Gopi Krishna Panda, Bhubaneswar V. ITO, Bhubaneswar

ITA 443/CTK/2015

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7219 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 17-01-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 20-11-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: B K MOHAPATRA
• Keywords: Gift; Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK SMC BENCH, CUTTACK BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO.443/CTK/2015 ASSESSMENT YEAR : 2009 - 2010 GOPI KRISHNA PANDA, REGIONAL COLLEGE OF MANAGEMENT, CHANDRASEKHARPUR, BHUBANESWAR. VS. ITO, WARD 2(3), BHUBANESWAR. PAN/GIR NO. ALDPP 5522 G ( ASSESSEE ) .. ( RESPONDENT ) ASSESSEE BY : SHRI B.K.MOHAPATRA, AR REVENUE BY : SHRI D.K.PRADHAN, DR DATE OF HEARING : 1 7 /01/ 2017 DATE OF PRONOUNCEMENT : 17 /01/ 2017 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - BERHAMPUR , DATED 27.10.2014 , FOR THE ASSESSMENT YEAR 2009 - 2010 . 2. THE APPEAL FILED BY THE ASSESSEE IS BARRED BY 312 DAYS. THE ASSESSEE HAS FILED CONDONATION PETITION DATED 20.11.2015 SU PPORTED BY AFFIDAVIT FOR CONDONING THE DELAY IN FILING THE APPEAL. AFTER GOING THROUGH THE CONDONATION PETITION, I FIND THAT THE ASSESSEE HAD REASONABLE CAUSE FOR NOT FILING THE APPEAL WITHIN THE STIPULATED TIME. 2 ITA NO.443/CTK/2015 ASSESSMENT YEAR :2009 - 2010 LD D.R. DID NOT HAVE ANY OBJECTION FOR CONDONING THE DELAY. I, THEREFORE, CONDONE THE DELAY OF 312 DAYS IN FILING THE APPEAL BEFORE THE TRIBUNAL AND ADMIT THE APPEAL FOR HEARING. 3 . GROUND NO.1 OF THE APPEAL IS GENERAL IN NATURE AND HENCE, REQUIRES NO SEPARATE ADJUDICATION. 4 . IN GROUND NO.3 OF THE APPEAL, THE GRIEVANCE OF THE ASSESSEE IS THAT THE LD CIT(A) ERRED IN CONFIRMI NG THE ACTION OF THE ASSESSING O FFICER IN ADDING RS.15,00,000/ - BEING GIFT RECEIVED FROM CLOSE RELATIVES AS INCOME OF THE ASSESSEE. 5 . BRIEF FACTS OF THE CASE ARE THAT DURING THE SCRUTINY PROCEEDING, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS DEPOSITED, IN CASH AN AMOUNT OF RS.25,14,000/ - CONSISTING OF RS.14,14,000/ - AND RS.11,00,000/ - IN TWO SAVINGS BANK ACCOUNTS MAINTAINED AT AXIS BANK. ON BEING ASKED TO EXPL AIN THE SOURCE OF THIS DEPOSIT, THE ASSESSEE STATED THAT THE DEPOSIT HAS BEEN MADE OUT OF HIS SALARY SAVINGS AMOUNTING TO RS.4,64,000/ - , SAVINGS OF WIFE AMOUNTING TO RS.2,50,000/ - AND CASH GIFT OF RS.18,00,000/ - FROM SIX RELATIVES. THE ASSESSEE SUBMITTED T HAT HE RECEIVED GIFTS FROM RELATIVES, THE DETAILS OF WHICH ARE AS FOLLOWS; (I) RS.3,00,000/ - FROM SHRI ASHIS KUMAR MOHAPATRA, COUSIN BROTHER OF THE SPOUSE OF THE ASSESSEE, (II)RS. 5,00,000/ - FROM SHRI GIRIJA SHANKAR PANDA, FATHER OF THE ASSESSEE, (III)RS. 3,00,000/ - FROM SMT. REBATI PANDA, MOTHER OF THE ASSESSEE.(IV) RS,2,00,000/ - FROM SHRI GATI 3 ITA NO.443/CTK/2015 ASSESSMENT YEAR :2009 - 2010 KRUSHNA PANDA, BROTHER OF THE ASSESSEE, (V) RS,.3,00,000/ - FROM SHRI UMESH CHANDRA PATI, FATHER - IN - LAW OF THE ASSESSEE AND (VI) RS.2,00,000/ - FROM SHRI RINKESH KUMA R PATI, BROTHER - IN - LAW OF THE ASSESSEE. 6 . THE ASSESSING OFFICER EXAMINED IN DETAIL THE CLAIM OF THE ASSESSEE AND ALSO SUMMONED THE DONORS. THE ASSESSING OFFICER OBSERVED THAT SHRI MOHAPATRA, THE FIRST DONOR IS THE SON OF SHRI NIRANJAN MOHAPATRA, WH O IS THE BROTHER OF SMT. SAROJINI PATI, THE MOTHER - IN - LAW OF THE ASSESSEE. BY REFERRING TO SECTION 56(2)(VI), WHICH DEFINES THE TERM RELATIVE, THE ASSESSING OFFICER HELD THAT SHRI MOHAPATRA DOES NO COME WITHIN THE SAID DEFINITION OF RELATIVE AND, ACCORDING LY, THE GIFT OF RS.3,00,000/ - RECEIVED FROM SHRI MOHAPATRA IS LIABLE TO TAX U/S.56. 7 . IN RESPECT OF THE OTHER DONORS, THE ASSESSING OFFICER HELD, ON EXAMINATION OF THE DETAILS FURNISHED THAT THERE IS NO EVIDENCE REGARDING THE GENUINENESS OF THE GIFT OR THE CREDITWORTHINESS OF THE DONORS TO MAKE THOSE CASH GIFTS. HE, ACCORDINGLY, HELD THAT THE GIFT OF RS.15,00,000/ - FROM THE FIVE RELATIVES AS UNEXPLAINED RECEIPT OF CASH/UNEXPLAINED DEPOSIT AND, ACCORDINGLY, BROUGHT THE SAME TO TAX. 8 . ON APPEAL, LD CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFFICER OBSERVING AS UNDER: SO FAR AS GIFTS OF RS.15,00,000/ - FROM THE RELATIVES OF THE APPELLANT IS CONCERNED, AGAIN ON CONSIDERATION OF THE FACTS, I AM NOT INCLINED TO INTERFERE WITH THE ACTION OF THE AO. IT I S NOT POSSIBLE TO TAKE ON FACE VALUE THE CONTENTION OF THE FATHER OF THE APPELLANT, SHRI GIRIJA SHANKAR PANDA THAT HE GAVE THE GIFT 4 ITA NO.443/CTK/2015 ASSESSMENT YEAR :2009 - 2010 OUT OF RS.5,00,000/ - , WHICH HE RECEIVED AS LIC MATURITY VALUE ALMOST 3 TO 4 YEARS BACK. THE DONOR HAS A BANK ACCOUNT SINCE L ONG AND HAS ALSO OTHER LIABILITIES. THEREFORE, IT IS NOT POSSIBLE TO ACCEPT THAT HE HELD THE CASH WITH HIM ONLY TO GIVE IT AS A GIFT TO ONE OF HIS SONS DURING THE YEAR. SIMILARLY, THERE IS NO EVIDENCE THAT THE MOTHER OF THE APPELLANT, WHO IS ADMITTEDLY A H OME MAKER KEPT SUCH LARGE SUM OF RS.3,00,000/ - IN CASH WITH HER, WHEN HER HUSBAND HAS GOT A BANK ACCOUNT. IN FACT, IN THE ABSENCE OF ANY INCOME OF THE MOTHER, THE GENERATION OF RS.3,00,000/ - CASH SAVINGS IS ITSELF NOT POSSIBLE. IT IS ALSO QUITE IMPROBABLE THAT THE MOTHER WILL GIVE HER ENTIRE SAVINGS AS GIFT TO ONE OF HER SONS. SIMILARLY, AS HAS BEEN BROUGHT BY THE AO IN HIS ASSESSMENT ORDER AND ALSO IN THE REMAND REPORT, THE BROTHER OF THE APPELLANT WAS AN AYURVEDIC DOCTOR AND WAS NOT IN GOVERNMENT SERVICE EARLIER. THE RETURNED INCOME OF SHRI PANDA WAS VERY MEAGRE AND DOES NOT SUGGEST THAT HE WOULD BE \ CAPABLE OF SAVING RS.2,00,000/ - , WHICH HE GIFTED TO HIS BROTHER. GIVEN HIS ECONOMIC CONDITION, THE GIFT APPEARS QUITE IMPROBABLE. SO FAR AS GIFT OF RS.2,00,0 00/ - FROM THE BROTHER - IN - LAW IS CONCERNED, AS HAS BEEN BROUGHT OUT BY THE AO IN HIS ASSESSMENT ORDER, SHRI PATI JOINED AS PROJECT ENGINEER WITH WIPRO ONLY IN 2007 AND AS PER THE TERMS OF THE EMPLOYMENT DATED 23.06.2007, HIS STIPEND WAS RS. 12,000/ - FOR FI RST THREE MONTHS, WHICH WOULD INCREASE TO RS. 15,190/ - FOR THE BALANCE PERIOD. GIVEN SUCH MEAGRE RECEIPTS AND CONSIDERING THE FACT THAT SHRI PATI WOULD HAVE HIS OWN EXPENSES, IT IS NOT POSSIBLE TO ACCEPT THE APPELLANT'S CONTENTION THAT HE GIFTED RS.2,00,00 0/ - TO HIM, WHICH WAS AGAIN KEPT IN CASH BY SHRI PATI, THOUGH ADMITTEDLY HE HAD A BANK ACCOUNT. SIMILARLY, THE ALLEGED GIFT OF RS.3,00,000/ - FROM SHRI UMESH CHANDRA PATI IS WITHOUT ANY EVIDENCE. SHRI PATI, WHO IS THE FATHER - IN - LAW OF THE APPELLANT, HAS TWO SONS, ONE OF WHOM WAS STILL STUDYING IN AN ENGINEERING COLLEGE. HE MAINTAINS A SAVINGS ACCOUNT WITH STATE BANK OF INDIA AND THE WITHDRAWALS FROM THE BANK ACCOUNT DO NOT SUGGEST AVAILABILITY OF CASH OF RS.3.00.000 - WITH HIM TO MAKE THE ABOVE GIFT. IN VIE W OF THE ABOVE DISCUSSION, I DO NOT FIND ANY INFIRMITY IN THE ACTION OF THE AO IN REFUSING TO ACCEPT THE GENUINENESS OF THE GIFTS OF RS.15,00,000/ - AND THE CREDITWORTHINESS OF THE RESPECTIVE DONORS TO MAKE THOSE GIFTS. 9 . LD A.R. OF THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES. 10 . LD D.R. RELIED ON THE ORDERS OF LOWER AUTHORITIES. 11 . ON A QUERY BY THE BENCH TO LD A.R. OF THE ASSESSEE THAT WHAT IS THE EVIDENCE TO PROVE THE CREDITWORTHINESS OF THE GIVER S OF THE GIFTS OF RS.15,00,000/ - TO THE ASSESSEE AS THE GIFTS WERE PAID TO THE ASSESSEE IN CASH, 5 ITA NO.443/CTK/2015 ASSESSMENT YEAR :2009 - 2010 HE COULD NOT GIVE ANY MATERIAL TO EXPLAIN THE CREDITWORTHINESS OF THE GIVERS OF THE GIFTS TO THE ASSESSEE. HENCE, IN VIEW OF THE FINDINGS OF THE ASSESSING OFFICER AND LD CIT (A), I FIND NO GOOD REASON TO INTERFERE WITH THE ORDER OF LD CIT(A) AND DISMISS THIS GROUND OF APPEAL OF THE ASSESSEE. 12 . IN GROUND NO.3 OF THE APPEAL, THE GRIEVANCE OF THE ASSESSEE IS THAT THE LD CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.2,50,000/ - MADE BY SMT. TANUSHREE PANDA, WIFE OF THE ASSESSEE TOWARDS INVESTMENT IN HOUSE PROPERTY. 13 . I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSEE CLAIMED THAT H IS WIFE SMT. TANUSHREE PANDA INVESTED RS.2,50,000/ - IN PURCHASE OF HOUSE PROPERTY. IN HER DEPOSITION BEFORE THE ASSESSING OFFICER ON 28.10.2011, SHE CLAIMED THAT THE INVESTMENT OF RS.2,50,000/ - IN 2008 - 2009 WAS SAVINGS FROM HER TUITION INCOME DURING THE EARLIER YEARS. THE DETAILS OF TUITION INCOME FROM F.Y. 2000 - 2001 TO 2007 - 08 WERE SUBMITTED BY HER. SHE CLAIMED TO HAVE COMPLETED B.SC IN 2001 AND M.A.(TA) IN 2004 AND STARTED EARNING FROM TUITI ON FROM THE PERIOD OF HER STUDY CAREER IN B.SC & M.A. (TA). THE ASSESSING OFFICER DID NOT ACCEPT THE EXPLANATION OF THE WIFE OF THE ASSESSEE AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE AS UNDISCLOSED INCOME OF THE ASSESSEE. 14 . ON APPEAL, LD CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 6 ITA NO.443/CTK/2015 ASSESSMENT YEAR :2009 - 2010 15 . LD A.R. OF THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES AND LD D.R. RELIED ON THE ORDERS OF LOWER AUTHORITIES. 16 . I FIND THAT IT IS AN UNDISPUTED FACT THAT THE WIFE OF THE A SSESSEE WAS EARNING INCOME FROM TUITION FROM ASSESSMENT YEAR 2001 I.E. WHILE STUDYING IN B.S C AND M.A(TA). SHE GOT MARRIED IN 2005 TO THE ASSESSEE. THE INVESTMENT HAS BEEN CLAIMED TO HAVE BEEN MADE IN F.Y. 2008 - 09 RELEVANT TO A.Y. 2009 - 2010. HENCE, THE EXPLANATION OF THE WIFE OF THE ASSESSEE SMT. TANUSHREE PANDA CANNOT BE BRUSHED ASIDE AS IT CANNOT BE SAID THAT FOR THE LAST 10 YEARS, THE WIFE OF THE ASSESSEE COULD NOT HAVE SAVED RS.2,50,000/ - TO INVEST IN THE PURCHASE OF HOUSE PROPERTY. I AM OF THE CON SIDERED VIEW THAT THE SUM OF RS.2,50,000/ - COULD REASONABLY HAVE BEEN SAVED BY THE WIFE OF THE ASSESSEE SMT. TANUSHREE PANDA FOR CONTRIBUTING IN INVESTMENT IN HOUSE PROPERTY. HENCE, I SET ASIDE THE ORDERS OF LOWER AUTHORITIES AND DELETE THE ADDITION OF R S.2,50,000/ - AND ALLOW THIS GROUND OF APPEAL OF THE ASSESSEE. 17 . IN GROUND NO.4 OF THE APPEAL, THE GRIEVANCE OF THE ASSESSEE IS THAT LD CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.4,64,000/ - BEING INVESTMENT MADE BY THE ASSESSEE IN PURCHASE OF FLAT FROM METRO BUILDERS. 7 ITA NO.443/CTK/2015 ASSESSMENT YEAR :2009 - 2010 18 . I HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE CLAIMED TO HAVE INVESTED RS .4,64,000/ - OUT OF HIS PAST SAVINGS IN PURCHASE OF HOUSE PROPERTY, WHICH WAS NOT ACCEPTED BY THE ASSESSING OFFICER ON THE GROUND THAT SUCH SAVINGS COULD NOT HAVE BEEN MADE BY THE ASSESSEE. 19 . ON APPEAL, LD CIT(A) OBSERVED THAT THE ASSESSEE STATED THAT SI NCE 2000 - 2001, HIS GROSS INCOME WAS RS.9,18,832/ - . IT WAS SUBMITTED THAT OUT OF THIS AMOUNT, RS.4,64,000/ - WAS DEPOSITED IN THE BANK DURING THE IMPUGNED ASSESSMENT YEAR. THE ASSESSING OFFICER DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE COULD NOT HAVE SAVED MORE THAN 50% OF HIS SALARY IN CASH OVER A PERIOD OF 10 YEARS. 20 . BEFORE ME, LD A.R. REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES WHEREAS LD D.R. SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 21 . I FIND THAT THE ASSESSEE CLAIMED TO HAVE INVESTED RS.4,64,000/ - OUT OF HIS GROSS INCOME SINCE 2000 - 2001 OF RS.9,18,832/ - , WHICH WAS NOT ACCEPTED BY THE REVENUE AUTHORITIES ON THE GROUND THAT A PERSON CANNOT SAVE 50% OF HIS SALARY OVER A PERIOD OF 10 YEARS. I FIND THAT NO MATERIAL HAS BEEN BROUGHT ON RECORD TO SHOW THAT THE ASSESSEE COULD NOT HAVE SAVED RS.4,64,000/ - FOR 8 ITA NO.443/CTK/2015 ASSESSMENT YEAR :2009 - 2010 INVESTING IN PURCHASE OF HOUSE PROPERTY DURING THE YEAR OUT OF HIS PAST INCOME SINCE 2000 - 2001. THE ADDITION HAS BEEN MADE ONLY ON THE BA SIS OF SUSPICION. IT IS UPTO THE PERSON TO MAINTAIN HIS LIFE STYLE. IF THE ASSESSEE SAVES MORE AND SPEND LESS, THEN IT IS POSSIBLE FOR HIM TO SAVE ABOUT 50% OF HIS SALARY EARNED OVER A PERIOD OF 10 YEARS. THEREFORE, WITHOUT BRINGING ANY MATERIAL ON RECOR D, THE REVENUE CANNOT SAY THAT THE ASSESSEE COULD NOT HAVE SAVED RS.4,64,000/ - I.E HALF OF HIS SALARY OF RS.9,18,832/ - AND MAKE THE ADDITION OF RS.4,64,000/ - TO THE INCOME OF THE ASSESSEE. THEREFORE, I SET ASIDE THE ORDERS OF LOWER AUTHORITIES AND DELETE THE ADDITION OF RS.4,64,000/ - AND ALLOW THIS GROUND OF APPEAL OF THE ASSESSEE. 22 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCE D IN THE OPEN COURT ON 1 7 / 01/2017 IN THE PRESENCE OF PARTIES. SD/ - ( N.S SAINI) A CCOUNTANT MEMBER CUTTACK; DATED 17 /01 /2017 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, ASST.REGISTRAR, ITAT, CUTTACK 1. THE ASSESSEE : GOPI KRISHNA PANDA, REGIONAL COLLEGE OF MANAGEMENT, CHANDRASEKHARPUR, BHUBANESWAR. 2. THE RESPONDENT. ITO, WARD 2(3), BHUBANESWAR 3. THE CIT(A) , BERHAMPUR, CAMP; BBSR 4. CIT , BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//