Smt. Tapasi Singh, Burdwan V. ITO, Ward-2(3), Burdwan

ITA 491/KOL/2020

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 5750 (ITAT-KOLKATA)
• Duration Of Justice: 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 30-03-2021
• Assessment Year: 2004-2005
• Appeal Filed On: 08-09-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAYANTA KHANRA
• Assessee Lawyers: BISWESHWAR GHOSH
• Keywords: Unexplained cash credit; Gift; Business income
• Section: 143(3); 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH (SMC), KOLKATA [BEFORE SHRI P.M. JAGTAP, VICE PRESIDENT (KZ)] [THROUGH VIRTUAL COURT] I.T.A. NO. 491/KOL/2020 ASSESSMENT YEAR: 2004-05 SMT. TAPASI SINGH.................................. ....APPELLANT B.C. ROAD, BURDWAN, WEST BENGAL 713 101. [PAN: AJDPS 0639 M] VS ITO, WARD 2(3), BURDWAN................... ............RESPONDENT APPEARANCES BY: SHRI BISWESHWAR GHOSH, ADVOCATE APPEARING ON BEHALF OF THE ASSESSEE. SHRI JAYANTA KHANRA, JCIT, SR. DR APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : MARCH 30, 2 021 DATE OF PRONOUNCING THE ORDER : APRIL 30, 20 21 ORDER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEA LS)- BURDWAN DATED 04.06.2020 AND THE SOLITARY ISSUE INV OLVED THEREIN RELATES TO THE ADDITION OF RS. 4,00,000/- M ADE BY THE AO AND CONFIRMED BY THE LD. CIT(A) U/S 68 OF THE IN COME TAX ACT, 1961 BY TREATING THE GIFTS RECEIVED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION AS UNEXPLAINED CASH CREDIT. 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L WHO IS ENGAGED IN THE BUSINESS TRADING OF SUGAR, ATTA A ND MAIDA. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATI ON WAS FILED BY HER ON 26.10.2004 DECLARING A TOTAL INCOME OF RS. 2,15,870/-. DURING THE YEAR UNDER CONSIDERATION, TH E 2 I.T.A. NO. 491/KOL/2020 ASSESSMENT YEAR : 2004-05 SMT. TAPASI SINGH ASSESSEE HAD INTRODUCED A FRESH CAPITAL OF RS. 4,00 ,000/- AND THE SOURCE OF THE SAME WAS EXPLAINED AS GIFT OF RS. 1,00,000/- EACH RECEIVED FROM FOUR PERSONS NAMELY M ANA DAS, MOHANLAL SAU, NEMAI CHANDRA DEY S/O BHUDHAR CHANDRA DEY AND NEMAI CH. DEY S/O BHUPATI CHARAN DE Y. IN SUPPORT OF HER CLAIM OF HAVING RECEIVED THE SAID GI FTS, TAX PARTICULARS OF THE DONORS WERE FURNISHED BY THE ASS ESSEE ALONG WITH THE COPIES OF RELEVANT CHEQUES AS WELL A S THE DECLARATIONS OF THE DONORS CONFIRMING THE GIFTS. IN ORDER TO VERIFY THE ASSESSEES CLAIM, SUMMONS U/S 131 OF THE ACT WERE ISSUED BY THE AO TO ALL THE DONORS ENQUIRING T HEIR PERSONAL ATTENDANCE. HOWEVER, NONE OF THE DONORS AP PEARED BEFORE THE AO FOR THEIR EXAMINATION. EVEN THE ASSES SEE FAILED TO PRODUCE THE DONORS FOR THE EXAMINATION BE FORE THE AO. KEEPING IN VIEW THIS FAILURE AS WELL AS THE FAC T THAT NONE OF THE DONORS HAD BLOOD RELATIONS WITH THE ASSESSEE , THE AO HELD THAT THE IDENTITY AND CREDITWORTHINESS OF THE DONORS AS WELL AS THE GENUINENESS OF THE TRANSACTIONS INVOLVI NG GIFTS WAS NOT ESTABLISHED. HE, THEREFORE, TREATED ALL THE FOUR GIFTS AGGREGATING TO RS. 4,00,000/- AS UNEXPLAINED CASH C REDIT AND ADDITION TO THAT EXTENT WAS MADE BY HIM TO THE TOTAL INCOME OF THE ASSESSEE U/S 68 IN THE ASSESSMENT COM PLETED U/S 143(3) VIDE AN ORDER DATED 26.12.2006. 3. AGAINST THE ORDER PASSED BY THE AO U/S 143(3), A N APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE LD. CIT(A) AND THE FOLLOWING SUBMISSION WAS MADE ON BEHALF OF THE ASSESSEE IN WR ITING BEFORE THE 3 I.T.A. NO. 491/KOL/2020 ASSESSMENT YEAR : 2004-05 SMT. TAPASI SINGH LD. CIT(A) IN SUPPORT OF HER CASE THAT ALL THE GIFT S RECEIVED FROM FOUR DONORS WERE GENUINE: THAT IN THE YEAR UNDER CONSIDERATION, THE ASSESSEE RE CEIVED GIFTS FROM FOUR PERSONS THROUGH ACCOUNT PAYEE CHEQUE OF RS. 1,00 ,000 EACH AMOUNTING TO RS.4,00,000/-. NOW THE A.O. CONTENDED T HAT IN THE ABSENCE OF ANY BLOOD RELATIONS BETWEEN THE ASSESSEE AND THE DONO RS, THE CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION C ANNOT BE ESTABLISHED AND THEREFORE THE SAID SUM OF RS.4,00,000 /- WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. NOW, THE GIFTS WERE MA DE BY ACCOUNT PAYEE CHEQUES DATED 20.03.2004 AND 25.03.2004 AND THE FINAN CE ACT, 1998 SPECIFICALLY STATED THAT GIFTS FROM NON-RELATIVES CA N BE ACCEPTED ON AND FROM 1 ST DAY OF OCTOBER 1998 TILL 31 ST DAY OF AUGUST 2004, AND ONLY AFTER SUCH DATE THE FINANCE ACT, 2004 LIMITED THE ACCEPTANC E OF GIFTS FROM NON- RELATIVE UPTO RS.25,000/- ONLY AND ANY AMOUNT ABOVE AND BEYOND RS.25,000/- SHALL BE TAXABLE IN THE HAND OF THE DONEE. SO IT WAS WELL WITHIN THE FOUR COMERS OF THE LAW IN ACCEPTING THE GIFTS OF R S. 1,00,000/- EACH ON 20.03.2004 AND 25.03.2004 AS ENUMERATED BY THE PROVI SIONS OF THE FINANCE ACT, 1998, THEREFORE MAKING IT NOT ULTRAVIRE S TO THE STATUTE. NOW, COMING TO THE GENUINENESS OF THE TRANSACTION, THE GIFTS WERE MADE THROUGH ACCOUNT PAYEE CHEQUES, WHICH ITSELF IS A THIRD PA RTY CORROBORATION AUTHENTICATING THE GENUINENESS OF THE TRANSACTIONS. AND REGARDING THE CREDITWORTHINESS OF THE PERSON MAKIN G GIFTS, THEY WERE INCOME TAX ASSESSEE AND THEY MADE THE GIFTS OUT OF THE IR TAX PAID ACCUMULATED CAPITAL, AND TO CORROBORATE THIS PLEASE FIND ENCLOSED THE COPY OF THEIR RETURN OF INCOME ACKNOWLEDGEMENTS, COM PUTATION SHEET OF THE YEAR UNDER CONSIDERATION. HENCE THE ADDITION TO THE TUNE OF RS.4,00,000/- IS ILLEGAL AND DONE BEYOND POWERS VESTED BY THE STATUTE AND THEREFORE IT IS REQU ESTED TO UPHELD JUSTICE BY DELETING THE SAME. 4. THE LD. CIT(A) DID NOT FIND MERIT ON THE ABOVE S UBMISSION MADE ON BEHALF OF THE ASSESSEE FOR THE FOLLOWING RE ASONS GIVEN IN PARAGRAPH NO. 5.3.5 OF HIS IMPUGNED ORDER: I HAVE CAREFULLY GONE THROUGH THE ASSESSMENT ORDER, T HE OBSERVATIONS OF THE A.O. AND THE CONTENTIONS AND ARGUMENTS OF THE APP ELLANT. I HAVE PERUSED THE INCOME TAX RETURNS OF THE PERSONS WHO HAVE GIVEN RS. 1,00,000/- EACH TO THE APPELLANT SMT. TAPASI SINGHA. I T IS PERTINENT TO NOTE THAT ALL THE FOUR PERSONS SHRI MOHAN LAL SAU, SHRI MANA DAS, SHRI NIMAI CHANDRA DEY S/O BHUDHAR CHANDRA DEY AND SHRI NEMAI CHA NDRA DEY S/O 4 I.T.A. NO. 491/KOL/2020 ASSESSMENT YEAR : 2004-05 SMT. TAPASI SINGH BHUPATI CHARAN DEY HAVE FILED INCOME TAX RETURN SHOWIN G INCOME OF RS. 52,400/- AND ALL THESE INCOME TAX RETURNS HAVE BEEN F ILED ON THE SAME DATE I.E. 08.11.2004. IT IS HARD TO BELIEVE THAT ALL THE PURPORTED DONORS, WHO ARE UNRELATED WILL FILE THEIR RETURN OF INCOME ON THE SAME DATE I.E. 08. 11.2004 AND SHOWING IDENTICAL INCOME OF RS. 52,400/-. IT IS ALSO NOT AM ENABLE TO REASON AND LOGIC THAT A PERSON HAVING LIMITED INCOME OF RS. 52, 400/- WOULD GIFT AN AMOUNT OF RS. 1,00,000/- TO AN UNRELATED PERSON. FOR THE REASONS GIVEN ABOVE AND RELYING ON CERTAIN JUDICIAL PRONOUNCEMENTS AS DISCUSSED IN THE IMPUGNED ORDER, THE LD. CIT(A) CONFIRMED THE ADDITION MADE BY THE AO U/S 68 BY TRE ATING THE GIFTS CLAIMED TO BE RECEIVED BY THE ASSESSEE AS UNEXPLAIN ED CASH CREDIT. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE ASSES SEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 5. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OB SERVED THAT ALL THE FOUR DONORS WHO HAD GIVEN THE GIFTS IN QUESTION TO THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION WERE ENGAGED IN THE BU SINESS AND IN THE RETURNS OF INCOME FILED REGULARLY FOR THE YEAR UNDE R CONSIDERATION, THE BUSINESS INCOME EARNED BY THEM WAS DULY DECLARED AS IS EVIDENT FROM THE PHOTOCOPIES OF THEIR IT RETURN ACKNOWLEDGEMENT PLACED AT PAGE NO. 32 & 33 OF THE PAPER BOOK. MOREOVER ALL THE GIF TS IN QUESTION WERE GIVEN TO THE ASSESSEE BY THE FOUR DONORS BY ACCOUNT PAYEE CHEQUES AND THEIR DECLARATIONS CONFIRMING THE GIFTS GIVEN T O THE ASSESSEE WERE ALSO FURNISHED ON RECORD GIVING ALL THE RELEVANT PA RTICULARS INCLUDING THE PERMANENT ACCOUNT NUMBER OF THE DONORS. AS RIGH TLY CONTENDED BY THE LEARNED COUNSEL FOR THE ASSESSEE, THE PRIMAR Y ONUS TO ESTABLISH THE IDENTITY AND CREDITWORTHINESS OF THE CONCERNED DONORS AS WELL AS 5 I.T.A. NO. 491/KOL/2020 ASSESSMENT YEAR : 2004-05 SMT. TAPASI SINGH THE GENUINENESS OF THE RELEVANT TRANSACTIONS INVOLV ING GIFTS THUS WAS DULY DISCHARGED BY THE ASSESSEE BY PRODUCING THE RE LEVANT DOCUMENTARY EVIDENCE AND WITHOUT BRINGING ON RECORD ANY MATERIAL OR EVIDENCE TO DISPROVE OR DISLODGE THE CLAIM OF TH E ASSESSEE, THE AUTHORITIES BELOW, IN MY OPINION, WERE NOT JUSTIFIE D IN TREATING THE GIFTS RECEIVED BY THE ASSESSEE AS UNEXPLAINED CASH CREDIT U/S 68 MERELY ON THE BASIS OF DOUBTS AND SUSPICION. I, THE REFORE, DELETE THE ADDITION OF RS. 4,00,000/- MADE BY THE AO AND CONFI RMED BY THE LD. CIT(A) U/S 68 AND ALLOW THIS APPEAL OF THE ASSESSEE . 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH APRIL, 2021. SD/- (P.M. JAGTAP) VICE PRESIDE NT DATED: 30/04/2021 BISWAJIT, SR. PS COPY OF ORDER FORWARDED TO: 1. SMT. TAPASI SINGH, B.C. ROAD, BURDWAN 713 101. 2. ITO, WARD 2(3), BURDWAN. 3. THE CIT(A) 4. THE CIT 5. DR TRUE COPY, BY ORDER, ASSISTANT REGISTRAR/DDO ITAT, KOLKATA