SHRI MAHENDRA DRONKER, Indore V. THE ITO WARD 1(1), Indore

ITA 455/IND/2015

• Counselvise Citation: 45522714 RSA 2015
• Duration Of Justice: 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-12-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 07-01-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 12-06-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Keywords: Unexplained cash credit; Gift

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE (SINGLE MEMBER CASE) BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER I.T.A.NO. 455/IND/2015 A.Y. : 2005-06 SHRI MAHENDRA DRONKAR, INDORE. ITO, 1(1), INDORE VS. APPELLANT RESPONDENT PAN NO. ACEPD7599K A PPELLANT S BY : SHRI VIJAY BANSAL, CA RESPONDENT BY : SHRI R. A. VERMA, DR O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A)-I, INDORE, DATED 26.02.2015 FOR THE ASSES SMENT YEAR 2005-06. 2. FOLLOWING GROUND HAS BEEN RAISED BY THE ASSESSEE :- DATE OF HEARING : 15 .12. 2015 . DATE OF PRONOUNCEMENT : 15 . 1 2 .2015 SHRI MAHENDRA DRONKAR, INDORE VS. ITO, WARD 1(1), I NDORE I.T.A.NO. 455/IND/2015 A.Y.2005-06 2 2 THAT THE LD. CIT(A)-I, INDORE, IS QUITE WRONG IN CONFIRMING THE ADDITION OF RS. 4,15,000/- U/S 68 OF THE ACT BY CONSIDERING THE CREDITS OF GIFTS RECEIVED OF RS. 1,15,000/- FROM SMT. USHA DRONKAR (MOTHER OF ASSESSEE ), RS. 1,00,000/- FROM SHRI KAMLAKAR DRONKAR (FATHER OF ASSESSEE), RS. 1,00,000/- FROM SHRI PRABHAKAR SOMAN (FATHER-IN-LAW OF ASSESSEE ) AND RS. 1,00,000/- FROM SANJEEV LONDHE ( SISTERS HUSBAND OF ASSESSEE ) AS UNEXPLAINED CASH CREDIT, WHEREAS ASSESSEE HAS GIVEN THE PROPER EXPLANATION, IDENTITY, SOURCE AND RELATION OF THE DONORS WHICH IS QUITE UNJUST, ILLEGAL AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. THE ORDER PASSED IS BAD IN LAW. 3. THE SHORT FACTS OF THE CASE ARE THAT THE ASSESSEE H AS FILED THE RETURN OF INCOME DECLARING INCOME OF RS. 4,37,330/-. THE ASSESSEE DERIVES THE INCOME FROM RETAIL TRADING OF MOTOR PUMPS AND SPARE PARTS. THE ASSESSEE HAS CLAIMED TO HAVE SHRI MAHENDRA DRONKAR, INDORE VS. ITO, WARD 1(1), I NDORE I.T.A.NO. 455/IND/2015 A.Y.2005-06 3 3 RECEIVED GIFT FROM HIS MOTHER RS. 1,15,000/-, HIS F ATHER RS. 1,00,000/- AND FROM HIS FATHER IN LAW RS. 1,00,000/ - ALL THE THREE DONORS RE THE RELATIVES OF THE ASSESSEE AND A RE PENSIONERS. COPY OF THE PASS BOOK AND RELEVANT DOCU MENTS WERE VERIFIED BY THE ASSESSING OFFICER AND AO FOUND THAT THE THREE DONORS ARE INCOME TAX PAYEES. IN THE BANK ACC OUNT OF SMT. USHA DRONKAR, CASH OF RS. 40,000/- WAS DEPOSIT ED ON 5.2.2005 AND RS. 35,000/- ON 9.2.2005, WHICH WAS GI VEN AS GIFT TO ASSESSEE ON 10.2.2005 BY CHEQUE. FURTHER, T HE CASH OF RS. 49,000/- WAS DEPOSITED ON 24.03.2005, WHICH WAS GIVEN TO THE ASSESSEE ON 28.3.2005 AND IN THE SAVING BANK AC COUNT OF SHRI K.L.DRONKAR, RS. 49,050/- WAS DEPOSITED ON 21. 2.2005 AND RS. 49,500/- DEPOSITED ON 22.2.2005 AND RS. 1 L AKH WAS GIVEN TO THE ASSESSEE THROUGH PAY ORDER ON 23.2.200 5. THUS, THERE WAS CASH DEPOSITED IN THE BANK ACCOUNT OF DON OR JUST BEFORE THE DATE ON WHICH THE GIFT WAS MADE TO THE A SSESSEE. THEREFORE, FOR THE PURPOSE OF VERIFICATION AND GENU INENESS OF THE TRANSACTION, THE AO HAS EXAMINED THE DONORS IN PERSON. AFTER EXAMINING ALL THE DONORS, SMT. USHA DRONKAR W AS NOT SHRI MAHENDRA DRONKAR, INDORE VS. ITO, WARD 1(1), I NDORE I.T.A.NO. 455/IND/2015 A.Y.2005-06 4 4 ASSESSED TO TAX. SHE WAS A TEACHER AND SHE COULD NO T OFFER ANY EXPLANATION REGARDING SOURCE OF DEPOSIT OF RS. 40,0 00/- ON 5.2.2005, RS. 35,000/- ON 9.2.2005 AND CASH DEPOSIT OF RS. 49,000/-, WHICH WAS GIVEN TO THE ASSESSEE ON 28.3.2 005. THEREFORE, THE AO HAS DISALLOWED THE CASH DEPOSITS IN RESPECT OF SMT. K.L. DRONKAR, SHRI K.L. DRONKAR, WHO IS GOV ERNMENT PENSIONER AND HE COULD NOT EXPLAIN HE SOURCE REGARD ING DEPOSIT IN THE BANK. THEREFORE, THE AO HAS DISALLOW ED RS. 1 LAKH. IN THE CASE OF RS. 1 LAKH RECEIVED FROM SHRI PRABHAKAR SOMAN, THE ASSESSEE COULD NOT PRODUCE HIM. THEREFOR E, THE AO HAS MADE THE ADDITION AND CIT(A) HAS CONFIRMED THE ADDITION. 4. I HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PART IES. 5. THE LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIE S BELOW. 6. THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED THAT AL L THE FOUR DONORS HAVE ACCEPTED THAT THE ASSESSEE HAS RECEIVED GIFT FROM HIS MOTHER AND FATHER. THEREFORE, IT MAY BE ALLOWED. THE LD. AUTHORIZED REPRESENTATIVE ALSO SUBMITTED TH AT THE ASSESSEE HAS RECEIVED GIFT FROM SHRI PRABHAKAR SOMA N, FATHER- SHRI MAHENDRA DRONKAR, INDORE VS. ITO, WARD 1(1), I NDORE I.T.A.NO. 455/IND/2015 A.Y.2005-06 5 5 IN-LAW AND SANJEEV LONDHE OF RS. 1 LAKH EACH. IN TH E CASE OF SHRI PRABHAKAR SOMAN, THE COPY OF THE BANK ACCOUNT AND PAN CARD WERE SUBMITTED. ON VERIFICATION OF THE BANK AC COUNT, THE FDR OF RS. 1,24,659/- WAS ENCASHED AND OUT OF THAT AMOUNT, THE GIFT HAS BEEN GIVEN. HE DID NOT REMAIN PRESENT. THE AO DID NOT REQUIRE SHRI SANJEEV LONDHE TO REMAIN PRESENT. SHRI SANJEEV LONDHE WAS NOT PRODUCED. 7. HAVING HEARD BOTH THE PARTIES, I AM OF THE OPINION THAT IN THE CASE OF SMT. USHA DRONKAR AND SHRI KAMLAKAR DRONKAR, THE ASSESSEE HAS PRODUCED COPIES OF BANK STATEMENTS . I FIND FROM THE STATEMENT OF THE BANK ACCOUNTS THAT THE AM OUNT OF CASH WAS DEPOSITED IN THE BANK ACCOUNT PRIOR TO GIV ING THIS AMOUNT. THE AO HAS IN HIS ASSESSMENT ORDER HAS CLEA RLY STATED THAT SMT. USHA DRONKAR HAS GIVEN GIFT OF RS. 1,15,000/- THROUGH ACCOUNT PAYEE CHEQUE ON 7.2.2005 AND THAT AMOUNT OF RS. 1,15,000/- WAS DEPOSITED IN THE BANK ACCOUNT IN CASH, RS. 40,000/- ON 5.2.2005, RS. 35,0 00/- ON 9.2.2005 AND CASH OF RS. 49,000/- WAS DEPOSITED ON 24.2.2005 AND GIVEN TO THE ASSESSEE ON 28.3.2005. THEREFORE, SHRI MAHENDRA DRONKAR, INDORE VS. ITO, WARD 1(1), I NDORE I.T.A.NO. 455/IND/2015 A.Y.2005-06 6 6 THE AO HAS EXAMINED AND HE WANTED TO VERIFY THE SOU RCE OF CASH DEPOSITED IN THE BANK. THE ASSESSEE COULD NOT REPLY BEFORE THE AO, BEFORE THE CIT(A) AND BEFORE US. NO DOCUMENTARY EVIDENCE IS PRODUCED IN RESPECT OF CASH DEPOSITED PRIOR TO GIVING THE CHEQUE. SIMILARLY, IN THE CASE OF SHRI K.L.DRONKAR, HE HAS DEPOSITED MONEY OF RS. 49 ,500/- ON 21.2.2005 AND AGAIN RS. 49,500/- ON 22.2.2005. THE ASSESSEE COULD NOT EXPLAIN THE SOURCE. THEREFORE, IN MY OPIN ION, THE AO AND LD. CIT(A) ARE JUSTIFIED IN MAKING THE ADDITION . THEREFORE, I DISMISS THE APPEAL ON THIS GROUND. 8. IN RESPECT OF THE GIFT RECEIVED BY THE ASSESSEE FRO M SHRI PRABHAKAR SOMAN, THE ASSESSEE COULD NOT PRODUCE, BU T NOW HE IS EXPIRED. ON VERIFICATION OF THE BANK ACCOUNT, SHRI PRABHAKAR SOMAN HAD GIFTED THIS AMOUNT OUT OF MATUR ITY OF FDR RS. 1,24,659/-. THEREFORE, I AM OF THE VIEW THA T IN THIS CASE, THE ASSESSEE HAS EXPLAINED THE SOURCE OF MONE Y OF SHRI PRABHAKAR SOMAN, HIS FATHER IN LAW OF THE ASSESSEE. THEREFORE, I CONSIDER IT AS A GENUINE GIFT AND I DELETE THE AD DITION. SHRI MAHENDRA DRONKAR, INDORE VS. ITO, WARD 1(1), I NDORE I.T.A.NO. 455/IND/2015 A.Y.2005-06 7 7 9. IN RESPECT OF SHRI SANJEEV LONDHE, THE ASSESSEE DID NOT PRODUCE HIM BEFORE THE AO. THEREFORE, I RESTORE THI S ISSUE TO THE FILE OF AO AND AO IS DIRECTED TO VERIFY THE SAM E AND DECIDE THE MATTER AFRESH. 10. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. THIS ORDER HAS BEEN PRONOUNCED IN THE OP EN COURT ON 15 TH DECEMBER, 2015. SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 15 TH DECEMBER, 2015. CPU* 16.12.