Sh. Navdeep Gulati, Chandigarh V. ACIT, Chandigarh

ITA 808/CHANDI/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8997 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2007-2008
• Appeal Filed On: 30-10-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Unexplained cash credit; Gift
• Section: 153A; 68; 139

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.808/CHD/2015 (ASSESSMENT YEAR : 2007-08) SH.NAVDEEP GULATI, VS. THE A.C.I.T., SCO 92-93, SECTOR 17C, CENTRAL CIRCLE-II, CHANDIGARH. CHANDIGARH. PAN: AAUPG3970B (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR SEHGAL RESPONDENT BY : SHRI MANJIT SINGH, DR DATE OF HEARING : 15.11.2016 DATE OF PRONOUNCEMENT : 18.11.2016 O R D E R PER ANNAPURNA GUPTA, A.M . : THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-3, GURGAON DATED 31.8.2015 FOR ASSESSMENT YEAR 2007-08. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUND THAT, THE LEARNED COMMISSIONER OF INCOME TAX (APPE ALS)-3, GURGAON HAS FAILED TO APPRECIATE THE FACTS AND CIRCUMSTANCE S OF THE CASE AND HAS THEREBY ERRED IN REJECTING THE SOURCE OF CASH DEPOS IT IN SAVING BANK ACCOUNT OF MINOR DAUGHTER ON HER 'NAMKARAN CEREMONY ' ON FLIMICAL GROUNDS. 2 3. THE ONLY ISSUE IN THE PRESENT APPEAL IS AGAINST THE ADDITION OF A SUM OF RS.1,05,000/- ON ACCOUNT O F UNEXPLAINED CASH DEPOSIT IN BANK. 4. BRIEFLY STATED, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE FILED COPY OF BANK STATE MENT OF HIS MINOR DAUGHTER, KAIRA GULATI, WITH HSBC BANK, WHICH SHOWED CASH DEPOSIT OF RS.1,05,000/- IN THE SAID AC COUNT ON 09.09.2006. ON BEING ASKED TO EXPLAIN THE SAME, THE ASSESSEE STATED THAT THE CASH DEPOSITED PERTAINED T O SAGAN/ GIFTS RECEIVED IN THE DENOMINATION OF RS.110 0/-, RS. 501/-, RS.2100/- ETC. AT THE NAMKARAN CEREMON Y, HELD SOON AFTER THE BIRTH OF HIS DAUGHTER ,KAIRA, ON 26. 06. 2006. THE ASSESSEE STATED THAT RECEIPT OF SAGAN /GIFTS FORMED PART OF THE TRADITION AND RELIGIOUS PRACTICE AND CUSTOMS IN INDIAN HINDU CEREMONIES AND WAS RECEIVED FROM SOME 56 RELATIVES. THE ASSESSEE FURTHER SUBMIT TED THAT OUT OF THE TOTAL AMOUNT OF RS.1,07,800/-RECEIV ED ON 02.09.06, AN AMOUNT OF RS.1,05,000/-WAS DEPOSITED I N THE BANK ACCOUNT OPENED OF HIS DAUGHTER KAIRA, IN HSBC BANK, AFTER DEDUCTING EXPENSES FROM THE SAME. THE ASSESSEE ALSO ENCLOSED A HANDWRITTEN LIST OF THE NA MES OF DONORS AS EVIDENCE. THE AO REJECTED THE EXPLANATION OF THE ASSESSEE FOR THE REASON THAT THE LIST FURNISHED BY HIM WAS NOT AUTHENTICATED BY ANY OF THE DONORS, WHOSE NAMES APPEARED THEREIN, THAT THE STATEMENT OF AFFAIRS AND CASH FLOW STATEMENT FILED BY THE ASSESSEE REFLECTED NO S UCH CASH DEPOSIT AND THE DETAIL OF GIFT RECEIVED IN THE YEAR 3 UNDER CONSIDERATION FILED BY THE ASSESSEE DEPICTED NO SUCH GIFT RECEIVED BY THE ASSESSEE ON THE OCCASION OF NAMKARAN CEREMONY OF HIS DAUGHTER, KAIRA GULATI. THE AO THEREFORE HELD THAT THE EXPLANATION FILED BY THE ASSESSEE WAS ONLY AN AFTERTHOUGHT AND SINCE NO DOCUMENTARY EVIDENCE WAS FILED IN SUPPORT OF THE SA ME HE HELD THE EXPLANATION TO BE COMPLETELY UNSATISFACTOR Y AND REJECTED THE SAME, MAKING ADDITION OF THE ENTIRE CA SH DEPOSIT OF RS. 1,05,000/-IN THE BANK ACCOUNT IN HSB C, IN THE NAME OF KAIRA GULATI, AS UNEXPLAINED CASH CREDI T UNDER SECTION 68 OF THE INCOME TAX ACT,1961. 5. AGGRIEVED BY THE SAME THE ASSESSEE FILED AN APPEAL TO THE CIT( APPEALS), WHO UPHELD THE ORDER O F THE AO BY HOLDING THAT THE HANDWRITTEN LIST OF DONORS C OULD NOT BE ACCEPTED AS EVIDENCE TO PROVE THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE TRANSACTION OF THESE GIFTS AS IT WAS A SELF-SERVING DOCUMENT, THAT NO DETAILS OF THE NAMKARAN CEREMONY NOR ANY EXPENSES ATTRIBUTED TO THE FUNCTION WAS SUBMITTED OR SHOWN I N THE BOOKS OF THE ASSESSEE AND THE AMOUNT OF GIFTS RECEI VED WAS NOT SHOWN IN THE RETURN OF INCOME FILED UNDER SECTI ON 139 OR 153A OF THE INCOME TAX ACT,1961. 6. AGGRIEVED BY THE SAME THE ASSESSEE HAS COME UP IN APPEAL BEFORE US. 7. DURING THE COURSE OF HEARING BEFORE US, LD. COUNSEL FOR THE ASSESSEE REITERATED THE ARGUMENTS M ADE 4 BEFORE THE LOWER AUTHORITIES AND STATED THAT THE IM PUGNED CASH DEPOSIT WAS ON ACCOUNT OF SHAGUN RECEIVED ON T HE NAMKARAN CEREMONY OF THE DAUGHTER OF THE ASSESSEE. AS EVIDENCE OF THE SAME LD.COUNSEL FOR THE ASSESSEE DR EW OUR ATTENTION TO THE COPY OF PASSPORT OF HIS DAUGHTER, KAIRA GULATI, AS EVIDENCE OF THE FACT THAT SHE WAS BORN O N 26/06/2006. THEREAFTER HE DREW OUR ATTENTION TO THE LIST OF DONORS, NOTED DOWN BY THE WIFE OF THE ASSESSEE I N HER DIARY, AND PLACED AT PAGE 2 OF THE PAPER BOOK FILED BEFORE US AND POINTED OUT THE DATE WRITTEN THEREON AS 02. 09. 2006, AS ALSO THE LIST OF 56 DONORS /PERSONS AND S TATED THAT IT WAS EVIDENT THEREFROM THAT IMMEDIATELY AFT ER THE BIRTH OF THE DAUGHTER, HER NAMKARAN CEREMONY WAS H ELD ON 02.09.2006, AND SMALL GIFTS RECEIVED FROM 56 REL ATIVES/ FRIENDS IN CASH. LD.COUNSEL FOR THE ASSESSEE SUBMIT TED THAT HOLDING OF SUCH CEREMONIES BEING CUSTOMARY AMO NGST HINDUS, IT CANNOT BE DENIED THAT THE SAME WAS HELD AND SHAGUN RECEIVED ON THE OCCASION. LD.COUNSEL FOR THE ASSESSEE FURTHER STATED THAT IT IS DIFFICULT/EMBARR ASSING TO OBTAIN CONFIRMATION OF THE GIFTS GIVEN FROM THE DON ORS OF THESE TYPES. LD. COUNSEL FOR THE ASSESSEE STATED TH AT THEREAFTER THE AMOUNT RECEIVED BY WAY OF GIFTS/SHAG UN WAS DEPOSITED IN THE BANK ACCOUNT OF THE MINOR DAUGHTER , HAVING BEEN RECEIVED ON CELEBRATION OF HER BIRTH, O N 09- 09-2006.LD.COUNSEL STATED THAT IT WAS CLEARLY ESTAB LISHED THAT THE AMOUNTS FOUND CREDITED IN THE BANK PERTAIN ED TO GIFTS RECEIVED ON THE OCCASION OF THE NAMKARAN CERE MONY 5 OF THE DAUGHTER AND THEREFORE COULD NOT BE TREATED AS UNEXPLAINED CASH CREDITS. 8. LD. DR ON THE OTHER HAND RELIED UPON THE ORDER OF THE CIT (APPEAL) AND STATED THAT THE ASSESSEE H AD FAILED TO ESTABLISH THE HOLDING OF THE NAMKARAN CE REMONY OF HIS DAUGHTER, SINCE NO EXPENSES HAD BEEN FOUND D EBITED IN THE CASH FLOW STATEMENT PRODUCED BY THE ASSESSEE NOR HAS THE GIFTS RECEIVED IN CASH BEEN ACCOUNTED FOR EITHER IN THE CASHBOOK OR THE RETURN OF INCOME FILED BY TH E ASSESSEE. LD. DR STATED THAT THE LD.CIT ( APPEAL) HAD THEREFORE, RIGHTLY REJECTED THE ASSESSEES CONTENTI ON. 9. WE HAVE HEARD THE CONTENTIONS OF BOTH THE PARTIES, PERUSED THE ORDERS OF THE AUTHORITIES BELO W AS ALSO THE DOCUMENTS PLACED BEFORE US. THE ISSUE TO BE EXAMINED IN THE PRESENT CASE IS WHETHER THE DEPOSIT OF RS.1,05,000/- IN THE BANK ACCOUNT OF THE DAUGHTER O F THE ASSESSEE MS. KAIRA GULATI, CAN BE ATTRIBUTED TO THE GIFTS RECEIVED ON HER NAMKARAN CEREMONY AND THUS HELD T O BE A CASH DEPOSITS DULY EXPLAINED BY THE ASSESSEE. 10. UNDOUBTEDLY, THE ASSESSEES DAUGHTER WAS BORN ON 26.6.2006 WHICH IS PROVED BY THE DATE OF BIRTH MENTIONED ON HER PASSPORT. IT IS ALSO TRUE THAT AS PER INDIAN TRADITION AND RELIGIOUS PRACTICE A NAMKARAN CEREMONY IS HELD AFTER THE BIRTH OF A CHILD AND IT IS CUSTOMARY FOR FRIENDS/RELATIVES INVITED TO MAKE GIF TS ON THE OCCASION. THEREFORE, THE POSSIBILITY OF THE AS SESSEE 6 HOLDING SUCH A CEREMONY AND GETTING CASH AND GIFTS, AFTER THE BIRTH OF HIS DAUGHTER AND BEFORE 9.9.2006, I.E . THE DATE ON WHICH CASH WAS DEPOSITED IN THE BANK, CANNO T BE RULED OUT COMPLETELY. BUT HAVING SAID SO, WE FIND THAT AS PER THE ASSESSEES OWN SUBMISSIONS, 56 GUESTS/FRIEN DS AND RELATIVES HAD GIVEN GIFTS/CASH ON THE OCCASION, WHILE WE FIND THAT THE ASSESSEE HAS OFFERED NO EXPLANATIO N FOR MEETING THE EXPENSES ON THE OCCASION EXCEPT FOR ATTRIBUTING RS.2800 FOR THE SAME, BY STATING THAT O UT OF THE AMOUNT OF RS.1.07,800/- RECEIVED, AN AMOUNT OF RS.1,05,000/- WAS DEPOSITED IN THE BANK AFTER DEDUC TING THE EXPENSES FROM THE SAME. NO OTHER EVIDENCE OF A NY EXPENSES INCURRED HAS BEEN FILED BY THE ASSESSEE, N OR HAS ANY SUCH EXPENSES BEEN REFLECTED IN THE CASH FLOW STATEMENT FILED BY THE ASSESSEE. IT IS IMPROBABLE AND DIFFICULT TO BELIEVE THAT THE EXPENSES INCURRED ON THE CELEBRATION, WITH APPROXIMATELY 60 PEOPLE, AMOUNTED TO ONLY RS.2800/-. FURTHER, CONSIDERING THE FACT THAT THE ASSESSEE FILED RETURN OF INCOME DISCLOSING TOTAL I NCOME OF RS.3,64,860/- FOR THE YEAR, IT IS DIFFICULT TO BELI EVE THAT GIFTS RECEIVED ON THE NAMKARAN CEREMONY AMOUNTED TO RS.1,07,800/- WHICH IS APPROXIMATELY 30% OF THE IN COME OF THE ASSESSEE. 11. IN THE BACKDROP OF THE ABOVE, WE HOLD THAT THE RE IS MERIT IN THE CONTENTION OF THE ASSESSEE THAT CAS H WAS RECEIVED BY WAY OF GIFTS/CHEQUES ON THE NAMKARAN OF HIS DAUGHTER BUT AT THE SAME TIME, WE CONSIDER AN AMOUN T OF 7 RS.30,000/- TO BE APPROPRIATE AMOUNT RECEIVED BY WA Y OF GIFT/SHAGUN , CONSIDERING THE STATUS OF THE ASSESSE E AND THE FACT THAT MEAGER EXPENDITURE HAS BEEN SHOWN TO HAVE BEEN INCURRED ON THE CEREMONY. TO THIS EXTENT THE CASH DEPOSITED IN THE BANK ON ACCOUNT OF HIS DAUGHTER IS TREATED AS EXPLAINED AND ADDITION ON ACCOUNT OF IT IS DELETED. CONSEQUENTLY, THE BALANCE CASH DEPOSITED IN THE BANK AMOUNTING TO RS.77,800/- IS TREATED AS UNEXPLA INED AND ADDITION MADE TO THIS EXTENT IS UPHELD. 12. IN EFFECT, THE APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (BHAVNESH SAINI) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 18 TH NOVEMBER, 2016 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH