RAM AGARWAL, Jaipur V. DCIT, Jaipur

ITA 695/JPR/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4923 (ITAT-JAIPUR)
• Duration Of Justice: 1 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2004-2005
• Appeal Filed On: 13-08-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N S JANG
• Keywords: Gift; Assessment record
• Section: 142(1); 131; 68; 69; 6

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH SMC JAIPUR BEFORE SHRI B.R. JAIN, ACCOUNTANT MEMBER ITA NO. 695/JP/2013 ASSESSMENT YEAR: 2004-05 PAN NO. AHTPA4985H SHRI RAM AGARWAL, VS. DY. COMMISSIONER OF INCOME TAX 534, MAHAVEER NAGAR, CENTRAL CIRCLE-3, TONK ROAD, JAIPUR. JAIPUR (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SHRI N.S. JANGPANGI. DATE OF HEARING : 03.10.2013 DATE OF PRONOUNCEMENT : 04.10.2013 ORDER PER B.R. JAIN, A.M. THIS APPEAL BY ASSESSEE AGAINST THE ORDER DATED 18 TH JULY, 2013 OF LD. CIT (APPEALS), CENTRAL, JAIPUR RAISES THE FOLLOWING GRO UNDS :- 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 2,50,000/- ON ACCOUNT OF GIFT RECEIVED FROM SHRI RAM KUMAR BABU LAL AGARWAL U/S 6 8 OF THE I.T. ACT, 1961 WITHOUT CONSIDERATION THE SUBMISSION OF T HE ASSESSEE AND MATERIAL EVIDENCES SUBMITTED DURING THE ASSESSMENT PROCEEDINGS. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 50,491/- ON ACCOU NT OF ALLEGED OPENING BALANCE DIFFERENCE DULY REFLECTED IN THE IN COME TAX RETURN FILED EARLIER TO THE DATED OF SEARCH U/S 69 OF THE I.T. A CT, 1961. 3. THE ASSESSEE CRAVES YOUR INDULGENCE TO ADD, AMEN D OR ALTER ALL OR ANY GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 2 2. THE ASSESSEES APPLICATION FOR ADJOURNMENT IN TH IS APPEAL LISTED FOR HEARING ON 11/9/2013 HAS BEEN OPPOSED BY THE REVENUE AS THE SI GNATURES THEREON DID NOT TALLY WITH THE SIGNATURE OF THE APPELLANT ON APPEAL MEMO. EVEN THE REASONS STATED IN THE APPLICATION FOR SEEKING ADJOURNMENT WERE FOUND VAGU E. THE REQUEST WAS, THEREFORE, NOT FOUND BONAFIDE AND STOOD REJECTED. SUMMONS U/S 131 OF THE INCOME TAX ACT, 1961 WERE ALSO ISSUED TO THE ASSESSEE FOR HIS PERSO NAL APPEARANCE ON 01/10/2013 FOR VERIFICATION OF SIGNATURES ON RECORD AND FURTHER HE ARING OF APPEAL ON MERIT ON 01/10/2013. DESPITE SERVICE OF SUMMONS BY PRIVATE S ERVICE EFFECTED THROUGH INCOME TAX DEPARTMENT, NO APPEARANCE HAS BEEN MADE BY THE APPELLANT. THE HEARING OF THE MATTER IN APPEAL STOOD ADJOURNED FOR 03/10/2013. NE ITHER THE APPELLANT MADE ANY APPEARANCE NOR SENT ANY APPLICATION FOR ADJOURNMENT ON THIS DAY. THERE, THUS, APPEARS TO BE A DELIBERATE DEFIANCE BY THE APPELLANT IN NOT ASSISTING THIS TRIBUNAL. ON THIS DAY, THE LD. D.R. SHRI N.S. JANGPANGI PRODUCED ASSESSMEN T RECORD AND ALSO LAID ON RECORD COPIES OF ASSESSEES SUBMISSION IN ASSESSMENT PROCE EDINGS MADE BEFORE THE ASSESSING OFFICER. UNDER THE CIRCUMSTANCES, IT WAS DECIDED TO HEAR LD. D.R. EX PARTE QUA THE ASSESSEE WITH REFERENCE TO MATERIAL ON RECORD. 3. BRIEFLY THE FACTS OF THE CASE IN GROUND NO.1 IN APPEAL ARE THAT A NOTICE U/S 153-C READ WITH SECTION 153-A OF THE ACT WAS ISSUED ON 31/8/2010. THE ASSESSEE FILED RETURN DECLARING NIL INCOME ON 18/10/2010. PU RSUANT TO NOTICE U/S 143(2)/142(1) OF THE ACT ISSUED ON 19/10/2010, THE ASSESSEE PRODUCED BOOKS OF ACCOUNT, WHICH WERE EXAMINED ON TEST CHECK BASIS. T HE ASSESSEE WAS FOUND DERIVING INCOME FROM INTEREST UNDER THE HEAD INCOME FROM OTH ER SOURCES. THE ASSESSEE WAS ALSO FOUND TO HAVE CREDITED A SUM OF RS. 2,50,000/- IN HIS CAPITAL ACCOUNT AND THE 3 SAME WERE SHOWN DEPOSITED IN HIS SAVINGS BANK ACCOU NT ON 28/2/2004 MAINTAINED WITH THE STATE BANK OF BIKANER AND JAIPUR. THE ASSE SSEE HAS CLAIMED THIS AMOUNT AS A RECEIPT OF GIFT FROM SHRI RAM KUMAR BABU LAL AGARWA L. THE ASSESSING OFFICER REQUIRED HIM TO ESTABLISH THE GENUINENESS OF THE GI FT AS WELL AS CREDITWORTHINESS OF THE DONOR AND A DETAILED QUESTIONNAIRE U/S 142(1) WAS I SSUED ON 26/11/2010. IN COMPLIANCE THERETO, THE ASSESSEE FURNISHED A REPLY ON 30/11/2010, WHEREBY LAYING A COPY OF THE GIFT DEED, COPY OF RETURN FILED FOR ASS ESSMENT YEAR 2003-04, COMPUTATION OF INCOME, PAN CARD NUMBER AND COPY OF BANK DRAFT D ATED 28/2/2004 DRAWN ON UTI BANK AND ALSO A COPY OF BALANCE SHEET AS ON 31/3/20 03 OF THE SAID PERSON ON ASSESSMENT RECORD. THE ASSESSEE ALSO GAVE HIS ADDRE SS OF AHMEDABAD AND STATED THAT SHRI RAM KUMAR BABU LAL AGARWAL HAPPENS TO BE IN H IS DISTANT RELATION AND THUS SHOWED HIS INABILITY TO ASK HIM TO ATTEND THE OFFIC E OF THE ASSESSING OFFICER AS THE EXERCISE WOULD BE QUITE EMBARRASSING FOR HIM. THE A SSESSEE ALSO STATED THAT FOR A GIFT TO BE GENUINE, IT IS NOT NECESSARY THAT THE GIFT SH OULD COME FROM A RELATIVE AND THAT TOO ON SOME OCCASION. THE ASSESSEE, HOWEVER, AFFIRMED T HAT HE IS NOT IN POSITION TO GIVE DETAILS OF THE FAMILY MEMBERS OF THE DONOR. UNDER T HE CIRCUMSTANCES AND ON THE BASIS OF SUCH EXPLANATION, THE ASSESSEE CLAIMED THAT ALL THE CONTENTS OF A VALID GIFT ARE AVAILABLE AND THUS, THE AMOUNT SO RECEIVED REQUIRES TO BE TREATED AS A GENUINE GIFT. 4. THE ASSESSING OFFICER CONSIDERED THE ASSESSEES EXPLANATION ON MERIT. HE WAS NOT SATISFIED WITH THE EXPLANATION SO TENDERED BY T HE ASSESSEE AS THE ASSESSEE HAS NEITHER PLACED ANY RELIABLE DOCUMENT OR EVIDENCE TO SUPPORT THE IDENTITY OF THIS PERSON, RELATION WITH THE ASSESSEE, CAPACITY OF THA T PERSON TO PART WITH SUCH SUBSTANTIAL AMOUNT IN THE FORM OF GIFT AND THE GENUINENESS OF T HE TRANSACTION. SINCE THE ASSESSEE 4 FAILED TO ESTABLISH RELATION WITH THE DONOR, HIS ID ENTITY, OCCASION OF GIFT, CAPACITY OF MAKING GIFT AND IN ABSENCE OF ANY RELIABLE MATERIAL AND EVIDENCE ON RECORD WITH RESPECT TO SOURCE OF AVAILABILITY OF THE SAID SUM A ND ASSESSEE HAVING FAILED TO FURNISH HIS BANK ACCOUNT AND KEEPING IN VIEW THE CIRCUMSTAN CE THAT SUCH PERSON SHRI KANHARAM AGARWAL HAS MADE A SURRENDER OF RS. 1.5 CR ORE FOR THE ENTIRE GROUP ON THIS ACCOUNT AND LATER RETRACTED THE SAME FOR NO VALID R EASON, CONSIDERED ALL SUCH CIRCUMSTANCES AND MATERIAL ON RECORD AND FOUND THAT THE CASE LAWS RELIED UPON BY THE ASSESSEE ARE OF NO ASSISTANCE TO THIS CASE. HE, THE REFORE, WAS OF THE FIRM OPINION THAT THE TRANSACTION OF GIFT WAS NOT GENUINE AND BEING N OT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE, PROCEEDED TO ADD THE ENTIRE AMOUNT OF RS. 2,50,000/- AS THE ASSESSEES INCOME U/S 68 OF THE ACT. 5. THE LD. CIT(A) CONSIDERED THE ENTIRE GAMUT OF CA SE LAWS AND THE SUBMISSIONS WITH REFERENCE TO MATERIAL ON RECORD. SHE TOOK NOTE OF THE FACT THAT DURING THE SEARCH OPERATIONS, THE SEARCHED PERSON HAD ADMITTED IN HIS STATEMENT THAT BOGUS GIFTS HAD BEEN TAKEN BY VARIOUS MEMBERS OF THE GROUP. ONE SUC H GIFT OF RS. 2,50,000/- WAS NOT PROVED TO BE GENUINE RECEIPT OF GIFT BY THE APPELLA NT. THE ASSESSEE HAD LAID ONLY INCOME TAX RETURN AND BALANCE SHEET PERTAINING TO A SSESSMENT YEAR 2003-04 ON RECORD. BOTH THESE DOCUMENTS WERE NEITHER RELEVANT NOR TAKE N AS A RELIABLE EVIDENCE TO PROVE THE FINANCIAL CAPACITY OF SHRI RAM KUMAR BABU LAL A GARWAL . MOREOVER, THE BANK STATEMENT FOR THE RELEVANT PERIOD HAS NOT BEEN FURN ISHED TO PROVE THE AVAILABILITY OF ADEQUATE FINANCE ON THE DATE OF MAKING THE GIFT. TH E ASSESSEE ALSO REFUSED TO PRODUCE THE DONOR NOR LAID ANY DOCUMENTARY EVIDENCE TO SUBS TANTIATE THE CORRECTNESS OF THE CLAIM OF THE GENUINENESS OF THE GIFT. THE COPY OF G IFT DEED LAID ON RECORD WAS FOUND AS 5 A SELF SERVING DOCUMENT AND TAKEN AS AN UNRELIABLE EVIDENCE. SINCE NO RELIABLE AND RELEVANT DOCUMENT WAS FILED TO SUPPORT THE GENUINEN ESS OF THE GIFT AND THE FINANCIAL CAPACITY OF THE DONOR WAS NOT PROVED, THE CASE LAWS RELIED BEFORE HER WERE THUS FOUND DISTINGUISHABLE ON FACTS. THE EXPLANATION OF THE AS SESSEE WAS NOT FOUND SATISFACTORY. SHE, THEREFORE, UPHELD THE FINDINGS REACHED BY THE ASSESSING OFFICER AND CONFIRMED THE ADDITION OF RS. 2,50,000/- MADE U/S 68 OF THE A CT. 6. I HAVE HEARD LD. D.R. WITH REFERENCE TO MATERIAL ON RECORD. PERUSAL OF DECLARATION OF GIFT DEED DATED 28/2/2004 REVEALS TH AT THE APPELLANT SHRI RAM AGARWAL HAS NOT ACCEPTED THE GIFT AND THE COLUMN OF CONFI RMATION AND ACCEPTANCE ABOVE THE SIGNATURES OF RAM KUMAR AGARWAL SHOWING PLACE AT A HMEDABAD ON DATED 28/2/2004 HAS BEEN LEFT BLANK. THE APPELLANT DID NOT PRODUCE SHRI RAM KUMAR BABU LAL AGARWAL NOR PRODUCED THE DECLARATION OF GIFT IN ORI GINAL BEFORE ANY OF THE AUTHORITIES BELOW. EVEN THE BACK SIDE OF THE DECLARATION IS FOU ND BLANK AND THE SAME DOES NOT SHOW THE NAME OF THE PURCHASER OF STAMP PAPER, PLAC E, DATE AND NAME OF STAMP VENDOR FROM WHOM THE SAME WAS PURCHASED. THERE IS NO EXPLA NATION AS TO THE PLACE OF RECEIPT OF THIS AMOUNT. ON THE FACE OF THE DOCUMENT ITSELF, THERE IS NO ACCEPTANCE OF THE DONEE AND AS SUCH ESSENTIALS OF A VALID GIFT ARE NOT SATI SFIED. THE LD. CIT(A) HAS TAKEN IT AS A SELF SERVING DOCUMENT. THE BANK STATEMENT OF SAID S HRI RAM KUMAR BABU LAL AGARWAL WITH UTI BANK LIMITED MANINAGAR BRANCH, AH MEDABAD AS STATED IN THE DECLARATION OF GIFT HAS NEITHER BEEN PRODUCED NOR F OUND MAINTAINED BY THE ASSESSEE WHEN PERUSED FROM THE BALANCE SHEET FOR THE YEAR 31 /3/2003 PLACED ON RECORD. THE COPY OF A DEMAND DRAFT DATED 28/2/2004 LAID ON REC ORD REVEALS THAT THE DRAFT HAS BEEN ISSUED IN THE NEW ACCOUNT BY GUJARAT MERCANTILE C O-OPERATIVE BANK LIMITED FOR 6 WHICH THERE IS NO REFERENCE IN THE DECLARATION OF G IFT NOR IN THE BALANCE SHEET SOUGHT TO BE RELIED UPON BY THE APPELLANT. THE ASSESSEE BROUG HT NO BANK ACCOUNT OF THE SAID PERSON ON RECORD OF THE AUTHORITIES BELOW TO SHOW T HE AVAILABILITY OF IMMEDIATE SOURCES FOR MAKING THE BANK DRAFT FOR THIS PURPOSE OR EVEN TO PROVE THAT THE SAID MONEY HAS FLOWN FROM THE FUNDS BELONGING TO SHRI RA M KUMAR BABU LAL AGARWAL. THE APPELLANT BEFORE LD. CIT(A) IS NOT FOUND SURE O F THE PLACE OF RESIDENCE OF SAID PERSON AS BEFORE ASSESSING OFFICER HE SPOKE OF HIS RESIDENCE AT AHMEDABAD, WHEREAS BEFORE LD. CIT(A) HIS AVERMENT IS THAT THE ASSESSIN G OFFICER DID NOT CAUSE ANY ENQUIRY FROM HIS COUNTERPART AT DELHI. NATURE AND S OURCE OF AVAILABILITY OF FUNDS HAS NOT BEEN EXPLAINED SATISFACTORILY. RELATIONSHIP OF THE APPELLANT WITH THE DONOR HAS NOT BEEN EXPLAINED EXCEPT MAKING BALD STATEMENT THAT H E IS IN HIS DISTANT RELATION. THE APPELLANT EVEN AFFIRMED THAT HE DOES NOT KNOW THE D ETAILS OF THE FAMILY MEMBERS OF THE DONOR NOR THERE WAS ANY OCCASION OF MAKING GIFT TO HIM BY THE SAID PERSON. THE MATERIAL DISCLOSED BY THE ASSESSEE IS FOUND UNTRUST WORTHY AND LACKS CREDIBILITY. THE BURDEN THAT LAY UPON THE ASSESSEE TO PROVE THE GENU INENESS OF HIS CLAIM OF A VALID GIFT HAS NOT BEEN DISCHARGED. THE ESSENTIALS OF A VALID GIFT ARE ALSO NOT FOUND SATISFIED. THE NATURE AND SOURCE OF CREDIT APPEARING IN HIS BO OKS OF ACCOUNT IS NOT FOUND SATISFACTORILY EXPLAINED. THE AUTHORITIES BELOW HAD CONSIDERED THE ENTIRE SUBMISSIONS AND MATERIALS BROUGHT ON RECORD BY THE ASSESSEE AND REACHED FINDING OF FACT THAT THE GIFT IS NOT GENUINE. ON THE PECULIAR FACTS AND CIRC UMSTANCES OF THE CASE AND IN PARTICULAR THE APPELLANTS FAILURE TO TENDER THE SA TISFACTORY EXPLANATION ABOUT NATURE AND SOURCE OF THE RECEIPT, THE ADDITION MADE U/S 6 8 OF THE ACT IS FOUND JUSTIFIED. THERE BEING NO MERIT IN THE GROUND NO. 1 RAISED IN APPEAL , THE SAME STANDS REJECTED. 7 7. AS REGARDS, GROUND NO. 2 IN APPEAL, THE LD. CIT( A) FOUND THAT THE CAPITAL BALANCE AS AT THE END OF 31/3/2003 AVAILABLE WITH T HE APPELLANT WAS RS. 13,01,000/- WHEREAS THE OPENING BALANCE IS FOUND CREDITED ON 01 /4/2003 BY RS. 13,51,491/-. THERE WAS, THUS, AN EXCESS CREDIT IN CAPITAL ACCOUNT ON 0 1/4/2003 BY AN AMOUNT OF RS. 50,491/-. NO EXPLANATION FOR THE SAID DIFFERENCE HA S BEEN FURNISHED. THE ADDITION SO MADE, THUS, ON FACTS, STOOD CONFIRMED BY THE LD. CI T(A). 8. HAVING HEARD LD. D.R. WITH REFERENCE TO THE MATE RIAL ON RECORD, I FIND THAT THE LD. CIT(A) UPON APPRECIATION OF FACTS, HAS CONFIRME D THE ADDITION OF RS. 50,491/- ON ACCOUNT OF EXCESS AMOUNT OF CREDIT APPEARING IN HIS CAPITAL ACCOUNT ON 01/4/2003. I, THEREFORE, FIND NO MERIT TO SHOW ANY INDULGENCE IN THE WELL REASONED DECISION REACHED IN APPEAL BY LD. CIT(A). THE GROUND NO. 2 RAISED IN APPEAL BEING DEVOID OF ANY MERIT, STANDS REJECTED. 9. IN THE RESULT, THE APPEAL BY THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 04 TH OCTOBER, 2013. SD/- (B.R. JAIN) ACCOUNTANT MEMBER JAIPUR, DATED : 04/10/2013 * RANJAN COPY FORWARDED TO :- 1. SHRI RAM AGARWAL, JAIPUR. 2. THE DCIT, CENTRAL CIRCLE 3, JAIPUR. 3. THE CIT (A) 4. THE CIT 5. THE D/R GUARD FILE (ITA NO. 695/JP/2013) BY ORDER, AR ITAT JAIPUR.