MR/ BHUSHAN SHARMA, Jaipur V. ITO, JHUNJHUNU

ITA 832/JPR/2011

• Counselvise Citation: 83223114 RSA 2011
• Duration Of Justice: 3 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 23-11-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 27-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D C SHARMA
• Keywords: Gift; Opportunity of being heard
• Section: 143(3); 68; 69

Judgement Text

IN THE INCOMETAX APPELLATE TRIBUNAL JAIPUR BENCH: JAIPUR (BEFORE SHRI R.P. TOLANI AND SHRI T.R. MEENA) I.T.A. NO. 832/JP/2011 ASSTT. YEAR- 2007-08 PAN NO. AQKPS 1453 R SHRI BHUSHAN SHARMA, THE I.T.O., S/O- SH. JHANDU RAM SHARMA, VRS. WARD 1, JHUNJHUN U. NEAR GAYATRI MANDIR, JHUNJHUNU. (APPELLANT) (RESPONDENT) ASSESSEE BY :- SHRI P.C. PARWAL. DEPARTMENT BY :- SHRI D.C. SHARMA. DATE OF HEARING : 18/09/2014 DATE OF PRONOUNCEMENT : 14/11/2014 O R D E R PER: T.R. MEENA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 25/07/2011 OF THE LEARNED CIT(A)-III, JAIPUR FOR THE A.Y. 2007-08. THE EFFECTIVE GROUNDS OF APPEAL ARE AS UNDER:- (1) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW IN CONFIRMING THE ADDITION OF RS. 6,50,000/- U/S 69A BY:- - TREATING THE GIFT RECEIVED FROM JASODA DEVI RS. 2 LA CS AND SEEMA DEVI RS. 3.30 LACS AND DEPOSITED IN THE BANK ACCOUNT ON 10/01/2007 AS UNEXPLAINED. - TREATING THE INVESTMENT TO THE EXTENT OF RS. 1`,20,0 00/- OUT OF SAVINGS OF THE ASSESSEE AND DEPOSITED IN BAN K ON 10/01/2007 AS UNEXPLAINED. ITA 832/JP/2011 BHUSHAN SHARMA VS. ITO 2 (2) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN FACT AND IN LAW IN CONFIRMING THE ADDITION OF RS. 6,68,000/- (5,50,000 + 1,18,000) U/S 69 ON ACCOUNT OF UNEXPLAI NED INVESTMENT IN HOUSE. (3) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS. 44,368/- BEING 50% OF EXPENDITURE OF RS. 88,725/- DEBITED IN PROFIT AND L OSS ACCOUNT. (4) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW IN CONFIRMING THE ADDITION OF RS. 1210/- ON A CCOUNT OF DIFFERENCE IN CASH AND BANK BALANCE. (5) THE APPELLANT CRAVES TO LATER, AMEND AND MODIFY ANY GROUND OF APPEAL. (6) NECESSARY COST BE AWARDED TO THE ASSESSEE. 2. THE FIRST AND SECOND GROUND OF APPEAL ARE AGAINST CONFIRMING THE ADDITION OF RS. 6,50,000/- AND RS. 5,50,000/- U/S 6 9 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS THE ACT). THE ASS ESSEE IS AN ASTROLOGER. HE FILED HIS RETURN OF INCOME ON 03/7/2007 AT RS. 1 ,95,452/-. THE CASE WAS SCRUTINIZED U/S 143(3) OF THE ACT. THE ASSESSEE DID NOT MAINTAIN ANY BOOKS OF ACCOUNT FOR THIS BUSINESS. THE ASSESSEE REVISED HIS INCOME TAX RETURN BY SHOWING ADDITION INCOME OF RS. 2,46,920/-, WHICH INCL UDES MONTHLY POST OFFICE INVESTMENT INCOME RS. 2,16,000/-, INTEREST T HEREON RS. 8420/- AND INTEREST ON R.D. AT RS. 22,500/-. THE ASSESSEE PURC HASED AN IMMOVABLE PROPERTY AT RS. 12 LACS ON WHICH STAMP DUTY WAS PAID AT RS. 1,08,000/- AND REGISTRATION FEES AT RS. 10,000/-. THE ASSESSING OFFICER GAVE REASONABLE OPPORTUNITY OF BEING HEARD TO EXPLAIN TH E INVESTMENT MADE IN THE IMMOVABLE PROPERTY. THE ASSESSEE FILED REPLY BEF ORE HIM, WHICH HAS ITA 832/JP/2011 BHUSHAN SHARMA VS. ITO 3 BEEN REPRODUCED AT PAGE NOS. 4 TO 6 OF THE ASSESSME NT ORDER AND CONCLUDED THAT THE ASSESSEE HAS NOT EXPLAINED RS. 6 ,50,000/-, WHICH WAS DEPOSITED IN CASH ON 10/1/2007. THE ADVANCE AMOUNT PAID AT RS. 5,50,000/- HAS NOT BEEN EXPLAINED BY THE ASSESSEE. THE CLAIM OF THE ASSESSEE HAS SMT. JAOSDA DEVI AND SMT. SEEMA DEVI H AD DONATED RS. 5,30,000/- ON 08/1/2007 IN CASH WITH EVIDENCE TO HIM . THE ASSESSEE INVESTED TOTAL AMOUNT IN BUILDING PURCHASE AT RS. 1 3,18,000/-, FOR WHICH RS. 6,50,000/- WERE PAID THROUGH DEMAND DRAFT. THERE AFTER, NO EXPLANATION OF REMAINING AMOUNT OF RS. 6,68,000/- WAS MADE AVAIL ABLE BY THE ASSESSEE BEFORE HIM. THUS, HE MADE ADDITION OF RS. 6,18,000/- AS UNDISCLOSED INCOME U/S 69 OF THE ACT. 3. BEING AGGRIEVED BY THE ORDER OF THE LEARNED ASSE SSING OFFICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LEARNED CIT( A), WHO HAD ALLOWED THE APPEAL PARTLY BY OBSERVING THAT GIFT RECEIVED B Y THE ASSESSEE FROM SMT. JASODA DEVI HAS NO CREDITWORTHINESS AND ALSO GIFT WAS GIVEN IN CASH. THEREFORE, THE IMMEDIATE SOURCE OF THE SAME IS NOT A SCERTAINABLE, AS NO RECORDS ARE BEING MAINTAINED BY THE DONOR IN THIS R EGARD. FURTHER, A CLOSELY RELATED PERSON, BEING THE MOTHER OF THE APPELLANT, THE AFFIDAVIT FILED BY HER IN THIS REGARD IS HAVING VERY LITTLE EVIDENTIARY VA LUE. THE CASE LAW, IN VIEW OF THE ABOVE FACTS, IT IS HELD THAT THE SOURCES AND GENUINENESS OF THE GIFT FROM SMT. JASODA DEVI COULD NOT BE PROVED IN PROPER AND DESIRED MANNER. ITA 832/JP/2011 BHUSHAN SHARMA VS. ITO 4 EVEN IN CASE OF GIFT RECEIVED FROM SMT. SEEMA DEVI, THE CREDITWORTHINESS AND GENUINENESS OF GIFT WAS NOT ESTABLISHED BY THE A SSESSEE BEFORE THE ASSESSING OFFICER. MERE FILING OF CONFIRMATION, CHE QUE ROUTE OF GIFT RECEIVED, GIFT DEED ETC. ARE NOT SUFFICIENT TO PROVE THE GIFT AS GENUINE ONE, IDENTITY, CAPACITY OF THE DONOR AND GENUINENESS OF THE TRANSA CTION ARE REQUIRED TO BE ESTABLISHED IN THIS REGARD TO AVOID THE APPLICAT ION OF SECTION 68 IN SUCH MATTER. HE RELIED FURTHER VARIOUS DECISIONS OF VARI OUS COURTS MENTIONED ON PAGE 10 OF ITS ORDER. AFTER DISCUSSING THE ARGUMENT OF THE ASSESSEE IN LENGTH, HE CONFIRMED THE ADDITION OF RS. 6.50 LACS MADE BY THE ASSESSING OFFICER. FOR REMAINING AMOUNT OF RS. 5,50,000/-, IT HAS BEEN HELD THAT GIFTS RECEIVED FROM SHRI PRADEEP KUMAR, IT HAS BEEN HELD THAT AGREEMENT FOR SALE OF HOUSE PROPERTY WAS MADE ON 21/1/2007 AND ADV ANCE OF RS. 5,50,000/- WAS MADE ON 21/1/2007 AND SOURCE OF THIS CASH DEPOSITED IN BANK ACCOUNT WAS GIFT AND DEPOSITED IN BANK ACCOUNT ON 17/1/2007. HOWEVER, THE FACTS WERE THAT THE CASH WAS WITHDRAWN BY THE ASSESSEE ON 22/1/2007, WHICH IS PRIOR TO THE CASH WITHDRAWAL MAD E BY THE APPELLANT AND PURPORTEDLY UTILIZED TOWARDS MAKING SUCH CASH AD VISE TO THE SELLER REALITY AND EXPOSE THE TRUTH OF THE APPELLANT PLEA IN THIS REGARD. THEREFORE, CREDITWORTHINESS OF DONOR HAVE NOT RELEVANCE TO THE ISSUE UNDER CONSIDERATION AS THEIR GIFTS ARE NOT FOUND RELEVANT TO THE ADVANCE PAYMENT ITA 832/JP/2011 BHUSHAN SHARMA VS. ITO 5 OF RS. 5.50 LACS AS SUCH. ACCORDINGLY BE CONFIRMED THE ADDITION OF RS. 5.50 LACS. 4. NOW THE ASSESSEE IS IN APPEAL BEFORE US. 5. THE LEARNED A.R. FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEES MOTHER SMT. JASODA DEVI HAD GIVEN GIFT OF RS. 2.00 LACS TO HIM ON 08/1/2007 TO HELP HIM TO PURCHASE THE HOUSE. SMT. J ASODA DEVI IS REGULARLY ASSESSED TO TAX. SHE HAS INCOME FROM PERF ORMING RELIGIOUS AND SPIRITUAL CEREMONY. ALONGWITH RETURN, SHE HAS FILED STATEMENT OF AFFAIRS, IN WHICH AS ON 31/3/2007 THIS GIFT HAS BEEN REFLECTED. SHE ALSO FILED AN AFFIDAVIT BEFORE THE ASSESSING OFFICER AS EVIDENCE. SHE HAS PERFORMED THE RELIGIOUS ACTIVITY LIKE PATH PUJA, KIRTAN, PERFORMI NG RELIGIOUS AND SOCIAL CEREMONY ON MARRIAGE, MEHANDI ETC. THESE ACTIVITIES ARE CARRIED OUT BY THE LADIES/FEMALES. THUS, IDENTITY OF THE DONOR, GENUINE NESS OF THE GIFT AND CREDITWORTHINESS OF THE DONOR HAS FULLY SATISFIED. TH ERE IS NO PROVISION IN LAW THAT NO CASH GIFT CAN BE GIVEN AND ROUTED THROUG H THE BANKING CHANNEL. HE FURTHER EXPLAINED THE TERMS OF GIFT BY CONSIDERING THE VARIOUS DECISIONS OF THE HONBLE HIGH COURTS. FURTHER GIFT RECEIVED FROM SMT. SEEMA DEVI AT RS. 3.30 LACS I.E. WIFE OF THE ASSESSE E ON 08/1/2007 TO HELP HIM TO PURCHASE HIS HOUSE, FOR WHICH COPY OF THE GIF T DEED WAS FILED BY THE ASSESSEE. SMT. SEEMA DEVI, WIFE OF THE ASSESSEE IS R EGULARLY ASSESSED TO TAX. SHE HAS INCOME FROM PERFORMING RELIGIOUS AND S PIRITUAL CEREMONY. SHE ITA 832/JP/2011 BHUSHAN SHARMA VS. ITO 6 HAS ATTACHED WITH RETURN STATEMENT OF AFFAIRS WHEREIN GIFT OF RS. 3.30 LACS HAS BEEN DISCLOSED BY HER. FOR THE SOURCE OF INCOME , SHE HAS FILED HER AFFIDAVIT. HER STATEMENT WAS ALSO RECORDED OF HER IN COME WHERE SHE HAS EXPLAINED HER SOURCE OF INCOME AND ALSO DISCLOSED T HE FACT THAT SHE KEPT HER SAVINGS WITH HER FATHER IN LAW SHRI JHANDU RAM, WHICH HAS ALSO BEEN CONFIRMED BY SHRI JHANDU RAM IN AN AFFIDAVIT. NONE OF THESE EVIDENCES HAVE BEEN CONTROVERTED BY THE LOWER AUTHORITIES. HER E ALSO, THERE IS NO PROVISION OF LAW THAT GIFT SHOULD BE MADE THROUGH BA NKING CHANNEL. THUS, HE PRAYED TO ALLOW THE APPEAL IN FAVOUR OF THE ASSES SEE. 6. FOR ADDITION OF RS. 5.50 LACS, THE LEARNED A.R. SUBMITTED THAT THE SALE DEED WAS EXECUTED ON 22/1/2007. IT HAS BEEN STA TED THAT OUT OF TOTAL SALE AMOUNT RS. 5.50 LACS IS ALREADY RECEIVED IN AD VANCE FROM THE PURCHASER I.E. ON 22/1/2007 AND BALANCE AMOUNT OF R S. 6.50,000/- WOULD BE RECEIVED AS PER SCHEDULE FIRST DETAILED ABOVE IN PRESENCE OF THE SUB- REGISTRAR. THE FACTS REMAINS IS THAT RS. 6.50 LACS F OR WHICH DRAFT IS MADE OUT ON 10/1/2007 WAS GIVEN TO THE PURCHASER BEFORE THE S UB-REGISTRAR, RS. 5.50 LACS WAS PAID ON 27/1/2007 AFTER WITHDRAWING FROM THE BANK SUBSEQUENT TO THE DATE OF EXECUTION OF THE SALE DEE D. 7. AT THE OUTSET, THE LEARNED D.R. VEHEMENTLY SUPPO RTED THE ORDER OF THE LEARNED CIT(A). ITA 832/JP/2011 BHUSHAN SHARMA VS. ITO 7 8. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IN THE INTERE ST OF JUSTICE, THESE ISSUES ARE SET ASIDE TO THE ASSESSING OFFICER FOR RE-EXAMI NATION AND ALSO DIRECTED TO GIVE A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE TO PRODUCE THESE DONORS BEFORE THE ASSESSING OFFICER ALONGWITH EVIDENCES, IF ANY, AND TAKE DECISION AS PER LAW. 9. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED F OR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN THE OPEN COURT ON 14/11/2014. SD/- SD/- (R.P. TOLANI) (T.R. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER JAIPUR, DATED : 14 TH NOVEMBER, 2014 * RANJAN COPY FORWARDED TO :- 1. SHRI BHUSHAN SHARMA, JHUNJHUNU. 2. THE ITO, WARD 1, JHUNJHUNU. 3. THE CIT (A) 4. THE CIT 5. THE D/R GUARD FILE (I.T.A. NO. 832/JP/2011) BY ORDER, AR ITAT JAIPUR.