ITO 23(2)(3), MUMBAI V. JAGDISH N. THAKKAR, MUMBAI

ITA 4991/MUM/2010

• Counselvise Citation: 499119914 RSA 2010
• Duration Of Justice: 3 year(s) 2 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Next Hearing Date: 22-08-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 16-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P SINGH
• Assessee Lawyers: HARI S RAHEJA
• Keywords: Unexplained cash credit; Gift; Peak credit
• Section: 80C

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI . , , ! ! ! ! '# $% '# $% '# $% '# $% , ,, , & & & & ' ' ' ' BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER . / ITA NO. 4991/MUM./2010 ( &) * !+* / ASSESSMENT YEAR : 200607 ) INCOME TAX OFFICER WARD23(2)(3) PRATYAKSHAKAR BHAVAN BANDRAKURLA COMPLEX MUMBAI 400 051 .. ,- / APPELLANT ) V/S MR. JAGDISH N. THAKKAR A19A BLUE BELLS DEVIDAYAL ROAD MULUND (W), MUMBAI 400 080 .... ./,- / RESPONDENT , . / PERMANENT ACCOUNT NUMBER AABPT4165C ./' . / C.O. NO. 86/MUM./2013 ( . 4991 /MUM./2010 12# 3 ) (ARISING OUT OF ITA NO. 4991/MUM./2010 ( &) * !+* / ASSESSMENT YEAR : 200607 ) MR. JAGDISH N. THAKKAR A19A BLUE BELLS DEVIDAYAL ROAD MULUND (W), MUMBAI 400 080 .. ./' / CROSS OBJECTOR ) V/S INCOME TAX OFFICER, WARD23(2)(3) PRATYAKSHAKAR BHAVAN, BANDRAKURLA COMPLEX, MUMBAI 400 051 .... ./,- / RESPONDENT MR. JAGDISH N. THAKKAR 2 , . / PERMANENT ACCOUNT NUMBER AABPT4165C 4! 5 6 / REVENUE BY : MR. O.P. SINGH &) *7# 5 6 / ASSESSEE BY : MR. HARIS RAHEJA )! 5 # / DATE OF HEARING 22.08.2013 $ 8+ 5 # / DATE OF ORDER $ $ $ $ / ORDER '# $% '# $% '# $% '# $% , ,, , & & & & 9 9 9 9 / PER AMIT SHUKLA, J.M. THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVENU E AND THE CROSS OBJECTION BY THE ASSESSEE, CHALLENGING THE IMPUGNED ORDER DATED 18 TH MARCH 2010, PASSED BY THE LEARNED COMMISSIONER (APPEALS) XXXIII, MUMBAI, FOR THE QUANTUM OF ASSESSMENT PASSED UNDER SECTION 143( 3) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT ). WE FIRST TAKE UP REVENUES APPEAL, WHEREIN, FOLLOWING GROUNDS HAVE BEEN RAISED: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF GIFT OF ` 1 0LAKH FROM MOTHER EVEN THOUGH THE CREDITWORTHINESS OF THE DONOR AND REASONS FOR THE GIFT WAS NOT PROVED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION OF LO AN OF ` 57,000 WHICH WAS HELD TO BE UNEXPLAINED AND FAILURE BY THE ASSESSEE TO ESTABLISH CREDITRWORTHINESS AND GENUINENESS OF LOAN CREDITORS . 2. FACTS IN BRIEF : THE ASSESSEE, IN THE PRESENT CASE, IS AN INDIVID UAL WHOSE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AS PER THE AIR INFORMATION THAT THE ASSESSEE HAS DEPOSITED A SUM OF ` 38,20,000, IN CASH IN BHARAT CO OPERATIVE BANK, MUMBAI, FORT MAIN BRANCH. THE ASSES SING OFFICER REQUIRED THE ASSESSEE TO EXPLAIN THE REASONS AND SOURCE OF D EPOSIT OF THE ABOVE CASH IN THE BANK ACCOUNT. IN RESPONSE, THE ASSESSEE SUBM ITTED THAT THE ASSESSEE HAS DEPOSITED CASH AND AT THE SAME TIME HAD MADE WI THDRAWALS FROM THE MR. JAGDISH N. THAKKAR 3 BANK ACCOUNT AND THE REASON FOR SUCH DEPOSITS AND W ITHDRAWALS WAS THAT THE ASSESSEE HAILS FROM ANJAR IN KUTCH REGION OF GUJARA T AND AFTERMATH OF EARTHQUAKE, THE ASSESSEES HOUSE WAS DESTROYED AND HE INTENDED TO LOOK OUT FOR A PROPERTY TO BUILD A SMALL HOUSE FOR HIS FAMIL Y. AS THE NEGOTIATION FROM THE BROKER CONTINUED, HE HAD TO COME TO KUTCH AFTER WITHDRAWING THE AMOUNT IN CASH AND ONCE THE DEAL WAS NOT FRUCTIFIED, THE C ASH WAS AGAIN WE DEPOSITED IN THE BANK ACCOUNT. REGARDING THE MAIN S OURCE OF CASH, HE SUBMITTED THAT THE ASSESSEE HAS RECEIVED A GIFT FRO M HIS MOTHER FOR SUMS AGGREGATING TO ` 6,00,000 AND ` 2,25,000 FROM HIS MOTHERINLAW. THE OTHER AMOUNT WAS ON ACCOUNT OF LOANS TAKEN FROM VARIOUS P ERSONS FOR SUMS LESS THAN ` 20,000, AGGREGATING TO ` 2,50,000. IN SUPPORT OF THESE LOANS, THE ASSESSEE FILED CONFIRMATION LETTERS AND VARIOUS DOC UMENTS. INSOFAR AS THE LOAN TAKEN FROM VARIOUS PERSONS, THE ASSESSING OFFI CER ACCEPTED THE LOANS FROM NINE PERSONS AGGREGATING TO ` 1,57,000 AND THE BALANCE WAS ADDED ON THE GROUND THAT THE ASSESSEE COULD NOT FURNISH THE INCOME TAX RETURN OF THESE PARTIES. THE ASSESSEE HAD ALSO SUBMITTED THAT THESE LOANS WERE SQUARED OFF DURING THE YEAR. REGARDING GIFTS, HE HE LD THAT THE ONUS OF THE ASSESSEE TO PROVE THE GENUINENESS AND CREDITWORTHIN ESS OF THE TWO RELATIVES COULD NOT BE PROVED. HOWEVER, THE ASSESSING OFFICER ACCEPTED THE FACT THAT THERE HAD BEEN CASH DEPOSIT AND WITHDRAWALS, THEREF ORE, HE HELD THAT PEAK OF THE DEPOSIT SHOULD BE DETERMINED WHICH SHOULD BE AD DED AS UNEXPLAINED CASH CREDIT UNDER SECTION 68. ACCORDINGLY, HE WORKE D OUT THE PEAK OF ` 14,66,825 AND REDUCING THE SAME FROM THE UNSECURED LOANS TO THE EXTENT OF ` 1,57,000 WHICH WAS ACCEPTED BY HIM. ULTIMATELY, HE ADDED THE PEAK DEPOSIT OF ` 13,09,825 UNDER SECTION 68. 3. BEFORE THE COMMISSIONER (APPEALS), IT WAS SUBMITTED BY THE ASSESSEE THAT INSOFAR AS THE GIFT RECEIVED FROM CLOSE RELATI VES, THE ASSESSEE HAS FILED DECLARATION OF GIFT EXECUTED BY HIS MOTHER WHEREIN SHE HAD DEPOSED THAT ` 4,00,000 WERE GIVEN OUT OF HER ACCUMULATED LIFE TIM E SAVING AND ` 6,00,000 WAS FROM SALE OF FAMILY GOLD JEWELLERY. BEING 71 YE ARS OF AGE, SHE HAD GIVEN MR. JAGDISH N. THAKKAR 4 HER ENTIRE SAVING TO HIS SON FOR CONSTRUCTING THE H OUSE AT NATIVE PLACE. THE DETAILS OF PURCHASE AND SALE OF JEWELLERY WAS ALSO GIVEN. THE CONTENT OF THE GIFT DECLARATION HAS BEEN INCORPORATED BY THE COMMI SSIONER (APPEALS) IN DETAIL IN PARA3.2 OF THE ORDER. REGARDING THE GIFT OF ` 2.25 LAKHS RECEIVED FROM THE MOTHERINLAW, DECLARATION OF GIFT WAS ALS O FILED STATING THAT SHE HAD GIVEN THIS AMOUNT OUT OF NATURAL LOVE AND AFFEC TION AND ALSO THAT HE NEEDED THE AMOUNT FOR BUYING A NEW HOUSE. THE CONTE NT OF THIS GIFT DECLARATION HAVE BEEN INCORPORATED IN PAGE5 OF THE APPELLATE ORDER. REGARDING LOAN AMOUNT TAKEN FROM VARIOUS PERSONS AG GREGATING TO ` 93,000, THE ASSESSEE SUBMITTED THAT THESE FIVE PERSONS HAD GIVEN LOAN FOR SUM BELOW ` 20,000 AND EXCEPT FOR ONE, MR. NARESH GAJRA, ALL T HESE PERSONS WERE FILING RETURN OF INCOME. THE PERMANENT ACCOUNT NUMBER OF T HESE PERSONS WAS ALSO GIVEN, HOWEVER, THE RETURN OF INCOME COULD NOT BE F ILED. REGARDING THE ADDITION ON ACCOUNT OF PEAK OF THE DEPOSIT, SUBMISS IONS WERE MADE WHICH HAVE BEEN DEALT BY THE COMMISSIONER (APPEALS) AT PA GE6 OF HIS ORDER. 4. THE COMMISSIONER (APPEALS), INSOFAR THE GIFT RECEIV ED FROM THE ASSESSEES MOTHER SMT. DAMYANTIBEN THAKKAR, THE HE ACCEPTED THE ASSESSEES CONTENTION ON THE GROUND THAT THE SOURCE OF GIFT HAS BEEN DULY EXPLAINED AS THE SALE OF GIFTED ORNAMENTS WAS DULY CORROBORATED BY PURCHASE MEMOS OF THE JEWELLERY AND ALSO THE SALE BILLS. THE BALANCE AMOUNT FROM ACCUMULATED SAVINGS WAS ALSO ACCEPTED LOOKING TO TH E FACTS AND MATERIAL PLACED ON RECORD AND CIRCUMSTANCES OF THE CASE. HE HAS ALSO EXAMINED THE FACT THAT SHE HAS BEEN DOING STITCHING AND REPAIRIN G OF CLOTHS FOR VARIOUS SHOPS AND PERSONS, THE DETAILS OF WHICH HAS BEEN EL ABORATED BY HIM IN PARA 3.3. THE CONFIRMATION LETTERS FROM THE PERSONS WHO HAD ENGAGED THE ASSESSEES MOTHER FOR STITCHING AND REPAIRING OF CL OTHS WERE ALSO FILED, WHICH WERE EXAMINED BY HIM. LOOKING TO THE OVER ALL FACTS , HE ACCEPTED THE SAID LOAN OF ` 10,00,000 AFTER OBSERVING AND HOLDING AS UNDER: 3.3 I HAVE CAREFULLY CONSIDERED THE ORDER OF THE A SSESSING OFFICER AND THE SUBMISSION MADE BY THE APPELLANT ALONG WITH VARIOUS DOCUMENTS PROVIDED BY MR. JAGDISH N. THAKKAR 5 THE APPELLANT. I FIND THAT REGARDING GIFT RECEIVED FROM MOTHER, TO SUPPORT THE CONTENTION, THE APPELLANT HAS FILED AN AFFIDAVIT VI DE WHICH HIS MOTHER SMT DAMAYANTI N THAKKAR HAS DECLARED THE BESTOWING OF R S. 10 LACS AS GIFT TO HER SON WHO IS THE APPELLANT IN THIS CASE I.E. SHRI JAG DISH N THAKKAR. THE SOURCE OF THIS GIFT HAS BEEN STATED TO BE SALE OF GOLD ORN AMENTS VIDE WHICH A SUM OF RS.6 LACS WAS REALIZED. FOR PROVING THE ABOVE SALE, PURCHASE MEMOS OF MAMAI JEWELLERS HAVE BEEN SUBMITTED. REGARDING THE BALANC E OF RS.4 LACS, THE SAME IS SAID TO BE FROM ACCUMULATED SAVINGS EARNED FROM DOING HOUSEHOLD ACTIVITIES, STITCHING, ALTERATION AND REPAIRING OF CLOTHES, AND OTHER JOB WORK FOR VARIOUS PEOPLE. I FIND THAT THE PERSONS FOR WHOM SH E HAS DONE THE WORK FOR WERE MANAV MENS WEAR, LION DHIRENDRA N SHAH, AJAY M JOSHI, HITEN D RUPUAREL AND SHARDA JAM AND THEY HAVE FILED LETTERS OF CONFIRMATION STATING THAT SMT DAMAYANTI N THAKKAR HAS BEEN DOING JOB WOR K FOR THEM AND HAS BEEN PAID REGULARLY FOR THE SAME. IN FACT, IN THE C ASE OF MANAV MENS WEAR IT HAS BEEN MENTIONED BY THE OWNER MR KANTI K GALA THA T SHE HAS BEEN DOING THE WORK FOR THEM FOR ALMOST 13 TO 14 YEARS TILL 20 02 WHEN SHE HAS STOPPED THE WORK DUE TO HER OLD AGE. THE SAME HAS ALSO BEEN STATED BY LION DHIRENDRA N SHAH. IN VIEW OF THIS, I FIND THAT THE APPELLANT HAS BEEN ABLE TO MEET THE BASIC CRITERIA REGARDING IDENTITY OF THE P ERSON WHO HAS GIFTED THE MONEY, RELATION WITH THE PERSON, SOURCE OF MONEY I. E. CREDIT WORTHINESS OF THE, DONOR AND THE REASON FOR THE GIFT. REGARDING R EASON FOR THE GIFT, IT IS SEEN THAT MRS DAMAYANTHI HAS STATED THAT SHE HAS GIVEN T HE CONCERNED MONEY AS GIFT TO THE APPELLANT SHIR JAGDISH N THAKKAR AS SHE STAYS WITH HIM AND HE TAKES CARE OF HER SINCE 1988. THE GIFT OF FUNDS IS A RECIPROCAL GESTURE TO THE SON WHO TAKES CARE OF HER AND THIS GIFTING OF FUNDS IS NOT AN UNNATURAL OCCURRENCE. PARENTS, ESPECIALLY, ELDERLY PARENTS, D O GIFT MONEY TO CHILDREN WHO TAKE CARE OF THEM AS AND WHEN CHILD REQUIRES IT. IN VIEW OF THIS, IT CANNOT BE SAID THAT THE GIFT IS NOT GENUINE. I FIND THAT THE ASSESSING OFFICER HAS NOT GONE INTO ALL THESE DETAILS AND HAS MADE NO INQUIRY REGA RDING THIS. THE ASSESSING OFFICER BEFORE TAKING A DECISION, WAS REQUIRED TO L OOK INTO THE TOTALITY OF CIRCUMSTANCES AND EVIDENCES AND NOT SUMMARILY DISMI SS THE EXPLANATION FILED BY THE APPELLANT. I AM THEREFORE, INCLINED TO ACCEP T THE VERSION OF THE APPELLANT ON THE ISSUE OF RS.10 LACS RECEIVED BY TH E APPELLANT FROM HIS MOTHER IN CASH AS GIFT RECEIVED. 5. AS REGARDS GIFT OF ` 2.25 LAKHS RECEIVED FROM ASSESSEES MOTHERIN LAW, THE COMMISSIONER (APPEALS) REJECTED THE ASSESS EES EXPLANATION AND CONFIRMED THE GIFT ON THE GROUND THAT THE ASSESSEE HAS NOT BEEN ABLE TO PROVE THE BASIC CRITERIA OF GENUINENESS OF THE GIFT . FOR THE BALANCE LOAN AGGREGATING TO ` 93,000, HE HAS NOTED THAT THE ASSESSEE HAS FILED P AN DETAILS IN FORM NO.16 AND COPY OF RETURN OF INCOME FILED IN RESPECT OF THREE PERSONS. ACCORDINGLY, OUT OF ` 93,000, HE ACCEPTED THE LOAN AMOUNT OF SUMS AGGREGATING TO ` 57,000 AND BALANCE LOAN OF ` 36,000 WAS ADDED AS THERE HAS BEEN NO DOCUMENTARY EVIDENCE TO PROVE THE SAME. MR. JAGDISH N. THAKKAR 6 6. BEFORE US, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSING OFFICER HAS NOT MADE THE ADDITION ON ACCO UNT OF GIFT / LOAN PER SE BUT ON ACCOUNT OF PEAK DEPOSIT IN THE BANK WHICH HA S NOT BEEN APPRECIATED BY THE COMMISSIONER (APPEALS) IN PROPER PERSPECTIVE . THE ASSESSING OFFICER HAS MERELY TRIED TO SHOW THAT THE AMOUNT DEPOSITED IN THE BANK ACCOUNT WAS ON ACCOUNT OF UNEXPLAINED CASH IN THE FORM OF NONG ENUINE GIFT AND LOAN TRANSACTIONS. HOWEVER, HE HAS MADE THE ADDITION PUR ELY TAKING THE PEAK OF THE DEPOSITS. ALTERNATIVELY, WITH REGARD TO THE GEN UINENESS OF THE GIFT / LOAN, HE STRONGLY RELIED UPON THE FINDINGS AND OBSERVATIO NS OF THE ASSESSING OFFICER. 7. ON THE OTHER HAND, THE LEARNED COUNSEL, ON BEHALF O F THE ASSESSEE, SUBMITTED THAT FIRSTLY, THE LEARNED DEPARTMENTAL RE PRESENTATIVES ARGUMENT CANNOT BE ENTERTAINED ON THE GROUND THAT THE REVENU E HAS NOT TAKEN THIS GROUND AND THE ONLY ISSUE INVOLVED IS ON ACCOUNT OF GIFT RECEIVED FROM RELATIVES AND THE LOAN TAKEN FROM VARIOUS PARTIES. HE SUBMITTED THAT INSOFAR AS THE SOURCE OF GIFT TAKEN FROM RELATIVES, THE ASS ESSEE HAS FURNISHED ALL THE DETAILS WITH REGARD TO PURCHASE AND SALE OF JEWELLE RY BY THE ASSESSEES MOTHER AND ALSO HER EARNINGS FROM STITCHING OF CLOT HS. HE HAS ALSO TRIED TO SUBSTANTIATE THE FINDINGS OF THE COMMISSIONER (APPE ALS) FROM THE DOCUMENTS AND EVIDENCE PLACED IN THE PAPER BOOK BEFORE US VIZ . CONFIRMATION LETTER FROM THE PERSONS WHO HAVE GIVEN LOAN, THEIR ACKNOWLEDGEM ENT OF THE RETURN OF INCOME, SALARY CERTIFICATE, PURCHASE AND SALE OF JE WELLERY BY THE ASSESSEES MOTHER, CONFIRMATION FROM VARIOUS PERSONS FOR WHOM THE ASSESSEES MOTHER WAS CARRYING OUT THE STITCHING WORK, ETC. FROM THES E DOCUMENTS, HE SUBMITTED THAT IT IS EVIDENTLY CLEAR THAT THE ASSES SEE HAS DISCHARGED THE ONUS NOT ONLY WITH REGARD TO THE SOURCE OF THE GIFT BUT ALSO THE LOAN AMOUNT WHICH CONSTITUTED THE DEPOSIT MADE IN THE BANK ACCOUNT. H E THUS STRONGLY RELIED UPON THE FINDINGS OF THE COMMISSIONER (APPEALS). MR. JAGDISH N. THAKKAR 7 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSING OFFICER WAS TRYING TO EXAM INE THE VARIOUS DEPOSITS MADE IN THE BANK ACCOUNT OF THE ASSESSEE FOR SUMS A GGREGATING TO ` 38,20,000. THE ASSESSING OFFICER HAS ACCEPTED THE A SSESSEES CONTENTION THAT THERE HAVE BEEN REGULAR WITHDRAWALS AND DEPOSI TS AND, THEREFORE, THE ENTIRE DEPOSITS CANNOT BE ADDED. ACCORDINGLY, HE PR OCEEDED TO MAKE ADDITION ON PEAK OF THE DEPOSIT. FOR THE MAIN SOURCE OF DEPO SIT, IT WAS EXPLAINED BEFORE HIM THAT THE SAME IS OUT OF GIFTS FROM RELAT IVES AND LOANS TAKEN FROM VARIOUS PERSONS. THE ASSESSING OFFICER PARTLY ACCEP TED THE ASSESSEES EXPLANATION WITH REGARD TO PART OF THE LOAN AMOUNT FROM THE PEAK DEPOSIT, HOWEVER, WITH REGARD TO THE SOURCE OF OTHER DEPOSIT WHICH WAS OUT OF GIFT / LOAN HAS BEEN DISBELIEVED BY HIM ON THE GROUND THAT THE GENUINENESS AND THE CREDITWORTHINESS HAVE NOT BEEN PROVED. ONCE THE ASSESSING OFFICER HAS ACCEPTED THE ASSESSEES EXPLANATION THAT THERE HAS BEEN REGULAR DEPOSITS AND WITHDRAWALS AND HAS MADE THE ADDITION ON ACCOUN T OF PEAK, THEN THE SOURCE OF PEAK DEPOSIT HAS TO BE EXAMINED. THE SOUR CE OF THE DEPOSIT IS ONLY FROM GIFT AND LOAN RECEIVED BY THE ASSESSEE WHICH I S NOTHING BUT REFLECTED IN PEAK DEPOSIT ONLY. THEREFORE, THE ARGUMENTS TAKEN B Y THE LEARNED DEPARTMENTAL REPRESENTATIVE THAT THE ASSESSING OFFI CER HAS MADE ADDITION ONLY ON ACCOUNT OF PEAK DEPOSIT AND NOT ON OTHER GR OUNDS IS NOT TENABLE. 9. NOW COMING TO THE ADDITION OF ` 10,00,000 ON ACCOUNT OF GIFT RECEIVED FROM ASSESSEES MOTHER SMT. DAMYANTIBEN THAKKAR, TH E ASSESSEES EXPLANATION HAD BEEN THAT SHE HAS GIVEN SUM OF ` 6,00,000 OUT OF SALE OF JEWELLERY AND SUM OF ` 4,00,000 OUT OF HER ACCUMULATED SAVINGS. FOR BOTH THESE SOURCES, THE ASSESSEE HAS GIVEN VARIOUS EVIDE NCE LIKE PURCHASE AND SALE OF JEWELLERY MADE BY THE MOTHER FOR ` 6,00,000, CONFIRMATION LETTERS FROM THE PERSONS FOR WHOM SHE HAS BEEN DOING STITCH ING AND REPAIRING OF CLOTHS OUT OF WHICH SHE HAS SAVED SUM OF ` 4,00,000. THESE ASPECTS HAVE BEEN EXAMINED IN DETAIL BY THE COMMISSIONER (APPEAL S) WHICH HAVE BEEN REPRODUCED IN THE FORGOING PARAGRAPHS WHICH HAS NOT BEEN REBUTTED BEFORE MR. JAGDISH N. THAKKAR 8 US. ONCE, THE NATURE AND THE SOURCE OF THE CREDIT H AS BEEN EXPLAINED BY THE ASSESSEE AFTER SUBSTANTIATING THE SAME WITH PROPER EVIDENCE, WE DO NOT FIND ANY REASON TO DEVIATE FROM THE FINDINGS RECORDED BY THE COMMISSIONER (APPEALS). MOREOVER, WE HAVE ALSO GONE THROUGH THE EVIDENCE WHICH HAS NOT BEEN FOUND TO BE FALSE OR REBUTTED BY THE ASSESSING OFFICER AND, THEREFORE, THE ASSESSEES EXPLANATION HAS TO BE ACCEPTED. THUS , THE DELETION OF ` 10,00,000 ON ACCOUNT OF GIFT RECEIVED FROM MOTHER I S LIABLE TO BE ACCEPTED AND, ACCORDINGLY, GROUND NO.1, RAISED BY THE DEPART MENT IS TREATED AS DISMISSED. 10. AS REGARDS THE ADDITION ON LOAN AGGREGATING TO ` 57,000, THE COMMISSIONER (APPEALS) HAS EXAMINED THE CONFIRMATIO N LETTER OF THREE PERSONS ALONG WITH THEIR INCOME TAX PARTICULARS AND FORM NO.16 AND HAS ACCEPTED THE SAME TO BE GENUINE. ONCE THE ASSESSEE HAS DISCHARGED THE ONUS OF PROVING THE IDENTITY AND CREDITWORTHINESS O F THE PERSONS WHO HAVE ADVANCED THE LOAN WHICH ARE LESS THAN ` 20,000, THERE REMAINS NOTHING MORE TO PROVE, WITHOUT, THERE BEING ANY CONTRARY MATERIA L ON RECORD TO REBUT THE SAME. THUS, THE FINDINGS RECORDED BY THE COMMISSION ER (APPEALS) ON THIS SOURCE ALSO ARE HEREBY AFFIRMED. GROUND NO.2, IS TH US TREATED AS DISMISSED. 11. THE REVENUE HAS ALSO RAISED AN ADDITIONAL GROUNDS W HICH READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED CIT(A) ERRED IN NOT ADJUDICATING ON THE PEA K CASH CREDIT OF ` 13,09,825 WHICH WAS THE SUBJECT MATTER OF ADDITION. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED CIT(A) FAILED TO APPRECIATE THE FACT THAT T HE TOTAL CASH CREDITS WERE TO THE TUNE OF ` 38,20,000, WHEREAS THE A.O. HAD MADE AN ADDITION OF ` 13,09,825 ONLY REPRESENTING THE PEAK CREDIT . 12. IN VIEW OF OUR FINDINGS GIVEN ABOVE THAT THE PEAL C ASH DEPOSIT OF ` 13,09,825, CONSTITUTES LOAN AND GIFT AMOUNT, THIS G ROUND, AS RAISED BY THE MR. JAGDISH N. THAKKAR 9 REVENUE STANDS DISMISSED. IN THE PRESENT CASE, THE ASSESSING OFFICER HAS WORKED OUT THE PEAK OF ` 14,66,825. OUT OF THIS AMOUNT, THE ASSESSING OFFICER HAS HIMSELF GIVEN RELIEF OF ` 1,57,000 ON ACCOUNT OF LOAN AMOUNT. THE BALANCE AMOUNT CONSTITUTE OF GIFT OF ` 10 LAKHS FROM THE MOTHER OF THE ASSESSEE, ` 2.25 LAKHS FROM THE MOTHERINLAW AND LOAN TAKEN F ROM VARIOUS PERSONS. ONCE THE ASSESSING OFFICER HIMSELF HAS ACC EPTED THAT THE PEAK OF THE DEPOSITS CONSISTS OF THESE AMOUNTS AND HAS GIVE N BENEFIT OF ` 1,57,000, THEN THERE REMAINS NO MERIT IN THE ADDITIONAL GROUN D RAISED BY THE REVENUE, HENCE, THE SAME ARE DISMISSED. 13. 7 #: 4! 5 74 ) 4# ;< = 13. IN THE RESULT, THE REVENUES APPEAL IS TREATED AS DISMISSED. 14. IN THE CROSS OBJECTION, THE ASSESSEE HAS RAISED FOL LOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF GIFT OF ` 10 LAKH FROM MOTHER EVEN THOUGH THE CREDITWORTHINESS O F THE DONOR AND REASONS FOR THE GIFT WAS NOT PROVED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION OF LO AN OF ` 57,000 WHICH WAS HELD TO BE UNEXPLAINED AND FAILURE BY THE ASSESSEE TO ESTABLISH CREDITWORTHINESS AND GENUINENESS OF LOAN CREDITORS. 15. INSOFAR AS THE ADDITION ON ACCOUNT OF GIFT OF ` 2.25 LAKHS AS RECEIVED FROM ASSESSEES MOTHERINLAW, SMT. JAVERBEN KAKUBA I SOKHA, THE ASSESSING OFFICER HAS GIVEN A CLEAR CUT FINDINGS TH AT THE ASSESSEE HAS NOT BEEN ABLE TO SUBSTANTIATE THE SAME BY GIVING ANY SO URCE OF THE AMOUNT GIVEN BY THE MOTHERINLAW. NO DETAILS OF PAN OR INCOME H AS BEEN GIVEN EXCEPT FOR DECLARATION, WHICH HAS BEEN STATED TO BE OUT OF ACCUMULATED SAVINGS. IN CASE OF ASSESSEES MOTHER, THE ASSESSEE WAS ABLE TO SUBSTANTIATE BY PROPER EVIDENCE AND DOCUMENTS ABOUT THE SOURCE OF THE GIFT , HOWEVER, IN CASE OF MR. JAGDISH N. THAKKAR 10 MOTHERINLAW, NO SUCH EVIDENCE HAS BEEN FILED. THI S HAS ALSO BEEN RECORDED BY THE COMMISSIONER (APPEALS) IN PARA3.4. 16. BEFORE US ALSO, NO SUCH EVIDENCE HAS BEEN PLACED SO AS TO BELIEVE THAT THE GIFT RECEIVED FROM THE MOTHERINLAW IS FROM GE NUINE SOURCE. THE LEARNED COUNSEL HAD SUBMITTED BEFORE US THAT THE MO THERINLAW HAS SINCE BEEN DECEASED, THEREFORE, THE ASSESSEE IS UNABLE TO PRODUCE ANY FURTHER EVIDENCE. HOWEVER, THE ONUS IS ON THE ASSESSEE, TO PRIMAFACIE PROVE THAT THE GIFT RECEIVED FROM MOTHERINLAW IS FROM GENUIN E SOURCE. AS NO EVIDENCE WHATSOEVER HAS BEEN FURNISHED BEFORE THE AUTHORITIE S BELOW OR BEFORE US TO PROVE THE GENUINENESS OF THIS GIFT, HENCE, WE ARE U NABLE TO DEVIATE FROM THE FINDINGS RECORDED BY THE ASSESSING OFFICER AS WELL AS THE COMMISSIONER (APPEALS). ACCORDINGLY, THERE IS NO MERIT IN THE GR OUNDS RAISED BY THE ASSESSEE AND THE SAME IS DISMISSED. 17. IN GROUND NO.2, THE ASSESSEE HAS CHALLENGED THE CON FIRMATION OF LOAN AGGREGATING TO ` 36,000 AS RECEIVED FROM TWO PERSONS. 18. THE FACTS, AS HAS BEEN DISCUSSED ABOVE ARE THAT, TH E ASSESSEE HAS RECEIVED LOAN OF ` 2,50,000 FROM 14 PERSONS, OUT OF WHICH THE ASSESSI NG OFFICER HAS HIMSELF ACCEPTED THE LOAN AGGREGATING T O ` 1,57,000 RECEIVED FROM NINE PERSONS AND BALANCE LOAN AMOUNT OF ` 93,000 RECEIVED FROM FIVE PERSONS WERE DISALLOWED. OUT OF THESE FIVE PERSONS, LOAN FROM THREE PARTIES AGGREGATING TO ` 57,000 HAS BEEN ACCEPTED BY THE LEARNED COMMISSION ER (APPEALS) ON THE GROUND THAT THESE PERSONS HAVE FIL ED THE REQUISITE DETAILS LIKE CONFIRMATION LETTER, COPY OF RETURN OF INCOME, AND FORM NO.16 I.E., SALARY CERTIFICATE. FOR THE BALANCE TWO PERSONS FOR SUMS A GGREGATING TO ` 36,000, NO DOCUMENTS WHATSOEVER HAS BEEN FILED EXCEPT FOR CONF IRMATION LETTER. HENCE, IN THE ABSENCE OF ANY EVIDENCE TO PROVE THE NATURE AND SOURCE OF LOAN AMOUNTS FROM THESE TWO PERSONS, THE FINDINGS GIVEN BY THE ASSESSING OFFICER MR. JAGDISH N. THAKKAR 11 AND LEARNED COMMISSIONER (APPEALS) STANDS CONFIRMED . ACCORDINGLY, THE SAME IS DISMISSED. 19. GROUND NO.3, THE ASSESSEE HAS CHALLENGED THE DISALL OWANCE OF CLAIM OF ` 81,146 UNDER SECTION 80C. 20. THE LEARNED COMMISSIONER (APPEALS) HAS CONFIRMED TH E DISALLOWANCE ON THE GROUND THAT THE ASSESSEE, NEITHER BEFORE THE ASSESSING OFFICER NOR DURING THE COURSE OF APPELLATE PROCEEDINGS HAS PROD UCED ANY PROOF IN CONNECTION WITH THE CLAIM OF SUCH DEDUCTION WHICH W AS CLAIMED BY WAY OF REVISED COMPUTATION OF INCOME. 21. BEFORE US, THE LEARNED COUNSEL SUBMITTED THAT THE A SSESSEE HAS MADE PAYMENT TO LIC WHICH ARE REFLECTED FROM THE BANK ST ATEMENT AND IN SUPPORT OF HIS CONTENTION, HE POINTED OUT RELEVANT ENTRIES IN THE BANK STATEMENT WHICH ARE APPEARING AT PAGE6 AND 7 OF THE PAPER BO OK VOL.I. HE SUBMITTED THAT THIS BANK STATEMENT WAS BEFORE THE A.O. AS HE HIMSELF HAS MADE ADDITION ON ACCOUNT OF DEPOSIT MADE FROM THIS BANK ACCOUNT ONLY. 22. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPRESE NTATIVE HAS RELIED UPON THE FINDINGS OF THE LEARNED COMMISSIONER (APPE ALS). 23. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS, PERUSED THE RELEVANT FINDINGS OF THE ASSESSING OFFICER AS WELL AS THE LEARNED COMMISSIONER (APPEALS) AND THE MATERIAL PLACED ON R ECORD. ON A PERUSAL OF THE BANK STATEMENT, WE FIND THAT THE ASSESSEE HAS M ADE FOLLOWING PAYMENTS THROUGH CHEQUE WHICH HAS BEEN CLEARED FROM THE BANK ACCOUNT OF THE ASSESSEE ON THE FOLLOWING DATES: DATE CLG. AMOUNT ( ` ) 09.05.2005 LIC 27,018 17.05.2005 LIC 2,522 MR. JAGDISH N. THAKKAR 12 19.11.2005 LIC 23,363 14.01.2006 LIC 2,440 55,343 IN THE BANK STATEMENT, THE CLEARING OF CHEQUE IS SH OWN IN FAVOUR OF THE LIC. THUS, PRIMAFACIE, IT SHOWS THAT THE ASSESSEE HAS MADE PAYMENT TO THE LIC AND IF THAT IS SO, DEDUCTION UNDER SECTION 80C HAS TO BE ALLOWED. HOWEVER, THESE PAYMENTS HAVE NOT BEEN VERIFIED BY T HE ASSESSING OFFICER, THEREFORE, THE MATTER IS RESTORED BACK TO THE FILE OF THE A.O ONLY FOR LIMITED PURPOSES OF VERIFICATION FOR THE SUMS CLAIMED ON AC COUNT OF LIC PAYMENT. THUS, GROUND NO.3, IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 24. 7 #: ./' 5 ./' >5 1?@ ' '$ !# A ) 4# ;< = 24. IN THE RESULT, ASSESSEES CROSS OBJECTION IS TR EATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 25. 4! 5 74 ) 4# ;< ! ./' 5 ./' >5 1?@ ' '$ !# A ) 4# ;< = 25. TO SUM UP, REVENUES APPEAL IS TREATED AS DISMI SSED AND ASSESSEES CROSS OBJECTION IS TREATED AS PARTLY ALLOWED FOR ST ATISTICAL PURPOSES. $ 5 8+ B C): 6 TH SEPTEMBER 2013 5 D = ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH SEPTEMBER 2013 SD/- . .. . B. RAMAKOTAIAH ACCOUNTANT MEMBER SD/- '# '# '# '# $% $% $% $% & & & & AMIT SHUKLA JUDICIAL MEMBER MUMBAI, C) C) C) C) DATED : 6 TH SEPTEMBER 2013 MR. JAGDISH N. THAKKAR 13 $ 5 .&#'E FE+# / COPY OF THE ORDER FORWARDED TO : (1) &) *7# / THE ASSESSEE; (2) 4! / THE REVENUE; (3) G () / THE CIT(A); (4) G / THE CIT, MUMBAI CITY CONCERNED; (5) E!JD .&#&) , , / THE DR, ITAT, MUMBAI; (6) DK* L / GUARD FILE. /E# .&# / TRUE COPY $) / BY ORDER . 4. MN / PRADEEP J. CHOWDHURY !7O &)4 M! / SR. PRIVATE SECRETARY 1 / ; 4 / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI