I.T.O, Ward - 53(3), Kolkata, Kolkata V. Aftab Hossain Laskar, Kolkata

ITA 55/KOL/2010

• Counselvise Citation: 5523514 RSA 2010
• Duration Of Justice: 1 year(s) 7 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2011
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 22-08-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 08-01-2010
• Court: TRIBUNAL
• Department Lawyers: M BHATTACHARYA
• Assessee Lawyers: S L KOCHAR
• Keywords: Gift; Source of fund
• Section: 68

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BEN CH B, KOLKATA () BEFORE . .. . . .. . , , , , , SHRI B.R.MITTAL, JUDICIAL MEMBER. /AND . .. .!' !'!' !'. .. . , #$ SHRI C.D.RAO, ACCOUNTANT MEMBER %& %& %& %& ' ' ' ' / ITA NO.55/KOL/2010 () *+/ ASSESSMENT YEAR : 2005-06 (-. / APPELLANT ) I.T.O., WARD-53(3), KOLKATA - ( - - VERSUS - . (01-./ RESPONDENT ) AFTAB HOSSAIN LASKAR, KOLKATA (PAN: ACGPL 5116 L) -. 2 3 #/ FOR THE APPELLANT: SHRI M.BHATTACHARYA 01-. 2 3 #/ FOR THE RESPONDENT: SHRI S.L.KOCHAR #4 / ORDER ( (( ( . .. .!' !'!' !'. .. . ) )) ), , , , #$ PER SHRI C.D.RAO, AM THIS APPEAL IS FILED BY THE REVENUE AGAINST ORDER DATED 18.09.2009 OF THE CIT(A)-XXXIII, KOLKATA PERTAINING TO A.Y. 2005-06. 2. IN THIS APPEAL THE REVENUE HAS TAKEN THE FOLLOWING TWO GROUNDS : 1. THAT THE LD. CIT(A) ERRED IN DELETING THE ADDIT ION OF RS.7,11,000/- ONLY BECAUSE OF INVOKING SECTION 69A INSTEAD OF SECTION 68. 2. THAT THE LD. CIT(A) ERRED IN DELETING THE ADDITI ON OF RS.2,08,000/- ON ACCOUNT OF DRAWINGS WITHOUT VERIFYING THE FACTS ON RECORD . 3. THE BRIEF FACTS OF THE ABOVE ISSUES ARE THA T WHILE DOING THE SCRUTINY ASSESSMENT AO ADDED AN AMOUNT OF RS.7,11,000/- BY INVOKING SEC TION 69A INSTEAD OF SECTION 68 AND RS.2,08,000/- ON ACCOUNT OF LOW DRAWINGS BY OBS ERVING THAT 2 DURING THE FY 2004-05 THE ASSESSEE PURCHASED A PRO PERTY UNDER A REGISTERED CONVEYANCE ON 22.04.2004 AT A PRICE OF RS.6,00,020/ - FOR WHICH HE PAID RS.60,020/- FOR STAMP DUTY, RS.52,669/- FOR DEFICIT STAMP DUTY AND PAID RS.5,797/- AS FEE FROM SMT. APARNA PAUL AND OTHER FOUR VENDORS. FROM 19.02 .2003 THE CREDIT BALANCE IN THE BANK ACCOUNT OF THE ASSESSEE WAS RS.1,228/-. SINCE 01.04.2003 TO 14.04.2004 DURING THIS PERIOD FOR ABOUT ONE YEAR NO MONEY WAS DEPOSIT ED AND ON 15.04.2004 RS.6,11,000/- WAS DEPOSITED ON TRANSFER AND ON 17.0 4.2004 AGAIN RS.1,00,000/- WAS DEPOSITED ON TRANSFER AND FROM THIS ACCUMULATED AMO UNT IN BANK FIVE CHEQUES ERE ISSUED TO THE VENDORS ON 22,04.2004 AND ON 23.04.20 04 RESPECTIVELY. THE ASSESSEE RECEIVED NINE GIFTS, OUT OF WHICH GIFTS FROM FOUR D ONORS WERE RECEIVED ON 13.04.2004 AND FIVE OTHER GIFTS FROM FIVE DONORS WERE RECEIVED ON 15.04.2004. SINCE DURING THE PERIOD YEAR UNDER CONSIDERATION NO MONEY WAS DEPOSI TED IN THE BANK ACCOUNT BUT WHEN MONEY WAS URGED TO PURCHASE A PROPERTY NINE DO NORS APPEARED AND GIFTED RS.7,11000/- ALL TOGETHER. ON DEPOSITION OF GIFTED MONEY INTO BANK FIVE CHEQUES WERE ISSUED TO FIVE VENDORS. THUS MONEY PAID BY THE ASSESSEE FOR PURCHAS E OF PROPERTY FORM HIS UNEXPLAINED MONEY U/S 69A OF THE ACT IS CHARGED TO HIS INCOME. THEREFORE TOTAL GIFTS OF RS.7,11,000/- IS CHARGED TO INCOME AS INCOME FROM U NEXPLAINED SOURCE U/S 69A OF THE ACT. DURING THE ASSESSMENT PROCEEDINGS IT IS FOU ND THAT THE ASSESSEE PURCHASED A PROPERTY DURING THE FY 2004-05 OF WHICH DEED VALUE WAS RS.6,00,000/- FOR WHICH THE ASSESSEE PAID RS.60,020/- FOR STAMP DUTY, RS.52,669 /- FOR DEFICIT STAMP DUTY AND PAID FEE OF RS.5,797/-. THEREFORE, THE TOTAL VALUE OF TH E PROPERTY WAS RS.7,18,486/- BUT AS PER BALANCE SHEET, INVESTMENT IN PROPERTY HAS BEEN SHOWN RS.7,12,689/-. THEREFORE, EXCESS VALUE OF THE PROPERTY I.E. RS.7,18,486/- RS. 7,12,689/- = RS.5,797/- HAS BEEN SPENT AND THIS MONEY OF RS.5,797/- HAS BEEN SPENT W HICH IS OUT OF HIS DECLARED SOURCE OF INCOME AND THIS EXPENDITURE HAS BEEN CHARGE TO T HE INCOME OF THE ASSESSEE. THE ASSESSEE HAS STATED IN THE HISTORY SHE ET THAT HIS AVERAGE EXPENDITURE FOR FAMILY IS RS.2,50,000/- AND THIS AMOUNT OF MONEY HE SHOULD HAVE DRAWN FROM HIS FUND. THE HISTORY SHEET ANNEXED WITH HIS RETURN FOR THE ASSESSMENT YEAR 2005-06 HAS EVIDENTIARY VALUE. HENCE, TAKING RS.2,50,000/- AS E XPENDITURE FOR DOMESTIC PURPOSE, THE DIFFERENCE BETWEEN RS.2,50,000/- - RS.42,000/- (DRAWN FROM CAPITAL) I.E. RS.2,08,000/- IS ADDED BACK TO THE TOTAL INCOME. 3.1. ON APPEAL THE LD. CIT(A) HAS DELETED BOTH THE ADDITIONS BY OBSERVING AS UNDER :- 5.2. I HAVE GONE THROUGH THE FINDINGS OF THE ASS ESSING OFFICER AND SUBMISSION OF THE A/R. SECTION 69A CAN BE APPLIED ONLY IN THE CAS E WHERE ASSESSEE IS FOUND TO BE OWNER OF ASSETS AND IT IS NOT RECORDED IN THE BOOKS OF ACCOUNT AND THE SOURCE OF INVESTMENT IS NOT SATISFACTORILY EXPLAINED. THEREFO RE SEC.69A CAN BE INVOKED ONLY IF THE ASSET IS NOT RECORDED IN THE BOOKS OF THE ASSES SEE. IN THE CASE APPELLANT THE ASSETS IS DULY RECORDED IN THE BALANCE SHEET AND THEREFORE IN VOKING SEC.69A IS NOT IN ORDER. THE OTHER OBJECTION OF THE ASSESSEE THAT SINCE NO A DDITIONS WERE MADE U/S 68, WHICH AMOUNTED TO ACCEPTING THE SOURCE OF FUNDS AND THERE FORE ITS APPLICATION, AS INVESTMENT IN PROPERTY CANNOT BE QUESTIONED U/S 69A IS ALSO TO BE UPHELD. FROM THE DISCUSSION IN THE ASSESSMENT ORDER, HOWEVER IT APPEARS THAT THE A SSESSING OFFICER INTENDED TO CONSIDER THE GIFTS RECEIVED BY THE ASSESSEE AS UNEX PLAINED BUT INVOKED SECTION 69A. IT WOULD THEREFORE BE ONLY FAIR TO CONSIDER THE ADDITI ONS FROM THE POINT OF VIEW OF 3 SEC.68. THE OBJECTION OF THE ASSESSING OFFICER IS T HAT DONORS ARE CLOSE RELATIONS, LIVED IN THE SAME BUILDING, HAVING BANK ACCOUNT WITH THE SAME BANK, CARRIED OUT SIMILAR BUSINESS AND THERE IS CASH DEPOSIT IMMEDIATELY PREC EDING THE MAKING OF GIFTS. AS AGAINST THIS, THE A/R SUBMITS THAT THERE IS NOTHING ILLEGAL IN FAMILY MEMBERS MAKING GIFTS TO ANOTHER MEMBER OF THE FAMILY, OR LIVING IN ONE BUILDING OR HAVING BANK ACCOUNT WITH SAME BANK OR CARRYING OUT SIMILAR BUSI NESS. AS REGARDS SOURCE OF CREDIT IN THE BANK ACCOUNTS PRECEDING THE MAKING OF GIFTS THE A/R FILED PROFIT AND LOSS ACCOUNT, CAPITAL ACCOUNTS, BALANCE SHEET. CASH FLOW STATEMENT, AND BANK STATEMENT WITH NARRATION FOR EACH OF THE DONOR ALONG WITH EVI DENCES THAT THEY ARE FILING THE RETURN OF INCOME. IT WAS POINTED OUT THAT GIFTS ARE REFLECTED IN THE CAPITAL ACCOUNT OF THE DONORS AND THE SOURCE OF FUNDS IS EXPLAINED ON THE BASIS OF CASH FLOW STATEMENTS. SINCE THE EVIDENCES SUBMITTED WERE PART OF THE INCO ME TAX RECORD OF THE DONORS AND REFLECT MAKING OF GIFTS AND THE CREDITS IN THE BANK ACCOUNT ARE EXPLAINED ON THE BASIS OF CASH FLOW STATEMENT THE GIFTS WOULD HAVE TO BE T REATED AS GENUINE. THEREFORE THE ADDITIONS IN MY OPINION COULD NOT BE MADE TO BE TRE ATED AS GENUINE. THE ADDITIONS OF RS.7,11,000/- MADE BY THE ASSESSING OFFICER IS THER EFORE DELETED. THIS GROUND OF THE ASSESSEE SUCCEEDS. 7.1. I HAVE CONSIDERED THE OBSERVATIONS OF THE ASSE SSING OFFICER AND THE SUBMISSION OF THE A/R. THE ASSESSEE WAS UNMARRIED, THEREFORE FAMI LY WOULD CONSIST OF FATHER, MOTHER AND HIMSELF AND TOTAL DRAWINGS OF ALL THE FA MILY MEMBERS PUT TOGETHER WAS MORE THAN THE FAMILY DRAWINGS MENTIONED IN THE HIST ORY SHEET AND CONSIDERED BY THE ASSESSING OFFICER. THEREFORE IN MY OPINION ON ACCOU NT OF LOW DRAWINGS WAS NOT CALLED FOR. THIS GROUND OF THE ASSESSEE IS ALLOWED. 3.3. AGGRIEVED BY THIS THE REVENUE IS IN APPEAL BEFORE US. 4. THE LD. DR APPEARING ON BEHALF OF THE REV ENUE REITERATED THE SUBMISSIONS MADE BY AO IN THE ASSESSMENT ORDER AND REQUESTED TO SET ASIDE THE ORDER OF LD. CIT(A) AND RESTORE THAT OF AO. 5. ON THE OTHER HAND, THE LD. COUNSEL ON BEHA LF OF ASSESSEE RELIED ON THE ORDERS OF LD. CIT(A). THE LD. COUNSEL FOR ASSESEE FILED COPY OF PROFIT AND LOSS ACCOUNTS AND STATEMENTS OF THE ACCOUNTS OF THE FAMILY MEMBERS WH O ARE DONORS WHICH ARE PLACED IN PAGES 8 TO 51 OF THE PAPER BOOK. HE FURTHER SUBMITT ED THAT ALL THE DOCUMENTS PLACED BEFORE THIS TRIBUNAL ARE ALSO FILED BEFORE THE REVE NUE AUTHORITIES. THEREFORE HE REQUESTED TO UPHOLD THE ORDERS OF LD. CIT(A). 7. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREFUL PERUSAL OF THE MATERIALS AVAILABLE ON RECORD, WE ARE OF THE VIEW THAT LD. CI T(A) HAS RIGHTLY DELETED THE ADDITION 4 MADE U/S 69A OF THE IT ACT BY OBSERVING THAT IN THE CASE OF APPELLANT THE ASSETS IS DULY RECORDED IN THE BALANCE SHEET AND THEREFORE INVOKIN G SEC.69A IS NOT IN ORDER. THE OTHER OBJECTION OF ASSESSEE THAT SINCE NO ADDITIONS WERE MADE U/S 68, WHICH AMOUNTED TO ACCEPTING THE SOURCE OF FUNDS AND THEREFORE ITS APPLICATION, AS INVESTMENT IN PROPERTY CANNOT BE QUESTIONED U/S 69A IS ALSO TO BE UPHELD. THEREFORE WE FIND NO INFIRMITY IN THE ORDERS OF LD. CIT(A) TO BE INTERFE RED WITH. 7.1. AS REGARDING DELETION OF RS.2,08,000/- ON ACC OUNT OF LOW DRAWINGS WE FIND NO INFIRMITY IN THE ORDERS OF LD. CIT(A) TO BE INTERFE RED WITH. SINCE LD. CIT(A) HAS DELETED THE SAME BY OBSERVING THAT THE TOTAL FAMILY DRAWINGS EXCEEDED THE FAMILY EXPENDITURE MENTIONED IN THE HISTORY SHEET AND THER EFORE NO ADDITIONS WAS REQUIRED TO BE MADE ON ACCOUNT OF LOW DRAWINGS. THEREFORE WE CO NFIRM THE ORDER OF LD. CIT(A) ON THIS ISSUE AND DISMISS THE REVENUES APPEAL. 8. IN THE RESULT THE APPEAL OF THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE COURT ON 06.09.2011. SD/- SD/- . .. . . .. . , , , , B.R.MITTAL, JUDICIAL MEMBER . .. .!' !'!' !'. .. . , ,, , #$ #$ #$ #$ , C.D.RAO, ACCOUNTANT MEMBER. ( (( ('$ '$ '$ '$) )) ) DATE: 06.09.2011. #4 2 0& 5#&*6- COPY OF THE ORDER FORWARDED TO: 1. AFTAB HOSSSAIN LASKAR, V-168, KARBALA ROAD, KOLKATA -700018. 2 I.T.O., WARD-53(3), KOLKATA 3. THE CIT, 4. THE CIT(A)-XXXIII, KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA 1& 0/ TRUE COPY, #4(;/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES R.G.(.P.S.) 5