLAIN THE SOURCE OF SUCH CASH DEPO SIT. THE ASSESSEE CONTENDED THAT HE RECEIVED GIFT FROM HIS F ATHER. A COPY OF GIFT DEED, AFFIDAVIT AND BANK ACCOUNT OF HI S FATHER WAS SUBMITTED. THE A.O. REQUIRED THE ASSESSEE TO PRODU CE HIS FATHER, WHICH THE ASSESSEE FAILED TO DO. IN THE SU BSEQUENT PROCEEDINGS, THE ASSESSEE SUBMITTED THAT THE SOURCE OF CASH AMOUNTING TO RS. 32,33,000/- WAS OPENING CASH BALAN CE OF RS.7,52,000/- AND WITHDRAWALS FROM THE SAME BANK AC COUNT. THE ASSESSEE FILED ALSO CASH FLOW STATEMENT IN SUPP ORT OF THIS CONTENTION. THE A.O. OBSERVED THAT IT WAS A COMPLE TE U-TURN BY THE ASSESSEE FROM EARLIER EXPLANATION OF THE SOU RCE OF CASH DEPOSITED INTO HIS BANK ACCOUNT, WHERE THE ABOVE CA SH WAS STATED TO HAVE BEEN RECEIVED FROM HIS FATHER AS GIF TS. HE THEREFORE, MADE DISALLOWANCE OF RS.32,33,000/- ON A CCOUNT OF FAILURE OF THE ASSESSEE TO OFFER SOURCE OF CASH AMO UNTING TO RS. 32.33 LAC. THE LD. CIT(A) UPHELD THE ADDITION. 4. AFTER CONSIDERING THE RIVAL SUBMISSION AND PE RUSING THE RELEVANT MATERIAL ON RECORD, IT IS OBSERVED THAT THE A.O. MADE ADDITION OF RS. 32.33 LAC ON THE GROUND THAT : `THE EXPLANATION OFFERED BY THE ASSESSEE FOR THE NATURE AND SOURCE O F CASH AMOUNTING TO RS. 32,33,000/- INTO HIS SAVING BANK A CCOUNT DURING THE RELEVANT PREVIOUS YEAR IS NOT SATISFACTO RY AND THEREFORE A SUM OF RS. 32,33,000/- CREDITED INTO TH E BANK ACCOUNT OF THE ASSESSEE IS ADDED TO THE INCOME OF T HE ASSESSEE U/S 68 OF I. TAX ACT. IT IS THEREFORE, CLEAR THAT THE A.O. MADE ADDITION OF RS. 32.33 LAC ON ACCOUNT OF UNSATISFACT ORY EXPLANATION GIVEN BY THE ASSESSEE TOWARDS DEPOSIT O F EQUAL SUM IN THE SAVING BANK ACCOUNT. IMPLIEDLY, THE A.O . DROPPED THE MAKING OF ADDITION IN RESPECT OF GIFT RECEIVED BY THE ASSESSEE FROM HIS FATHER. IT IS SO FOR THE REASON THAT THE A.O. HIMSELF RECORDED IN THE ASSESSMENT ORDER THAT A SUB STANTIAL PART OF THE GIFT WAS RECEIVED THROUGH CHEQUES, WHEREAS H E MADE ADDITION IN RESPECT OF CASH DEPOSITED IN THE BANK A CCOUNT. THIS MANIFESTS THAT THE A.O. ACCEPTED THE EXPLANATION OF THE ASSESSEE QUA THE RECEIPT OF GIFT FROM FATHER THROUGH BANKING CHANNEL. SINCE, THE ADDITION HAS BEEN MADE ON ACCO UNT OF FAILURE OF THE ASSESSEE TO EXPLAIN THE SOURCE OF CA SH OF RS.32.33 LAC DEPOSITED BY THE ASSESSEE IN HIS BANK ACCOUNT, WHAT REMAINS TO BE EXAMINED IS THE EXPLANATION GIVE N BY THE ASSESSEE ABOUT THE SOURCE OF SUCH CASH DEPOSITED IN BANK. THE A.O. HAS DRAWN A CHART ON PAGE 3 OF THE ASSESSMENT ORDER INDICATING CASH DEPOSITED IN BANK TO THE TUNE OF RS . 32.33 LAC AND CASH WITHDRAWN FOR A SUM OF RS. 26.59 LAC. THE ADDITION HAS BEEN MADE BY SIMPLY CONSIDERING ALL THE ENTRIES OF CASH DEPOSITS IN THE BANK FOR A SUM OF RS. 32.33 LAC WIT HOUT CONSIDERING THE CORRESPONDING WITHDRAWALS MADE FROM THE BANK. HERE, IT IS RELEVANT TO MENTION THAT THE ASS ESSEE, INTER ALIA, DISCLOSED INCOME OF RS. 430455/- BY GIVING A NOTE AT THE END OF HIS COMPUTATION OF INCOME READING : `THIS IS PROFIT ON TRADING. SALE 36,00,000/- PROFIT APPROX. 11.96% AP PLYING SECTION 44AF. WHEN THE ASSESSEE HAD MADE A SALES OF RS. 36/- LAC, WHICH FACT HAS NOT BEEN CONTROVERTED BY T HE AO, I FAIL TO UNDERSTAND THE LOGIC IN TREATING A LOWER AMOUNT OF CASH DEPOSIT IN THE BANK ACCOUNT AS UNEXPLAINED. IN THE GIVEN CIRCUMSTANCES, I AM SATISFIED THAT THE ADDITION SUS TAINED BY THE LD. CIT(A) DESERVES TO BE AND IS HEREBY DELETED. 5. IN THE RESULT, THE APPEAL IS ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 03.08.201 6. SD/- [R.S. SYAL] ACCOUNTANT MEMBER DATED, 3 RD AUGUST, 2016. SELF COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI. **