Jag Bhushan Tanwar, Faridabad V. ITO, Ward- 1(3), Faridabad

ITA 6733/DEL/2019

AI Insights

The case involves an appeal by Jag Bhushan Tanwar against the order of the Commissioner of Income-tax (Appeals), Faridabad, which partly sustained the addition of Rs. 12,55,000/- to the assessee's income for the assessment year 2010-11. The addition was initially made by the Assessing Officer under sections 143(3) and 147 of the Income-tax Act, 1961, following a reassessment notice. The CIT(A) deleted a portion of the addition but sustained the remainder. The Tribunal, after considering the facts and the independent income sources of the assessee's wife and father, decided in favor of the assessee, leading to the deletion of the remaining addition.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 108660 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 04-01-2023
• Assessment Year: 2010-2011
• Appeal Filed On: 12-08-2019
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift; Source of fund
• Section: 147; 148; 143(3)

Judgement Text

1 ITA No. 6733/Del/2019 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC”: NEW DELHI BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER ITA No. _6733/DEL/2019 [Assessment Year: 2010-11 Jag Bhushan Tanwar, Flat-105, GH-1, Divyalok Residency, Sector-21D, Faridabad. PAN- ABWPT8428n Vs Income Tax Officer, Ward-1(3), Faridabad. APPELLANT RESPONDENT Assessee represented by Sh. Sanjay Rawat, Adv. (Proxy counsel) Department represented by Sh. S.L. Anuragi, Sr. DR Date of hearing 05.01.2023 Date of pronouncement 11.01.2023 O R D E R PER KUL BHARAT, JM: This appeal, by the assessee, is directed against the order of the learned Commissioner of Income-tax (Appeals), Faridabad, dated 31.05.2019, pertaining to the assessment year 2010-11. The assessee has raised following grounds of appeal: “1. That on the facts and in the circumstances of the case and in law, Ld CIT-A erred in partly sustaining the order passed by Ld AO u/s 143(3) /147 without appreciating that the Assessment Order is bad in law, void-ab-initio and is liable to quashed. 2. That on the facts and in the circumstances of the case and in law, Ld 2 ITA No. 6733/Del/2019 CIT-A erred in partly sustaining the order passed by Ld AO u/s 143(3) / 147 without appreciating the cash deposits are allowed partly from the proceeds of cash withdrawls is subjective and solely on the basis of whims and mercy of the Ld AO/ CIT(A). 3. That on the facts and in the circumstances of the case and in law, Ld CIT-A erred in partly sustaining the order passed by Ld AO, without appreciating that gifts received by spouse from her brother is genuine and such claim of gift inspite of furnishing an affidavit can't be washed away, 4. That on the facts and in the circumstances of the case and in law, Ld CIT-A erred in partly sustaining the order passed by Ld AO without appreciating that a small diary in her own land was run by the spouse of the assesse and deposits to the extent of? 2.00 Lac out of past / current savings from such diary are genuine. As the savings are too small to file to file the ITR. Further, the income from the diary is exempt from tax. 5. That the Appellant prays for the grant of permission to add, alter, delete, modify, any or all of the grounds of appeal at any time on or before or during the time of hearing before the Hon'ble ITAT”. 2. The facts giving rise to the present appeal are that in this case the assessment reopened u/s 147 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”). Notice u/s 148 of the Act dated 31.03.2017 was issued and served upon the assessee through speed post. In response to notice the assessee himself attended the proceedings and requested for adjournment. Thereafter, the case was adjourned from time to time. The reasons were supplied to the learned Authorized Representative of the assessee Shri D.D. Chawla, Advocate who filed his reply which is reproduced by the Assessing officer. Before the Assessing Officer the source of cash deposit, the bank account was stated out of past savings, sale 3 ITA No. 6733/Del/2019 consideration of jewellery of asessee’s wife and cash withdrawals from the bank account. However, the Assessing Officer did not accept the contention and made addition of Rs. 12,55,000/-. Aggrieved against this the assessee preferred appeal before the learned CIT(Appeals), who out of the addition of Rs. 12,55,000/- deleted the amount of Rs. 9,63,000/- and rest of the addition was sustained. Aggrieved against this, the assessee preferred the present appeal before this Tribunal. 3. At the time of hearing one Shri Sanjay Rawat, proxy counsel, attended the proceedings and sought adjournment. However, looking to the facts that various opportunities were given to the assessee and the matter is being adjourned on one pretext or the other, the request for adjournment was rejected and the appeal was taken up for hearing. 4. Learned DR submitted that the learned CIT(Appeals) has given substantial relief to the assessee. Therefore, there is no reason to disturb the finding of the learned CIT(Appeals), same may be affirmed. 5. I have heard learned DR and perused the material available on record. The learned CIT(Appeals) granted part relief by observing as under: “7. The facts of the case as well as material available on record have been gone through, it is noted from the perusal of the bank account that the appellant has made cash deposits in his bank account on various dates. There is merit in the submission of the appellant that part of the house hold 4 ITA No. 6733/Del/2019 expenses have been contributed by his father and wife from their respective sources of income. The AO has already allowed amount of Rs.1,15,000/- out of total withdrawals made by the appellant from his bank account for Rs.2,47,500/-. Keeping in view the facts of the case, further credit of Rs.50,000/- is allowed towards the source of cash deposits in the bank account out of such withdrawals. Further it is noted that the appellant has explained the cash gift of Rs. 1,50.000/- and Rs.1,00,000/- from Sh. Brij Pal Singh and Sh. Satbir Singh by furnishing satisfactorily documentary evidence. The same is hereby accepted as source of cash deposits to the extent of Rs.2,50,000/-. However, ongoing through the capital account of Sh. Ganesh Kumar, it is noted that no such cash gift of Rs.50,000/- has been reflected. Therefore, the submission of the appellant has not been found as substantiated. Similarly no satisfactory evidence in respect of cash gift of Rs..50,C00/- in respect of Sh. Harish Kumar have been furnished. Further no credit can be allowed in respect of Rs.2,00,G00/- out of past/ current savings of the appellant and his wife in the absence of any satisfactorily evidence and moreover none of them has been filing their ITRs in the past years. Even if it is assumed that they were having income below taxable limits the same would have been consumed in their house hold expenses. The appellant has explained the source of cash deposits of Rs.3,00,000/- from the sale of gold jewelry by Smt. Saroj Tanwar and therefore, the source of cash deposit to this extent has been found as explained. Further there is merit in the submission of the Ld. AR that the appellant has shown income of Rs.3,64,000/- during the year which has been deposited in the bank account on various dates. Therefore, the amount has been considered twice by the AO while making the addition as well as by taking it as a part of returned income. Keeping in view the overall facts and discussion as above, it is noted that the appellant had explained source of cash deposits of Rs. 9,63,000/-. In the circumstances the addition made by AO is deleted to the extent of Rs.9,63,000/- and the balance addition is hereby confirmed. Ground of appeal Nos. 4 & 5 of the appellant are partly allowed.” 6. From the above it is clear that the learned CIT(Appeals) did not give further relief in respect of sum of Rs. 2,00,000/- on account of non-furnishing of satisfactory evidence. However, looking to the facts and circumstances as stated by 5 ITA No. 6733/Del/2019 the assessee and the material placed before the authorities below, the authorities ought to have made necessary inquiry to verify the correctness of the claim. However, no inquiry was made. The Revenue has not rebutted the fact that wife and father of the assessee were having independent source of income. Therefore, the addition on the basis of no house-hold withdrawal is not justified. I, therefore, direct the Assessing Officer to delete the addition. Grounds raised by the assessee are allowed. 7. Appeal of the assessee stands allowed. Order pronounced in open court on 11 th January, 2023. Sd/- (KUL BHARAT) JUDICIAL MEMBER *MP* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI