Sh. Jagdish Rai, Ellenabad V. Income Tax Officer, Sirsa

ITA 426/CHANDI/2010

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 8488 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 15-07-2010
• Assessment Year: 2001-2002
• Appeal Filed On: 26-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S KEMWAL
• Keywords: Gift
• Section: 143(3); 147

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH (SMC) BEFORE SHRI N. BARATHVAJA SANKAR VICE PRESIDENT I.T.A NO. 426/CHANDI/2010 ASSESSMENT YEAR: 2001-02 JAGDISH RAI C/O M/S HET RAM V INCOME TAX OFFICER CHANAN MAL, NAI MANDI WARD 2, AAYAKAR BHAWAN ELLANABAD SECTOR 20, HUDA, SIRSA PAN: ABAPR 3868 C (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI M.R. SHARMA RESPONDENT BY: SHRI S.S. KEMWAL ORDER THIS IS AN APPEAL PREFERRED BY THE ASSESSEE SHRI JA GDISH RAI OF ELLANABAD FOR ASSESSMENT YEAR 2001-02 AGAINST THE APPELLATE O RDER DATED 3.2.2010 OF LD. CIT(A), ROHTAK. THE ONLY ISSUE BROUGHT BEFORE ME F OR ADJUDICATION BY THE ASSESSEE IS WHETHER THE LD. CIT(A) ERRED IN CONFIRM ING THE ADDITION OF RS. 1.00 LAKH DISBELIEVING THE GIFT RECEIVED BY THE ASSESSEE FROM HIS BROTHER-IN-LAW? THE EFFECTIVE GROUND OF APPEAL IS AS UNDER: THAT ON FACTS & LAW, THE LD. CIT(A) ERRED IN CONFI RMING THE ADDITION OF RS. 1,00,000 DISBELIEVING THE GIFT RECEIVED BY THE APP ELLANT FROM HIS BROTHER- IN-LAW, THROUGH BANKING CHANNELS OUT OF EXPLAINED C REDITS OF DONOR ACCEPTED BY THE ASSESSING OFFICER. 2 THE BRIEF FACTS PERTAINING TO THIS ISSUE AS CALLE D OUT FROM THE RECORDS ARE THAT WHILE FRAMING THE ASSESSMENT U/S 143(3) READ W ITH SEC 147 FOR THE RELEVANT ASSESSMENT YEAR, THE ASSESSING OFFICER FOUND THAT R S. 1.00 LAKH WAS SHOWN IN THE CAPITAL ACCOUNT OF THE APPELLANT IN THE BOOKS O F PARTNERSHIP CONCERN M/S 2 CHANAN MAL LILA DHAR, IN WHICH THE APPELLANT IS A P ARTNER. IN THE ASSESSMENT OF M/S CHANAN MAL LILA DHAR THE ASSESSING OFFICER MADE AN ADDITION OF RS. 1.00 LAKH IN THE ASSESSMENT ORDER DATED 30.1.2004 PASSED U/S 143(3) AND ON APPEAL BEFORE THE LD. CIT(A), THE LD. CIT(A) DIRECTED THE AMOUNT TO BE DELETED AS PER HIS ORDER DATED 15.9.2004, FOLLOWING THE DECISION O F HON'BLE PUNJAB & HARYANA HIGH COURT (252 ITR 344) AND DIRECTED THAT THE ADDI TION COULD BE MADE IN THE HANDS OF THE APPELLANT SHRI JAGDISH RAI. THE ASSES SING OFFICER THEREAFTER IN THE ORDER DATED 16.12.2006 MADE THE ADDITION OF RS. 1.0 0 LAKH IN THE HANDS OF THE APPELLANT TREATING THE GIFT RECEIVED BY IT FROM SHR I BHAGWAN DASS. WHILE MAKING THIS ADDITION THE ASSESSING OFFICER, DID NOT ACCEPT THE GENUINENESS OF RS. 1.00 LAKH WHICH THE APPELLANT HAD SUBMITTED BEFORE HIM T HAT IT WAS RECEIVED AS GIFT FROM BHAGWAN DASS (JIJA OF THE APPELLANT). HOWEVER , THE ASSESSING OFFICER WAS OF THE VIEW THAT SHRI BHAGWAN DASS WAS NOT HAVING C REDITWORTHINESS TO GIVE RS. 1.00 LAKH TO THE APPELLANT AND HENCE THE TRANSACTI ON WAS TREATED AS BOGUS AND THE AMOUNT HAS BEEN TREATED AS APPELLANTS OWN MONE Y FROM UNDISCLOSED SOURCES. AGGRIEVED BY THIS ORDER OF THE ASSESSING OFFICER, THE ASSESSEE MOVED THE MATTER BEFORE THE FIRST APPELLANT AUTHORITY AND MADE DETAILED SUBMISSIONS AS WERE MADE BEFORE THE ASSESSING OFFICER. 3 THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, WAS OF THE VIEW THAT SHRI BHAGWAN DASS IS JIJA (ELDER SIST ERS HUSBAND) OF THE APPELLANT AND IT IS NOT CUSTOMARY IN THE HINDU SOCIETY TO ACC EPT GIFTS FROM JIJA RATHER THEY ARE GIVEN GIFTS BY HINDU FAMILIES ON ONE OCCASION O R OTHER. EVEN ACCORDING TO HIM, THE CREDITWORTHINESS OF SHRI BHAGWAN DASS DOES NOT STAND PROVED IN VIEW OF FACTS & CIRCUMSTANCES AS DISCUSSED IN THE DETAILED ASSESSMENT ORDER. THEREFORE, HE CONFIRMED THE ADDITION MADE BY THE ASSESSING OFF ICER. THE ASSESSEE IS STILL AGGRIEVED AND IS ON SECOND APPEAL BEFORE ME. 4 AT THE TIME OF HEARING, LD. COUNSEL FOR THE ASSES SEE, SHRI M.R. SHARMA 3 PLACED ON RECORD A COMPILATION CONSISTING OF 18 PAG ES, COMPRISING THEREIN FOLLOWING MATERIALS, WHICH ARE CERTIFIED TO HAVE BE EN PRODUCED BEFORE THE LOWER AUTHORITIES: SR NO PARTICULARS DATED PAGES 1 COPY OF STATEMENT OF SHRI BHAGWAN DASS MODI -- 1 -5 2 COPY OF BANK ACCOUNT OF CENTRAL BANK OF INDIA -- 6 ELLANABAD, A/C NO. HSS-5587 3 COPY OF BANK ACCOUNT OF CENTRAL BANK OF INDIA, ELLANABAD, A/C NO. HSS-6299 -- 7 4 COPY OF JAGDISH RAIS CAPITAL ACCOUNT -- 8 5 COPY OF ACCOUNT IN THE BOOKS OF M/S CHANAN MAL LILA DHAR -- 9 6 COPY OF FORM-J BILL NO. 77 28.12.2000 10 7 COPY OF FORM-J BILL NO. 78 29.12.2000 11 8 COPY OF FORM-J BILL NO. 35 08.08.2001 12 9 COPY OF MEMORANDUM OF GIFT -- 13 10 COPY OF STATEMENT OF SHRI BHAGWAN DASS MODI -- 14-16 11 COPY OF JAMABANDI -- 17-18 BY PLACING THE ABOVE MATERIAL ON RECORD, LD. COUNS EL FOR THE ASSESSEE SUBMITTED AS UNDER: SHRI BHAGWAN DASS WAS HAVING 84 BIGHAS OF AGRICULT URAL LAND. HE SOLD SOME OF HIS AGRICULTURAL PRODUCE PARTLY THROUGH T HE COMMISSION AGENCY OF THE FIRM M/S CHANAN MAL LILA DHAR, ELLENABAD AND PA RTLY IN THE VICINITY OF HIS AGRICULTURAL LAND. THE DONOR HAD CREDIT BALA NCE WITH THE FIRM M/S CHANAN MAL LILA DHAR, ELLANABAD AS UNDER: 31.3.2000 RS. 2,01,238/- 31.3.2001 RS. 2,25,238/- 31.3.2001 RS. 3,02,138/- AND FROM THIS BALANCE OF RS. 3,02,138/- HE RECEIVED RS. 1.00 LAKH THROUGH THE CHEQUE AND DEPOSITED THE SOME IN HIS SAVING BA NK ACCOUNT FROM WHERE HE GIFTED RS. 1.00 LAKH TO SHRI JAGDISH RAI O N 9.3.2001. THUS THE DONOR WAS MAN OF SOURCE AND HAD CAPACITY TO GIFT R S. 1.00 LAKH. AS REGARDS REASON AND OCCASION OF THIS GIFT, AFTER THE DEATH OF SHRI BHAGWAN DASSS FATHER THE LAND TENANTS STARTED TROUBLING HI M AND AT THAT TIME SHRI JAGDISH RAI (THE ASSESSEE) CAME TO HIS RESCUE AND I N CONSIDERATION THEREOF SHRI BHAGWAN DASS MADE THE GIFT. IN HIS ST ATEMENT RECORDED ON 4 29.8.2006, SHRI BHAGWAN DASS STATED THAT TOTAL LAND HOLDING OF HIS FAMILY WAS ABOUT 84 BIGHAS AND WHOLE OF THIS LAND WAS CULT IVATED AND TAKEN CARE OF BY HIM. THUS, IT CAN BE SEEN THAT THE WHOLE OF PROCEEDS OUT OF 84 BIGHAS BELONGS TO SHRI BHAGWAN DASS. HE SAVES RS. 3.00 LAKHS PER ANNUM AFTER MEETING OUT ALL HIS ROUTINE EXPENSES. HENCE GIFT OF RS. 1.00 LAKH GIVEN BY HIM TO THE ASSESSEE, SHRI JAGDISH RAI , HAS TO BE CONSIDERED AS GENUINE. 5 PER CONTRA LD. D.R. FOR THE REVENUE REITERATED TH E FINDINGS OF THE ASSESSING OFFICER AS HIS SUBMISSIONS. HE SUBMITTED THAT SHRI BHAGWAN DASS IN HIS STATEMENT CLEARLY STATED THAT HE HAD TAKEN A LO AN OF RS. 5.8 LAKH THROUGH KISSAN CREDIT CARD FOR THE MARRIAGE CEREMONY OF HI S DAUGHTER AND TO BUY A ELECTRIC CONNECTION IN HIS AGRICULTURAL LAND FIELDS . HE ALSO BROUGHT TO MY NOTICE THAT SHRI BHAGWAN DASS HAD FOUR DAUGHTERS, TWO SONS AND MOTHER. HAD THE DONOR BEEN SO RICH, HE WOULD NOT HAVE TAKEN LOAN FO R MARRIAGE OF HIS DAUGHTER ETC. AFTER THE SUPPORT OF HIS FAMILY MEMBERS, THER E WOULD HARDLY BE ANY AMOUNT LEFT FOR SAVING AND EVEN THERE WERE ANY SAVINGS BY HIM THAT WOULD BE SPENT IN HIS FAMILY AFFAIRS AND THERE WOULD BE NO CASE OF GIFT T O ASSESSEE WHO IS ALREADY A PARTNER IN THE FIRM HAVING HUGE CAPITAL. SHRI BHAG WAN DASS HAD ONLY RS. 532/- AS ON 9.3.2001 AND THE AMOUNT OF RS. 1.00 LAKH WAS CREDITED TO THIS ACCOUNT AND ON THE SAME DATE THE CHEQUE OF RS. 1.00 LAKH WAS IS SUED IN FAVOUR OF SHRI JAGDISH RAI, AS ALLEGED GIFT. ALTHOUGH IDENTITY OF THE ALLEGED DONOR IS BEING PROVED, THE CREDIT WORTHINESS AND GENUINENESS OF S UCH GIFT IS NOT AT ALL PROVED. IN THESE CIRCUMSTANCES, THERE IS NO NECESSITY TO DI STURB THE ORDER OF LOWER AUTHORITIES. 6 IN HIS REJOINDER THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER HAD BASED HIS DECISION ON THE STA TEMENT GIVEN BY SHRI BHAGWAN DASS ON 29.8.2006 AND THAT LOANS WERE TAKEN IN THE YEAR 2005. HE ALSO SUBMITTED, REFERRING TO PAGE 14 OF THE PAPER B OOK THAT SHRI JAGDISH RAI HAD SUFFICIENT BALANCE IN HIS CAPITAL ACCOUNT AND THERE WAS NO NEED FOR HIM TO INFLATE BY BOGUS CREDIT, THE CAPITAL ACCOUNT. 7 I HAVE HEARD THE RIVAL SUBMISSIONS AND CONSIDERED THE FACTS AND MATERIALS 5 ON RECORD. THERE IS NO DISPUTE ABOUT THE FACT THAT SHRI BHAGWAN DASS, THE DONOR HAD IN HIS CONTROL 84 BIGHAS OF AGRICULTURAL LAND. ALSO AS POINTED OUT BY LD. COUNSEL FOR THE ASSESSEE, SHRI JAGDISH RAI THE ASSE SSEE HAD SUFFICIENT BALANCE IN HIS CAPITAL ACCOUNT AS ON 31.3.2001 (RS. 8,41,59 8) AND I FIND FORCE IN THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE THA T THERE WAS NO NECESSITY TO INFLATE THE CAPITAL ACCOUNT BY BRINGING BOGUS AMOUN T OF RS. 1.00 LAKH. IT IS ALSO SEEN THAT THE DONOR HAD TAKEN LOAN OF RS. 5.80 LAKH S THROUGH KISSAN CREDIT CARD IN 2005 ONLY. I AM CONCERNED WITH THE POSITION PRE VAILING IN ASSESSMENT YEAR 2001-02 FOR DECIDING THIS ISSUE. THE ASSESSING OFF ICER HAS ALSO NOT DISPUTED THE ARGUMENT BY LD. COUNSEL FOR THE ASSESSEE THAT THE J IJA OF THE DONOR, HAD ASSISTED THE DONOR IN HIS GETTING AWAY FROM THE TROUBLES GIV EN TO HIM BY THE TENANTS AFTER THE DEATH OF HIS FATHER. THE DONORS STATEMENT THA T HE HAD GIVEN RS. 1.00 LAKH GIFT IN CONSIDERATION OF ASSESSEES HELP TO GET AWA Y FROM SUCH TROUBLES, CAN NOT BE DISBELIEVED. IN SUCH FACTS & CIRCUMSTANCES, I A M OF THE VIEW THAT GIFT GIVEN IN A SUM OF RS. 1.00 LAKH BY SHRI BHAGWAN DASS IS GE NUINE AND HENCE I QUASH THE ORDERS OF LOWER AUTHORITIES IN THIS ISSUE AND A LLOW THE APPEAL OF THE ASSESSEE. 8 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 3 RD DAY OF SEPTEMBER, 2010. SD/- (N. BARATHVAJA SANKAR) VICE PRESIDENT DATED: 03.09.2010 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/ THE DR 6