ITO, Sirsa V. Sh. Badri Parshad Gupta, Sirsa

ITA 474/CHANDI/2011

• Counselvise Citation: 47421514 RSA 2011
• Duration Of Justice: 4 year(s) 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 04-08-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 06-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D S SIDHU
• Keywords: Unexplained investment; Gift; Source of fund
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES SMC CHANDIGARH BEFORE SHRI H.L. KARWA, HONBLE VICE PRESIDENT ITA NO.474/CHD/2011 ASSESSMENT YEAR:2007-08 ITO, VS. SH. BADRI PARSHAD GUPTA WARD I C/O SHIVDEI RESORTS SIRSA, HISSAR ROAD SIRSA PAN NO. AAUPG6261B (APPELLANT) (RESPONDENT) APPELLANT BY : SH. D.S. SIDHU RESPONDENT BY : SH. TEJ MOHAN SINGH DATE OF HEARING : 06/08/2015 DATE OF PRONOUNCEMENT : 14/08/2015 ORDER PER H.L.KARWA, VP THE APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 23/02/2011PASSED BY THE CIT(A), ROHTAK. 2. IN THIS APPEAL REVENUE HAS RAISED THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 9.00 LACS MADE ON ACCOUNT OF INVESTMENT MADE IN THE CONSTRUCTION OF HOUSE PRO PERTY. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 9.00 LACS MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAD CLAIMED THAT THE SAID INVESTMENT WAS I NITIALLY MADE BY HIS SON SH. VISHNU BHAGWAN GUPTA AND LATER ON IT WAS RE- IMBURSED BY HIM VIDE TWO CHEQUES OF RS. 4.5 LACS EA CH DATED 15.03.2007. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION WITHOUT APPRECIA TING THE FACT THAT THE ASSESSEES SON SH. VISHNU BHAGWAN GUPTA WA S UNABLE TO 2 EXPLAIN THE INVESTMENT OF RS. 9.00 LACS MADE BY HIM ON BEHALF OF HIS FATHER. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 9.00 LACS WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE SHIFTED HIS STAND REGARDING INVESTMENT ON THE CONSTRUCTION OF PROPERTY, WHEN HI S SON SH. VISHNU BHAGWAN GUPTA WAS UNABLE TO EXPLAIN THE SOURCE OF I NVESTMENT OF RS. 9.00 LACS CLAIMED TO HAVE BEEN MADE BY HIM ON B EHALF OF HIS FATHER. 3. BRIEFLY STATED, THE ASSESSEE FILED HIS RETURN DE CLARING AN INCOME OF RS. 2,49,640/- ON 31/10/2007. DURING ASSESSMENT PROCEED INGS IT WAS FOUND THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE H AD SPENT AN AMOUNT OF RS. 9.00 LACS IN THE CONSTRUCTION OF HOUSE PROPERTY. IN RESPONSE TO THE QUERY BY THE AO OF THE SOURCE OF INVESTMENT, THE APPELLANT STATE D THAT DUE TO THE AGE FACTOR, HE HAD ENTRUSTED ALL THE JOBS TO HIS SON, SH. V.B. GUPTA ,AND THE ENTIRE EXPENDITURE OF 9.00 LACS WAS MET BY HIS SON. HE FUR THER STATED THAT LATER ON HE HAD REPAID THE ENTIRE AMOUNT TO HIS SON BY TWO CHEQ UES. FURTHER, DURING ASSESSMENT PROCEEDINGS ,THE AO RECORDED THE STATEME NT OF SH. V.B. GUPTA WHO ON BEING QUESTIONED ABOUT THE SOURCE OF RS.9 LACS I NVESTED BY HIM IN HIS FATHERS HOUSE , STATED THAT HE HAD WITHDRAWN A SUM OF RS. 3 .80 LACS IN CASH FROM HIS PERSONAL SAVINGS A/C IN BANK OF RAJASTHAN, SIRSA AN D A SUM OF RS. 5.25 LACS IN CASH WAS GIFTED BY HIS FATHER ON 15.04.2006. ON PERUSAL OF THE AFORESTATED BANK ACCOUNT OF SH. V.B. GUPTA, THE AO OBSERVED THAT CAS H WAS WITHDRAWN, AMOUNTING TO RS. 3.80 LACS, ON THREE DATES AND ALLE GEDLY THE SAME WERE USED TO RE-DEPOSIT IN THE SAME A/C .THE AO THEREFORE HELD THAT THE ASSESSEE HAD NO CASH AVAILABLE WITH HIM FOR MAKING ANY INVESTMENT O N BEHALF OF HIS FATHER. REGARDING THE CONTENTION OF SH. V.B .GUPTA RELATIN G TO THE GIFT OF RS. 5.25 LACS RECEIVED FROM HIS FATHER, THE AO HELD THAT IT WAS W ITHOUT ANY BASIS AND APPEARED TO BE AN AFTER THOUGHT. IN VIEW OF THE ABO VE, THE AO ADDED THE ABOVE INVESTMENT OF RS. 9.00 LACS U/S 69 OF THE IT ACT VIDE HIS ORDER DT. 23/02/2011. 3 4. THE CIT(A) DELETED THE ADDITION VIDE HIS ORDER D ATED 23/02/2011 BY HOLDING AT PARA 4 OF HIS ORDER: 4. I HAVE CONSIDERED THE ISSUE AND THE SUBMISSION S MADE BY THE DR. THE FACT THAT THE APPELLANT HAD WITHDRAWN CASH OF R S. 29.25 LACS FROM HIS BANK A/C DURING THE PERIOD 24.10.2005 TO 30.03.2006 IS NOT IN DISPUTE. THIS BEING THE CASE, THE SOURCE OF GIFT OF RS. 5.25 LAC S ON 05.04.2006 CAN NOT BE DOUBTED MERELY ON THE GROUND THAT THERE IS A GAP BETWEEN THE WITHDRAWAL OF FUNDS AND GIFT MADE. AS REGARDS THE S OURCE FOR INVESTMENT OF RS. 3.80 LACS BY THE SON OF THE APPELLANT, IT IS EVIDENT FROM THE WITHDRAWALS FROM THE BANK A/C. CASH DEPOSITS SUBSEQ UENT TO THE WITHDRAWALS CAN NOT BE THE SOLE GROUND FOR DOUBTING THE GENUINENESS OF THE CLAIM. IN VIEW OF THE ABOVE, THE ADDITION MADE BY THE AO OF RS. 9.00 LACS IS DELETED AND THE GROUNDS OF APPEAL ARE ALLO WED. 5. AGGRIEVED BY THE ORDER OF THE CIT(A), THE REVENU E HAS FILED THIS APPEAL BEFORE THE TRIBUNAL. 6. BEFORE ME, THE DR RELIED HEAVILY UPON THE ORDER OF THE AO WHILE THE AR BESIDES PLACING RELIANCE ON THE ORDER OF THE CIT(A) , FURTHER VEHEMENTLY ARGUED THAT THE PRESENT ADDITION WAS ON ACCOUNT OF QUESTIO NING THE SOURCE OF THE SOURCE WHICH IS NOT TENABLE FOR MAKING ADDITION U/S 69 OF THE INCOME TAX ACT 1961.HE PLACED RELIANCE ON A NUMBER OF DECISIONS IN SUPPORT OF HIS CONTENTION. 7. I HAVE HEARD THE ARGUMENTS OF BOTH THE REPRESENT ATIVES AND PERUSED ALL MATERIAL PLACED BEFORE ME. 8. THE ONLY ISSUE IN THE PRESENT CASE IS REGARDS AD DITION MADE TO THE INCOME OF THE ASSESSE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN HOUSE U/S 69 OF THE INCOME TAX ACT,1961. UNDER THIS SECTION THE VALUE OF INVESTMENTS MADE BY THE ASSESSE IN A FINANCIAL YEAR IMMEDIATELY PRECEDING THE ASSESSMENT YEAR MAY BE DEEMED TO BE INCOME OF THE ASSESSE OF SUCH FINANCIAL YEAR, IF- I) SUCH INVESTMENTS ARE NOT RECORDED IN THE BOOKS O F ACCOUNT ,IF ANY, MAINTAINED BY HIM FOR ANY SOURCE OF INCOME, AND II)(A) THE ASSESSE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE OF THE INVESTMENT, OR 4 (B) THE EXPLANATION OFFERED BY HIM IS,IN THE OPI NION OF THE ASSESSING OFFICER,NOT SATISFACTORY. 9. IN THE PRESENT CASE AS IS EVIDENT FROM THE ASSES SMENT ORDER ITSELF THE ASSESSE EXPLAINED THAT THE INVESTMENT IN HIS HOUSE, OF RS.9 LACS, DURING THE IMPUGNED YEAR, WAS MET BY HIS SON, MR.V.B.GUPTA. TH E ASSESSE FILED A CONFIRMATION LETTER OF HIS SON, IN THIS REGARD, DUR ING ASSESSMENT PROCEEDINGS. BESIDES ,THE STATEMENT OF ASSESSES SON WAS ALSO REC ORDED DURING ASSESSMENT PROCEEDINGS WHEREIN HE AGAIN REITERATED THAT THAT T HE INVESTMENT IN HIS FATHERS HOUSE WAS MADE BY HIM FROM MAY 2006 ONWARDS, THROUG H WITHDRAWALS MADE FROM HIS BANK ACCOUNT. SH V.B GUPTA, SON OF THE ASS ESSE, ALSO FILED A CERTIFICATE ISSUED BY HIS BANK ON 30-11-2009 SHOWING CASH WITHD RAWALS OF 3.80 LACS ON VARIOUS DATES. HE FURTHER CONTENDED THAT THE BALANC E INVESTMENTS WERE MADE FROM CASH GIFT OF 5.25 LACS RECEIVED FROM HIS FATHE R. THE ASSESSE ALSO STATED THAT HE HAD LATER RETURNED THE SUM OF RS. 9 LACS TO HIS SON VIDE TWO CHEQUES OF RS.4.5 LACS EACH FROM HIS TERM DEPOSIT ACCOUNT AND PLACED A COPY OF THE ACCOUNT AS EVIDENCE BEFORE THE ASSESSING OFFICER. THE CIT(A) A FTER APPRECIATING THE ASSESSES EXPLANATION AND ALL EVIDENCES PLACED BY HIM IN SUPP ORT OF HIS EXPLANATION ,ACCEPTED THE CONTENTION OF THE ASSESSE THAT THE IN VESTMENT IN HIS HOUSE OF RS.9 LACS WAS MADE BY HIS SON MR.V.B. GUPTA. THE CIT(A) HAS GIVEN A VERY CLEAR FACTUAL FINDING ON THIS AT PARA 4 OF HIS ORDER REPR ODUCED SUPRA. IN CLEAR WORDS THE CIT(A) HAS STATED THAT THE SOURCE OF FUNDS OF THE SON OF THE ASSESSE IN THE FORM OF GIFT FROM HIS FATHER OF RS.5.25 LACS CANNOT BE DOUBTED IN VIEW OF THE HUGE CASH WITHDRAWALS OF RS.29.25 LACS DURING THE CORRE SPONDING PERIOD IN WHICH THE GIFT WAS MADE, FROM THE BANK ACCOUNT OF THE ASSESEE . MOREOVER THE CIT(A) HELD THAT THE INVESTMENT OF RS. 3.80 LACS STOOD EXPLAINE D BY THE WITHDRAWALS MADE FROM THE BANK ACCOUNT OF THE SON OF THE ASSESSE. TH E CIT(A) FURTHER STATED THAT 5 MERELY BECAUSE SUBSEQUENTLY THERE WERE DEPOSITS TH E GENUINENESS OF THE CLAIM CANNOT BE DOUBTED. I FIND NO REASON TO DISAGREE WIT H THE FINDINGS OF THE CIT(A). I FIND THAT THE ASSESSEE HAS GIVEN A SATISFACTORY A ND DULY SUBSTANTIATED EXPLANATION OF THE SOURCE OF HIS INVESTMENT OF RS. 9.00 LACS IN HIS HOUSE. 10. EVEN OTHERWISE, IT IS SETTLED LAW THAT ASSESSEE CANNOT BE PRESUMED TO HAVE SPECIAL KNOWLEDGE ABOUT THE SOURCE OF SOURCE. THE FACT THAT AN ASSESSEE IS UNABLE TO SATISFY THE AUTHORITIES AS TO THE SOUR CE FROM WHICH THE DEPOSITOR DERIVED THE MONEY CANNOT BE USED AGAINST THE ASSESS EE. THIS VIEW HAS BEEN HELD BY THE HONBLE SUPREME COURT IN THE CASE OF CI T(CENTRAL), CALCUTTA VS. DAULAT RAM RAWATMULL [1973] 87 ITR 349 (SC). 11. I THEREFORE HOLD THAT THE ADDITION OF RS. 9.00 LACS HAS BEEN CORRECTLY DELETED BY THE CIT(A). 12. IN EFFECT THEREFORE, THE APPEAL OF THE REVENUE STANDS DISMISSED ORDER PRONOUNCED IN THE OPEN COURT ON 14/08/2015 SD/- (H.L. KARWA) VICE PRESIDENT DATED: 14/08/2015 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR