ITO, New Delhi V. Shri Punyanand Giri, New Delhi

ITA 4481/DEL/2009

• Counselvise Citation: 448120114 RSA 2009
• Duration Of Justice: 2 year(s) 11 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 25-09-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 25-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS MEETA GUPTA
• Keywords: Gift; Charitable institution; Additional evidence
• Section: 12A; 69; 56

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F NEW DELHI) BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO.4481/DEL/2009 ASSESSMENT YEAR : 2006-07 ITO, PUNYANAND GIRI, WARD-20 (2), 11-BELA ROAD, NEW DELHI. V. SHRI RAM ROAD, CIVIL LINES, NEW DELHI. AND I.T.A. NO.4636/DEL/2009 ASSESSMENT YEAR : 2006-07 PUNYANAND GIRI, ITO, 11-BELA ROAD, WARD-20(2), SHRI RAM ROAD, NEW DELHI. CIVIL LINES, N.DELHI. V. (APPELLANT) (RESPONDENT) PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO.AJUPG AJUPG AJUPG AJUPG- -- -8996 8996 8996 8996- -- -U UU U DEPARTMENT BY : MRS. MEETA GUPTA, SR. DR. RESPONDENT BY : SHRI J.K. HANDA, C.A. ORDER PER TS KAPOOR, AM: THESE ARE CROSS APPEALS FILED BY THE ASSESSEE AS WELL AS BY T HE REVENUE AGAINST THE ORDER OF LD CIT(A) DATED 22.9.20 09. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER:- ITA NO../DEL/ 2 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD CIT(A) IS NOT JUSTIFIED IN TREATING THE AMOUNT OF ` .22,20,000/- AS THE INCOME OF THE ASSESSEE. 2. THAT THE ASSESSEE RESERVES THE RIGHT TO RAISE ANY FRESH GRO UND OF APPEAL AND TO DELETE MODIFY AMEND ANY GROUND OF APP EAL AT THE TIME OF HEARING. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER:- 1. THE LD CIT(A) ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF ` .10,00,000/- AS UNDISCLOSED INVESTMENT. 2. THE LD CIT(A) ERRED IN LAW AND ON FACTS IN ACCEPTING THE ADDITIONAL EVIDENCE FURNISHED BY THE ASSESSEE WITHOUT A FFORDING ANY OPPORTUNITY TO THE ASSESSING OFFICER TO EXAMINE THE SAME, THUS VIOLATING THE PROVISIONS OF RULE 46A(3) OF THE IT RULES. 3. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ALL OR ANY OF THE AFORESAID GROUNDS OF APPEAL AND ADD ANY OTHER GROUND OF APPEAL. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILE D HIS RETURN OF INCOME ON 30.8.2006 & INCOME WAS DECLARED TO BE F ROM STOCKS & SHARES. THE CASE WAS SELECTED FOR SCRUTINY AND NECESSARY NO TICES WERE ISSUED. ON THE BASIS OF AIR, THE ASSESSING OFFICER NOTED TH AT ASSESSEE HAD INVESTED ` . 15 LAKHS IN PURCHASE OF BONDS ISSUED BY THE RESERVE BANK OF INDIA (RBI). THE ASSESSEES COUNSEL FILED A COPY OF BANK ACCOUNT MAINTAINED WITH PUNJAB NATIONAL BANK, CIVIL LINES, DELHI ALONG WITH IT THE LD AR OF THE ASSESSEE GAVE BRIEF PROFILE OF ASSESSEE SWAMI PUNYANAND GIRI MAHARAJ GIVING BRIEF INTRODUCTION AN D STATED THAT THE ASSESSEE WAS ENGAGED IN DELIVERY DISCOURSES AND WAS ENGAGED IN CHARITABLE ACTIVITIES. THE ASSESSING OFFICER FOUND FROM THE BANK ACCOUNT THAT ASSESSEE HAD DEPOSITED AN AMOUNT OF ` .22,20,000/- FROM ITA NO../DEL/ 3 TIME TO TIME IN HIS BANK ACCOUNT AND ALSO OBSERVED THA T PAYMENTS WERE MADE FROM TIME TO TIME TO PINAK MOOLCHANDANI. THEREFORE, THE ASSESSING OFFICER CONFRONTED THE LD AR ABOUT THE SOURCE OF DEPOSIT AND PURPOSE OF GIVING CHEQUES TO SHRI PINAK MOOLCHANDANI. AFTER VARIOUS ADJUSTMENTS TAKEN BY THE LD AR HE SUBMITTED ON 17.11.2 008 THAT CASH OF ` .22,20,000/- DEPOSITED IN THE BANK WAS VOLUNTARILY AN D OFFERINGS MADE BY THE DEVOTEES TO THE ASSESSEE WHICH WERE MADE IN THE COURSE OF THE YEAR. IT WAS FURTHER SUBMITTED THAT OFFERINGS M ADE BY THE DEVOTEES TO THE ASSESSEE WAS NOT THE INCOME OF THE ASSESSEE AND RELIED UPON THE TERMS AS USED IN SECTION 2(24) AND ALSO RELIED ON THE CASE OF CIT CENTRAL V. BIJLI COTTON MULLS PVT. LTD. THE ASSESSING OFFICER CONFRONTED THE LD AR WITH THE PROVISIONS OF SECTION 56 (2)(V) OF THE ACT AND ASKED HIM AS TO WHY THE RECEIPTS RECEIVED BY THE A SSESSEE BE NOT TREATED AS INCOME FROM OTHER SOURCES AND THE SAME NOT B EING DECLARED IN THE RETURN OF INCOME AND WHY IT SHOULD NOT BE TAX ED U/S 69 OF THE ACT. IN REPLY TO THAT THE LD AR SUBMITTED THAT ASSESSE E DID NOT RECEIVE AMOUNT EXCEEDING ` .25,000/- FROM ANY ONE PERSON DURING THE YEAR AND FILED AFFIDAVIT IN SUPPORT OF HIS CLAIM. HOWEVER, THE LD AR DID NOT FILE DETAIL OF PERSONS FROM WHOM THE DONATIONS WERE ACCEPTE D AND RATHER IN HIS LETTER DATED 12.11.2008 TOOK AN ALTERNATIVE P LEA THAT SINCE THE ASSESSEE WAS ENGAGED IN CHARITABLE ACTIVITIES THROUGH HIS VARIOUS ASHRAMS AND INSTITUTIONS AND THE INSTITUTIONS WERE EXEMPT U/S 12A OF THE INCOME TAX ACT, 1961 AND THEREFORE THIS WAS NOT T AXABLE. THE ASSESSING OFFICER HOWEVER, DID NOT ACCEPT THE CONTENTIO NS OF ASSESSEE AND MADE AN ADDITION OF ` .22,20,000/- U/S 69 OF THE ACT. 4. IN RESPECT OF QUERY OF THE ASSESSING OFFICER REGARDIN G INVESTMENT IN RBI BONDS TO THE EXTENT OF ` .15 LAKHS , THE LD AR SUBMITTED THAT ASSESSEE HAD MADE INVESTMENT IN RBI BONDS OF ` .5 LAKHS AND NO INVESTMENT OF ` .`.10 LAKHS WAS MADE IN RBI BONDS AND IN SUPPORT OF ITA NO../DEL/ 4 THIS THE LD AR ALSO FILED AFFIDAVIT DENYING ANY INVEST MENT OF ` .10LAKHS. THE ASSESSING OFFICER ACCEPTED THE INVESTMENT OF ` .5 LAKHS AS IT WAS MADE FROM BANK ACCOUNT AND REGARDING SECOND INVESTMEN T OF ` .10 LAKHS HE ADDED BACK THE AMOUNT TO THE INCOME OF THE ASSESSEE BEING NOT EXPLAINED BY THE ASSESSEE. 5. THE THIRD ADDITION OF ` .39,030/- WAS MADE ON ACCOUNT OF INTEREST CALCULATED @ 12% ON PAYMENTS MADE TO SHRI PINAK MOOL CHANDANI AND MRS. POONAM MOOLCHANDANI. 6. DISSATISFIED WITH THIS ORDER, THE ASSESSEE FILED APPEAL BEFORE LD CIT(A) AND SUBMITTED AS UNDER:- A) THAT ASSESSEE WAS A RELIGIOUS AND PIOUS PERSON WHO LEFT FROM HIS HOUSE AT A VERY TENDER AGE OF 15 TO GAIN KNOWLEDG E AND AFTER STUDYING AT BANARAS FOR 12 YEARS HE GOT THE DEGREE OF VEDENTACHARYA AND TOOK SANYAS AND VISITED VARIOUS PLA CES IN INDIA FOR DISSEMINATION OF VEDIC AND SPIRITUAL KNOWLED GE. HE HAS DEVOTED HIS ENTIRE LIFE IN THE STUDY OF VEDAS AND OTHE R RELIGIOUS LITERATURE AND HAS ESTABLISHED VARIOUS GAUSHALAS AND AN N- KSHETRAS. B) THAT THE OFFERINGS MADE TO HIM WERE VOLUNTARILY P AYMENTS WHICH WERE PERSONAL IN NATURE AND WERE MADE OUT OF P ERSONAL REGARDS, ESTEEMED RESPECT TOWARDS THE ASSESSEE AND HAD NO RELATION WITH ANY OF HIS OFFICE BEING HELD BY HIM OR SERVICES RENDERED BY HIM. C) THAT THE ABOVE FACTS WERE EXPLAINED TO LD ASSESSING O FFICER AND IT WAS ALSO EXPLAINED TO HIM THAT INCOME WAS NOT ASSESSABLE ITA NO../DEL/ 5 U/S 56(2)(V) OF THE ACT AS THE ASSESSEE HAD NOT RECEIVE D AMOUNT EXCEEDING ` .25,000/- FROM A SINGLE PERSON DURING THE YEAR. D) THAT IN ORDER TO DECIDE THE QUESTION OF TAXABILIT Y OR OTHERWISE OFFERINGS IN THE HANDS OF SANYASI, IT IS IMPORTANT TO H AVE A LOOK AT THE INSTITUTIONS OF THE SANYASI SO THAT TRUE NATURE OF OFFERINGS MADE BE UNDERSTOOD IN PROPER PERSPECTIVE AND ONE OF THE ESSENTIAL FEATURES OF THE INSTITUTION OF SANYASI IS AN OA TH BY THE SANYASI AT THE TIME OF BEGINNING OF SANYAS. E) THAT THE PURPOSE OF LIFE OF A SANYASI IS DISTINGUISH ABLE FROM THE PURPOSE OF LIFE OF NORMAL HOUSEHOLDER. FOR A NORM AL HOUSEHOLDER IN NORMAL CIRCUMSTANCES HAS SELF INTEREST AN D WORLDLY PLEASURE AS OF PARAMOUNT CONSIDERATION. ON THE OTHER HAND, A SANYASI GIVES UP HIS SELF INTEREST AND WORLDLY P URSUITS TO ATTAIN A STATE OF COMPLETE DETACHMENT. F) THAT THE RECEIPTS OF ` .22,20,000/- WERE PERSONAL IN NATURE AND THEREFORE WAS NOT AN INCOME WITHIN THE MEANING OF IN COME TAX ACT, 1961 IN VIEW OF JUDGMENTS OF VARIOUS HIGH COURT S IN CIT V. SRI SAHRI VENAMAMALAI RAMANUJA JEER SW AMINGGAI 231 ITR 632 (MAD.) AND CIT V. SRI GIRDHARRAM HARIRAM BHAGAT 15 4 ITR 10 (GUJ.). G) THAT THE RATIO OF THE ABOVE DECISIONS ARE THAT WH ERE THE PAYMENT HAS BEEN MADE FOR REASONS WHICH ARE PERSONAL A ND VOLUNTARILY AND FOR PERSONAL QUALITIES OF THE RECIPIE NT ON ACCOUNT OF ESTEEMED REGARD TOWARDS THE ASSESSEE THE RECEIPT WOU LD NOT AMOUNT TO INCOME. ITA NO../DEL/ 6 7. IN RESPECT OF INVESTMENT OF ` .10 LAKHS IN RBI BONDS IT WAS SUBMITTED BEFORE LD CIT(A) THAT THE ASSESSEE HAS TAKEN U P WITH RBI AND RBI HAD REFERRED THE SAME TO CORPORATION BANK AN D ASSESSEE WITH HIS EFFORTS HAD GOT REPLY FROM THE BANK THAT NO SUCH R BI BONDS WERE ISSUED IN THE NAME OF THE ASSESSEE. A COPY OF CONFIRMATIO N FROM BANK WAS SUBMITTED TO LD CIT(A). 8. REGARDING THIRD ADDITION OF ` .39,030/- THE LD AR SUBMITTED THAT ASSESSEE HAD FURNISHED TWO CERTIFICATES FROM SHRI PINAK MOOLCHANDANI AND MRS. POONAM MOOLCHANDANI CERTIFYING THAT THEY HA VE RECEIVED PAYMENTS FROM THE ASSESSEE ON ACCOUNT OF PURCHASE OF SHARE S AND THEREFORE IT CANNOT BE SAID THAT THE AMOUNTS PAID TO ABOVE PERSONS WAS NOT EXPLAINED. 9. THE LD CIT(A) WAS NOT SATISFIED AND HE UPHELD THE A DDITION MADE BY ASSESSING OFFICER OF AMOUNTING TO ` .22,20,000/- FOR UNEXPLAINED DEPOSITS BUT GAVE RELIEF OF ` .10,00,000/- ON ACCOUNT OF ALLEGED INVESTMENT IN RBI BONDS ON THE BASIS OF A CERTIFICATE FROM BANK THAT NO INVESTMENT OF ` .10 LAKHS WAS MADE BY ASSESSEE IN RBI BONDS. 10. AGGRIEVED, BOTH ASSESSEE AS WELL AS REVENUE HAS FILED APPEALS BEFORE THIS TRIBUNAL. 11. AT THE OUTSET, THE LD AR ARGUED THAT NO RECEIPT WAS IN EXCESS OF ` .25,000/- AND THEREFORE ASSESSING OFFICER WAS NOT CORREC T IN HOLDING THE RECEIPTS OF ASSESSEE U/S 56(2)(V) OF THE ACT. HE FURT HER ARGUED THAT ASSESSEE IS A SPIRITUAL PERSON AND WAS ENGAGED IN CHARITAB LE ACTIVITIES THROUGH HIS VARIOUS TRUSTS AND INSTITUTIONS AND AMOUNTS R ECEIVED BY HIM REPRESENTED AMOUNTS PAID TO HIM BY HIS DEVOTEES AND OR DISCIPLES AND WERE OFFERINGS MADE TO HIM DUE TO HIS PERSONAL QU ALITIES AS A SANYASI. 12. THE LD DR, ON THE OTHER HAND, RELIED UPON THE O RDER OF ASSESSING OFFICER AND ARGUED THAT RECEIPTS NECESSARILY REPRESENTE D THE INCOME OF ASSESSEE AND REGARDING DEPARTMENTS APPEAL, HE ARGUED TH AT ITA NO../DEL/ 7 ASSESSING OFFICER WAS NOT GIVEN AN OPPORTUNITY TO EXAMIN E THE CERTIFICATE RELIED UPON BY LD CIT(A) AND THEREFORE THE MATTER SHOULD BE REMANDED BACK IN SO FAR AS INVESTMENT OF ` .10 LAKHS WAS CONCERNED. 13. IN REPLY AND REJOINDER THE LD AR STRESSED UPON HIS ARGUMENTS AND SUBMITTED THAT LD CIT(A) HAD DELETED THE ADDITI ON OF ` .10,00,000/- AFTER SATISFYING HIMSELF. 14. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PA RTIES AND HAVE GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT ASSESSEE IS ENGAGED IN THE BUSINESS OF SALE & PURCHASE OF SHAR ES AS IS EVIDENT FROM THE RETURN OF INCOME FILED BY HIM. THE BUSINESS OF PURCHASE AND SALE OF SHARE IS QUITE RISKY AND INVOLVES LOT OF GREED ON THE PART OF A PERSON ENGAGED IN SUCH ACTIVITIES. THER EFORE, THE CLAIM OF LD AR THAT ASSESSEE IS A SPIRITUAL PERSON AND HAS NO LUST O F MONEY IS NOT BASED UPON THE FACTS OF THE CASE. HAD IT BEEN SO T HE ALLEGED DONATIONS & GIFTS RECEIVED BY HIM SHOULD HAVE BEEN SPEN T BY HIM ON SOCIAL OR CHARITABLE PURPOSES RATHER THEN INVESTING IN STOCK MARKET AND RBI BONDS. HIS CLAIM THAT ASSESSEE HAD VARIOUS TRUSTS AND I NSTITUTIONS WHICH WERE INVOLVED IN CHARITABLE ACTIVITIES DO NOT HOLD GROUND FOR CLAIMING HIS PERSONAL RECEIPTS AS TAX FREE BECAUSE THOSE TRUSTS WERE ALSO CLAIMED TO BE ENJOYING BENEFIT U/S 12A OF THE AC T. THE AMOUNTS DEPOSITED IN HIS PERSONAL BANK ACCOUNT ARE ASSESSEES OWN R ECEIPTS AND DID NOT RELATE TO HIS TRUSTS OR INSTITUTIONS, NOR IT HAS BEEN PROVED THAT ASSESSEE HAD TRANSFERRED THESE FUNDS INTO THE ACCOUNT S OF TRUSTS. THE LD AR COULD HAVE PROVED HIS CLAIM OF BEING DONAT IONS/GIFTS OF IN SMALL DENOMINATION BY FILING OF COPIES OF BANK SLIPS U SED FOR DEPOSIT OF MONEY IN THE BANK ACCOUNT WHICH INVARIABLY CONTAIN DENOMINATION OF NOTES DEPOSITED IN THE BANK ACCOUNT. THE LD AR ALSO CO ULD NOT PROVE FROM ANY ACCOUNTS/DIARIES MAINTAINED BY THE ASSESSEE TO SH OW THAT THESE WERE PART OF DAILY GIFTS/DONATIONS OF AMOUNTS IN VOLVING LESS THAN ` .25,000/- FROM ONE PERSON. THEREFORE, FROM THE FACTS OF THE CASE, IT ITA NO../DEL/ 8 CANNOT BE CONCLUDED THAT SMALL AMOUNTS WERE DONATED B Y DEVOTEES. THE ASSESSEE IS A PERSON HAVING LUST FOR MONEY AS HE WAS ENG AGED IN RISKY BUSINESS FOR GREED & THEREFORE, IT CANNOT BE SAID THAT HE WAS A SPIRITUAL PERSON HAVING NO LUST OF MONEY IN VIEW OF TH E ABOVE DISCUSSION, WE DO NOT SEE ANY REASON TO INTERFERE IN THE ORDER OF LD CIT(A). THEREFORE, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. 15. AS FAR AS THE APPEAL OF DEPARTMENT REGARDING ADD ITION OF ` .10 LAKHS ON ACCOUNT OF ALLEGED INVESTMENT IN RBI BONDS, W E HAVE OBSERVED THAT ASSESSEE WAS ABLE TO PROVE BEFORE LD CIT(A) ON THE BASIS OF LETTER FROM THE BANK THAT HE HAD NOT MADE ANY IN VESTMENT IN RBI BONDS AMOUNTING TO ` .10 LAKHS AND THEREFORE, LD CIT(A) HAD DELETED THE ADDITION. HOWEVER, BEFORE ACCEPTING THE CERTIFI CATE, HE SHOULD HAVE OBTAINED REMAND REPORT FROM THE ASSESSING OFFICER AS T HE CERTIFICATE AMOUNTED TO ADDITIONAL EVIDENCE. IN VIEW OF ABOVE, WE REMIT BACK THE FILE TO THE OFFICE OF ASSESSING OFFICER FOR RE-ADJUDICA TION ON THE POINT OF ` .10 LAKHS INVESTMENT IN RBI BONDS. NEEDLESS TO SAY THAT THE NECESSARY OPPORTUNITY WILL BE GRANTED TO THE ASSESSEE TO EXPLAIN HIS CASE. 16. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S ALLOWED FOR STATISTICAL PURPOSES AND APPEAL FILED BY THE ASSESSEE IS DIS MISSED. 17. ORDER PRONOUNCED IN THE OPEN COURT ON 23RD DAY OF NOVEMBER, 2012. SD/- SD/- (RAJPAL YADAV) (T.S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 23.11.2012. HMS COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT ITA NO../DEL/ 9 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). DATE OF HEARING 25.9.2012 DATE OF DICTATION 16.11.2012 DATE OF TYPING 16.11.2012 DATE OF ORDER SIGNED BY 23.1.2012 BOTH THE MEMBERS & PRONOUNCEMENT. DATE OF ORDER UPLOADED ON NET 23.11.2012 & SENT TO THE BENCH CONCERNED.