SHRI RAJENDRA BHALOTHIA, Jaipur V. ACIT, Jaipur

ITA 574/JPR/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54307 (ITAT-JAIPUR)
• Duration Of Justice: 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 09-06-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D K MEENA
• Assessee Lawyers: RAJIV PANDEY
• Keywords: Gift; Income from undisclosed sources; Capital receipt
• Section: 68; 69; 56

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, A JAIPUR (BEFORE SHRI R.K.GUPTA AND SHRI N.L. KALRA) ITA NO.574/JP/2011 ASSESSMENT YEAR : 2005-2006 SH. RAJENDRA BHALOTHIA VS. ASSTT. COMMISSIONER OF SIRSI ROAD, INCOME TAX, CENTRAL JAIPUR. CIRCLE-2, JAIPUR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJIV PANDEY RESPONDENT BY : SHRI D.K. MEENA DATE OF HEARING: 22.11.2011 DATE OF PRONOUNCEMENT: 22.12.2011 ORDER PER SHRI N.L. KALRA, A.M. 1. THE ASSESSEE HAS FILED AN APPEAL AGAINST ORDER O F LD. CIT (A) CENTRAL JAIPUR DATED 23.03.2011. THE FIRST GROUND OF APPEAL IS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED- IN CONFIRMING THE ADDITION OF RS.35,000/- AS INCOME FROM OTHER SOURCES AND NOT ACCEPTING THE SAME AS AGRICULTURE INCOME. 2. THE ASSESSEE HAS SHOWN INCOME FROM CONTRACT AT R S.3.5 LAKH AND AGRICULTURAL INCOME OF RS.80,000/-. FOR VERIFICATION OF INCOME UNDER DIFFE RENT HEADS, THE ASSESSEE IS NOT HAVING ALL THE DETAILS. BEFORE THE A.O. THE ASSESSEE CLAIMED THAT HE OWNS 30 BIGHAS OF AGRICULTURAL LAND. THE A.O. OBTAINED INFORMATION OF DETAILS OF ASSETS FURN ISHED BY THE ASSESSEE TO THE ELECTION COMMISSSION ON 12.10.2003 AT THE TIME OF FILING NOM INATION FOR ELECTION OF LEGISLATOR AND NOTICED 2 THAT ASSESSEE OWNS 5.27 BIGHAS OF AGRICULTURAL LAND . ACCORDINGLY THE A.O. ESTIMATED AGRICULTURAL INCOME OF RS.45,000 AND AN ADDITION OF RS.35,000 WA S MADE. 3. BEFORE THE LD. CIT (A), IT WAS STATED THAT SUCH ADDITION HAS BEEN DELETED IN EARLIER YEARS. 4. THE LD. CIT (A) AFTER CONSIDERING THE CONTENTION OF THE ASSESSEE CONFIRMED THE ADDITION AFTER OBSERVING AS UNDER: I HAVE CONSIDERED THE SUBMISSION OF LD. A.R. AND HA VE PERUSED THE MATERIAL ON RECORD. ON PERUSAL OF THE APPEAL ORDER OF A.Y. 2001 -02, REFERRED BY THE A.R. OF THE APPELLANT, IT IS SEEN THAT THE LD. CIT (A) HAS DELETED THE ADDITION ON THE GROUND THAT THE A.O. HAS NOT DOUBTED ABOUT THE HOLDING OF AGRICULTURAL LAND AND ACCORDINGLY AGRICULTURAL INCOME OF RS.65,000/- FROM 30 BIGHAS OF LAND WAS HELD TO BE NOT UNREASONABLE BY THE LD. CIT (A). SIMILARL Y IN A.Y. 2000-01 AND A.Y. 2004-05, A.O. COULD NOT BROUGHT ON RECORD THAT THE LAND HOLDING OF APPELLANT IS ONLY 5.27 BIGHA AND NOT 30 BIGHA AS CLAIMED AND HEN CE NO ADDITION WAS MADE. HOWEVER IN THE YEAR UNDER CONSIDERATION, THE A.O. H AS HELD THAT THE APPELLANT OWNS ONLY 5.27 BIGHAS OF AGRICULTURAL LAND AND NOT 30 BIGHA AS IS BEING CLAIMED, WHICH IS QUITE EVIDENT FROM THE APPELLANTS OWN ADM ISSION BY WAY OF STATEMENT OF ASSETS FILED BEFORE THE ELECTION COMMISSION ON 12.1 0.03, WHEREIN HALF SHARE OF 10.55 BIGHA AGRICULTURAL LAND WAS SHOWN. THESE BEIN G THE FACTS AND EVIDENCE GATHERED BY THE A.O. DURING THE YEAR, I HAVE NO ALT ERNATIVE BUT TO RESPECTFULLY DIFFER FROM THE ORDER OF LD. CIT (A) FOR A.Y. 2001- 02 AND UPHOLD THE ESTIMATION OF AGRICULTURAL INCOME AT RS.45,000/- AND THEREBY ADDI TION OF RS.35,000/- AS INCOME FROM UNDISCLOSED SOURCES. 5. BEFORE US, THE LD. A/R SUBMITTED AS UNDER: ASSESSEE HUMBLY SUBMITS THAT THERE IS NO CHANGE IN THE AREA OF CULTIVATION WHICH REMAINS SAME AS IN A.Y. 2000-01 ONWARDS AND IS 30 B IGHAS WHICH HAS ALSO BEEN REITERATED IN WRITTEN SUBMISSION. LD. CIT (A) HAS P ERUSED THE AFFIDAVIT FILED BEFORE THE ELECTION COMMISSION WHICH HAS BEEN REFERRED TO AT PAGE 3 OF APPELLATE ORDER. THE CULTIVATION BEING DONE BY ASSESSEE IS ON 30 BIG HAS WHICH INCLUDES LAND HOLDING GIVEN TO HIM BY HIS BROTHER. ASSESSEE HAS S UBMITTED AGRICULTURE LAND WHICH IS IN HIS OWN NAME IN HE REVENUE RECORD AND W HICH IS MENTIONED IN THE AFFIDAVIT FILED BEFORE THE ELECTION COMMISSION. LD. CIT (A) HAS PERUSED THE REVENUE RECORD AND NOT THE AGREEMENT WITH CO-SHARER WHO IS CULTIVATING 30 BIGHAS OF AGRICULTURE LAND AND PROCEEDS OF SUCH AGRICULTUR E LAND HAVE BEEN GIVEN TO THE ASSESSEE. IT IS NOT AS PER PROVISIONS OF LAW THAT I NCOME OUT OF CULTIVATION SHOULD BE OF AGRICULTURE LAND OF WHICH ASSESSEE IS THE OWNER. 3 ASSESSEE HUMBLY SUBMITS THAT CO-SHARER AGREEMENT AN D KHASRA GIRDHAWARI ARE ENCLOSED AS PB 19 & 20 THERE IS NO REASON TO DISREG ARD THE SAME AS CO-SHARER HAS ACCEPTED GIVING OF INCOME FROM AGRICULTURE AMOUNTIN G TO RS.80,000/- TO THE ASSESSEE AND THE CO-SHARES DECLARATION HAS NOT BEEN CONTROVERTED. ASSESSEE HUMBLY PRAYS THAT THE DECLARED AGRICULTURE INCOME OF RS.80,000/- MAY PLEASE BE ACCEPTED AND ADDITION OF RS.35,000/- AS O THER INCOME MAY PLEASE BE DELETED. 6. ON THE OTHER HAND THE LD. D/R RELIED ON THE ORDE RS OF LD. CIT (A). OUR ATTENTION WAS DRAWN TO THE AFFIDAVIT IN WHICH AREA IS NOT MENTION ED AFFIDAVIT IS DATED 25.11.2003 WHILE THE ASSESSMENT YEAR INVOLVED IS 05-06. 7. WE HAVE HEARD BOTH THE PARTIES. THE AFFIDAVIT SA YS THAT THE DEPONENT IS CULTIVATING LAND WHICH IS MENTIONED IN REVENUE RECORD IN THE NAME OF THE ASSESSEE. MOREOVER AFFIDAVIT IS DATED 25.11.2003. IN THIS AFFIDAVIT IT IS MENTIONED THAT DEPONENT WILL PAY RS.40,000/- ON 15.4.2004 AND ANOTHER RS.40,000/- ON 15.11.2004. THE AFFIDAVIT DO ES NOT SHOW THAT SUM WAS ACTUALLY PAID. THE ASSESSEE HAS NOT ABLE TO CONTROVERT THAT HE HAS NOT SHOWN AGRICULTURAL LAND OF 5.27 BIGHA. ORDERS OF LD. CIT (A) FOR EARLIER YEARS ARE NOT APPLICABLE AS PER THE FINDING OF LD. CIT (A) WE, THEREFORE FEEL THAT LD. CIT (A) WAS JUSTIFIED IN CONFIRMING T HE ADDITION OF RS.35,000/- AS DURING THIS YEAR, THE A.O. HAS COLLECTED THE INFORMATION OF OWNERSHIP OF AGRICULTURAL LAND TO THE EXTENT OF 5.27 BIGHAS. 8. THE SECOND GROUND OF APPEAL IS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED- IN CONFIRMING THE ADDITION OF RS.2 LACS AS ADDITION TO INCOME OF THE APPELLANT U/S 68 AND TREATING THE SAME TO BE UNEXPLAINED CASH DEP OSIT AND NOT FOLLOWING PROVISIONS OF LAW AND IN NOT APPRECIATING FACTS AND EVIDENCE SUBMITTED. 4 9. ON THIS ISSUE, IT WILL BE USEFUL TO REPRODUCE TH E PARAS NO.3.1 TO 3.3.2 FROM THE ORDER OF LD. CIT (A). ON THE ISSUE OF CASH DEPOSIT ON DIFFERENT DATES IN THE BANK ACCOUNT TOTALING OF RS.2 LAKH DURING THE YEAR, THE EXPLANATION OF THE APPELL ANT THAT BEING SOCIAL WORKER, VARIOUS PERSONS CONTRIBUTED AT DIFFERENT POINT OF T IME AND GAVE HIM AMOUNT TOTALING TO RS.2 LAKHS FOR THEIR WORK OF GENERAL IN TEREST TO BE DONE BY THE APPELLANT, WAS NOT ACCEPTED BY THE A.O. ON THE GROU ND THAT THE APPELLANT HAS FAILED TO FURNISH THE EXACT NATURE OF SOCIAL WORK P ERFORMED AND THE CONCERNED AMOUNT GIVEN AS WELL AS THE LIST OR NAMES OF THE PE RSONS GIVING THE AMOUNT. A.O. HAS ALSO REFERRED TO THE DECISION OF CIT VS. P.MOHA NKALA & OTHERS (2007) 291 ITR 278 (SC) & SUMATI DAYAL VS. CIT (1995) (SC 124) . THE A.O. REJECTED THE CLAIM OF THE APPELLANT OF THI S BEING CAPITAL RECEIPT. A.O. OBSERVED THAT AS THE APPELLANT IS RECEIVING MONEY I N LIEU OF SERVICES RENDERED BY HIM AS APPELLANT HIMSELF ADMITTED THEN THE MONEY RE CEIVED WOULD CERTAINLY BE AN INCOME IN LIEU OF SERVICES RENDERED AND CANNOT BE T HE CAPITAL RECEIPT. A.O. THEREFORE ADDED RS.2 LAKHS U/S 68 AS UNEXPLAINED CA SH DEPOSITS. BEFORE ME IT WAS SUBMITTED THAT THE APPELLANT IS A SOCIAL WORKER AND CONTESTED ELECTION OF MLA AND OTHERS AND FOR PROMOTING CAUSE OF SOCIETY, HE IS GETTING CONTRIBUTION FROM THE GENERAL PUBLIC TO RAISE THEIR GRIEVANCES IN PUBLIC FORUM AND BEFORE THE AUTHORITIES. HE SUCCESSFULLY LOBBIES THE CASE WITH THE GOVT. AND PUBLIC AUTHORITIES AND GETS THE WORK DONE. IT WAS FURTHER SUBMITTED THAT EACH ENTRY OF CONTRIBUTION IS LESS THAN RS.25,000/-. MOREOVER, IT IS NOT INCOME BUT CAPITAL RECEIPTS. ON LEGAL GROUND, IT WAS SUBMITTED THAT TH E ADDITION SO MADE BY A.O. U/S 68 IS BAD IN LAW AS SECTION 68 REFERS TO ANY SUM CR EDITED IN THE BOOKS ACCOUNTS, WHEREAS THE APPELLANT DOES NOT MAINTAIN BOOKS OF AC COUNTS AND ENTRY IN THE BANK STATEMENT IS NOT THE ENTRY IN THE BOOKS OF ACCOUNTS . ALTERNATIVELY IT WAS FURTHER SUBMITTED THAT SOMETIMES APPELLANT HAS TO INCUR EXP ENDITURE OUT OF HIS OWN POCKET AND APPELLANT ALSO DEVOTES TIME AND ENERGY FOR GENE RAL PUBLIC SERVICE AND ACCORDINGLY, 75% DEDUCTION BE ALLOWED ON ACCOUNT OF EXPENDITURE. I HAVE CONSIDERED THE SUBMISSION OF THE LD. A.R. AN D HAVE PERUSED THE MATERIAL ON RECORD. AT THE OUTSET IT IS MENTIONED THAT UNDISPUT EDLY CASH DEPOSITS IN THE BANK ACCOUNT OF THE APPELLANT IS FOUND TOTALING TO RS.2, 00,000/-. AS PER THE PROVISIONS OF THE ACT, THE ONUS IS ON THE APPELLANT TO EXPLAIN THE SOURCE OF THESE DEPOSITS ALONG WITH SUFFICIENT EVIDENCES. THE APPELLANT HAS JUST GIVEN REASONS THAT IT IS THE CONTRIBUTION BY THE GENERAL PUBLIC FOR THE WORK DON E FOR THEM BEING A SOCIAL CAUSE, BUT THE APPELLANT HAS FAILED TO FURNISH ANY SPECIFIC DETAILS OF THE PERSONS 5 CONTRIBUTING THE CONTENDED MONEY AND ALSO FAILED TO FURNISH THE DETAILS REGARDING THE EXACT NATURE OF WORK DONE BY THE APPELLANT AT E ACH OF THE TIME WHEN THE CONTRIBUTION WAS RECEIVED, EITHER BEFORE THE A.O. O R EVEN BEFORE THE UNDERSIGNED DURING APPELLATE PROCEEDINGS. ACCORDINGLY, CASH DEP OSITS OF RS.2 LAKHS IN THE BANK ACCOUNT HAVE BEEN RIGHTLY HELD BY THE A.O. TO BE UNEXPLAINED AND NEEDS TO BE UPHELD. THE OTHER ARGUMENT THAT IT IS A CAPITAL RECEIPT, IS ALSO NOT CORRECT. AS PER THE APPELLANTS OWN VERSION, HE IS DOING WORK FOR THE P ERSONS OF TOWNS AND VILLAGES OF HIS CONSTITUENCY AND HE GETS THE CONTRIBUTION FROM THE PUBLIC FOR RAISING THE GRIEVANCES AND FOR GETTING THE WORK DONE. THUS THE APPELLANT IS RECEIVING CONTRIBUTION IN LIEU OF SERVICES RENDERED BY HIM AN D ACCORDINGLY, THE AMOUNT RECEIVED WILL BE REVENUE RECEIPT AS INCOME AND CANN OT AT ALL BE CONSIDERED AS CAPITAL RECEIPT. OTHER ARGUMENT THAT DEDUCTION OF A BOUT 75% BE ALLOWED, IS ALSO REJECTED IN VIEW OF THE FACT THAT FIRSTLY THE APPEL LANT HAS JUST MENTIONED THAT SOMETIMES THE APPELLANT ALSO INCURS EXPENDITURE OUT OF HIS OWN POCKET FOR GENERAL PUBLIC AND HE ALSO DEVOTES TIME AND ENERGY FOR GENE RAL PUBLIC, WHICH MEANS THAT APPELLANT HAS TO INCUR VERY SMALL OUT OF POCKET EXP ENSES THAT TOO ONLY SOMETIMES AND MOREOVER SECONDLY, NO EVIDENCE OF SUCH EXPENDIT URE HAS BEEN FURNISHED EITHER BEFORE THE A.O. OR EVEN BEFORE THE UNDERSIGN ED. NOW COMING TO THE LEGAL ARGUMENT, IT IS ADMITTED TH AT CASH DEPOSIT IN THE BANK ACCOUNT ARE NOT COVERED U/S 68. HOWEVER, AS THESE C ASH DEPOSITS ARE PRIMA-FACIELY FOUND UNEXPLAINED IN HEARING ON 15.11.2010 THE UNDE RSIGNED VIDE ORDER SHEET ENTRY DATED 15.11.2010, HAS ASKED THE A.R OF THE AP PELLANT TO SHOW CAUSE AS TO WHY SHOULD NOT THE ADDITION OF RS.2 LAKHS BE CONSID ERED U/S 69. IT WAS REPLIED THAT ONUS CAST UPON HIM HAS BEEN SATISFACTORILY EXPLAINE D AND HE RELIED UPON THE DECISION IN THE CASE OF CIT VS. NOORJAHAN (PK) (SMT ) 237 ITR 570. THE FACTS OF THE REPORTED CASE ARE DISTINGUISHABLE FROM THE INST ANT CASE OF THE APPELLANT. IN THE REPORTED CASE, THE HONBLE ITAT CONSIDERING THE COM PLETE ABSENCE OF RESOURCES OF THE 20 YEAR OLD MUSLIM LADY AND ALSO CONSIDERING TH E FACT THAT HAVING REGARD TO HER AGE AND THE CIRCUMSTANCES IN WHICH SHE WAS PLAC ED, SHE COULD NOT BE CREDITED WITH HAVING MADE ANY INCOME OF HER OWN AND IN THE C IRCUMSTANCES, THE HONBLE TRIBUNAL HAS DELETED THE ADDITION OF THE VALUE OF I NVESTMENT, WHICH WAS ALSO UPHELD BY THE HONBLE HIGH COURT. IN THE INSTANT CA SE OF THE APPELLANT, ALL THESE FACTORS AVAILABLE IN THE REPORTED CASE ARE ABSENT. ACCORDINGLY, THE RATIO OF DECISION IS NOT APPLICABLE. THE ARGUMENT OF THE A.R SO TAKEN IS REJECTED. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND LEGAL POSITION ON THIS ISSUE, THE ADDITION OF RS.2 LAKHS IS HELD TO BE MAD E U/S 69 OF I.T. ACT, BEING THE UNEXPLAINED CASH DEPOSITS IN THE BANK ACCOUNT. 6 10. BEFORE US THE LD. A/R HAS FILED THE SUBMISSIONS WHICH ARE SUMMARIZED AS UNDER: (A) ASSESSEE IS A SOCIAL WORKER AND HAS CONTESTED E LECTIONS OF PANCHAYAT, M.L.A AND M.P. (B) THE ASSESSEE RECEIVED CASH OF RS.2 LAKH ON ACCO UNT OF ASSISTING GENERAL PUBLIC IN ACTIVELY PURSUING THE ISSUES OF ELECTRIC SHORTAGE F OR IRRIGATION, TOLL TAX LEVIED AND OTHERS MATTERS. (C) AMOUNTS WERE RECEIVED FROM GENERAL PUBLIC AND N ONE OF THE RECEIPT EXCEEDS RS.25,000/- AND IN SOME CASES LESS THAN RS.1,000/-. (D) THE CREDIT IN BANK ACCOUNT IS NOT HIT U/S 68 O F I.T. ACT. (E) RELIANCE WAS PLACED ON THE DECISION OF MAYAWAT I V DCIT. 11. ON THE OTHER HAND THE LD. A/R HAS RELIED ON THE ORDERS OF AUTHORITIES BELOW: 12. WE HAVE HEARD BOTH THE PARTIES. THE A.O. IN HIS ORDER HAS NOT INVOKED THE PROVISIONS OF SECTION 68 OF I.T. ACT. THE FINDING OF A.O. IS THAT THE ASSESSEE HAS FILED TO SUBSTANTIATE HIS CONTENTION ABOUT DEPOSIT OF RS.2 LAC. THE DECISION IN THE CASE OF MAYAWATI IS NOT APPLICABLE AS IN THAT CASE THE ASSESSEE STATED THAT SHE HAS RECEI VED GIFTS AND SUCH GIFTS WERE TO BE TAXED UNDER SECTION 56 OF I.T. ACT. THE DECISION OF JURISDICTIO NAL HIGH COURT IN THE CASE OF ABDUL GANI GURDEJI 213 ITR 798 IS NOT APPLICABLE AS IN THAT CA SE THE AMOUNT RECEIVED WAS A VOLUNTARY DONATION FROM A NON RESIDENT WHOSE IDENTITY STANDS PROVED. IN THE INSTANT CASE, IT IS NOT ACCEPTED BY THE A.O. THAT THE AMOUNT WAS RECEIVED FROM PUBLI C. IT IS NOT THE CASE OF THE ASSESSEE THAT SUCH AMOUNTS WERE ALSO RECEIVED IN EARLIER YEAR. IF THE FUNDS ARE RECEIVED FROM PUBLIC DURING ELECTION 7 THEN SUCH DETAILS ARE TO BE GIVEN TO THE OBSERVER ( EXPENDITURE). WE, THEREFORE FEEL THAT LD. CIT (A) WAS JUSTIFIED IN CONFIRMING THE ADDITION. 13. THE LAST GRIEVANCE OF THE ASSESSEE IS AGAINST C HARGING OF INTEREST. INTEREST IS MANDATORY AND THE ASSESSEE WILL GET CONSEQUENTIAL RELIEF, IF ANY. IN THE RESULT THE APPEAL IS DISMISSED. THE ORDER IS PRONOUNCED IN OPEN COURT ON 22.12.201 1 SD/- SD/- (R.K.GUPTA) (N.L.KALRA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 22.12.2011 *S.KUMAR* COPY FORWARDED TO:- 1. SHRI RAJENDRA BHALOTHIA, SIRSI ROAD, JAIPUR. 2. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CI RCLE-2, JAIPUR. 3. THE CIT 4. THE CIT(A), 5. THE D/R, ITAT, JAIPUR 6. THE GUARD FILE IN ITA NO.574/JP/2011 BY ORDER A.R., I.T.A.T., JAIPUR