Himanshu Garg, New Delhi V. ITO, New Delhi

ITA 4761/DEL/2010

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90961 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 29-04-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 01-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T VASANTHAN
• Keywords: Gift
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : C : NEW DELHI BEFORE SHRI R.S. SYAL, AM AND SHRI C.M. GARG, JM ITA NO.4761/DEL/2010 ASSESSMENT YEAR : 2006-07 HIMANSHU GARG, 14/22, FIRST FLOOR, SHAKTI NAGAR, NEW DELHI. PAN: AGWPG7723N VS. ITO, WARD 20(1), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE DEPARTMENT BY : SHRI T. VASANTHAN, SR. DR DATE OF HEARING : 29.04.2015 DATE OF PRONOUNCEMENT : 30.04.2015 ORDER PER R.S. SYAL, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER PASSED BY THE CIT(A) ON 31.8.2010 IN RELATION TO THE ASSESSME NT YEAR 2006-07. ITA NO.4761/DEL/2010 2 2. WE HAVE HEARD THE LD. DR. THERE IS NO APPEARANCE FROM THE SIDE OF THE ASSESSEE. ONE ADJOURNMENT APPLICATION WAS FILE D, WHICH STANDS REJECTED. AS SUCH, WE ARE PROCEEDING TO DISPOSE OF THIS APPEAL EX PARTE QUA THE ASSESSEE. 3. FIRST GROUND OF THE APPEAL IS AGAINST THE CONFIR MATION OF ADDITION OF RS.50,000/- MADE U/S 68 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER ALSO CALLED THE ACT) . 4. SUCCINCTLY, THE ASSESSEE CLAIMED TO HAVE RECEIVE D A GIFT OF RS.50,000/- FROM ONE SHRI RAJ KUMAR, WHICH WAS DECL ARED IN THE BOOKS OF ACCOUNT. IN THE ABSENCE OF ANY CONFIRMATION FROM THE DONOR, THE AO TREATED IT AS INCOME OF THE ASSESSEE U/S 56(2)(V) O F THE ACT. THE ASSESSEE FILED APPLICATION UNDER RULE 46A OF THE INCOME-TAX RULES, 1962 BEFORE THE LD. CIT(A) SUBMITTING CONFIRMATION OF THE DONOR WHO HAD PASSED AWAY ON 24.1.2007. RELATIONSHIP BETWEEN THE ASSESS EE AND THE DONOR WAS ALSO DISCLOSED, WHO HAPPENED TO BE BROTHER OF T HE ASSESSEES MOTHER. IN VIEW OF THIS RELATION, THE LD. CIT(A) HELD THAT THE PROVISIONS OF SECTION 56(2)(V) WERE NOT APPLICABLE. HOWEVER, CON SIDERING THE BANK ITA NO.4761/DEL/2010 3 STATEMENT OF THE DONOR, WHICH, BEFORE THE CREDIT OF RS.55,000/- PRIOR TO TRANSFER OF RS.50,000/- TO THE ASSESSEE, HAD A SMAL L BALANCE OF RS.429/- HE, CONFIRMED THE ADDITION BY TREATING IT AS UNEXPL AINED CASH CREDIT. 5. IT IS OBVIOUS THAT THE GIFT WAS RECEIVED BY THE ASSESSEE FROM THE BROTHER OF HIS MOTHER. MERELY BECAUSE THE BALANCE I N THE ACCOUNT OF THE DONOR WAS LESS BEFORE THE TRANSACTION, CANNOT BE A REASON TO TREAT THE GIFT AS BOGUS. THE ASSESSING OFFICER REFUSED TO ACCEPT THE CAPACITY ETC. OF THE DONOR WITHOUT EXAMINING HIM. SINCE THE DONOR IS NO MORE ALIVE, THERE CANNOT BE ANY FURTHER INVESTIGATION IN THIS R EGARD. CONSIDERING THE SMALLNESS OF THE AMOUNT AND THE RELATIONSHIP BETWEE N THE DONOR AND THE DONEE AND THE FURTHER FACT THAT THE DONOR IS NO MOR E ALIVE, WE ACCEPT THE GENUINENESS OF THE GIFT RECEIVED BY THE ASSESSEE. ACCORDINGLY, THIS ADDITION IS DELETED. THIS GROUND IS ALLOWED. 6. THE SECOND GROUND IS AGAINST THE CONFIRMATION OF ADDITION OF RS.2,04,843/- MADE BY THE AO U/S 68 OF THE ACT. TH E FACTS APROPOS THIS GROUND ARE THAT THE AO NOTICED CASH DEPOSITS IN THE ASSESSEES CAPITAL ACCOUNT MAINTAINED WITH M/S GANESH TRADERS TOTALING TO RS.3,55,000/-. ITA NO.4761/DEL/2010 4 THE AO GOT CONVINCED TO THE EXTENT OF RS.1,46,187/- . HE, THEREFORE, MADE ADDITION FOR THE REMAINING AMOUNT OF RS.2,04,8 43/-. THE ASSESSEES EXPLANATION ABOUT THE AMOUNT RECEIVED FR OM CERTAIN RELATIVES AND OTHER PARTIES, DID NOT PERSUADE THE AO. DURING THE COURSE OF FIRST APPELLATE PROCEEDINGS, THE ASSESSEE FILED CONFIRMAT IONS OF ALL THE 15 DEPOSITORS WITH THEIR PERMANENT ACCOUNT NOS. AND AL SO COPIES OF THEIR INCOME-TAX RETURNS. THE ASSESSEE SUBMITTED THAT SO ME OF THOSE DOCUMENTS COULD NOT BE FILED BEFORE THE AO FOR WANT OF TIME. THE LD. CIT(A) CALLED FOR THE REMAND REPORT. THE AO REFUSE D TO ACCEPT THE BONA FIDE OF THE SOURCE OF THE AMOUNT BY HOLDING THAT SUCH CO NFIRMATIONS WERE EXPECTED TO BE FILED BEFORE HIM AND NOT THE CIT(A). THE LD. FIRST APPELLATE AUTHORITY UPHELD THE ADDITION BY OBSERVIN G THAT THERE WAS ONLY REMOTE LIKELIHOOD OF SUCH AMOUNTS HAVING BEEN RECEI VED. 7. HAVING HEARD THE LD. DR AND PERUSED THE RELEVANT MATERIAL ON RECORD, WE FIND FROM THE IMPUGNED ORDER THAT THE AS SESSEE FURNISHED CONFIRMATIONS FROM ALL THE DEPOSITORS HAVING ADVANC ED SMALL AMOUNTS RANGING BETWEEN RS.17,000/- TO RS.19,500/-. NOT O NLY THAT, THE ASSESSEE ITA NO.4761/DEL/2010 5 ALSO FILED CASH FLOW STATEMENT BY WHICH THE AMOUNT RECEIVED FROM THESE PERSONS WAS RETURNED DURING THE YEAR ITSELF. WE FI ND THAT THE AO HAS SIMPLY REFERRED TO THE CASH DEPOSITS IN THE CAPITAL ACCOUNT OF THE ASSESSEE WITHOUT NARRATING THE AMOUNTS WITHDRAWN. ONCE A PA RTICULAR AMOUNT IS RECEIVED FROM A PERSON WHICH IS CREDITED TO THE CAP ITAL ACCOUNT AND, THEREAFTER, AMOUNT IS RETURNED TO SUCH PERSON BY SH OWING AS WITHDRAWAL IN THE CAPITAL ACCOUNT, IT IS NOT PERMISSIBLE TO AC CEPT THE WITHDRAWAL ASPECT AND REJECT THE RECEIPT FROM SUCH RELATIVES W ITHOUT ANY FURTHER INVESTIGATION. HERE IS A CASE IN WHICH NO INVESTIG ATION HAS BEEN CARRIED OUT BY THE AO TO ASCERTAIN THE VERACITY OF THESE SQ UARED UP CREDITORS. CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE INSTANT CASE, WE ARE SATISFIED THAT THE ASSESSEE SUFFICIENTLY DIS CHARGED THE ONUS CAST UPON HIM TO PROVE THE GENUINENESS OF THESE CREDITS. THIS GROUND IS ALLOWED. ITA NO.4761/DEL/2010 6 8. IN THE RESULT, THE APPEAL IS ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 30.04.201 5. SD/- SD/- [C.M. GARG] [R.S. SYAL] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, 30 TH APRIL, 2015. DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.