ITO, CHITTORGARH V. Smt. Ekta Vaswani, CHITTORGARH

ITA 420/JODH/2013

• Counselvise Citation: 42023314 RSA 2013
• Duration Of Justice: 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 17-02-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 03-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Assessee Lawyers: S K GANGWANI
• Keywords: Presumptive income; Gift
• Section: 6

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR ( BEFORE SHRI HARI OM MARATHA AND SHRI N.K. SAINI ) ITA NO.420/JODH/2013 ASSESSMENT YEAR: 2009-10 PAN: AFEPG 2193 K THE ITO VS SMT. EKTA VASAWANI WARD -1 26, GADI LOHAR CAMPUS CHITTORGARH CHITTORGARH (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI N.A. JOSHI ASSESSEE BY : SHRI S.K. GANGWANI DATE OF HEARING : 17.02.2014. DATE OF PRONOUNCEMENT : 21.02.2014 ORDER PER HARI OM MARATHA, J.M. THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD CIT(A), UDAIPUR, DATED 29-04-2013 PERTAINING TO A.Y. 2009- 10. 2.1 BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE AS AN INDIVIDUAL FILED HER RETURN OF INCOME [ROI] FOR THE A.Y. 2009-10 ON 14-07- 2009 UNDER THE PROVISIONS OF SECTION 44AF OF THE IN COME-TAX ACT, 1961 (THE ACT FOR SHORT), DECLARING TOTAL INCOME OF RS . 1,80,211/-. THE ASSESSEE 2 DERIVES HER INCOME FROM SALE OF GRIHA UDHYOG PRODUC TS LIKE PAPAD, BADI, PICKLESS, SAUCES ETC. DURING THE ASSESSMENT PROCEED INGS, HER BANK ACCOUNT OPENED WITH PUNJAB NATIONAL BANK, CHITTORGARH WAS E XAMINED AND IT WAS FOUND THAT DURING THE F.Y. 2008-09 RELEVANT TO A.Y . 2009-10 SHE HAS DEPOSITED CASH AGGREGATING TO RS. 16,18,200/-. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF EACH CASH CREDIT APPEARING IN THIS BANK ACCOUNT WITH THE HELP OF EVIDENCE. SHE WAS ALSO ASKED TO PRODUCE ALL THE SALES BILL/ BOOK USED DURING THE PERIOD UNDER CONSIDERATION TO ESTAB LISH THE TOTAL SALES/ TURNOVER DECLARED BY HER AND ALSO TO FILE THE COPIE S OF BILLS/ VOUCHERS CERTIFYING PURCHASES OF RAW MATERIALS. SHE REPLIE D VIDE LETTER DATED 10-08- 2011 THROUGH HER AUTHORISED REPRESENTATIVE AS UNDER :- 1. THAT THE CREDIT ENTRIES ARE GIFTS FROM ASSES SEES GRANDMOTHER AND GRANDFATHER AND FROM HER HUSBAND TOO AND FROM NANA FROM KOTA AND THE TOTAL AMOUNT RECEIVED COMES TO RS. 7,56,000/-. 2. THE AMOUNT AS ABOVE MENTIONED ALSO CONTRIBUTES FROM RECEIPTS OF SUMS OF DEBTORS ALSO. 3. THAT THERE ARE NO SALES/PURCHASE VOUCHERS KEPT BY ASSESSEE OF GROSS SALES DECLARED AND SAME WAS ON THE CASH BASIS MOSTLY AND THAT IS WHY SHE HAS OPTED FOR SECTION 44AF OF THE ACT AND THEREBY DECLARED A PRESUMPTIVE INCOME AS PER ITR FILED. 4. THAT NO ACCOUNTS, BILLS, VOUCHERS WERE KEPT IN TACT AS IT WAS HER HOBBY AND ON ESTIMATED SALES, NET PROFIT @ 5% WAS DECLARED OR EVEN MORE HAS BEEN RETURNED. 3 5. THAT THE ASSESSEE DID NOT MAINTAIN ANY KACCHI BAHI OR SO, ONLY VAT PAID RAW MATERIAL FROM WITHIN THE STATE DEALERS WAS PURCHASED AND CONSUMED IN MAKING HER HOME PRODUCT S AS MENTIONED AND THE VARIOUS COLUMNS FILED OF ITR AR E BASED UPON THE NET PROFIT U/S 44AF OF THE ACT. SINCE SHE HAS STATED THAT A SUM OF RS. 7.56 LACS HA S BEEN RECEIVED AS GIFTS FROM HER VARIOUS FAMILY MEMBERS, SHE WAS ASKED TO P ROVE THE GENUINITY OF THESE GIFTS, ALLEGEDLY RECEIVED FROM HER GRANDFATHE R, GRANDMOTHER, NANA, HUSBAND AND CLOSE RELATIVES. FROM THE ASSESSEES S IDES, A WRITTEN REPLY DATED 14-12-2011 WAS FILED ALONGWITH A CASH FLOW STATEME NT APART FROM THE SUM RECEIVED FROM GIFTS. IT WAS STATED THAT REMAINING A MOUNT WAS FROM SALE PROCEEDS AS DECLARED IN THE RETURN FILED U/S 44AF O F THE ACT TO THE TUNE OF RS. 22.00 LACS. DURING THE YEAR UNDER CONSIDERATION, TH E ASSESSEE HAS STATED TO HAVE DEPOSITED VARIOUS AMOUNTS IN HER BANK AND A LSO WITHDREW AMOUNTS AS PER HER BUSINESS NEEDS FROM THE SAME ACCOUNT. TH E ASSESSEE FURNISHED THREE GIFT DEEDS WHICH ARE DEPICTED IN THE FOLLOWIN G CHART. S.N. GIFT SHOWN TO HAVE MADE BY 1. SHRI ROOPCHAND S/O LATE SHRI DANCHAND GANGWANI,58, PRATAP NAGAR, CHITTORGARH RS. 2,75,000/- 2. SMT. PURNIMA DEVI W/O SHRI ROOPCHAND GANGWANI,58, PRATAP NAGAR, CHITTORGARH RS. 2,50,000/- 3. SHRI PRIYAL DASS S/O LATE SHRI KISHANDASS J RAJDEV, 1-M-28, VIGYAN NAGAR, KOTA RS. 2,31,000/- TOTAL RS. 7,56,000/- HOWEVER, THE A.O. WANTED ALL THE THREE DONORS TO B E PRODUCED BEFORE HIM IN PERSON. THE A.O. ALSO ASKED THE ASSESSEE TO FURNISH THE LIST OF DEBTORS FROM 4 WHOM SHE HAD RECEIVED CASH. THE ASSESSEE COULD NOT PRODUCE THE DONORS IN PERSON FOR EXAMINATION. ON THAT VERY BASIS, THE A.O . HAS COME TO A CONCLUSION THAT THE ASSESSEE HAS BEEN UNABLE TO PRO VE THE SOURCE OF CASH DEPOSITS MADE IN HER BANK ACCOUNT. ACCORDINGLY, THE A.O. HAS TREATED TOTAL AMOUNT OF RS. 16,08,200/- AS INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES AND HAS ADDED THE SAME U/S 69A OF THE ACT I N HER HANDS. 2.2 FROM THE BANK ACCOUNT, A RECEIPT OF INTEREST OF RS. 9,729/- IS SHOWN BUT THIS AMOUNT HAS NOT BEEN DISCLOSED IN HER RETU RN. THEREFORE, AN AMOUNT OF RS. 9,729/- HAS ALSO BEEN ADDED UNDER THE HEAD INCOME FROM OTHER SOURCES. AS A RESULT, THE TOTAL INCOME OF THE ASSE SSEE HAS BEEN COMPUTED AT RS. 17,98,140/-. 2.3 AGGRIEVED, THE ASSESSEE WENT IN APPEAL BEFORE T HE LD CIT(A) WHO HAS DELETED THE ADDITION OF RS. 16,08,200/- ADDED U/S 6 9A OF THE ACT. 2.4 NOW THE REVENUE IS AGGRIEVED AND HAS FILED THIS APPEAL BY RAISING THE FOLLOWING GROUNDS. ON THE FACTS AND IN THE PRESENT CIRCUMSTANCES OF THE CASE, THE LD CIT(A) HAS ERRED IN :- 1. DELETING THE ADDITION OF RS. 16,08,200/- MADE U/S 69A BY A.O. IN RESPECT OF CASH DEPOSITS MADE IN THE SERVING THAT THE ASSESSEE FILED RETURN U/S 44AF IN SPITE OF THE FACTS THAT THE ASSESSEE FAILED TO FURNISH AN Y COGENT EVIDENCES REGARDING THE SOURCE OF CASH DEPOSIT I N THE BANK ACCOUNT. 5 2. DELETING THE ADDITION BY OBSERVING THAT IN NO BOOKS CASE IT CANNOT BE PRESUMED THAT CASH DEP OSITED IN BANK IS UNEXPLAINED, DESPITE THE FACT THAT THE A SSESSEE HAS FAILED TO PROVE THE CREDITWORTHINESS OF CONTENDE D DONORS OF GIFT THAT TOO IN CASH AND ALSO IGNORING THE F ACT THAT OUT OF SALE OF RS. 22.00 LACS, THE NET PROFIT BEING PRESUMED @ 55 WILL ONLY RS. 1.1 LACS AND THEREBY ONLY THIS AMOUNT OF DEPOSIT CAN BE TREATED AS EXPLAINED AND NOT ENTI RE CONTENDED SALE PROCEEDS. 2.5 WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CA REFULLY PERUSED THE ENTIRE MATERIAL ON RECORD. BOTH THE PARTIES HAVE RE ITERATED THEIR EARLIER STAND. IT IS A CLEAR CUT CASE OF DECLARATION OF INCOME UND ER THE PROVISIONS OF SECTION 44AF OF THE ACT. THE A.O. HAS ACCEPTED THE RETURN F ILED IN RESPECT OF ASSESSEES BUSINESS U/S 44AF OF THE ACT. FROM THE E XPLANATION AS INDICATED ABOVE, WE ARE CONVINCED THAT THE ASSESSEE HAS BEEN ABLE TO PROVE THE GIFTS RECEIVED FROM VARIOUS NATURAL RELATIVES BEING GRAND FATHER, GRANDMOTHER AND HUSBAND. ALL THESE GIFTS STAND PROVED BY THE EVIDEN CE FILED ON RECORD AND ONLY BECAUSE THOSE WERE NOT PRODUCED BEFORE THE A.O . , THEIR GIFTS CANNOT BE TREATED AS INGENUINE . WITH THE HELP OF CASH FLOW STATEMENT, THE ASSESSEE HAS EXPLAINED THE RECEIPT FROM BUSINESS IN CASH WHICH H AVE BEEN PROPERLY EXPLAINED. IT IS TRUE THAT THE ASSESSEE HAS DECLARE D THE INCOME U/S 44AF OF THE ACT ON ESTIMATION BASIS AS PROVIDED BY THE ACT ITSELF, WHICH IS A SPECIAL PROVISION FOR COMPUTATION OF INCOME UNDER THE HEAD PROFITS AND GAINS OF BUSINESS /PROFESSIONS IN THE CASE OF RETAILER BUSIN ESS AND IN SUCH CASES THE 6 PROVISIONS OF SECTION 44AA AND 44AB DO NOT APPLY. THIS PROVISION IS AIMED AT ENCOURAGEMENT OF RETAILERS TO PAY TAXES WI THOUT ADHERING TO THE NITTY-GRITTYS OF THE TECHNICALITIES WITH REGARD TO MAINTENANCE OF BOOKS OF ACCOUNT AS PER THE ACT. IN SUCH CASES, THE PROFIT D ECLARED BY THE ASSESSEE ON DECLARED SALES CANNOT BE DOUBTED. IN OUR CONSIDERED OPINION, THE ASSESSEE HAS GIVEN ENOUGH PROOF OF THESE GIFTS RECEIVED FROM VAR IOUS NEAR AND DEAR RELATIVES WHO, IN THE NORMAL COURSE OF LIFE INTEND TO MAKE SUCH GIFTS IN ORDER TO KEEP GOOD FAMILY RELATIONS AND ALSO TO HELP THEI R NEAR AND DEAR ONES. THE INSISTENCE ON PRODUCTION OF SUCH RELATIVES LIKE GRA NDPARENTS IS AGAINST THE SOCIAL NORMS AND AGAINST THE BASICS OF OUR SOCIETY. OTHERWISE ALSO IT MAY NOT BE PRACTICABLE TO DEMAND PRODUCTION OF OLD RELATIVE S BEING VERY AGED PERSONS. IT IS ALSO NOT SOCIALLY WARRANTED TO MAKE SUCH EXERCISE WHERE EVEN THE DONORS ARE SO CLOSELY RELATED, OTHERWISE EITHER THEY WOULD NOT MAKE SUCH GIFTS OR THE ASSESSEE WOULD LIKE TO HIDE THE F ACT OF RECEIPT OF GIFTS FROM THE DEPARTMENT. SINCE THE ASSESSEE HAS PRODUCED ENO UGH EVIDENCE TO PROVE THE GENUINITY OF THE GIFTS, WE ACCEPT THEM AS GENUI NE IN THE LIGHT OF THESE EVIDENCE. ONLY BECAUSE THE DONORS WERE NOT PRODUC ED BEFORE THE A.O., HE CANNOT TREAT THEM AS INGENUINE UNLESS THE A.O. BRIN GS SOME TANGIBLE EVIDENCE ON RECORD TO DOUBT THE CLAIM OF THE ASSESS EE. IN THIS CASE, NO SUCH SITUATION HAS ARISEN. THEREFORE, WE ACCEPT THESE G IFTS AS GENUINE. REGARDING 7 CASH DEPOSITS OUT OF SALE PROCEEDS IS CONCERNED, TH ESE ALSO CANNOT BE QUESTIONED WHEN THE ASSESSEE HAS CLAIMED THAT CERT AIN AMOUNT WAS DEPOSITED IN CASH FROM THE RECEIPTS OF HER BUSINESS AND PARTICULARLY WHEN THE RETURN OF INCOME HAS BEEN FILED U/S 44AF OF THE ACT AND THE SAME HAS BEEN ACCEPTED BY THE A.O. THEREFORE, IN THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE DO NOT FIND ANY INFIRMITY IN THE FI NDINGS OF THE LD CIT(A) WHO HAS DELETED THE ADDITION OF RS. 16,08,200/- MAD E ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS IN THE BANK ACCOUNT. AS A RESULT OF OUR ABOVE FINDINGS, THE ONLY GROUND RAISED IN THIS APPEAL HAS TO FAIL. 3.0 IN THE RESULT, THE APPEAL OF THE REVENUE IS DI SMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 21-0 2-2014. SD/-/- SD/- ( N.K. SAINI ) (HARI OM MARATHA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JODHPUR *MISHRA COPY FORWARDED TO :- 1. THE ITO, WARD-1, CHITTORGARH 2. SMT. EKTA VASWANI,. CHITTORGARH 3. THE LD. CIT (A) 4. THE LD. CIT 5. THE D/R 6. GUARD FILE (ITA NO.420/JODH/2013) BY ORDER, AR ITAT, JODHPUR 8