ITO, New Delhi V. Shri Pankaj Mahajan, New Delhi

ITA 4085/DEL/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91226 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 17-06-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 31-07-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIKRAM SAHAY
• Keywords: Income from undisclosed sources

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : F : NEW DELHI BEFORE SHRI R.S. SYAL, AM AND SHRI A.T. VARKEY, JM ITA NO.4085/DEL/2012 ASSESSMENT YEAR : 2008-09 ITO, WARD-37(1), NEW DELHI. VS. PANKAJ MAHAJAN, C/O A.C. GUPTA & ASSOCIATES, 104-105, M.M. HOUSE, RAJA IRON FACTORY BUILDING, 59, RANI JHANSI ROAD, NEW DELHI 110 055. PAN: AAFPM2880F (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ANIL GUPTA, CA DEPARTMENT BY : SHRI VIKRAM SAHAY, SR. DR DATE OF HEARING : 17.06.2015 DATE OF PRONOUNCEMENT : 18.06.2015 ORDER PER R.S. SYAL, AM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) ON 31.5.2012 IN RELATION TO THE ASSESSME NT YEAR 2008-09. ITA NO.4085/DEL/2012 2 2. THE ONLY ISSUE RAISED HERE IN THE APPEAL THROUGH DIFFERENT GROUNDS IS AGAINST THE DELETION OF ADDITION OF RS.13,01,000 /- MADE BY THE ASSESSING OFFICER (AO). 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT A N AIR INFORMATION WAS RECEIVED ABOUT THE ASSESSEE HAVING DEPOSITED CASH OF RS.13,01,000/- IN ORIENTAL BANK OF COMMERCE (OBC), CONNAUGHT PLACE, N EW DELHI. ON BEING CALLED UPON TO EXPLAIN THE SOURCE OF THIS CAS H DEPOSIT, THE ASSESSEE STATED THAT HE INHERITED MORE THAN RS.13 LAC FROM H IS MOTHER SMT. SAROJ GUPTA, WHO DIED ON 14.8.2006. HE CLAIMED THAT SMT. SAROJ GUPTA WAS A REGULAR INCOME-TAX ASSESSEE AND USED TO FILE HER IN COME-TAX RETURNS. IN SUPPORT OF THIS CONTENTION, HE FILED A COPY OF HER RETURN FOR THE AY 2006- 07; A COPY OF WILL DATED 28.2.2006; AND A COPY OF D EATH CERTIFICATE. ON PERUSAL OF THE WILL OF SMT. SAROJ GUPTA, THE AO OBS ERVED THAT SHE CLAIMED THROUGH THIS WILL TO HAVE POSSESSED MOVEABL E ASSETS INCLUDING SAVING BANK ACCOUNT IN OBC, FDRS IN OBC, NATIONAL S AVING CERTIFICATE, SHARES OF LIMITED COMPANIES, CASH AS ISTRIDHAN, GOLD AND DIAMOND JEWELLERY RECEIVED AT THE TIME OF HER MARRI AGE AND FURTHER AS ITA NO.4085/DEL/2012 3 PURCHASED FROM ISTRIDHAN. AS PER THIS WILL, CASH (NOT QUANTIFIED) WAS TO BE GIVEN TO THE ASSESSEE AND GOLD AND DIAMOND JE WELLERY TO SMT. SHEFALI MAHAJAN, WIFE OF THE ASSESSEE. THE AO OBSE RVED THAT THERE WAS NO MENTION ABOUT THE AMOUNT OF CASH AVAILABLE WITH HER. ON BEING CALLED UPON TO FURNISH EVIDENCE OF HER FILING INCOM E-TAX RETURNS ALONG WITH BALANCE SHEETS AND STATEMENT OF AFFAIRS AS ON 31.3.2005, 31.3.2006 AND 14.8.2006 (DATE OF DEATH), THE ASSESSEE DID NOT FILE ANY STATEMENT OF AFFAIRS AS ON 31.3.2005 AND 31.3.2006. COPIES OF B ALANCE SHEET OF HER PROPRIETORSHIP CONCERNS, NAMELY, M/S SATYAM INVESTM ENTS AND M/S MAHAJAN INVESTMENTS AND FINANCIAL SERVICES AS ON 31 .3.2005 WERE FILED, WHICH DEPICTED CASH BALANCE OF RS.16,706/- AND RS.7 ,754/-, RESPECTIVELY. STATEMENT OF AFFAIRS OF SMT. SAROJ GUPTA AS ON 14.8 .2006 FILED BY THE ASSESSEE SHOWED THAT THERE WAS NO CASH IN HAND AS O N THAT DATE. THE AO NOTICED FROM THE RECORDS OF SMT. SAROJ GUPTA SUBMIT TED BY THE ASSESSEE THAT THERE WAS NO MENTION OF ANY CASH BALANCE, WHET HER AS ISTRIDHAN OR OTHERWISE WHICH COULD HAVE BEEN REFLECTED IN THE AL ANCE SHEETS OF THE PROPRIETORSHIP CONCERNS OR IN THE STATEMENT OF AFFA IRS. THE AO NOTICED THAT THE AVAILABILITY OF SUCH CASH IN HAND AND OTHE R MOVEABLE ASSETS WITH ITA NO.4085/DEL/2012 4 SMT. SAROJ GUPTA ATTRACTED THE LEVY OF WEALTH TAX A S THE VALUE OF CASH AND JEWELLERY AS CLAIMED BY THE ASSESSEE EXCEEDED R S.15 LAC. SINCE NO WEALTH-TAX RETURN WAS FILED AND THERE WAS NOTHING T O SHOW THE AVAILABILITY OF CASH TO THE EXTENT OF RS.13.01 LAC, THE AO MADE ADDITION FOR THIS SUM AS INCOME FROM UNDISCLOSED SOURCES. THE LD. CIT(A) CONCURRED WITH THE SUBMISSIONS ADVANCED ON BEHALF O F THE ASSESSEE AND DELETED THE ADDITION. THE REVENUE IS AGGRIEVED AGAI NST SUCH DELETION OF ADDITION. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PER USED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ENTIRE CONTROVER SY ROTATES AROUND THE SOURCE OF CASH OF RS.13.01 LAC DEPOSITED BY THE ASS ESSEE IN HIS BANK ACCOUNT, WHICH WAS CLAIMD TO HAVE BEEN RECEIVED FRO M THE ESTATE OF SMT. SAROJ GUPTA, HIS MOTHER, WHO PASSED AWAY ON 14.8.20 06. FROM THE DISCUSSION MADE ABOVE, IT IS PATENT THAT THERE IS N O DIRECT EVIDENCE OF THE AVAILABILITY OF CASH TO THIS EXTENT IN HER HANDS. T HE ASSESSEE HAS CLAIMED IT AS `ISTRIDHAN, WHICH WAS NOT REFLECTED ANYWHERE . NOW THE QUESTION ARISES AS TO WHETHER THE EXISTENCE OF CASH TO THE A BOVE EXTENT AS ITA NO.4085/DEL/2012 5 `ISTRIDHAN CAN BE ACCEPTED AS GENUINE IN THE EXTAN T FACTS. IT CAN BE OBSERVED FROM THE ASSESSMENT ORDER THAT SHE WAS PRO PRIETOR OF TWO CONCERNS, NAMELY, M/S SATYAM INVESTMENTS AND M/S MA HAJAN INVESTMENTS AND FINANCIAL SERVICES. SHE FILED HER RETURN FOR THE AY 2005-06 DECLARING TOTAL INCOME OF RS.1,42,710/- WIT H THE AMOUNT OF TAX LIABILITY AT RS.1,242/-, A COPY OF WHICH IS AVAILAB LE ON PAGE 5 OF THE PAPER BOOK. IN THIS RETURN, SHE CLAIMED TO HAVE E ARNED INCOME FROM THE ABOVE REFERRED TWO PROPRIETORSHIP CONCERNS. A PERU SAL OF THE PROFIT & LOSS ACCOUNT OF M/S MAHAJAN INVESTMENTS AND FINANCI AL SERVICES, A COPY OF WHICH IS AVAILABLE ON PAGE 9 OF THE PAPER B OOK, INDICATES GROSS REVENUE FROM OPERATIONS AT RS.5,050/-. HER CAPITAL BALANCE IN THIS CONCERN AS ON 31.3.2005 STANDS AT RS.1,14,243/-. N OW, WE TURN TO THE PROFIT & LOSS ACCOUNT OF M/S SATYAM INVESTMENTS, IN WHICH GROSS INCOME FROM OPERATIONS HAS BEEN SHOWN AT RS.1.73 LA C. BALANCE SHEET OF THIS PROPRIETORSHIP CONCERN INDICATES CAPITAL OF SM T. SAROJ GUPTA AT RS.3.56 LAC. HERE, IT IS INTERESTING TO MENTION TH AT SHE HAS MADE WITHDRAWALS TO THE TUNE OF RS.1.52 LAC FROM THIS CO NCERN. HER COMPUTATION OF INCOME FOR THE AY 2006-07 INDICATES EARNING OF INTEREST ITA NO.4085/DEL/2012 6 FROM BANK ON SAVING BANK ACCOUNT, ON TAX SAVING BON DS, ON FDRS AND ON NSCS. IT IS FURTHER IMPORTANT TO NOTE THAT SMT. SAROJ GUPTA WAS HAVING SOME AMOUNTS PARKED IN SAVING BANK ACCOUNTS, FDRS AND NATIONAL SAVING CERTIFICATES AND HENCE REGULARLY EA RNING INTEREST INCOME THEREFROM. WE FAIL TO COMPREHEND AS TO HOW SUCH A WISE PERSON, BEING FULLY AWARE OF AND ACTUALLY EARNING INTEREST INCOME BY INVESTING FUNDS, CAN BE EXPECTED TO KEEP HUGE CASH OF RS.15.06 LAC I N HER ALMIRAH FOR YEARS TOGETHER. 5. THE ASSESSEE TRIED TO PROVE THE AVAILABILITY OF CASH WITH HER TO THE TUNE OF RS.13.01 LAC BY SUBMITTING BEFORE THE LD. C IT(A) THAT SHRI A.C.GUPTA, EXECUTOR OF THE WILL OF HIS MOTHER, OPEN ED THE LOCKER OF ALMIRAH KEPT AT THE RESIDENCE IN THE PRESENCE OF TH REE WITNESSES AND CASH OF RS.15.06 LAC WAS FOUND ON SUCH OPENING OF ALMIRA H. IT IS RELEVANT TO NOTE THAT SHRI A.C. GUPTA, CLAIMED TO BE THE EXECUT OR OF THE WILL OF SMT. SAROJ GUPTA, IS NONE OTHER THAN FATHER OF THE ASSES SEE AND HUSBAND OF THE DECEASED. FURTHER, WHAT HAS BEEN CLAIMED TO HAVE B EEN OPENED BY HIM IS NOT A BANK LOCKER, BUT, SIMPLY AN ALMIRAH IN THE HOUSE. SMT. SAROJ ITA NO.4085/DEL/2012 7 GUPTA DIED ON 14.8.2006 AND THIS ALMIRAH AT THE ASS ESSEES OWN HOME WAS CLAIMED TO HAVE BEEN OPENED ON 12.2.2007, ROUGH LY AT A GAP OF AROUND SIX MONTHS AND THAT TOO IN THE PRESENCE OF T HREE WITNESSES. IT IS UNDISPUTED THAT THE ONLY BENEFICIARIES OF THE WILL OF SMT. SAROJ GUPTA HAPPENED TO BE THE ASSESSEE AND HIS WIFE. ADMITTED LY, THERE IS NO CONFLICTING CLAIM ON THE WILL OF SMT. SAROJ GUPTA. IN SUCH A SITUATION, WE FAIL TO UNDERSTAND THE NECESSITY OF ANY SO-CALLE D EXECUTOR OF THE WILL, BEING FATHER OF THE ASSESSEE AND THE CIRCUMSTANCES LEADING TO THE OPENING THE ALMIRAH AT THE RESIDENCE AFTER A GAP OF AROUND SIX MONTHS FROM THE DEATH OF DEATH AND THAT TOO IN THE PRESENC E OF THREE WITNESSES. WHEN THERE WERE NO CONFLICTING CLAIMS ON THE WILL OF THE DECEASED AND THE BENEFICIARIES WERE ONLY THE ASSESSEE AND HIS WI FE, IT IS NOT UNDERSTANDABLE AS TO WHAT PROMPTED THE FAMILY OF T HE DECEASED TO ALLEGEDLY OPEN THE ALMIRAH AFTER SIX MONTHS AND THA T TOO IN THE PRESENCE OF THREE WITNESSES. WHAT WAS THE NEED OF WITNESSES IN THE ABSENCE OF ANY DISPUTE, IS BEYOND OUR UNDERSTANDING. WE FIND THAT THIS IS NOTHING BUT CAMOUFLAGE. THE ENTIRE EXERCISE APPEARS TO HAVE BEE N SHOWN TO HAVE ITA NO.4085/DEL/2012 8 BEEN CARRIED OUT FOR GIVING A COLOUR OF GENUINENESS TO THE AVAILABILITY OF CASH OF RS.15.06 LAC FROM THE ALMIRAH OF THE DECEAS ED. 6. THERE IS ANOTHER INTERESTING ASPECT OF THE MA TTER. WHEN THE AO POINTED OUT THE OBLIGATION OF SMT. SAROJ GUPTA OF FILING WEALTH-TAX RETURN IN CASE SHE HAD CASH AND JEWELLERY ETC. EXC EEDING RS.15 LAC, THE ASSESSEE CAME OUT WITH A FANTASTIC EXPLANATION THAT OUT OF RS.15.06 LAC FOUND AT THE TIME OF DEATH, ONLY A SUM OF RS.13.01 LAC WAS AVAILABLE UP TO THE END OF THE YEAR, THAT IS, 31.3.2006 AND THE REMAINING AMOUNT WAS RECEIVED DURING THE PERIOD 1.4.2006 TO 14.8.2006, B EING THE DATE OF HER DEATH. THIS WAS JUST A FUTILE ATTEMPT TO THWART TH E OBLIGATION OF FILING WEALTH TAX RETURN AND BEARING THE CONSEQUENCES FOR ITS NON-FILING. 7. IT IS FURTHER PERTINENT TO MENTION THAT SMT. S AROJ GUPTA, WAS PROPRIETOR OF TWO CONCERNS AND WE HAVE NOTICED NEGL IGIBLE CASH BALANCE IN THE BALANCE SHEETS OF THESE TWO PROPRIETORSHIP C ONCERNS WHICH HAVE BEEN PLACED ON RECORD. IF SHE REALLY HAD LACS OF C ASH IN HAND, HERE BUSINESS WOULD NOT HAVE BEEN RUN ON SUCH NEGLIGIBLE CASH BALANCE. ITA NO.4085/DEL/2012 9 8. ALL THE ABOVE CIRCUMSTANCES PROVE IT BEYOND A NY SHADOW OF DOUBT THAT THERE WAS NO CASH IN HAND AVAILABLE AS ISTRID HAN ON THE DEATH OF SMT. SAROJ GUPTA THAT WAS BEQUEATHED BY THE ASSESSE E TO THE TUNE OF RS.13.01 LAC. EXCEPT FOR A BALD CLAIM OF FINDING C ASH OF RS.15.06 LAC ON THE SUDDEN OPENING OF THE ALMIRAH ON THE DEATH OF S MT. SAROJ GUPTA, THERE IS NO EVIDENCE ABOUT THE SOURCE OF THE AVAILA BILITY OF CASH TO SUCH A HUGE EXTENT IN HER HANDS. IN OUR CONSIDERED OPINIO N, THE ASSESSEE JUST CONCOCTED A STORY OF INHERITING CASH FROM HIS MOTHE R AFTER HER DEATH. 9. WE ARE REMINDED OF THE JUDGMENT OF THE HONBLE S UPREME COURT IN THE CASE OF CIT VS. DURGA PRASAD MORE (1971) 82 ITR 540 (SC). IN THIS CASE, IT HAS BEEN HELD THAT SELF SERVING RECITALS C ANNOT BE ACCEPTED AS TRUE UNLESS THE ASSESSEE PROVES IT. THE HONBLE SUPREME COURT HAS HELD THAT THE AO IS ENTITLED TO LOOK INTO SURROUNDING CIRCUMS TANCES FOR FINDING OUT REALITY. SIMILAR VIEW HAS BEEN REITERATED BY THE H ONBLE SUPREME COURT IN THE CASE OF SUMATI DAYAL VS. CIT (1995) 214 ITR 801 (SC) . IN THIS CASE, THE ASSESSEE TENDERED AN EXPLANATION THAT SHE GOT THE AMOUNTS FROM HORSE RACES, WHICH WAS NOT ACCEPTED BY THE ITO WHO CAME TO HOLD THAT ITA NO.4085/DEL/2012 10 THE WINNING TICKETS WERE PURCHASED BY THE ASSESSEE AFTER THE EVENT. UPHOLDING THE VIEW TAKEN BY THE AO, THE HONBLE SUP REME COURT HELD THAT FOR CONSIDERING WHETHER THE APPARENT IS REAL, THE MATTER SHOULD BE CONSIDERED BY APPLYING THE TEST OF HUMAN PROBABILIT IES. VIEWED FROM THAT ANGLE, THE HONBLE SUMMIT COURT UPHELD THE VIE W CANVASSED BY THE AO THAT THE EXPLANATION OF THE ASSESSEE WAS NOT GEN UINE. IN OUR CONSIDERED OPINION, THE ENTIRETY OF FACTS AND CIRCU MSTANCES PREVAILING IN THE INSTANT CASE DO LEAD TO AN IRRESISTIBLE CONCLUS ION THAT THERE WAS NO CASH AVAILABLE WITH SMT. SAROJ GUPTA AT THE TIME OF HER DEATH AND THE ASSESSEE WAS NOT JUSTIFIED IN CLAIMING THAT A SUM O F RS.13.01 LAC WAS BEQUEATHED FROM HIS MOTHER. WE, THEREFORE, OVERTUR N THE IMPUGNED ORDER ON THIS SCORE AND RESTORE THE OPINION OF THE AO. 10. IN THE RESULT, THE APPEAL IS ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 18.06.201 5. SD/- SD/- [A.T. VARKEY] [R.S. SYAL] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, 18 TH JUNE, 2015. ITA NO.4085/DEL/2012 11 DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.