Shri Prakash Chandnani, Bhopal V. The ACIT- 3(1), Bhopal

ITA 40/IND/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1522 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 02-11-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 18-05-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MRIDULA BAJPAI
• Assessee Lawyers: M K SHARMA
• Keywords: Unexplained cash credit; Gift
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : ACRPC4212F I.T.A.NO. 37/IND/2011 A.Y. : 2005 - 06 ACIT, SHRI PRAKASH CHANDNANI, 3(1), BHOPAL VS BHOPAL APPELLANT RESPONDENT I.T.A.NO. 40/IND/2011 A.Y. : 2005 - 06 SHRI PRAKASH CHANDNANI, ACIT, 3(1), BHOPAL VS BHOPAL APPELLANT RESPONDENT DEPARTMENT BY : SMT. MRIDULA BAJPAI, CIT DR ASSESSEE BY : SHRI M.K.SHARMA DATE OF HEARING : 28 . 01 .201 3 DATE OF PRONOUNCEMENT : 31 . 01 .201 3 -: 2: - 2 O R D E R PER R. C. SHARMA, A.M. THESE ARE CROSS APPEALS BY THE REVENUE AND ASSESSEE AGAINST THE ORDER PASSED BY THE LD.CIT(A) DATED 30 TH DECEMBER, 2010, FOR THE ASSESSMENT YEAR 2005-06. 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. FACTS IN BRIEF ARE THAT THE ASSESSEE IS AN INDIVIDUAL DOING BUSINESS OF TRADING OF JEWELLERY AND FINANCE BUSINESS. RETURN OF INCOME WAS FILED WHEREIN INCOME OF RS. 10 .25 LAKHS WAS DECLARED. THE CASE WAS SELECTED UNDER SCRUTINY AND ADDITIONS WERE MADE ON ACCOUNT OF CAPITAL INTRODUCE D, UNSECURED LOAN TAKEN FROM P.K. CHANDNANI, HUF, GIFT RECEIVED FROM BROTHER P.K. CHANDNANI, AMOUNT RECEIVED FROM M AYA DEVI CHANDNANI AND ALSO IN RESPECT OF PROFIT DECLAR ED IN THE PROFIT AND LOSS ACCOUNT. THE ASSESSING OFFICER OBSE RVED THAT THE ASSESSEE DID NOT COOPERATE DURING THE ASSESSMEN T PROCEEDINGS AND NO EXPLANATION FOR THE AMOUNT CREDI TED IN THE CAPITAL ACCOUNT, UNSECURED LOAN, GIFT AMOUNT WAS SU BMITTED, THEREFORE, ADDITIONS WERE MADE BY PASSING ORDER U/S 144. -: 3: - 3 BEFORE THE CIT(A), THE ASSESSEE FILED DETAILED SUB MISSION, UNDER RULE 46A, WHICH WAS SENT BY THE LD.CIT(A) TO ASSESSING OFFICER FOR HIS REMAND REPORT THEREON. AFTER CONSID ERING REMAND REPORT AND ITS COUNTER REPLY BY THE ASSESSEE , THE CIT(A) DELETED ADDITION ON ACCOUNT OF UNSECURED LOA N, CREDIT IN THE CAPITAL ACCOUNT AND UNEXPLAINED CASH CREDIT OF RS. 2,03,90,000/- OUT OF TOTAL ADDITION OF RS. 3,05,36, 000/-. HOWEVER, THE CIT(A) HAS CONFIRMED ADDITION IN RESPE CT OF GIFT OF RS. 1,01,46,000/- AND EXPENSES AMOUNTING TO RS. 36, 139/- AND AMOUNT CREDITED IN MIP ACCOUNT AMOUNTING TO RS. 1,10,860/-. AGAINST THIS ORDER OF CIT(A), BOTH ASSE SSEE AND REVENUE ARE IN APPEAL BEFORE US. 3. THE GROUNDS TAKEN BY THE REVENUE READS AS UNDER :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE CIT(A) HAS ERRED IN :- 1. DELETING THE ADDITION OF RS. 1,74,054/- OUT OF RS. 2,77,20,914/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNDISCLOSED SOURCES. -: 4: - 4 2. DELETING THE ADDITION OF RS. 12,00,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF CAPITAL ACCOUNT. 3. DELETING THE ADDITION OF RS. 1,30,21,135/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNSECURED LOAN U/S 68. 4. DELETING THE ADDITION OF RS. 2,03,90,000/- OUT OF TOTAL ADDITION OF RS. 3,05,36,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CASH U/S 68. 4. THE GROUNDS TAKEN BY THE ASSESSEE READS AS UNDER :- 1) IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE THE ORDER PASSED BY THE LD.AO IS ILLEGAL AND WITHOUT JURISDICTION AS NO NOTICE U/S 143(2) WAS SERVED ON THE APPELLANT WITHIN TIME PERIOD STIPULATED IN THE SECTION. 2) THE LD. CIT(A) HAS CONFIRMED THE ADDITIONS DESPITE THE FACT THAT NO EVIDENCE OF SERVICE OF NOTICE WAS HELD ON RECORDS -: 5: - 5 CONSEQUENTLY WHOLE PROCEEDINGS IS WITHOUT JURISDICTION. 3. THE LD. CIT(A) HAS ERRED IN CONFIRMING THE TOTAL ADDITION OF RS. 1,02,92,999/- TO THE TOTAL RETURNED INCOME OF THE APPELLANT. 4) THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 1,01,46,000/- U/S 68 ON ACCOUNT OF GIFT RECEIVED DESPITE THE FACT THAT APPELLANT HAS FILED SUFFICIENT EVIDENCES IN SUPPORT OF GIFT RECEIVED I.E. CONFIRMATION, COPY OF PASSPORT, AFFIDAVIT, COPY OF NRO BANK A/C OF MR. PARASRAM CHANDNANI ALONGWITH THE BALANCE SHEET OF HIS BUSINESS CONCERN IN DUBAI; THE SUPPORTING ADEQUATELY PROVED ALL INGREDIENTS OF GIFT I.E. IDENTITY, GENUINENESS, CAPACITY, RELATIONSHIP AND OCCASION. 5. THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 36,139/- ON ACCOUNT OF DISALLOWING THE EXPENSES CLAIMED BY THE APPELLANT BECAUSE IT IS CALCULATED ON THE AD HOC -: 6: - 6 BASIS OF A CERTAIN PERCENTAGE OF THOSE EXPENSES, WHICH MAY INCLUDE SOME PERSONAL ELEMENT. 6) THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 1,10,860/- DESPITE THE FACT THAT THIS IS AN AMOUNT OF MATURITY OF MIP ISSUED BY UTI ON REDEMPTION AND THEREFORE IT IS EXEMPT U/S 10(33) OF THE INCOME-TAX ACT, 1961. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AN D FOUND FROM RECORD THAT WHILE FRAMING THE ASSESSMENT U/S 1 44, THE ASSESSING OFFICER MADE ADDITION ON THE PLEA THAT TH E ASSESSEE HAS NOT COOPERATED AND DID NOT FURNISH ANY EXPLANAT ION. DURING APPELLATE PROCEEDINGS, THE ASSESSEE HAS SUBM ITTED DETAILED JUSTIFICATION AGAINST THE ADDITION SO MADE . THESE DOCUMENTS WERE SENT BY THE LD.CIT(A) TO THE ASSESSI NG OFFICER UNDER RULE 46A. THE ASSESSING OFFICER ALSO CONSIDER ED THESE DOCUMENTS AND SENT HIS REMAND REPORT. AFTER CONSIDE RING REMAND REPORTS, THE CIT(A) DELETED THE ADDITION MAD E ON ACCOUNT OF CASH CREDIT, CREDIT IN THE CAPITAL ACCO UNT AND -: 7: - 7 UNSECURED LOAN. PRECISE OBSERVATION AND FINDING OF CIT(A) WAS AS UNDER :- THE ISSUE INVOLVED HAS BEEN EXAMINED CAREFULLY BASED ON THE WRITTEN SUBMISSION ALONGWITH THE DOCUMENTS FILED. IN MY CONSIDERED VIEW THE APPELLANT HAS CONCLUSIVELY DISCHARGED ITS ONUS IN RESPECT OF SECTION 68 OF THE ACT. THE ASSESSING OFFICER DURING THE ASSESSEE DISCHARGED ITS ONUS IN RESPECT OF SECTION 68 OF THE ACT. THE AO DURING THE ASSESSMENT OR DURING THE REMAND PROCEEDINGS HAS NOT BROUGHT ANY COGENT MATERIAL ON RECORD TO REBUT THE CLAIM OF THE APPELLANT REGARDING THE LOAN OF RS. 1,54,90,000/-. MOREOVER, THE POINT INVOLVED IN APPEAL IS WHETHER THE LOAN GIVEN DURING THE YEAR WERE ACTUALLY GIVEN TO THE APPELLANT BY MR. PARASRAM CHANDNANI OR THERE ARE MERE ENTRIES. ON THE BASIS OF EVIDENCES FILED INCLUDING CONFIRMATION CERTIFICATE OF BANK REGARDING FOREIGN REMITTANCES IN THE NRE ACCOUNT OF MR. -: 8: - 8 PARASRAM CHANDANI, STRONGLY SUPPORTS THE CONTENTION OF THE APPELLANT BECAUSE THE OBSERVATION OF THE AO IN THE REMAND REPORT IS BASED ONLY ON SUSPICION AND CONJECTURE AND NOT SUPPORTED BY ANY MATERIAL EVIDENCE. THE APPELLANT HAS FURNISHED VARIOUS DOCUMENTARY EVIDENCES AS STATED ABOVE IN SUPPORT OF THE LOAN TAKEN AND, THEREFORE, THE ADDITION OF RS.1,54,90,000/- MADE OUT OF RS.3,05,36,000/- IS DELETED. AS FAR AS THE SUM OF RS. 49,00,000/- IS CONCERNED, THE SAME REPRESENTS REPAYMENT OF EXCESS AMOUNT BY MR. PARASRAM CHANDANI TO THE APPELLANT WHICH ARE MADE THROUGH ACCOUNT PAYEE CHEQUES WHICH ARE REFLECTED IN THE NRO ACCOUNT NO. 004010100038155 OF THE MR. PARASRAM CHANDANI AND THE BANK ACCOUNT OF THE APPELLANT. IT IS CLEAR FROM THE DETAILS FILED THAT THE TRANSACTIONS ARE NOT IN THE FORM OF LOAN -: 9: - 9 TAKEN BY THE APPELLANT BUT IT IS MERELY REPAYMENT OF EXCESS AMOUNT GIVEN BY THE APPELLANT TO MR. PARASRAM CHANDANI. MOREOVER, THE IDENTITY OF THE PERSON WHO HAS RECEIVED THE MONEY ALONGWITH THE GENUINENESS OF THE TRANSACTIONS ARE NOT IN DISPUTE ALONGWITH HIS CREDITWORTHINESS. THUS, THE REPAYMENT DOES NOT CONSTITUTE A LOAN TO THE APPELLANT AND, THEREFORE, NO ADDITION IS WARRANTED U/S 68 OF THE IT. ACT. THUS, THE ADDITION OF RS. 49,00,000/- FORMING PART OF RS. 3,05,36,000/- STANDS DELETED. 6. THE ADDITION OF RS. 22 LAKHS IN RESPECT OF AMOUNT RECEIVED FROM MAYA DEVI CHANDNANI WAS DELETED BY TH E LD.CIT(A) AFTER HAVING THE FOLLOWING OBSERVATIONS : - I HAVE GONE THROUGH THE ASSESSMENT ORDER AND THE REPLY OF THE LD. AR. THE AO HAS NOT GIVEN ANY COMMENT ON THIS ADDITION. THE LD. AR ON THE OTHER HAND HAS STATED THAT THIS AMOUNT -: 10: - 10 IS RECEIVED IN THE SUBSEQUENT YEAR (A.Y. 2006- 07) AND DULY ACCOUNTED FOR BY THE APPELLANT. EVEN THE AO IN THIS RESPECT HAS MADE ADDITION U/S 143(3) FOR A.Y. 2006-07 A COPY OF WHICH HAS BEEN FILED BY THE LD. AR AND IS PLACED ON RECORD. THUS, THERE IS NO REASON HOW THE ADDITION CAN BE MADE IN A.Y. 2005-06. ALL THE RELEVANT DOCUMENTS IN SUPPORT OF HIS CONTENTION HAS FILED BY THE ID. COUNSEL INCLUDING COPY OF LEDGER ACCOUNT OF BOTH THE ASSESSMENT YEARS AND COPY OF THE ASSESSMENT ORDER FOR A.Y. 2006- 07. THE ADDITION, THEREFORE, IS DELETED AND THE GROUND IS DECIDED IN FAVOUR OF THE APPELLANT. 7. AFTER CAREFULLY PERUSING THE FINDINGS RECORDED BY T HE LD.CIT(A) VIS--VIS REMAND REPORT SENT BY THE ASSES SING OFFICER AND ITS COUNTER REPLY FILED BY THE ASSESSEE, WE FOU ND THAT THE ADDITION ON ACCOUNT OF CASH CREDIT AND AMOUNT RECEI VED BY MAYA DEVI CHANDNANI HAS BEEN CORRECTLY DELETED BY T HE LD.CIT(A) AFTER HAVING THE DETAILED FINDINGS. ALL T HE THREE INGREDIENTS OF CASH CREDITORS BEING IDENTITY, GENUI NENESS OF -: 11: - 11 TRANSACTION AND CREDITWORTHINESS OF ALL THE CREDITO RS WERE DULY ESTABLISHED. ACCORDINGLY, WE DO NOT FIND ANY INFIR MITY IN THE ORDER OF CIT(A) FOR DELETING THE ADDITION ON ACCOUN T OF UNSECURED LOAN AND CASH CREDIT. 8. SIMILARLY, ADDITION MADE ON ACCOUNT OF MONEY TRANSFERERED FROM P. C. JEWELLERS TO THE DEEPESH TR ADING AND FINANCE, THE ADDITIONS WERE DELETED BY THE LD.CIT(A ) AFTER HAVING THE FOLLOWING OBSERVATIONS :- THE LD. AR HAS STATED THAT THE LEDGER ACCOUNT OF BOTH THE PROPRIETARY CONCERNS WERE SUBMITTED TO THE AO DURING THE REMAND REPORT PROCEEDINGS WHICH INDICATES THAT THESE ARE NOTHING BUT TRANSFER FROM ONE PROPRIETARY CONCERN TO ANOTHER OF THE ASSESSEE PROPRIETOR. THE AMOUNT IN QUESTION REPRESENTS TRANSFER OF FUNDS FROM DEEPESH TRADE & FINANCE TO M/S. P.C. JEWELLERS, BEING TWO PROPRIETARY CONCERNS OF MR. PRAKASH CHANDNANI. THE CASH BOOK AND THE BANK STATEMENT IDENTIFYING THE TRANSFER OF FUNDS WERE FURNISHED. THE TRANSFER -: 12: - 12 ENTRIES DO NOT INDICATE FRESH INFLOW OF FUND DURING THE YEAR. ALL THESE DOCUMENTS GOES TO PROVE THAT THEY ONLY REPRESENT TRANSFER OF OWN FUNDS FROM ONE CONCERN TO ANOTHER AND, THEREFORE, THERE IS NO REASON TO TREAT IT AS INCOME CHARGEABLE TO TAX AS PER LAW. THIS ADDITION IS, THEREFORE, DELETED. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND FOUND FROM RECORD THAT BOTH THE CONCERNS ARE PROPRIETORY CONCERNS OF THE ASSESSEE, TRANSFER OF FUND FROM ONE ACCOUNT TO OTHER ACCOUNT DOES NOT AMOUNT TO ANY FRESH INFLOW OF FUND S, ACCORDINGLY, DELETION OF ADDITION BY THE LD.CIT(A) WAS JUSTIFIED IN TERMS OF ITS FINDING RECORDED AT PARA 7, THE REL EVANT PORTION OF WHICH HAVE BEEN REPRODUCED HEREINABOVE. 10. THE ADDITION OF RS. 1,66,48,000/- WAS DELETED BY TH E LD.CIT(A) AFTER HAVING THE FOLLOWING OBSERVATIONS : - I HAVE GONE THROUGH THE ASSESSMENT ORDER, THE SUBMISSION MADE BY THE LD. AR, REMAND REPORT OF THE AO AND THE REJOINDER OF THE LD. AR AGAINST THE REMAND REPORT AND THE SUPPORTING DOCUMENTS FILED -: 13: - 13 DURING THE APPELLATE PROCEEDINGS. IT IS SEEN THAT T HE IMPUGNED ADDITION OF RS.1,66,48,000/- HAS BEEN MADE ON ACCOUNT OF INTER TRANSFER OF FUNDS FROM P.C. JEWELLERS TO DEEPESH TRADE & FINANCE. THE LD. AR HAS SUBMITTED THAT THE ADDITION MADE IS UNLAWFUL BECAUSE THE AMOUNTS IN QUESTION IS ONLY BY WAY OF TRANSFER OF FUNDS FROM ONE PROPRIETARY CONCERN TO ANOTHER CONCERN OF THE SAME PROPRIETOR MR. PRAKASH CHANDNANI, THE ASSESSEE. THE LD. AR HAS SUBMITTED LEDGER ACCOUNT, CASH BOOK AND BANK STATEMENT INDENTIFYING THESE TRANSACTIONS OF THE ASSESSEE. IT IS ALSO STATED THAT ACCOUNTS OF BOTH THE CONCERNS ARE AUDITED U/S 4AB AND THEY WERE AVAILABLE WITH THE AO AS THEY WERE FILED WITH THE RETURN OF INCOME. THERE IS STRENGTH IN THE ARGUMENT OF THE LD. AR BECAUSE THES E TRANSFER OF FUND FROM ONE PROPRIETARY CONCERN TO ANOTHER CANNOT CONSTITUTE INCOME AS PER LAW AND THEREFORE THE AO WAS NOT JUSTIFIED IN MAKING THE ADDITION. THE AO HAS FURTHER NOT GIVEN ANY SPECIFIC OR COGENT REASON EITHER IN THE ASSESSMENT ORDER OR IN THE -: 14: - 14 REMAND REPORT FOR MAKING SUCH ADDITION. SINCE, THE AMOUNTS ARE RECORDED IN THE BOOKS AT BOTH THE ENDS, THERE IS NO MERIT IN MAKING ADDITION OF RS.1 ,66,48,000/- TO THE INCOME OF THE APPELLANT FROM UNDISCLOSED SOURCES, THEREFORE, THIS ADDITION IS DELETED. 11. IT IS CLEAR FROM THE FINDINGS RECORDED BY THE LD.CI T(A) THAT THE ADDITION HAS BEEN MADE BY THE ASSESSING OF FICER IN RESPECT OF INTER TRANSFER OF FUNDS FROM P. C. JEWEL LERS TO DEEPESH TRADE & FINANCE. NO COGENT REASON HAS BEEN GIVEN BY THE ASSESSING OFFICER NOR ANY SPECIFIC JUSTIFICATIO N EVEN IN THE REMAND REPORT TO THE EFFECT THAT WHY THIS ADDITION HAS BEEN MADE WHEN ENTRIES ARE PROPERLY RECORDED IN BOOKS OF BOTH THE FIRMS. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) FOR DELETING THESE ADDITIONS, WHICH WERE MAD E AFTER RECORDING HIS FINDING AT PARA 6, RELEVANT PORTION O F WHICH HAS BEEN REPRODUCED HEREIN ABOVE. 12. AFTER HAVING THE FOLLOWING OBSERVATIONS, THE CIT(A) HAS CONFIRMED THE ADDITION OF RS. 1,01,46,000/- RECEIVE D BY THE ASSESSEE AS GIFT :- -: 15: - 15 THE OTHER COMPONENT OF RS.3,05,36,000/- IS RS.1,01,46,000/- IS THE GIFT MADE BY MR. PARASRAM CHANDANI TO APPELLANT DURING THE YEAR UNDER CONSIDERATION. THE APPELLANT HAS FILED CONFIRMATION , COPY OF PASSPORT, AFFIDAVIT AND COPY OF BANK ACCOUN T (NRO A/C.) OF MR. PARASRAM CHANDANI ALONGWITH HIS BALANCE SHEET FOR HIS BUSINESS CONCERN IN DUBAI IN SUPPORT OF THE GIFT RECEIVED. 1 HAVE GONE THROUGH FACTS OF THE CASE AND THE TRANSACTIONS RECORDED IN THE BOOKS OF THE APPELLANT IN RESPECT OF THE GIFT WHICH ARE RECEIVED ON FOLLOWING DATES :- DATE OF RECEIPT AMOUNT (IN RS.) 22.09.2004 10,00,000.00 23.09.2004 20,00,000.00 02.12.2004 9,46,000.00 02.12.2004 12,00,000.00 19.01.2005 25,00,000.00 20.01.2005 25,00,000.00 TOTAL 1,01,46,000.00 APPELLANT RECEIVED GIFTS FOR RS. 1,01,46,000.00 AGA IN FROM HIS BROTHER MR. PRAKASH CHNDNANI ON VARIOUS DATES, WHICH WAS RECEIVED ON 22.09.04 RS. 10,00,000.00, ON 23.09.04 RS. 20,000 ON 2.12.04 -: 16: - 16 RS. 9,46,000.00, ON 2.12.04 RS. 12,00,000.00,ON 19.01.05 RS. 25,00,000.00 AND ON 20.01.05 RS. 25,00,000.00. THESE GIFTS WERE RECEIVED IN CASH. TH E BANK ACCOUNT OF PARASRAM CHANDNANI NO. 04010100038155 WITH AXIS BANK SHOW THAT THESE AMOUNTS WERE WITHDRAWN FROM IT AND ON THE DATE OF WITHDRAWAL THE AMOUNT WAS CREDITED IN THE BOOKS OF THE APPELLANT AS GIFT. APPELLANT FILED COPIES OF CONFIRMATION, PASSPORT, ALONGWITH BANK STATEMENT OF THESE ACCOUNTS OF LENDE R AND OTHER DOCUMENTS. AN AFFIDAVIT OF LENDER, MR PARASRAM CHANDNANI, WAS ALSO FILED BY APPELLANT, WHICH ALSO CONFIRMS THE GIFT TRANSACTIONS WITH REFERENCE TO RESPECTIVE NRE A/C NO. 044010100026664 AND NRO ACCOUNTS NO. 04010100038155. THIS AFFIDAVIT ALSO CONFIRMS THAT MR. PARASRAM CHNDNANI HAS AUTHORISED HIS BROTHER MR PRAKASH CHANDNANI VIDE A GENERAL POWER OF ATTORNEY TO OPERATE BANK ACCOUNT TO FACILITATE HIM AND -: 17: - 17 HIS FAMILY HERE IN INDIA. A COPY OF BALANCE SHEET OF DEEPESH TRADING CO. L.L.C., A COMPANY OWNED BY MR. PARASRAM CHANDNANI, FOR THE YEARS ENDING ON 31.12. 2002, 31.12.2003 AND 31.12.2004 WERE ALSO FILED SHOWING NET PROFIT OF (ARABIAN DHEHRAM) AED-21,52,415.00, AED26,03,300.00 AND AED-30,96,200.00. IT IS ALSO CONTENDED THAT THE DONOR IS THE REAL BRO THER OF THE APPELLANT AND THE GIFT HAVE BEEN RECEIVED AF TER MAKING WITHDRAWALS IN CASH FROM THE NRO ACCOUNT OF MR. PARASRAM CHANDANI AND REFLECTED IN THE CASH BOOK OF THE APPELLANT ACCORDINGLY. HOWEVER, ON PERUSAL OF THE FACTS OF THE CASE, I FAIL TO UNDERST AND WHY THE ENTIRE GIFT OF RS.1,01,46,000/- HAVE BEEN RECEIVED IN CASH WHEN THE DONOR AND THE DONEE WERE HAVING BANK ACCOUNTS WHEREAS OTHER TRANSACTIONS BETWEEN THEM WERE BY CHEQUES ONLY. THEREFORE, THE TRANSACTION RELATING TO GIFT IS NOT PROVED BEYOND D OUBT AND THEREFORE, ADDITION OF RS. 1,01,46,000/- OUT OF -: 18: - 18 RS. 3,05,36,000/- IS CONFIRMED. 13. WITH RESPECT TO THE ADDITION CONFIRMED BY THE LD.CI T(A) IN RESPECT OF GIFT OF RS. 1,01,46,000/- RECEIVED FR OM THE BROTHER, WE FOUND THAT THIS AMOUNT WAS ALREADY EXIS TED IN THE ASSESSEES BOOKS OF ACCOUNT AS CASH CREDIT RECEIVED FROM HIS BROTHER, WHICH WAS PAID BY THE ASSESSEE TO HIS BROT HER THROUGH ACCOUNT PAYEE CHEQUE AND THE AMOUNT WAS DUL Y CREDITED IN THE NRO ACCOUNT OF BROTHER. FROM THIS N RO ACCOUNT, CASH WAS WITHDRAWN AND THE SAME WAS GIVEN TO THE ASSESSEE AS GIFT. THERE IS NO LEGAL REQUIREMENT FO R RECEIVING THE AMOUNT OF GIFT BY CHEQUE. SINCE ALL THE THREE I NGREDIENTS OF VALID GIFT I.E. IDENTITY, GENUINENESS OF TRANSACTIO N, CREDITWORTHINESS OF DONOR IS WELL ESTABLISHED EVEN AS PER THE FINDINGS RECORDED BY THE LD.CIT(A) AT PARA 9 OF HIS ORDER AS REPRODUCED HEREINABOVE, WE DO NOT FIND ANY JUSTIFIC ATION IN THE ORDER OF CIT(A) FOR CONFIRMING ADDITION ON ACCOUNT OF GIFT MERELY ON THE PLEA THAT IT WAS RECEIVED IN CASH. GI FT WAS RECEIVED FROM REAL BROTHER AND IT WAS NOT A NEW CRE DIT, BUT THE CREDIT BALANCE IN THE ASSESSEES BOOKS OF ACCOUNT W AS REPAID AND THE SAME AMOUNT WAS RECEIVED BACK THROUGH PROP ER DEBIT -: 19: - 19 AND CREDIT IN THE BANK ACCOUNT OF THE ASSESSEES BA NK AND ENTRIES IN NRO ACCOUNT OF HIS BROTHER. ACCORDINGLY, WE REVERSE THE ORDER OF CIT(A) AND DIRECT THE ASSESSING OFFICE R TO DELETE THE ADDITION MADE ON ACCOUNT OF ALLOW THE GIFT AMOU NT RECEIVED FROM BROTHER. 14. GROUND NOS. 5 & 6 WERE NOT PRESSED BY THE LD. AUTHORIZED REPRESENTATIVE WITH REGARD TO DISALLOWA NCE OF EXPENSES OF RS. 36,139/- AND ADDITION ON ACCOUNT OF MATURITY OF NIR AMOUNTING TO RS. 1,10,160/-, THE SAME ARE, T HEREFORE, DISMISSED IN LIMINE. 15. WITH REGARD TO ASSESSEES ALLEGATION REGARDING NON SERVICE OF NOTICE U/S 143(2), WE FOUND THAT THE CIT (A) HAS CONFIRMED THE ACTION OF ASSESSING OFFICER REGARDING SERVICE OF NOTICES U/S 143(2) AFTER HAVING FOLLOWING OBSERVATI ONS :- I HAVE GONE THROUGH THE SUBMISSIONS OF THE LD. AUTHORIZED REPRESENTATIVE AND THE REMAND REPORT OF THE ASSESSING OFFICER. THE REMAND REPORT OF THE ASSESSING OFFICER ALONGWITH THE EVIDENCES OF THE DISPATCH OF NOTICE U/S 143(2) THROUGH THE SPEED POS T CLEARLY ESTABLISHES THE FACT THAT NOTICE U/S 143(2) -: 20: - 20 WAS ISSUED AND SERVED WITHIN THE STIPULATED TIME ON THE LAST KNOWN ADDRESS AS PER THE PROVISIONS OF INCOME-TAX ACT, 1961, AND, THEREFORE, GROUND NOS. 2 TO 4 ARE DECIDED AGAINST THE APPELLANT. 16. IN TERMS OF THE FINDING RECORDED BY THE LD.CIT(A) V IS-- VIS FACT BROUGHT ON RECORD FROM REMAND REPORT, WE D O NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) CONFIRMING THE ACTION OF ASSESSING OFFICER FOR PROPER SERVICE OF NOTICE U/S 143(2) WITHIN THE STIPULATED PERIOD. ACCORDINGLY, THE GROUND NO.1 TAKEN BY THE ASSESSEE STANDS DISMISSED. 17. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED, WHEREAS THE APPEAL OF THE ASSESSEE IS ALLOWED IN PA RT. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 31 ST JANUARY, 2013. SD/- SD/- (JOGINDER SINGH) (R. C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 31 ST JANUARY, 2013. CPU* 2829