ACIT Cir 3[1] Dhule., Dhule V. Shri Bhavesh Madanlal Jain, Nandurbar

ITA 693/PUN/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 72073 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 04-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANN KAPTHUAMA
• Keywords: Unexplained cash credit; Capital asset; Gift; Business income; Additional evidence; Cost of acquisition; Corroborative evidences; Onus to prove
• Section: 68; 63

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 693/PN/2012 (ASSTT.YEAR : 2008-09) ACIT, CIRCLE-3(1), DHULE .. APPELLANT VS. BHAVESH MADANLAL JAIN, 1652, TILAK ROAD, NANDURBAR PAN NO. AFEPJ 0316D .. RESPONDENT CO.NO.24/PN/2013 (ARISING OUT OF ITA NO.693/PN/2012) (ASSESSMENT YEAR 2008-09) BHAVESH MADANLAL JAIN, 1652, TILAK ROAD, NANDURBAR PAN NO. AFEPJ 0316D .. CROSS OBJECTOR VS. ACIT, CIRCLE-3(1), DHULE .. APPELLANT IN THE APPEAL ASSESSEE BY : SHRI SUNIL GANOO REVENUE BY : MS. ANN KAPTHUAMA DATE OF HEARING : 19-06-2013 DATE OF PRONOUNCEMENT : -08-2013 ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE REVENUE AND THE CO FILED B Y THE ASSESSEE ARE DIRECTED AGAINST THE ORDER DATED 16-01-2012 OF THE CIT(A)-I, NASHIK RELATING TO ASSESSMENT YEAR 2008-09. FOR THE SAKE OF CONVENIENCE THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY TH IS COMMON ORDER. 2 ITA NO.693/PN/2012 (BY REVENUE) : 2. GROUND OF APPEAL NO.1 BY THE REVENUE READS AS UN DER : 1. THE LD.CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONSIDERING THE RECEIPT OF RS.36,69,900/- TO BE TAXED UNDER THE HEAD CAPITAL GAINS AS AGAINST SUCH RECEIPTS BEING TAXED UNDER TH E HEAD BUSINESS INCOME BEING ADVENTURE IN NATURE OF TRADE BY THE AS SESSING OFFICER. 2.1 FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSES SEE IS AN UNMARRIED INDIVIDUAL AND FILED HIS RETURN OF INCOME DECLARING TOTAL INCOME OF RS.9,41,637/- AND AGRICULTURAL INCOME OF RS.2,06,05 8/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOT ED FROM THE COMPUTATION OF INCOME THAT THE ASSESSEE HAS SOLD 25 NOS. OF OPEN PLOTS ADMEASURING 3901.95 SQ.MTRS IN SURVEY NOS. 197 + 19 8/1 AT VENUGOPAL NAGAR, NANDURBAR. THE TOTAL SALE CONSIDERATION REC EIVED WAS SHOWN AT RS.36,69,000/- . AFTER DEDUCTING THE COST OF SELLI NG EXPENDITURE OF RS.3,38,390/- NET CONSIDERATION WAS SHOWN AT RS.33, 30,610/-. AFTER CONSIDERING INDEXATION BY TREATING THE DATE OF ACQU ISITION BY THE ORIGINAL HOLDER, COST OF IMPROVEMENT AND DEDUCTION U/S.54F, THE NET LONG TERM CAPITAL GAIN WAS SHOWN AT RS.8,96,505/-. HOWEVER, DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE FILED A REVISED CALCULATION OF THIS CAPITAL GAIN AT RS.9,76,896/-. 2.2 FROM THE DETAILS FURNISHED BY THE ASSESSEE THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS RECEIVED 80 NOS. OF RES IDENTIAL PLOTS ADMEASURING 8300 SQ.MTRS IN SURVEY NOS. 197 + 198/1 AT NANDURBAR IN SUCCESSION OF LATE ROHINI BAI W/O. SHARAD CHANDRA V ADAKLAR WHO WAS RESIDING AT GOKUL ROAD, NANDURBAR. SHE EXPIRED ON 12-03-2004 AND BEFORE HER DEATH SHE HAD EXECUTED A WILL ON 01-03-2 004. THIS WILL WAS 3 DULY REGISTERED WITH SUB-REGISTRAR. IT WAS SUBMITT ED BY THE ASSESSEE THAT HE HAD SUCCEEDED THE ABOVE OPEN PLOTS FROM ROHINI B AI VADALKAR WHO WAS AN AGRICULTURIST AND TREATED THE SAID PLOTS AS HIS FIXED ASSETS. IT WAS ACCORDINGLY ARGUED THAT THE SAME ARE FIXED ASSETS A ND THE LONG TERM CAPITAL GAIN HAS BEEN COMPUTED AS PER PROVISIONS OF SECTION 45 R.W.S. 49(1) OF THE INCOME TAX ACT. 2.3 HOWEVER, THE ASSESSING OFFICER DID NOT ACCEPT T HE CONTENTS OF THE WILL ON THE FOLLOWING GROUNDS BY READING THE WILL B ETWEEN THE LINES : A) THE SO-CALLED WILL WAS EXECUTED ON 01.03.2004 A ND IMMEDIATELY AFTER 11 DAYS I.E. ON 12.03.2004 SHE DI ED. B) THE REASONS FOR MAKING WILL AS STATED TO BE OLD AGE, ILL HEALTH AND UNSOUND MIND. STILL THE SIGNATURE IS SO CLEAR THAT ONLY PERSON WHO IS WITH A SOUND HEALTH AND SOUND MIND CA N SIGN. C) THE TESTATOR IS HAVING TWO QUALIFIED MARRIED SO NS TO WHOM NOMINAL MOVABLE ASSETS HAVE BEEN GIVEN. D) THE ASSESSEE WHOSE AGE IS ONLY 21 YEARS AND WHO IS NEITHER RELATED TO HER NOR EVEN BELONGS TO HER COMMUNITY HA S BEEN GIVEN 80 PLOTS. E) NO REASONS ARE MENTIONED IN THE SO CALLED WILL FOR BESTOWING 80 PLOTS TO THE ASSESSEE AND FOR WHICH ACT FOR THE ASSESSEE IT IS HIS RETURN. F) IN THE WILL THE TESTATOR MENTIONS, 'SHE WAS A L ECTURER' WHEREAS THE ASSESSEE IN HIS SUBMISSION STATES THAT 'SHE WAS AN AGRICULTURIST.' 2.4 IN VIEW OF THE ABOVE THE AO QUESTIONED THE AUTH ENTICITY OF THE WILL AND TREATED THE WILL AS A FAKE WILL ON THE ABOVE GR OUNDS AND TREATED THE TRANSACTION AS THAT OF BENAMI TRANSACTION. THE AO A CCORDINGLY TREATED THE COST OF ACQUISITION AS NIL. THE AO NOTED THAT THE ASSESSEE AND HIS FATHER BOTH ARE REAL ESTATE DEALERS AND THE ASSESSEE HAS O BTAINED THE PLOTS BY WAY 4 OF A FAKE WILL AND NOW SHOWING THE SURPLUS AS CAPIT AL GAIN BY AVAILING OF BENEFITS OF INDEXATION, DEDUCTION/S.54F ETC. TO EVA DE TAXES. 2.5 RELYING ON THE DECISION OF HONBLE SUPREME COUR T IN THE CASE OF G. VENKAT SWAMI NAIDU & CO. VS. CIT (1959) 35 ITR 594 (SC) AND THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE O F SMT. BHANUMATI VS. CIT (1979) 119 ITR 69 (BOM.) THE AO TREATED THE TRANSACTION AS ADVENTURE IN THE NATURE OF TRADE AND CONSIDERED T HE SALE CONSIDERATION OF RS.36,69,000/- AS BUSINESS INCOME. THE AO ALSO REJECTED THE CLAIM OF SELLING EXPENDITURE OF RS.3,38,390/- IN ABSENCE OF ANY EVIDENCE FILED BEFORE HIM. 3. BEFORE THE CIT(A) IT WAS SUBMITTED THAT THERE IS NO HARD AND FAST RULE OF HEALTH THAT THE OLD AGE IN EVERY CASE SHOWS SHAKE OF HAND. FUTHER, THE ASSESSING OFFICER ADMITS THAT THE WILL IS MADE IN SOUND MIND AND HEALTH. ON THE CONTRARY THE SHAKING SIGNATURE IS CONSIDERED AS SUSPICIOUS BY THE COURTS. IT WAS SUBMITTED THAT THE AO IS PR ESUMING EVERY ASPECT TO THE EXTREME EXTENT AND IS BENT UPON NOT TO ACCEPT THE GENUINE TRANSFER BY THE LADY. THE TESTATOR HAS GIVEN TO HER YOUNGER SO N LAND IN NANDURBAR SHIVAR - S.NO. 50/2 - AREA 2.26 HECTARES WHICH ME ANS NEARLY 23,000 SQ. MTS. THIS CANNOT BE SAID MEAGRE. IT WAS ARGUED TH AT THE ELDEST SON IS ALSO GIVEN ENTIRE LOT OF SHARES AND JOINT ACCOUNT IN BAN KS. THEREFORE THE AOS CONTENTION IS NOT CORRECT. IT WAS ARGUED THAT DISP OSAL OF PROPERTY UNDER WILL DOES NOT REQUIRE ANY RELATIONSHIP OR OF THE SA ME COMMUNITY. THE NON- MENTION OF ANY REASON FOR BESTOWING THE LEGACY CANN OT LEAD TO PRESUME OR INFER THAT THE WILL IS FAKE. THE MENTION BY THE TE STATOR AS LECTURER AND THAT BY THE ASSESSEE AS AGRICULTURIST CANNOT LEAD TO CON CLUDE THAT THE WILL IS 5 FAKE. THE TESTATOR IN SECOND PARA CLEARLY MENTIONE D THAT SHE WAS DOING AGRICULTURE FOR 30 TO 35 YEARS. IT WAS ACCORDINGLY ARGUED THAT THE AO HAS TRIED TO TREAT THE WILL AS FAKE ON FLIMSY GROUNDS A ND NOT ON ANY COGENT EVIDENCE. 3.1 THE ASSESSEE SUBMITTED THAT THE REQUIREMENTS OF THE WILL AS PER SECTION 63 OF THE INDIAN SUCCESSION ACT ARE DULY FULFILLED IN RESPECT OF THE WILL UNDER CONSIDERATION. IN ADDITION WHILE REGIST ERING THE DEED, THE WITNESSES, THE COMPUTER OPERATOR AND THE SON OF THE TESTATOR HAVE GIVEN STATEMENT CONFIRMING THE EXECUTION OF THE WILL. CON SENT OF OTHER LEGAL HEIRS WAS ALSO FILED. IT WAS ACCORDINGLY ARGUED THAT THE WILL SHOULD BE HELD AS A VALID WILL PROPERLY EXECUTED AND NOT AS FAKE WILL A ND THE LEGACY / PLOTS RECEIVED BY THE ASSESSEE BE TREATED AS VALID. 3.2 AS REGARDS THE OBSERVATION OF THE AO TREATING THE T RANSACTION AS A BENAMI TRANSACTION IT WAS ARGUED THAT THERE IS NOTH ING ON RECORDS TO SUBSTANTIATE THE SAME EXCEPT PRESUMPTION. THERE IS NO EVIDENCE THAT THE PROPERTY IN QUESTION WAS FLOWN FROM THE ASSESSEE TO SMT. ROHINIBAI. ON THE CONTRARY THE SAID LADY HAS COME INTO POSSESSION OF THE LAND SINCE 20- 11-1973 (WHEN THE ASSESSEE WAS NOT EVEN BORNE) AND WAS A VALID PURCHASE DEED. VARIOUS DECISIONS WERE ALSO MADE TO SUBSTANTIATE THE CASE OF THE ASSESSEE 4. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE THE LD.CIT(A) CALLED FOR A REMAND REPORT FROM THE AO. AFTER CONS IDERING THE SAME AND ON THE BASIS OF ARGUMENTS ADVANCED BY THE ASSESSEE THE LD.CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE TREATING THE INCO ME AS LONG TERM CAPITAL 6 GAIN AND ALLOWED DEDUCTION U/S.54F AS CLAIMED BY TH E ASSESSEE BY HOLDING AS UNDER : 6. I HAVE CAREFULLY CONSIDERED THE FACTS AND CIRCU MSTANCES OF THE CASE AND THE RIVAL SUBMISSIONS. I FIND FROM THE RECORD THAT AO HAS DOUBTED THE IMPUGNED WILL AND THAT IS ONLY REASONS FOR DISALLO WING THE CLAIM OF LONG TERM CAPITAL GAIN AND TAX THE SAID PROFIT AS BUSINESS IN COME. IN THIS CONTEXT, IT IS NOTICED THAT THE APPELLANT HAS RECEIVED THE SAID IM PUGNED 80 PLOTS BY WILL EXECUTED BY SMT. ROHINIBAI SHARADCHANDRA VADALKAR O N 01-03-2004, AND THEREAFTER SHE DIED ON 12-03-2004. THIS DOCUMENT IS DULY REGISTERED ON 31-07- 2004. THE AO CONSIDERED THIS WILL AS FAKE AND FUR THER CONSIDERED IT AS BENAMI TRANSACTION AND HENCE, REJECTED THE CLAIM OF APPELLANT OF CAPITAL GAIN AND TAXED THE SAID PROFIT AS BUSINESS INCOME. 6.1 THE APPELLANT HAS FILED THE XEROX COPY OF WILL AS WELL AS A TRANSLATED COPY IN ENGLISH. ON PERUSAL OF THE WILL IT IS NOTI CED THAT : A) THE TESTATOR, SMT ROHINIBAI SHARADCHADRA VADALKA R, AGED 70 YEARS OLD, RESIDENCE OF GANPATI ROAD NANDURBAR, HAS EXECU TED WILL AS ON 1 ST MARCH 2004, AS SHE BECOME AGED AND DUE TO OLD AGE HER HEALTH DO NOT REMAIN GOOD. B) AS PER THE WILL, THE TESTATOR HAS GIVEN HER MOVA BLE AND IMMOVABLE PROPERTIES, TO HER SON SHRI.PURUSHOTTAM V ADALKAR, SOU.MADHURI P.VADALKAR, VIRAL MADANLAL JAIN, BHAVESHMADANLAL JA IN (THE; APPELLANT). THE WILL IS WITNESSED BY THE TWO WITNESSES. I FIND FROM THE RECORD THAT BY VIRTUE OF THE REGIST ERED WILL, THE APPELLANT GOT THE POSSESSION AND OWNER-SHIP OF THE SAID IMPUGNED PLOTS, SINCE THE YEAR 2004. THE APPELLANT CONTINUOUSLY HAS BEEN ENJOYING AND HOLDING THE RIGHTS IN THE SAID PLOTS, AND SELLING IT AS PER REG ISTERED SALE DEEDS. OUT OF THESE PLOTS, THE APPELLANT HAS SOLD SOME PLOTS DURING THE YEAR UNDER CONSIDERATION AND PROFIT EARNED THEREON, IS OFFERED FOR TAXATION UNDE R THE HEAD OF ' LONG TERM CAPITAL-GAIN', AS IT WAS HELD BY HIM FOR THE PERIOD MORE THAN 36 MONTHS. IN EARLIER YEARS ALSO THE APPELLANT HAS SOLD SOME PLOT S, RECEIVED UNDER THIS WILL, AND DULY SHOWN IN THE RETURN OF INCOME. I FIND FROM THE RECORD THAT THE A.O HAS NOT MADE OU T ANY CASE TO PROVE THAT THE SAID IMPUGNED WILL IS 'FAKE'. THERE IS N O EVIDENCE ON RECORD THAT EITHER ANY FAMILY MEMBERS OF THE TESTATOR SMT. ROHINIBAI S HARADCHANDRA VADALKAR, I.E. HER SONS, HUSBAND OR ANY OTHER RELATIVE HAS CHALLEN GED THE VALIDITY OF THE WILL IN ANY COURT OF LAW. ON THE CONTRARY, THEY CONFIRMED THE FACTS OF THE WILL. NO OTHER PERSON HAS CHALLENGED THE VALIDITY OF THE SAID WILL ANY COURT OF LAW. THE STATE AUTHORITIES, CONSIDERING THE WILL A S GENUINE, RECODED THE NAME OF THE APPELLANT AS SUCCESSOR-OWNER ON THE BASIS OF SA ID DOCUMENTS. THERE IS NO 7 DISPUTE IN THIS REGARDS, AS THE APPELLANT HAS SOLD THE VARIOUS PLOTS RECEIVED UNDER THE WILL. I FIND FROM RECORDS THAT THE A.O HAS NOT REBUTTED T HE VARIOUS CONTENTIONS OF THE APPELLANT. HE HAS NOT BROUGHT AN Y SUPPORTING EVIDENCE TO PROVE HIS CONTENTION THAT THE WILL IS FAKE. THE VAR IOUS REASONS GIVEN BY THE A.O ARE ON PRESUMPTION, ASSUMPTION AND SURMISES AND ARE NOT SUFFICIENT TO HOLD THAT THE SAID IMPUGNED WILL IS FAKE. NOT A SINGLE F ACT OF THE WILL HAS BEEN DISPROVED BY THE A.O., WHO MERELY, DISBELIEVED BUT NOT DISPROVED THE CONTENTS OF THE WILL AND ITS VALIDITY. I FURTHER FIND THAT THE VARIOUS REASONS GIVEN BY TH E A.O ARE NOT SUFFICIENT TO PROVE THAT THE SAID WILL IS FAKE. E VEN THOUGH, THE APPELLANT BELONGS TO THE JAIN COMMUNITY AND TESTATOR, IS A BRAHMIN, AND THERE' WAS A BUSINESS RELATION WITH FATHER OF THE APPELLANT IS ALSO NOT S UFFICIENT TO CONSIDER THE SAID WILL AS FAKE. 6.2 WHY DID THE OWNER OF THE PROPERTY EXECUTE A WIL L IN FAVOUR OF THE APPELLANT, IS A MATTER OF HER SWEET WILL. ONE MAY BY A WILL DEPRIVE HIS CLOSE FAMILY MEMBERS INCLUDING HIS/HER SONS AND DAUGHTERS . HE HAD RIGHT TO DO SO. IF A WILL IS FOUND TO BE VALID, NO FURTHER QUESTION AS TO WHY DID HE DO SO WOULD COMPLETELY OUT OF THE DOMAIN OF THE AO. A WILL MA Y BE EXECUTED EVEN FOR THE BENEFIT OF OTHERS INCLUDING ANIMALS. IN VIEW OF THE VARIOUS FACTORS, I FIND THERE IS NO SUFFICIENT REASONS GIVEN BY THE A.O, TO CONSIDER THE SAID WILL AS FAKE FURTHER, 1 DO NOT FIND ANY SUBSTANCE IN THE A.O'S REASONING MENTIO NED IN THE ASSESSMENT AS WELL AS IN REPORT, WHICH DO NOT PROVE BEYOND DOUBT, THAT THE IMPUGNED WILL IS A FAKE WILL. I FIND THAT A.O REJECTED CLAIM OF THE APPEL LANT ON MERE DOUBT AND SUSPICIOUS. IT WAS A SETTLE LAW THAT SUSPICIOUS, HOWEVER SO STRONG, CANNOT TAKE PLACE OF A LEGAL PROOF AS HELD BY HON'BLE SUPREME COURT I N THE CASE OF UMA CHARAN SING AND BOR'S 37 ITR 271. THUS, THE LEARNED A.O. IS NOT JUSTIFIED TO MAKE THE ADDITION MERELY ON SURMISES AND CONJECTURES. IN VIEW OF THE ABOVE, AND CONSIDERING THE VARIOUS FACTS, PRINCIPLES LAID DOWN S IN THE DECISIONS CITED SUPRA RELIED UPON BY THE APPELLANT, I FIND THERE IS NO SU FFICIENT REASONS TO HOLD THE SAID WILL AS FAKE. THEREFORE, ALL THE CONTENTIONS O F THE A.O IN RESPECT OF THE WILL FAIL. UNDER THE CIRCUMSTANCES, THE APPELLANT CERTA INLY DESERVES TO CLAIM THE LONG TERM CAPITAL GAIN, CONSIDERING THE HOLDING PER IOD AND OWNER-SHIP OF THE SAID PLOTS, WHICH WERE RECEIVED BY HIM BY VIRTUE OF THE ABOVE CITED WILL. FOR THE PURPOSE OF DETERMINING THE INDEXED COST OF ACQUISIT ION IN RESPECT OF AN ASSET ACQUIRED UNDER A GIFT OR WILL, THE COST INFLATION INDEX HAS TO BE WORKED OUT BY TAKING THE DATE OF ACQUISITION BY THE PREVIOUS OWNE R. 6.3 THE ISSUE INVOLVED IN THIS APPEAL IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF SPECIAL BENCH OF THE TR IBUNAL IN THE CASE OF DC1T VS. MANJULA SHAH (318 ITR 417) WHEREIN IT HAS BEEN HELD AS UNDER: 8 'WHEN THE COST OF ACQUISITION TO THE PREVIOUS YEAR AS ON THE DATE OF ACQUISITION OF THE CAPITAL ASSET BY HIM IS TO BE AD OPTED AS THE COST OF ACQUISITION TO THE ASSESSEE, EVEN FOR THE PURPOSE O F WORKING OUT THE INDEXED COST OF ACQUISITION AS PER THE MEANING GIVE N IN EXPLANATION TO SECTION 48, IT IS NOT LOGICAL TO ADOPT THE COST OF INFLATION INDEX FOR THE YEAR IN WHICH THE CAPITAL ASSET BECAME THE PROPERTY OF T HE ASSESSEE AND NOT, THAT FOR THE YEAR IN WHICH THE ASSET WAS ACQUIRED B Y THE PREVIOUS OWNER. FOR THE PURPOSE OF COMPUTING THE LONG TERM C APITAL GAINS ARISING FROM THE TRANSFER OF A CAPITAL ASSET WHICH HAD BECOME PROPERTY OF THE ASSESSEE UNDER THE GIFT, THE FIRST YEAR IN WHIC H THE CAPITAL ASSET WAS HELD BY THE ASSESSEE HAS TO BE DETERMINED TO WORK O UT THE INDEXED COST OF ACQUISITION AS ENVISAGED IN EXPLANATION (III) TO SECTION 48 AFTER TAKING INTO ACCOUNT THE PERIOD FOR WHICH THE SAID CAPITAL ASSET WAS HELD BY THE- PREVIOUS OWNER. IN THAT VIEW OF THE MATTER, TH E INDEXED COST OF ACQUISITION OF SUCH CAPITAL ASSET HAS TO BE COMPUTE D WITH REFERENCE TO THE YEAR IN WHICH THE PREVIOUS OWNER FIRST HELD THE ASSET.' FURTHER, HON'BLE JURISDICTIONAL BOMBAY HIGH COURT I N THE CASE OF C1T VS. MANJULA J. SHAH IN INCOME-TAX APPEAL NO. 3378 OF 2010 HELD THAT THE TRIBUNAL WAS JUSTIFIED IN HOLDING THAT WHILE CO MPUTING THE CAPITAL GAINS ARISING ON TRANSFER OF A CAPITAL ASSET ACQUIRED BY THE ASSESSEE UNDER A GIFT, THE INDEXED COST OF ACQUISITION HAS TO BE COM PUTED WITH REFERENCE TO THE YEAR IN WHICH THE PREVIOUS OWNER FIRST HELD THE ASSET AND NOT THE YEAR IN WHICH THE ASSESSEE BECAME THE OWNER OF THE ASSET. THIS VIEW IS FOLLOWED AND FORTIFIED BY A RECENT DEC ISION OF JURISDICTIONAL ITAT PUNE, DATED 30/12/2011, IN THE CASE OF ITO VS. SMT. NIMA GREAVE IRANI, PUNE [I.T.A. NO, 1322/PN/2010 : A.Y. 2004-05]. IN VIEW OF THE ABOVE AND AS THE IMPUGNED WILL IS NO T CONSIDERED AS FAKE, THE PROFIT/INCOME ON SALE OF SAID PLOTS IS REQUIRED TO BE TAXED UNDER THE HEAD OF 'LONG TERM CAPITAL GAIN', AS SHOW N BY THE APPELLANT. AS SUCH, FURTHER CLAIM OF DEDUCTION BY THE APPELLAN T UNDER THE PROVISION OF SECTION 54F, AS MADE IN THE RETURN IS ALSO ENTIT LED AND BE ALLOWED. IN VIEW OF THE FACTS AND FOR THE REASONS DISCUSS ED AS ABOVE, THE GROUNDS NOS. 3,4,5,6,7; 8; 15; 16 &17 ARE HEREBY ALLOWED. THE ADDITION MADE BY THE A.O IS, THEREFORE, DELETED, WITH A DIRECTION TO THE A.O TO TAX THE SAID INCOME AS LONG TERM CAPITAL GAIN AND ALLOW DEDUCTION U/S.54F AS CLAIMED BY THE APPELLANT. 4.1 AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REV ENUE IS IN APPAL BEFORE US. 9 5. THE LD. DEPARTMENTAL REPRESENTATIVE HEAVILY REL IED ON THE ORDER OF THE AO. HE SUBMITTED THAT ON THE BASIS OF THE DETA ILS FURNISHED BY THE ASSESSEE THE LD.CIT(A) CALLED FOR A REMAND REPORT F ROM THE AO WHO GAVE A DETAILED REPORT DATED 08-07-2011 DOUBTING THE GEN UINENESS OF THE WILL AND POINTING OUT THAT THE TRANSACTION WAS A COLOURA BLE DEVICE TO EVADE TAX. HE SUBMITTED THAT THE LADY HAD EARLIER APPLIED FOR DEMARCATION OF PLOTS BEFORE THE DISTRICT AUTHORITIES AND SRI MADANLAL JA IN, FATHER OF THE ASSESSEE, WAS THE ORGANIZER/DEVELOPER. THUS THE BU SINESS TRANSACTION WAS BEING GIVEN A COLOUR OF THE WILL AND THE AO HAD REQ UESTED THE LD.CIT(A) TO OBTAIN FURTHER CLARIFICATION IN THIS REGARD FROM THE LOCAL AUTHORITIES. HOWEVER, THE LD.CIT(A) CONSIDERING THE VARIOUS OBSE RVATIONS GIVEN BY THE AO HELD THE WILL AS GENUINE AND NOT CONSIDERED THE ISSUES RAISED BY THE AO IN THE ASSESSMENT ORDER/REMAND REPORT. HE ACCOR DINGLY SUBMITTED THAT THE ORDER OF THE LD.CIT(A) BE SET-ASIDE AND THE ORD ER OF THE AO BE RESTORED. 6. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HA ND HEAVILY RELIED ON THE ORDER OF THE CIT(A). REFERRING TO THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF RABINDRANATH MUKHERJEE AND ANOTHER VS. PANCHANAN BANERJEE (DEAD) AND OTHERS REPORTED IN 19 95 (082)-AIR-1684- SC (A COPY OF WHICH WAS FILED DURING THE COURSE OF HEARING) THE LD. COUNSEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO THE FOLLOWING : (1) DEPRIVATION OF THE NATURAL HEIRS BY THE TESTAT RIX. (2) . . . . . . . (3) . . . . . . . (4) . . . . . . . 10 (4) AS TO THE FIRST CIRCUMSTANCE, WE WOULD OBSERVE THAT THIS SHOULD NOT RAISE ANY SUSPICION, BECAUSE THE WHOLE IDEA BEHIND EXECUTION OF WILL IS TO INTERFERE WITH THE NORMAL LINE OF SUCCESSION. SO NATURAL HEIRS WOULD BE DEBARRED IN EVERY CASE OF WILL; OF COURSE, IT MAY B E THAT IN SOME CASES THEY ARE FULLY DEBARRED AND IN OTHERS ONLY PARTIALLY. AS IN THE PRESENT CASE, THE TWO EXECUTORS ARE SONS OF A HALF-BLOOD BROTHER OF SAROJ BALA, WHEREAS THE OBJECTORS DESCENDANTS OF A FULL BLOOD SISTER, THE DISINHERITA NCE OF LATTER COULD NOT HAVE BEEN TAKEN AS A SUSPICIOUS CIRCUMSTANCE, WHEN SOME OF HER DESCENDANTS ARE EVEN BENEFICIARIES UNDER THE WILL. 6.1 REFERRING TO THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF BHUSHAN KUMAR DEWAN VS. STATE AND OTHERS REPORTED I N 84 (2000) DLT 679 HE DREW THE ATTENTION OF THE BENCH TO THE FOLLO WING : 8. THE VERY NATURE AND PURPOSE OF EXECUTION OF TH E WILL IS TO MAKE KNOWN THE INTENTION OF THE TESTATOR REGARDING HIS P ROPERTY AND THE SAME HAS TO BE EXECUTED WHEN THE INTENTION IS TO OBSTRUCT TH E NATURAL NORMAL LINE OF SUCCESSION, FOR THE SONS AND DAUGHTERS WOULD NATURA LLY INHERIT ACCORDING TO THE HINDU SUCCESSION ACT ON THE DEATH OF THE MOTHER ACCORDING TO THE LINE OF SUCCESSION. WHEN A PERSON DESIRES TO INTERFERE WITH THE SAID NORMAL COURSE OF SUCCESSION THE NECESSITY OF EXECUTION OF A WILL ARI SES AND THEN SUCH A WILL IS EXECUTED. IT IS THUS NATURAL THAT IN THE CASE OF EX ECUTION OF THE WILL NATURAL HEIRS ARE AT TIMES DEBARRED AND DISINHERITED FROM I NHERITING THE PROPERTY LEFT BEHIND BY THE DECEASED. THEREFORE, THE FIRST CIRCUM STANCE, WHICH IS SOUGHT TO BE PROVED BY THE RESPONDENTS FOR HOLDING THAT THE W ILL WAS EXECUTED UNDER SUSPICIOUS CIRCUMSTANCES, THEREFORE, HAS NO MERIT A T ALL. IN THIS CONNECTION, REFERENCE MAY BE MADE TO THE DECISION OF THE SUPREM E COURT IN RABINDRA NATH MUKHERJEE V. PANCHANAN BANERJEE, REPORTED IN AIR 1995 SCC 459 WHEREIN IT WAS HELD THAT THE CIRCUMSTANCE OF DEPRIV ATION SHOULD NOT RAISE ANY SUSPICION BECAUSE THE WHOLE IDEA BEHIND EXECUTION O F THE WILL IS TO INTERFERE WITH THE NORMAL LINE OF SUCCESSION. IT WAS FURTHER HELD THAT NATURAL HEIRS WOULD BE DEBARRED IN EVERY CASE OF WILL WHEN, IT MAY BE T HAT IN SOME CASES THEY ARE FULLY DEBARRED AND IN OTHERS ONLY PARTIALLY. IT HAS COME ON EVIDENCE THAT THE TESTATRIX WAS STAYING WITH HER SON FOR A LONG PERIO D OF TIME I.E. AFTER ONE OF HER SONS LEFT THE SAID PREMISES AND SHE WAS BEING LOOKE D AFTER BY THE SAID SON AND HER GRANDSON. SO IN THE NATURAL COURSE SHE WAS GRAT EFUL TO THE FAMILY FOR LOOKING AFTER HER AT HER OLD AGE AND, THEREFORE, TH OUGHT IT FIT THAT HER PROPERTY, ON HER DEATH WOULD GO TO HER GRANDSON, WHO ALSO HAP PENED TO BE ONLY MALE CHILD IN THE FAMILY. THE SAID THOUGHT PROCESS IS FA IRLY NATURAL AND IT CANNOT BE VIEWED WITH ANY SUSPICION. 6.2 REFERRING TO THE COMMENTARY ON THE INDIAN SUCCE SSION ACT, 1925 BY SANJIVA ROW HE DREW THE ATTENTION OF THE BENCH TO T HE FOLLOWING : CLAUSE (B) CONTEMPLATES WILLS MADE OUTSIDE CALCUTT A, MADRAS AND BOMBAY, AND WILLS MADE IN RESPECT OF IMMOVABLE PROPERTY SIT UATED OUTSIDE THESE CITIES. THEREFORE, WILLS EXECUTED OUTSIDE THESE CITIES IN R ESPECT OF IMMOVABLE PROPERTIES SITUATE OUTSIDE THESE CITIES ARE NOT SUB JECT TO THE CONDITION OF OBTAINING PROBATE BEFORE GETTING ADVANTAGE OF ANY S UCH WILL. 11 6.3 HE SUBMITTED THAT WHEN NONE OF THE FAMILY MEMBE RS OF THE TESTATOR HAS CHALLENGED THE VALIDITY OF THE WILL IN ANY COUR T OF LAW AND WHEN IN TURN THEY HAD CONFIRMED THE FACTS OF THE WILL THE ASSESS ING OFFICER WAS NOT JUSTIFIED IN DOUBTING THE GENUINENESS OF THE WILL. THE VARIOUS REASONS GIVEN BY THE ASSESSING OFFICER DOUBTING THE GENUINE NESS OF THE WILL ARE BASED ON SURMISES, PRESUMPTIONS AND CONJECTURES. N OT A SINGLE FACT OF THE WILL HAS BEEN DISPROVED BY THE ASSESSING OFFICER. THEREFORE, THE VALIDITY OF THE WILL CANNOT BE DOUBTED. REFERRING TO PROVIS IONS OF SECTION 49(1)(II) HE SUBMITTED THAT THE COST OF ACQUISITION OF THE AS SETS SHALL BE DEEMED TO BE THE COST FOR WHICH THE PREVIOUS OWNER OF THE PRO PERTY HAD ACQUIRED IT AS INCREASED BY THE COST OF ANY IMPROVEMENT OF THE ASS ETS INCURRED OR BORNE BY THE PREVIOUS OWNER OR THE ASSESSEE AS THE CASE M AY BE. SINCE THE ASSESSEE IN THE INSTANT CASE HAS INHERITED THE LAND ED PROPERTY AS PER THE WILL, THEREFORE, THE PROVISIONS OF SECTION 49 (1)(I I) WOULD APPLY AND THE ASSESSEE IS ENTITLED TO GET THE DEDUCTION U/S.54F A LSO. HE ACCORDINGLY SUBMITTED THAT THE ORDER OF LD.CIT(A) BE UPHELD AND THE GROUND RAISED BY THE REVENUE BE DISMISSED. 7. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND THE ASSESSING O FFICER DOUBTED THE WILL ON THE GROUND THAT THE TESTATOR DIED WITHIN A PERIO D OF 11 DAYS AFTER THE EXECUTION OF THE WILL, THE SIGNATURE IS VERY CLEAR AND THEREFORE THE REASONS FOR MAKING THE WILL ON THE GROUND OF OLD AGE AND IL L-HEALTH IS DOUBTFUL, THE TESTATOR HAD NOT GIVEN ENOUGH PROPERTY TO HER 2 QUA LIFIED MARRIED SONS, THE ASSESSEE IS NOT RELATED TO HER OR BELONGS TO HER CO MMUNITY AND NO REASONS 12 HAVE BEEN MENTIONED FOR GIVING THE PLOTS THROUGH A WILL. FURTHER, THE ASSESSEE HAS MENTIONED THAT THE TESTATOR WAS AN AGR ICULTURIST WHEREAS AS PER THE WILL SHE WAS A LECTURER. WE FIND FROM THE VARIOUS DETAILS FURNISHED BY THE ASSESSEE BEFORE THE LD.CIT(A) THAT THE TESTA TOR AS PER THE WILL HAD GIVEN HER MOVABLE AND IMMOVABLE PROPERTIES TO HER S ON, DAUGHTER AND THE ASSESSEE. THE WILL IS WITNESSED BY 2 WITNESSES. T HE ASSESSEE GOT THE POSSESSION AND OWNERSHIP OF THE PLOTS IN QUESTION S INCE THE YEAR 2004 AND WAS CONTINUOUSLY ENJOYING AND HOLDING RIGHTS IN THE SAID PLOTS. NOTHING HAS BEEN BROUGHT ON RECORD BY THE ASSESSING OFFICER TO PROVE THAT THE SAID WILL IS FAKE OTHER THAN DOUBTING THE SAME ON PRESUM PTION. NONE OF THE FAMILY MEMBERS INCLUDING HER CHILDREN AND HER HUSBA ND HAS EVER CHALLENGED THE VALIDITY OF THE WILL IN ANY COURT OF LAW. ON THE CONTRARY THEY HAVE CONFIRMED THE FACTS OF THE WILL. 7.1 THE HONBLE SUPREME COURT IN THE CASE OF RABIND RANATH MUKHERJEE AND ANOTHER HAS HELD THAT THE CIRCUMSTANCES OF DEPR IVATION SHOULD NOT RAISE ANY SUSPICION BECAUSE THE WHOLE IDEA BEHIND E XECUTION OF A WILL IS TO INTERFERE WITH THE NORMAL LINE OF SUCCESSION. IT W AS FURTHER HELD THAT NATURAL HEIRS WOULD BE DEPRIVED IN EVERY CASE OF WI LL WHEN, IT MAY BE THAT IN SOME CASES THEY ARE DULLY DEPRIVED AND IN SOME P LACES ONLY PARTIAL. THIS VIEW OF HONBLE SUPREME COURT HAS BEEN FOLLOWE D BY THE HONBLE DELHI HIGH COURT IN THE CASE OF BHUSHAN KUMAR DEWAN (SUPRA). SINCE THE LD. DEPARTMENTAL REPRESENTATIVE COULD NOT CONTR OVERT THE DETAILED REASONINGS GIVEN BY THE LD.CIT(A) WHICH ARE ALREADY REPRODUCED AT PARA 4 OF THIS ORDER, THEREFORE, IN ABSENCE OF ANY CONTRAR Y MATERIAL BROUGHT TO OUR NOTICE AND FOLLOWING THE DECISION OF HONBLE SUPREM E COURT IN THE CASE OF RABINDRANATH MUKHERJEE AND ANOTHER AND THE DECISION OF THE HONBLE 13 DELHI HIGH COURT IN THE CASE OF BHUSHAN KUMAR DEWAN WE FIND NO INFIRMITY IN THE ORDER OF THE LD.CIT(A) ON THIS ISS UE. WE ACCORDINGLY UPHOLD THE ORDER OF THE CIT(A) ON THIS ISSUE. THE GROUND RAISED BY THE REVENUE IS ACCORDINGLY DISMISSED. 8. GROUND OF APPEAL NO.2 BY THE REVENUE READS AS UN DER : 2. THE LD.CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING THE ADDITION OF RS.1,00,000/- MADE BY THE ASSESSING OFF ICER AS INCOME FROM SAND BUSINESS. 8.1 FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSES SEE HAS SHOWN LOSS OF RS.4,89,790/- FROM SAND BUSINESS. THE ASSESSING OF FICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTED THAT THE DIS TRICT COLLECTOR VIDE ITS ORDER DATED 21-11-2006 HAS AWARDED CONTRACT OF EXEC UTION OF SAND FROM TARADE TAPINADI OF 14000 BRASS OF SAND ON PAYMENT O F ROYALTY OF RS.16,05,000/-. THIS ORDER WAS EFFECTIVE FOR THE P ERIOD FROM 18-10-2006 TO 31-07-2007. FROM THE DETAILS FURNISHED BY THE A SSESSEE THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS PREPARED SAND T RADING ACCOUNT WHERE AN OPENING BALANCE OF 7696 BRASS OF SAND HAS BEEN CONS IDERED. AS AGAINST ROYALTY OF RS.8,79,550/-, THE ASSESSEE HAS SHOWN SA LES OF SAND OF 345 BRASS FOR RS.3,39,760/- UPTO 31-07-2007AND HAS ARRI VED AT LOSS OF RS.4,89,790/-. IN ABSENCE OF ANY DOCUMENTARY EVID ENCE TO SUPPORT THAT HE HAS EXTRACTED SAND FROM THE RIVER WHICH IS MUCH LES S THAN THE ESTIMATED FIGURE AND CONSIDERING THE FACT THAT NO PRUDENT BUS INESSMAN AFTER KNOWING THE QUANTITY AND PERIOD SHALL ACT IN THE WAY THE AS SESSEE HAS ACTED AND FURTHER CONSIDERING THE FACT THAT COST OF CONSTRUCT ION MATERIAL PARTICULARLY SAND IS ON A VERY HIGH SIDE THE ASSESSING OFFICER R EJECTED THE TRADING ACCOUNT PREPARED BY THE ASSESSEE AND ESTIMATED THE INCOME AT RS.1 LAKH. 14 8.2 IN APPEAL THE LD.CIT(A) DELETED THE ADDITION ON THE GROUND THAT ASSESSING OFFICER HAS SUMMARILY REJECTED THE LOSS A ND HAS NOT CONSIDERED THE SUBMISSION OF THE ASSESSEE THAT THE PERIOD FROM 01-04-2007 TO 31-07- 2007 IS MONSOON PERIOD AND THE ASSESSEE HAD TO ENCO UNTER DIFFICULTIES IN EXTRACTING SAND. SINCE EXCAVATION OF SAND IS A SEA SONAL ACTIVITY THE ASSESSING OFFICER WAS NOT JUSTIFIED IN REJECTING TH E SAND TRADING ACCOUNT. HOWEVER, SINCE THE ASSESSEE DOES NOT MAINTAIN PROPE R RECORDS TO ESTABLISH THAT UPTO 31-07-2007 ONLY 345 BRASS OF SAND VALUED AT RS.3,89,760/- WAS EXTRACTED THE LD.CIT(A) DIRECTED THE ASSESSING OFFI CER TO ESTIMATE THIS VALUE AT RS. 5 LAKHS AS AGAINST THE SALE OF RS.3,89 ,760/- WHICH RESULTED IN REDUCING THE LOSS BY RS.1,10,240/-. HE ACCORDINGLY DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. 8.3 AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REV ENUE IS IN APPEAL BEFORE US. 9. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. THE LD. DEPA RTMENTAL REPRESENTATIVE COULD NOT CONTROVERT THE FINDINGS GI VEN BY THE LD.CIT(A) THAT PERIOD FROM 01-04-2007 TO 31-07-2007 IS MONSO ON PERIOD AND THE ASSESSEE HAD TO ENCOUNTER DIFFICULTIES IN EXTRACTIN G THE SAND WHICH IS A SEASONAL ACTIVITY. CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE AND IN VIEW OF THE REASONED ORDER PASSED BY THE LD.CIT(A) ON THIS ISSUE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) D IRECTING THE ASSESSING OFFICER TO ESTIMATE THE VALUE OF RS.5 LAKHS AS AGAI NST THE SALE OF 15 RS.3,89,760/- IN ABSENCE OF MAINTENANCE OF PROPER R ECORDS. IN OUR OPINION, THE ORDER OF THE LD.CIT(A) UNDER THE FACT S AND CIRCUMSTANCES IS A REASONED ONE AND REQUIRES NO INFERENCE FROM OUR SID E. ACCORDINGLY, THE SAME IS UPHELD AND THE GROUND RAISED BY THE REVENUE ON THIS ISSUE IS DISMISSED 10. GROUND OF APPEAL NO.3 BY THE REVENUE READS AS U NDER : 3. THE LD.CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING RS.63,000/- OUT OF ADDITION OF RS.1,12,375/- MADE U /S.68 BY THE ASSESSING OFFICER. 10.1 FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSE SSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTED THAT THE ASS ESSEE HAS SHOWN TO HAVE RECEIVED CASH GIFTS OF RS.1,12,375/- FROM 4 DI FFERENT PARTIES THE DETAILS OF WHICH ARE AS UNDER : 1. SAU. GULABEEN MADANLAL (MOTHER) RS.21,000/- IN C ASH 2. REKHA RAVINDRA JAIN (ELDER SISTER) RS.21,000/- IN CASH 3. VIRAL MADANLAL JAIN (ELDER SISTER) RS.21,000/- IN CASH 4. SMALL GIFTS ON BIRTHDAY, VARIOUS PERSONS RS.49,375/- IN CASH ------------------------- RS.1,12,375/- ------------------------- 10.2 ACCORDING TO THE ASSESSING OFFICER THE ASSESS EE HAS NOT FILED ANY CONFIRMATION OF ANY GIFT RECEIVED EXCEPT THE COMPUT ERISED ACCOUNT EXTRACT OF THE DONORS SIGNED BY THE ASSESSEE HIMSELF. NO G IFT DEED HAS BEEN EXECUTED. THEREFORE, ACCORDING TO HIM IT IS NOT CL EAR AS TO WHETHER THE GIFT IS SPONTANEOUS AND WITHOUT CONSIDERATION AND THE DO NOR WAS COMPETENT TO MAKE THE GIFT AND DULY ACCEPTED BY THE RECEIPIENT. ACCORDING TO THE ASSESSING OFFICER AS PER THE PROVISIONS OF SECTION 68 THE ONUS IS ON THE ASSESSEE TO PROVE THE CREDIT WORTHINESS OF THE DONO R AND THE GENUINENESS 16 OF THE TRANSACTION. IN THE INSTANT CASE THE ASSESS EE HAS NOT FILED ANY GIFT DEED AND THEREFORE MERE STATEMENT THAT THE ASSESSEE HAS RECEIVED THE ABOVE GIFT IS UNTENABLE. INVOKING THE PROVISIONS OF SECT ION 68 THE ASSESSING OFFICER MADE ADDITION OF RS.1,12,375/- U/S.68 OF TH E I.T. ACT. 10.3 IN APPEAL THE LD.CIT(A) DELETED THE ADDITION B Y OBSERVING AS UNDER: 8.3 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE C ASE AND THE RIVAL SUBMISSIONS. THE APPELLANT HAS FURNISHED THE NAMES, IDENTITY OF HIS FAMILY MEMBERS. FURTHER, IT IS OBSERVED THAT DURING THE C OURSE OF ASSESSMENT PROCEEDINGS APPELLANT HAS FILED CONFIRMATION OF CAS H GIFTS GIVEN BY HIS MOTHER AND TWO ELDER SISTERS AND BROUGHT TO THE NOTICE OF THE A.O THAT THEY ARE ASSESSED TO TAX AND THE GIFTS ARE CUSTOMARY GIFTS. HOWEVER, A.O REJECTED THE EXPLANATION OF THE APPELLANT AND TAXED THE SAID GIF TS AS UNEXPLAINED CREDITS U/S.68. HE HAS NOT EXAMINED TO ANY DONOR, THOUGH THEY ARE ASSESSED TO TAX. THE BONA FIDE EXPLANATION OF THE APPELLANT CANNOT B E LIGHTLY REJECTED. AS THE FAMILY DONORS ARE TAX PAYERS, IT CANNOT BE SAID THA T THEY DO NOT HAVE CREDITWORTHINESS TO MAKE SUCH AMOUNTS AS GIFTS. 8.4 THE APPELLANT HOWEVER HAS NOT FILED ANY SUPPORTING EVIDENCES IN RESPECT OF THE AMOUNT OF RS.49,375/- CLAIMED AS REC EIVED AS GIFTS ON BIRTHDAY. OUT OF THE TOTAL AMOUNT OF GIFT AMOUNTING TO RS.1,1 2,375/-, GIFTS RECEIVED FROM THE RELATIVES SMT. GULABBEN MADANLAL JAIN(MOTHER) RS.21,000/-, REKHA RAVINDRA JAIN (EIDER SISTER ) RS.21,000/- AND VIRAL MADANLAL JAIN (ELDER SISTER) RS.21,000/- AGGREGATING TO RS.63,000/- STANDS EXPLA INED AND THE BALANCE RECEIPT OF CASH CLAIMED AS GIFTS RECEIVED FROM VARIOUS PERS ONS AMOUNTING TO RS.49,375/- IS TREATED AS UNEXPLAINED. THE IMPUGNED ADDITION OF RS.1,12,375/- IS, THEREFORE, REDUCED TO RS.49,375/-. THE AO IS D IRECTED ACCORDINGLY. THIS GROUND OF APPEAL IS PARTLY ALLOWED. 10.4 AGGRIEVED WITH SUCH ORDER OF THE LD.CIT(A) THE REVENUE IS IN APPEAL BEFORE US. 11. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. FROM THE VAR IOUS DETAILS FURNISHED BY THE ASSESSEE WE FIND THE ASSESSEE HAS RECEIVED T HE GIFT FROM HIS MOTHER AND 2 ELDER SISTERS WHO ARE ASSESSED TO TAX. CONSI DERING THE TOTALITY OF THE FACTS OF THE CASE AND CONSIDERING THE SMALLNESS OF THE GIFTS RECEIVED FROM 17 MOTHER AND SISTERS WHO ARE ASSED TO TAX WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) IN ACCEPTING THE GENUINENESS OF THE GIFT AND THE CREDIT WORTHINESS OF THE DONORS. FURTHER, THE ASSESSING O FFICER HAS NOT EXAMINED ANY OF THE DONORS WHO ARE INCOME TAX ASSESSEES. IN VIEW OF THE DETAILED REASONING GIVEN BY THE LD.CIT(A) DELETING THE CASH GIFTS RECEIVED BY THE ASSESSEE FROM HIS MOTHER AND HIS 2 SISTERS WHO ARE INCOME TAX ASSESSEES WE FIND NO INFIRMITY IN HIS ORDER ON THIS ISSUE. A CCORDINGLY, THE SAME IS UPHELD AND THE GROUND RAISED BY THE REVENUE IS DISM ISSED. 12. GROUND OF APPEAL NO.4 BY THE REVENUE READS AS U NDER : 4. THE LD.CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING THE ADDITION OF RS.40,51,000/- MADE BY THE ASSESSING OF FICER U/S.68 OF THE I.T. ACT. 12.1 FACTS OF THE CASE, IN BRIEF ARE THAT ON GOING THROUGH THE BALANCE SHEET OF THE ASSESSEE THE ASSESSING OFFICER NOTED T HAT THE ASSESSEE HAS INTRODUCED CASH OF RS.40,51,000/- DURING THE YEAR I N THE NAME OF CERTAIN PERSONS AS ADVANCE AGAINST SALE OF PLOTS. THE ASSE SSEE HAS NOT COMPLETED THE TRANSACTION OF SALE WITH THESE PARTIES TILL THE END OF THE ACCOUNTING YEAR. ON GOING THROUGH THE LIST OF SUCH PERSONS THE AO NO TED THAT THE ASSESSEE HAS CLAIMED TO HAVE EXECUTED ONLY SALE DEED OF 15 P ERSONS AND IN RESPECT OF REMAINING 14 PARTIES, THE SALE DEED HAS NOT BEEN EXECUTED TILL THE DATE OF COMPLETION OF THE ASSESSMENT. THE ASSESSEE ALSO DI D NOT FURNISH ANY COPY OF AGREEMENT FOR SALE FROM THESE PERSONS. FURTHER, SINCE THE PERIOD BETWEEN ADVANCE AND REGISTRATION OF SALE DEED IS VE RY LONG, THEREFORE, THE AO WAS OF THE OPINION THAT ALL THE PERSONS CANNOT W AIT FOR SUCH A LONG PERIOD WITHOUT ANY DOCUMENTARY EVIDENCE IN SUPPORT OF PAYMENT OF CASH ADVANCE GIVEN TO THE ASSESSEE. DURING THE COURSE O F HEARING THE ASSESSEE 18 HAS FILED SALE DEED IN RESPECT OF SEVEN PEOPLE ONLY . ON EXAMINATION OF COPY OF SALE DEED IN RESPECT OF TRANSACTION WITH PE RSONS AT SERIAL NO. 4,5,6 AND 8 THE AO OBSERVED THAT THOUGH THE SALE DEED IS TYPED, BUT DATE AND AMOUNT OF ADVANCE HAS BEEN SPECIFICALLY IN THE ASSE SSEE'S HANDWRITING AND NOT TYPED. SOME TIME THERE IS OVERWRITING. THIS ITS ELF ACCORDING TO THE AO PROVES THAT THE ASSESSEE HAS INTRODUCED HIS OWN UNA CCOUNTED MONEY IN THE NAME OF THESE PERSONS UNDER THE HEAD 'ADVANCES AGAI NST PLOTS/LANDS' 12.2 THE AO FURTHER NOTED THAT BURDEN IS ON THE ASS ESSEE TO PROVE THE GENUINENESS OF THE CREDIT BY PRODUCING CONFIRMATION LETTERS FROM THE CREDITORS WITH COMPLETE NAME AND ADDRESSES OF THE P ARTIES WHO HAVE ADVANCED THE PLOTS. IN THE PRESENT CASE THE ASSESSE E HAS NOT FURNISHED THE SAME AND HAS MERELY GIVEN THE NAMES. THE PRINCIPLES CONTAINED IN SECTION 68 ARE SQUARELY APPLICABLE TO SUCH ADVANCES. THE AS SESSEE HAS FAILED TO PROVE THAT THE AMOUNT REPRESENTS ADVANCES AGAINST T HE PURCHASES OF PLOTS. HE THEREFORE WAS OF THE OPINION THAT THE AMOUNT IS NOTHING BUT ASSESSEE'S OWN MONEY ROUTED THROUGH THE HEAD ADVANCES RECEIVED IN CASH FOR THE PURCHASE OF PLOT. HE ACCORDINGLY ADDED AN AMOUNT O F RS.40,51,000/- TO THE TOTAL INCOME OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. 12.3 BEFORE THE CIT(A) THE ASSESSEE MADE ELABORATE SUBMISSIONS AND FILED THE SALE DEEDS EXECUTED, THE LETTERS OF CONFI RMATION AND THE COPIES OF CIVIL SUITS FILED BY THE PURCHASERS OF THE PLOT AS ADDITIONAL EVIDENCE WHICH THE LD.CIT(A) FORWARDED TO THE ASSESSING OFFI CER FOR HIS COMMENTS. AFTER OBTAINING THE REMAND REPORT FROM T HE ASSESSING OFFICER AND CONSIDERING THE SUBMISSIONS FILED BY THE ASSESS EE BEFORE HIM AND 19 CONSIDERING THE VARIOUS CASE DECISIONS THE LD.CIT(A ) DELETED THE ADDITION MADE BY THE ASSESSING OFFICER BY HOLDING AS UNDER : 9.4 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE C ASE, THE ASSESSMENT ORDER, THE REPORT OF THE AO, THE RIVAL SUBMISSIONS AND THE POSITION OF LAW ON THE SUBJECT. IN RESPECT OF THIS GROUND THE APPELLANT HAS SUBMITTED VARIOUS COPIES OF REGISTERED SALE DEED, WHICH WERE NOT REGISTERED AT THE TIME OF ASSESSMENT PROCEEDING. THE TOTAL DISALLOWANCE UNDER THE HEAD IS RS.40,51,000/-. IN THE REPORT DATED 08/07/2011, THE ID. AO AFTER EXAMINING THE ADDITIONAL EVIDENCE HAS ACCEPTED THE ADVANCE OF RS.7,10,000/- AS EXPLAI NED, LEAVING THE BALANCE OF RS.33,41,000/- TO DECIDE WHETHER OR THE MATERIAL AV AILABLE ON RECORD, IT CAN BE CONSIDERED AS EXPLAINED OR NOT. THE ACCOUNT OF MUKE SH BELDAR WHEREIN THE AO HAS POINTED OUT A DIFFERENCE OF RS.1,80,000/- STAND EXPLAINED BECAUSE THE SAID AMOUNT WAS RECEIVED BEFORE 01/04/2007 AND IS ENTERE D IN THE BOOKS OF ACCOUNT. THIS ACCOUNT IS, THEREFORE, RECONCILED AND NO DIFFERENCE IS FOUND. 9.5 THE APPELLANT HAS SHOWN OUTSTANDING LIABILITIE S OF RS.40,51,000/- ON ACCOUNT OF ADVANCES TOWARDS CUSTOMERS, AS PER ANN-A ENCLOSED WITH THE ASSESSMENT ORDER. DURING ASSESSMENT PROCEEDINGS, AP PELLANT HAS SUBMITTED THE DETAILS THEREOF AND EXPLAINED THE CREDITS AND A LSO SUBMITTED THE EVIDENCE IN THIS REGARD. APPELLANT HAS PRODUCED THE COPIES OF SALES DEEDS IN RESPECT OF 15 PERSONS, OUT OF 31 PERSONS, WHOSE TRANSACTION WERE REGISTERED AT THE TIME OF ASSESSMENT. SUBSEQUENTLY, THE BY THE APPELLANT, AND POINTED OUT THE REASONS FOR NON ACCEPTANCE THE CREDITED AMOUNTS. ON PERUSAL OF THE REASONS, IT IS NOTICED THAT MOST OF THE REASONS ARE LIKE : I) 'DEED FILED BUT HAND WRITTEN DATES AND AMOUNT RECEIPT NOT SIGNED BY PAYEE. NO REVENUE STAMP.' II) NO DEED, ONLY CONFIRMATION LETTER. NO P AN . III) NO DEED. ONLY CONFIRMATION LETTER. NO PAN. REC EIPT NOT SIGNED BY PAYEE. NO REVENUE STAMP. IV) NO DETAIL PAYMENT IN DEED .RECEIPT NOT S IGNED BY PAYEE. NO REVENUE STAMP, V) NO DEED ONLY CONFIRMATION LETTER RECEIPT NOT SIGNED BY PAYEE. NO REVENUE STAMP. FROM THE ABOVE REMARKS, IT CANNOT BE SAID THAT THE SAID CREDITED AMOUNTS ARE NOT EXPLAINED, WHEN PARTICULARLY, THE SALES DEEDS W ERE EFFECTED IN RESPECT OF CUSTOMERS, WHOSE AMOUNT HAVE BEEN RECEIVED IN ADVAN CE AGAINST THE SALE OF PLOTS AND COPIES OF WHICH ARE FILED ON RECORDS. SOM E SALES ARE STILL TO BE REGISTERED, AS REMAINING AMOUNT IS YET TO BE RECEIV ED BY THE APPELLANT. THUS, IT IS AMPLE CLEAR FROM THE ABOVE NARRATED FAC TS IN RESPECT OF THE SAID CREDITOR THAT THE APPELLANT HAS SUBMITTED THE INFOR MATION AND DOCUMENTARY EVIDENCE OF ACCEPTANCE SAID CREDITED AMOUNT, AND PR OVED BEYOND DOUBT THE 20 IDENTITY, GENUINENESS AND CREDIT WORTHINESS OF THE CREDITOR AND DISCHARGED HIS ONUS. IT IS FURTHER NOTICED THAT THE OPINION OF THE A.O REGARDI NG NOT ACCEPTING THE EXPLANATION OFFERED DURING THE COURSE OF ASSESSMENT PROCEEDING, AS NOT SATISFACTORY MUST BE BASED ON PROPER APPRECIATION O F THE FACTS AND THE MATERIAL AND OTHER SURROUNDING CIRCUMSTANCES AVAILA BLE ON RECORD. THE OPINION OF THE A.O MUST BE FORMED OBJECTIVELY BY AP PRECIATION MATERIAL AVAILABLE ON RECORD. IT IS SEEN FROM RECORD THAT AP PELLANT HAS DISCHARGED THE BURDEN TO PROVE THE CREDITS CITED SUPRA BY FILING S UFFICIENT EVIDENCE WHICH REQUIRES SUPPORTING THE CREDITS AND PROVES THE TRAN SACTIONS. IN VIEW OF THE ABOVE AND IN THE CIRCUMSTANCES OF TH E CASE, I AM OF THE CONSIDERED OPINION THAT THE APPELLANT HAS DULY DISC HARGED HIS BURDEN OF PROOF, WHICH A PERSON OF ORDINARY PRUDENCE COULD HAVE DISC HARGED. THUS, ONCE THE APPELLANT HAS DISCHARGED HIS BURDEN, THE ONUS GOT S HIFTED ON THE A.O TO PROVE THAT THE EVIDENCE FILED BY THE APPELLANT IS NOT COR RECT. THE LEARNED A.O. HAS NOT BROUGHT ANY EVIDENCE OR COGENT MATERIAL ON RECO RD WHICH MAY PROVE THAT THE A.O. HAD DISCHARGED HIS BURDEN IN THIS REG ARD. ONCE THE APPELLANT HAS ESTABLISHED THE IDENTITY OF THE CREDITOR AND THE BURDEN GOT SHIFTED TO THE A.O, ASSESSEE CANNOT BE C ALLED UPON TO PROVE THE WORTHINESS OF THE CREDITORS. THIS VIEW IS SUPPORTED BY THE DECISION OF JURISDICTIONAL TRIBUNAL OF PUNE IN ITA.NO.764/PUNE/19 8 5 IN THE CASE OF ITO VS. SURESH KALMADI [32 TTJ] (PUNE) 330(TM). THE HON'BLE JURISDICTIONAL BOMBAY HIGH COURT HAS HE LD IN THE CASE OF ORIENT TRADING CO. LTD V CIT [ 1963] 49 ITR 723 (BOM) THAT : 'WHEN THE ENTRY STAND IN THE NAME OF THIRD PARTY AND ASSESSEE ESTABLISHES THE ID ENTITY OF CREDITOR AND PRODUCE EVIDENCE SHOWING THAT ENTRY IS NOT FICTITIO US, INITIAL BURDEN LYING ON THE ASSESSEE STANDS DISCHARGED; THE BURDEN SHIFTS O N REVENUE TO SHOW THAT THE ENTRY REPRESENTED ASSESSEE'S SUPPRESSED INCOME -CAS H CREDITS, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, COULD NOT BE TREATED AS ASSESSEE'S UNDISCLOSED INCOME THE HON'BLE SUPREME COURT HAS HELD IN THE CASE OF CIT V K.S.KANNAN KUNHI [1973] 87 ITR 395 (SC) THAT: WHERE EXPLANATION OF THE ASSESSEE WAS NOT ABS URD AND IT WAS CAPABLE OF BEING EXAMINED, I T AUTHORITY ACT ED ARBITRARILY IN REJECTING THE EXPLANATION WITHOUT MAKING PROPER ENQUIRY. FURTHER, I NOTED THAT A. O. MERELY DISBELIEVED BUT NOT DISPROVED THE FACTS STATED BY THE APPELLANT IN RESPECT OF THE SAID CRED ITOR. IT IS NOT REJECTED BY THE A.O. MERELY DISBELIEVING THE REASONABLE EXPLANATION OF T HE APPELLANT, IS NOT SUFFICIENT FOR ADDITION. FURTHER, AN EXPLANATION PR IMA-FACIE REASONABLE CANNOT BE REJECTED ON ARBITRARY GROUNDS, OR ON MERE SUSPICIOUS OR ON IMAGINARY OR IRRELEVANT GROUND, AS HELD IN LAJWANTI SIAL V CIT [1956] 30 ITR 228 (NAG). IN VIEW OF THE ABOVE AND IN THE CIRCUMSTANCES OF CA SE, APPELLANT HAS FILED BONA FIDE EXPLANATION, WITH SUPPORTING DOCUMENTARY EVIDE NCE AND HENCE, THAT CANNOT BE REJECTED ON THE GROUNDS AND REASONS, AS STATED B Y THE A.O. THEREFORE, THE 21 ADDITION MADE BY THE A.O CANNOT BE SUSTAINED AND HE NCE, IT IS CONSIDERED THAT THE APPELLANT HAD SUFFICIENTLY PROVED THE SAID CRED ITS. THEREFORE, THE IMPUGNED ADDITION OF RS.40,51,000/- IS DELETED. THIS GROUND OF APPEAL IS ALLOWED. 12.4 AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE RE VENUE IS IN APPEAL BEFORE US. 13. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE FIND THE ASSESSING OFFICER DISALLOWED AN AMOUNT OF RS.40,51,000/- ON THE GROUN D THAT ASSESSEE HAS RECEIVED ADVANCE FROM VARIOUS PARTIES FOR SALE OF P LOTS AND THE ASSESSEE HAS NOT COMPLETED THE TRANSACTION OF SALES BEFORE T HE END OF THE ACCOUNTING YEAR AND THEREFORE THE TRANSACTION IS DOUBTFUL. FU RTHER, THE SALE DEEDS ARE TYPED BUT THE DATE AND AMOUNT OF ADVANCE HAS BEEN H AND-WRITTEN BY THE ASSESSEE AND AT SOMETIMES THERE IS OVERWRITING. TH EREFORE, THE ASSESSING OFFICER DOUBTED THE GENUINENESS OF THE ADVANCE AGAI NST PLOTS/LAND AND HELD THAT THE ASSESSEE HAS INTRODUCED HIS OWN UNACC OUNTED MONEY. WE FIND THE LD.CIT(A) CALLED FOR A REMAND REPORT FROM THE ASSESSING OFFICER ON THE BASIS OF THE ADDITIONAL EVIDENCE FILED BY TH E ASSESSEE BEFORE HIM AND THE ASSESSING OFFICER ACCEPTED THE ADVANCE OF R S.7,10,000/- LEAVING THE BALANCE OF RS.33,41,000/- TO BE DECIDED BY THE LD.CIT(A). WE FIND ON THE BASIS OF VARIOUS DOCUMENTS FILED BY THE ASSESSE E THE LD.CIT(A) OBSERVED THAT THE ASSESSEE HAS SUBMITTED THE NECESS ARY INFORMATION AND DOCUMENTARY EVIDENCE OF ACCEPTANCE OF THE SAID CRE DIT AMOUNT AND HAS PROVED BEYOND DOUBT THE IDENTITY, GENUINENESS AND C REDIT WORTHINESS OF THE CREDITOR AND DISCHARGED HIS ONUS. HE HAS ALSO OBSERVED THAT THE 22 ASSESSING OFFICER WHILE REJECTING THE EXPLANATION G IVEN DURING THE COURSE OF ASSESSMENT PROCEEDINGS HAS NOT BASED HIS REASONI NG ON PROPER APPRECIATION OF FACTS AND THE MATERIAL AND OTHER SU RROUNDING CIRCUMSTANCES AVAILABLE ON RECORD. THE ASSESSING OFFICER HAS NOT FORMED HIS OPINION OBJECTIVELY BY APPRECIATING THE MATERIAL AVAILABLE ON RECORD. THE LD. DEPARTMENTAL REPRESENTATIVE COULD NOT CONTROVERT T HE DETAILED REASONING GIVEN BY THE LD.CIT(A) WHICH IN OUR OPINION IS A RE ASONED ONE. UNDER THESE FACTS AND CIRCUMSTANCES, WE FIND NO INFIRMITY IN THE ORDER OF THE LD.CIT(A) DELETING THE ADDITION ON THIS ISSUE. THE GROUND RAISED BY THE REVENUE IS ACCORDINGLY DISMISSED. CO NO.24/PN/2013 (BY ASSESSEE) : 14. THE LD. COUNSEL FOR THE ASSESSEE AT THE TIME OF HEARING DID NOT PRESS THE CO FOR WHICH THE LD. DEPARTMENTAL REPRESENTATIV E HAS NO OBJECTION. ACCORDINGLY, THE CO FILED BY THE ASSESSEE IS DISMIS SED AS NOT PRESSED. 15. IN THE RESULT, THE APPEAL FILED BY THE REVENUE AS WELL AS THE CO FILED BY THE ASSESSEE ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 14 TH DAY OF AUGUST 2013. SD/- SD/- (SHAILENDRA KUMAR YADAV) (R.K. PAND A) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED : 14 TH AUGUST 2013 SATISH 23 COPY OF THE ORDER IS FORWARDED TO : 1. THE ASSESSEE 2. THE DEPARTMENT 3. THE CIT(A)-I, NASHIK 4. THE CIT-I. NASHIK 5. D.R. A BENCH, PUNE 6. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE 24