ITO, New Delhi V. Sh. Rakesh, New Delhi

ITA 4537/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86603 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2015
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 07-01-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 31-07-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIKRAM SAHAY
• Assessee Lawyers: SANJEEV BAJAJ
• Keywords: Gift; Additional evidence
• Section: 44AD

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F: NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER AND SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 4537/DEL/2013 ASSESSMENT YEAR: 2009-10 ITO, WARD 26(4), ROOM NO. 1810, 18 TH FLOOR E-2, BLOCK, CIVIC CENTRE, NEW DELHI. VS. RAKESH, HOUSE NO. 838, DICHAON KALAN, NAJAFGARH, NEW DELHI. AHIPR4446C (APPELLANT) (RESPONDENT) APPELLANT BY: SH. VIKRAM SAHAY, SR. DR RESPONDENT BY: SH. SANJEEV BAJAJ , CA O R D E R PER S.V. MEHROTRA, A.M. THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF LD. CIT(A)-XXIV, NEW DELHI DATED 24/05/2013 FOR A.Y. 20 09-10. 2. THE ASSESSEE HAD FILED RETURN OF INCOME DECLARIN G TOTAL INCOME AT RS. 2,64,363/- FROM SALE OF BRICKS, BADARPUR CEMENT AND IRON. AN AIR INFORMATION WAS RECEIVED BY ASSESSING OFFICER THAT THE ASSESSEE HAD DEPOSITED CASH TOTALING TO RS. 1,11,79,988/- IN ACC OUNT WITH AXIS BANK LTD. AND CREDIT CARD PAYMENTS OF RS. 4,76,780/- WERE MAD E WITH ICICI BANK LTD. IN COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE FI LED COPY OF PROFIT AND LOSS ACCOUNT AND BALANCE SHEET AND AFFIDAVIT FROM S HRI RANDHIR SINGH THAT HE HAD GIFTED AMOUNT OF RS. 24 LAKHS TO ASSESSEE. 2.1 THE AO OBSERVED THAT THE AFFIDAVIT WAS VAGUE AS IT DID NOT REFER TO IDENTITY, CAPACITY, RELEVANCY AND GENUINENESS WAS N OT PROVED. THE AFFIDAVIT ALSO DID NOT MENTION THE MODE AS TO WHETHER IN CASH OR BY DRAFT THE GIFT WAS MADE. HE FURTHER OBSERVED THAT FATHER COULD GIVE T HE AMOUNT THROUGH ITA NO. 4537/D/ 2013 2 CHEQUE NOT IN CASH AS THERE WAS NO URGENCY. HE FUR THER OBSERVED THAT THE COPY OF BANK ACCOUNT AS WELL AS SALE PURCHASE DEED OF LAND WAS ALSO INCOMPLETE. HE, ACCORDINGLY, MADE AN ADDITION OF R S. 1,11,79,988/- U/S 68 AND ALSO MADE A DISALLOWANCE OF RS. 2 LAKHS ON ACCO UNT OF UNVERIFIABLE NATURE OF EXPENSES. BEFORE LD. CIT(A) THE ASSESSEE FILED APPLICATION UNDER RULE 46A AND REQUESTED FOR ADMISSION OF ADDITIONAL EVIDENCE AS WELL AS AN ADDITIONAL GROUND OF APPEAL ON THE GROUND THAT SUFF ICIENT OPPORTUNITY TO PRODUCE THESE EVIDENCES WAS NOT PROVIDED TO THE ASS ESSEE BY THE AO DURING ASSESSMENT PROCEEDINGS. LD. CIT(A) FORWARDED THESE EVIDENCES AND PAPER BOOK TO AO ON 26/02/2013. THE AO GAVE HIS COMMENTS VIDE LETTER DATED 18/03/2013 IN WHICH HE OBJECTED TO THE ADMITTANCE O F ADDITIONAL EVIDENCE ON THE GROUND THAT THE ACCOUNTS STATEMENT OF AXIS BANK MENTIONED MR. RAKESH AS THE EXCLUSIVE OWNER OF THE BANK ACCOUNT, WHEREAS THE ASSESSEE HAD CLAIMED THAT ACCOUNT NO. 079010100265389 IN AXIS BA NK WAS A JOINT ACCOUNT IN THE NAME OF SH. RAKESH AND SH. DEVINDER, AND THE CASH DEPOSITED IN THIS ACCOUNT AMOUNTED TO RS. 67,16,100/- WHICH PERTAINED TO PARTNERSHIP FIRM. THE AO STATED THAT SINCE THE BANK STATEMENT ONLY HA D THE NAME OF THE ASSESSEE SH. RAKESH, THE CASH DEPOSITED IN THE BANK ACCOUNT WAS TO BE CONSIDERED IN THE HANDS OF THE ASSESSEE ONLY. AS R EGARDS THE AFFIDAVIT OF SH. RANDHIR SINGH, HE RELIED ON THE ASSESSMENT ORDER. 2.2 LD. CIT(A) AGAIN WROTE A LETTER DATED 18/04/201 3 WHICH HAS BEEN REFERRED TO IN PARA 4.2 OF HIS ORDER AND REPRODUCED HEREUNDER FOR READY REFERENCE: 4.2 IT WAS POINTED TO THE AO VIDE THIS OFFICE LET TER OF EVEN NUMBER DATED 18.04.2013 THAT A PROPER REBUTTAL OF THE AFFI DAVIT OF SH. RANDHIR SINGH HAD NOT BEEN GIVEN BY THE AO DURING A SSESSMENT PROCEEDINGS. SH. RANDHIR SINGH WAS NEVER EXAMINED UNDER OATH WITH REFERENCE TO HIS AFFIDAVIT, AS MANDATED BY THE CBDT IN ITS INSTRUCTION NO. 1271 DT. 08.01.1979. FURTHER, IT W AS ALSO POINTED OUT TO THE AO THAT A COPY OF THE PARTNERSHIP DEED D T. 01.01.207 ALONG WITH PAN APPLICATION BETWEEN THE APPELLANT SH . RAKESH AND HIS BROTHER SH. DEVINDER HAD A DIRECT BEARING ON TH E GROUND OF APPEAL NO. 4, WHEREBY THE APPELLANT HAD IMPUGNED TH E ADDITION OF THE CASH DEPOSITS IN HIS AXIS BANK ACCOUNT WHICH WA S BEING HELD BY ITA NO. 4537/D/ 2013 3 HIM JOINTLY WITH HIS BROTHER SH. DEVINDER. MOREOVE R, THE APPELLANT HAD ALSO PLACED ON RECORD A CERTIFICATE DT. 21.02.2 013 SIGNED BY THE AXIS BANK, VIKASPURI BRANCH, STATING THAT THE APPEL LANT SH. RAKESH WAS HAVING A SAVING BANK ACCOUNT NO. 07901010023538 9 IN THEIR BRANCH SINCE 23.01.2007 ALONG WITH SH. DEVINDER. I N THE LIGHT OF THE ABOVE, AND AFTER CAREFUL CONSIDERATION OF THE R EASONS GIVEN BY THE LD. AR AND THE SUBMISSIONS MADE BY THE APPELLAN T IN HIS REJOINDER, AND AFTER FINDING THAT THE ADDITIONAL EV IDENCE SUBMITTED BY THE APPELLANT HAD A CLOSE NEXUS AND DIRECT BEARI NG ON THE GROUNDS OF APPEAL TAKEN BY THE APPELLANT, IT WAS DE CIDED TO ADMIT THE ADDITIONAL EVIDENCE. ACCORDINGLY, THE AO WAS G IVEN DIRECTIONS U/S 250(4) OF THE INCOME TAX ACT TO GO THROUGH THE ADDITIONAL EVIDENCE, CARRY OUT NECESSARY REQUISITE ENQUIRIES A ND TO SUBMIT HIS REMAND REPORT THEREAFTER. 2.3 THE REMAND REPORT OF THE AO DATED 9 TH MAY, 2013 HAS BEEN REPRODUCED IN PARA 4.3 WHICH WAS AS UNDER: 4.3 THE REMAND REPORT OF THE AO WAS RECEIVED VID E HIS LETTER DATED 09.05.2013, IN WHICH THE ASSESSING OFFICER ST ATED THAT: A) AFTER EXAMINING SH. RANDHIR, FATHER OF THE APPELLAN T, WHO HAD FILED AN AFFIDAVIT TO THE EFFECT THAT HE HAD MA DE A GIFT OF RS. 24 LACS TO HIS SON AND AFTER RECORDING HIS STAT EMENT ON 08.05.2013, WHEREIN SH. RANDHIR CONFIRMED THAT THE GIFT WAS MADE IN CASH OUT OF WITHDRAWALS MADE FROM HIS BANK ACCOUNT, WHEREIN THE SALE PROCEEDS OF AGRICULTURAL LAND HAD BEEN DEPOSITED, IT IS SUBMITTED THAT THE CONTENTS O F THE AFFIDAVIT CAN BE RELIED UPON. B) AS REGARDS THE CASH DEPOSITS IN SAVING BANK ACCOUNT IN AXIS BANK, VIKAS PURI BRANCH, THE ASSESSEE CLAIMED THAT THE ACCOUNT PERTAINED TO PARTNERSHIP FIRM UNDER THE NAM E AND STYLE OF M/S RAKESH KUMAR DEVINDER KUMAR. IN SUPPO RT OF THE CLAIM, A PHOTOCOPY OF THE PARTNERSHIP DEED DT. 01.01.2007 WAS FILED AS ADDITIONAL EVIDENCE ALONG WITH A CERTI FICATE DT. 21.02.2013 FROM AXIS BANK MANAGER THAT THIS ACCOUNT WAS A JOINT ACCOUNT OF SH. RAKESH AND SH. DEVINDER. THUS , IT CAN BE CONCLUDED THAT THE FIRM IS A SEPARATE ENTITY AND THE CASH DEPOSITS IN THE BANK ACCOUNT TO THE TUNE OF RS. 67, 16,100/-, AS REPORTED IN THE AIR, CANNOT BE TREATED AS ASSESSEE S INCOME. 3. AFTER CONSIDERING THE REMAND REPORT, LD. CIT(A) DELETED THE TOTAL ADDITION OF RS. 1,11,79,988/-. FURTHER LD. CIT(A) ALSO DELETED THE ADDITION OF RS. 2 LAKHS TAKING NOTE OF THE FACT THAT THE RETURN WAS FILED U/S 44AD (WHICH SHOULD HAVE BEEN 44AFAS SUBMITTED BY LD. COUNSEL). ITA NO. 4537/D/ 2013 4 4. BEING AGGRIEVED WITH THE ORDER OF LD. CIT(A) THE DEPARTMENT IS IN APPEAL BEFORE US AND HAS TAKEN FOLLOWING GROUNDS OF APPEAL: 1. DELETING THE ADDITION OF RS. 20,63,088/- EVEN THO UGH THE SAME REMAINED UNEXPLAINED. OUT OF TOTAL ADDITION OF RS. 1,11,79,988/- ONLY RS. 91,16,900/- WAS EXPLAINED. 2. DELETING THE EXPENSES OF RS. 2,00,000/- ON ACCOUNT OF DISALLOWANCE OF EXPENSES BY HOLDING THE BUSINESS OF ASSESSEE TO BE COVERED U/S 44AD WHEREAS FACTS STATE THAT THE AS SESSEE DEALS IN TRADING OF BUILDING MATERIAL. 5. APROPOS GROUND NO. 1 LD. CIT(DR) SUBMITTED THAT CIT(A) HAS NOT GIVEN ANY COMMENTS ON RS. 20,63,088/- AND DELETED THE SAM E. HE SUBMITTED THAT THERE WAS NOTHING IN THE REMAND REPORT ON THIS AMOU NT. 6. LD. COUNSEL FOR THE ASSESSEE REFERRED TO PAGE 23 OF THE PAPER BOOK, WHEREIN THE WRITTEN SUBMISSIONS MADE BEFORE LD. CIT (A) ARE CONTAINED IN WHICH IT WAS, INTER-ALIA, POINTED OUT THAT THERE WE RE THREE BANK ACCOUNTS THE DETAILS OF WHICH WAS AS UNDER: A) AXIS BANK HAVING ACCOUNT NO. 360010100007535 16,00,000.00 IN THE NAME OF SH. RAKESH PERSONAL ACCOUNT B) AXIS BANK HAVING ACCOUNT NO. 079010100295246 28,63 ,888.00 IN THE NAME OF SH. RAKESH BUSINESS ACCOUNT C) AXIS BANK HAVING ACCOUNT NO. 079010100235389 67,16 ,100.00 IN THE NAME OF SH. RAKESH AND DEVENDRA (JOINT A/C) TYPE (PARTNERSHIP FIRM BUSINESS ACCOUNT) TOTAL 111,79,988.00 6.1 HE SUBMITTED THAT THE BUSINESS TURNOVER IN RESP ECT OF PERSONAL BUSINESS WAS ROUTED THROUGH BANK ACCOUNT NO. 079010 100295246 AND THE DIFFERENCE AS MENTIONED IN THE DEPARTMENTS GROUND OF APPEAL RELATES TO DEPOSITS OF THIS BANK ACCOUNT. 7. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES. 8. ADMITTEDLY, LD. CIT(A) HAS NOT RECORDED ANY FIND ING IN REGARD TO THE SUM OF RS. 20,63,088/- AND THE AO IN HIS REMAND REP ORT ALSO HAS NOT COMMENTED ON THIS AMOUNT. THEREFORE, WE RESTORE TH IS GROUND TO THE FILE OF AO FOR CONSIDERING THE ASSESSEES SUBMISSIONS AND T HEN DECIDE THE ISSUE WITH RESPECT TO THE ADDITION OF RS. 20,63,088/-. 9. IN THE RESULT, THIS GROUND IS ALLOWED FOR STATIS TICAL PURPOSES. ITA NO. 4537/D/ 2013 5 10. APROPOS GROUND NO. 2, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A) BECAUSE IT IS NOT DISPUTED THAT THE ASSESSEE HAD FILED ITS RETURN OF INCOME U/S 44AF SHOWING TAXABLE INCOME OF RS. 2,64,363/- WHICH WAS IN EXCESS OF 8% PRESUMPTIVE TAX. WE, THEREFORE , CONFIRM THE ORDER OF LD. CIT(A) ON THIS GROUND. 11. IN THE RESULT, THE DEPARTMENTS APPEAL IS PARTL Y ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 23/01/2015 SD/- SD/- (H.S. SIDHU) JUDICIAL MEMBER (S.V. MEHROTRA) ACCOUNTANT MEMBER DATED: 23/01/2015 *KAVITA COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI. TRUE COPY BY ORDER ASSISTANT REGISTRAR