Ayush Sharma, Indore V. Income Tax Officer 5 (4), Indore

ITA 412/Ind/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9413 (ITAT-INDORE)
• Duration Of Justice: 7 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 04-05-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Gift; Principle of natural justice
• Section: 271(1)(c); 143(3); 147; 148

Judgement Text

[ITA 412/IND/2018] [AYUSH SHARMA, INDORE] , , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.412/IND/2018 ASSESSMENT YEAR: 2009-10 SHRI AYUSH SHARMA 11,KHAJRANA, MENON COLONY INDORE / VS. ITO - 5(4) INDORE ( APPELLANT ) ( REVENUE ) P.A. NO. DPGPS3967Q APPELLANT BY SHRI PANKAJ S HAH , A.R. RESPONDENT BY SHRI RAJIV JAIN, D.R. DATE OF HEARING: 29.11.2018 DATE OF PRONOUNCEMENT: 20.12.2018 / O R D E R PER KUL BHARAT, J.M: APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER OF TH E COMMISSIONER OF INCOME TAX (APPEALS)-II, INDORE DATED [ITA 412/IND/2018] [AYUSH SHARMA, INDORE] 2 13.3.2018 PERTAINING TO THE ASSESSMENT YEAR 2009-10. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- GROUND-I: AGAINST REASSESSMENT 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE COMMISSIONER OF INCOME TAX (APPEALS)-II (CIT(A)) ERRED IN CONFIRMING THE ACTION OF A.O. IN PASSING THE REASSE SSMENT UNDER SECTION 147 OF THE ACT. 2. THE APPELLANT PRAYS THAT THE SAID REASSESSMENT ORDE R BEING ILLEGAL, UNWARRANTED BE DIRECTED TO BE QUASHED. GROUND-II: AGAINST REJECTION OF AFFIDAVITS ON PROBA BILITIES: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE COMMISSIONER OF INCOME TAX (APPEALS)-II (CIT(A)) ERRED IN OBSERVING THAT MERELY FILING AN AFFIDAVIT REGARDING THE CASH GIFT AND LOAN DOES NOT PROVE THE GENUINENESS OF TRANSACTIONS WHICH IS IN CONTRARY TO THE RATIO OF SUPREME COURT WHICH HAS HELD THAT STATEMEN T ON AFFIDAVIT CANNOT BE REJECTED WITHOUT CROSS EXAMINATION OF DEP ONENT ON PREPONDERANCE OF PROBABILITIES. 2. THE APPELLANT PRAYS THAT THE ORDER OF LEARNED CIT(A ) IN CONTRAVENTION TO PRINCIPLES OF NATURAL JUSTICE BE SET ASIDE/RESTO RED BACK TO DECIDE THE ISSUE ON MERITS AND FACTS STATED THROUGH AFFIDA VIT AS PER PROCEDURE AND NOT BY MERELY GOING ON PREPONDERANCE OF PROBABILITIES. GROUND NO.-III: AGAINST ADDITION ON ACCOUNT OF UNEX PLAINED GIFT 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE CIT(A) ERRED IN CONFIRMING THE ACTION OF A.O. IN MAKING TH E ADDITION ON THE ALLEGED GROUND OF UNEXPLAINED GIFT AMOUNTING TO RS. 1147000 WITHOUT APPRECIATING THE GENUINENESS OF THE SAID TRANSACTIO NS. 2. THE APPELLANT PRAYS THAT THE SAID ADDITION BE DIREC TED TO BE DELETED. GROUND-IV THE APPELLANT CRAVES LEAVE TO ADD, TO AMEND, TO ALT ER AND/OR TO DELETE ALL OR ANY OF THE ABOVE GROUNDS OF APPEAL. [ITA 412/IND/2018] [AYUSH SHARMA, INDORE] 3 2. GROUND NOS.1 & 2 ARE AGAINST LEGALITY OF THE ORDER. THE FACTS GIVING RISE TO THE PRESENT APPEAL ARE THAT CASE OF THE ASSESSEE WAS REOPENED AND THE ASSESSMENT U/S 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS THE ACT) WAS FRAMED VIDE ORDER DATED 15.12.2016. THE ASSESSMENT WAS REOPENED ON THE BASIS OF THE CASH DEPOS ITS MADE IN SAVING BANK ACCOUNT NO.63017156496 OF THE ASSESSEE. THE TOTAL CASH DEPOSIT OF RS.11,47,000/- WAS NOTICED AS THE ASSESSEE HAD NOT FILED RETURN OF INCOME , THEREFORE, THE ASSESSMENT WAS REOPENED BY ISSUING A N OTICE U/S 148 OF THE ACT DATED 21.3.2016 AFTER OBTAINING REQUISITE APPROVAL OF THE PRINCIPAL CIT-II, INDORE. LD . COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED THAT REOPEN ING IS BAD IN LAW AS THE ASSESSEE HAD NOT ATTAINED MAJORITY WHEN GIFTS WERE RECEIVED AND DEPOSITED IN THE BANK ACCOUNT. AT THE MOST, THE REVENUE COULD HAVE CLUBBE D THIS TO THE INCOME OF PARENT OF THE ASSESSEE. [ITA 412/IND/2018] [AYUSH SHARMA, INDORE] 4 3. ON THE CONTRARY, LD. D.R. OPPOSED THE SUBMISSIONS AND SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORDS AND GONE THROUGH THE ORDER S OF THE AUTHORITIES BELOW. THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE IS THAT EVEN IF IT IS ASSUMED THAT CASH DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE PARTAKES CHARACTER OF INCOME, SAME WAS REQUIRED TO BE CLUBBED WIT H INCOME OF THE PARENT AS PER SECTION 64 IA OF THE ACT, AS AT THE TIME OF RECEIPT OF SUCH SUM, HE WAS MINOR. UNDISPUTEDLY, A SUM OF RS.11,47,000/- WAS FOUND DEPOSITED ON VARIOUS DATES IN THE BANK ACCOUNT OF THE ASSESSEE RANGING FROM 9.2.2009 TO 24.3.2009. AS PER THE SECONDARY SCHOOL EXAMINATION MARKS SHEET ISSUED BY CENTRAL BOARD OF SECONDARY EDUCATION, DATE OF BIRTH OF T HE ASSESSEE IS SHOWN AS 26.8.1992. THEREFORE, HIS AGE WH EN DEPOSITS WERE MADE WAS BELOW 18 YEARS. THUS, ON THE [ITA 412/IND/2018] [AYUSH SHARMA, INDORE] 5 DATES OF DEPOSIT, THE ASSESSEE WAS MINOR. IT CANNOT BE NOW INFERRED THAT AMOUNT WAS EARNED POST DEPOSIT. AS PER SECTION 64 IA OF THE ACT, THIS AMOUNT IF IT WAS INCOM E AS CLAIMED BY THE REVENUE OUGHT TO HAVE BEEN CLUBBED WIT H ONE OF THE PARENT OF THE ASSESSEE. HOWEVER, SINCE NO RETURN HAS BEEN FILED, IT WAS ONLY AFTER THE AIR INFORMATION DEPOSITS MADE IN THE BANK CAME TO THE NOTICE OF THE A.O. ACCORDINGLY, THE ASSESSEE WAS ISSUED NOTICE FOR REOPE NING THE ASSESSMENT FILED IN THE YEAR UNDER APPEAL. WE HAVE NOTICED THAT THE ASSESSEE HAD NOT RAISED SUCH PLEA BEFOR E THE AUTHORITIES BELOW. EVEN BEFORE ASSESSING OFFICER ALSO, NO SUCH OBJECTION WAS RAISED BY THE ASSESSEE. THE ASSESSMENT IS MADE ON 15.12.2016. THE ASSESSEE HAS ATTAINED MAJORITY. THEREFORE, CONSIDERING THE FACT TH AT THE ASSESSEE HAS NOT RAISED THIS OBJECTION BEFORE THE A.O. , HE HAS RATIFIED THE TRANSACTION MADE IN HIS BANK ACCOUNT [ITA 412/IND/2018] [AYUSH SHARMA, INDORE] 6 DURING THE PERIOD OF HIS MINORITY. THIS GROUND OF THE ASSESSEES APPEAL IS DISMISSED. 5. GROUND NOS.2 & 3 ARE INTERCONNECTED AND IS ON MERI T OF THE ADDITION. LD. COUNSEL FOR THE ASSESSEE SUBMIT TED THAT THE AUTHORITIES BELOW FAILED TO TAKE NOTE OF THE FACT THAT THE DEPOSITS WERE MADE WHEN THE ASSESSEE WAS A MINOR AND HAVING NO SOURCE OF INCOME. THESE WERE OUT OF GI FTS RECEIVED FROM THE PARENT AND OTHER RELATIVES. AFFIDAVI TS WERE FILED BEFORE THE LD. CIT(A). WE FIND THAT THE A.O. HAS REJECTED THE EVIDENCES FILED BY THE ASSESSEE BY OBSE RVING AS UNDER: ON PERUSAL AND VERIFICATION OF DOCUMENTS PLACED ON RECORD AND AFTER GOING THROUGH THE STATEMENT RECORDED AND DISCUSSIONS MADE WITH THE ASSESSEE IT IS CONCLUDED THAT THE CLAIM OF THE ASSESSEE REGARDING CASH GIFTS AND CASH LOANS RECEIVED FROM VARIOUS PERSONS AND DEPOSITION OF THE SAME IN BANK ACCOUNT IS INCORRECT AND IS NOT SUPPORTED BY ANY DOCUMENTARY E VIDENCES AND IT IS ONLY AN AFTERTHOUGHT. MERELY FILING OF AN AFFIDAVIT REGARD ING CASH GIFT AND LOAN DOES NOT PROVE THE GENUINENESS OF TRANSACTION. BY NO STRETC H OF IMAGINATION IT CAN BE BELIEVED THAT THE ASSESSEE KEPT ON ACCUMULATING THE SO CALLED GIFTS AND LOANS RECEIVED FROM VARIOUS PERSONS ON DIFFERENT DATES FO R THREE YEARS AND DEPOSITED THE SAME IN HIS ACCOUNT AT ONCE. IT IS ALSO UNBELI EVABLE THAT THE SAME PERSONS CONTINUED TO GIVE HIM CASH GIFTS AND LOANS FOR CONT INUOUSLY 3 YEARS I.E. 2005-06, 2006-07 & 2007-08 WHICH HE KEPT ON ACCUMULATING DUR ING 3 YEARS AND DEPOSITED THE SAME AT ONCE DURING THE YEAR 2008-09. THE REASONS FOR WHICH SUCH CASH GIFT/CASH LOAN WAS CLAIMED TO HAVE BEEN G IVEN BY THE ASSESSEE IN HIS STATEMENT IS NOT AT ALL CONVINCING OR GENUINE AND A LSO ARE NOT SUPPORTED BY ANY [ITA 412/IND/2018] [AYUSH SHARMA, INDORE] 7 DOCUMENTARY EVIDENCE. REASONS FOR ACCUMULATION OF ABOVE CASH GIFTS AND CASH LOANS PUTFORTH BY THE ASSESSEE IN HIS STATEMENT IS ONLY AN AFTERTHOUGHT, HENCE NOT ACCEPTABLE ET AGRICULTURAL LAND AND THERE IS NO THING HE CAN PUT ON RECORD WHICH SUPPORT THE CLAIM OF THE ASSESSEE. HAD HE RE CEIVED THESE AMOUNTS IN THREE DIFFERENT YEARS (AS CLAIMED BY THE ASSESSEE), SUCH AMOUNTS WOULD HAVE BEEN DEPOSITED IN THE SAME YEAR IN WHICH THEY WERE RECEIVED AND NOT SUDDENLY DURING THE YEAR UNDER CONSIDERATION. EVEN THE ASSE SSEE FAILED TO PROVE WITH ANY DOCUMENTARY EVIDENCE THAT ANY OF THE SO CALLED LOAN S WAS REPAID BY HIM. HE COULD NOT EVEN GIVE ANY DATE, MONTH OR YEAR IN WHIC H SUCH LOANS WERE REPAID BY HIM OR SOURCE OF INCOME THROUGH WHICH HE REPAID SUC H LOANS. AS IS EVIDENT FROM THE PART OF STATEMENT REPRODUCED ABOVE HE COULD NOT REMEMBER ANY OF THE EVENTS REGARDING ANY OF THE PERSON FOR RECEIPT OF MONEY OR REPAYING THE SAME. IT IS SIMPLY BECAUSE NO SUCH EVENTS HAPPEN AT ANY TIME WH ICH HE COULD HAVE REMEMBERED. IT IS ALSO NOT ACCEPTABLE THAT ALL THE LOANS TAKEN FROM FRIENDS AND RELATIVES WERE INTEREST FREE LOANS, AS STATED BY AS SESSEE IN HIS STATEMENT. HOW CAN ALL THE PERSONS, THOUGH CLOSE RELATIVES/FRIENDS , BE SO GENEROUS TO HIM THAT ALL OF THEM GIVEN LOAN TIME AND AGAIN TO HIM WITHOUT AN Y CONSIDERATION/INTEREST. EVEN THE STATEMENT OF FAMILY MEMBERS, WHO ARE NONE OTHER THAN HIS FATHER, MOTHER AND AUNTY, RECORDED DURING THE COURSE OF ASS ESSMENT PROCEEDINGS DOES NOT SUPPORT THE CLAIM OF THE ASSESSEE AS THEY DONT HAVE ANY KNOWLEDGE OF AMOUNTS GIVEN, OCCASION AND PERIOD IN WHICH SO CALL ED GIFTS WERE GIVEN. SINCE CASH GIFTS AND LOANS AMOUNTING RS.11,47,000/- CLAIM ED TO BE TAKEN BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION REMAIN S UNEXPLAINED AS THE CREDITWORTHINESS AND GENUINENESS OF TRANSACTIONS ST ANDS UNPROVED, THE SAME IS TREATED AS INCOME EARNED BY HIM FROM UNDISCLOSED SO UIRCES AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. HAVING REGARD TO THE ABOVE, I AM SATISFIED THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF HI S TAXABLE INCOME AND THEREBY CONCEALED INCOME TO THE EXTENT OF RS.11,47,000/- FO R WHICH HE IS LIABLE FOR PENALTY U/S 271(1)(C) OF THE I.T. ACT, 1961, HENCE PENALTY PROCEEDINGS U/S 271(1)(C) ARE INITIATED SEPARATELY HEREWITH FOR CON CEALMENT OF INCOME. 6. THE LD. CIT(A) HAS CONFIRMED THIS FINDING. WE FI ND THAT NONE OF THE PERSONS WHO HAVE GIVEN AFFIDAVITS WAS EXAMINED BY THE AUTHORITIES BELOW. FURTHER, WHEN THE DEPOSITS WERE MADE, THE ASSESSEE WAS A MINOR. THEREFOR E, IT WAS INCUMBENT UPON THE AUTHORITIES BELOW TO EXAMINE THE DEPONENTS OF THE AFFIDAVITS. THIS EXERCISE HAS NO T BEEN [ITA 412/IND/2018] [AYUSH SHARMA, INDORE] 8 CARRIED OUT BY THE AUTHORITIES BELOW. THEREFORE, WE DIRECT THE A.O. TO DELETE THE ADDITION. GROUND NOS.2 & 3 O F THE ASSESSEES APPEAL, ARE ALLOWED. 7. GROUND NO.4 IS GENERAL IN NATURE AND NEEDS NO SEPARATE ADJUDICATION. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLO WED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 20 . 12.2018. SD/- (MANISH BORAD) SD/- (KUL BHARAT) A CCOUNTANT MEMBER JUDICIALMEMBER INDORE; DATED : 20/12/2018 VG/SPS COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR, INDORE