Sri.Arunkumar Sinkaram, Cochin V. The DCIT, Ernakulam

ITA 372/COCH/2015

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 2599 (ITAT-COCHIN)
• Duration Of Justice: 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2016
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 05-11-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 26-06-2015
• Court: TRIBUNAL
• Department Lawyers: K P GOPAKUMAR; TRIPTHI BISWAS
• Assessee Lawyers: K K CHANDRASEKHARAN
• Keywords: Unexplained cash credit; Gift; Reason to believe
• Section: 153A; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH C OCHIN BEFORE S/SHRI B.P. JAIN, AM AND GEORGE GEOR GE K., JM I.T.A. NOS.371 TO 373/COCH/2015 ASSESSMENT YEARS : 2008-09-2010-11 ARUNKUMAR S. ARUN NIVAS, AYAPPANKAVU, ERNAKULAM. [PAN:ARWPS 4585P] VS. THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2, ERNAKULAM. (ASSESSEE -APPELLANT) (REVENUE-RESPONDENT) I.T.A. NO.368 TO 370/COCH/2015 ASSESSMENT YEARS : 2008-09-2010-11 SMT. KONNIKATTU KUMARI, ARUN NIVAS, AYAPPANKAVU, ERNAKULAM. [PAN:AJLPK 3644A] VS. THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2, ERNAKULAM. (ASSESSEE -APPELLANT) (REVENUE-RESPONDENT) ASSESSEE BY SHRI K.K.CHANDRASEKHARAN, ADV. REVENUE BY SMT. TRIPTHI BISWAS, CIT(DR) & SHRI K.P. GOPAKUMAR, SR. DR DATE OF HEARING 14/12/2015 DATE OF PRONOUNCEMENT 04/01/2016 O R D E R PER BENCH: THESE SIX APPEALS IN THE CASE OF TWO ASSESSES A RISE FROM TWO CONSOLIDATED ORDERS OF THE LD. CIT(A)-IV, KOCHI EACH DATED 31-03 -2015 FOR THE ASSESSMENT YEARS 2008-09 TO 2010-11 IN RESPECT OF EACH ASSESSE E. I.T.A. NOS. 371-373/COCH/2015 & 368-370/COCH/2015 2 2. SINCE THE ISSUES IN THE CASE OF BOTH THE ASSESS ES ARE IDENTICAL, THEREFORE ALL THE SIX APPEALS IN THE CASE OF BOTH THE ASSESSES AR E BEING TAKEN UP BY HIS CONSOLIDATED ORDER. 3. WE SHALL FIRST TAKE UP THE ASSESSEE APPEALS IN THE CASE OF SHRI ARUNKUMAR S. FOR THE ASSESSMENT YEARS 2008-09 TO 2010-11 IN I.T. A. NOS. 371 TO 373/COCH/2015 AS UNDER: I.T.A. NO. 371/COCH/2015 : A.Y. 2008-09 4. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPE ALS)-IV, COCHIN IN SO FAR AS IT IS PREJUDICIAL TO THE APPELLANT IS OPPOSE D TO LAW, FACTS , WEIGHT OF EVIDENCE AND CIRCUMSTANCES OF THE CASE. 2. THE COMMISSIONER OF INCOME TAX(APPEALS)-IV OUGH T TO HAVE HELD IN FACTS AND CIRCUMSTANCE OF THE CASE THAT THE ISSUANCE OF N OTICE U/S. 153A AND SUBSEQUENT ASSESSMENT ORDER ARE WITHOUT JURISDICTIO N AND ILLEGAL. 3. THE COMMISSIONER OF INCOME TAX(APPEALS)-IV OUGHT TO HAVE SEEN THAT IN FACTS AND CIRCUMSTANCE OF THE CASE, THE ADDITION OF RS.2,50,000.00 BEING GIFT RECEIVED FROM HIS FATHER IS UNJUST AND UNREASONABLE . 4. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED A T THE TIME OF HEARING, IT IS HUMBLY PRAYED THAT THE HONBLE TRIBUNAL MAY BE P LEASED TO ALLOW ALL THE GROUNDS AND GRANT SUCH OTHER APPROPRIATE RELIEFS WH ICH ARE DEEMED NECESSARY FOR THE INTEREST OF JUSTICE. 5. GROUND NOS.1, 2 & 4 ARE GENERAL IN NATURE AND T HEREFORE, DO NOT REQUIRE ANY ADJUDICATION. 6. AS REGARDS GROUND NO. 3, THE BRIEF FACTS OF T HE CASE AS EMANATING FROM THE ORDER OF THE ASSESSING OFFICER ARE REPRODUCED HEREI NBELOW: I.T.A. NOS. 371-373/COCH/2015 & 368-370/COCH/2015 3 ASSESSEE ALSO SHOWN INCREASE IN HIS CAPITAL ACCOUN T IN TUNE OF RS.2,50,000/- WHICH HE SHOWN AS GIFT FROM HIS FATHER BUT DESPITE TWICE AN OPPORTUNITY GIVEN FOR PRODUCING EVIDENCE IN SUPPORT OF THE SAME, ASSE SSEE NOT PRODUCED ANY EVIDENCE OTHER THAN A CONFIRMATION LETTER FROM HIS FATHER AND DETAILS OF CHEQUE ISSUED BY HIS FATHER WHICH ACCORDINGLY TO HI M WAS PAID TO HIM. I EXAMINED THE CLAIM MADE BY THE ASSESSEE INDEED TH ERE ARE TWO CHEQUES DATED 14.3.2008 AND 17.3.2008 ISSUED BY HIS FATHER BUT BOTH OF THEM ARE BEARER CHEQUE AND NOT ACCOUNT PAYEE CHEQUES SO ONCE THE MONEY WITHDRAWN WHETHER IT COME TO ASSESSEE OR NOT IS NOT POSSIBLE TO ESTABLISHED, BECAUSE HAD ASSESSEE DEPOSIT THE SAME IN HIS ACCOUNT IT SHA LL BE REFLECTED AS DEPOSITS MADE BY HIM, OR IF HE KEPT THE SAME AS CASH IN HAND IT IS ALSO NOT POSSIBLE BECAUSE HE SHOWN CLOSING BALANCE OF CASH IN HAND AS RS.9000/- ONLY. IN SUCH CIRCUMSTANCES, THIS INCREASE IN CAPITAL ACCOUNT OF THE ASSESSEE CANNOT BE TREATED AS SOURCED FROM GIFT, SO ADDED BACK IN HIS TOTAL INCOME AS UNEXPLAINED CREDITS AND INCOME FROM OTHER SOURCES. ADDITION = RS.2,50,000/- 7. THE LD. CIT(A) CONFIRMED THE ACTION OF THE ASS ESSING OFFICER. 8. THE LD. COUNSEL FOR THE ASSESSEE ARGUED THAT T HE ASSESSING AUTHORITY AND THE LD. CIT(A) ERRED IN LAW IN TREATING THE SUM OF RS.2 ,50,000.00 BEING VALUE OF TWO CHEQUES RECEIVED BY THE ASSESSEE FROM HIS FATHER ON 14-3-2008 AND 17-3-2008 AS GIFT. DATE CHEQUE NO. A/C NO. NAME OF BANK AMOUNT 14-3-2008 302243 1540 SYNDICATE BANK RS.1,50,000.00 (PL. REFER TO P-3) 17-3-2008 302245 1540 SYNDICATE BANK RS.1,00,000.00 (DO) THOUGH CONFIRMATION LETTER IS FILED, THE AO REJECTE D THE SAME AND TREATED AS INCOME OF THE ASSESSEE. THE LD. CIT(A), WITHOUT UND ERSTANDING THE REAL FACTS, CONFIRMED THE ADDITION. THE AFORESAID AMOUNT HAVE B EEN FULLY RECORDED IN THE BOOKS OF ACCOUNT OF SINKARAM M. CHETTIAR AND THE CO PY OF THE RELEVANT PAGE OF I.T.A. NOS. 371-373/COCH/2015 & 368-370/COCH/2015 4 THE AUDITED BALANCE SHEET OF M. SINKARAM FOR THE F. Y. 2007-08 AND LEDGER COPY IN THE SAME ACCOUNT HAVE ALSO BEEN ALSO FILED. THE ADMISSION OF DONOR AND DONEE IS A VALID PROOF ESPECIALLY WHEN GIFTS ARE BE TWEEN FATHER AND SON WHO ARE LIVING UNDER THE SAME ROOF. IN GIFT TRANSACTION IMM EDIATE NECESSITY OF DONEE/RECIPIENT IN GETTING MONEY NEED NOT BE PROVED . WHAT IS TO BE PROVED IS THE GENUINENESS OF TRANSACTION, IDENTITY OF DONOR A ND HIS CAPACITY TO PAY. IN THIS CASE DONOR IS FATHER WHOSE RETURNED INCOME FOR THE YEAR IS RS.46,84,619.00. THEREFORE THE ALLEGED GIFT CANNOT BE TREATED AS INC OME OF THE ASSESSEE, HENCE PRAYED FOR ITS DELETION AND RENDER JUSTICE TO THE A SSESSEE. 9. THE LD. DR RELIED UPON THE ORDER OF BOTH THE AUTHORITIES BELOW. 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE FACTS OF THE CASE. THE ADDITION MADE BY THE ASSESSING OFFICER HAS BEEN MAD E SINCE THE GIFT HAS NOT BEEN RECEIVED THROUGH ACCOUNT PAYEE CHEQUE/DRAFT BU T BY CASH AND THEREFORE, THE ASSESSING OFFICER HAS NOT ACCEPTED THE CONFIRMA TION LETTER FILED BY THE FATHER. THE LD. CIT(A) ALSO CONFIRMED THE ACTION OF THE ASS ESSING OFFICER. 11. IT IS UNDISPUTED THAT THE FATHER HAS SUBMITTE D THE CONFIRMATION LETTER REGARDING THE GIFT GIVEN TO HIS SON, THE ASSESSEE T HROUGH TWO BEARER CHEQUES AS MENTIONED HEREINABOVE. IT IS UNDISPUTED THAT THE A FORESAID AMOUNT HAS BEEN RECORDED IN THE BOOKS OF ACCOUNT OF THE FATHER SHRI SINKARAM M. CHETTIAR THE I.T.A. NOS. 371-373/COCH/2015 & 368-370/COCH/2015 5 DONOR AND COPY OF THE RELEVANT BALANCE SHEET AND TH E LEDGER COPY FOR THE IMPUGNED YEAR ARE ALSO A PART OF RECORD BEFORE US. NOTHING HAS BEEN BROUGHT ON RECORD BY ANY OF THE AUTHORITIES BELOW THAT THE CAS H WITHDRAWN THROUGH THE SAID BEARER CHEQUES HAS BEEN UTILIZED BY THE FATHER OF S HRI SINKARAM M. CHETTIAR ELSEWHERE. THERE IS NO DISPUTE TO THE IDENTITY ALS O. THE FATHER OF THE ASSESSEE, SHRI SINKARAM M. CHETTIAR THE DONOR HAS FILED THE R ETURN OF INCOME AT RS.46,84,619/- FOR THE IMPUGNED YEAR. THE SAME IS N OT UNDER DISPUTE. THEREFORE, THE CAPACITY OF THE DONOR CANNOT BE DOUBTED. THE RE LATIONSHIP BETWEEN THE DONOR AND THE DONEE BEING FATHER AND SON IS NOT AT DISPUTE. SIMPLY BECAUSE THE GIFT HAS BEEN GIVEN THROUGH BEARER CHEQUES CANNOT B E A BASIS TO PROVE THE TRANSACTION AS INGENUINE ESPECIALLY WHEN THE CONFIR MATION FROM THE DONOR HAS NOT BEEN PROVED TO BE FALSE. IN THE CIRCUMSTANCES AND FACTS OF THE CASE, WE HOLD THAT THE ASSESSEE HAS BEEN ABLE TO PROVE THE IDENTI TY, CREDITWORTHINESS AND THE GENUINENESS OF THE TRANSACTION. IN THE CIRCUMSTANC ES AND FACTS OF THE CASE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN TREATING THE SAME AS INCOME OF THE ASSESSEE AND IS ACCORDINGLY DIRECTED TO DELETE THE SAME. THU S, THE ORDER OF THE LD. CIT(A) IS REVERSED AND GROUND NO. 3 OF THE ASSESSEE IS ALL OWED. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IN I.T.A. NO. 371/COCH/2015 IS ALLOWED. I.T.A. NO. 372/COCH/2015 : A.Y. 2009-10 12. NOW WE SHALL TAKE UP THE APPEAL OF THE ASSESSE E IN I.T.A. NO.372/COCH/2015 FOR THE ASSESSMENT YEAR 2009-10 AS UNDER: 13. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: I.T.A. NOS. 371-373/COCH/2015 & 368-370/COCH/2015 6 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPE ALS)-II, COCHIN IN SO FAR AS IT IS PREJUDICIAL TO THE APPELLANT IS OPPOSED TO LAW, FACTS , WEIGHT OF EVIDENCE AND CIRCUMSTANCES OF THE CASE. 2. THE COMMISSIONER OF INCOME TAX(APPEALS)-IV OUGH T TO HAVE HELD IN FACTS AND CIRCUMSTANCE OF THE CASE THAT THE ISSUANCE OF N OTICE U/S. 153A AND SUBSEQUENT ASSESSMENT ORDER ARE WITHOUT JURISDICTIO N AND ILLEGAL. 3. THE COMMISSIONER OF INCOME TAX(APPEALS)-IV OUGHT TO HAVE HELD THAT IN FACTS AND CIRCUMSTANCE OF THE CASE, THE ADDITION OF RS.4,00,000.00 BEING GIFT RECEIVED FROM HIS FATHER IS UNJUST AND UNREASONABLE . 4. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED A T THE TIME OF HEARING, IT IS HUMBLY PRAYED THAT THE HONBLE TRIBUNAL MAY BE P LEASED TO ALLOW ALL THE GROUNDS AND GRANT SUCH OTHER APPROPRIATE RELIEFS WH ICH ARE DEEMED NECESSARY FOR THE INTEREST OF JUSTICE. 14. GROUND NOS.1, 2 & 4 ARE GENERAL IN NATURE AND THEREFORE, DO NOT REQUIRE ANY ADJUDICATION. 15. AS REGARDS GROUND NO. 3, THE BRIEF FACTS OF THE CASE AS EMANATING FROM THE ORDER OF THE ASSESSING OFFICER ARE REPRODUCED HEREI NBELOW: LIKE LAST YEAR, THIS YEAR AGAIN ASSESSEE CLAIMED G IFT FROM HIS FATHER WHICH ACCORDING TO HIM ARE RS.4,00,000/- BUT THERE IS NO AVAILABLE EVIDENCE OTHER THAN TWO CASH CHEQUE PAYMENT MADE FROM HIS FATHERS ACCOUNT, HAD THIS BEEN PAID TO ASSESSEE FIRST OF ALL THEY SHOULD BE I N NATURE OF ACCOUNT PAYEE BUT THEY ARE CASH (BEARER) TYPE, FURTHER EVEN IF AS SESSEE TAKEN THE CASH CHEQUE THEY SUPPOSED TO BE REFLECTED EITHER IN HIS BANK ACCOUNT OR HIS WEALTH INCREASED OR HE KEPT THEM AS CASH IN HAND BU T NONE OF THE ABOVE THREE CIRCUMSTANCES HAPPEN. THERE IS NO CREDIT IN H IS ACCOUNT AS VISIBLE, THERE IS NO INCREASE IN HIS WEALTH I.E. GOLD OR IMM OVABLE PROPERTY AFTER RECEIPT OF THESE CHEQUES, AND HE HAD NOT SHOWN ANY SUBSTANTIAL CASH IN HAND, IT IS JUST RS. 12 THOUSANDS ONLY. HENCE THER E IS NO REASON TO BELIEVE THE VERSION OF ASSESSEE. WIDE ORDER SHEET ENTRY DATED 10.10.2012 AND BY LETT ER DATED 18.1.2013 THE SAME QUESTION HAD BEEN ASKED TO ASSESSEE AND WHATEV ER HE PROVIDE IS ALREADY DISCUSSED ABOVE. I.T.A. NOS. 371-373/COCH/2015 & 368-370/COCH/2015 7 IN SUCH CIRCUMSTANCES, THE GIFT IS TREATED AS UNEXP LAINED CREDIT IN HIS CAPITAL ACCOUNT AND ADDED BACK IN HIS TOTAL INCOME UNDER TH E HEAD INCOME FROM THE OTHER SOURCE. ADDITION = RS.4 LAKH 16. THE CIT(A) CONFIRMED THE ACTION OF THE LD. CI T(A). 17. THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE SUBMISSIONS MADE BEFORE US WHEREAS THE LD. DR RELIED UPON THE ORDER OF BOTH THE AUTHORITIES BELOW. 18. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE FACTS OF THE CASE. AS REGARDS GROUND NO.3, THE FACTS IN THE PRESENT CASE ARE IDENTICAL TO THE FACTS IN THE ASSESSEES OWN CASE IN I.T.A. NO. 371/COCH/2015 FOR THE ASSESSMENT YEAR 2008-09. IN THE PRESENT CASE, THE ASSESSEE HAS RECE IVED RS. 4 LAKHS AS GIFT FROM HIS FATHER SHRI SINKARAM M. CHETTIAR. THE ASSESSEE HAS SUBMITTED THE CONFIRMATION LETTER FROM THE DONOR, THE FATHER OF T HE ASSESSEE HAS DECLARED THE RETURN OF INCOME AT RS.45,07,090.00 IN THE IMPUGNED YEAR. NO DEFECT IN THE CONFIRMATION LETTER HAS BEEN POINTED OUT BY ANY OF THE AUTHORITIES BELOW. ACCORDINGLY, THE ASSESSEE HAS PROVED THE IDENTITY, CREDITWORTHINESS AND THE GENUINENESS OF THE TRANSACTION. SINCE THE FACTS IN THE PRESENT CASE ARE IDENTICAL TO THE FACTS IN ASSESSEES OWN CASE IN I.T.A. NO.37 1/COCH/2015 FOR THE ASSESSMENT YEAR 2008-09, OUR ORDER THEREIN SHALL BE IDENTICALLY APPLICABLE IN THE PRESENT CASE FOR THE SAID GIFT OF RS.4.00 LACS. ACC ORDINGLY, GROUND NO. 3 OF THE ASSESSEE IS ALLOWED. THUS THE APPEAL OF THE ASSESS EE IN I.T.A. NO.372/COCH/2015 IS ALLOWED. I.T.A. NOS. 371-373/COCH/2015 & 368-370/COCH/2015 8 I.T.A. NO. 373/COCH/2015 : A.Y. 2010-11 19. WE SHALL TAKE UP THE APPEAL OF THE ASSESSEE I N I.T.A. NO.373/COCH/2015 FOR THE ASSESSMENT YEAR 2010-11 AS UNDER: 20. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPE ALS)-II, COCHIN IN SO FAR AS IT IS PREJUDICIAL TO THE APPELLANT IS OPPOSED TO LAW, FACTS , WEIGHT OF EVIDENCE AND CIRCUMSTANCES OF THE CASE. 2. THE COMMISSIONER OF INCOME TAX(APPEALS)-IV OUGH T TO HAVE HELD IN FACTS AND CIRCUMSTANCE OF THE CASE THAT THE ISSUANCE OF N OTICE U/S. 153A AND SUBSEQUENT ASSESSMENT ORDER ARE WITHOUT JURISDICTIO N AND ILLEGAL. 3. THE COMMISSIONER OF INCOME TAX(APPEALS)-II OUGHT TO HAVE HELD THAT IN FACTS AND CIRCUMSTANCE OF THE CASE, THE ADDITION OF RS.7,50,000.00 BEING GIFT RECEIVED FROM HIS FATHER IS UNJUST AND UNREASONABLE . 4. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED A T THE TIME OF HEARING, IT IS HUMBLY PRAYED THAT THE HONBLE TRIBUNAL MAY BE P LEASED TO ALLOW ALL THE GROUNDS AND GRANT SUCH OTHER APPROPRIATE RELIEFS WH ICH ARE DEEMED NECESSARY FOR THE INTEREST OF JUSTICE. 21. GROUND NOS.1, 2 & 4 ARE GENERAL IN NATURE AND THEREFORE, DO NOT REQUIRE ANY ADJUDICATION. 22. AS REGARDS GROUND NO. 3, THE BRIEF FACTS OF THE CASE AS EMANATING FROM THE ORDER OF THE ASSESSING OFFICER ARE REPRODUCED HEREI NBELOW: LIKE LAST YEAR, THIS YEAR AGAIN ASSESSEE CLAIMED G IFT FROM HIS FATHER WHICH ACCORDING TO HIM ARE RS.7,50,000,. THIS WAS SPECIFI CALLY ASKED FROM ASSESSEE THAT HE PROVIDED THE EVIDENCE FOR THE SAME BY ORDER SHEET ENTRY DATED I.T.A. NOS. 371-373/COCH/2015 & 368-370/COCH/2015 9 10.10.2012 AND AGAIN BY A LETTER DATED 18.1.2013, I N RESPONSE TO THESE QUERY ASSESSEE REPLIED IN THIS MANNER HE RECEIVED A CHEQUE IN HDFC BRANCH ON 1.2.2010 FOR AMOUNT OF RS.6,00,000/-. HE RECEIVE RS.1,16,680 IN SHAPE OF PIGMY DEPOSIT IN SYNDICATE BANK ON 31.3.2010. HE RECEIVED RS.33,320 AS CASH GIFT ON 28.1.2010. HOWEVER HIS ARGUMENTS ARE NOT CONVINCING DUE TO FOL LOWING REASONS THE ABOVE MENTIONED CHEQUE IS ACTUALLY PROCEED OF L OTTERY WINNING IN ACCOUNT OF ASSESSEE, IN HIS DURING SEARCH AND POST SEARCH SWORN STATEMENT ASSESSEE HAD ACCEPTED THAT THERE IS ONE AGENT NAMED DIPU THAKKAR WORKED FOR THEM AND HE SETTLED MATTERS WHEN THEY ARE NOT A BLE TO RECEIVED THE PRIZE ON TICKETS, EVEN IF THIS VERSION IS NOT ACCEP TABLE THIS AMOUNT CAME THROUGH TRANSFER FROM COIMBATORE AND NARRATION IN B ANK STATEMENT IS LIKE THIS CHQ DEP-MICR-CLG-COINBATORE-TR, WHICH MEAN CL EARLY THAT THIS WAS NOT GIVEN BY HIS FATHER TO HIM BECAUSE THERE IS NO KNOWN ACCOUNT OF HIS FATHER IN COIMBATORE NEITHER DEPARTMENT IS IN POSSE SSION OF THIS INFORMATION NOR ASSESSEE GROUP CLAIMED THAT THEY MAINTAIN ACCOU NT IN COIMBATORE. THE PIGMY DEPOSIT WERE DEPOSITS MADE THROUGH OUT TH E YEAR AND THERE WAS NO SUCH CREDIT IN HIS ACCOUNT, THIS IS UNEXPLAINED MONEY WHICH CAME IN HIS CASH FLOW STATEMENT CASH GIFT IS ALSO NOT ACCEPTABLE BECAUSE NO IMMEDIA TE UTILIZATION OF GIFT IS KNOWN, IF ASSESSEE ALREADY DRAWS AN AMOUNT OF RS.1 LAKH FROM HIS INCOME FOR EXPENDITURE THEN WHAT HE HAD DONE WITH THIS AMO UNT, SO IT IS ALSO NOT ACCEPTABLE. HENCE ALL OF THE GIFTS CLAIMED BY ASSESSEE ARE REJE CTED AND TREATED AS UNEXPLAINED CREDIT IN HIS CAPITAL ACCOUNT AND ADDED BACK IN HIS TOTAL INCOME UNDER THE HEAD INCOME FROM THE OTHER SOURCES. 23. THE CIT(A) CONFIRMED THE ACTION OF THE LD. CI T(A). 24. THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE SUBMISSIONS MADE BEFORE US WHEREAS THE LD. DR RELIED UPON THE ORDER OF THE LD. CIT(A). 25. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE FACTS OF THE CASE. AS REGARDS GROUND NO. 3, THE FACTS IN THE PRESENT CASE ARE IDENTICAL TO THE FACTS IN I.T.A. NOS. 371-373/COCH/2015 & 368-370/COCH/2015 10 ASSESSEES OWN CASE IN I.T.A. NO.371/COCH/2015 FOR THE ASSESSMENT YEAR 2008- 09. THE ASSESSEE HAS SUBMITTED THE CONFIRMATION LET TER FROM HIS FATHER SHRI SINKARAM M. CHETTIAR IN WHICH NO DEFECT HAS BEEN PO INTED OUT BY ANY OF THE AUTHORITIES BELOW. THE ASSESSEES FATHER, THE DONOR HAS DECLARED THE RETURN OF INCOME AT RS.67,85,293.00 IS NOT UNDER DISPUTE. IN THE CIRCUMSTANCES AND FACTS OF THE CASE, THE ASSESSEE HAS ESTABLISHED THE THREE ESSENTIAL INGREDIENTS OF SECTION 68 OF THE ACT, I.E., THE IDENTITY, CREDITWO RTHINESS AND GENUINENESS OF THE TRANSACTION. SINCE THE FACTS IN THE PRESENT CASE AR E IDENTICAL TO THE FACTS IN ASSESSEES OWN CASE IN I.T.A. NO.371/COCH/2015 FOR THE ASSESSMENT YEAR 2008- 09, OUR ORDER HEREINABOVE SHALL BE IDENTICALLY APPL ICABLE IN THE PRESENT CASE FOR THE GIFT OF RS.7.50 LACS. ACCORDINGLY, GROUND NO. 3 OF THE ASSESSEE IS ALLOWED. THUS THE APPEAL OF THE ASSESSEE IN I.T.A.NO.373/COC H/2015 IS ALLOWED. ACCORDINGLY, THE APPEALS OF THE ASSESSEE IN I.T.A. NOS.371 TO 373/COCH/2015 ARE ALLOWED. 26. WE SHALL NOW TAKE UP THE APPEALS IN I.T.A. NO S. 368 TO 370/COCH/2015 IN THE CASE OF SMT. K. KUMARI FOR THE ASSESSMENT YEARS 2008-09 TO 2010-11 AS UNDER: I.T.A. NO. 368/COCH/2015 : A.Y. 2008-09 27. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPE ALS)-II, COCHIN IN SO FAR AS IT IS PREJUDICIAL TO THE APPELLANT IS OPPOSED TO LAW, FACTS , WEIGHT OF EVIDENCE AND CIRCUMSTANCES OF THE CASE. I.T.A. NOS. 371-373/COCH/2015 & 368-370/COCH/2015 11 2. THE COMMISSIONER OF INCOME TAX(APPEALS) OUGHT T O HAVE HELD IN FACTS AND CIRCUMSTANCE OF THE CASE THAT THE ISSUANCE OF N OTICE U/S. 153A AND SUBSEQUENT ASSESSMENT ORDER ARE WITHOUT JURISDICTIO N AND ILLEGAL. 3. THE COMMISSIONER OF INCOME TAX(APPEALS)-II OUGHT TO HAVE HELD THAT IN FACTS AND CIRCUMSTANCE OF THE CASE THE ADDITION OF RS.6,00,000.00 BEING RETURN OF LOAN FROM HER HUSBAND M. SINKARAM IS UNJU ST AND UNREASONABLE. 4. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED A T THE TIME OF HEARING, IT IS HUMBLY PRAYED THAT THE HONBLE TRIBUNAL MAY BE P LEASED TO ALLOW ALL THE GROUNDS AND GRANT SUCH OTHER APPROPRIATE RELIEFS WH ICH ARE DEEMED NECESSARY FOR THE INTEREST OF JUSTICE. 28. GROUND NOS. 1, 2 AND 4 ARE GENERAL IN NATURE AND THEREFORE, DO NOT REQUIRE ANY ADJUDICATION. 29. AS REGARDS GROUND NO. 3, THE BRIEF FACTS AS P ER THE ORDER OF THE ASSESSING OFFICER ARE REPRODUCED HEREINBELOW FOR THE SAKE OF CONVENIENCE: ASSESSEES CLAIM THAT SHE HAD RECEIVED BACK ADVANC E OF RS.6 LAKH FROM HER HUSBAND MR. SINKARAM WHICH SHE HAD GIVEN IN AY 2006 -07 IS REJECTED BECAUSE IN FIRST YEAR WHEN SHE GIVEN THE ABOVE MENTIONED AD VANCE IT WAS REJECTED AS SCREENING FOR HER HUSBAND AND BECAUSE SHE WAS NOT A BLE TO PROVIDE ANY SOURCE OR MODE OF ADVANCE PAYMENT SIMILARLY GIFT GIVEN TO HER SON ANOOP WAS ALSO REJECTED, THESE REJECTION HAD NOT BEEN REFLECTED IN HER ASSESSED INCOME BUT REFLECTED IN RESPECTIVE ASSESSED INCOME OF HER HUSB AND AND SON. NOW THERE IS INCREASE OF RS.6,00,000 IN HER TOTAL WEALTH AS WELL AS SAME AMOUNT CAME INTO HER CASH FLOW BUT HOW SHE HAD RECEIVED BACK THE ABO VE MENTIONED ADVANCE IS NOT CLEAR SO IT BECOME AN UNEXPLAINED CREDIT IN HER CAPITAL ACCOUNT, HENCE THE SAME IS TREATED AS UNEXPLAINED CREDIT IN HER AND AD DED BACK IN HER TOTAL INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES. AD DITION = RS.6,00,000/-S 30. THE LD. CIT(A) CONFIRMED THE ACTION OF THE AS SESSING OFFICER. 31. THE LD. AR ARGUED THAT THE ASSESSING AUTHORITY AND THE LD. CIT(A) ERRED IN LAW AND IN FACT IN TREATING THE SUM OF RS.6,00,00/- FOR THE ASSESSMENT YEAR 2008- 09 AS INCOME OF THE ASSESSEE DISREGARDING THE FACT THAT THE ALLEGED AMOUNT WAS I.T.A. NOS. 371-373/COCH/2015 & 368-370/COCH/2015 12 REPAYMENT OF LOAN/ADVANCE RECEIVED FROM HER HUSBAND . THE LD. CIT(A), WITHOUT UNDERSTANDING THE REAL FACTS, CONFIRMED THE ADDITIO N. THE ORIGINAL LOAN WAS PAID TO SINKARAM ON 27.7.2005 BY WITHDRAWING AN AMOUNT O F RS.9,00,000.00 VIDE CHEQUE NO. 287389 FROM HER ACCOUNT WITH CANARA BANK . THE ASSESSEE RECEIVED BACK THE AMOUNT ON 1-2-2008 THROUGH BANK VIDE CHEQU E NO. 190622 FROM SB A/C NO. 57058116879 WHICH IS IN THE NAME OF M.R. AN ITHA, BENAMI OF SINKARAM MUTHUSWAMY CHETTIAR. THE ASSESSEE HAS FILED COPY OF THE BANK ACCOUNT AND LEDGER COPY OF RELEVANT ACCOUNT. IT IS PERTINENT T O NOTE THAT THE TRANSACTION IS BETWEEN A HUSBAND AND WIFE WHO ARE LIVING UNDER THE SAME ROOF. THE ASSESSEE IS A HOUSEWIFE AND ALL MONEY TRANSACTIONS ARE DONE THROUGH HER HUSBAND. THERE IS NO REASON FOR ITS DISALLOWANCE THEREFORE THE ADD ITION IS UNWARRANTED AND IS LIABLE TO BE DELETED HENCE PRAYED FOR ITS DELETION AND RENDER JUSTICE TO THE ASSESSEE. 32. THE LD. DR ON THE OTHER HAND RELIED UPON THE ORDER OF BOTH THE AUTHORITIES BELOW. 33. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE FACTS OF THE CASE. THE UNDISPUTED FACT IN THE PRESENT CASE ARE THAT THE OR IGINAL LOAN WAS PAID TO M. SINKARAM ON 27.07.2005 BY WITHDRAWING CASH OF RS.9 LAKHS VIDE CHEQUE NO. 287389 FROM HER ACCOUNT WITH CANARA BANK. THE COPY OF THE BANK ACCOUNT WAS ALSO FILED BEFORE BOTH THE AUTHORITIES BELOW. IT IS ALSO UNDISPUTED THAT THE I.T.A. NOS. 371-373/COCH/2015 & 368-370/COCH/2015 13 TRANSACTION IS BETWEEN HUSBAND AND WIFE LIVING TOGE THER WHERE THE ASSESSEES TRANSACTIONS ARE BEING DONE THROUGH HER HUSBAND. EVE N IF DISALLOWANCE HAS BEEN MADE FOR THE ASSESSMENT YEAR 2006-07 FOR WHICH NECE SSARY TAX MUST HAVE BEEN PAID IN THAT YEAR, IT DOES NOT MEAN THAT THE LOAN T RANSACTION WILL NOT BE SETTLED. IN THE IMPUGNED YEAR, THE LOAN AMOUNT HAS BEEN SETT LED AND WITHOUT ANY MATERIAL AND COGENT REASONING AVAILABLE WITH ANY OF THE AUTHORITIES BELOW, THE SAID AMOUNT CANNOT BE TREATED AS INCOME OF THE ASSE SSEE. IN THE CIRCUMSTANCES AND FACTS OF THE CASE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN TREATING THE SAID AMOUNT AS INCOME OF THE ASSESSEE AND ACCORDINGLY, T HE ORDER OF THE LD. CIT(A) IS REVERSED AND ACCORDINGLY, GROUND NO. 3 OF THE ASSES SEE IS ALLOWED. THUS THE APPEAL OF THE ASSESSEE IN I.T.A. NO.368/COCH/2015 I S ALLOWED. I.T.A. NO. 369/COCH/2015 : A.Y. 2009-10 34. WE SHALL TAKE UP THE APPEAL OF THE ASSESSEE IN I.T.A. NO.369/COCH/2015 FOR THE ASSESSMENT YEAR 2009-10 AS UNDER: 35. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPE ALS)-II, COCHIN IN SO FAR AS IT IS PREJUDICIAL TO THE APPELLANT IS OPPOSED TO LAW, FACTS , WEIGHT OF EVIDENCE AND CIRCUMSTANCES OF THE CASE. 2. THE COMMISSIONER OF INCOME TAX(APPEALS) OUGHT T O HAVE HELD IN FACTS AND CIRCUMSTANCE OF THE CASE THAT THE ISSUANCE OF N OTICE U/S. 153A AND SUBSEQUENT ASSESSMENT ORDER ARE WITHOUT JURISDICTIO N AND ILLEGAL. 3. THE COMMISSIONER OF INCOME TAX(APPEALS)-II OUGHT TO HAVE HELD THAT IN FACTS AND CIRCUMSTANCE OF THE CASE THE ADDITION OF RS.44,525.00 BEING ALLEGED TO HAVE BEEN RECEIVED FROM HER HUSBAND, M. SINKARAM IS UNJUST AND UNREASONABLE. I.T.A. NOS. 371-373/COCH/2015 & 368-370/COCH/2015 14 4. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED A T THE TIME OF HEARING, IT IS HUMBLY PRAYED THAT THE HONBLE TRIBUNAL MAY BE P LEASED TO ALLOW ALL THE GROUNDS AND GRANT SUCH OTHER APPROPRIATE RELIEFS WH ICH ARE DEEMED NECESSARY FOR THE INTEREST OF JUSTICE. 36. GROUND NOS. 1, 2 & 4 ARE GENERAL IN NATURE AND THEREFORE, DO NOT REQUIRE ANY ADJUDICATION. 37. AS REGARDS GROUND NO. 3, THE SAME IS NOT PRE SSED BY THE LD. COUNSEL FOR THE ASSESSEE AND ACCORDINGLY, THE SAME IS DISMISSED . ACCORDINGLY, GROUND NO. 3 IS DISMISSED. THUS THE APPEAL OF THE ASSESSEE IN I. T.A. NO. 369/COCH/2015 IS DISMISSED. I.T.A. NO. 370/COCH/2015 : A.Y. 2010-11 38. WE SHALL TAKE UP THE APPEAL OF THE ASSESSEE IN I.T.A. NO.370/COCH/2015 FOR THE ASSESSMENT YEAR 2010-11. 39. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPE ALS)-IV, COCHIN IN SO FAR AS IT IS PREJUDICIAL TO THE APPELLANT IS OPPOSE D TO LAW, FACTS , WEIGHT OF EVIDENCE AND CIRCUMSTANCES OF THE CASE. 2. THE COMMISSIONER OF INCOME TAX(APPEALS)-IV OUGH T TO HAVE HELD IN FACTS AND CIRCUMSTANCE OF THE CASE THAT THE ISSUANCE OF N OTICE U/S. 153A AND SUBSEQUENT ASSESSMENT ORDER ARE WITHOUT JURISDICTIO N AND ILLEGAL. 3. THE COMMISSIONER OF INCOME TAX(APPEALS)-IV OUGHT TO HAVE HELD THAT IN FACTS AND CIRCUMSTANCE OF THE CASE THE ADDITION OF RS.2,00,000.00 BEING GIFT RECEIVED FROM HER HUSBAND, M. SINKARAM IS UNJUST AN D UNREASONABLE. I.T.A. NOS. 371-373/COCH/2015 & 368-370/COCH/2015 15 4. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED A T THE TIME OF HEARING, IT IS HUMBLY PRAYED THAT THE HONBLE TRIBUNAL MAY BE P LEASED TO ALLOW ALL THE GROUNDS AND GRANT SUCH OTHER APPROPRIATE RELIEFS WH ICH ARE DEEMED NECESSARY FOR THE INTEREST OF JUSTICE. 40. GROUND NOS. 1, 2 & 4 ARE GENERAL IN NATURE AND THEREFORE, DO NOT REQUIRE ANY ADJUDICATION. 41. AS REGARDS GROUND NO. 3, THE ASSESSEE HAS CLA IMED TO HAVE RECEIVED RS.2 LAKHS AS GIFT FROM HER HUSBAND. THE ASSESSEE HAS P ROVIDED THE CONFIRMATION LETTER FROM HER HUSBAND WHICH WAS NOT FOUND SUFFICI ENT BY THE ASSESSING OFFICER AND ACCORDINGLY, THE SAME WAS TREATED AS INCOME OF THE ASSESSEE WHICH WAS CONFIRMED BY THE LD. CIT(A). 42. THE LD. COUNSEL FOR THE ASSESSEE ARGUED THAT T HE ASSESSING AUTHORITY AND THE LD. CIT(A) ERRED IN LAW IN TREATING THE SUM OF RS.2,00,000.00/- FOR THE AY 2010-11 AS INCOME OF THE ASSESSEE DISREGARDING THE FACT THAT THE AFORESAID AMOUNT WAS GIFT RECEIVED FROM HER HUSBAND. THE LD. CIT(A), WITHOUT UNDERSTANDING THE REAL FACTS, CONFIRMED THE ADDITIO N. THE ASSESSEES HUSBAND, M. SINKARAM HAS SUFFICIENT SOURCE OF KNOWN FUNDS TO GI VE GIFT TO HIS WIFE. THE PAYMENT HAS BEEN FULLY RECORDED IN THE BOOKS OF ACC OUNTS OF DONOR - M. SINKARAM. THE ASSESSEE HAS FILED COPY OF THE BALANC E SHEET AND LEDGER ACCOUNT OF M. SINKARAM. MERE ACCEPTANCE OF DONOR AND DONEE IS ENOUGH PROOF IN GIFT TRANSACTION. IN THIS CASE DONOR IS HUSBAND WHOSE RE TURNED INCOME FOR THE YEAR IS I.T.A. NOS. 371-373/COCH/2015 & 368-370/COCH/2015 16 RS.67,85,293.00. THE LD. COUNSEL FOR THE ASSESSEE A RGUED THAT TREATING THE PAYMENT OF GIFT TO THE SPOUSE WHO IS LIVING UNDER T HE SAME ROOF AS BOGUS AND ADDING THE SAME TO THE TOTAL INCOME OF THE ASSESSEE IS INCORRECT AND THEREFORE, THE ADDITION IS LIABLE TO BE DELETED AND HENCE PRAY ED FOR ITS DELETION AND PRAYED FOR ITS DELETION AND RENDER JUSTICE TO THE ASSESSEE . 43. THE LD. DR ON THE OTHER HAND RELIED UPON THE ORDER OF BOTH THE AUTHORITIES BELOW. 44. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE FACTS OF THE CASE. THE UNDISPUTED FACTS IN THE PRESENT CASE ARE THAT THE A SSESSEE HAS RECEIVED A GIFT OF RS.2 LAKHS FROM HER HUSBAND WHO HAS PROVIDED THE CO NFIRMATION LETTER IN WHICH NO DEFECT HAS BEEN POINTED OUT BY ANY OF THE AUTHOR ITIES BELOW. THE ASSESSEE IS REQUIRED TO ESTABLISH THE THREE ESSENTIAL INGREDIEN TS, I.E., IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION . AS REGARDS THE IDENTITY, THERE IS NO DISPUTE THAT THE DONOR IS THE HUSBAND O F THE ASSESSEE. AS REGARDS THE CREDITWORTHINESS, IT IS ALSO UNDISPUTED THAT THE RE TURNED INCOME OF THE DONOR- HUSBAND IS RS.67,85,293/- WHICH IS A MATTER OF RECO RD. NO DEFECT HAS BEEN POINTED OUT IN THE CONFIRMATION LETTER. THE COPY OF THE BALANCE SHEET AND LEDGER ACCOUNT OF THE HUSBAND OF THE ASSESSEE WERE PROVIDE D TO THE LD. CIT(A) AND ARE BEFORE US ON RECORD AND NO DEFECT IN THE SAME HAS B EEN POINTED OUT BY THE LD. CIT(A). ACCORDINGLY, THE GENUINENESS OF THE TRANSAC TION CANNOT BE DOUBTED. AS I.T.A. NOS. 371-373/COCH/2015 & 368-370/COCH/2015 17 FAR AS RELATIONSHIP IS CONCERNED, HUSBAND CAN VERY WELL GIVE GIFT TO THE WIFE. ACCORDINGLY, IN THE CIRCUMSTANCES AND FACTS OF THE CASE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN TREATING THE SAID AMOUNT AS INCOME OF THE ASSESSEE WITHOUT BRINGING ANY MATERIAL ON RECORD ADVERSE TO THE ASSE SSEE AND ACCORDINGLY, THE ORDER OF THE LD. CIT(A) IS REVERSED AND ACCORDINGLY , GROUND NO. 3 OF THE ASSESSEE IS ALLOWED. THUS THE APPEAL OF THE ASSESSE E IN I.T.A. NO.370/COCH/2015 IS ALLOWED. 45. IN THE RESULT, THE APPEALS FILED BY THE ASSE SSEE, SHRI ARUNKUMAR S. IN I.T.A. NOS. 371 TO 373/COCH/2015 ARE ALLOWED AND THE APPEA LS FILED BY THE ASSESSEE, SMT. K. KUMARI IN I.T.A. NOS.368 & 370/COCH/2015 A RE ALLOWED AND THE APPEAL FILED BY THE ASSESSEE, SMT. K. KUMARI IN I.T.A. NO. 369/COCH/2015 IS DISMISSED. PRONOUNCED IN THE OPE N COURT ON 04-01-2016. SD/- SD/- (GEORGE GEORGE K.) (B.P. JAIN) JUDICIAL MEMBER ACC OUNTANT MEMBER PLACE: KOCHI DATED: 04TH JANUARY, 2016 GJ COPY TO: 1. ARUNKUMAR S. ARUN NIVAS, AYAPPANKAVU, ERNAKULAM. 2. KONNIKATTU KUMARI, ARUN NIVAS, AYAPPANKAVU, ERNAK UAM. 3. THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL C IRCLE-2, ERNAKULAM. 4. THE COMMISSIONER OF INCOME-TAX(APPEALS)-IV, KOCH I. I.T.A. NOS. 371-373/COCH/2015 & 368-370/COCH/2015 18 5. THE COMMISSIONER OF INCOME-TAX, CENTRAL, KOCHI. 6. D.R., I.T.A.T.,COCHIN. 7. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T., COC HIN