Sh. Naresh Kumar, New Delhi V. ITO, Ghaziabad

ITA 3998/DEL/2015

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6928 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 3
• Next Hearing Date: 21-11-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 16-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DR SH RAKESH GUPTA
• Keywords: Unexplained cash credit; Gift; Additional evidence
• Section: 143(3); 142(1); 234B; 68; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : SMC-3: NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO.3998/DEL/2015 ASSESSMENT YEAR : 2009-10 NARESH KUMAR, C/O M/S RRA TAXINDIA, D-28, SOUTH EXTENSION, PART-I, NEW DELHI 49 (PAN: ADLPK2372F) VS. ITO, WARD-1(4) GHAZIABAD (APPELLANT) (R ESPONDENT) ASSESSEE BY : DR. SH. RAKESH GUPTA, ADV. & SH. SOMIL AGGARWAL, ADV. DEPARTMENT BY : SH. ANIL KUMAR SHARMA, SR. DR ORDER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER PASSED BY THE CIT(A) ON 2.4.2015 IN RELATION TO THE ASSESSMENT YEAR 2009-10 ON THE FOLLOWING GROUNDS:- 1. THAT HAYING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN C ONFIRMING THE ACTION OF LD. AO IN MAKING AGGREGATE ADDITION O F RS. 2 10,00,000 ON ACCOUNT OF UNSECURED LOAN RECEIVED FR OM WIFE OF ASSESSEE AND GIFT OF RS. 5,00,000/- RECEIVED FR OM ASSESSEE'S MOTHER-IN-LAW OF ASSESSEE U/S 68 BY TREA TING IT AS ALLEGED INCOME OF ASSESSEE AND THAT TOO BY RECORDIN G INCORRECT FACTS AND FINDINGS AND WITHOUT GIVING ADE QUATE OPPORTUNITY OF HEARING AND WITHOUT BRINGING ANY ADV ERSE MATERIAL ON RECORD AND WITHOUT CONSIDERING THE SUBM ISSIONS OF ASSESSEE. 2. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER, ACTION OF LD. CIT(A) IN CONFIRMING THE ACTION OF LD. AO IN MA KING AGGREGATE ADDITION OF RS.15,00,000/- ON ACCOUNT OF UNSECURED LOAN AND GIFT RECEIVED FROM ASSESSEE'S WIFE AND MOT HER-IN-LAW ULS 68 WHICH IS BAD IN LAW AND AGAINST THE FACTS AN D CIRCUMSTANCES OF THE CASE. 3. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANC ES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN C ONFIRMING THE ACTION OFLD. AO IN MAKING ADDITION OF RS.1,75,4 00/- BY 3 TREATING THE AGRICULTURAL INCOME AS INCOME FROM OTH ER SOURCES. 4. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER, ACTION OF LD. CIT(A) IN CONFIRMING THE ACTION OF LD. AO IN MAKING VARIOUS ADDITION AND FRAMING THE IMPUGNED ASSESSMEN T ORDER IS ILLEGAL, VOID AB INITIO, CONTRARY TO LAW AND FAC TS, BEYOND JURISDICTION AND DESERVES TO BE QUASHED. 5. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN R EJECTING THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE. 6. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT REVERSING THE ACTION OF AO IN CHARGING THE INTEREST U/S. 234B OF THE INCOME TAX ACT, 1961. 7. THAT THE APPELLANT CRAVES TO LEAVE TO ADD, MODIF Y, AMEND OR DELETE ANY OF THE GROUNDS OF APPEAL AT TH E TIME OF 4 HEARING AND ALL THE ABOVE GROUNDS ARE WITHOUT PREJU DICE TO EACH OTHER. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S FILED THE RETURN OF INCOME ON 23.3.2010 AT THE TOTAL INCOME OF RS . 1,49,820/- AND THE SAME WAS PROCESSED AND SUBSEQUENTLY THE CASE OF T HE ASSESSEE WAS SELECTED FOR SCRUTINY ON THE BASIS OF THE AIR INFORMAT ION AND NOTICE U/S. 143(2) OF THE I.T. ACT, 1961 WAS ISSUED ON 21.9.2010. SUBSEQUENTLY, NOTICES U/S. 142(1) OF THE I.T. ACT ALONGWITH QUESTIONN AIRE WAS ALSO ISSUED ON 30.9.2010. IN RESPONSE TO THE SAME, THE AR OF THE ASSESSEE FILED HIS WRITTEN REPLY ALONGWITH SOME DOCUMENTARY EV IDENCES SUPPORTING THE CLAIM OF THE ASSESSEE. AS A MATTER OF RECORD THE BOOKS OF ACCOUNTS ARE NOT MAINTAINED BY THE ASSESSEE AS SU CH THE SAME HAVE BEEN PRODUCED BY THE ASSESSEE BEFORE THE AO. AFTER PE RUSING THE RECEIPT AND PAYMENT ACCOUNT OF THE ASSESSSEE AND THE CREDIT ENTRY IN THE BANK ACCOUNT OF THE ASSESSEE AND AS PER THE AIR I NFORMATION AVAILABLE ON RECORD, THE ASSESSEE HAS MADE THE INVEST MENT OF RS. 70 LACAS ON 6.10.2002 AND PURCHASE IMMOVABLE PROPERTY. A FTER CONSIDERING ALL THE DOCUMENTARY EVIDENCES THE AO FOUND THAT THE AMOUNT OF RS. 10 LACS RECEIVED BY THE ASSESSEE FROM S MT. MANJU BANSAL AS WELL AS RS. 5 LACS FROM HIS MOTHER IN LAW SMT. GOMT I DEVI AS A GIFT IS UNEXPLAINED CASH CREDIT OF THE ASSESSEE WITHIN THE M EANING OF SECTION 5 68 OF THE I.T. ACT AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE ON ACCOUNT OF INCOME FROM OTHER SOURCES AMOUNTING TO RS. 1,75 ,460/- AND COMPLETED THE ASSESSMENT U/S. 143(3) OF THE I.T. ACT, 1961 ON 23.12.2011. 3. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) WHO CONFIRMED THE ACTION OF THE AO AND D ISMISSED THE APPEAL OF THE ASSESSEE VIDE HIS ORDER DATED 2.4 .2015. 4. NOW THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER AND FILE THE PRESENT APPEAL BEFORE THE TRIBUNAL. 5. AT THE TIME OF HEARING, LD. COUNSEL OF THE ASS ESSEE STATED THAT THE ISSUE IN DISPUTE IS SQUARELY COVERE D BY THE VARIOUS DECISIONS RENDERED BY THE HONBLE HIGH COU RTS AS WELL AS ITAT BENCHES INCLUDING THE DECISION OF THE HONB LE ALLAHABAD HIGH COURT IN THE CASE OF SHANTA DEVI VS. CIT REPORTED IN 171 ITR 532 AND ITAT, AMRITSAR BENCH DE CISION IN THE CASE OF YADWINDER SINGH VS. ITO PASSED IN ITA N O. 508(ASR)/2014 DATED 24.2.2016 REPORTED IN (2016) 48 ITR (RIB) 0328 (AMRITSAR). HE STATED THAT ADMITTEDLY THE ASS ESSEE IS NOT MAINTAINING THE BOOKS OF ACCOUNTS IN HIS ORDINA RY COURSE OF BUSINESS AND AO HAD MADE THE ADDITION IN DISPUTE U/S. 68 OF THE I.T. ACT. THEREFORE, THE PROVISIONS OF SECT ION 68 OF THE 6 ACT ARE NOT ATTRACTED IN THE CASE OF THE ASSESSEE, HENCE, BY RESPECTFULLY FOLLOWING THE PRECEDENT, AS AFORESAID, THE ADDITION IN DISPUTE MAY BE DELETED AND APPEAL OF TH E ASSESSEE MAY BE ALLOWED. 6. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND STATED THAT THE SAME MAY BE AFFIRMED. 7. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS ESPECIALLY THE ORDER OF THE LD. CIT(A) AND THE ORDERS OF THE H ONBLE HIGH COURT OF ALLAHABAD IN THE CASE OF SHANTA DEVI VS. CIT REPORTED IN 171 ITR 532 AND DECISION OF THE ITAT, AMRITSAR BENCH IN THE CASE OF YADWINDER SINGH VS. ITO PASSED IN ITA NO. 508(ASR)/ 2014 DATED 24.2.2016 REPORTED IN (2016) 48 ITR (TRIB) 03 28 (AMRITSAR). THE RELEVANT PORTION OF THE DECISION OF THE HONBLE ALLAHABAD HIGH COURT IS REPRODUCED AS UNDER:- IT IS NOT IN DISPUTE THAT IN CASE THE BOOKS OF ACC OUNT OF THE PARTNERSHIP FIRM ARE NOT TO BE TREATED AS THOSE OF THE INDIVIDUAL PARTNER, THEN THE AMOUNT OF RS. 8,400 WHICH REPRESE NTS ALLEGED UNDISCLOSED INCOME, COULD NOT BE BROUGHT TO TAX ALO NG WITH THE INCOME OF THE ASSESSEE FOR THE ASSESSMENT YEAR 1963 -64, BECAUSE IN THAT CASE, THE PROVISIONS OF SECTION 69 OF THE I NCOME TAX ACT SHALL BE APPLICABLE. 7 PERUSAL OF SECTION 68 OF THE INCOME TAX ACT WOULD SHOW THAT IN RELATION TO THE EXPRESSION ' BOOKS ', THE EMPHAS IS IS ON THE WORD ' ASSESSEE '. IN OTHER WORDS, SUCH BOOKS HAVE TO BE THE BOOKS OF THE ASSESSEE HIMSELF AND NOT OF ANY OTHER ASSESSEE. IN THE PRESENT CASE, ADMITTEDLY, THE ASSESSEE MAI NTAINED NO BOOKS OF ACCOUNT. THE CASH CREDIT ENTRY OF WHICH TH E SUM IN QUESTION FORMS PART, WAS FOUND IN THE BOOKS THE ACC OUNT OF THE PARTNERSHIP FIRM WHICH IN ITS OWN RIGHT IS AN ASSES SEE. IN THE ABOVE VIEW OF THE MATTER, THE BOOKS OF ACC OUNT OF THE PARTNERSHIP FIRM HEREIN CANNOT BE CONSIDERED AS THO SE OF THE INDIVIDUAL ASSESSEE HEREIN AND, THEREFORE, SECTION 68 OF THE INCOME TAX ACT WOULD NOT BE ATTRACTED TO THE PRESENT CASE. THE ABOVE VIEW RECEIVES SUPPORT FROM LAXMI NARAIN GUPTA V. CIT [1980] 124 ITR 94 (PAT). NO DECISION TAKING A CONTRARY VIEW HAS BEEN BROUG HT TO OUR NOTICE AT THE BAR. FOR THE REASONS AFOREMENTIONED, WE ANSWER THE QUE STION IN THE NEGATIVE, I.E., IN FAVOUR OF THE ASSESSEE AND A GAINST THE REVENUE AND DISPOSE OF THE REFERENCE ACCORDINGLY. N O COSTS. 7.1 I FURTHER FIND THAT THE ITAT, AMRITSAR BENCH IN THE CASE OF YADWINDER SINGH VS. ITO PASSED IN ITA NO. 508(ASR)/ 2014 DATED 24.2.2016 REPORTED IN (2016) 48 ITR (TRIB) 03 28 (AMRITSAR) HAS HELD AS UNDER:- 6. I HAVE HEARD THE PARTIES AND HAVE PERUSED THE M ATERIAL AVAILABLE ON RECORD. SECTION 68 OF THE LT. ACT, READS AS FOLLOWS : SECTION 68: 'WHERE ANY SUM IS FOUND CREDITED IN THE BOOK OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE T HEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION O F THE [ASSESSING] OFFICER, SATISFACTORY, THE SUM SO CREDITED MAY BE C HARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PR EVIOUS YEAR.' 8 7. SO SECTION 68 TALKS OF ANY SUM FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR. AS- PER THIS SECTION, IF THE ASSESSEE OFFERS NO EXPLANATION, THE SECTION WOULD A PPLY. BUT THIS EXPLANATION HAS TO BE WITH REGARD TO ANY SUM FOUND CREDITED IN THE BOOKS. THIS IS AMPLY CLEAR FROM THE USE OF THE EXPRESSION 'ABOUT THE NATURE AND SOURCE THEREOF' (THEREOF' BEING THE OPERATIVE WORD) . THEN, IN CASE. THE EXPLANATION OFFERED BY THE ASSESSEE IS NOT FOUND BY THE AO TO BE SATISFACTORY, THE SECTION CAN BE INVOKED. THIS EXPL ANATION, OBVIOUSLY, HARKS BACK TO ANY SUM FOUND CREDITED IN THE BOOKS. THE WORDS 'THE SUM SO CREDITED' AGAIN RELATE TO ANY SUM FOUND CREDITED IN THE BOOKS 'SO CREDITED', HERE BEING THE PREGNANT EXPRESSION. 8. THUS, A PLAIN READING OF THE SECTION ESTABLISHES THAT IT OPERATES ONLY WHERE BOOKS ARE MAINTAINED BY AN ASSESSEE AND A SUM IS FOUND CREDITED THEREIN. 9. NOW, IN THE PRESENT CASE, IT REMAINS UNDISPUTED THAT THE ASSESSEE HAS NOT MAINTAINED ANY BOOKS DURING THE YEAR. THUS, THE PROVISIONS OF SECTION 68 OF THE ACT ARE NOT AT ALL ATTRACTED AND THEY HAV E BEEN WRONGLY APPLIED BY THE AUTHORITIES BELOW. THIS POSITION HAS BEEN DU LY RECOGNIZED IN 'SH. OM PARKASH SHARMA, FARIDABAD' (SUPRA). NO CONTRARY DECISION HAS BEEN CITED BEFORE THIS BENCH. 10. IN VIEW OF THE ABOVE, THE GRIEVANCE OF THE ASSE SSEE BY WAY OF THE ADDITIONAL GROUNDS TAKEN IS JUSTIFIED AND IS ACCEPT ED AS SUCH. DUE TO SUCH ACCEPTANCE, SINCE THE PROVISIONS OF SECTION 68 OF T HE ACT ARE THEMSELVES HELD TO BE NOT APPLICABLE AND MIS-APPLIED, NOTHING FURTHER REMAINS TO BE ADJUDICATED. 11. ACCORDINGLY, THE ORDER UNDER APPEAL IS REVERSED . THE ADDITION IS CANCELLED. 12. IN THE RESULT, THE APPEAL IS ALLOWED. 8. AFTER PERUSING THE AFORESAID FINDING OF THE H ONBLE ALLAHABAD HIGH COURT AND THE COORDINATE BENCH, AS AFORESAID, I AM OF THE CONSIDERED VIEW THAT THE ISSUE IN DISPUTE IS SIMIL AR AND SQUARELY COVERED BY THE AFORESAID DECISION, THEREFORE, RESPECTFULLY FOLLOWING THE ABOVE 9 PRECEDENTS, THE ADDITION IN DISPUTE IS HEREBY DELET ED AND ACCORDINGLY, THE ISSUE IN DISPUTE IS ALLOWED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 20-01-201 7. SD/- [H.S. SIDHU] JUDICIAL MEMBER DATED, 20-01-2017. SRBHATNAGAR COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) DR, ITAT AR, ITAT, NEW DELHI.