ITO, Kanpur V. Smt. Lata Ben Shah, Kanpur

ITA 657/LKW/2010

• Counselvise Citation: 65723714 RSA 2010
• Duration Of Justice: 3 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-04-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 06-03-2014
• Assessment Year: 2001-2002
• Appeal Filed On: 04-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Gift; Corroborative evidences; Onus to prove
• Section: 143(3); 131; 68

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.657/LKW/2010 ASSESSMENT YEAR:2001 - 02 INCOME TAX OFFICER - 1(2), KANPUR. VS. SMT. LATA BEN SHAH, 51/31, BIRHANA ROAD, KANPUR. PAN:ATFPS9962D (APPELLANT) (RESPONDENT) O R D E R PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED ON BEHALF OF REVENUE AGAINST THE ORDER OF CIT(A) ON A SOLITARY GROUND WITH REGARD TO DELETION OF ADDITION OF RS.31,40,000/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CASH CREDIT INTRODUCED IN THE ACCOUNT OF ASSESSEES MINOR SON MASTER JINESH KUMAR SHAH. 2. THE BRIEF FACTS, BORNE OUT FROM THE RECORD WITH REGARD TO THE IMPUGNED CONTROVERSY, ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS NOTED THE DEPOSIT S OF RS.31,40,000/ - ON DIFFERENT DATES IN THE ACCOUNT OF MINOR SON OF THE ASSESSEE MASTER JINESH KUMAR SHAH. IN ORDER TO VERIFY THE NATURE OF DEPOSITS, THE ASSESSEE WAS ASKED TO EXPLAIN THE DEPOSIT INTRODUCED IN THE APPELLANT BY SHRI P. K. DEY, D.R. RESPONDENT BY SHRI RAKESH GARG, ADVOCATE DATE OF HEARING 06/03/2014 DATE OF PRONOUNCEMENT 1 1 / 0 4 / 2 0 1 4 2 ACCOUNT OF HER SON. IN RESPONSE THERETO , IT WAS STATED ON BEHALF OF THE ASSESSEE THAT THE SON OF THE ASSESSEE HAS RECEIVED GIFTS OF VARIOUS AMOUNTS FROM DIFFERENT PERSONS. IN ORDER TO PROVE THE GENUINENESS OF THE GIFT, THE ASSESSEE HAS FURNISHED THE DETAILS OF THE DONORS AND THE COPIES OF THE BANK ACCOUNTS, COPY OF RETURNS OF INCOME ETC. BESIDES CONFIRMATION WAS ALSO FILED. THE ASSESSING OFFICER HAS ASKED THE ASSESSEE TO PRODUCE THEM FOR EXAMINATION. THE ASSESSING OFFICER HAD ALSO ISSUED SUMMONS U/S 131 OF THE ACT TO THE DONORS BUT SOME SUMM ONS WERE RECEIVED UNSERVED AND THE ASSESSEE WAS AGAIN ASKED TO PRODUCE THEM FOR EXAMINATION. IN RESPONSE THERETO, THE ASSESSEE HAS WRITTEN A LETTER TO THE ASSESSING OFFICER STATING THEREIN THAT THE DONORS ARE STATIONED OUTSIDE KANPUR AND HAVE SHOWN THEIR INABILITY TO COME TO KANPUR ON REQUEST OF THE ASSESSEE AND HE ACCORDINGLY REQUESTED THE ASSESSING OFFICER TO ENFORCE THEIR PRESENCE AS PER LAW PROVIDED UNDER THE CPC AND INCOME TAX ACT BUT THEY WERE NOT SUMMONED AND ASSESSMENT WAS COMPLETED AND THE ENTIRE AMOUNT OF RS.31,30,000/ - WAS ADDED U/S 68 OF THE ACT IN THE HANDS OF THE ASSESSEE. 3. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) AND THE ASSESSEE HAS FURNISHED THE DETAILS OF THE DONORS, GIFT DEEDS, AFFIDAVITS OF SOME OF THE DONORS. THE CIT(A) FO RWARDED THE DOCUMENTS TO ASSESSING OFFICER FOR MAKING NECESSARY ENQUIRY AND VERIFICATION AS PER THE GUIDELINES LAID DOWN BY THE CIT(A) IN HIS LETTER. FOR THE SAKE OF REFERENCE, WE EXTRACT THE RELEVANT PORTION OF THE LETTER OF CIT(A) AS UNDER: 'IT IS SEEN THAT AN ADDITION OF RS.31,40,000/ - HAS BEEN MADE ON ACCOUNT OF UNEXPLAINED CASH CREDITS. THERE WERE GIFTS SHOWN TO HAVE BEEN RECEIVED FROM NIRMALA DEVI GARG RS.5 LAKH, LATE SHRI DAYA NAND SINGH RS.1,25,000/ - , SHRI RAKESH KUMAR GUPTA RS.4 LAKHS. AO HAS MAD E QUERIES REGARDING THE GIFT AND THE CASH CREDITS BY ISSUING NOTICE U/S 143(3) DATED 12.3.2004 IN THIS CONNECTION YOU ARE DIRECTED TO EXAMINE THE PERSONS MENTIONED IN YOUR NOTICE U/S 143(3) AND 143(2) 3 DATED 12.3.2004. FOR THIS PURPOSE THE APPELLANT MAY BE ASKED TO PRODUCE THESE PERSONS. IF THE APPELLANT MAKES A REQUEST THEN SUMMONS U/S 131(1) MAY BE ISSUED TO THESE PERSONS TO ASSIST HER IN DISCHARGING THE DUTIES CAST UPON HER. THE AO SHOULD EXAMINE THE CREDITWORTHINESS OF THESE PERSONS. THE AO SHOULD LOOK I NTO THE IMMEDIATE SOURCE FROM WHICH THE AMOUNT HAVE BEEN GIVEN BY THESE PERSONS. IN THE CASE OF DONORS THE AO MAY EXAMINE THE OCCASIONS IF ANY ON WHICH THE SAID GIFTS HAD BEEN GIVEN BY THE DONORS. THE AO SHOULD ALSO EXAMINE WHETHER THE DONORS HAVE BEEN GIF TS TO OTHER PERSONS IN PAST. THE DETAILS OF ANY GIFT RECEIVED BY THE DONEES OR THEIR FAMILY MEMBERS BY THE DONOR OF HER FAMILY MEMBERS MAY BE OBTAINED. IT SHOULD ALSO BE FOUND WHETHER THE DONOR AND THE DONEES WERE UNDER CONSTANT TOUCH WITH EACH OTHERS. WHE THER THERE WERE FREQUENTLY MEETING EACH OTHER ON SOCIAL OCCASIONS. THE AO SHOULD ALSO FIND OUT THE MANNER IN WHICH THE AMOUNT SO RECEIVED HAS BEEN UTILIZED BY THE DONE. THE ASSESSING OFFICER SHOULD ALSO FIND OUT THE OTHER INVESTMENT MADE BY THE DONE DURIN G THE YEAR UNDER CONSIDERATION. THE ASSESSING OFFICER SHOULD SUBMIT HIS REPORT BY 14/11/2005. 4. OUT OF TOTAL SEVEN PERSONS, THE ASSESSING OFFICER HAS VE RIFIED THE DETAILS OF BANK ACCOUNTS AND RETURN OF INCOME OF SHRI RAKESH KUMAR GUPTA WHO HAS MADE A G IFT OF RS.4 LAC TO THE SON OF THE ASSESSEE AND SUBMITTED THE REMAND REPORT. SUBSEQUENTLY, THE CIT(A) FURTHER WROTE A LETTER TO THE ASSESSING OFFICER ASKING THE ASSESSING OFFICER TO SUPPLY THE COPY OF THE STATEMENTS RECORDED BY THE INSPECTOR ALONG WITH THE SUPPORTING EVIDENCE. ACCORDINGLY, THE COMPLETE DETAILS WERE SUBMITTED TO THE CIT(A) AND THE CIT(A) HAS EXAMINED THE STATEMENT RECORDED BY THE INSPECTOR AND NOTICED THAT ALL THE FIVE DONORS HAVE ACCEPTED HAVING GIVEN MONEY TO THE SON OF THE ASSESSEE. IT I S ALSO NOTED THAT DURING THE COURSE OF EXECUTION OF COMMISSION ISSUED TO SHRI AMAR NATH TIWARI, INSPECTOR, WHO WENT TO DELHI, ALL THE DONORS HAVE ATTENDED THE OFFICE AND MADE THE STATEMENT BEFORE THE INSPECTOR AND INSPECTOR ALSO CARRIED ON NECESSARY ENQUIR IES. THE CIT(A) HAS ALSO EXAMINED THE CREDENTIALS OF EACH AND EVERY DONOR AND T HEIR STATEMENT RECORDED BY THE INSPECTOR IN WHICH THEY ALL HAVE ADMITTED 4 HAVING GIVEN THE GIFT IN QUESTION TO THE ASSESSEES SON. BESIDES PAN AND OTHER DETAILS WERE ALSO FURNISHED. HAVING CAREFULLY EXAMINED ALL THESE DETAILS, THE CIT(A) WAS CONVINCED WITH THE GENUINENESS OF THE GIFTS GIVEN TO THE SON OF THE ASSESSEE AND ACCORDINGLY DELETED THE ADDITION. THE RELEVANT OBSERVATION S OF THE CIT(A) ARE EXTRACTED HEREUNDER: 10. I HAVE CONSIDERED THE FACTS AND CIRCUMSTANCES OF THE CASE AND AS DETAILED ABOVE. IT CAN BEEN SEEN THAT THE AO; MADE THE ADDITION BECAUSE THE ALLEGED CREDITORS DID NOT RESPOND TO THE SUMMONS U/S 131 OF THE I.T. A CT ISSUED TO THEM FOR ATTENDING THE PROCEEDINGS. HOWEVER, IT CAN BE SEEN THAT THE APPELLANT HAS FURNISHED GIR NO./PANO OF THE CONCERNED PERSONS BEFORE THE AO, AS NOTED ABOVE AND NECESSARY CONFIRMATION BY WAY OF AFFIDAVIT ARE ALSO FILED BEFORE THE AO. FROM THE DETAILS OF PROCEEDINGS DURING THE REMAND REPORT, IT IS FURTHER SEEN THAT THE PERSONS HAVE ATTENDED THE INCOME TAX PROCEEDINGS IN DELHI BEFORE SHRI AMAR NATH TIWARI, ITI WHO HAS FURNISHED HIS REPORT WHICH HAS BEEN FORWARDED TO ITO - 1(3), KANPUR AND JTCIT , RANGE - 1 , KANPUR VIDE LETTER F.NO. JCIT/R - 1 /KNP/ REMAND REPORT/2007 - 08/1787 DATED 11.02.2008. THE SUMMARY OF THE REMAND REPORT AS REPRODUCED ABOVE IN PARA - 9 SHOWS THAT THE CREDITORS HAVE CONFIRMED THE TRANSACTION IN THE STATEMENT BEFORE THE INS PECTOR ALSO AND THEY ARE ASSESSED TO TAX. THE TRANSACTIONS HAVE BEEN CARRIED OUT THROUGH BANKING CHANNELS AND THEY ARE APPEARING IN THE BOOK OF BOTH THE TRANSACTING PARTIES. LOOKING A THE FACTS AND CIRCUMSTANCES OF THE CASE THAT: ( A ) ALL THE CREDITORS HAVE CONFIRMED THE TRANSACTIONS IN THE STATEMENT BEFORE ITI; ( B ) THEY ARE ASSESSED TO TAX AS PER PANO. AVAILABLE ON RECORD AND THEY HAVE ALSO FURNISHED DOCUMENT IN SUPPORT OF THEIR CREDITWORTHINESS; ( C ) THE TRANSACTION HAS BEEN ENTERED THROUGH BANKING CHANNELS AND FINA LLY THE ENQUIRIES CARRIED OUT BY THE DEPARTMENT DURING THE REMAND PROCEEDINGS CONFIRMED THE TRANSACTIONS OF CREDIT IN THE BOOKS OF THE APPELLANT. IN VIEW OF ABOVE, I FIND THAT THE APPELLANT HAS DISCHARGED HIS ONUS IN RELATION TO SECTION 68 OF THE I.T. ACT FOR THE CREDITS OF 5 RS.10,00,000/ - AND RS.21,40,000/ - AND ALSO AS PER THE DOCUMENTS AND CONFIRMATIONS AND INQUIRIES CONDUCTED BY THE DEPARTMENT, TH E TRANSACTIONS REMAIN VERIFIED AND EXPLAINED WITHIN THE MEANING OF SECTION 68 OF THE INCOME TAX ACT. 5. NOW THE REVENUE IS BEFORE US WITH THE SUBMISSION THAT CIT(A) HAS ACCEPTED THE GENUINENESS OF GIFTS WITHOUT VERIFYING THE DEFECTS WITH REGARD TO THE GE NUINENESS OF THE GIFTS POINTED OUT BY THE ASSESSING OFFICER. BESIDES HE PLACED RELIANCE UPON THE ASSESSMENT ORDER. 6. THE LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, BESIDES PLACING HEAVY RELIANCE UPON THE ORDER OF CIT(A) HAS CONTENDED THAT DURING THE COURSE OF REMAND PROCEEDINGS, THE DONORS WERE EXAMINED BY THE INSPECTOR ALONG WITH THEIR FINANCIAL STATUS AND CREDENTIALS. NO DEFECT WAS POINTED OUT WITH REGARD TO THE GENUINENESS OF THE GIFTS DURING THE COURSE OF REMAND PROCEEDINGS BY THE ASSE SSING OFFICER. THEREFORE, THE ASSESSEE HAS DISCHARGED ITS PRIMARY ONUS WHICH LAY UPON IT TO PROVE THE GENUINENESS OF THE GIFT TRANSACTION. 7. HAVING GIVEN A THOUGHTFUL CONSIDERATION TO THE RIVAL SUBMISSIONS AND FROM A CAREFUL PERUSAL OF ORDERS OF THE LOW ER AUTHORITIES, WE FIND THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE DONORS WERE NOT PRODUCED FOR EXAMINATION AS THE ASSESSING OFFICER COULD NOT SUMMON THEM ON RECEIPT OF REQUEST FROM THE ASSESSEE DUE TO SHORTAGE OF TIME AS THE ASSESSMENT WAS GOING TO BE TIME BARRED AND THE REQUEST WAS MADE ON 22/03/2014. BUT DURING THE COURSE OF APPELLATE PROCEEDINGS, THE CIT(A) HAS CALLED THE REMAND REPORT FROM THE ASSESSING OFFICER AND DURING THE COURSE OF REMAND PROCEEDINGS ALL THE DONORS WERE EXAMINED BY THE I NSPECTOR TO WHOM THE COMMISSION WAS ISSUED IN WHICH THEY ADMITTED HAVING GIVEN THE GIFT TO THE SON OF THE ASSESSEE. NO DEFECT WAS POINTED OUT IN ENQUIRY CONDUCTED WITH REGARD TO THE GENUINENESS OF THE FINANCIAL 6 POSITION OF THE DONORS BY THE ASSESSING OFFI CER. THE CIT(A) HAS RELIED UPON THE STATEMENT OF THE DONORS WHILE DELETING THE ADDITION. SINCE THE ASSESSEE HAS DISCHARGED ITS ONUS TO PROVE THE GENUINENESS OF THE GIFT, THE CIT(A) HAS RIGHTLY DELETED THE ADDITION. SINCE WE FIND NO INFIRMITY IN THE ORDE R OF CIT(A), WE CONFIRM HIS ORDER. 8 . IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON 1 1 / 0 4 / 2 0 1 4 ) SD/. SD/. ( A. K. GARODIA ) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 1 1 / 0 4 / 2 0 1 4 *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR