ITO 25(2)(1), MUMBAI V. JAYABEN R. BURIA, MUMBAI

ITA 6819/MUM/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93013 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: J
• Next Hearing Date: 20-10-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 07-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PAWAN KU MAR BEERLA
• Keywords: Gift
• Section: 68

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES J MUMBAI . . , , BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI N.K.BILLAIYA, ACCOUNTANT MEMBER . / ITA NO. 6819/MUM/2012 / ASSESSMENT YEAR 2004-05 THE ITO 25(2)(1), C-11 BLDG., ROOM NO.107, P.K.BHAVAN, BKC, BANDRA(E), MUMBAI -51 / VS. SMT. JAYABEN R. BURIA, A/1/101, STAR GALAXY, L.T.ROAD, BORIVALI (WEST), MUMBAI 400092 ! ./ ./ PAN/GIR NO. : AAKPB 8800D ( !$ / APPELLANT ) .. ( %&!$ / RESPONDENT ) A PPELLANT BY SHRI PAWAN KUMAR BEERLA RESPONDENT BY : SHRI ANIL THAKUR ( ) * / DATE OF HEARING : 24/06/2015 ( ) * / DATE OF PRONOUNCEMENT : 24/06/2015 / O R D E R PER I.P.BANSAL, JM: THIS IS AN APPEAL FILED BY THE REVENUE AND IT IS DIRECTED AGAINST ORDER PASSED BY LD. CIT(A)-35 MUMBAI DATED 1/8/2012 FOR A SSESSMENT YEAR 2004- 05. GROUNDS OF APPEAL READ AS UNDER: 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CLT(A) ERRED IN DELETING THE ADDITION TO THE TUNE OF RS.15 ,65, 947/- OUT OF TOTAL ADDITION OF RS. 16,80,021/- U/S.68 OF THE ACT WITHOUT APPREC IATING THE FACT THAT THE ASSESSEE FAILED TO PROVIDE THE NECESSARY DOCUMENTAR Y EVIDENCE REGARDING CREDITS APPEARING IN THE BANK ACCOUNT SUCH AS GIFT, SALE OF SILVER UTENSILS AND OTHER RECEIPTS DURING THE COURSE OF ASSESSMENT PROCEEDING S OR EVEN DURING THE COURSE OF APPELLATE PROCEEDINGS. ' . / ITA NO. 6819/MUM/2012 / ASSESSMENT YEAR 2004-05 2 (II) 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CLT(A) ERRED IN DELETING THE ADDITION TO THE TUNE OF RS. 1 5,65,947/- OUT OF TOTAL ADDITION OF RS. 16,80,021/- U/S.68 OF THE ACT WITHOUT APPREC IATING THE FACT THAT THE SAID ACCOUNT WAS NOT DISCLOSED TO THE DEPARTMENT IN THE RETURN OF INCOME.' (III) 'THE APPELLANT PRAYS THAT THE ORDER OF THE C IT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE A.O BE RESTORED.' 2. THE ASSESSEE IS AN OLD LADY OF 75 YEARS. ALL TH E CREDITS IN HER ACCOUNT IN ABN AMRO BANK WERE ADDED TO THE INCOME OF THE ASSE SSEE. THE SUMMARY OF THE BANK ACCOUNT AS GIVEN IN THE ASSESSMENT ORDER IS AS FOLLOWS: OP.BALANCE 14239 BANK CHARGE 200 GIFT RECEIVED 130000 INV. C/F 1074175 C.Y INV RETURN 580000 C.Y.INVESTMENT 580000 SILVER UTENSIL SOLD 336000 CL BALANCE 31.03.05 39885 M.F GAIN SHORT TERM 11455 BANK INTEREST 2926 OTHER 619640 1694260 1694260 2.1 ACCORDING TO AO ASSESSEE COULD NOT EXPLAIN THE CREDIT ENTRIES, THEREFORE, AFTER EXCLUDING THE OPENING BALANCE HE ADDED A SUM OF RS.16,80,021/- TO THE INCOME OF THE ASSESSEE BEING UNEXPLAINED CASH CREDI T UNDER SECTION 68 OF THE INCOME TAX ACT, 1961(THE ACT). THE ADDITION WAS A GITATED IN AN APPEAL FILED BEFORE LD. CIT(A). 3. BEFORE LD. CIT(A) THE DETAILS OF CREDIT IN THE BANK ACCOUNT WERE SUBMITTED WHICH IS REPRODUCED IN PARA -4 OF THE CIT (A)S ORDER AS ANNEXURE A AND FROM THE SAID CHART ANOTHER CHART IS REPRODUCED GIVING SUMMARY OF THE BANK ACCOUNT FROM THE DEPOSIT, WHICH IS REPRODUCED BELOW: . / ITA NO. 6819/MUM/2012 / ASSESSMENT YEAR 2004-05 3 PARTICULARS RS. PARTICULARS RS. OPENING BALANCE 14239 PROCEEDS OF OPENING INVESTMENT 600,000 BANK CHARGES 200 GAIN ON ABOVE INVESTMENT 84,946 OTHERS 29,500 PROCEEDS OF CURRENT YEAR INVESTMENT 500,000 CURRENT INVESTMENT TO NEXT YEAR 1,145,000 GAIN ON ABOVE CURRENT YEAR INVESTMENT 4650 CURRENT YEAR INVESTMENT 500,000 BANK INTEREST 2,927 DIVIDEND 20,325 PROCEEDS FROM SALE OF SILVER UTENSILS 336,000 CASH GIFT DEPOSITED 105,000 GIFT RECEIVED 25,000 OTHER RECEIPTS 21,500 CLOSING BALANCE 39,887 TOTAL 1,714,587 TOTAL 1,714,587 TOTAL EXCLUDING OPENING/ CLOSING BALANCE 1,700,348 1,674,700 3.1 A CHART HAS ALSO BEEN PREPARED REGARDING TAXABL E INCOME EARNED BY THE ASSESSEE FROM MUTUAL FUNDS AND BANK ETC. AND THE SA ME CHART IS ALSO REPRODUCED BELOW: S.NO. NAME DATE OF INVESTMENT AMT. INVESTED DATE OF SALE AMOUNT REALIZED FROM SALE GAIN NATURE 1. ICICI MUTUAL FUND 4/1/2002 175,000 11/5/2003 197.357 22,357 LONG TERM 2. ICICI MUTUAL FUND 4/1/2002 50,000 11/7/2003 66,805 16,805 LONG TERM 3. ICICI MUTUAL FUND 4/1/2002 50,000 11/7/2003 58,496 8,496 LONG TERM 4. ICICI MUTUAL FUND 4/1/2002 275,000 11/14/2003 299,710 24,710 LONG TERM 5. ICICI MUTUAL FUND 11/18/2003 250,000 1/23/2004 252,997 2,997 SHORT TERM 6. ICICI MUTUAL FUND 11/18/2003 250,000 1/28/2004 251,653 1,653 SHORT TERM 7. JM MUTUAL FUND 4/1/2002 50,000 11/6/2003 62,577 12,577 LONG TERM TOTAL CAPITAL GAIN 1,100,000 1,189,595 89,595 BANK INTEREST 2,927 TOTAL TAXABLE INCOME 92,522 . / ITA NO. 6819/MUM/2012 / ASSESSMENT YEAR 2004-05 4 3.2 AFTER CONSIDERING ALL THESE SUBMISSIONS LD. CI T(A) RECORDED A FINDING THAT AO MADE ADDITION BY TAKING INTO CONSIDERATION ALL CREDIT ENTRIES IN THE BANK ACCOUNT WITHOUT LOOKING INTO THE NATURE OF THE CREDITS. MOST OF THE CREDITS ARE FROM REALIZATION OF INVESTMENT IN MUTUA L FUNDS INVESTED EITHER IN THE SAME YEAR OR IN EARLIER YEARS AND IN SUCH SITU ATION ONLY PROFIT FROM MUTUAL FUND COULD BE TAXED. REGARDING GIFTS AND SI LVER UTENSILS, THE ASSESSEE HAD FILED DECLARATION AND NOTHING CONTRARY HAD BEEN PROVED BY THE AO. CONSIDERING THE AMOUNT INVOLVED AND AGE OF THE ASSE SSEE, THE ADDITION WAS NOT JUSTIFIED. THE INVESTMENT IN MUTUAL FUNDS IS NOTHI NG BUT ROTATION OF FUNDS FROM ONE MUTUAL FUND TO ANOTHER AND SWITCH OF THE SAID FUNDS PERIODICALLY. THUS, HE HAS HELD THAT ONLY FOLLOWING INCOME CAN BE AS SESSED. 1. BANK INTEREST RS. 2,979/ - 2. PROFIT ON SALE OF MF RS. 89,595/ - 3. OTHER RECEIPTS RS. 21,500/- TOTAL RS.1,14,074/- 3.3 IN THIS MANNER LD. CIT(A) SUSTAINED THE ADDITI ON OF RS.1,14,074/- IN RESPECT OF ADDITION MADE BY THE AO AT RS.16,80,021/ - AND APPEAL HAS BEEN PARTLY ALLOWED BY HIM. THE REVENUE IS AGGRIEVED W ITH THE DELETED PART OF THE ADDITION AND HAS FILED AFOREMENTIONED GROUNDS. 4. LD. DR RELIED UPON THE ORDER PASSED BY AO AND ON THE OTHER HAND LD. AR OF THE ASSESSEE RELIED UPON THE ORDER PASSED BY LD . CIT(A). 5. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENT IONS HAVE CAREFULLY BEEN CONSIDERED. THE ENTIRE DEPOSIT IN THE BANK A CCOUNT WERE ADDED BY THE AO. THE ASSESSEE HAD SUBMITTED THE EXPLANATION WH ICH HAS BEEN CONSIDERED BY LD. CIT(A) AND HE HAS RECORDED A FINDING THAT AS SESSEE COULD EXPLAIN ALL THE DEPOSITS IN THE BANK ACCOUNT WHICH COULD NOT BE ADD ED UNDER SECTION 68 OF THE ACT. HE HAS HELD THAT ADDITION TO THE EXTENT OF R S.1,14,074/- WAS SUSTAINABLE . / ITA NO. 6819/MUM/2012 / ASSESSMENT YEAR 2004-05 5 WHICH HAS BEEN UPHELD BY HIM. LOOKING INTO THE EN TIRETY OF THE FACTS, WE ARE OF THE OPINION THAT LD. CIT(A) DID NOT COMMIT ANY E RROR IN GIVING IMPUGNED RELIEF TO THE ASSESSEE. WE DECLINE TO INTERFERE . ACCORDINGLY, THE APPEAL FILED BY THE REVENUE IS DISMISSED. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 24/06/2015 ( 0 1 2 24/06/2015 ( SD/- SD/- ( / N.K.BILLAIYA ) ( . . / I.P. BANSAL ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; 1 DATED 24/06/2015 / COPY OF THE ORDER FORWARDED TO : 1. !$ / THE APPELLANT 2. %&!$ / THE RESPONDENT. 3. 4) ( ) / THE CIT(A)- 4. 4) / CIT 5. 56 %)78 , * 78 , / DR, ITAT, MUMBAI 6. 9 / GUARD FILE. / BY ORDER, & 5) %) //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . . ./ VM , SR. PS