Sri Nathan William Bhupal Sekar, Trichy V. ITO, Trichy

ITA 561/CHNY/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 4520 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2006-2007
• Appeal Filed On: 26-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: OMKARESHWAR CHIDRA; MRS P N KAMALA DEVI
• Assessee Lawyers: S SRIVATSAN
• Keywords: Gift; Income from undisclosed sources; Onus to prove

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH D CHENNAI (BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER A ND SHRI GEORGE MATHAN, JUDICIAL MEMBER) .. I.T.A. NO. 561/MDS/2010 ASSESSMENT YEAR : 2006-07 SRI NATHAN WILLIAM BHUPAL SEKAR. EVEREST HARDWARE, 83, MADURAI ROAD, TRICHY-620 008. PAN :AAKPB8135H (APPELLANT) V. THE INCOME-TAX OFFICER, WARD-II(2), TRICHY-620 001. (RESPONDENT) APPELLANT BY : SHRI S. SRIVATSAN RESPONDENT BY : SHRI OMKARESHWAR CHIDRA & MRS. P.N. KAMALA DEVI O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDE R OF THE LEARNED CIT(APPEALS). TRICHY IN ITA NO.190/08-09 DATED 10-0 2-2010 FOR THE ASSESSMENT YEAR 2006-07. 2. SHRI S. SRIVATSAN, CA REPRESENTED ON BEHALF OF T HE ASSESSEE AND MRS. P.N. KAMALA DEVI, LEARNED DEPARTMENTAL REPRESENTATIVE AN D THE LEARNED CIT(DR) SHRI OMKARESHWAR CHIDRA REPRESENTED ON BEHALF OF THE REV ENUE. 3. IT WAS SUBMITTED BY THE LEARNED AUTHORIZED REPRE SENTATIVE THAT THE ASSESSEE IS AN INDIVIDUAL WHO HAD RECEIVED AN AMOUN T OF RS. 6 LAKHS FROM HIS WIFE, SMT. PHILOMENA WHO HAD RECEIVED THE GIFT FROM HER FATHER SRI A. ITA NO.561/MDS/2010 2 AROKIADOSS. IT WAS THE SUBMISSION THAT THE AO HAD ASKED THE ASSESSEE TO PROVE THE SOURCE OF THE GIFT AND THE ASSESSEE HAD PRODUCE D CONFIRMATION LETTER FROM SHRI AROKIADOSS ALONG WITH HIS BANK PASS BOOKS. IT WAS THE SUBMISSION THAT SHRI AROKIADOSS BEING THE FATHER-IN-LAW OF THE ASSESSEE HAD ALSO GIVEN A CONFIRMATION LETTER SPECIFYING THAT HE WAS 93 YEARS OF AGE AND H IS RETIREMENT BENEFITS HAD BEEN DEPOSITED WITH SOME LOCAL PEOPLE FOR INTEREST AND THE SAME HAD BEEN COLLECTED AND HAD BEEN GIVEN AS GIFT TO HIS DAUGHTE R AS SHRI AROKIADOSS WANTED TO SETTLE HIS AFFAIRS DURING HIS LIFE TIME AND PART ITION HIS ASSETS. IT WAS THE SUBMISSION THAT THE AO HAD VERIFIED THE BANK ACCOUN T OF SHRI AROKIADOSS AND IT WAS NOTICED THAT THE AMOUNT OF RS. 6 LAKHS HAD BEEN REMITTED TO THE BANK ACCOUNT BETWEEN 21-10-2005 AND 22-11-2005 AND CONSE QUENTLY HAD HELD THAT THE AMOUNT COULD HAVE BEEN THE MONEY OF THE ASSESSE E WHICH WAS ROUTED THROUGH THE BANK ACCOUNT OF THE FATHER-IN-LAW. IT WAS THE SUBMISSION THAT THE ASSESSEE HAD PRODUCED THE EVIDENCES IN THE FORM OF THE BANK ACCOUNT AS ALSO THE CONFIRMATION FROM HIS FATHER-IN-LAW WHICH PROVE D THAT THE GIFT HAD BEEN GIVEN TO THE ASSESSEES WIFE WHO HAD IN TURN GIVEN THE MO NEY TO THE ASSESSEE. IT WAS THE SUBMISSION THAT THE LEARNED CIT(A) WITHOUT CONS IDERING THE SUBMISSIONS OF THE ASSESSEE HAD BLINDLY UPHELD THE ADDITION MADE I N THE ASSESSMENT. 4. IN REPLY THE LEARNED DR SUBMITTED THAT THE EVIDE NCES PRODUCED WERE CONCOCTED EVIDENCES. IT WAS THE SUBMISSION THAT TH E FATHER-IN-LAW OF THE ITA NO.561/MDS/2010 3 ASSESSEE HAD RETIRED NEARLY 45 YEARS AGO AND HOW HE HAD GENERATED THE AMOUNT OF RS. 6 LAKHS HAD ALSO NOT BEEN SHOWN. IT WAS THE FURTHER SUBMISSION THAT WHERE THIS MONEY WAS KEPT WAS ALSO NOT SHOWN. IT W AS THE SUBMISSION THAT THE ASSESSEE WAS UNABLE TO PROVE THE GENUINENESS OF THE GIFT RECEIVED THROUGH HIS WIFE FROM HIS FATHER-IN-LAW. THE LEARNED DR RELIED UPON THE DECISION OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF ORIENTAL WIRE INDUSTRIES (P.) LTD. V. CIT REPORTED IN 131 ITR 688 WHEREIN IT HAD BEEN HEL D THAT FOR A LOAN SHOWN IN THE BOOKS OF THE ASSESSEE THE BURDEN IS ON THE ASSE SSEE TO PROVE THE GENUINENESS OF THE TRANSACTION AND IF NO PROPER EXP LANATION REGARDING THE SOURCE OF THE LOAN IS GIVEN OR THE CAPACITY OF THE PERSON TO GIVE THE LOAN OR THAT THE LOAN IN FACT WAS GIVEN BY THE PERSON CONCERNED, THE SUM IS LIABLE TO BE ASSESSED AS INCOME FROM UNDISCLOSED SOURCES. THE LEARNED DR FU RTHER RELIED UPON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CA SE OF GORDHANDAS HARGOVANDAS AND ANOTHER V. CIT REPORTED IN 126 ITR 560 WHEREIN IT HAS BEEN HELD THAT THE BURDEN OF PROOF IS ON THE ASSESSEE AN D THE CUMULATIVE EFFECT OF ENTIRE EVIDENCE HAS TO BE TAKEN INTO CONSIDERATION AND IF THE ASSESSEE IS UNABLE TO PROVE THE SOURCE OF MONEY FOUND TO HAVE BEEN REC EIVED BY HIM THE SAME IS LIABLE TO BE ASSESSED AS INCOME FROM UNDISCLOSED SO URCES. THE LEARNED DR VEHEMENTLY SUPPORTED THE ORDERS OF THE LEARNED CIT( A) AND THE AO. ITA NO.561/MDS/2010 4 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PER USAL OF THE ASSESSMENT ORDER CLEARLY SHOWS THAT THE AO HAS FOUND THAT THE AMOUNT OF RS. 6 LAKHS HAS BEEN REMITTED TO THE ACCOUNT OF THE THE ASSESSEES FATHER-IN-LAW WITHIN A SPAN OF ONE MONTH BETWEEN 21-10-2005 AND 22-11-2005. IT IS ALSO UNDISPUTED THAT THIS IS THE AMOUNT WHICH HAS BEEN GIFTED BY THE ASSESSEE S FATHER-IN-LAW TO HIS DAUGHTER, WHO IS THE WIFE OF THE ASSESSEE AND THIS IS THE AMOUNT WHICH THE ASSESSEES WIFE HAS GIFTED TO THE ASSESSEE. IT IS ALSO NOTICED THAT THE ASSESSEE HAS PRODUCED A CONFIRMATION LETTER FROM THE ASSESSE ES FATHER-IN-LAW CONFIRMING THAT HE HAS GIFTED THE AMOUNT OF RS. 6 LAKHS TO THE ASSESSEES WIFE. THE AO IS DOUBTING THE CAPACITY OF THE ASSESSEES FATHER-IN-L AW TO GENERATE THIS AMOUNT OF RS. 6 LAKHS. WHAT IS TO BE APPRECIATED HERE IS THA T THE FIRST ENTRY OF THE AMOUNT OF RS. 6 LAKHS HAS TAKEN PLACE IN THE BANK ACCOUNT OF THE ASSESSEES FATHER-IN- LAW. IT IS FOR THE ASSESSEES FATHER-IN-LAW INTO W HOSE ACCOUNTS THE MONEY HAS COME, WHO IS TO EXPLAIN THE SOURCE OF THE MONEY. T HIS IS BECAUSE THE ASSESSEE HAS SHOWED A SOURCE AND THE SOURCE HAS ALSO BEEN CO NFIRMED AS HAVING BEEN GIVEN THE MONEY. THUS THE BURDEN PLACED ON THE ASS ESSEE TO PROVE THE SOURCE OF THE AMOUNT OF RS. 6 LAKHS IN HIS ACCOUNTS WAS CO MPLIED WITH. IN THE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE ADDITION MADE BY THE AO AND AS CONFIRMED BY THE LEARNED CI(A) OF THE AMOUNT OF RS. 6 LAKHS BEING THE GIFT RECEIVED BY THE ASSESSEE FROM HIS WIFE WHO HAD IN T URN RECEIVED THE GIFT FROM HER ITA NO.561/MDS/2010 5 FATHER IS UNSUSTAINABLE IN LAW AND THE SAME IS DELE TED. IN THE CIRCUMSTANCES, THE APPEAL OF THE ASSESSEE IS ALLOWED. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 7. THE ORDER WAS PRONOUNCED IN THE COURT ON 09-07-2 010. SD/- SD/- (ABRAHAM P. GEORGE) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 9 TH JULY, 2010. H. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A), TRICHY (4) CIT-I, TRICHY (5) D.R. (6) GUARD FILE