Sh. Narendra Kumar Sharma, Ghaziabad V. ITO, Ghaziabad

ITA 7028/DEL/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7447 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2008-2009
• Appeal Filed On: 29-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURENDER PAL
• Assessee Lawyers: RAJAM BHATIA
• Keywords: Gift; Principle of natural justice; Source of fund; Onus to prove
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER I.T.A. NO. 7028/DEL/2014 A.Y. : 2008-09 NARENDRA KUMAR SHARMA, M-219, SECTOR-12, PRATAP VIHAR, GHAZIABAD (PAN: CCIPS5356R) VS. INCOME TAX OFFICER, WARD 1(4), GHAZIABAD (APPELLANT) (RESPONDENT) DEPARTMENT BY : SH. SURENDER PAL, SR. DR ASSESSEE BY : SH. RAJAM BHATIA, ADV. DATE OF HEARING : 20-07-2016 DATE OF ORDER : 08-08-2016 ORDER PER H.S. SIDHU, JM ASSESSEE HAS FILED THE APPEAL AGAINST THE ORDER D ATED 31.10.2014 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-GHA ZIABAD PERTAINING TO ASSESSMENT YEAR 2008-09 ON THE FOLLOWING GROUND:- 1. THE ORDER OF THE LD. CIT(A) IS BAD BOTH IN LAW AND ON FACTS OF THE CASE. 2. THE CIT(A) HAS ERRED IN CONFIRMING LEVY OF PENALTY U/S. 271(1)(C) OF RS. 10,14,376/-. ITA NO.7028/DEL/2014 2 3. THE CIT(A) ERRED IN ARBITRARILY NOT CONSIDERING THE APPLICATION FILED UNDER RULE 46A. 4. THE CIT(A) ERRED IN NOT INDIVIDUALLY DEALING WITH T HE VARIOUS CONTENTIONS RAISED BEFORE HIM. 5. THE CIT(A) ERRED IN INVOKING EXPLANATION 1 TO SECT ION 271(1)(C) WHEN THE AO HAD NOT INVOKED THE SAME AND MOREOVER THE EXPLANATION WAS INVOKED BY THE CIT(A) BEHIND THE ASSESSEE APPELLANTS BACK WITHOUT OPPORTUNITY OF REBUTTAL TO THE ASSESSEE. IN ANY CASE THE ASSESSEES CASE DO ES NOT FALL WITHIN THE AMBIT OF EXPLANATION 1 AND MOREOVER THE ASSESSEE OFFERED VALID REBUTTAL. 6. THE ORDER PASSED BY THE CIT(A) IS ARBITRARY, MECHAN ICAL, NON-REASONED AND BASED ON IRRELEVANT CONSIDERATION S WHILE IGNORING RELEVANT MATERIAL, EVIDENCES AND CONSIDERA TIONS AND IS CONTRARY TO LAW AND PROCEDURE AND PRINCIPLES OF NATURAL JUSTICE AND FAIR PLAY AND WAS VISIBLY MADE IN A HUR RIED AND BIASED MANNER WITH A PREMEDIATED MIND AND WITHOU T AFFORDING A FULL AND SUFFICIENT OPPORTUNITY OF BEIN G HEARD. 7. THE ASSESSEE APPELLANT CRAVES LEAVE TO ADD/ AMEND / DELETE ANY GROUND TAKEN HEREINABOVE. 8. THE APPEAL IS WITHIN TIME THE ORDER OF THE CIT(A) H AVING BEEN RECEIVED ON 19.11.2014. 2. THE FACTS NARRATED BY THE REVENUE AUTHORITIES AR E NOT DISPUTED BY BOTH THE PARTIES, THEREFORE, THE SAME ARE NOT REPEATED H ERE FOR THE SAKE OF CONVENIENCE. 3. AT THE TIME OF HEARING, LD. COUNSEL OF THE ASSES SEE, SH. RAJAN BHATIA, STATED THAT THE QUANTUM ON WHICH THE PENALTY HAS B EEN IMPOSED, HAS ALREADY ITA NO.7028/DEL/2014 3 BEEN DELETED BY THE ITAT IN ITA NO. 6383/DEL/2012 ( AY 2008-09) VIDE ORDER DATED 05.2.2016. HE HAS ALSO FILED THE COPY OF TH E ORDER DATED 05.2.2016 PASSED BY THE ITAT, DELHI BENCH E IN ITA NO. 6383 /DEL/2012 (AY 2008-09) IN ASSESSEES OWN CASE. 4. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 5. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS AND PERUSED THE RECORDS. WE FIND THAT IN ASSESSEES OWN CASE IN ITA NO. 6383 /DEL/2012 FOR A.Y. 2008-09 VIDE ORDER DATED 05.2.2016, THE TRIBUNAL HA D ADJUDICATED THE ISSUE VIDE PARA NO. 10 TO 11.2 AT PAGES 5 TO 7 AND DELETED THE QUANTUM ADDITION IN THIS REGARD. THE TRIBUNAL HAS HELD AS UNDER:- 10. WE FIRST TAKE UP THE ISSUE ON MERITS. THE A.O. ACCEPTED AS GENUINE THE GIFT RECEIVED BY THE ASSESSEE FROM HIS WIFE SMT.KAUSHAL SHARMA TO THEEXTENT OF RS.9,10,000/-. AMOUNT RECEIV ED AS GIFT FROM THE MOTHER AND FATHER OF THE ASSESSEE WERE DISBELIE VED AND ADDITION MADE. ON PERUSAL OF THE EVIDENCES, WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE HAS LEAD SUFFI CIENT EVIDENCE TO PROVE THE GENUINENESS OF THESE GIFTS. BOTH THE MOTH ER AND FATHER HAVE CONFIRMED HAVING GIVEN THE GIFS AND HAVE FILED AFFIDAVITS IN SUPPORT OF THE SAME. GIFT DEEDS WERE EXECUTED BY BO TH OF THEM. AS THE MOTHER WAS NOT KEEPING WELL, SHE COULD NOT BE P RODUCED BEFORE THE A.O. NEVERTHELESS, THE ASSESSEE HAD VIDE LETTER DT. 5.7.2011 ITA NO.7028/DEL/2014 4 REQUESTED THE A.O. TO DEPUTE A DEPARTMENTAL OFFICER TO THE RESIDENCE, SO THAT THE STATEMENT OF SMT.CHANDERVATI COULD BE RECORDED. THIS WAS NOT DONE. THUS, TO MAKE AN ADDIT ION ON THE GROUND THAT SHE WAS NOT PRODUCED IS WRONG. SMT. CHA NDERVATI DEVI FILED VARIOUS DOCUMENTS TO SUBSTANTIATE THE SOURCES FROM WHERE SHE HAD GIVEN A GIFT TO HER SON. THE A.O. HAS NOT CONDU CTED ANY INDEPENDENT INVESTIGATION NOR BROUGHT ANY EVIDENCE ON RECORD, TO LEAD US TO A CONCLUSION THAT THE EVIDENCE PRODUCED BY THE ASSESSEE IS NOT RELIABLE. SMT .CHANDERVATI DEVI HAD FILED A RETURN OF INCOME FOR THE A.Y. 2008-09. THERE IS NO BASIS TO DOUBT TH E WILL WRITTEN BY SMT.RAMKALI WHO IS THE MOTHER OF SMT.CHANDRAVATI DE VI. REGISTRATION OF WILL IS NOT MANDATORY. THE WILL WAS NOTARISED WILL AND HAS TWO WITNESSES. IF THE A.O. CHOSE TO DISPUTE THE WILL, HE COULD HAVE EXAMINED THE WITNESSES. HE FAILED TO DO. THE AFFIDAVITS FROM VARIOUS PERSONS FILED BY THE ASSESSEE HAVE WRO NGLY BEEN DISMISSED AS FABRICATIONS. NO INQUIRY WAS MADE BY T HE A.O. NOR WAS ANY MATERIAL GATHERED TO COME TO SUCH A CONCLUS ION. THE EVIDENCE WAS DISMISSED BASED ON SURMISES AND CONJEC TURES. HENCE FOR ALL THESE REASONS, WE ARE OF THE CONSIDERED OPI NION THAT THE GIFT OF RS.15 LAKHS GIVEN BY THE ASSESSEES MOTHER SMT. CHANDRAVATI DEVI IS A GENUINE GIFT AND CANNOT BE ADDED U/S 68 O F THE ACT. ITA NO.7028/DEL/2014 5 11. COMING TO THE GIFT RECEIVED FROM THE FATHER SHR I PREM DUTT SHARMA, WE FIND THAT HE HAS BEEN EXAMINED ON OATH A ND HE HAS CONFIRMED THE SAME. THE SOURCE OF FUNDS WERE EXPLAI NED AS AMOUNT RECEIVED FROM SH.RAM KUMAR SHARMA ON THE EXECUTION OF AN AGREEMENT TO SELL. MR.RAM KUMAR SHARMA CONFIRMED TH IS AGREEMENT ON OATH. THE AO HAS NOT AN IOTA OF EVIDEN CE TO DISBELIEVE THESE EVIDENCES OR THESE STATEMENTS RECO RDED OF OATH. THE A.O. REJECTED THE EVIDENCE FILED BY THE ASSESSE E BASED ON SURMISES AND CONJECTURES. IF THE SOURCE OF FUNDS CA NNOT BE PROVED BY THE FATHER OR BY MR.RAM KUMAR SHARMA, THE COURSE OF ACTION SHOULD HAVE BEEN TO MAKE AN ADDITION IN THEIR HANDS . SH.SHARMA HAS FILED HIS RETURN OF INCOME FOR THE A.Y. 2008-09 . THUS IN OUR VIEW, THE ASSESSEE DISCHARGED THE BURDEN OF PROOF T HAT LAY ON HIM AND HAD PROVED THE GENUINENESS OF THESE GIFTS. 11.1. EVEN OTHERWISE THE ASSESSEE BEING AN ENGINE D RIVER IN THE RAILWAYS DOES NOT MAINTAIN BOOKS OF ACCOUNTS. THUS TECHNICALLY THE ADDITION CANNOT BE MADE U/S 68 OF THE ACT AND ENTRI ES IN BANK PASS BOOK CANNOT BE CONSIDERED AS ENTRY IN THE BOOKS OF ACCOUNTS. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT, PUNE VS. BHAICHAND H GANDHI 141 ITR 67, HELD AS FOLLOWS. ITA NO.7028/DEL/2014 6 INCOME-CASH CREDIT-BANK PASS BOOK IS NOT A BOOK MAINTAINED BY ASSESSEE OR UNDER HIS INSTRUCTIONS CASH CREDIT FOR PREVIOUS YEAR SHOWN IN ASSESSEES BANK P ASS BOOK NOT SHOWN IN CASH BOOK OF ASSESSEE FOR THAT YEAR CANNOT BE TREATED AS INCOME OF THAT PREVIOUS YEAR I.T. A CT, 1961 SEC.68. WHEN MONEYS ARE DEPOSITED IN A BANK THE RELATIONSHI P THAT IS CONSTITUTED BETWEEN THE BANKER AND THE CUSTOMER IS ONE OF DEBTOR AND CREDITOR AND NOT OF TRUSTEE AND BENEFICI ARY. THE PASS BOOK SUPPLIED BY THE BANK TO ITS CONSTITUENT I S ONLY A COPY OF THE CONSTITUENTS ACCOUNT IN THE BOOKS MAIN TAINED BY THE BANK. IT IS NOT AS IF THE PASS BOOK IS MAINTAIN ED BY THE BANK AS THE AGENT OF THE CONSTITUENT NOR CAN IT BE SAID THAT THE PASS BOOK IS MAINTAINED BY THE BANK UNDER THE INSTRUCTIONS OF THE CONSTITUENT. HENCE, THE PASS BO OK SUPPLIED BY THE BANK TO THE ASSESSEE CANNOT BE REGARDED AS T HE BOOK OF THE ASSESSEE, THAT IS, A BOOK MAINTAINED BY THE ASSESSEE OR UNDER HIS INSTRUCTIONS. THEREFORE, A CASH CREDIT FO R THE PREVIOUS YEAR SHOWN IN THE ASSESSEES BANK PASS BOO K BUT NOT SHOWN IN THE CASH BOOK MAINTAINED BY THE ASSESS EE FOR THAT YEAR, DOES NOT FALL WITHIN THE AMBIT OF S.68 O F THE ACT AND AS SUCH THE SUM SO CREDITED IS NOT CHARGEABLE T O TAX AS INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. 11.2. IN VIEW OF THE ABOVE DISCUSSION, BOTH IN LAW AND ON MERITS, THE ADDITION IN QUESTION IS BAD IN LAW AND HENCE DE LETED. THESE GROUNDS OF THE ASSESSEE ARE ALLOWED. ITA NO.7028/DEL/2014 7 5.1 KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE ADDITION ON WHICH THE PENALTY IN DISPUTE WAS LE VIED, HAS ALREADY BEEN DELETED BY THE ITAT VIDE ORDER DATED 05.2.2016 IN I TA NO. 6383/DEL/2012 (2008-09), AS AFORESAID, HENCE, THE PENALTY IN DI SPUTE WILL NOT SURVIVE. ACCORDINGLY, WE SET ASIDE THE ORDERS OF THE AUTHOR ITIES BELOW AND DELETE THE PENALTY IN DISPUTE AND ALLOW THE APPEAL FILED BY TH E ASSESSEE. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 08/08/2016. SD/- SD/- [O.P. KANT] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 08/08/2016 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY OR DER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES