Appeal details
Counselvise Citation
[2010] 119 COUNSELVISE.COM (IT) 5547 (ITAT-DELHI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 month(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
12-02-2010
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
H
Next Hearing Date
12-01-2010
Assessment Year
2006-2007
Appeal Filed On
12-11-2009
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : H NEW DELHI BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMEBR AND SHRI K.G.BANSAL, ACCOUNTANT MEMBER I.T.A NO. 4332/DEL/09 ASSESSMENT YEAR 2006-07 VIDUR TALWAR, D-1/36, VASANT VIHAR, NEW DELHI. VS. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 47 (1), NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI V.K. AGGARWAL, CA RESPONDENT BY : SHRI N.K. CHAND, SR. DR. ORDER PER RAJPAL YADAV, JM: THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE OR DER OF LD. CIT (A) DATED 24 TH SEPTEMBER, 2009 PASSED FOR ASSTT. YEAR 2006-07. IN THE FIRST GROUND OF APPEAL IT IS PLEADED BY THE ASSESSE E THAT LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.8,30,000/- W HICH HAS BEEN ADDED BY THE AO WITH THE HELP OF SECTION 56(2)(V) OF THE ACT. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE HA S FILED HIS RETURN OF INCOME ON 29.7.2006 DECLARING AN INCOME OF RS. 23,1 3,979/-. THE ASSESSEE HAD RECEIVED A SUM OF RS. 5,50,000/- FROM SHRI AMIT BURMAN THROUGH ACCOUNT PAYEE CHEQUE ON 22.2.2006. SIMILARL Y HE HAS SHOWN ITA NO. 4332/DEL/09 ASSTT. YEAR 2006-07 2 RECEIPT OF CASH THROUGH ACCOUNT PAYEE CHEQUE FROM M /S. S.S. FOOD PRODUCTS LTD. ON 28 TH MARCH, 2006 AMOUNTING TO RS. 2,80,000/-. ACCORDING TO THE ASSESSEE HE HAS RECEIVED BOTH THES E AMOUNTS AS LOAN. IN SUPPORT OF HIS CLAIM HE FILED THE CONFIRMATION F ROM THE LOANERS, THE DETAILS FROM THE BANK EXHIBITING THE TRANSMISSION O F FUNDS FROM THEIR ACCOUNT TO THE ASSESSEES ACCOUNT. THE AO HAS CONST RUED THE TRANSACTION AS A GIFT WITHIN THE MEANING OF SECTION 56 (2)(V) OF THE ACT. HE WAS OF THE OPINION THAT ASSESSEE HAS NOT SHOWN ANY INTEREST PAYABLE ON THESE LOANS. THEREFORE, THESE ARE TO BE TREATED AS A GIFT TO THE ASSESSEE WITHIN THE MEANING OF SECTION 56(2)(V) OF THE ACT. HE MADE THE ADDITION OF RS. 8,30,000/- IN THE TOTAL INCOME OF THE ASSESS EE. 3. ON APPEAL LD. CIT (A) HAS CONFIRMED THE ADDITION ON THE GROUND THAT ABOVE SUMS HAVE BEEN TAKEN BY THE ASSESSEE WIT HOUT CHARGING ANY INTEREST AND WITHOUT STIPULATING ANY TERMS AND COND ITIONS ABOUT THE RETURN. THUS CIRCUMSTANCES SUGGEST THAT THESE ARE N OT ACTUALLY LOAN BUT MORE IN THE NATURE OF GIFT AND AS SUCH ARE CHARGEAB LE TO TAX AS INCOME FROM OTHER SOURCES AS PER SECTION 56 (2) OF THE ACT . 4. LD. COUNSEL FOR THE ASSESSEE WHILE IMPUGNING THE ORDER OF LD. CIT (A) CONTENDED THAT LOANER OR LOANEE HAVE NEVER DENI ED THAT LOAN WOULD NOT BE REFUNDED. MERELY NON-CHARGING OF INTEREST WO ULD NOT CHANGE THE ITA NO. 4332/DEL/09 ASSTT. YEAR 2006-07 3 NATURE OF A LOAN INTO A GIFT. THE CREDITORS WHICH HAVE ADVANCED THESE LOANS TO THE ASSESSEE ARE CONFIRMING THAT THESE ARE LOANS ONLY AND NOT THE GIFT. THE ASSESSEE HAS MADE REPAYMENT OF RS. 50 ,000/- TO SHRI AMIT BURMAN VIDE CHEQUE NO. 367756 ON 8 TH JANUARY, 2009. IT INDICATE THAT ASSESSEE HAS TO REPAY THE LOANS. LD. DR ON THE OTH ER HAND RELIED UPON THE ORDER OF LD. CIT(A). 5. WE HAVE DULY CONSIDERED THE RIVAL CONTENTION AND GONE THROUGH THE RECORD CAREFULLY. THERE IS NO BASIS WITH THE AO TO CONSTRUE A LOAN TRANSACTION AS A GIFT. THE ONLY CIRCUMSTANCES ASSIG NED BY THE AO IS THAT THESE LOANS ARE TAKEN BY THE ASSESSEE WITHOUT MAKIN G PAYMENT OF INTEREST. LD. CIT (A) ASSIGNED ONE MORE REASON THAT THERE IS NO STIPULATION OF TIME IN WHICH THESE ARE REQUIRED TO BE REPAYED. IN OUR OPINION THESE TWO CIRCUMSTANCE WOULD NOT BE SUFFICI ENT TO CHANGE THE NATURE OF A LOAN TRANSACTION INTO GIFT. THE PARTIES ARE CONFIRMING AND STICKING TO THEIR STAND THAT THESE ARE ONLY LOANS A DVANCED BY THEM TO THE ASSESSEE. HAD THE AO CALLED THEM AND RECORDED THEIR STATEMENT AND WAS ABLE TO COLLECT SOME OTHER EVIDENCE EXHIBITING THE FACT THAT THERE WAS NO INTENTION TO REPAY THE LOAN THEN PROBABLY HE WOULD BE JUSTIFIED IN TREATING THEM AS GIFT. IN A FRIENDLY LOAN THE LOANE R MAY NOT CHARGE INTEREST FROM THE LOANEE BUT THAT WOULD NOT INDICATE THAT HE IS FORGETTING HIS ITA NO. 4332/DEL/09 ASSTT. YEAR 2006-07 4 PRINCIPLES ALSO. TAKING INTO CONSIDERATION ALL THES E FACTS AND CIRCUMSTANCES WE ALLOW THIS GROUND OF APPEAL AND DE LETE THE ADDITION OF RS. 8 ,30,000/-. 6. GROUND 2 RELATES TO CHARGING OF INTEREST U/S 234 A, 234B AND 234C. LD. COUNSEL FOR THE ASSESSEE DID NOT ADVANCE ANY AR GUMENTS ON THESE ISSUES. THESE ARE CONSEQUENTIAL IN NATURE. HENCE TH IS GROUND IS REJECTED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. . ORDER PRONOUNCED IN THE OPEN COURT ON 12.2.2010. [K.G. BANSAL] [RAJPAL YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER VEENA DATED: 12.2.10 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT
