Parveen Kumar Goel, Jagadhari V. DCIT, Yamunanagar

ITA 845/CHANDI/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2370 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-05-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 30-04-2013
• Assessment Year: 1996-1997
• Appeal Filed On: 06-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N K SAINI
• Keywords: Gift
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B CHANDIGARH BEFORE SHRI T.R.SOOD, ACCOUNTANT MEMBER AND MS.SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 845/CHD/2011 ASSESSMENT YEAR : 1996-97 SHRI PARVEEN KUMAR GOEL, V DCIT CIRCLE, C/O KRISHNA ENGINEERING INDUSTRIES, YAMUNANAGAR. NEW CHHACHHRAULI ROAD, JAGADHARI. PAN: AADHP-5039F (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MAHESH KUMAR DEPARTMENT BY SHRI N.K.SAINI DATE OF HEARING : 30.04.2013 DATE OF PRONOUNCEMENT : 10.05.2013 ORDER PER T.R.SOOD, AM THE PRESENT APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER PASSED BY THE LD. CIT(A) DATED 18.07.2012 U/S 250(6) OF THE INCOME-TAX ACT,1961 (IN SHORT 'THE ACT'). 2. IN THIS APPEAL THE ASSESSEE HAS RAISED FOLLOWING EFFECTIVE GROUNDS VARIOUS GROUNDS BUT AT THE TIME O F HEARING, LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT ONLY DISPUTE INVOLVED IS CONFIRMATION OF ADDITION ON ACC OUNT OF INTEREST ON FDRS. 3. AFTER HEARING BOTH THE PARTIES, WE FIND THAT IN THIS CASE ORIGINALLY, ASSESSMENT WAS REOPENED BY ISSUING A NO TICE U/S 148 OF THE ACT ON THE BASIS OF INFORMATION RECEIVED BY DDIT(INVESTIGATION) THAT SOME FDRS HAVE BEEN MADE F OR OBTAINING LOANS BY THE ASSESSEE. THE ASSESSEE REQU ESTED AO 2 TO EXAMINE THE BANK OFFICIALS TO PROVE WHO HAS OPEN ED THE FDR ACCOUNTS. THIS REQUEST WAS NOT COMPLIED AND INT EREST ON FDRS WAS ADDED TO THE INCOME OF THE ASSESSEE ON THE BASIS THAT FDRS WERE ULTIMATELY ENCASHED THROUGH SB ACCOUNT OF ASSESSEE. MATTER ULTIMATELY TRAVELED TO THE TRIBUNAL AND TRIBUNAL RESTORED MATTER TO THE AO WIT H A DIRECTION TO EXAMINE THE ISSUE AND TO SUMMON BANK O FFICIALS AND ASCERTAIN THE OWNERSHIP OF FDRS. IN PURSUANCE OF THE DIRECTION OF TRIBUNAL, AO ISSUED SUMMONS TO THE BAN K AUTHORITIES TO PRODUCE THE ORIGINAL RECORD AND ALSO CALLED ASSESSEE TO BE PRESENT. SHRI SATINDER PAL DHAND, C HIEF MANAGER OF THE RELEVANT BRANCH OF THE BANK APPEARED AND HIS STATEMENT WAS ALSO RECORDED. THE GIST OF THE S TATEMENT WAS THAT BANK DID NOT HAVE THE RELEVANT RECORDS BEC AUSE OF THE CHANGE FROM MANUAL BANKING TO COMPUTERIZED BANK ING AND IT WAS ALSO STATED THAT IT WAS NOT NECESSARY TH AT LOAN ACCOUNT HOLDERS SHOULD OPEN THE FDRS AND FURNISH SA ME AS SECURITY ON ALL OCCASIONS. THE AO AGAIN NOTED THAT SINCE IT WAS ALREADY NOTICED BY THE CIT(APPEALS) IN THE EARL IER ORDER THAT FDRS HAD BEEN REALIZED THROUGH THE SAVING BANK ACCOUNT OF THE ASSESSEE, THEREFORE, ONUS WAS ON ASS ESSEE TO SHOW HOW THE FDRS WERE MADE. IN THIS BACKGROUND, ADDITION ON ACCOUNT OF INTEREST AMOUNTING TO RS.3,6 6,465/- WAS MADE BY AO BY FOLLOWING PARAS : IN GROUND NO.9, THE ASSESSEE HAS TAKEN ALTERNATIVE PLEA (WITHOUT PREJUDICE TO HIS CONTENTION IN THE GROUND 1 TO 8) THAT WHEN THE ALLEGED FDRS/CDRS GOT ENCASHED AND MATURED IN THE MIDDLE OF THE RELEVANT ASSESSMENT YE AR, ONLY THE INCOME UPTO THE PERIOD OF ENCASHMENT COULD AT T HE MOST BE ADDED. 3 ACCORDINGLY, THE INCOME WORKED OUT AT RS.3,66,465/- (+ AGRICULTURAL INCOME OF RS.10,000/- AS A RESULT OF O RDER GIVING EFFECT TO THE LD. CIT(APPEALS)S AFORESAID O RDER IS DETERMINED TO BE ASSESSEE'S TOTAL INCOME FOR THE YE AR IN HAND. 4. ON APPEAL BEFORE CIT(APPEALS), IT WAS MAINLY SUB MITTED THAT IN THE ABSENCE OF RECORDS PRODUCED BY THE BANK OFFICIALS AND PARTICULARLY THE STATEMENT THAT IT WA S NOT NECESSARY THAT SHRI P.KUMAR AND SHRI P.K.GOYAL ARE THE SAME PERSONS AND THEREFORE, ADDITION COULD NOT BE M ADE IN THE HANDS OF ASSESSEE. RELIANCE WAS PLACED ON SOME CASE- LAWS. LD. CIT(APPEALS) DID NOT FIND MERIT IN THESE CONTENTIONS AND DISMISSED ASSESSEE'S APPEAL VIDE PA RA 5, WHICH IS AS UNDER : 5. THE FACTS OF THE CASE AS WELL AS THE SUBMISSION S OF THE APPELLANT HAVE BEEN CONSIDERED BY THE UNDERSIGNED CASES CITED ARE DISTINGUISHABLE ON FACT S. KEEPING IN VIEW THE FACTS THAT BANK AUTHORITIES HAV E NOT BEEN ABLE TO PRODUCE THE RELEVANT RECORD BEING MORE THAN 10 YEARS OLD, THE ONLY COURSE BEFORE THE DEPARTMENT TO ASCERTAIN THE OWNERSHIP OF THE FDRS/CDRS PLEDGED WITH OBC WAS TO SEE WHOSE BANK ACCOUNT WAS USED TO ENCASH THE FDRS/CDRS IN DISPUTE. SINCE THE FDRS/CDRS WERE ENCASHED THROUGH APPELLANTS SAVING BANK ACCOUNT, THE APPELLANT HAS BEEN RIGHTLY TREATED AS THE OWNER OF THE FDRS/CDRS. THE ACTION OF THE AO DOES NOT CALL FOR ANY INTERFERENCE. THE APPELLANT HAS RIGHTLY BEEN GIVEN CREDIT FOR THE PERIOD UPTO THE DATE OF ENCASHMENT. IN THE RESULT, THE ADDITION OF RS.3,66,470/-+RS.10,000/- AGRICULTURAL INCOME IS CONFIRMED. 5. BEFORE US, LD. COUNSEL OF THE ASSESSEE REFERRED TO THE ORDER OF TRIBUNAL AND SUBMITTED THAT TRIBUNAL IN TH E EARLIER ORDER HAD CLEARLY OBSERVED THAT WITHOUT KNOWING THE OWNERSHIP OF THE FDRS, ADDITION COULD NOT HAVE BEEN MADE ON ACCOUNT OF INTEREST ON FDRS. RECORDS WERE NOT A VAILABLE WITH THE BANK TO PROVE THAT IT WAS ONLY ASSESSEE WH O HAS OPENED THE FDR ACCOUNT. REVENUE HAS NO MATERIAL TO PROVE 4 THAT FDRS WERE GOT PREPARED BY THE ASSESSEE HIMSELF . IN ANY CASE, WHY SHOULD ASSESSEE GIVE FDRS WORTH RS.80,00,000/- FOR OBTAINING A LOAN OF ABOUT RS.40 0,000/-. 6. ON THE OTHER HAND, LD. DR SUBMITTED THAT FDRS HA VE BEEN REALIZED THROUGH THE SAVING BANK ACCOUNT OF TH E ASSESSEE AND IF THE FDRS DID NOT BELONG TO THE ASSE SSEE, WHY AND HOW ASSESSEE'S SB ACCOUNT COULD HAVE BEEN U SED FOR ENCASHING THE FDRS. HE ALSO CONTENDED THAT IF ASSESSEE HAS OBTAINED THE OD LIMIT, NO OUTSIDERS WOULD COME WITHOUT THE KNOWLEDGE OF ASSESSEE TO PLEDGE HIS FDRS. 7. WE HAVE CONSIDERED RIVAL SUBMISSIONS CAREFULLY A ND DID NOT FIND ANY FORCE IN THE STATEMENT OF LD. COUNSEL OF ASSESSEE. COMMON SENSE WOULD TELL ANYBODY THAT WHE N SOMEBODY APPROACHES A BANK FOR OBTAINING ANY LOAN F ACILITY, NORMALLY BANK WOULD CALL FOR SOME KIND OF SECURITY AND MANY TIMES, SUCH SECURITY IS TAKEN IN THE FORM OF F DRS. IT IS ALMOST IMPOSSIBLE TO BELIEVE THAT ASSESSEE HAS O BTAINED LOAN AND SOME STRANGER HAS PLEDGED HIS FDR WITHOUT THE KNOWLEDGE OF ASSESSEE. THIS BECOMES FURTHER TOTALL Y IMPOSSIBLE TO BELIEVE THAT SUCH FDRS HAVE BEEN ULTI MATELY ENCASHED THROUGH THE SB ACCOUNT OF ASSESSEE AND THE SE FACTS HAS NOT BEEN DISPUTED BY THE ASSESSEE BEFORE US. IN FACT, HON'BLE SUPREME COURT IN THE CASE OF SUMATI D AYAL V CIT 214 ITR 801 WAS CONCERNED WITH A SITUATION WHER E A LADY FROM BANGALORE CLAIMED THAT SHE HAS WON THREE JACKPOT PRIZES IN HORSE RACES. THE ITO INCLUDED THESE AMOUN TS AS INCOME FROM OTHER SOURCES AND ASSESSED THEM ACCOR DINGLY. 5 THE AAC CONFIRMED THE ORDER AND ASSESSEE REFERRED T HE MATTER TO SETTLEMENT COMMISSION. THE SETTLEMENT COMMISSION, BY A MAJORITY DECISION, REJECTED THE EXPLANATION OF THE ASSESSEE BY OBSERVING AS UNDER : (I) THE APPELLANTS KNOWLEDGE OF RACING WAS VERY M EAGRE, (II) A JACKPOT IS A STAKE OF FIVE EVENTS IN A SINGLE DAY A ND ONE CAN BELIEVE A REGULAR AND EXPERIENCE PUNTER CLEARING A JACKPOT OC CASIONALLY BUT THE CLAIM OF THE APPELLANT OF HAVING WON A NUMBER OF JA CKPOTS IN THREE OR FOUR SEASONS NOT MERELY AT ONE PLACE BUT AT THREE DIFFERENT CENTRES, NAMELY, MADRAS, BANGALORE AND HYDERABAD APPEARED, P RIMA FACIE, TO BE WILD AND CONTRARY TO STATISTICAL THEORIES AND, EXPE RIENCE OF FREQUENCIES AND PROBABILITIES. (III) THE APPALLANTS BOOKS DID NOT SHOW ANY DRAWINGS ON RACE DAYS OR ON THE IMMEDIATELY PRECEDING PRECEDIN G DAYS FOR THE PURCHASE OF JACKPOT COMBINATION-TICKETS, WHICH ENTA ILED SIZABLE AMOUNTS VARYING GENERALLY BETWEEN RS. 2,000 AND RS.3000. TH E DRAWINGS RECORDED IN THE BOOKS COULD NOT BE CO-RELATED TO THE VARIOUS RACING EVENTS AT WHICH THE APPELLANT MADE THE ALLEGED WINNINGS. (IV)WHILE THE APPELLANT'S CAPITAL ACCOUNT WAS CREDITED WITH THE GROSS AMOUNT OF RACE INNINGS, THERE WERE NO DEBITS EITHER FOR EXPENSES AND PURCHASES OF TICKETS OR FOR LOSSES, (V) IN VIEW OF THE EXCEPTIONAL LUCK CLAIMED TO HAVE BEEN E NJOYED BY THE APPELLANT, HER LOSS OF INTEREST IN RACES FRONT 1972 ASSUMED. SIGNIFICANCE. THE SETTLEMENT COMMISSION TOOK THE VIEW THAT WINNIN GS IN RACING BECAME LIABLE TO INCOME-TAX FROM APRIL 1, 1972, BUR ONE WO ULD NOT GIVE UP AN ACTIVITY YIELDING OR LIKELY TO YIELD A LARGE INCOME MERELY BECAUSE THE INCOME WOULD SUFFER TAX AND THAT THE POSITION WOULD BE DIFFERENT, HOWEVER, IF THE CLAIM OF WINNINGS IN RACES WAS FALS E AND WHAT WERE PASSED OFF AS SUCH WINNINGS REALLY REPRESENTED THE APPELLA NT'S TAXABLE, INCOME FROM SOME UNDISCLOSED SOURCES ON APPEAL TO THE SUPREME COURT HELD AS UNDER: HELD, DISMISSING THE APPEAL, THAT THE SETTLEMENT C OMMISSION AFTER CONSIDERING THE SURROUNDING CIRCUMSTANCES AND APPLY ING THE TEST OF HUMAN PROBABILITIES HAD RIGHTLY CONCLUDED THAT THE APPELL ANT'S CLAIM ABOUT THE AMOUNT BEING HER WINNINGS FROM RACES WAS NOT GENUIN E. 8. FROM ABOVE IT IS CLEAR THAT HON'BLE APEX COURT H AS APPROVED THE TEST OF HUMAN PROBABILITY. THIS TEST HAS BEEN FOLLOWED IN VARIOUS LEADING CASES INCLUDING THE DEC ISION IN CIT V MOHANKALA P. 291 ITR 278 WHERE THE RECEIPT OF GIFT RECEIVED FROM A PERSON WITHOUT SOURCES WAS REJECTED ON THE BASIS OF THIS TEST. WHEN THE FACTS OF THE CASE BEF ORE US ARE EXAMINED ON THIS TOUCH-STONE OF HUMAN PROBABILITY T EST, IT BECOMES ALMOST IMPOSSIBLE TO ACCEPT THAT SOME STRAN GER 6 WOULD COME AS AN ANGEL, MAKE A FDR AND PLEDGE THE S AME AGAINST A PARTICULAR LOAN OF THE ASSESSEE AND ASSES SEE DOES NOT KNOW ANYTHING ABOUT IT. IF THE BANK DOES NOT H AVE DOCUMENTS, ASSESSEE WOULD HAVE DEFINITELY KNOWN WHO IS THE PERSON WHO HAS MADE THE FDR. WE ARE OF THE OPI NION THAT REVENUE HAS ADDED ONLY INTEREST ON SUCH FDRS, MAY BE ON CONSIDERATE GROUNDS OR INADVERTENTLY, BUT THAT W OULD NOT LEAD TO THE CONCLUSION THAT ADDITION IS NOT CALLED FOR. IN THESE CIRCUMSTANCES, WE FIND NO INFIRMITY IN THE OR DER OF LD. CIT(APPEALS) AND ACCORDINGLY, CONFIRM THE SAME. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. 10. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH MAY,2013. SD/- SD/- (SUSHMA CHOWLA) (T.R.SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 10 TH MAY,2013. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT ,DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH