DCIT, New Delhi V. Shri Sanjeev Nanda, New Delhi

ITA 599/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 98050 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 19-10-2015
• Assessment Year: 2001-2002
• Appeal Filed On: 01-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SUNITA KEJRIWAL
• Keywords: Unexplained investment; Unexplained expenditure; Gift; Business income
• Section: 69C; 68; 6; 56

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `G NEW DELHI BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER I.T.A.NO.599/DEL/2013 ASSESSMENT YEAR : 2001-02 I.T.A.NO.600/DEL/2013 ASSESSMENT YEAR : 2004-05 I.T.A.NO.601/DEL/2013 ASSESSMENT YEAR : 2006-07 DCIT, VS SHRI SANJEEV NANDA, CENTRAL CIRCLE-13, 4, PRITHVI RAJ ROAD, ROOM NO.332, ARA CENTRE, NEW DELHI. JHANDEWALAN EXTN., NEW DELHI. (PAN: ACKP N7555K) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AJAY WADHWA ADV. RESPONDENT BY : SMT. SUNI TA KEJRIWAL DATE OF HEARING: 20.10.2015 DATE OF PRONOUNCEMENT: 04.12.2015 O R D E R PER CHANDRAMOHAN GARG, J.M. THESE APPEALS BY THE REVENUE HAVE BEEN FILED AGAIN ST THE ORDERS OF THE CIT(A)-I, NEW DELHI ALL DATED 9.11.2012 PASSED IN F IRST APPEALS NO. 74, 75 & 76/11-12 FOR ASSESSMENT YEAR 200-1-02, 2004-05 AND 2006-07 RESPECTIVELY. I.T.A. NO. 599/D/2013 FOR A.Y. 2001-02 2. THE REVENUE HAS RAISED SOLE GROUND IN THIS APPEA L WHICH READS AS UNDER:- 2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN FACT AND IN THE CIRCUMS TANCES OF THE CASE IN DELETING THE ADDITION OF RS.50,00,000/- MADE BY ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED DEPOSIT S IN BANK A/C OF ASSESSEE. 3. APROPOS ABOVE GROUND, WE HAVE HEARD ARGUMENTS OF BOTH THE SIDES AND CAREFULLY PERUSED THE RELEVANT MATERIAL PLACED ON R ECORD BEFORE US. LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE STAND AND ACTION OF THE ASSESSING OFFICER AND SUBMITTED THAT THE CIT(A) HAS GROSSLY E RRED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLA INED DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE. LD. COUNSEL FOR THE RESPON DENT/ASSESSEE STRONGLY SUPPORTED THE IMPUGNED ORDER AND CONTENDED THAT IF THE AMOUNT OR PROCEEDS ARE FOUND TO BE TAXABLE IN THE HANDS OF ASSESSEES FATH ER SHRI SURESH NANDA AND ALSO TAXED THEREIN, THEN THE QUESTION OF TAXING THE RECE IPTS TWICE IN THE HANDS OF ASSESSEE DOES NOT ARISE AND THE CIT(A) CORRECTLY GR ANTED RELIEF TO THE RESPONDENT. 4. ON CAREFUL CONSIDERATION OF ABOVE RIVAL SUBMISSI ONS OF BOTH THE SIDES, WE OBSERVE THAT THE CIT(A) GRANTED RELIEF WITH FOLLOWI NG OBSERVATIONS AND CONCLUSION:- 5.4 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS O F THE APPELLANT AND THE FACTS OF THE CASE. IT IS NOT DISP UTED THAT THE AFORESAID AMOUNT OF RS.50,00,000/- WAS RECEIVED BY THE APPELLANT FROM HIS FATHER SH. SURESH NANDA. THESE A MOUNTS WERE RECEIVED BY WAY OF ACCOUNT PAYEE CHEQUES DRAWN ON THREE DATES, I.E. 10.5.2000, 11.5.2000 AND 19.1.200 1, FROM THE NRE ACCOUNT OF SH SURESH NANDA WITH DEUTSCHE BANK, NEW DELHI. ON 29.4.2000, THERE IS A CREDIT OF RS. 1,04, 44,617/- IN THE DEUTSCHE BANK ACCOUNT BEING PROCEEDS OF NRNR DE POSIT WITH SBI ENCASHED BY SH. SURESH NANDA. THE SOURCE O F 3 PAYMENT OF RS.25,00,000/- ON 10.5.2000 AND RS. 15,0 0,000/- ON 11.5.2000 TO THE APPELLANT SH. SANJEEV NANDA IS OUT OF THIS AMOUNT. ON 18.1.2001, THERE IS A CREDIT OF RS. 17,5 0,000/- IN THE IN THE DEUTSCHE BANK ACCOUNT BEING PROCEEDS OF INTEREST ON RBI BONDS INVESTED BY SH. SURESH NANDA. THE SOUR CE OF PAYMENT OF RS. 10,00,000/- ON 19.1.2001 TO THE APPE LLANT SH. SANJEEV NANDA IS OUT OF THIS AMOUNT. THUS, THE SOUR CE OF MONEY IS CLEAR AND UNDISPUTED. THERE IS NO PROVISIO N UNDER THE INCOME TAX ACT, 1961 TO TAX AN AMOUNT THE SOURC E OF WHICH HAS BEEN EXPLAINED OR STANDS ESTABLISHED. IF THE SOURCE WAS NOT ESTABLISHED, IT COULD HAVE BEEN TAXED U/S 6 8 OF THE ACT. HOWEVER, AS THE SOURCE IS ESTABLISHED IN THE C ASE, SECTION 68 IS NOT ATTRACTED. THE ONLY PROVISION UNDER WHICH THE AMOUNT RECEIVED CAN BE BROUGHT TO TAXATION IS SECTI ON 56. UNDER THIS SECTION, ANY SUM OF MONEY RECEIVED WITHO UT CONSIDERATION IS CHARGEABLE TO TAX UNDER CLAUSE (V) OR CLAUSE (VI) AND CLAUSE (VII) TO SECTION 56(2). HOWEVER, RE CEIPT OF MONEY FROM RELATIVES IS EXEMPTED UNDER THESE PROVIS IONS, AND THESE PROVISIONS ARE APPLICABLE ONLY FROM A/Y 2005- 06. SECTION 56(1) CAN ALSO BE INVOKED PROVIDED THE AMOU NT IS UNEXPLAINED OR NOT TAXED IN SOME OTHER HAND. IN THE PRESENT CASE, THE SOURCE OF THE AMOUNTS RECEIVED STANDS EST ABLISHED. THE ONLY REASON IT HAS BEEN BROUGHT TO TAX, PRESUMA BLY U/S 56(1), IS THAT SH. SURESH NANDA BEING A NONRESIDENT HAS REFUSED TO DISCLOSE THE SOURCE OF HIS INCOME ABROAD AND, THEREFORE, THE SOURCE OF MONEY REMAINS UNEXPLAINED. AS MENTIONED ABOVE, THE SOURCE OF THESE RECEIPTS BY TH E APPELLANT ARE PROCEEDS OF NRNR DEPOSITS AND INTERES T ON RBI BONDS RECEIVED BY SH. SURESH NANDA, FATHER OF THE A PPELLANT. IF THESE PROCEEDS ARE FOUND TO BE TAXABLE, AND ALSO TAXED, IN THE HANDS OF THE SH. SURESH NANDA, THE QUESTION OF TAXING THE RECEIPT IN THE HANDS OF THE APPELLANT WOULD NOT ARI SE. NO DOUBT, CONTRARY TO THE STAND OF THE REVENUE, THE HO NBLE ITAT HAS HELD SH. SURESH NANDA TO BE A NON-RESIDENT VIDE ITS ORDER DATED 24.7.2012 IN ITA NOS.1428, 1429 AND 1430/DEL/ 2012. HOWEVER, INCOME ACCRUING OR ARISING FROM ASSETS HEL D IN INDIA WOULD STILL BE TAXABLE IN INDIA IN THE CASE O F SH.SURESH NANDA. THE ITAT HAS REMANDED THE MATTER ON SEVERAL ISSUES TO THE FILE OF THE ASSESSING OFFICER IN THE CASE OF SH. SURESH NANDA IN THE ABOVE APPEALS. THE ASSESSING OFFICER I S DIRECTED TO CONSIDER THE TAXABILITY OF PROCEEDS OF NRNR DEPOSIT AND INTEREST ON RBI BONDS IN THE CASE OF SH . SURESH NANDA AND BRING IT TO TAXATION ACCORDING TO LAW. TH E AMOUNT 4 CAN NOT BE TAXED IN THE HANDS OF THE APPELLANT SH. SANJEEV NANDA. THE GROUND OF THE APPELLANT IS ALLOWED AND THE ADDITION IS DELETED. APPELLANT GETS RELIEF OF RS .50,00,000/-. 5. ON LOGICAL ANALYSIS OF ABOVE CONCLUSION OF THE F IRST APPELLATE AUTHORITY, AT THE OUTSET, WE NOTE THAT AS PER SECTION 68 OF THE I NCOME TAX ACT, 1961, IF SOURCE OF RECEIPTS WAS NOT ESTABLISHED, THEN IT COULD HAVE BEEN TAXED UNDER THE SAID PROVISION. PER CONTRA, THERE IS NO PROVISION IN TH E ACT TO TAX AN AMOUNT OR PROCEED OF RECEIPT THE SOURCE OF WHICH HAS BEEN EXP LAINED OR STANDS ESTABLISHED. IN THE PRESENT CASE, THE SOURCE OF IMPUGNED RECEIPT S BY THE ASSESSEE ARE PROCEEDS OF NRNR DEPOSIT AND INTEREST ON RBI BONDS RECEIVED BY FATHER OF THE ASSESSEE SHRI SURESH NANDA AND IF THESE PROCEEDS HAVE BEEN F OUND TO BE TAXABLE IN THE HANDS OF SHRI SURESH NANDA, THEN THE QUESTION OF TA XING THE SAME U/S 68 OF THE ACT WOULD NOT ARISE. LD. DR COULD NOT CONTROVERT THESE FINDINGS OF THE LD. CIT(A), THUS, WE ARE UNABLE TO SEE ANY INFIRMITY, P ERVERSITY OR ANY OTHER VALID REASON TO INTERFERE WITH THE ORDER OF THE CIT(A) AN D WE UPHOLD THE SAME. ACCORDINGLY, SOLE GROUND OF THE REVENUE FOR ASSESSM ENT YEAR 2001-02 BEING DEVOID OF MERITS IS DISMISSED. I.T.A.NO. 600/DEL/2013 FOR A.Y. 2004-05 6. THE REVENUE HAS RAISED SOLE GROUND IN THIS APPEA L WHICH READS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.12, 00,000/- 5 MADE BY ASSESSING OFFICER ON A/C OF UNEXPLAINED DEP OSIT IN BANK A/C OF ASSESSEE. 7. APROPOS ABOVE GROUND, WE HAVE HEARD ARGUMENTS OF BOTH THE SIDES AND CAREFULLY PERUSED THE RELEVANT MATERIAL PLACED ON R ECORD BEFORE US. LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ACTION AN D STAND OF THE ASSESSING OFFICER IN MAKING ADDITION ON ACCOUNT OF UNEXPLAINE D DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE. HE FURTHER PRAYED THAT TH E IMPUGNED ORDER MAY BE SET ASIDE BY RESTORING THAT OF THE ASSESSING OFFICER AS THE CIT(A) GRANTED RELIEF TO THE RESPONDENT WITHOUT ANY BASIS AND ON INCORRECT P REMISE. LEARNED COUNSEL OF THE ASSESSEE SUPPORTED THE IMPUGNED FIRST APPELLATE ORDER AND SUBMITTED THAT THE ASSESSEE RECEIVED ALLEGED AMOUNT FROM HIS FATHER BY WAY OF ACCOUNT PAYEE CHEQUE DRAWN ON 10.6.2003 FROM NRE ACCOUNT OF SHRI SURESH NANDA WITH DEUTSCHE BANK, NEW DELHI AND THE SOURCE OF ALLEGED AMOUNT IN QUESTION HAS BEEN PROPERLY EXPLAINED BY THE ASSESSEE, HENCE THE CIT(A) WAS CORRECT IN ALLOWING THE ISSUE IN FAVOUR OF THE ASSESSEE. 8. ON CAREFUL CONSIDERATION OF ABOVE RIVAL CONTENTI ONS AND VIGILANT PERUSAL OF THE OPERATIVE PART OF THE IMPUGNED ORDER , WE NOTE THAT THE FIRST APPELLATE AUTHORITY GRANTED RELIEF WITH FOLLOWING C ONCLUSION AND FINDINGS:- 4. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND THE FACTS OF THE CASE, WHICH ARE SIMI LAR TO THE FACTS FOR A/Y 2001-02. IT IS NOT DISPUTED THAT THE AFORESAID AMOUNT OF RS. 12,00,000/- WAS RECEIVED BY THE APPEL LANT FROM HIS FATHER SH. SURESH NANDA. THE AMOUNT WAS RE CEIVED BY WAY OF ACCOUNT PAYEE CHEQUE DRAWN ON 10.6.2003, FROM THE NRE ACCOUNT OF SH SURESH NANDA WITH DEUTSCHE BA NK, 6 NEW DELHI. ON 9.4.2003, THERE IS A CREDIT OF RS.23, 65,000/- IN THE DEUTSCHE BANK ACCOUNT, NEW DELHI, BEING INWA RD REMITTANCE FROM ABROAD RECEIVED BY SH. SURESH NANDA . THE REMITTANCE IS FROM DEUTSCHE BANK, SINGAPORE, BELONG ING TO SH. SURESH NANDA WHICH HAS BEEN CREDITED TO THE CAP ITAL ACCOUNT OF SH SURESH NANDA, FATHER OF THE APPELLANT . WITH THIS REMITTANCE, AND AFTER CERTAIN OTHER DEBIT AND CREDIT TRANSACTIONS, THE CREDIT BALANCE ON 1.6.2003 IN THE AFORESAID BANK ACCOUNT WAS RS. 18,34,598.75P. THE SOURCE OF P AYMENT OF RS. 12,00,000/- ON 10.06.2003 TO THE APPELLANT S H. SANJEEV NANDA IS OUT OF THIS BALANCE IN THE ACCOUNT OF SH SURESH NANDA. THUS, THE SOURCE OF MONEY IS CLEAR AN D UNDISPUTED. THERE IS NO PROVISION UNDER THE INCOME TAX ACT, 1961 TO TAX AN AMOUNT THE SOURCE OF WHICH HAS BEEN EXPLAINED OR STANDS ESTABLISHED. IF THE SOURCE WAS NOT ESTABLISHED, IT COULD HAVE BEEN TAXED U/S 68 OF THE ACT. HOWEVER, AS THE SOURCE IS ESTABLISHED IN THE CASE, SECTION 68 IS NOT ATTRACTED. THE ONLY PROVISION UNDER WHICH TH E AMOUNT RECEIVED CAN BE BROUGHT TO TAXATION IS SECTION 56. UNDER THIS SECTION, ANY SUM OF MONEY RECEIVED WITHOUT CONSIDER ATION IS CHARGEABLE TO TAX UNDER CLAUSE (V) OR CLAUSE (VI) A ND CLAUSE (VII) TO SECTION 56(2). HOWEVER, RECEIPT OF MONEY F ROM RELATIVES IS EXEMPTED UNDER THESE PROVISIONS, AND T HESE PROVISIONS ARE APPLICABLE ONLY FROM A/Y 2005-06. SE CTION 56(1) CAN ALSO BE INVOKED PROVIDED THE AMOUNT IS NO T TAXED IN SOME OTHER HAND. IN THE PRESENT CASE, THE SOURCE OF THE AMOUNTS RECEIVED STANDS ESTABLISHED. THE ONLY REASO N IT HAS BEEN BROUGHT TO TAX, PRESUMABLY U/S 56(1), IS THAT SH. SURESH NANDA BEING A NON-RESIDENT HAS REFUSED TO DISCLOSE THE SOURCE OF HIS INCOME ABROAD AND, THEREFORE, THE SOU RCE OF MONEY REMAINS UNEXPLAINED. AS MENTIONED ABOVE, THE SOURCE OF THESE RECEIPTS BY THE APPELLANT ARE REMIT TANCES FROM THE SINGAPORE ACCOUNT TO NEW DELHI ACCOUNT OF SH. SURESH NANDA, FATHER OF THE APPELLANT, WITH DEUTSCH E BANK. IF THESE PROCEEDS ARE FOUND TO BE TAXABLE, AND ALSO TAXED, IN THE HANDS OF THE SH. SURESH NANDA, THE QUESTION OF TAXING THE SAME RECEIPT IN THE HANDS OF THE APPELLANT WOUL D NOT ARISE. THE SAME AMOUNT CANNOT BE TAXED IN THE HANDS OF THE APPELLANT SH. SANJEEV NANDA. NO DOUBT, CONTRARY TO THE STAND OF THE REVENUE, THE HONBLE ITAT HAS HELD SH. SURESH NANDA TO BE A NON-RESIDENT VIDE ITS ORDER DATED 24. 7.2012 IN ITA NOS. 1428, 1429 AND 1430/DEL/2012. EVEN IF TAXA BILITY OF THIS AMOUNT IS NOT FINALLY SUSTAINED IN THE HAND S OF SH 7 SURESH NANDA, FATHER OF THE APPELLANT, IT CANNOT BE TAXED IN THE HANDS OF THE APPELLANT - EITHER AS GIFT, BEING FROM A RELATIVE AND NO LAW EXISTING DURING THE PERIOD TO T AX IT AS SUCH; OR AS UNEXPLAINED RECEIPT AS ITS SOURCE STAND S CLEARLY ESTABLISHED. THE ONLY WAY THIS AMOUNT CAN BE TAXED IN THE HANDS OF SH SANJEEV NANDA, THE APPELLANT, IS IF IT CAN BE TREATED AS A BUSINESS RECEIPT OR SALARY OR PERQUISI TE IN HIS HANDS. THIS NOT BEING THE CASE, THE QUESTION OF TAX ABILITY OF THIS AMOUNT IN THE HANDS OF THE APPELLANTS DOES NOT ARISE. THE GROUND RAISED BY THE APPELLANT IS ALLOWED AND T HE ADDITION IS DELETED. APPELLANT GETS RELIEF OF RS. 1 2,00,000/-. 9. THE AFORESAID CONCLUSION IS SIMILAR TO THE ORDER OF ASSESSMENT YEAR 2001-02 (SUPRA) AND WE CLEARLY NOTE THAT THE ASSESSEE PROPE RLY EXPLAINED SOURCE OF AMOUNT IN QUESTION THAT THE SAME WAS RECEIVED FROM HIS NON-RE SIDENT FATHER SHRI SURESH NANDA FROM THE DEPOSITS IN HIS BANK ACCOUNT BY WAY OF ACC OUNT PAYEE CHEQUE DATED 10.6.2003 WHEREIN THERE WAS A CREDIT BALANCE OF RS. 23,65,000 ON 9.4.2013 I.E. MUCH PRIOR TO ISSUANCE OF CHEQUE TO ASSESSEE. THESE FAC TS HAVE NOT BEEN CONTROVERTED BY THE ASSESSING OFFICER AND THE LEARNED DEPARTMENTAL REPRESENTATIVE AND THUS WE ARE UNABLE TO SEE ANY INFIRMITY OR ANY OTHER VALID REAS ON TO INTERFERE WITH THE IMPUGNED ORDER OF THE LD. CIT(A) AND WE UPHOLD THE SAME AS T HE ALLEGED AMOUNT CANNOT BE TREATED AS UNEXPLAINED RECEIPT OF THE ASSESSEE AND CANNOT BE TAXED IN THE HANDS OF RESPONDENT U/S 68 OF THE ACT. ACCORDINGLY, SOLE GR OUND OF REVENUE FOR ASSESSMENT YEAR 2004-05 BEING DEVOID OF MERITS IS DISMISSED. I.T.A. NO. 601/D/2013 FOR A.Y. 2006-07 10. THE REVENUE HAS RAISED SOLE GROUND IN THIS APPE AL WHICH READS AS UNDER:- 8 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW, FACT AND IN CIRCUMSTANCES OF THE CASE IN DELETING THE ADDITION OF RS.23,57,038/- MADE BY ASS ESSING OFFICER ON A/C OF UNEXPLAINED INVESTMENT BY THE ASSESSEE. 11. APROPOS AFORESAID GROUND, WE HAVE HEARD ARGUMEN TS OF BOTH THE PARTIES AND CAREFULLY PERUSED THE RELEVANT MATERIAL PLACED ON R ECORD. LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE STAND AND ACTION OF TH E ASSESSING OFFICER AND CONTENDED THAT THE CIT(A) GRANTED RELIEF TO THE ASSESSEE WITH OUT ANY BASIS, HENCE, THE IMPUGNED ORDER MAY BE SET ASIDE BY RESTORING THAT OF THE ASS ESSING OFFICER. LD. COUNSEL OF THE ASSESSEE HAS DRAWN OUR ATTENTION TOWARDS PARA 5.4 O F THE IMPUGNED ORDER AND STRONGLY SUPPORTED THE FIRST APPELLATE ORDER WHEREIN THE REL IEF HAS BEEN GRANTED WITH FOLLOWING CONCLUSION AND OBSERVATIONS:- 5.4 I HAVE CAREFULLY CONSIDERED THE OBSERVATIONS OF THE ASSESSING OFFICER, SUBMISSIONS OF THE APPELLANT AND THE FACTS OF THE CASE. IT IS SEEN THAT FOR A/Y 2006-07 IN THE CASE OF SH SURESH NANDA, FATHER OF THE APPELLANT, AN ADDITION OF RS.7,44,07,498/- WAS MADE IN RESPECT OF PAYMENTS TO VARIOUS PARTIES WITH REGARD TO VARIOUS CONSULTANCY AND OTHER SERVICES IN RESPECT OF SONALI FARMS. IT IS SE EN THAT THE THESE AMOUNTS, THE BREAK-UP OF WHICH IS AVAILABLE I N THE TABLE AT PARA 9.1 (PAGES-34 AND 35 OF THE ASSESSMEN T ORDER), INCLUDES THE SAME PAYMENTS MADE BETWEEN 20.4.2005 A ND 16.7.2005 TO CRAIG ROBERTS ASSOCIATES INC. AGAINST VARIOUS INVOICES TOWARDS CONSULTANCY CHARGES AND PROFESSION AL SERVICES WITH REGARD TO SONALI FARMS. THE TOTAL OF THESE AMOUNTS ALSO COMES TO USD 54,599. IT WAS SUBMITTED BY THE APPELLANT BEFORE THE ASSESSING OFFICER THAT THE REM ITTANCES ARE FROM DEUTSCHE BANK, SINGAPORE, BELONGING TO SH. SURESH NANDA, FATHER OF THE APPELLANT, TO WHICH THE APPELLANT IS A CO-SIGNATORY AND SIGNS ON THE CHEQUE S IN THE ABSENCE OF HIS FATHER. THE ASSESSING OFFICER DISBEL IEVED THE SUBMISSIONS OF THE APPELLANT ASSUMING THAT THE APPE LLANT HELD BANK ACCOUNTS ABROAD. THE ONLY REASON FOR THE ASSESSING OFFICER TO CONCLUDE SO WAS PRESENCE OF AN AMEX 9 CARD ISSUED IN THE UK. SIGNIFICANTLY, NO EVIDENCE O F ANY SEPARATE BANK ACCOUNT BELONGING TO THE APPELLANT WA S FOUND DURING THE COURSE OF SEARCH. IT IS NOT DISPUTABLE T HAT THE AMOUNTS OF PAYMENTS TOTALING USD 54,599 MADE TO CRA IG ROBERTS ASSOCIATES INC., WHICH HAVE BEEN ADDED IN T HE CASE OF THE APPELLANT AS WELL AS IN THE CASE OF HIS FATH ER SH. SURESH NANDA, WERE THE SAME AND RELATED TO VARIOUS INVOICES TOWARDS CONSULTANCY CHARGES AND PROFESSION AL SERVICES WITH REGARD TO SONALI FARMS. THIS FACT EME RGES FROM THE TWO ASSESSMENT ORDERS PASSED BY THE SAME ASSESSING OFFICER IN THE CASE OF THE APPELLANT AND HIS FATHER SH SURESH NANDA. IT HAS BEEN SUBMITTED THAT THESE A MOUNTS WERE PAID OUT OF THE SINGAPORE ACCOUNT OF SH SURESH NANDA AND ALSO TAXED IN HIS HANDS. THERE IS NO EVIDENCE T HAT THERE IS SOME OTHER SOURCE FOR THE PAYMENT OF THESE AMOUN TS. THUS, THE SOURCE OF INVESTMENT IS CLEAR AND UNDISPU TED. IF THE SOURCE IS NOT ESTABLISHED, THE AMOUNT CAN BE BR OUGHT TO TAXATION U/S 69C AS UNEXPLAINED EXPENDITURE. BUT AS THE SOURCE OF PAYMENT IS CLEAR FROM THE ASSESSMENT ORDE R IN THE CASE OF THE APPELLANTS FATHER SH SURESH NANDA, AND ALSO TAXED IN HIS HANDS, IT CANNOT BE AGAIN BROUGHT TO T AXATION IN THE HANDS OF THE APPELLANT. THE AMOUNT COULD HAVE B EEN TAXED U/S 56 AS RESIDUAL INCOME OR GIFT. UNDER THIS SECTION, ANY SUM OF MONEY RECEIVED WITHOUT CONSIDERATION IS CHARGEABLE TO TAX UNDER CLAUSE (V) OR CLAUSE (VI) A ND CLAUSE (VII) TO SECTION 56(2). HOWEVER, RECEIPT OF MONEY F ROM RELATIVES IS EXEMPTED UNDER THESE PROVISIONS, AND T HESE PROVISIONS ARE APPLICABLE ONLY FROM A/Y 2005-06. SE CTION 56(1) CAN ALSO BE INVOKED PROVIDED THE AMOUNT IS NO T TAXED IN SOME OTHER HAND. IN THE PRESENT CASE, THE SOURCE OF THE AMOUNTS RECEIVED STANDS ESTABLISHED. AS MENTIONED A BOVE, THE SOURCE OF PAYMENTS IS FROM THE SINGAPORE ACCOUN T OF SH. SURESH NANDA, FATHER OF THE APPELLANT, WITH DEUTSCH E BANK. IF THESE AMOUNTS ARE FOUND TO BE TAXABLE, AND ALSO TAXED, IN THE HANDS OF THE SH. SURESH NANDA, THE QUESTION OF TAXING THE SAME AMOUNTS IN THE HANDS OF THE APPELLANT WOUL D NOT ARISE. THE SAME AMOUNT CANNOT BE TAXED IN THE HANDS OF THE APPELLANT SH. SANJEEV NANDA. NO DOUBT, CONTRARY TO THE STAND OF THE REVENUE, THE HONBLE ITAT HAS HELD SH. SURESH NANDA TO BE A NON-RESIDENT VIDE ITS ORDER DATED 24. 7.2012 IN ITA NOS. 1428, 1429 AND 1430/DEL/2012. EVEN IF TAXA BILITY OF THIS AMOUNT IS NOT FINALLY SUSTAINED IN THE HAND S OF SH SURESH NANDA, FATHER OF THE APPELLANT, IT CANNOT BE TAXED IN 10 THE HANDS OF THE APPELLANT - EITHER AS UNEXPLAINED INVESTMENT, AS ITS SOURCE STANDS CLEARLY ESTABLISHE D; OR AS GIFT, BEING FROM A RELATIVE AND NO LAW EXISTING DUR ING THE PERIOD TO TAX IT AS SUCH. THE AMOUNT COULD HAVE BE EN TAXED IN THE HANDS OF SH SANJEEV NANDA, THE APPELLANT, IF IT COULD BE TREATED AS A BUSINESS RECEIPT OR SALARY OR PERQU ISITE IN HIS HANDS. THIS NOT BEING THE CASE, THE QUESTION OF TAXABILITY OF THIS AMOUNT IN THE HANDS OF THE APPELLANTS DOES NOT ARISE. THE GROUND RAISED BY THE APPELLANT IS ALLOWED AND T HE ADDITION IS DELETED. APPELLANT GETS RELIEF OF RS.23 ,57,038/-. 12. IN VIEW OF ABOVE, WHEN WE PROCEED TO ANALYZE TH E FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, WE NOTE THAT IN THE CASE OF AS SESSEES FATHER SHRI SURESH NANDA, AN ADDITION OF RS.7,44,07,498 HAS BEEN MADE IN RESPECT OF VARIOUS PAYMENTS TO VARIOUS PARTIES WITH REGARD TO VARIOUS CONSULTANCY AND OTHER SERVICES IN RESPECT OF SONALI FARMS. IN THE CASE OF SHRI SURESH NANDA FOR ASSESSMENT YEAR 2006-07, THE ASSESSING OFFICER HAS GIVEN A CHART AT PAGES 34 & 35 WHEREIN AT PAGE 35, LAST FIVE ENTRIES INCLUDE PA YMENTS MADE BETWEEN 20.4.2005 TO 16.7.2005 TO CRAIG ROBERTS ASSOCIATES INC. AGAINST VARIOUS INVOICES TOWARDS CONSULTATION CHARGES AND PROFESSIONAL SERVI CES PERTAINING TO SONALI FARMS TOTAL OF WHICH COMES TO USD 54599. THESE FAC TS HAVE NOT BEEN DISPUTED OR CONTROVERTED BY THE ASSESSING OFFICER. 13. IT IS ALSO AMPLY CLEAR THAT THE REMITTANCES ARE FROM DEUTSCHE BANK SINGAPORE BELONGING TO THE FATHER OF THE ASSESSEE S HRI SURESH NANDA TO WHICH RESPONDENT IS A CO-SIGNATORY AND AUTHORIZED TO SIGN CHEQUES IN THE ABSENCE OF HIS FATHER. THE ASSESSING OFFICER WAS INCORRECT AND WR ONG IN HOLDING THAT THE ASSESSEE HELD AND OPERATED SAID BANK ACCOUNT ABROAD WHEREAS HE COULD NOT BRING 11 ANY MATERIAL OR EVIDENCE TO ESTABLISH THAT THE ASSE SSEE SOLELY OR INDIVIDUALLY HELD AND OPERATED SAID BANK ACCOUNT ABROAD. THE ASSESSI NG OFFICER HAS NOT BROUGHT OUT ANY OTHER EVIDENCE TO SUPPORT THAT THERE WAS AN Y OTHER SOURCE OF PAYMENT BY THE ASSESSEE AND ON THE OTHER HAND, THE SOURCE AND PURPOSE OF INVESTMENT IS CLEAR AND UNDISPUTED THAT THE AMOUNTS PAID TO M/S CRAIG R OBERTS WERE FROM BANK ACCOUNT OF SHRI SURESH NANDA AND ALSO TAXED IN HIS HAND, THEN IT CANNOT BE AGAIN BROUGHT TO TAX IN THE HANDS OF PRESENT ASSESSEE MER ELY BECAUSE HE ISSUED CHEQUES ON BEHALF OF HIS FATHER AS CO-SIGNATORY FROM THE FU NDS BELONGING TO HIS FATHER. LD. CIT(A) WAS RIGHT IN HOLDING THAT IF THE SOURCE OF EXPENDITURE OR INVESTMENT IS NOT ESTABLISHED, THEN THE AMOUNT CAN BE BROUGHT TO TAX U/S 69C OF THE ACT AS UNEXPLAINED EXPENDITURE BUT AS THE SOURCE IS ESTABL ISHED, THEN NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE. THE CIT(A) WAS VERY CAUTIOUS ABOUT APPLICATION OF OTHER TAXING PROVISIONS AS HE ALSO C ONSIDERED THE APPLICABILITY OF SECTION 56 OF THE ACT AND HELD THAT THE AMOUNT COUL D HAVE BEEN TAXED U/S 56 OF THE ACT AS RESIDUAL INCOME OR GIFT, HOWEVER, THE RE CEIPT OF MONEY FROM RELATIVES IS EXEMPT UNDER THESE PROVISIONS WHICH ARE ONLY APP LICABLE FROM ASSESSMENT YEAR 2005-06 ONWARDS. 14. WE ARE ALSO IN AGREEMENT WITH THE CONCLUSION OF THE LD. CIT(A) THAT EVEN IF TAXABILITY OF THIS AMOUNT IS NOT FINALLY SUSTAIN ED IN THE HANDS OF SHRI SURESH NANDA, IT CANNOT BE TAXED IN THE HANDS OF PRESENT A SSESSEE I.E. SHRI SANJEEV NANDA EITHER AS UNEXPLAINED INVESTMENT AS ITS SOURC E IS CLEARLY ESTABLISHED AND 12 THE SAME CANNOT BE TAXED AS GIFT BEING FROM RELATIV E. THERE WAS ONLY SITUATION WHEN THE AMOUNT IN QUESTION COULD BE TAXED IN THE H ANDS OF THE ASSESSEE IF IT COULD BE TREATED AS SALARY OR BUSINESS RECEIPTS OR PERQUISITES IN THE HANDS OF ASSESSEE AND THIS IS NOT BEING THE CASE OF THE ASSE SSING OFFICER. FINALLY, ON LOGICAL ANALYSIS OF THE CONCLUSION OF THE ASSESSING OFFICER, WE REACH TO A FORTIFIED VIEW THAT THE CIT(A) WAS RIGHT IN DELETIN G THE ADDITION WHICH WAS MADE WITHOUT ANY BASIS AND WE ARE UNABLE TO SEE ANY VALI D REASON TO INTERFERE WITH THE FIRST APPELLATE ORDER OF THE LD. CIT(A) AND THUS, W E UPHOLD THE SAME. ACCORDINGLY, SOLE GROUND OF THE REVENUE FOR ASSESSM ENT YEAR 2006-07 IS ALSO DISMISSED. 15. IN THE RESULT, ALL THREE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 04.12.2015. SD/- SD/- (L.P. SAHU) (C.M. GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 04TH DECEMBER, 2015 GS COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASSTT. REGISTRAR