Shri Mahendra Singh Tomar , Ratlam V. ITO-1 Ratlam, Ratlam

ITA 86/Ind/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 3600 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 8 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-11-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 01-06-2020
• Assessment Year: 2012-2013
• Appeal Filed On: 12-02-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VINEET A D UB E
• Assessee Lawyers: S N AGRAWAL
• Keywords: Reopening of assessment; Capital asset; Gift; Income from undisclosed sources; Salary income; Document seized; Source of fund; Question of law; Tangible material; Corroborative evidences; Assessment record; Capital receipt; Onus to prove; Reason to believe; Documents seized; Reassessment proceedings; Set aside; Liquidation
• Section: 271(1)(c); 69C; 143(3); 234B; 250; 201; 64; 113; 43; 48; 73; 72; 13; 153; 22; 147; 68; 69; 148; 144; 139

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NOS.86 & 584/IND/2018 ASSESSMENT YEAR:2012-13 MAHENDRA SINGH TOMAR 243, RAJIV NAGAR, RATLAM (M.P.) / VS. ITO - 1 RATLAM ( APPELLANT ) ( REVENUE ) P.A. NO. AJMPT3321J APPELLANT BY SHRI S. N . AGRAWAL , C A REVENUE BY SMT. VINEETA DUBE , SR. DR DATE OF HEARING: 15.09.2020 DATE OF PRONOUNCEMENT: 11.11.2020 / O R D E R PER KUL BHARAT, J.M: THESE TWO APPEALS BY THE ASSESSEE ARE PERTAINING TO ASSESSMENT YEAR 2012-13 ONE IN QUANTUM PROCEEDINGS AND ANOTHER QUA PENALTY PROCEEDINGS ARE DIRECTED AGAINST THE DIFFERENT ORDERS OF LD. COMMISSIONER OF INCOME TAX (APPEAL)- (IN SHORT LD. CIT(A), UJJAIN DATED 12.12.2 017 & 09.05.2018. MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 2 FIRST WE TAKE THE ASSESSEE APPEAL IN QUANTUM PROCEEDINGS IN ITANO.86/IND/2018. THE ASSESSEE HAS RAISED FOLLOWI NG GROUNDS OF APPEAL: 1.1] THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD CIT(A) ERRED IN APPROVING TH E ACTION OF THE LD ASSESSING OFFICER IN ISSUANCE OF N OTICE U / S 148 OF THE ACT MERELY ON THE BASIS OF PRESUMPTION AND ON THE BASIS OF INFORMATION RECEIVED BY HIM IN THE ABSENCE OF ANY TANGIBLE MATERIAL AND LIVE LINK OF CONCEALME NT OF INCOME. 1.2] THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW LD CIT[A] ERRED IN APPROVING THE ACTION OF THE LD ASSESSING OFFICER IN ISSUANCE OF THE NOTICE U / S 148 OF THE ACT MERELY ON THE BASIS OF INFORMATION AS RECEI VED BY HIM WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND SUBMISSION MADE BEFORE HIM AND WITHOUT INDEPENDENT APPLICATIONS OF HIS MIND PRIOR TO THE I SSUANCE OF THE NOTICE U / S 148 OF THE ACT 2] THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW THE LD CIT(A) ERRED IN MAINTAINING THE A DDITION OF RS 31,10,000/- TO THE TOTAL INCOME OF THE APPELL ANT BY INVOKING THE PROVISIONS OF SECTION 68 OF THE ACT ME RELY FOR THE REASON THAT THE SAME WAS OFFERED BY THE APPELLA NT IN THE RETURN AS FILED IN RESPONSE TO THE NOTICE AS IS SUED U/S 148 OF THE ACT WITHOUT PROPERLY APPRECIATING THE FA CTS OF THE CASE AND SUBMISSION MADE BEFORE HIM. 3] THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW THE LD CIT(A) ERRED IN MAINTAINING THE A DDITION OF RS 1,00,000/- AS MADE BY THE ASSESSING OFFICER T O THE TOTAL INCOME OF THE APPELLANT ON ACCOUNT OF LOW MAR RIAGE EXPENSES WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND SUBMISSION MADE BEFORE HIM. 4.1] THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD CIT(A) ERRED IN ENHANCING THE INC OME OF THE APPELLANT BY RS 34,64,150/- ON ACCOUNT OF GIFTS RECEIVED FROM VARIOUS RELATIVES EVEN WHEN THE APPEL LANT HAS PROPERLY ESTABLISHED THE GENUINENESS AND CREDITWORTHINESS OF THE DONOR WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND SUBMISSION M ADE MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 3 BEFORE HIM. 4.2] THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD CIT(A) GROSSLY ERRED IN ENHANCING THE TOTAL INCOME OF THE APPELLANT EVEN WHEN THE APPELLA NT HAD FILED SUFFICIENT DOCUMENTS BEFORE THE ASSESSING OFF ICER AND AFTER BEING SATISFIED WITH THE EXPLANATION OF THE A PPELLANT THE SAME WAS ACCEPTED BY HIM U / S 68 OF THE ACT. S ECTION 68 OF THE ACT DEALS ABOUT THE SATISFACTION OF THE A SSESSING OFFICER AND NOT OF THE LD CIT(A). 5] THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW THE LD CIT(A) ERRED IN ENHANCING THE INC OME OF THE APPELLANT BY AN AMOUNT OF RS 8,43,150/ - ON ACC OUNT OF OPENING CAPITAL OF THE APPELLANT WITHOUT PROPERL Y APPRECIATING THE FACTS OF THE CASE AND SUBMISSION M ADE BEFORE HIM. 6. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW THE LD. CIT(A) GROSSLY ERRED IN ENHANCIN G THE INCOME OF THE APPELLANT IN RESPECT OF GIFT AND OPEN ING CAPITAL WHICH WAS NOT IN DISPUTE BEFORE HIM AND THE REFORE ENHANCEMENT AS MADE BY THE LD. CIT(A) WAS WITHOUT H IS JURISDICTION. 7. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW THE LD. CIT(A) IN MAINTAINING THE ADDITI ON AS MADE BY THE ASSESSING OFFICER AND ALSO ENHANCED THE INCOME OF THE APPELLANT EVEN WHEN THE APPELLANT IS NOT HAVING ANY SOURCE OF OTHER INCOME AS TO JUSTIFY THE HUGE ADDITIONS IN VIEW OF DECISION OF THE HON'BLE APEX C OURT IN THE CASE OF SMT. P.K. NOORJAHAN AS REPORTED IN 237 ITR 570 (SC) 8. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW THE AMOUNT OF INTEREST AS CHARGED U/S 23 4B AND 234C OF THE ACT OF RS.3,61,774/- AND RS.32,141/ - IS EITHER WRONG OR EXCESSIVE AND THE SAME NOW REQUIRES TO BE DELETED IN FULL OR REDUCED SUBSTANTIALLY. 9. THE APPELLANT RESERVE HIS RIGHT TO ADD, ALTER, M ODIFY OR DELETE ANY GROUNDS OF APPEAL ON OR BEFORE THE DATE OF FINAL HEARING. 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS AN INDIVIDUA L AND HAVING SALARY INCOME BEING EMPLOYED AS CHARTERED MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 4 ACCOUNTANT. HE FILED HIS RETURN OF INCOME FOR THE A .Y. 2012-13 BY WAY OF E-FILING ON 28.07.2012 DECLARING T OTAL INCOME OF RS.2,02,437/-. ASSESSEE HAD PURCHASED AN AGRICULTURAL LAND AT GRAM AHIRKHEDI TEHSIL & DIST. INDO RE, ON 19.10.2011 AT SALE CONSIDERATION OF RS.60,00,000/-. ON THE BASIS OF THE INFORMATION RECEIVED FROM THE OFFICE OF THE REGISTRAR ASSESSMENT OF THE ASSESSEE WAS REOPENED U/S 1 47 OF THE ACT, ON THE GROUND THAT THE ASSESSEE HAD PURCHAS ED AN AGRICULTURAL LAND THEREBY HE MADE INVESTMENT OF RS.64,66,000/-. IN PURSUANCE TO THE NOTICE U/S 148 THE ASSESSEE FILED RETURN OF INCOME DECLARING INCOME AT RS.33,12,440/- HOWEVER, DURING THE COURSE OF ASSESSM ENT PROCEEDINGS HE STATED THAT THE RETURN OF INCOME FILED U/S 139 BE TREATED AS THE INCOME TAX RETURN FILED IN RES PONSE TO THE NOTICE U/S 148 OF THE ACT. THE ASSESSING OFFICE R DURING THE COURSE OF ASSESSMENT PROCEEDINGS CALLED UPON THE ASSESSEE TO EXPLAIN SOURCE OF INVESTMENT. IN RESPONSE , THERETO, THE ASSESSEE SUBMITTED THAT THE SOURCE OF INVESTMENT WAS GIFT RECEIVED FROM HIS FATHER WHO RET IRED FROM THE SERVICE OF RAILWAYS WHO GAVE GIFT OF RS.17,00,000/-, FURTHER HE RECEIVED GIFT FROM MOTHE R OF RS.5,26,000/-, GRANDMOTHER OF RS.6,00,000/-, WIFE OF RS.4,15,000/- AND OTHER RELATIVES AND FRIEND. THUS, H E MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 5 RECEIVED RS.65,74,150/- AS GIFT. THIS EXPLANATION OF THE ASSESSEE WAS NOT FOUND ACCEPTABLE BY THE ASSESSING OFFI CER. HE MADE ADDITION OF RS.31,10,000/-, IN THIS RESPECT. FURTHER, HE MADE ADDITION OF RS.1,00,000/- IN RESPECT OF MARRIAGE CEREMONY EXPENSES. 3. AGGRIEVED AGAINST THIS THE ASSESSEE PREFERRED AN APPE AL BEFORE THE LD. CIT(A) WHO AFTER CONSIDERING THE SUBM ISSIONS REJECTED THE EXPLANATION MADE BY THE ASSESSEE AND ENHANCED THE ADDITION MADE BY THE ASSESSING OFFICER. THEREBY, HE ASSESSED INCOME AT RS.65,74,150/-. 4. NOW THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. 5. GROUND NOS.1.1 & 1. 2 ARE AGAINST THE LEGALITY OF REOPENING. LD. COUNSEL FOR THE ASSESSEE REITERATED TH E SUBMISSIONS AS MADE IN THE WRITTEN SYNOPSIS. FOR THE SAKE OF CLARITY, SUBMISSIONS ARE REPRODUCED AS UNDER: A.1] THE PRESENT APPEAL IS FILED BY THE ASSESSEE AG AINST THE ORDER OF THE LD CIT (A), UJJAIN DATED 12-12-2017. A.2] THE APPELLANT IS AN INDIVIDUAL AND HIS ONLY SO URCE OF INCOME IS SALARY INCOME. A.3] THE BASIC DETAILS OF THE CASE ARE TABULATED AN D SUMMARIZED HEREUNDER FOR YOUR READY REFERENCE: S. NO PARTICULARS DATE/ AMOUNT [IN RS.] 1 DATE OF FILING OF INCOME - TAX RETURN UNDER SECTION 139 OF THE ACT 27-07-2012 2 TOTAL INCOME DECLARED IN THE INCOME - TAX RETURN FILE D UNDER SECTION 139 OF THE ACT 2,02,437 3 DATE OF ISSUE OF NOTICE UNDER SECTION 148 OF THE AC T 03 - 06 - 2015 4 DATE OF FILING OF INCOME - TAX RETURN IN RESPONSE TO THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT 02-07-2015 MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 6 5 TOTAL INCOME DECLARED IN THE INCOM E - TAX RETURN FILED IN RESPONSE TO THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT 33,12,440 6 DATE OF PASSING OF ASSESSMENT ORDER UNDER SECTION 1 43(3) R.W.S. 147 OF THE ACT 29-12-2016 7 TOTAL INCOME ASSESSED IN THE ASSESSMENT ORDER PASSE D UNDER SECTION 143(3) R.W.S. 147 OF THE ACT 34,12,437 8 DATE OF PASSING OF ORDER UNDER SECTION 250 OF THE A CT BY THE LD CIT(A), UJJAIN 12-12-2017 9 AMOUNT BY WHICH INCOME OF THE APPELLANT WAS ENHANCE D BY THE LD CIT(A), UJJAIN 43,07,300 10 TOTAL ASSESSED INCOME OF THE A PPELLANT AFTER GIVING EFFECT OF THE ORDER OF LD CIT(A), UJJAIN 77,19,737 A.4] THE CASE OF THE APPELLANT FOR THE ASSESSMENT Y EAR 2012-13 WAS REOPENED FOR VERIFICATION OF SOURCE OF PURCHASE OF AGRICULTURAL LAND BY THE APPELLANT. THE APPELLANT CATEGORICALLY EXPLAINED DURING THE CO URSE OF REASSESSMENT PROCEEDINGS THAT SOURCE OF PURCHASE OF THE SAID LAND WAS OUT OF GIFTS/ LOAN RECEIVED FROM RELATIVES / FRIEND. THE APPELLANT ALSO FILED AMPLE DOCUMENTARY EVIDENCES IN SUPPORT OF HIS CONTENTIONS. HOWEVER, THE ASSESSING OFFICER DID NOT ACCEPT THE CONTENTIONS PUT FORTH BY THE APPELLANT AND MADE THE FOLLOWING A DDITIONS TO THE TOTAL INCOME OF THE APPELLANT: S. NO PARTICULARS AMOUNT [IN RS.] 1 TOTAL INCOME DECLARED IN THE INCOME - TAX RETURN FILED UNDER SECTION 139 OF THE ACT 2,02,437 ADD ADDITIONAL INCOME SURRENDERED BY ASSESSEE/ ADDITION ON ACCOUNT OF GIFTS RECEIVED FROM RELATIVES AND LOAN R ECEIVED FROM FRIEND 31,10,000 ADD ADDITION ON ACCOUNT OF MARRIAGE EXPENSES 1,00,000 TOTAL INCOME ASSESSED IN THE ASSESSMENT ORDER PASS ED UNDER SECTION 143(3) R.W.S. 147 OF THE ACT 34,12,437 A.5] PARTY-WISE DETAILS OF ADDITION OF RS. 31,10,00 0/- AS MAINTAINED BY THE ASSESSING OFFICER IS TABULATED AND SUMMARIZED HEREU NDER FOR YOUR READY REFERENCE : S. NO NAME OF THE PARTY RELATION WITH APPELLANT NATURE OF RECEIPT GROSS AMOUNT [IN RS.] AMOUNT ACCEPTED AS GENUINE [IN RS.] AMOUNT NOT ACCEPTED AS GENUINE/ ADDITION MAINTAINED TO THE TOTAL INCOME [IN RS.] 1 SHRI GOPAL FATHER GIFT 17,00,000 6,00,000 11,00,000 MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 7 SINGH TOMAR 2 SMT NI LIMA TOMAR MOTHER GIFT 5,26,000 2,00,000 3,26,000 3 SMT JASODA BAI TOMAR GRANDMOTHER GIFT 6,00,000 2,00,000 4,00,000 4 SMT KIRTI TOMAR SPOUSE GIFT 4,15,000 1,21,000 2,94,000 5 SMT MADHU BALA RAJPUT MOTHER - IN - LAW GIFT 5,00,000 5,00,000 NIL 6 SHRI VIRENDRA SINGH RAJPUT FATHER - IN - LAW GIFT 7,00,000 7,00,000 NIL 7 SHRI AWADESH SINGH RAJPUT BROTHER - IN - LAW GIFT 3,00,000 3,00,000 NIL 8 SHRI RAVI GURJAR FRIEND LOAN 9,90,000 NIL 9,90,000 9 OPENING BALANCE OF CAPITAL - OPENING CAPITAL 8,43,150 8,43,150 NIL TOTAL 65,74,150 34,64,150 31,10,000 A .6] THE APPELLANT DURING THE COURSE OF REASSESSMENT PROCEEDINGS SPECIFICALLY LODGED A CLAIM BEFORE THE ASSESSING OF FICER TO WITHDRAW THE AMOUNT OF RS. 31,10,000/- AS OFFERED FOR TAX IN THE INCOME-TAX RETURN AS FILED IN RESPONSE TO THE NOTICE ISSUED UNDER SECTIO N 148 OF THE ACT. HOWEVER, THE ASSESSING OFFICER DID NOT ACCEPT THE C LAIM OF THE APPELLANT TO REDUCE THE TOTAL INCOME BY AN AMOUNT OF RS. 31,10,0 00/-. A.7] THE APPELLANT THEREAFTER PREFERRED AN APPEAL B EFORE THE LD CIT(A), UJJAIN AND DISPUTED THE AMOUNT OF ADDITIONAL INCOME WHICH WAS ERRONEOUSLY OFFERED FOR TAX IN THE INCOME-TAX RETUR N AND MAINTAINED BY THE ASSESSING OFFICER IN ADDITION TO AMOUNT OF RS. 1,00 ,000/- ADDED ON ACCOUNT OF MARRIAGE EXPENSES. HOWEVER, THE LD CIT(A), UJJAI N FURTHER ENHANCED THE INCOME OF THE APPELLANT BY AN AMOUNT OF RS. 43,07,3 00/-. A SUMMARY OF ADDITIONS SUSTAINED AND FURTHER ENHANCED BY THE LD CIT(A), UJJAIN IS TABULATED AND SUMMARIZED HEREUNDER FOR YOUR READY R EFERENCE: S. NO NAME OF THE PARTY NATURE OF RECEIPT GROSS AMOUNT [IN RS.] AMOUNT NOT ACCEPTED AS GENUINE BY AO/ ADDITION MAINTAINED BY AO [IN RS.] AMOUNT ACCEPTED AS GENUINE BY AO WHICH WAS ENHANCED BY LD CIT(A) [IN RS.] AMOUNT IN DISPUTE BEFORE THE HONBLE BENCH [IN RS.] 1 ADDITION ON ACCOUNT OF GIFTS/ LOAN RECEIVED FROM RELATIVES/ FRIEND 1.1 SHRI GOPAL GIFT 17,00,000 11,00,000 6,00,000 17,00,000 MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 8 SINGH TOMAR 1.2 SMT NILIMA TOMAR GIFT 5,26,000 3,26,000 2,00,000 5,26,000 1.3 SMT JASODA BAI TOMAR GIFT 6,00,000 4,00,000 2,00,000 6,00,000 1.4 SMT KIRTI TOMAR GIFT 4,15,000 2,94,000 1,21,000 4,15,000 1.5 SMT MADHU BALA RAJPUT GIFT 5,00,000 NIL 5,00,000 5,00,000 1.6 SHRI VIRENDRA SINGH RAJPUT GIFT 7,00,000 NIL 7,00,000 7,00,000 1.7 SHRI AWADESH SINGH RAJPUT GIFT 3,00,000 NIL 3,00,000 3,00,000 1.8 SHRI RAVI GURJAR LOAN 9,90,000 9,90,000 NIL 9,90,000 1.9 OPENING BALANCE OF CAPITAL OPENING CAPITAL 8,43,150 NIL 8,43,150 8,43,150 SUB-TOTAL [A] 65,74,150 31,10,000 34,64,150 65,74,150 2 OPENING BALANCE OF CAPITAL ADDED TWICE [DOUBLE ADDITION] OPENING CAPITAL 8,43,150 8,43,150 SUB-TOTAL [B] 65,74,150 31,10,000 43,07,300 74,17,300 3 ADDITION ON ACCOUNT OF MARRIAGE EXPENSES SUB-TOTAL [C] 1,00,000 NIL 1,00,000 GRAND TOTAL 75,17,300 1] GROUND NO. 1.1 & 1.2 CHALLENGING THE REOPENING OF THE CASE IN ABSENCE OF ANY TANGIBLE MATERIAL AND LIVE L INK OF CONCEALMENT OF INCOME AND MERELY FOR VERIFICATION O F SOURCE OF PURCHASE OF ASSET 1.1] THE APPELLANT IN THESE GROUNDS OF APPEAL HAS CHALLENGED THE REOPENING OF THE CASE IN ABSENCE OF ANY TANGIBLE MA TERIAL AND LIVE LINK OF CONCEALMENT OF INCOME AND MERELY FOR THE PURPOSE OF VERIFICATION OF SOURCE OF PURCHASE OF ASSET. MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 9 1.2] THE APPELLANT PURCHASED AN AGRICULTURAL LAND S ITUATED AT GRAM AHIRKHEDI, INDORE ON 19-10-2011 FOR A BASIC CONSIDE RATION OF RS. 60,00,000/-, STAMP DUTY OF RS. 3,75,000/- AND REGIS TRATION CHARGES OF RS. 91,000/- THEREBY TOTALING TO RS. 64,66,000/-. 1.3.1] THE APPELLANT THEREAFTER RECEIVED NOTICES RE GARDING QUERY ON FINANCIAL TRANSACTION WHICH WERE DULY RESPONDED TO BY THE APPELLANT AND REQUISITE SUPPORTING DOCUMENTARY EVIDENCES WERE ALS O FILED. THE NOTICES ISSUED REGARDING QUERY ON FINANCIAL TRANSACTION AND CORRESPONDING SUBMISSIONS OF THE APPELLANT ARE ENCLOSED HEREWITH FOR YOUR READY REFERENCE: S. NO PARTICULARS PAGE NO. OF COMPILATION 1 NOTICE DATED 06 - 02 - 2015 REGARDING QUERY OF FINANCIAL TRANSACTION ISSUED FROM THE OFFICE OF THE ITO, UJJA IN 187 2 SUBMISSION FILED ON 23 - 02 - 2015 IN RESPONSE TO THE NOTICE ISSUED FROM THE OFFICE OF THE ITO, UJJAIN 188 3 NOTICE DATED 28 - 04 - 2015 REGARDING QUERY OF FINANCIAL TRANSACTION ISSUED FROM THE OFFICE OF THE ITO-1, RA TLAM 189 4 SUBMISSION FILED IN RESPONSE TO THE NOTICE ISSUED F ROM THE OFFICE OF THE ITO-1, RATLAM 190-191 1.3.2] ON PERUSAL OF THE ABOVE TABLE, IT IS QUITE C LEAR THAT NOTICES ISSUED FROM TIME-TO-TIME WERE PROPERLY RESPONDED AND SUPPO RTING DOCUMENTARY EVIDENCES WERE ALSO FILED. HOWEVER, THE ASSESSING O FFICER PROCEEDED TO REOPEN THE CASE OF THE APPELLANT FOR THE ASSESSMENT YEAR 2012-13 IN THE MOST CASUAL AND HIGH-HANDED MANNER MERELY FOR VERIF ICATION OF SOURCE OF PURCHASE OF LAND WHICH IS NOT PERMISSIBLE IN LAW. 1.4.1] IT IS A SETTLED POSITION OF LAW THAT REOPENI NG CANNOT BE RESORTED TO FOR VERIFICATION OF SOURCE OF PURCHASE OF ASSET SINCE T HE INVESTMENT NEED NOT NECESSARILY COME FROM INCOME OF AN ASSESSEE CHARGEA BLE TO TAX. IT MAY BE OUT OF INCOME EXEMPTED FROM TAX, PAST SAVINGS, LOAN S, GIFTS, LIQUIDATION OF INVESTMENT OR SALE OF ANOTHER PROPERTY ETC. IT IS O NLY IF THERE IS ANY DEFINITE INFORMATION THAT THE ASSESSEE HAS SOME ADDITIONAL I NCOME, WHICH IS NOT DISCLOSED BY HIM AND IS INVESTED IN PURCHASE OF PRO PERTY, THEN ALONE THE NOTICE UNDER SECTION 148 OF THE ACT CAN BE ISSUED, AND THAT TOO, ONLY AFTER RECORDING THE BASIS ON WHICH THE ASSESSING OFFICER HAS FORMED HIS OPINION THAT HE HAS REASON TO BELIEVE THAT ANY SUCH INCOM E HAS ESCAPED ASSESSMENT. 1.4.2] IN THE FACTS OF THE PRESENT CASE, APPELLANT PROVIDED DETAILS REGARDING THE SOURCE OF PURCHASE OF LAND TO THE ASSESSING OFF ICER WHEREIN IT WAS CATEGORICALLY MENTIONED THAT THE LAND WAS PURCHASED OUT OF GIFTS RECEIVED FROM RELATIVE, LOAN RECEIVED FROM FRIEND AND OUT OF PAST SAVINGS OF THE APPELLANT. HOWEVER, THE ASSESSING OFFICER DID NOT C ONSIDER THE SUBMISSION MADE BY THE APPELLANT AND REOPENED HIS CASE FOR THE ASSESSMENT YEAR MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 10 2012-13 MERELY FOR VERIFICATION OF SOURCE OF PURCHA SE OF ASSET WHICH IS NOT PERMISSIBLE WITHIN THE GARB OF REOPENING UNDER SECT ION 147 OF THE ACT. 1.4.3] THE REASON RECORDED BY THE ASSESSING OFFICER PRIOR TO REOPENING OF THE CASE OF THE APPELLANT FOR THE ASSESSMENT YEAR 2 012-13 IS SCANNED AND REPRODUCED HEREUNDER FOR YOUR READY REFERENCE: 1.4.4] ON PERUSAL OF THE ABOVE REASONS AS RECORDED BY THE ASSESSING OFFICER, IT CLEARLY TRANSPIRES THAT THERE WAS ABSOL UTELY NO APPLICATION OF MIND ON THE PART OF THE ASSESSING OFFICER PRIOR TO REOPENING THE CASE OF THE APPELLANT FOR THE ASSESSMENT YEAR 2012-13. THIS FAC T IS DULY EVIDENT FROM THE REASONS ITSELF WHEREIN THE ASSESSING OFFICER ME RELY RECORDED A BELIEF THAT INCOME CHARGEABLE TO TAX OF RS. 63,75,000/- I. E. EQUIVALENT TO THE AMOUNT OF PURCHASE CONSIDERATION OF THE AGRICULTURA L LAND, HAD ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE ACT. THE REASONS RECORDED BY THE ASSESSING OFFICER CANNOT BY ANY STR ETCH OF IMAGINATION BE MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 11 TREATED AS REASON TO BELIEVE BUT IT MERELY TANTAMOU NTS TO REOPENING FOR MAKING FISHING AND ROVING INQUIRIES WHICH IS NOT PE RMISSIBLE IN LAW. 1.4.5] IT HAS BEEN HELD IN A CATENA OF JUDICIAL PRE CEDENTS THAT REOPENING CANNOT BE DONE FOR VERIFICATION OF SOURCE OF PURCHA SE OF ASSET. RELEVANT EXTRACTS FROM FEW OF THE LANDMARK JUDICIAL PRECEDEN TS WHICH HAVE ENUNCIATED THE ABOVE-MENTIONED PRINCIPLES ARE REPRO DUCED HEREUNDER FOR YOUR READY REFERENCE: 1.5.1] THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF SRI C.M. MAHADEVA VS. CIT [ITA NO. 795/2009] HAS HELD THAT: 16. THE FACTS OF THE AFORESAID CASE ARE QUITE SIMI LAR TO THE ONE ON HAND. IN THE PRESENT CASE ALSO THE REASON FOR REOPENING IS F OR FURTHER INVESTIGATION TO FIND OUT THE SOURCE OF INVESTMENT FOR THE PURCHASE OF THE PROPERTY, WHICH IS NOT PERMISSIBLE IN LAW. 18. IN THE PRESENT CASE, WHAT WE FIND IS THAT THERE IS NO NEXUS OR LIVE LINK BETWEEN THE MATERIAL WHICH HAD COME TO THE NOTICE O F THE ASSESSING OFFICER, AND THE FORMATION OF HIS BELIEF THAT THERE WAS ESCAPEMENT OF INCOME BY THE ASSESSEE WHICH MAY BE ASSESSABLE TO T AX. MERELY BY MENTIONING THE INCOME OF THE ASSESSEE IN THE ASSESS MENT YEAR, AND THE INVESTMENT MADE BY HIM FOR THE PURCHASE OF RESIDENT IAL PROPERTY, IT CANNOT BE CONCLUDED THAT THE DIFFERENCE WOULD AUTOMATICALL Y BE THE INCOME WHICH HAD ESCAPED ASSESSMENT. 20. THE SUBMISSION OF SRI E.I.SANMATHI, LEARNED COU NSEL FOR THE RESPONDENT-REVENUE IS THAT THE DIFFERENCE BETWEEN T HE INVESTMENT MADE BY THE ASSESSEE AND HIS INCOME DURING THE YEAR IN Q UESTION, WOULD BE THE INCOME WHICH HAD ESCAPED ASSESSMENT FROM TAX, IS AL SO NOT WORTHY OF ACCEPTANCE. INVESTMENT IS NOT NECESSARILY TO BE MAD E FROM THE INCOME DERIVED DURING ONE PARTICULAR YEAR IN QUESTION. AN INVESTMENT TO PURCHASE A RESIDENTIAL HOUSE OR A CAPITAL ASSET, CAN ALWAYS BE MADE FROM THE SAVINGS IN THE PAST YEARS, AS WELL AS THE SAVINGS F ROM THE YEAR IN QUESTION. IT COULD ALSO BE FROM GIFTS OR LOANS TAKEN FROM FRI ENDS AND RELATIVES. IT WAS ONLY IF THERE WAS ANY DEFINITE INFORMATION THAT THE ASSESSEE HAD SOME ADDITIONAL INCOME, WHICH WAS NOT DISCLOSED BY HIM A ND WAS INVESTED IN PURCHASE OF PROPERTY, THEN ALONE THE NOTICE UNDER S ECTION 148 OF THE ACT COULD HAVE BEEN ISSUED, AND THAT ALSO AFTER RECORDI NG THE BASIS ON WHICH THE ASSESSING OFFICER HAD FORMED HIS OPINION THAT H E HAD REASON TO BELIEVE THAT ANY SUCH INCOME HAD ESCAPED ASSESSMEN T. THE SAME IS TOTALLY LACKING IN THE PRESENT CASE. 24. IN THE PRESENT CASE, THERE IS NO ALLEGATION OF THE ASSESSEE NOT HAVING MADE FULL AND FINAL DISCLOSURE IN HIS RETURN OF INC OME FOR THE RELEVANT MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 12 ASSESSMENT YEAR. MUCH EMPHASIS HAS BEEN LAID ON THE FACT THAT DISCLOSURE OF THE PURCHASE OF THE PROPERTY WAS NOT MADE IN HIS RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR. ON BEING ASKED, SRI E .I.SANMATHI, LEARNED COUNSEL FOR THE RESPONDENT-REVENUE, COULD NOT PLACE BEFORE THE COURT ANY PROVISION OF LAW WHICH REQUIRED THE ASSESSEE, IN TH E ASSESSMENT YEAR 2004-05, TO DISCLOSE ABOUT THE FACT OF HAVING MADE THE ACTUAL INVESTMENT IN HIS RETURN OF INCOME. IN THE ABSENCE OF ANY LEGA L OBLIGATION ON THE ASSESSEE TO DISCLOSE ABOUT THE PURCHASE OF PROPERTY IN HIS RETURN OF INCOME, IT CANNOT BE SAID THAT THE ASSESSEE HAD CON CEALED ANY INCOME, EVEN THOUGH WHEN THERE IS NO DISPUTE ABOUT THE FACT THAT HE HAD DISCLOSED HIS AGRICULTURAL AS WELL AS NON-AGRICULTURAL INCOME DURING THE ASSESSMENT YEAR IN QUESTION, AND THERE IS NO FINDING AS TO INC OME FROM WHICH OTHER SOURCE HAD BEEN CONCEALED BY THE ASSESSEE 26. IN VIEW OF THE AFORESAID, WE ARE OF THE OPINION THAT THE ISSUANCE OF NOTICE UNDER SECTION 148 FOR ASSESSMENT OR RE-ASSES SMENT UNDER SECTION 147 OF THE ACT, WAS NOT BE VALID IN THE FACTS OF TH E PRESENT CASE. [EMPHASIS SUPPLIED] 1.5.2] THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V. SMT. MANIBEN VALJI SHAH AS REPORTED IN [2006] 283 ITR 453 (BOMBA Y) HAS CATEGORICALLY HELD THAT: HAVING HEARD SHRI DESAI, LEARNED SENIOR COUNSEL FO R THE APPELLANT, AS WELL AS SHRI BHUJALE, LEARNED COUNSEL FOR THE RESPONDENT , IT IS AN ADMITTED POSITION THAT THE ASSESSEE HAD INVESTED A SUM OF RS . 2,50,000 FOR THE PURPOSE OF PURCHASING THE FLAT AND WHAT WAS SOUGHT TO BE INVESTIGATED WAS THE SOURCE OF INCOME. A BARE PERUSAL OF THE AFO RESAID NOTICE DATED OCTOBER 10, 1991, CLEARLY INDICATES THAT THE OFFICE R WAS WANTING TO KNOW THE DETAILS WITH REGARD TO THE SOURCE OF FUNDS WITH REGARD TO PURCHASE OF THE SAID FLAT FOR A SUM OF RS. 2,50,000. OBVIOUSLY IN THE ABOVE, THERE IS NO QUESTION OF THE ASSESSING OFFICER HAVING ANY BASIS TO REASONABLY ENTERTAIN THE BELIEF THAT ANY PART OF THE INCOME OF THE ASSES SEE HAD ESCAPED ASSESSMENT AND THAT SUCH ESCAPEMENT WAS BY REASON O F OMISSION OR FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FUL LY AND TRULY ALL MATERIAL FACTS. UNDER THE AFORESAID FACTS AND CIRCUMSTANCES, WE FIN D NO MERIT IN THE ABOVE APPEAL, HENCE THE SAME STANDS DISMISSED, HOWEVER, N O ORDER AS TO COSTS. [EMPHASIS SUPPLIED] 1.5.3] THE HONBLE ITAT AGRA BENCH IN THE CASE OF S HRI RAJ SINGH VS. ITO- 3(3), MATHURA [ITA NO. 408/AGRA/2018] HAS HELD THAT : 28. THUS, THE JUDICIAL OPINION AND MANDATE OF LAW IS CLEAR AND LOUD THAT PROCEEDINGS UNDER SECTION 148 CANNOT BE INITIATED F OR VERIFICATION OF THE MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 13 SOURCES OF INVESTMENT. SUCH AN ACTION OF THE AO IN RESPECT OF THE CASE ON HAND CANNOT BE APPROVED IN LAW AND IS THEREFORE, QU ASHED. 29. THE TEXT OF THE REASONS RECORDED DO PROVES THAT VIRTUALLY THERE HAS BEEN NO APPLICATION OF MIND BY THE LEARNED ASSESSIN G OFFICER SO AS TO FORM REQUISITE SATISFACTION THAT INVESTMENT IN PROPERTY IS INCOME OF CURRENT YEAR AND WHICH HAS ESCAPED ASSESSMENT; THAT THE REASONS RECORDED IN THE CASE IN HAND ARE NO REASONS IN THE EYE OF LAW, BEING COM PLETELY BARREN AND BALD IN NATURE AS IT IS NOT MENTIONED THAT IN WHAT MATERIAL TERMS THE REPLY IS LACKING IN NATURE; THAT THE REASONS DO NOT SHOW ANY MENTAL EXERCISE HAVING BEEN DONE BY HIM BEFORE ARRIVING AT THE SATI SFACTION FOR ESCAPEMENT OF INCOME AND THUS, THE AO MADE HIS CONCLUSIONS, LE AVING THE READER TO GUESS FOR THE MATERIAL ON BASIS OF WHICH OF BELIEF OF ESCAPEMENT IS FOUNDED. THE SO CALLED REASONS INSTEAD OF BEING REA SONS TO BELIEVE ARE REASONS TO SUSPECT AND SOUGHT TO EXTEND THE SCOPE O F ENQUIRY FROM THE STAGE WHERE IT WAS LEFT VIDE ENQUIRY LETTER. THE IN VESTMENT NEED NOT NECESSARILY COME FROM THE INCOME. IT MAY BE OUT OF INCOME EXEMPTED FROM TAX, PAST SAVINGS, LOANS, GIFTS, LIQUIDATION OF INV ESTMENT OR SALE OF ANOTHER PROPERTY ETC., NOTICE UNDER SECTION 148 CANNOT BE I SSUED FOR VERIFICATION OF INFORMATION, BUT HERE THE JURISDICTIONAL SATISFACTI ON IS THE ESSENTIAL REQUIREMENT HAS TO BE SHOWN THAT THERE HAS BEEN REA SON TO BELIEVE THAT THERE WAS INCOME CHARGEABLE TO TAX. THE REASONS REC ORDED BY THE ASSESSING OFFICER SHOULD SPEAK HIS MIND AND THE BASIS FOR COMING TO CONCLUSION THAT INVESTM ENT HAD BEEN SOURCED FROM INCOME, WHICH SHOULD HAVE BEEN DISCLOSED AND H AD NOT BEEN SHOWN THEREFORE, THERE WAS ESCAPEMENT OF INCOME. THERE MU ST BE DIRECT NEXUS BETWEEN THE MATERIAL AND BELIEF OF ESCAPEMENT. THIS MENTAL EXERCISE MUST BE SELF-EVIDENT FROM THE REASONS RECORDED. REASONS MUST BE SELF-SPEAKING AND SELF-DEFENDING AS HELD BY THE HONBLE DELHI HIG H COURT IN THE CASE OF CIT VS INDO ARAB AIR SERVICES 283 CTR 0092 (DEL) TH AT: THERE IS A LONG DISTANCE TO TRAVEL BETWEEN A SUSPI CION THAT INCOME HAD ESCAPED ASSESSMENT AND FORMING REASONS TO BELIEVE T HAT INCOME HAD ESCAPED ASSESSMENT. THE PURPORTED REASONS DO NOT SH OW ANY SUCH EXERCISE BY THE LEARNED ASSESSING OFFICER AND HENCE WE HAVE NO HESITATION IN HOLDING THAT THE LEARNED ASSESSING OFFICER HAS E XCEED HIS AUTHORITY IN WRONGLY ACQUIRING THE JURISDICTION IN THE MATTER. 30. IN VIEW OF THE ABOVE DISCUSSION, WE ARE OF THE CONSIDERED VIEW THAT THE REASONS RECORDED BY THE LEARNED ASSESSING OFFICER, ARE NO REASONS IN THE EYE OF LAW FOR ASSUMING JURISDICTION IN THIS CASE F OR ISSUING NOTICE UNDER SECTION 148 OF THE ACT. 31. WE THEREFORE, QUASH THE ASSESSMENT ORDERS U/S 1 44 READ WITH SECTION 147 OF THE ACT DATED 30.03.2016 PASSED IN CONSEQUEN CE TO NOTICE DATED 20.03.2015 FOR ASSESSMENT YEAR 2008-09 IN THE PRESE NT APPEAL. MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 14 [EMPHASIS SUPPLIED] 1.5.4] THE HONBLE ITAT LUCKNOW BENCH B IN THE CA SE OF SHRI CHUNNILAL PRAJAPATI V. ITO-II, FAIZABAD [ITA NOS. 290 TO 293/ LUC/2010] HAS HELD THAT: 13. FROM THE ABOVE, IT IS CRYSTAL CLEAR THAT THE A SSESSING OFFICER ACTED UPON THE INFORMATION RECEIVED FROM THE INVESTIGATIO N WING. IN THE SAID INFORMATION, IT WAS STATED THAT THE ASSESSEE INVEST ED A SUM OF $5,38,860/- IN PURCHASE OF LAND SITUATED IN 150, RAFI AHMAD KID WAI NAGAR SCHEME (ELDECO GREEN), GOMTI NAGAR, LUCKNOW. HOWEVER, IT H AS NOT BEEN STATED THAT THE SAID INVESTMENT WAS OUT OF UNDISCLOSED INC OME OF THE ASSESSEE OR OUT OF INCOME WHICH ESCAPED ASSESSMENT. THE ASSESSI NG OFFICER ALSO HAD NOT MENTIONED IN THE AFORESAID REASONS THAT HE WAS SATISFIED THAT THE SAID SUM OF $5,38,860/- ESCAPED INCOME-TAX ASSESSMENT. H E SIMPLY RELIED ON THE INFORMATION GIVEN BY THE ADIT(INVESTIGATION). I T IS WELL SETTLED THAT IN CASE OF INCOME ESCAPING ASSESSMENT, THE ASSESSING O FFICER IS REQUIRED TO ISSUE NOTICE U/S. 148 OF THE ACT TO ASSESS THE INCO ME U/S. 147 OF THE ACT READ WITH SECTION 143(3) OF THE ACT. 14. FROM THE ABOVE PROVISIONS, IT IS CLEAR THAT THE ASSESSING OFFICER MUST HAVE REASON TO BELIEVE THAT ANY INCOME CHARGEABLE T O TAX HAS ESCAPED ASSESSMENT. HOWEVER, IT CANNOT BE SAID THAT IF THER E IS ANY INVESTMENT IT IS SUFFICIENT TO BELIEVE THAT THE INCOME TO THAT EXTEN T ESCAPED ASSESSMENT BECAUSE THERE MAY BE SO MANY SOURCES FOR MAKING INV ESTMENT AND IT IS NOT NECESSARY THAT ONLY ON THE BASIS OF INVESTMENT IT C AN BE PRESUMED THAT THE INCOME TO THAT EXTENT ESCAPED ASSESSMENT. THERE SHO ULD BE A CONCRETE FINDING BEFORE COMING TO THE CONCLUSION THAT ANY IN COME HAS ESCAPED ASSESSMENT AND MERELY ON THE BASIS OF THE INFORMATI ON PROVIDED BY ANY ANOTHER WING OF THE INCOME-TAX DEPARTMENT, THE ASSE SSING OFFICER CANNOT BELIEVE THAT THERE WAS INCOME WHICH HAS ESCAPED ASS ESSMENT. 16. CONSIDERING THE TOTALITY OF THE FACTS AS DISCUS SED HEREINABOVE, WE DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE AND HOLD THAT THE ASSESSING OFFICER WITHOUT REFERRING TO ANY MATERIAL WHICH COU LD JUSTIFY HIS CONCLUSION THAT THE INCOME OF THE ASSESSEE ESCAPED ASSESSMENT, INSTANTIATED THE PROCEEDINGS U/S. 147 OF THE ACT, THE SAID ACTION WA S NOT JUSTIFIED BECAUSE THE SAID ACTION APPEARS TO BE ON SUSPICION AND FOR MAKING ROVING ENQUIRIES. IN THAT VIEW OF THE MATTER, ASSESSMENTS FRAMED ON T HE BASIS OF NOTICES DATED 22.3.2006 ISSUED U/S. 148 OF THE ACT ARE SET ASIDE CONSIDERING THE SAME AS ILLEGAL AND BAD IN LAW, HENCE VITIATED. SIN CE WE HAVE DECIDED THE LEGAL ISSUE IN FAVOUR OF THE ASSESSEE, THEREFORE, N O FINDING HAS BEEN GIVEN ON THE OTHER GROUNDS CONTESTED BY THE ASSESSEE ON M ERITS. [EMPHASIS SUPPLIED] MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 15 1.6] IN VIEW OF THE ABOVE DISCUSSION AND FINDINGS R EITERATED IN THE JUDICIAL PRECEDENTS CITED SUPRA, IT IS HUMBLY SUBMITTED THAT THE CASE OF THE APPELLANT AS REOPENED MERELY FOR VERIFICATION OF SOURCE OF PURCH ASE OF ASSET DID NOT TANTAMOUNT TO ANY VALID REASON TO BELIEVE THAT INCOME CHARGEAB LE TO TAX HAS ESCAPED FROM ASSESSMENT THEREBY UNDERMINING THE VALIDITY OF ENTI RE REASSESSMENT PROCEEDINGS. THE REASSESSMENT PROCEEDINGS INITIATED IN THE CASE OF THE APPELLANT MERELY FOR VERIFICATION OF SOURCE OF PURCHASE OF LAND WAS THER EFORE GROSSLY UNJUSTIFIABLE AND WHOLLY UNWARRANTED AND ENTIRE REASSESSMENT PROCEEDI NGS DESERVE TO BE QUASHED AND SET-ASIDE ON THIS COUNT ITSELF. 1.7.1] IT HAS BEEN HELD IN VARIOUS JUDICIAL PRECEDE NTS THAT THE ASSESSING OFFICER SHOULD HAVE REASONS TO BELIEVE AND NOT REASONS TO S USPECT THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT AND REOPEN ING BASED ON MERE SUSPICION WAS HELD TO BE BAD IN LAW AND WITHOUT JUR ISDICTION. IT HAS BEEN REITERATED THAT SUSPICION AGAINST THE ASSESSEE HOWS OEVER STRONG IT MAY BE WITHOUT ANY BASIS AND TANGIBLE MATERIAL IN POSSESSI ON OF THE ASSESSING OFFICER COULD NOT BECOME REASON TO BELIEVE. 1.7.2] IT HAS ALSO BEEN POSTULATED THAT THERE MUST BE A LIVE LINK OR DIRECT NEXUS BETWEEN TANGIBLE MATERIAL IN POSSESSION OF THE ASSE SSING OFFICER AND THE FORMATION OF BELIEF THAT INCOME CHARGEABLE TO TAX H AS ESCAPED ASSESSMENT. IT IS ALSO WELL SETTLED THAT REOPENING CANNOT BE DONE FOR MAKING FISHING AND ROVING ENQUIRIES. IT IS ALSO A SETTLED POSITION OF LAW THA T THE ASSESSING OFFICER CANNOT REOPEN THE CASE OF THE ASSESSEE MERELY ON THE BASIS OF BORROWED OPINION AND HE MUST INDEPENDENTLY APPLY HIS MIND TO THE TANGIBLE M ATERIAL IN HIS POSSESSION AND REACH TO A CONCLUSION THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. 1.7.3] IN THE FACTS OF THE PRESENT CASE, REASONS AS RECORDED BY THE ASSESSING OFFICER QUITE CLEARLY PROVE THAT THERE WAS ABSOLUTE LY NO APPLICATION OF MIND BY THE ASSESSING OFFICER PRIOR TO REOPENING OF THE CASE OF THE APPELLANT SINCE THE ASSESSING OFFICER MENTIONED THAT INCOME EQUIVALENT TO THE AMOUNT INVESTED IN THE PURCHASE OF LAND HAD ESCAPED FROM ASSESSMENT. HENCE , IT CAN BE SATISFACTORILY CONCLUDED THAT THERE WAS NO TANGIBLE MATERIAL IN PO SSESSION OF THE ASSESSING OFFICER SO AS TO PROVE THE LIVE LINK OF CONCEALMENT OF INCOME AND THEREFORE, REOPENING OF THE CASE OF THE APPELLANT IS BAD IN LA W AND DESERVES TO BE SET-ASIDE. RELEVANT EXTRACTS FROM FEW OF THE LANDMARK JUDICIAL PRECEDENTS WHICH HAVE ENUNCIATED THE ABOVE-MENTIONED PRINCIPLES ARE REPRO DUCED HEREUNDER FOR YOUR READY REFERENCE: 1.8.1] THE HONBLE SUPREME COURT OF INDIA IN THE CA SE OF ITO VS LAKHMANI MEWAL DAS AS REPORTED IN [1976] 103 ITR 437 (SC) HAS HELD THAT: .THE REASONS FOR THE FORMATION OF THE BELIEF M UST HAVE RATIONAL CONNECTION WITH OR RELEVANT BEARING ON THE FORMATIO N OF THE BELIEF. RATIONAL CONNECTION POSTULATES THAT THERE MUST BE A DIRECT N EXUS OR LIVE LINK BETWEEN THE MATERIAL COMING TO THE NOTICE OF THE ITO AND THE FO RMATION OF THIS BELIEF THAT THERE HAS BEEN ESCAPEMENT OF THE INCOME OF THE ASSESSEE F ROM ASSESSMENT IN THE PARTICULAR YEAR BECAUSE OF HIS FAILURE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS. IT IS NO DOUBT TRUE THAT THE COURT CANNOT GO INTO S UFFICIENCY OR ADEQUACY OF THE MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 16 MATERIAL AND SUBSTITUTE ITS OWN OPINION FOR THAT OF THE ITO ON THE POINT AS TO WHETHER ACTION SHOULD BE INITIATED FOR REOPENING AS SESSMENT. AT THE SAME TIME WE HAVE TO BEAR IN MIND THAT IT IS NOT ANY AND EVER Y MATERIAL, HOWSOEVER VAGUE AND INDEFINITE OR DISTANT, REMOTE AND FARFETCHED, W HICH WOULD WARRANT THE FORMATION OF THE BELIEF RELATING TO ESCAPEMENT OF T HE INCOME OF THE ASSESSEE FROM ASSESSMENT. [EMPHASIS SUPPLIED] 1.8.2] THE HONBLE BOMBAY HIGH COURT IN THE CASE OF PR CIT VS SHODIMAN INVESTMENTS (P) LTD. AS REPORTED IN [2018] 93 TAXMA NN.COM 153 (BOMBAY) HAS HELD THAT: 12. THE RE-OPENING OF AN ASSESSMENT IS AN EXERCISE OF EXTRA-ORDINARY POWER ON THE PART OF THE ASSESSING OFFICER, AS IT LEADS TO U NSETTLING THE SETTLED ISSUE/ASSESSMENTS. THEREFORE, THE REASONS TO BELIEV E HAVE TO BE NECESSARILY RECORDED IN TERMS OF SECTION 148 OF THE ACT, BEFORE RE-OPENING NOTICE, IS ISSUED. THESE REASONS, MUST INDICATE THE MATERIAL (WHATEVER REASONS) WHICH FORM THE BASIS OF RE-OPENING ASSESSMENT AND ITS REASONS WHIC H WOULD EVIDENCE THE LINKAGE/NEXUS TO THE CONCLUSION THAT INCOME CHARGEA BLE TO TAX HAS ESCAPED ASSESSMENT. THIS IS A SETTLED POSITION AS OBSERVED BY THE SUPREME COURT IN S. NARAYANAPPA V. CIT [1967] 63 ITR 219, THAT IT IS OP EN TO EXAMINE WHETHER THE REASON TO BELIEVE HAS RATIONAL CONNECTION WITH THE FORMATION OF THE BELIEF. TO THE SAME EFFECT, THE APEX COURT IN ITO V. LAKHMANIMERWA L DAS [1976] 103 ITR 437 HAD LAID DOWN THAT THE REASONS TO BELIEVE MUST HAVE RATIONAL CONNECTION WITH OR RELEVANT BEARING ON THE FORMATION OF BELIEF I.E. TH ERE MUST BE A LIVE LINK BETWEEN MATERIAL COMING THE NOTICE OF THE ASSESSING OFFICER AND THE FORMATION OF BELIEF REGARDING ESCAPEMENT OF INCOME. IF THE AFORESAID RE QUIREMENT ARE NOT MET, THE ASSESSEE IS ENTITLED TO CHALLENGE THE VERY ACT OF R E-OPENING OF ASSESSMENT AND ASSUMING JURISDICTION ON THE PART OF THE ASSESSING OFFICER. 13. IN THIS CASE, THE REASONS AS MADE AVAILABLE TO THE RESPONDENT- ASSESSEE AS PRODUCED BEFORE THE TRIBUNAL MERELY INDICATES INFOR MATION RECEIVED FROM THE DIT (INVESTIGATION) ABOUT A PARTICULAR ENTITY, ENTERING INTO SUSPICIOUS TRANSACTIONS. HOWEVER, THAT MATERIAL IS NOT FURTHER LINKED BY ANY REASON TO COME TO THE CONCLUSION THAT THE RESPONDENT-ASSESSEE HAS INDULGE D IN ANY ACTIVITY WHICH COULD GIVE RISE TO REASON TO BELIEVE ON THE PART OF THE ASSESSING OFFICER THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. IT IS FOR THIS REASON THAT THE RECORDED REASONS EVEN DOES NOT INDICATE THE AMOUNT WHICH ACCORDING TO THE ASSESSING OFFICER, HAS ESCAPED ASSESSMENT. THIS IS AN EVIDENCE OF A FISHING ENQUIRY AND NOT A REASONABLE BELIEF THAT INCOME CHA RGEABLE TO TAX HAS ESCAPED ASSESSMENT. 14. FURTHER, THE REASONS CLEARLY SHOWS THAT THE ASS ESSING OFFICER HAS NOT APPLIED HIS MIND TO THE INFORMATION RECEIVED BY HIM FROM TH E DDIT (INV.). THE ASSESSING OFFICER HAS MERELY ISSUED A RE-OPENING NOTICE ON TH E BASIS OF INTIMATION REGARDING RE-OPENING NOTICE FROM THE DDIT (INV.) THIS IS CLEA RLY IN BREACH OF THE SETTLED POSITION IN LAW THAT RE- OPENING NOTICE HAS TO BE I SSUED BY THE ASSESSING OFFICE ON HIS OWN SATISFACTION AND NOT ON BORROWED SATISFACTI ON. [EMPHASIS SUPPLIED] 1.8.3] THE ABOVE-MENTIONED PRINCIPLES HAVE ALSO BEE N REITERATED IN THE FOLLOWING JUDICIAL PRECEDENTS: 1. CIT, DELHI V. KELVINATOR OF INDIA LTD. - [2010] 320 ITR 561 (SC) MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 17 2. PR. CIT-6 V. MEENAKSHI OVERSEAS (P.) LTD. - [2017] 395 ITR 677 (DELHI) 3. PR. CIT V. RMG POLYVINYL (I) LTD. - [2017] 396 ITR 5 (DELHI) 4. CHINTAN JADAVBHAI PATEL V. ITO - [2018] 404 ITR 76 (GUJARAT) 5. AJANTA PHARMA LTD. V/S. ACIT - [(2004) 267 ITR 200 (BOM)] 6. CIT-V V. ORIENT CRAFT LTD. - [2013] 354 ITR 536 (DE LHI) 7. PR. CIT V. TUPPERWARE INDIA (P.) LTD. - [2016] 284 CTR 68 (DELHI) 8. NU POWER RENEWABLES (P.) LTD. V. DCIT, CIRCLE 1(2)( A) - [2018] 94 TAXMANN.COM 29 (BOMBAY) 1.9] IN VIEW OF THE ABOVE, IT IS HUMBLY SUBMITTED T HAT REASONS RECORDED BY THE ASSESSING OFFICER THAT INCOME CHARGEABLE TO TAX OF RS. 63,75,000/- HAD ESCAPED FROM ASSESSMENT WAS NOT BASED ON ANY TANGIBLE MATER IAL IN POSSESSION OF THE ASSESSING OFFICER SO AS TO PROVE THE LIVE LINK OF C ONCEALMENT OF INCOME. HENCE, CASE OF THE APPELLANT AS REOPENED MERELY FOR VERIFI CATION OF SOURCE OF PURCHASE OF ASSET TANTAMOUNT TO REOPENING FOR MAKING FISHING AN D ROVING INQUIRIES WHICH IS NOT AT ALL PERMISSIBLE IN LAW. 7] GROUND NO. 8 CHARGEABILITY OF INTEREST UNDER S ECTION 234B AND SECTION 234C OF THE INCOME-TAX ACT, 1961 7.1] THE APPELLANT IN THIS GROUND OF APPEAL HAS CHA LLENGED THE CHARGEABILITY OF INTEREST UNDER SECTION 234B AND SECTION 234C OF THE ACT OF RS. 3,61,774/- AND RS. 32,141/- RESPECTIVELY. 7.2] THE INTEREST UNDER THESE SECTIONS IS CONSEQUEN TIAL AND MANDATORY IN NATURE. HENCE, IT IS HUMBLY SUBMITTED THAT THE ASSESSING OF FICER SHALL BE DIRECTED TO CHARGE INTEREST AS PER LAW ON THE AMOUNT OF INCOME THAT MA Y BE FINALLY ASSESSED. 6. ON THE CONTRARY, LD. SR. DR OPPOSED THE SUBMISSI ON MADE BY THE LD. COUNSEL FOR THE ASSESSEE AND SUBMITTED T HAT ADMITTEDLY THE ASSESSEE HAD PURCHASED IMMOVABLE PRO PERTY AND PURCHASE OF IMMOVABLE PROPERTY DOES NOT COMMENS URATE WITH THE INCOME DISCLOSED BY THE ASSESSEE. THEREFOR E, THE ASSESSING OFFICER WAS JUSTIFIED ON THE OPENING ASSE SSMENT. SHE SUBMITTED THAT AT THIS STAGE IT IS TO BE SEEN WHETH ER MATERIAL WAS AVAILABLE BEFORE AO TO FORM BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT AND THE CASE LAWS REL IED BY THE LD. COUNSEL ARE DISTINGUISHABLE. 7. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 18 AUTHORITIES BELOW. THE CONTENTION OF THE ASSESSEE I S THAT THE ASSESSING OFFICER HAS NOT APPLIED HIS MIND BEFORE R EOPENING OF THE ASSESSMENT. WE DO NOT SEE ANY MERIT IN THIS CON TENTION OF THE ASSESSEE AS THE MATERIAL REGARDING PURCHASE OF PROPERTY WAS NOT AVAILABLE BEFORE THE ASSESSING OFFICER. THE CASE LAWS AS RELIED UPON BY THE ASSESSEE DO NOT SUPPORT. THE FAC TS ARE DISTINGUISHABLE HERE IS NOT MERELY VERIFICATION OF SOURCE OF INVESTMENT BUT ALSO GENUINENESS OF SUCH SOURCE OF I NCOME. AS THE CLAIM OF THE ASSESSEE WAS BEFORE THE ASSESSING OFFICER WAS THAT HE RECEIVED GIFT FROM HIS FAMILY MEMBERS AND F RIEND. THEREFORE, IN THE ABSENCE OF MATERIAL EVIDENCE SUPP ORTING SUCH CLAIM THE ASSESSING OFFICER WAS JUSTIFIED IN REOPEN ING OF ASSESSMENT. ADMITTEDLY, IN RESPONSE TO NOTICE ISSUE D BEFORE RE- OPENING OF THE ASSESSMENT, IT WAS STATED THAT THE S OURCE OF INVESTMENT WAS GIFT AND LOAN FROM RELATIVES AND FRI END. BUT NO EVIDENCE PROVING CREDITWORTHINESS OF PERSONS WAS PL ACED BEFORE ASSESSING OFFICER. IT IS NOTICED THAT GRAND-MOTHER, MOTHER, MOTHER-IN-LAW AND WIFE OF THE ASSESSEE FROM WHOM HE RECEIVED GIFT ARE HOUSEWIVES. THEY DO NOT HAVE INDEPENDENT S OURCE OF INCOME EXCEPT THE GIFT RECEIVED AND SAVINGS MADE OU T OF HOUSEHOLD EXPENSES. THE ASSESSEE DID NOT PLACE ANY EVIDENCE PROVING THEIR INDEPENDENT SOURCE OF INCOME. HENCE, NO FAULT CAN BE FOUND IN THE ACTION OF ASSESSING OFFICER FOR REOPENING OF ASSESSMENT. THESE GROUNDS OF ASSESSS APPEAL ARE DI SMISSED. MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 19 8. GROUND NOS.2, 4.1, 4.2, 6 & 7 ARE AGAINST SUSTAINING THE ADDITION OF RS. 31,10,000/- AND ENHANCEMENT MADE BY TH E LD. CIT(A) INVOKING THE PROVISION OF SECTION 68 OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMI SSION AS MADE IN THE WRITTEN SUBMISSIONS. THE SUBMISSIONS OF THE ASSESSEE ARE REPRODUCED AS UNDER: 2] GROUND NO. 2, 4.1 AND 6 CHALLENGING THE ADDITI ON MAINTAINED BY THE ASSESSING OFFICER AND FURTHER ENHANCEMENT MADE BY THE LD CIT(A) ON ACCOUNT OF GIF TS/ LOAN RECEIVED FROM RELATIVES/ FRIEND 2.1] THE APPELLANT IN THESE GROUNDS OF APPEAL HAS C HALLENGED THE ADDITION OF RS. 31,10,000/- AS MAINTAINED BY THE ASSESSING O FFICER AND FURTHER ENHANCEMENT OF RS. 34,64,150/- AS MADE BY THE LD CI T(A) ON ACCOUNT OF GIFTS/ LOAN RECEIVED FROM RELATIVES/ FRIEND AND OPE NING BALANCE OF CAPITAL. 2.2.1] THE INCOME-TAX RETURN OF THE APPELLANT UNDER SECTION 139 OF THE INCOME-TAX ACT, 1961 WAS FILED ON 27-07-2012 WHEREI N TOTAL INCOME WAS DECLARED AT RS. 2,02,437/-. 2.2.2] HOWEVER, THE INCOME-TAX RETURN OF THE APPELL ANT IN RESPONSE TO THE NOTICE ISSUED UNDER SECTION 148 OF THE INCOME-TAX A CT, 1961 WAS FILED ON 02-07-2015 WHEREIN TOTAL INCOME WAS DECLARED AT RS. 33,12,440/- INCLUDING AN AMOUNT OF RS. 31,10,000/- WHICH WAS RE CEIVED AS GIFT/ LOAN FROM RELATIVES/ FRIEND BUT WAS INADVERTENTLY OFFERE D FOR TAX IN THE INCOME- TAX RETURN OF THE WRONG ADVICE OF THE PREVIOUS CONS ULTANT. 2.3] IT IS PERTINENT TO NOTE THAT THE APPELLANT LOD GED HIS CLAIM DURING THE COURSE OF ASSESSMENT PROCEEDINGS ITSELF TO EXCLUDE THE AMOUNT OF RS. 31,10,000/- FROM HIS TOTAL INCOME. COPY OF THE SUBM ISSION DATED 30-10- 2015 AS FILED BEFORE THE ASSESSING OFFICER TO EXCLU DE THE AMOUNT OF RS. 31,10,000/- AS OFFERED FOR TAX IN THE INCOME-TAX RE TURN FROM HIS TOTAL INCOME, HAS BEEN FILED ON PAGE NO. 40-47 OF THE COM PILATION. RIGHT OF THE ASSESSEE REGARDING EXCLUSION OF INCOME INADVERTENTLY OFFERED FOR TAX IN THE INCOME-TAX RET URN 2.4.1] AT THE OUTSET, IT IS PERTINENT TO MENTION TH AT ARTICLE 265 OF THE CON7STITUTION OF INDIA LAYS DOWN THAT NO TAX SHALL BE LEVIED EXCEPT BY MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 20 AUTHORITY OF LAW. HENCE ONLY LEGITIMATE TAX CAN BE RECOVERED AND EVEN A CONCESSION BY A TAX-PAYER DOES NOT GIVE AUTHORITY T O THE TAX COLLECTOR TO RECOVER MORE THAN WHAT IS DUE FROM HIM UNDER THE LA W. EXTRACT OF ARTICLE 265 OF CONSTITUTION OF INDIA IS REPRODUCED HEREUNDE R FOR YOUR READY REFERENCE: 265. TAXES NOT TO BE IMPOSED SAVE BY AUTHORITY OF LAW NO TAX SHALL BE LEVIED OR COLLECTED EXCEPT BY AUTHORITY OF LAW 2.4.2] FURTHER, THERE IS AN OLD CIRCULAR ON ASSESSE ES RIGHTS AS ISSUED BY THE HONBLE CBDT CIRCULAR NO: 14 (XL-35) DATED 11 TH APRIL, 1955 WHICH STATES AS UNDER: 'OFFICERS OF THE DEPARTMENT MUST NOT TAKE ADVANTAGE OF IGNORANCE OF AN ASSESSEE AS TO HIS RIGHTS. IT IS ONE OF THEIR DUTIE S TO ASSIST A TAXPAYER IN EVERY REASONABLE WAY, PARTICULARLY IN THE MATTER OF CLAIMING AND SECURING RELIEFS AND IN THIS REGARD THE OFFICERS SHOULD TAKE THE INITIATIVE IN GUIDING A TAXPAYER WHERE PROCEEDINGS OR OTHER PARTICULARS BEF ORE THEM INDICATE THAT SOME REFUND OR RELIEF IS DUE TO HIM. THIS ATTITUDE WOULD, IN THE LONG RUN, BENEFIT THE DEPARTMENT FOR IT WOULD INSPIRE CONFIDE NCE IN HIM THAT HE MAY BE SURE OF GETTING A SQUARE DEAL FROM THE DEPARTMEN T. ALTHOUGH, THEREFORE, THE RESPONSIBILITY FOR CLAIMING REFUNDS AND RELIEFS RESTS WITH ASSESSEE ON WHOM IT IS IMPOSED BY LAW, OFFICERS SHOULD (A) DRAW THEIR ATTENTION TO ANY REFUNDS OR RELIEFS TO WHICH THEY APPEAR TO BE CLEARLY ENTITLED BUT WHICH THEY HAVE OMITTED TO CLA IM FOR SOME REASON OR OTHER; (B) FREELY ADVISE THEM WHEN APPROACHED BY THEM AS T O THEIR RIGHTS AND LIABILITIES AND AS TO THE PROCEDURE TO BE ADOPTED F OR CLAIMING REFUNDS AND RELIEFS.' [EMPHASIS SUPPLIED] 2.4.3] THE ABOVE CIRCULAR HAS BEEN JUDICIALLY NOTED AND APPROVED IN MANY JUDGMENTS AND HAS BEEN RELIED UPON IN SUPPORT OF CL AIM OF THE ASSESSEE. IT IS QUITE CLEAR IN LIGHT OF ARTICLE 265 OF THE CONST ITUTION OF INDIA AND CIRCULAR ISSUED BY THE HONBLE CBDT THAT ONLY LEGITIMATE AMO UNT OF TAX DUE CAN BE RECOVERED AND THE DEPARTMENT CANNOT TAKE ADVANTAGE OF IGNORANCE OF AN ASSESSEE AS TO HIS RIGHTS. RELEVANT EXTRACTS FROM FEW OF THE JUDICIAL PRECEDEN TS WHICH HAVE ENUNCIATED THE ABOVE-MENTIONED PRINCIPLES ARE REPRO DUCED HEREUNDER FOR YOUR READY REFERENCE: 2.5.1] THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT V. BHASKAR MITTER AS REPORTED IN [1994] 73 TAXMAN 437 (CALCUTTA) HAS HELD THAT: MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 21 8. THE CONTROVERSY RAISED IN THE SECOND QUESTION I S AS TO WHETHER THE ANNUAL LETTING VALUE OF THE PROPERTY DETERMINED BY THE TRIBUNAL COULD BE AFIGURE LOWER THAN THAT RETURNED BY THE ASSESSEE. T HE PRINCIPLES FOR DETERMINING THE ANNUAL LETTING VALUE UNDER SECTION 23 ARE NOW WELL-SETTLED AND IF THE VALUE RETURNED IS NOT IN ACCORDANCE WITH SUCH PRINCIPLES, IT IS OPEN TO THE ASSESSEE TO CONTEND THAT THE VALUE AS M AY BE DETERMINED UPONCORRECT APPLICATION OF THE LAW SHOULD FORM THE BASIS OF ASSESSMENT. THE REVENUE AUTHORITIES, IN OUR VIEW, CANNOT BE HEA RD TO SAY THAT MERELY BECAUSE THE ASSESSEE HAS RETURNED A FIGURE WHICH IS HIGHER THAN THE ANNUAL VALUE DETERMINED IN ACCORDANCE WITH THE CORR ECT LEGAL PRINCIPLES, SUCH HIGHER AMOUNT AND NOT THE CORRECT AMOUNT SHOUL D BE LAWFULLY ASSESSED. AN ASSESSEE IS LIABLE TO PAY TAX ONLY UPO N SUCH INCOME AS CAN BE IN LAW INCLUDED IN HIS TOTAL INCOME AND WHICH CA N BE LAWFULLY ASSESSED UNDER THE ACT. THE LAW EMPOWERS THE ITO TO ASSESS T HE INCOME OF AN ASSESSEE ACCORDING TO LAW AND DETERMINE THE TAX PAY ABLE THEREON. IN DOING SO HE CANNOT ASSESS AN ASSESSEE ON AN AMOUNT, WHICH IS NOT TAXABLE IN LAW, EVEN IF THE SAME IS SHOWN BY AN ASSESSEE. THER E IS NO ESTOPPEL BY CONDUCT AGAINST LAW NOR IS THERE ANY WAIVER OF THE LEGAL RIGHT AS MUCH AS THE LEGAL LIABILITY TO BE ASSESSED OTHERWISE THAN A CCORDING TO THE MANDATE OF THE LAW (SIC). IT IS ALWAYS OPEN TO AN ASSESSEE TO TAKE THE PLEA THAT THE FIGURE, THOUGH SHOWN IN HIS RETURN OF TOTAL INCOME, IS NOT TAXABLE IN LAW. THE TRIBUNAL, THEREFORE, IN OUR VIEW DID NOT COMMIT ANY ERROR INDIRECTING TO FIX THE CORRECT ANNUAL LETTING VALUE OF THE PREMISE S IN QUESTION, IN ACCORDANCE WITH THE PROVISIONS OF SECTION 23 OF THE SAID ACT WITHREFERENCE TO THE MUNICIPAL VALUATION, ALTHOUGH SUCH SUM WAS L OWER THAN THE FIGURE SHOWN BY THE ASSESSEE IN HIS RETURNS OF TOTAL INCOM E. EMPHASIS SUPPLIED] 2.5.2] THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF MAYNAK PODDAR (HUF) V. WEALTH-TAX OFFICER AS REPORTED IN [2003] 2 62 ITR 633 (CALCUTTA) HAS HELD THAT: 10. THUS, UNLESS THE DEFINITION OF NET WEALTH R EAD WITH THE DEFINITION OF ASSET AS PROVIDED IN SECTION 2(M) A ND SECTION 2(EA) RESPECTIVELY, INCLUDE A BUILDING LET OUT TO A TENAN T USED FOR COMMERCIAL PURPOSES,THE SAME CANNOT BE SUBJECTED TO WEALTH-TAX . EVEN IF THE ASSESSEE HAD INCLUDED THE SAME IN HIS RETURN, THAT WILL NOT PRECLUDE THE ASSESSEE FROM CLAIMING THE BENEFIT OF LAW. THERE CANNOT BE A NY ESTOPPEL AGAINST STATUTE. A PROPERTY, WHICH IS NOT OTHERWISE TAXABLE , CANNOT BECOME TAXABLE BECAUSE OF MISUNDERSTANDING OR WRONG UNDERSTANDING OF LAW BY THE ASSESSEE OR BECAUSE OF HIS ADMISSION OR ON HIS MISA PPREHENSION. IF IN LAW AN ITEM IS NOT TAXABLE, NO AMOUNT OF ADMISSION OR M ISAPPREHENSION CAN MAKE IT TAXABLE. THE TAXABILITYOR THE AUTHORITY TO IMPOSE TAX IS INDEPENDENT OF ADMISSION. NEITHER THERE CAN BE ANY WAIVER OF THE RIGHT MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 22 BYTHE ASSESSEE. THE DEPARTMENT CANNOT RELY UPON ANY SUCH ADMISSION OR MISAPPREHENSION IF IT IS NOT OTHERWISE TAXABLE. [EMPHASIS SUPPLIED] 2.5.3] THE HONBLE ITAT KOLKATA BENCH A IN THE CA SE OF SUSHIL KUMAR DAS V. ITO AS REPORTED IN [2011] 11 ITR(T) 17 (KOLKATA) (URO) HAS HELD THAT: 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE MOOT QUESTION ARISING OUT OF THIS APPEAL IS WHETHER THE INCOME DETERMINED BY THE ASSESSING OFFI CER ON THE BASIS OF THE RETURN FILED BY THE ASSESSEE CAN BE A FIGURE LO WER THAN THE INCOME RETURNED BY THE ASSESSEE. IT IS A WELL SETTLED THAT THE PRINCIPLE FOR DETERMINING THE TAXABLE INCOME OF THE ASSESSEE UNDE R THE INCOME-TAX ACT SHOULD BE WITHIN THE PURVIEW OF THE LAW IN FORCE. I F THE TAXABLE INCOME DETERMINED BY THE ASSESSING OFFICER IS NOT IN ACCOR DANCE WITH SUCH PRINCIPLE IT IS OPEN TO THE ASSESSEE TO CONTEND THE SAME BEFORE THE HIGHER AUTHORITIES TO FOLLOW THE CORRECT APPLICATION OF LA W TO DETERMINE THE ACTUAL TAXABLE INCOME OF THE ASSESSEE. IN OUR CONSIDERED V IEW, THE LOWER AUTHORITIES, ARE NOT EXPECTED, TO SAY THAT MERELY B ECAUSE THE ASSESSEE HAS RETURNED INCOME WHICH IS HIGHER THAN THE INCOME DET ERMINED IN ACCORDANCE WITH LEGAL PRINCIPLES SUCH RETURNED INCOME CAN BE T REATED AS LAWFULLY ASSESSED. AN ASSESSEE IS LIABLE TO PAY TAX ONLY UPO N THE TAXABLE INCOME. THE LAW IMPOSED BY THE ASSESSING OFFICER TO ASSESS THE INCOME ACCORDING TO LAW AND DETERMINED THE TAX PAYABLE THEREON. IN D OING SO, THE ASSESSING OFFICER CANNOT ASSESS THE INCOME OF THE ASSESSEE AN AMOUNT WHICH IS NOT TAXABLE AS PER LAW THOUGH SHOWN BY THE ASSESSEE IN THE RETURN: IT IS ALWAYS OPEN TO THE ASSESSEE TO TAKE A PLEA THAT THE TAXABLE INCOME THOUGH SHOWN AS INCOME IS NOT TAXABLE UNDER LAW BEFORE THE HIGHER AUTHORITIES. THE COMMISSIONER OF INCOME-TAX (APPEALS) WITHOUT GO ING INTO THE MERITS OF THE CASE HELD THAT THE COMMISSIONER OF INCOME-TAX ( APPEALS) IS NOT HAVING ANY POWER TO REDUCE THE TAXABLE INCOME OF THE ASSES SEE AT THE APPELLATE STAGE, WHICH IS NOT CORRECT. IN THE CASE OF CHARANJ IT JAWA (SUPRA) RELIED UPON BY LEARNED COUNSEL FOR THE ASSESSEE SUPPORTS T HE VIEWS THAT THE INTEREST RECEIVED AS A RESULT OF THE ORDER OF THE H ON'BLE HIGH COURT WAS NOT A STATUTORY INTEREST AND WAS IN THE FORM OF DAMAGE/ COMPENSATION AND THE SAME WAS NOT LIABLE TO TAX. IN VIEW OF THE ABOVE, A FTER CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO ON PERUSAL OF THE CASE LAW RELIED UPON BY BOTH THE PARTIES WE HOL D THAT THE INTEREST OF RS. 2,53,730 RECEIVED BY THE ASSESSEE AS PER THE OR DER OF THE HON'BLE HIGH COURT WAS NOT TAXABLE AND THE SAME IS A CAPITAL REC EIPT. WE ALSO TAKE SUPPORT FROM THE CIRCULAR ISSUED BY THE CENTRAL BOA RD OF DIRECT TAXES VIDE CIRCULAR NO. 14 (XL-35), DATED APRIL 11, 1955 WHICH HAS DIRECTED THE OFFICERS NOT TO TAKE ADVANTAGE OF THE IGNORANCE OF THE ASSESSEE. THE APPELLATE AUTHORITIES HAVE POWERS TO ADMIT POINTS O F LAW AND ADMIT CLAIM FOR EXEMPTION BASED ON MATERIALS ON RECORD AS PER T HE JUDGMENT OF THE MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 23 HON'BLE SUPREME COURT IN THE CASE OF NATIONAL THERM AL POWER CO. LTD. V. CIT [1998] 229 ITR 383. IN VIEW OF THE ABOVE, WE DI RECT THE ASSESSING OFFICER TO TREAT THE AFORESAID RECEIPT OF RS. 2,53, 730 AS CAPITAL RECEIPT WHICH WAS RECEIVED BY HIM AS PER THE ORDER OF THE H ON'BLE HIGH COURT. [EMPHASIS SUPPLIED] 2.5.4] THE HONBLE SUPREME COURT OF INDIA IN THE CA SE OF CIT V. SHELLY PRODUCTS AS REPORTED IN [2003] 261 ITR 367 (SC) HAS CATEGORICALLY HELD THAT: 31. WE CANNOT LOSE SIGHT OF THE FACT THAT THE FAIL URE OR INABILITY OF THE REVENUE TO FRAME A FRESH ASSESSMENT SHOULD NOT PLAC E THE ASSESSEE IN A MORE DISADVANTAGEOUS POSITION THAN IN WHAT HE WOULD HAVE BEEN IF A FRESH ASSESSMENT WAS MADE. IN A CASE WHERE AN ASSESSEE CH OOSES TO DEPOSIT BY WAY OF ABUNDANT CAUTION ADVANCE TAX OR SELF-ASSE SSMENT TAX WHICH IS IN EXCESS OF HIS LIABILITY ON THE BASIS OF RETURN F URNISHED OR THERE IS ANY ARITHMETICAL ERROR OR INACCURACY, IT IS OPEN TO HIM TO CLAIM REFUND OF THE EXCESS TAX PAID IN THE COURSE OF ASSESSMENT PROCEED ING. HE CAN CERTAINLY MAKE SUCH A CLAIM ALSO BEFORE THE CONCERNED AUTHORI TY CALCULATING THE REFUND. SIMILARLY, IF HE HAS BY MISTAKE OR INADVERT ENCE OR ON ACCOUNT OF IGNORANCE, INCLUDED IN HIS INCOME ANY AMOUNT WHICH IS EXEMPTED FROM PAYMENT OF INCOME-TAX, OR IS NOT INCOME WITHIN THE CONTEMPLATION OF LAW, HE MAY LIKEWISE BRING THIS TO THE NOTICE OF THE ASS ESSING AUTHORITY, WHICH IF SATISFIED, MAY GRANT HIM RELIEF AND REFUND THE TAX PAID IN EXCESS, IF ANY. SUCH MATTERS CAN BE BROUGHT TO THE NOTICE OF THE CO NCERNED AUTHORITY IN A CASE WHEN REFUND IS DUE AND PAYABLE, AND THE AUTHOR ITY CONCERNED, ON BEING SATISFIED, SHALL GRANT APPROPRIATE RELIEF. IN CASES GOVERNED BY SECTION 240 OF THE ACT, AN OBLIGATION IS CAST UPON THE REVE NUE TO REFUND THE AMOUNT TO THE ASSESSEE WITHOUT HIS HAVING TO MAKE ANY CLAI M IN THAT BEHALF. IN APPROPRIATE CASES THEREFORE IT IS OPEN TO THE ASSES SEE TO BRING FACTS TO THE NOTICE OF THE CONCERNED AUTHORITY ON THE BASIS OF T HE RETURN FURNISHED WHICH MAY HAVE A BEARING ON THE QUANTUM OF THE REFU ND, SUCH AS THOSE THE ASSESSEE COULD HAVE URGED UNDER SECTION 237 OF THE ACT. THE CONCERNED AUTHORITY, FOR THE LIMITED PURPOSE OF CALCULATING T HE AMOUNT TO BE REFUNDED UNDER SECTION 240 OF THE ACT, MAY TAKE ALL SUCH FAC TS INTO CONSIDERATION AND CALCULATE THE AMOUNT TO BE REFUNDED. SO VIEWED AN ASSESSEE WILL NOT BE PLACED IN A MORE DISADVANTAGES POSITION THAN WHA T HE WOULD HAVE BEEN, HAD AN ASSESSMENT BEEN MADE IN ACCORDANCE WIT H LAW. [EMPHASIS SUPPLIED] 2.6] IN VIEW OF THE FINDINGS REITERATED IN THE JUDI CIAL PRECEDENTS CITED SUPRA, IT IS QUITE CLEAR THAT ASSESSEE IS LIABLE TO PAY TA X ONLY ON THE AMOUNT OF TAXABLE INCOME AS PER LAW. THE ASSESSEE CANNOT BE S ADDLED WITH TAX LIABILITY MERELY FOR THE REASON THAT HE HIMSELF INC LUDED AN AMOUNT IN HIS INCOME-TAX RETURN WHICH OTHERWISE WAS NOT TAXABLE U NDER THE INCOME-TAX ACT, 1961. IN THE FACTS OF THE PRESENT CASE, THE AP PELLANT CATEGORICALLY MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 24 LODGED A CLAIM BEFORE THE ASSESSING OFFICER TO EXCL UDE THE AMOUNT OF RS. 31,10,000/- WHICH WAS INADVERTENTLY OFFERED FOR TAX IN THE INCOME-TAX RETURN AS FILED IN RESPONSE TO THE NOTICE ISSUED UN DER SECTION 148 OF THE INCOME-TAX ACT, 1961. HOWEVER, SUCH CLAIM WAS NOT A LLOWED BY THE ASSESSING OFFICER AND THE ASSESSING OFFICER TREATED THE AMOUNT OF GIFTS/ LOAN RECEIVED FROM RELATIVES/ FRIEND AS NON-GENUINE AND MAINTAINED THE ADDITION TO THE EXTENT OF RS. 31,10,000/- I.E. AMOU NT OFFERED FOR TAX BY THE APPELLANT IN HIS INCOME-TAX RETURN. THE ACTION OF T HE ASSESSING OFFICER IN MAINTAINING THE ADDITION OF RS. 31,10,000/- WAS NEI THER LEGAL NOR PROPER SINCE THE AMOUNT OF GIFTS/ LOAN RECEIVED FROM RELAT IVES/ FRIEND IS NOT TAXABLE AS INCOME OF THE APPELLANT. HENCE, THE ADDI TION OF RS. 31,10,000/- AS MAINTAINED BY THE ASSESSING OFFICER NOW REQUIRES TO BE EXCLUDED FROM THE TOTAL INCOME OF THE APPELLANT. ADDITION MAINTAINED BY THE ASSESSING OFFICER AND FU RTHER ENHANCEMENT MADE BY THE LD CIT(A) IS NOT SUSTAINABL E EVEN ON MERITS OF THE CASE 2.7.1] THE CASE OF THE APPELLANT FOR THE ASSESSMENT YEAR 2012-13 WAS REOPENED FOR VERIFICATION OF SOURCE OF PURCHASE AGR ICULTURAL LAND DURING THE YEAR UNDER CONSIDERATION. 2.7.2] THE APPELLANT PURCHASED AN AGRICULTURAL LAND SITUATED AT GRAM AHIRKHEDI, INDORE ON 19-10-2011 FOR A CONSIDERATION OF RS. 64,66,000/- WHICH COMPRISED OF BASIC CONSIDERATION OF RS. 60,00 ,000/-, STAMP DUTY OF RS. 3,75,000/- AND REGISTRATION CHARGES OF RS. 91,0 00/-. 2.8.1] THE APPELLANT CATEGORICALLY STATED DURING TH E COURSE OF REASSESSMENT PROCEEDINGS THAT AMOUNT INVESTED IN THE PURCHASE OF AGRICULTURAL LAND WAS OUT OF GIFTS RECEIVED FROM RELATIVES, OUT OF LOAN R ECEIVED FROM FRIEND AND OUT OF HIS PAST SAVINGS REPRESENTED IN THE FORM OF CAPI TAL. 2.8.2] PARTY-WISE DETAILS OF THE SOURCE OF INVESTME NT MADE BY THE APPELLANT WHICH WAS ALSO PROVIDED DURING THE COURSE OF REASSE SSMENT PROCEEDINGS IS AS UNDER: S. NO NAME OF THE PARTY NATURE OF RECEIPT RELATION WITH APPELLANT PAN AMOUNT [IN RS.] 1 SHRI GOPAL SINGH TOMAR GIFT FATHER ACPPT6950P 17,00,000 2 SMT N ILIMA TOMAR GIFT MOTHER AOXPT5375G 5,26,000 3 SMT JASODA BAI TOMAR GIFT GRANDMOTHER N.A. 6,00,000 4 SMT KIRTI TOMAR GIFT SPOUSE AQLPT1730H 4,15,000 5 SMT MADHU BALA GIFT MOTHER - IN - N.A. 5,00,000 MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 25 RAJPUT LAW 6 SHRI VIRENDRA SINGH RAJPUT GIFT FATHER - IN - LAW AWZPR3103Q 7,00,000 7 SHRI AWADESH SINGH RAJPUT GIFT BROTHER - IN - LAW BTAPS4374K 3,00,000 8 SHRI RAVI GURJAR LOAN FRIEND BLIPG9820L 9,90,000 9 OPENING BALANCE OF CAPITAL OPENING CAPITAL - - 8,43,150 TOTAL 65,74,150 2.9] THE ASSESSING OFFICER WHILE PASSING THE ASSESS MENT ORDER ACCEPTED THE GIFTS RECEIVED FROM RELATIVES TO THE TUNE OF RS . 34,64,150/- AS GENUINE AND MAINTAINED THE ADDITIONS TO THE EXTENT OF RS. 3 1,10,000/-. THE LD CIT(A), UJJAIN HOWEVER ENHANCED THE INCOME OF THE A PPELLANT BY THE AMOUNT OF GIFTS RECEIVED FROM RELATIVES AND OPENING BALANCE OF CAPITAL OF RS. 34,64,150/- WHICH WERE ACCEPTED AS GENUINE BY T HE ASSESSING OFFICER. 2.10] DETAIL OF THE AMOUNT OF ADDITION OF RS. 31,10 ,000/- AS MAINTAINED BY THE ASSESSING OFFICER AND FURTHER ENHANCEMENT OF RS . 34,64,150/- AS MADE BY THE LD CIT(A) ON ACCOUNT OF GIFTS/ LOAN RECEIVED FROM RELATIVES/ FRIEND AND OPENING BALANCE OF CAPITAL IS SUMMARIZED HEREUN DER FOR YOUR READY REFERENCE: S. NO NAME OF THE PARTY NATURE OF RECEIPT GROSS AM OUNT [IN RS.] AMOUNT NOT ACCEPTED AS GENUINE BY AO/ ADDITION MAINTAINED BY AO [IN RS.] AMOUNT ACCEPTED AS GENUINE BY AO WHICH WAS ENHANCED BY LD CIT(A) [IN RS.] AMOUNT IN DISPUTE BEFORE THE HONBLE BENCH [IN RS.] 1 SHRI GOPAL SINGH TOMAR GIFT 17,00,000 11,00,000 6,00,000 17,00,000 2 SMT NILIMA TOMAR GIFT 5,26,000 3,26,000 2,00,000 5,26,000 3 SMT JASODA BAI TOMAR GIFT 6,00,000 4,00,000 2,00,000 6,00,000 4 SMT KIRTI TOMAR GIFT 4,15,000 2,94,000 1,21,000 4,15,000 5 SMT MADHU BALA RAJPUT GIFT 5,00,000 NIL 5,00,000 5,00,000 6 SHRI VIRENDRA SINGH RAJPUT GIFT 7,00,000 NIL 7,00,000 7,00,000 7 SHRI AWADESH SINGH RAJPUT GIFT 3,00,000 NIL 3,00,000 3,00,000 MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 26 8 SHRI RAVI GURJAR LOAN 9,90,000 9,90,000 NIL 9,90,000 9 OPENING BALANCE OF CAPITAL OPENING CAPITAL 8,43,150 NIL 8,43,150 8,43,150 SUB-TOTAL [A] 65,74,150 31,10,000 34,64,150 65,74,150 2.11.1] THE FOLLOWING DOCUMENTS WERE FILED BY THE A PPELLANT BEFORE THE ASSESSING OFFICER AND LD CIT(A) SO AS TO JUSTIFY TH E IDENTITY AND CREDITWORTHINESS OF THE DONOR/ LENDER AND GENUINENE SS OF THE TRANSACTION: S. NO DESCRIPTION OF DOCUMENTS PAGE NO. OF COMPILATIO N 1 SHRI GOPAL SINGH TOMAR, FATHER OF THE APPELLANT G IFT OF RS. 17,00,000/- 1.1 CONFIRMATION OF GIFT DULY NOTARIZED 68 1.2 DETAILS OF PENSION RECEIVED WHICH WAS THE SOURCE OF MAKING GIFT TO THE APPELLANT 69-71 1.3 BANK STATEMENT DULY EVIDENCING THE FACT THAT AMOUNT OF PENSION RECEIVED IN BANK WAS WITHDRAWN AND GIFTED T O THE APPELLANT 72 2 SMT NILIMA TOMAR, MOTHER OF THE APPELLANT GIFT OF RS. 5,26,000 2.1 CONFIRMATION OF GIFT DULY NOTARIZED 73 3 SMT JASODA BAI TOMAR, GRANDMOTHER OF THE APPELLANT GIFT OF RS. 6,00,000/- 3.1 CONFIRMATION OF GIFT DULY NOTARIZED 74 4 SMT KIRTI TOMAR, SPOUSE OF THE APPELLANT GIFT OF RS. 4,15,000 4.1 CONF IRMATION OF GIFT DULY NOTARIZED 75 5 SMT MADHU BALA RAJPUT, MOTHER-IN-LAW OF THE APPELLA NT GIFT OF RS. 5,00,000/- 5.1 CONFIRMATION OF GIFT DULY NOTARIZED 76 5.2 SALE DEED OF AGRICULTURAL LAND WHICH WAS THE SOURCE OF MAKING GIFT TO THE APPELLANT 77-82 6 SHRI VIRENDRA SINGH RAJPUT, FATHER-IN-LAW OF APPELL ANT GIFT OF RS. 7,00,000/- 6.1 CONFIRMATION OF GIFT DULY NOTARIZED 89 6.2 SALE DEED OF AGRICULTURAL LAND WHICH WAS THE SOURCE OF MAKING GIFT TO THE APPELLANT 90-94 7 SHRI AVDHESH SINGH RAJPUT, BROTHER-IN-LAW OF APPELL ANT GIFT OF RS. 3,00,000/- 7.1 CONFIRMATION OF GIFT DULY NOTARIZED 83 MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 27 7.2 SALE DEED OF AGRICULTURAL LAND WHICH WAS THE SOURCE OF MAKING GIFT TO THE APPELLANT 84-88 8 SHRI RAVI GURJAR, FRIEND OF APPELLANT LOAN OF RS. 9,90,000/- 8.1 CONFIRMATION OF ACCOUNTS 95 2.11.2] IN VIEW OF THE AMPLE DOCUMENTARY EVIDENCES AS FILED BEFORE THE ASSESSING OFFICER AND LD CIT(A) AND AS LISTED H EREINABOVE, IT IS CLEARLY EVIDENT THAT THE APPELLANT SATISFACTORILY D ISCHARGED THE PRIMARY ONUS CAST UPON HIM UNDER SECTION 68 OF THE INCOME-TAX ACT, 1961 TO ESTABLISH THE IDENTITY AND CREDITWORTH INESS OF THE DONOR/ LENDER AND GENUINENESS OF THE TRANSACTION AS ENTERED INTO WITH THEM. HENCE, IT IS HUMBLY SUBMITTED THAT ADDIT ION OF RS. 31,10,000/- AS MAINTAINED BY THE ASSESSING OFFICER AND FURTHER ENHANCEMENT OF RS. 34,64,150/- AS MADE BY THE LD CI T(A) ON ACCOUNT OF GIFTS/ LOAN RECEIVED FROM RELATIVES/ FRI END IS NEITHER LEGAL NOR PROPER AND REQUIRES TO BE DELETED IN ENTIRETY. 2.12.1] THE OBSERVATIONS OF THE ASSESSING OFFICER W HILE PASSING THE ASSESSMENT ORDER ALONG WITH CORRESPONDING EXPLANATI ONS/ JUSTIFICATIONS OF THE APPELLANT IN RESPECT OF EACH SUCH OBSERVATION ARE SUMMARIZED HEREUNDER FOR REFERENCE OF THE HONB LE BENCH: S. NO NAME OF THE PARTY PAN AMOUNT [IN RS.] OBSERVATIONS OF THE ASSESSING OFFICER CORRESPONDING EXPLANATIONS/ JUSTIFICATIONS OF THE APPELLANT 1 SHRI GOPAL SINGH TOMAR ACPPT6950P 17,00,000 ON PERUSAL OF THE BANK ACCOUNT OF SHRI GOPAL SINGH TOMAR, IT APPEARS THAT AN AMOUNT OF RS. 12,62,479/- WAS CREDITED BUT SOME OF THE AMOUNT WAS UTILISED BY HIM FOR ADVANCING FOR OTHER PURPOSE. CONSIDERING RETIREMENT BENEFITS AND PAST SAVING GIFT OF RS. 6,00,000/- WAS ACCEPTED AS CONFIRMATION OF GIFT DULY NOTARIZED, DETAILS OF PENSION RECEIVED AND BANK STATEMENT DULY EVIDENCING THE FACT THAT AMOUNT OF PENSION RECEIVED WAS WITHDRAWN FROM THE BANK ACCOUNT WAS FILED BEFORE THE ASSESSING OFFICER. THE PAN OF DONOR WAS ALSO PROVIDED. IF THE ASSESSING OFFICER WAS NOT SATISIFIED WITH THE MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 28 GENUINE AND BALANCE AMOUNT OF RS. 11,00,000/- IS CONSIDERED AS NOT EXPLAINED BY THE ASSESSEE SOURCE OF GIFT MADE BY DONOR, HE COULD HAVE MADE ADDITION IN THE HANDS OF THE DONOR BUT NOT IN THE HANDS OF THE APPELLANT. CONSIDERING THE AGE OF FATHER OF THE APPELLANT AND HIS PAST SAVINGS, AMOUNT OF GIFT OF RS. 17,00,000/- REQUIRES TO BE ACCEPTED AS GENUINE AND REASONABLE 2 SMT NILIMA TOMAR AOXPT5375G 5,26,000 IN ABSENCE OF INCOME-TAX RETURN, SOURCE OF GIFT IS NOT FULLY ACCEPTABLE BUT CONSIDERING THE PAST SAVING, GIFT OF RS. 2,00,000/- WAS ACCEPTED AND RS. 3,26,000/- IS TREATED AS UNEXPLAINED CONFIRMATION OF GIFT DULY NOTARIZED WAS FILED BEFORE THE ASSESSING OFFICER. THE PAN OF DONOR WAS ALSO PROVIDED. IF THE ASSESSING OFFICER WAS NOT SATISIFIED WITH THE SOURCE OF GIFT MADE BY DONOR, HE COULD HAVE MADE ADDITION IN THE HANDS OF THE DONOR BUT NOT IN THE HANDS OF THE APPELLANT. CONSIDERING THE AGE OF MOTHER OF THE APPELLANT AND HER PAST SAVINGS, AMOUNT OF GIFT OF RS. 5,26,000/- REQUIRES TO BE ACCEPTED AS GENUINE AND MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 29 REASONABLE 3 SMT JASODA BAI TOMAR N.A. 6,00,000 IN ABSENCE OF INCOME-TAX RETURN, SOURCE OF GIFT IS NOT FULLY ACCEPTABLE BUT CONSIDERING THE PAST SAVING, GIFT OF RS. 2,00,000/- WAS ACCEPTED AND RS. 4,00,000/- IS TREATED AS UNEXPLAINED CONFIRMATION OF GIFT DULY NOTARIZED WAS FILED BEFORE THE ASSESSING OFFICER. CONSIDERING THE AGE OF GRANDMOTHER OF THE APPELLANT AND HER PAST SAVINGS, AMOUNT OF GIFT OF RS. 6,00,000/- REQUIRES TO BE ACCEPTED AS GENUINE AND REASONABLE 4 SMT KIRTI TOMAR AQLPT1730H 4,15,000 THE ASSESSEE HAS NOT PROPERLY EXPLAINED THE SOURCE OF GIFT AS GIVEN BY HER TO THE ASSESSEE. CONSIDERING THE MARRIAGE GIFT AND OTHER SAVING, GIFT OF RS. 1,21,000/- ONLY WAS ACCEPTED AS GENUINE AND BALANCE AMOUNT OF GIFT OF RS. 2,94,000/- IS CONSIDERED AS UNEXPLAINED CONFIRMATION OF GIFT DULY NOTARIZED WAS FILED BEFORE THE ASSESSING OFFICER. THE PAN OF DONOR WAS ALSO PROVIDED. IF THE ASSESSING OFFICER WAS NOT SATISIFIED WITH THE SOURCE OF GIFT MADE BY DONOR, HE COULD HAVE MADE ADDITION IN THE HANDS OF THE DONOR BUT NOT IN THE HANDS OF THE APPELLANT. CONSIDERING THE AGE OF SPOUSE OF THE APPELLANT HER PAST SAVINGS AND THE FACT THAT MARRIAGE TOOK PLACE DURING THE YEAR ITSELF, AMOUNT OF GIFT OF RS. 4,15,000/- MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 30 REQUIRES TO BE ACCEPTED AS GENUINE AND REASONABLE 5 SMT MADHU BALA RAJPUT N.A. 5,00,000 THE ASSESSEE SUBMITTED COPY OF GIFT DEED AND IN RESPECT OF CREDITWORTHINESS OF THE RELATIVES, HE SUBMITTED THE COPY OF SALE DEED OF AGRICULTURAL LAND. CONSIDERING THE DOCUMENTS AS FILED BY THE ASSESSEE, IDENTITY, GENUINENESS AND CAPACITY OF THE GIFT IS ACCEPTED AS GENUINE AND THEREFORE NO ADDITION IS MADE IN RESPECT OF THESE GIFTS CONFIRMATION OF GIFT DULY NOTARIZED AND SALE DEED OF AGRICULURAL LANDS WERE FILED BEFORE THE ASSESSING OFFICER TO JUSTIFY THE SOURCE OF GIFT MADE BY THESE RELATIVES. PAN OF THE DONORS WERE ALSO PROVIDED, WHEREVER AVAILABLE. THE ASSESSING OFFICER DULY ACCEPTED THE CONTENTIONS OF THE APPELLANT AND DID NOT MAKE ANY ADDITION IN RESPECT OF GIFT RECEIVED FROM THESE RELATIVES 6 SHRI VIRENDRA SINGH RAJPUT AWZPR3103Q 7,00,000 7 SHRI AWADESH SINGH RAJPUT BTAPS4374K 3,00,000 8 SHRI RAVI GURJAR BLIPG9820L 9,90,000 THE ASSESSEE HAS NOT FILED THE CONFIRMATION AND BANK ACCOUNT. THE ASSESSEE HAS ALSO NOT PROVIDED COMPLETE ADDRESS. THE ASSESSEE HAS FAILED TO DISCHARGE THE PRIMARY ONUS LYING ON HIM TO EXPLAIN THE SOURCE. HENCE SAME IS TREATED AS NOT PROPERLY EXPLAINED CONFIRMATION OF ACCOUNTS DULY SIGNED WAS FILED BEFORE THE LD CIT(A). THE COMPLETE ADDRESS AND PAN OF THE LENDER WAS ALSO PROVIDED BEFORE THE LD CIT(A). IF THE LD CIT(A) WAS NOT SATISIFIED WITH THE SOURCE OF LOAN GIVEN BY LENDER, HE COULD HAVE MADE ADDITION IN THE HANDS OF THE LENDER BUT NOT IN MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 31 THE HANDS OF THE APPELLANT 9 OPENING BALANCE OF CAPITAL - 8,43,150 THE ASSESSEE IS A CHARTERED ACCOUNTANT FROM JANUARY 2009 AND FILED THE RETURN OF INCOME FROM A.Y. 2011- 12. THE SUBMISSION OF THE ASSESSEE IN THIS REGARD IS CONSIDERED THE ASSESSING OFFICER DULY ACCEPTED THE CONTENTIONS OF THE APPELLANT. HOWEVER, THE LD CIT (A) GROSSLY ERRED IN ADDING THIS AMOUNT TO THE TOTAL INCOME OF THE APPELLANT UNDER SECTION 68 OF THE ACT EVEN WHEN SUCH AMOUNT OF CAPITAL WAS DULY JUSTIFIED LOOKING AT THE QUALIFICATION OF THE APPELLANT AND ALSO LOOKING AT THE FACT THAT HE WAS IN JOB FOR THE LAST THREE TO FOUR YEARS TOTAL 65,74,150 2.12.2] THE LD CIT(A) DURING THE COURSE OF APPELLAT E PROCEEDINGS FURTHER ENHANCED THE INCOME OF THE APPELLANT ON ACCOUNT OF GIFTS RECEIVED FROM RELATIVES BY OBSERVING THAT SECTION 68 OF THE ACT E MBODIES THE EXPRESSION NATURE AND SOURCE WHICH HAS TO BE UNDERSTOOD TOGE THER AS A REQUIREMENT OF IDENTIFICATION OF THE SOURCE AND THE NATURE OF T HE SOURCE, SO THAT THE GENUINENESS OR OTHERWISE CAN BE INFERRED. THE LD CI T(A) FURTHER OBSERVED THAT THE APPELLANT FAILED TO FILE THE REQUISITE DOC UMENTARY EVIDENCES IN RESPECT OF GIFT AND THEREFORE, THE APPELLANT FAILED TO DISCHARGE THE BURDEN OF PROOF BY NOT ESTABLISHING THE GENUINENESS OF TRANSA CTION AND CREDIT WORTHINESS OF THE DONOR. 2.12.3] WITH DUE RESPECT, IT IS HUMBLY SUBMITTED TH AT THE OBSERVATIONS OF THE ASSESSING OFFICER AND THAT OF THE LD CIT(A) DO NOT HOLD THE FIELD IN RESPECT OF THE FOLLOWING UNCONTROVERTED FACTS INVOL VED IN THE PRESENT CASE: THE IDENTITY OF THE DONOR/ LENDER WAS PROVED BEYOND DOU BT. THE ASSESSING OFFICER HIMSELF ACCEPTED PART OF THE GIFTS RECEIVED FROM FATHER, MOTHER, MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 32 GRANDMOTHER AND SPOUSE OF THE APPELLANT AS GENUINE. THE ASSESSING OFFICER ALSO ACCEPTED THE GIFTS RECEIVED FROM FATHER-IN-LAW , MOTHER-IN-LAW AND BROTHER-IN-LAW AS GENUINE IN TOTALITY. THERE WAS NO SUCH FINDING THAT THE APPELLANT ROUTED HIS OWN UNACCOUNTED/ UNDISCLOSED I NCOME IN THE NAMES OF ANY BOGUS PARTIES. THE RELATIONSHIP OF THE DONOR WITH THE APPELLANT WAS DU LY ESTABLISHED. CONFIR MATION OF GIFT DULY NOTARIZED AND SIGNED BY THE DON OR WAS FILED BEFORE THE ASSESSING OFFICER AND LD CIT(A). CONFIRMATION OF AC COUNTS DULY SIGNED BY THE LENDER WAS ALSO FILED BEFORE THE LD CIT(A). THE SE DOCUMENTS WERE NOT DISPROVED BY ANY OF THOSE AUTHORITIES. THE COMPLETE ADDRESS AND PAN, WHEREVER AVAILABLE WERE A LSO PROVIDED TO THE ASSESSING OFFICER AND LD CIT(A). IF THERE WAS ANY D OUBT REGARDING THE SOURCE OF GIFT MADE/ LOAN GIVEN TO THE APPELLANT, N ECESSARY INFORMATION COULD HAVE BEEN CALLED DIRECTLY FROM THE PARTIES. I F THE ASSESSING OFFICER AND LD CIT(A) WOULD NOT HAVE BEEN SATISFIED WITH TH E EXPLANATION OF THE DONOR/ LENDER, NECESSARY ADDITION COULD HAVE BEEN M ADE TO THE TOTAL INCOME OF THE DONOR/ LENDER BUT NOT IN THE HANDS OF THE APPELLANT. SUPPO RTING DOCUMENTARY EVIDENCES SO AS TO ESTABLISH THE SOURCE OF GIFTS MADE BY THE RELATIVES WERE ALSO FILED BEFORE THE ASSESSING OFFICER AND THE LD CIT(A) IN RESPECT OF GIFTS RECEIVED FROM FEW OF THE RELATI VES THEREBY JUSTIFYING THE SOURCE OF SOURCE OF FUNDS RECEIVED BY THE APPELLANT . THE LOWER AUTHORITIES DID NOT DOUBT THE GENUINENESS OF THE TRANSACTION OF GIFT AND ALSO THE IDENTITY OF THE DONORS/ LENDER. HENCE, THERE WAS NO RATIONALE BEHIND PRESUMING THAT THE APPELLANT ROUTED HIS UNAC COUNTED/ UNDISCLOSED INCOME IN THE GARB OF GIFT/ UNSECURED LOAN. THE APPELLANT QUALIFIED AS A CHARTERED ACCOUNTANT IN TH E MONTH OF JANUARY, 2009. HE WAS A SALARIED PERSON AND RECEIVED NOMINAL INCOME DURING THE YEAR UNDER CONSIDERATION AND IN THE SUBSEQUENT YEAR S. THE DEPARTMENT FAILED TO BRING ON RECORDS ANY OTHER SOURCE OF INCO ME OF THE APPELLANT APART FROM HIS SALARY INCOME. LOOKING AT THE CIRCUMSTANTI AL EVIDENCES AND APPLYING THE TEST OF HUMAN PROBABILITY WHICH IS HEA VILY RELIED UPON THE DEPARTMENT OF LATE, THE ONUS WAS ON THE DEPARTMENT WHO WAS ALLEGING THAT THE APPARENT WAS NOT REAL, TO PROVE THAT SUCH EXORBITANT AMOUNT WAS MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 33 ACTUALLY THE UNACCOUNTED/ UNDISCLOSED INCOME OF THE APPELLANT WHICH WAS ROUTED BACK TO HIM BY MEANS OF GIFTS/ UNSECURED LOA N. 2.13] IN VIEW OF THE ABOVE DISCUSSION, ADDITION OF RS. 31,10,000/- AS MAINTAINED BY THE ASSESSING OFFICER AND ENHANCEMENT OF RS. 34,64,150/- AS MADE BY THE LD CIT(A) SEEMS TO BE MERELY BASED O N SURMISES AND CONJECTURES WHICH IS GROSSLY UNJUSTIFIABLE AND WHOL LY UNWARRANTED MORE SO WHEN THE APPELLANT SATISFACTORILY DISCHARGED THE PRIMARY ONUS CAST UPON HIM UNDER SECTION 68 OF THE ACT. RELEVANT EXTRACTS FROM FEW OF THE JUDICIAL PRECEDEN TS WHICH HAVE ENUNCIATED THE ABOVE-MENTIONED PRINCIPLES ARE REPRO DUCED HEREUNDER FOR YOUR READY REFERENCE: 2.14.1] THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT V. RAMESH SURI AS REPORTED IN [2015] 57 TAXMANN.COM 84 (DELHI) HAS CA TEGORICALLY HELD THAT: 7. IT WAS SUBMITTED THAT THE MODES FOR GIFTING AMO UNTS OF PROPERTIES CANNOT BE REALLY GONE INTO BY THE REVENUE, SO LONG AS THE IDENTITY OR RELATIONSHIP IS ESTABLISHED, WHICH HAS BEEN DONE IN THE PRESENT INSTANCE. THIS COURT CONSIDERED THE FACTUAL MATRIX. THE REVEN UE DOES NOT DISPUTE THE PRESENT RELATIONSHIP BETWEEN THE DONOR (THROUGH MR. WANEY) AND MR. ASHWANI SURI. IT ALSO DOES NOT DISPUTE THAT THE LET TER IN TERMS OF WHICH THE INITIAL DONATION WAS MADE TO MR. ASHWANI SURI, DIRE CTED THE DISBURSEMENT OF AMOUNTS IN A PARTICULAR PROPORTION, WHICH HE DID . THE ASSESSEE IS ALSO RELATED TO MR. ASHWANI SURI. IN THESE CIRCUMSTANCES , THE UNDERLINED TRANSACTION WHEREBY THE DONOR DIRECTED AMOUNTS TO B E DISBURSED BY MR. ASHWANI SURI TO SPECIFIED OR NAMED INDIVIDUALS CANN OT BE TREATED AS UNNATURAL. BOTH THE AUTHORITIES THE CIT(APPEALS) AND THE ITAT TOOK NOTE OF THESE FACTS AND FURTHER NOTICED THAT ALL THE GIF TS WERE ROOTED TO NORMAL BANKING TRANSACTIONS. WHILE SECTION 68 CERTAINLY EN ABLES THE AO TO BRING TO TAX AMOUNTS WHICH ARE SUSPECT, IN A TRANSACTION OF THE PRESENT KIND, WHERE THE IDENTITY AND THE RELATIONSHIP OF THE DONOR ARE KNOWN, THE AO IN OUR OPINION OUGHT NOT TO HAVE CONCLUDED THAT THE TRANSA CTION - BY WHICH THE ASSESSEE RECEIVED THE AMOUNT OF RS.1,84,860/- WAS I N GENUINE. 9. AS NOTICED EARLIER, THE RELATIONSHIP BETWEEN THE DONOR, MR. ASHWANI SURI AND MR. RAMESH SURI I.E. THE ASSESSEE IS NOT DISPUT ED. IN THESE CIRCUMSTANCES, TO REQUIRE FURTHER PROOF, CONSIDERIN G THAT THE DONOR WAS AN NRI AT THE GIVEN POINT OF TIME IN 1984, MIGHT HAVE BEEN ASKING FOR TOO MUCH. IN ANY EVENT THIS COURT IS OF THE OPINION THA T SINCE A CONCURRENT FINDING HAS BEEN RENDERED LARGELY BASED ON FACTS NO INTERFERENCE IS CALLED FOR. REFERENCE IS ACCORDINGLY REJECTED. [ EMPHASIS SUPPLIED] 2.14.2] THE HONBLE ANDHRA PRADESH AND TELANGANA HI GH COURT IN THE CASE OF PENDURTHI CHANDRASEKHAR V. DCIT, CENTRAL CI RCLE-11, HYDERABAD MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 34 AS REPORTED IN [2018] 407 ITR 179 (ANDHRA PRADESH A ND TELANGANA) HAS HELD THAT: 21. THE FURTHER OBSERVATION OF THE AO THAT THE ASS ESSEE APPEARED TO HAVE OPENED THE BANK ACCOUNT ONLY FOR THE PURPOSE OF REC EIVING CASH IN THE GUISE OF A GIFT, IS ALSO FLIMSY. WHEN THE DONOR HERSELF H AS GIVEN A CONFIRMATION LETTER CLEARLY STATING THEREIN THAT SHE HAS TRANSFE RRED THE AMOUNT OF RS.73,00,000/- TO THE ACCOUNT OF THE ASSESSEE AND F URTHER DECLARING THAT SHE GAVE THE SAID GIFT OUT OF HER NATURAL LOVE AND AFFECTION TOWARDS HER NEPHEW, THE AO OUGHT NOT TO HAVE ENTERTAINED FURTHE R DOUBTS. IF FOR FACILITATING RECEIPT OF A GIFT THE ASSESSEE HAS OPE NED AN ACCOUNT, WE DO NOT FIND ANYTHING WRONG IN THAT. IN OUR OPINION, THE WH OLE APPROACH OF THE AO IS WHOLLY PERVERSE WHICH CANNOT BE SUSTAINED. EQUAL LY, THE REASONS ASSIGNED BY THE TWO APPELLATE BODIES CONFIRMING THE ORDER OF THE AO ARE ALSO PERVERSE. 22. THE FINDINGS OF THE CIT(A) THAT GIFTS ARE TRADI TIONAL IN NATURE, THAT THEY ARE GIVEN IN FUNCTIONS LIKE MARRIAGES ETC., THAT TH ERE WAS NO SUCH OCCASION WARRANTING RECEIPT OF GIFT FROM NIRMALA TO THE ASSE SSEE, AND THAT IT IS VERY ODD TO NOTE THAT THE ENTIRE AMOUNT RECEIVED FROM HE R DAUGHTER HAS BEEN DIVERTED TO THE ASSESSEE AS A GIFT WITHOUT ANY CONS IDERATION, LOOK TO US TO BE EMPTY SERMONS AS THE CIT (A) EVIDENTLY JUDGED TH E CONDUCT OF THE PARTIES FROM HIS PERSONAL PERCEPTION, WHICH IS WHOL LY IMPERMISSIBLE. 23. WHEN THE ACT ITSELF DOES NOT ENVISAGE ANY OCCAS ION FOR A RELATIVE TO GIVE A GIFT, IT IS WELL-NIGH IMPERMISSIBLE FOR ANY AUTHO RITY AND EVEN FOR THAT MATTER FOR THE COURT TO IMPORT THE CONCEPT OF OCCAS ION AND DEVELOP A THEORY BASED ON SUCH CONCEPT. THE DONOR BEING NO OTHER THA N THE ASSESSEE'S OWN MATERNAL AUNT, IS A 'RELATIVE' AS DEFINED UNDER THE EXPLANATION TO SECTION 56(2)(V) OF THE ACT AND IN THE LIGHT OF THE PLEA OF THE ASSESSEE THAT SHE WAS BROUGHT UP BY THE ASSESSEE'S PARENTS, AND HER DAUGH TERS HAVING ALREADY BEEN MARRIED OFF AND IN A WELL-TO-DO POSITION, IT C ANNOT BE SAID THAT SUCH A GIFT FALLS BEYOND 'HUMAN PROBABILITY' TEST AS QUITE OFTEN APPLIED BY THE COURTS. HENCE, IT IS NOT PERMISSIBLE FOR THE AO TO JUDGE THE CONDUCT OF THE DONOR SITTING IN HIS ARM CHAIR. [EMPHASIS SUPPLIED] 2.14.3] THE HONBLE PUNJAB AND HARYANA HIGH COURT I N THE CASE OF CIT (CENTRAL), LUDHIANA V. JAWAHAR LAL OSWAL AS REPORTE D IN [2016] 382 ITR 453 (PUNJAB & HARYANA) HAS HELD THAT: 27. AN ARRANGEMENT BETWEEN A DONOR AND ANOTHER IS AN ARRANGEMENT BETWEEN THE DONOR AND HIS SOURCE OF MONEY. THE ONUS TO PROBE AND PROVE THIS ASPECT LIES UPON THE REVENUE AND NOT UPON THE ASSESSEE, PARTICULARLY MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 35 WHERE THE INCOME IS BEING DEALT WITH UNDER A DEEMIN G PROVISION. A PERSON WHO RECEIVES A GIFT, IS NOT REQUIRED TO PROVE THE S OURCE OF THE MONEY OF HIS DONOR. 30. THE TRIBUNAL HAS HELD THAT THERE IS NO EVIDENCE OR MATERIAL TO LINK VARINDER SHARMA TO THE ASSESSEE AND THAT FINDINGS H AVE BEEN RECORDED ON MERE SUSPICION, CONJECTURES AND SURMISES. THE TRIBU NAL HAS ALSO HELD THAT THE ASSESSEE, WHO ACCEPTED THE GIFT FOR AND ON BEHA LF OF HIS DAUGHTERS, WAS NOT PRIVY TO ANY INFORMATION REGARDING THE SOUR CE OF FUNDS WITH MR. B.P. BHARDWAJ. ONE CANNOT BE OBLIVIOUS TO THE FACT THAT SUCH A LARGE GIFT RECEIVED FROM A FOREIGN COUNTRY IS BOUND TO RAISE S USPICION BUT CAN NOT DISREGARD THE FACT THAT SUSPICION AND DOUBT CANNOT REPLACE PROOF OR TRANSLATE INTO REASONS, MUCH LESS REASONS FOR INVOK ING A DEEMING PROVISION TO HOLD THAT GIFTS REPRESENT THE INCOME OF THE ASSE SSEE, PARTICULARLY IN THE ABSENCE OF RELEVANT FACTS. [EMPHASIS SUPPLIED] 2.14.4] THE HONBLE BOMBAY HIGH COURT IN THE CASE O F MRS. KOMAL WAZIR V. DCIT AS REPORTED IN [2015] 281 CTR 506 (BOMBAY) HAS HELD THAT: 14. WE FIND THAT THE EXPLANATION OFFERED BY THE RE SPONDENT-ASSESSEE TO HER POSSESSION OF JEWELLERY OF RS. 6.57 LAKHS WAS T HAT THE SAME WAS GIFTED TO HER ON OCCASION OF HER MARRIAGE BY HER FA THER AND FATHER-IN-LAW. THIS EXPLANATION WAS NOT CONTESTED BY THE FATHER AN D FATHER-IN-LAW. THE AUTHORITIES ACCEPTED THE SOURCE OF THE JEWELLERY IN HER POSSESSION. HOWEVER, THE TRIBUNAL WAS NOT SATISFIED WITH THE EV IDENCE PRODUCED BY HER FATHER AND FATHER-IN-LAW. THIS CANNOT BE LEAD T O BE CONCLUSION THAT THE EXPLANATION OFFERED BY THE RESPONDENT-ASSESSEE IN R ESPECT OF THE JEWELLERY IN HER POSSESSION IS NOT SATISFACTORY. IN THE NORMA L COURSE OF HUMAN CONDUCT, ON OCCASIONS SUCH AS MARRIAGE THE PARENTS AND PARENTS-IN-LAW OF A BRIDE DO NORMALLY GIFT JEWELLERY TO THE BRIDE. ON OCCASION SUCH AS THIS, IT IS NOT POSSIBLE TO EXPECT THE BRIDE TO ASK FOR EVID ENCE OF BILLS/INVOICES TO SUPPORT THE PURCHASE OF THE JEWELLERY. ONE HAS TO P ROCEED ON THE BASIS THAT IT IS GENUINE. THUS HER EXPLANATION THAT SHE RECEIV ED THE JEWELLERY AS GIFTS FROM HER FATHER AND FATHER-IN-LAW IS SUFFICIENT EXP LANATION OF THE JEWELLERY IN HER POSSESSION AND THE GIFTS ARE NOT DENIED BY H ER FATHER AND FATHER-IN- LAW. WE ARE OF THE VIEW THAT INVOCATION OF SECTION 69 OF THE ACT IS THESE FACTS IS COMPLETELY UNWARRANTED. [EMPHASIS SUPPLIED] 2.14.5] THE HONBLE ANDHRA PRADESH HIGH COURT IN TH E CASE OF CIT V. DR. KODELA SIVA PRASADA RAO AS REPORTED IN [2013] 263 C TR 703 (ANDHRA PRADESH) HAS HELD THAT: 12 EVEN THOUGH THE ASSESSEE INFORMED THE DEPARTMENT TH AT THE DONOR WAS AVAILABLE IN INDIA IN DECEMBER 2006 ON AC COUNT OF THE DEATH OF HIS MOTHER-IN-LAW AND THE CONTACT DETAILS OF THE DO NOR IN INDIA (ADDRESS AND MOBILE NUMBERS), THE DEPARTMENT DID NOT BOTHER TO CONTACT HIM AND MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 36 VERIFY THE ABOVE FACTS. IN THIS VIEW OF THE MATTER, WE ARE OF THE VIEW THAT THE ASSESSEE HAD DISCHARGED THE BURDEN CAST ON HIM TO PROVE THE IDENTITY OF THE CREDITOR, THE CREDITWORTHINESS OF THE CREDIT OR AND THE GENUINENESS OF THE TRANSACTION. THEREFORE, THE CONTENTION OF THE R EVENUE THAT THE SAID SUM OUGHT TO BE ADDED TO THE INCOME OF THE ASSESSEE CAN NOT BE ACCEPTED. THE FINDING RECORDED BY THE TRIBUNAL IS BASED ON APPREC IATION OF THE MATERIAL ON RECORD AND CANNOT BE SAID TO BE PERVERSE. IN OUR VIEW, NO QUESTION OF LAW, MUCH LESS A SUBSTANTIVE QUESTION OF LAW ARISES FOR CONSIDERATION IN THIS APPEAL. [EMPHASIS SUPPLIED] 2.14.6] THE HONBLE ITAT GAUHATI BENCH (THIRD MEMBE R) IN THE CASE OF SMT. MADHU RAITANI V. ACIT, CIRCLE-3 AS REPORTED IN [201 1] 10 ITR(T) 91 (GAUHATI) (TM) HAS HELD THAT: 20. THE LD. A.M. FURTHER STATED IN HIS PROPOSED OR DER ENDORSING THE OBSERVATION OF CIT(A) THAT THE SOURCE OF INCOME OF THE DONORS DOES NOT PERMIT THEM TO MAKE GIFTS TO THE ASSESSEE. THE HON' BLE SUPREME COURT IN THE CASE OF DAULAT RAM RAWATMULL (SUPRA) HAS HELD T HAT THE ONUS OF PROVING THAT THE APPARENT IS NOT REAL WAS ON THE PA RTY WHO CLAIMED IT TO BE SO. THE REVENUE COULD NOT BRING ANY CONCLUSIVE EVID ENCE TO ESTABLISH THAT DONORS FROM WHOM THE GIFTS WERE RECEIVED WERE BOGUS AND THE ASSESSEE'S OWN UNDISCLOSED MONEY CAME BACK TO HER EN-ROUTE BOG US GIFTS. THE ABOVE POSITION IS ALSO SUPPORTED BY THE DECISION OF THE H ON'BLE GAUHATI HIGH COURT IN THE CASE OF NEMI CHAND KOTHARI (SUPRA), WH EREIN THEIR LORDSHIPS OF JURISDICTIONAL HIGH COURT WHILE EXPLAINING THE S COPE OF SECTION 68 OF THE ACT HAS OBSERVED AS UNDER : '....THE LOGICAL CONCLUSION, THEREFORE, HAS TO BE T HAT AN INQUIRY UNDER SECTION 68 NEED NOT NECESSARILY BE KEPT CONFINED BY THE ASS ESSING OFFICER TO THE TRANSACTIONS, WHICH TOOK PLACE BETWEEN THE ASSESSEE AND HIS CREDITOR BUT THE SAME MAY BE EXTENDED TO THE TRANSACTIONS, WHICH HAVE TAKEN PLACE BETWEEN THE CREDITOR AND HIS SUB-CREDITOR. THUS, WH ILE THE ASSESSING OFFICER IS, UNDER SECTION 68, FREE TO LOOK INTO THE SOURCE(S) OF THE CREDITOR AND/OR OF THE SUB-CREDITOR, THE BURDEN ON THE ASSES SEE UNDER SECTION 68 IS DEFINITELY LIMITED.' ACCORDING TO THE SAID DECISION, THEREFORE, CREDITOR 'S CREDITWORTHINESS HAS TO BE JUDGED VIS--VIS TRANSACTIONS, WHICH HAVE TAKEN PLACE BETWEEN THE ASSESSEE AND THE CREDITOR, AND IT IS NOT THE BUSINE SS OF ASSESSEE TO FIND OUT SOURCE OF MONEY OF HIS CREDITOR OR GENUINENESS OF TRANSACTIONS WHICH TOOK PLACE BETWEEN CREDITOR AND SUB-CREDITOR AND/OR CREDITWORTHINESS OF SUB-CREDITORS, FOR THESE ASPECTS MAY NOT BE WITHIN SPECIAL KNOWLEDGE OF THE ASSESSEEIN VIEW OF THE ABOVE, IN MY CONS IDERED OPINION, THE LOWER AUTHORITIES WERE NOT JUSTIFIED IN STATING THAT THE GIFTS WERE UNDISCLOSED INCOME OF THE ASSESSEE, WHICH WAS ACCED ED TO BY LD. A.M. MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 37 22. FURTHER, IT IS AN ESTABLISHED POSITION THAT FOR ARRIVING AT THE CONCLUSION THAT THE GIFT WAS NOT GENUINE AND THE SAME WAS UNDI SCLOSED INCOME OF THE ASSESSEE, THE DEPARTMENT OUGHT TO HAVE BROUGHT ON R ECORD EVIDENCE FOR SUCH SPECIFIC FINDING. HERE IN THIS CASE THE DEPART MENT COULD NOT BRING ON RECORD ANY EVIDENCE EXCEPT ALLEGING ON PRESUMPTION AND SUSPICION THAT THE GIFTS WERE BOGUS AND REPRESENTED ASSESSEE'S UNDISCL OSED INCOME. IN THESE CIRCUMSTANCES, THIS OBSERVATION OF THE DEPARTMENT, WHICH WAS ACCEDED TO BY THE LD. A.M., WITHOUT ANY CONCLUSIVE MATERIAL CA NNOT LEAD TO THE INFERENCE THAT THE AMOUNT WAS NOT GIFT BUT UNDISCLO SED INCOME OF THE ASSESSEE. RELIANCE IN THIS REGARD IS PLACED ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF BEDI & CO. (P.) LTD. ( SUPRA) AND DECISION OF HON'BLE CALCUTTA HIGH COURT IN THE CASE OF CURRENCY INVESTMENT CO. LTD. (SUPRA), WHEREIN IT HAS BEEN HELD THAT WHEN THE ASS ESSEE HAS DISCLOSED THE IDENTITY OF THE PARTIES FROM WHOM IT PURCHASED SHARES AND TO WHOM IT SOLD THE SHARES, GENUINENESS OF THE TRANSACTION CAN NOT BE DENIED MERELY BECAUSE THE ASSESSEE COULD NOT PRODUCE THE BROKERS THROUGH WHOM THE SHARE WERE SOLD. [EMPHASIS SUPPLIED] 2.14.7] THE HONBLE ITAT VISAKHAPATNAM BENCH IN THE CASE OF DR. VEMPALA BALA MANOHAR V. ITO, WARD-1(3), VISAKHAPATN AM AS REPORTED IN 2016] 50 ITR(T) 567 (VISAKHAPATNAM - TRIB.) HAS HEL D THAT: 16. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO RESPECTFULLY FOLLOWING THE DECISION OF HON'BLE HIGH COURT OF PUNJAB & HARYANA HIGH COURT AND HON'BLE HIGH COURT OF DELHI, WE ARE OF THE VIEW THAT IN THE ABSENCE OF ANYTHING TO SHOW THAT THE TR ANSACTION WAS BY WAY OF MONEY LAUNDERING, ADDITIONS COULD NOT BE MADE TO WARDS GIFTS WHEN THE ASSESSEE HAS DISCHARGED HIS BURDEN BY PROVING THE I DENTITY, GENUINENESS AND CAPACITY OF THE DONOR. WE FURTHER OPINED THAT G IFTS ARE NORMALLY MADE BY RELATIVES THROUGH NATURAL LOVE AND AFFECTION AND DO NOT NECESSARILY REQUIRE ANY PARTICULAR OCCASION. IN THE PRESENT CAS E ON HAND, THE ASSESSEE HAS DISCHARGED HIS BURDEN BY FURNISHING NECESSARY D ETAILS BEFORE THE A.O. THE A.O. HAS SUMMONED THE DONOR AND THE DONOR HAS P ERSONALLY APPEARED BEFORE THE A.O. AND ADMITTED THAT HE HAD GIVEN GIFT S TO HIS BROTHER. UNDER THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE A. O. WAS NOT CORRECT IN COMING TO THE CONCLUSION THAT THE ASSESSEE HAS NOT DISCHARGED GENUINENESS OF THE TRANSACTIONS AND CAPACITY OF THE DONOR. THEREFORE, WE DIRECT THE A.O. TO DELETE THE ADDITIONS MADE TOWARD S ALLEGED GIFTS OF RS.15 LAKHS FOR THE ASSESSMENT YEAR 2009-10, RS.22,90,000 /- FOR THE ASSESSMENT YEAR 2010-11 AND RS.43,00,789/- FOR THE ASSESSMENT YEAR 2011-12.. [EMPHASIS SUPPLIED] MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 38 2.14.8] THE HONBLE ITAT CHANDIGARH BENCH A IN TH E CASE OF KULDEEP SINGH V. ITO, WARD-1, JAGRAON AS REPORTED IN [2020] 113 TAXMANN.COM 265 (CHANDIGARH - TRIB.) HAS HELD THAT: 8. WE HAVE HEARD THE CONTENTIONS OF BOTH THE PARTI ES. WE ARE NOT IN AGREEMENT WITH THE LD.CIT(A) HOLDING THE EXPLANATIO N OF THE SOURCE OF CASH DEPOSITED IN THE BANK OF THE ASSESSEE TO THE EXTENT OF RS. 19, 17,000/- AS UNSATISFACTORY. THE ASSESSEE HAD EXPLAINED THE SOUR CE AS BEING RECEIVED AS GIFT FROM HIS FATHER WHICH IN TURN HAD BEEN EXPL AINED AS SOURCED FROM LAND SOLD BY HIM IN THE PRECEDING YEAR AND OUT OF H IS OWN SAVINGS AS UNDER: OUT OF LAND SOLD = RS.9,45,000 + RS.4,73,000 SAVINGS = RS.4,65,000/- THE ASSESSEE HAD FILED EVIDENCE OF SALE OF LAND IN THE PRECEDING YEAR FOR THE SAID AMOUNT WHICH THE AO HAD EXAMINED AND FOUND AND REPORTED AS CORRECT IN HIS REMAND REPORT. EVEN THE LD. CIT(A),W E FIND, HAS NOT DOUBTED THE VERACITY OF THE SAID DOCUMENT BUT HAS NOT ACCEP TED THE EXPLANATION FOR THE REASON THAT IT WAS IMPROBABLE THAT THE FATHER W OULD HAVE KEPT THE MONEY WITH HIM FOR A PERIOD OF EIGHT MONTHS BEFORE GIFTING IT TO HIS SON. WE DO NOT FIND ANY MERIT OR STRENGTH IN THIS REASONING OF THE LD. CIT(A). THERE IS NOTHING EXTRAORDINARILY UNUSUAL OR ABNORMAL IN THE FACT OF RETAINING MONEY FOR SOMETIME BEFORE GIFTING IT EVEN IF TO THE SON, SINCE THERE ARE VARIOUS CONSIDERATIONS WHICH ARE INVOLVED IN MAKING A GIFT AND IT IS UP TO THE DONOR TO DECIDE WHEN AND TO WHOM TO MAKE THE GIFT. IN THE PRESENT CASE THE PERIOD OF RETENTION OF THE AMOUNT FOR EIGHT MONTHS, WE FIND, IS NOT UNUSUALLY LARGE SO AS TO DOUBT THE GENUINENESS OF T HE SAME. CONSIDERING THE FACT THAT THE SOURCE OF THE AMOUNT WITH THE DON OR HAS NOT BEEN DOUBTED, NOR HAS THE REVENUE POINTED OUT OR BROUGHT ON RECORD ANY FACT SHOWING THE USAGE OF THE SAID AMOUNT BY THE DONOR P RIOR TO GIFTING, WE DO NOT SEE ANY REASON TO HOLD THE SAID EXPLANATION IMP ROBABLE AND WE FIND THE SAME ACCEPTABLE. [EMPHASIS SUPPLIED] 2.14.9] THE HONBLE ITAT INDORE BENCH IN THE CASE O F VINOD KUMAR JAIN VS. ITO AS REPORTED IN (2020) 58 CCH 0082 INDORETRIB VI DE ORDER DATED 28-01- 2020 HAS HELD THAT: 15. AS REGARDS CASH GIFT OF RS.2,50,00/- RECEIVED FROM ASSESSEE'S FATHER IT HAS BEEN CLAIMED THAT HIS FATHER WAS DERIVING INCOM E FROM KIRANA AND MONEY LENDING BUSINESS. SINCE HIS INCOME WAS BELOW THE TAXABLE LIMIT, RETURN OF INCOME WAS NOT FILED. HE BEING A SENIOR C ITIZEN IT CANNOT BE DENIED THAT HE HAD ACCUMULATED SAVINGS FROM LAND IN MANY YEARS AND THUS HIS CONTRIBUTION OF RS.2,50,000/- AS GIFT TO H IS SON FOR HELPING HIM TO PURCHASE A RESIDENTIAL HOUSE CANNOT BE DOUBTED. GIF T DEED WAS DULY NOTARIZED AND SIGNED BY ASSESSEE'S FATHER IS PLACED ON RECORD. IT IS ALSO MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 39 SUBMITTED BY LD. COUNSEL FOR THE ASSESSEE, THAT ASS ESSEE'S FATHER HAS ALSO EXPIRED BEFORE SOME TIME. 16. WE, THEREFORE, IN THE GIVEN FACTS AND CIRCUMSTA NCES OF THE CASE AND LOOKING TO THE PECULIARITY OF THE FACTS WHEREIN IN THE DONOR HAS EXPIRED AFTER SIGNING AN AFFIDAVIT FOR THE GIFT GIVEN TO HI S SON, FIND NO JUSTIFICATION IN THE ACTION OF THE LD. AO MAKING THE ADDITION FOR UN EXPLAINED INVESTMENT U/S 69 OF THE ACT, SINCE THE ASSESSEE HAS DULY EXPL AINED THE SOURCE OF RS.2,50,000/- BEING RECEIPT FROM HIS FATHER. ACCORD INGLY ADDITION U/S 69 OF THE ACT IS DELETED. THUS, GROUND NO. 2 & 3 STANDS A LLOWED. [EMPHASIS SUPPLIED] 2.14.10] THE HONBLE ITAT INDORE BENCH IN THE CASE OF SHRI SUNIL SOJATIA VS ACIT AS REPORTED IN (2018) 54 CCH 0110 INDORETRIB H AS HELD THAT: 10. GROUND NO.5 IS AGAINST CONFIRMING THE ADDITION OF RS.3,70,000/- MADE U/S 68 OF THE ACT. IT IS STATED BY THE LD. COUNSEL FOR THE ASSESSEE THAT THE AMOUNT WAS RECEIVED FROM THE MINOR CHILDREN OF RS.3 ,70,000/-. HE SUBMITTED THAT THE ASSESSING OFFICER AND CIT(A) BOT H ERRED IN NOT ALLOWING THE CLAIM OF THE ASSESSEE AND MAKING ADDITION. WE F IND THAT IN THE REMAND PROCEEDINGS, THE A.O. HAS CATEGORICALLY STATED THAT THESE ADVANCES WERE RECEIVED FROM THE MINOR CHILDREN AND THESE AMOUNTS PERTAIN TO THE PAST SAVINGS OF THE CHILDREN. THE LD. CIT(A) HAS NOT BRO UGHT ON RECORD ANY ADVERSE MATERIAL REBUTTING THE FINDING OF THE A.O. WE THEREFORE, DIRECT THE A.O. TO DELETE THIS ADDITION. [EMPHASIS SUPPLIED] 2.15] IN VIEW OF THE ABOVE DISCUSSION AND FINDINGS REITERATED IN THE JUDICIAL PRECEDENTS CITED SUPRA, IT IS HUMBLY SUBMITTED THAT THERE WAS NO JUSTIFICATION FOR MAINTAINING ADDITION OF RS. 31,10 ,000/- AND ENHANCING THE INCOME BY RS. 34,64,150/- IN LIGHT OF THE FACT THAT THERE WAS NO DOUBT REGARDING THE IDENTITY OF THE DONOR AND THEIR RELAT IONSHIP WITH THE APPELLANT, GENUINENESS OF THE GIFT/ LOAN TRANSACTIO NS AND SUCH PARTIES DULY OWNED UP THE AMOUNT GIFTED/ LENT TO THE APPELLANT. HENCE, IT IS HUMBLY SUBMITTED THAT THE ENTIRE AMOUNT OF RS. 65,74,150/- ON ACCOUNT OF GIFTS/ LOAN RECEIVED FROM RELATIVES/ FRIEND AND OPENING BA LANCE OF CAPITAL REQUIRES TO BE DELETED IN ENTIRETY FROM THE TOTAL I NCOME OF THE APPELLANT. NO ADDITION IS JUSTIFIABLE TO TOTAL INCOME OF AN AS SESSES IF EXISTENCE OF DONOR/ LENDER WAS NOT IN DOUBT AND SUC H PERSON HAD ADMITTED TO HAVE MADE GIFT/ LOAN TO THE ASSESSEE 2.16.1] IT IS A WELL SETTLED POSITION OF LAW THAT W HERE EXISTENCE OF DONOR/ LENDER WAS NOT IN DOUBT AND HE HAD ADMITTED TO HAVE MADE GIFT/ LOAN TO ASSESSEE, THE MERE FACT THAT EXPLANATION FURNISHED BY HIM ABOUT HIS MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 40 SOURCE OF SUCH ADVANCEMENT HAD NOT BEEN ACCEPTED BY REVENUE AUTHORITY COULD NOT LEAD TO ANY PRESUMPTION THAT SOURCE OF SU CH ADVANCE BY DONOR/ LENDER EMANATED FROM THE COFFERS OF THE ASSESSEE. 2.16.2] IT IS FURTHER WELL SETTLED THAT THE ONUS TO PROVE THAT THE APPARENT IS NOT THE REAL IS ON THE PARTY WHO CLAIMS IT TO BE SO . RELEVANT EXTRACTS FROM FEW OF THE LANDMARK JUDICIAL PRECEDENTS WHICH HAVE ENUNCIATED THE ABOVE-MENTIONED PRINCIPLES ARE REPRO DUCED HEREUNDER FOR YOUR READY REFERENCE: 2.17.1] THE HONBLE SUPREME COURT OF INDIA IN THE C ASE OF CIT V. DAULAT RAM RAWATMULL AS REPORTED IN [1973] 87 ITR 349 (SC) HAS HELD THAT: THE ONUS TO PROVE THAT THE APPARENT IS NOT THE REA L IS ON THE PARTY WHO CLAIMS IT TO BE SO. AS IT WAS THE DEPARTMENT WHICH CLAIMED THAT THE AMOUNT OF FIXED DEPOSIT RECEIPT BELONGED TO THE RESPONDENT FIRM EVEN THOUGH THE RECEIPT HAD BEEN ISSUED IN THE NAME OF B, THE BURDE N LAID ON THE DEPARTMENT TO PROVE THAT THE RESPONDENT WAS THE OWN ER OF THE AMOUNT DESPITE THE FACT THAT THE RECEIPT WAS IN THE NAME O F B. A SIMPLE WAY OF DISCHARGING THE ONUS AND RESOLVING THE CONTROVERSY WAS TO TRACE THE SOURCE AND ORIGIN OF THE AMOUNT AND FIND OUT ITS ULTIMATE DESTINATION. SO FAR AS THE SOURCE WAS CONCERNED, THERE WAS NO MATERIAL ON THE RECORD TO SHOW THAT THE AMOUNT CAME FROM THE COFFERS OF THE RESPONDENT- FIRM OR THAT IT WAS TENDERED IN B CALCUTTA BRANCH OF THE CENTRAL BANK, ON BEHALF OF THE RESPONDENT. AS REGARDS THE DESTINATION OF THE AMOUN T, THERE WAS NOTHING TO SHOW THAT IT WENT TO THE COFFERS OF THE RESPONDE NT. ON THE CONTRARY, THERE WAS POSITIVE EVIDENCE THAT THE AMOUNT WAS RECEIVED BY B. IT WOULD THUS FOLLOW THAT BOTH AS REGARDS THE SOURCE AS WELL AS T HE DESTINATION OF THE AMOUNT, THE MATERIAL ON THE RECORD GAVE NO SUPPORT TO THE CLAIM OF THE DEPARTMENT. [EMPHASIS SUPPLIED] 2.17.2] THE HONBLE RAJASTHAN HIGH COURT IN THE CAS E OF ARAVALI TRADING CO. V. ITO AS REPORTED IN [2008] 220 CTR 622 (RAJAS THAN) HAS HELD THAT: 19. THIS COURT HELD BY THE PARITY OF REASONINGS WH ICH PREVAILED IN DAULAT RAM RAWATMULL'S CASE (SUPRA) THAT IT CAN WELL BE SA ID THAT MERELY BECAUSE THE EXPLANATION FURNISHED BY SHRI BHOPAL SINGH, OM PRAKASH GUPTA AND SHRI GAURI SHANKER SINGHAL, ABOUT THE PURPOSE FOR W HICH THE GOLD ORNAMENTS WERE DELIVERED FOR MAKING NEW ORNAMENTS A ND THAT THE ORNAMENTS WERE BELONGING TO THEIR FAMILY WAS FOUND TO BE NOT ACCEPTABLE, COULD NOT HAVE PROVIDED ANY NEXUS FOR DRAWING INFER ENCE THEREFROM THAT THE PRIMARY GOLD AND GOLD ORNAMENTS BELONGED TO THE ASSESSEE. MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 41 20. THIS PRINCIPLE IS FULLY APPLICABLE TO THE PRESE NT CASE. THE FACT THAT THE EXPLANATION FURNISHED BY THE AFOREMENTIONED FOUR CR EDITORS ABOUT THE SOURCES WHEREFROM THEY ACQUIRED THE MONEY WAS NOT A CCEPTABLE BY THE REVENUE COULD NOT PROVIDE NECESSARY NEXUS FOR DRAWI NG INFERENCE THAT THE AMOUNT ADMITTED TO BE DEPOSITED BY THESE FOUR PERSO NS BELONGED TO THE ASSESSEE. THE ASSESSEE HAVING DISCHARGED HIS BURDEN BY PROVING THE EXISTENCE OF THE DEPOSITORS AND THE DEPOSITORS OWIN G THEIR DEPOSITS, HE WAS NOT FURTHER REQUIRED TO PROVE SOURCE OF SOURCE. 21. ACCORDINGLY THE TRIBUNAL, AND THE ASSESSING OFF ICER HAD SERIOUSLY ERRED AND MISDIRECTED THEMSELVES IN LAW BY NOT CORR ECTLY APPRECIATING THE LEGAL PRINCIPLE ABOUT NECESSITY OF ESTABLISHING SUC H NEXUS ONCE THE ASSESSEE HAS DISCHARGED HIS ONUS BY PROVING THE EXI STENCE OF THE DEPOSITORS AND THE DEPOSITORS HAVING ACCEPTED THEIR DEPOSITS WITH THE ASSESSEE. ONCE THIS ONUS IS DISCHARGED THE PRESUMPT ION RAISED UNDER SECTION 68 STANDS REBUTTED AND IT BECOMES BURDEN OF REVENUE TO PROVE THAT SOURCE OF SUCH DEPOSITS IS TRACEABLE TO ASSESSEE BE FORE THE SAME CAN BE TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE CONCE RNED. [EMPHASIS SUPPLIED] 2.17.3] THE HONBLE RAJASTHAN HIGH COURT IN THE CAS E OF KANHAIALAL JANGID V. ACIT AS REPORTED IN [2008] 217 CTR 354 (RAJASTHA N) HAS HELD THAT: 5. THE QUESTION NO. 1 RELATES TO DISALLOWANCE ON A CCOUNT OF CASH CREDITS FOUND IN THE BOOKS OF THE ASSESSEES. RS. 16,000 WAS ALLEGED TO HAVE BEEN BORROWED TO HAVE BEEN BY SRI DEVENDRA SANKHLA AND R S. 16,000 WAS ALLEGEDLY BORROWED FROM ONE RAMULAL. ASSESSEE HAS P RODUCED THE CONFIRMATION LETTERS FROM BOTH THE CREDITORS AND HA S ALSO PRODUCED SRI DEVENDRA SANKHLA BEFORE THE AO. SRI DEVENDRA SANKHL A ON BEING PRODUCED BEFORE THE AO, AFFIRMED THAT HE HAD GIVEN IN ADVANCE A SUM OF RS. 16,000 TO THE ASSESSEE. HOWEVER, THE EXPLANATIO N OF THE ASSESSEE ABOUT THE RECEIPT OF RS. 16,000 FROM DEVENDRA SANKH LA WAS REJECTED ON THE GROUND THAT ON INQUIRY FROM DEVENDRA SANKHLA TH E CREDITOR COULD NOT SATISFACTORILY EXPLAIN SOURCE WHEREFROM WHETHER HE COULD HAVE ADVANCED RS. 16,000, LOOKING TO HIS INCOME AND FAMILY EXPEND ITURES. IN OTHER WORDS, THE CASH CREDIT IN THE NAME OF DEVENDRA SANKHLA WAS REJECTED ON THE GROUND THAT THE ASSESSEE HAS FAILED TO PROVE SOURCE WHEREFROM DEPOSIT OR ADVANCE BY SRI DEVENDRA SANKHLA COULD BE MADE. THIS FINDING HAS BEEN CONSISTENTLY AFFIRMED BY CIT(A) AS WELL AS BY TRIBU NAL. WE ARE OF THE OPINION THAT IN REJECTING THE EXPLANATION OF THE AS SESSEE ON THE UNDISPUTED FACTS IS FOUNDED ON ERRONEOUS APPLICATION OF LAW IN THE MATTER. WHILE IT WAS THE ASSESSEE'S BURDEN TO FURNISH EXPLANATION RELATI NG TO SUCH CASH CREDITS, THE ASSESSEE'S BURDEN DOES NOT EXTEND BEYOND PROVIN G THE EXISTENCE OF THE CREDITOR AND FURTHER PROVING THAT SUCH CREDITOR OWN S TO HAVE ADVANCED THE AMOUNT CREDITED IN THE ACCOUNT OF ASSESSEE TO HIM. HOWEVER, THE BURDEN DOES NOT GO BEYOND TO PUT THE ASSESSEE UNDER AN OBL IGATION TO FURTHER MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 42 PROVE THAT WHEREFROM THE CREDITOR HAS GOT OR PROCUR ED THE MONEY TO BE DEPOSITED OR ADVANCED TO THE ASSESSEE. THE FACT THA T THE EXPLANATION FURNISHED BY THE CREDITOR ABOUT THE SOURCE FROM WHE RE HE PROCURED THE MONEY TO BE DEPOSITED OR ADVANCED TO THE ASSESSEE, IS NOT RELEVANT FOR THE PURPOSES OF REJECTING THE EXPLANATION FURNISHED BY THE ASSESSEE. AND MAKE ADDITIONS OF SUCH DEPOSITS AS INCOME OF THE ASSESSE E FROM UNDISCLOSED SOURCES BY INVOKING SECTION 68 OF THE IT ACT, UNLES S IT CAN BE SHOWN BY THE DEPARTMENT THAT THE SOURCE OF SUCH MONEY COMES FROM THE ASSESSEE HIMSELF OR SUCH SOURCE COULD BE TRACED TO THE ASSES SEE ITSELF. IN THE PRESENT CASE WHILE EXISTENCE OF SRI DEVENDRA SANKHLA THE CR EDITOR IS NOT IN DOUBT, AND HE HAS ADMITTED TO HAVE ADVANCED THE LOAN TO TH E ASSESSEE. THE FACT THAT THE EXPLANATION FURNISHED BY SRI DEVENDRA SANK HLA ABOUT HIS SOURCE OF SUCH ADVANCEMENT HAS NOT BEEN ACCEPTED BY THE RE VENUE AUTHORITY CANNOT LEAD TO ANY PRESUMPTION THAT THE SOURCE OF S UCH ADVANCEMENT BY SRI DEVENDRA SANKHLA EMANATED FROM THE ASSESSEE. TH EREFORE, ADDITION OF RS. 16,000 IN THE INCOME OF ASSESSEE AS CASH CREDIT IN THE NAME OF SRI DEVENDRA SANKHLA CANNOT BE SUSTAINED. SUCH ADDITION OF INCOME OF ASSESSEE HAS TO BE DELETED FROM THE INCOME OF ASSES SEE. [EMPHASIS SUPPLIED] 2.18] BORROWING THE RATIO FROM THE JUDICIAL PRECEDE NTS CITED SUPRA, IT CAN BE SATISFACTORILY HELD THAT ONUS IS ON THE DEPARTMENT WHO IS ALLEGING THAT THE APPARENT IS NOT REAL TO PROVE THAT MONEY RECEIVED B Y THE APPELLANT IN THE FORM OF GIFTS/ LOAN ACTUALLY EMANATED FROM THE COFF ERS OF THE APPELLANT AND REPRESENTS HIS UNACCOUNTED/ UNDISCLOSED INCOME. IF THE DEPARTMENT IS NOT ABLE TO DISCHARGE THIS ONUS, ADDITION MADE TO THE T OTAL INCOME OF THE APPELLANT ON ACCOUNT GIFTS/ LOAN HAS NO LEGS TO STA ND MORE SO WHEN THE IDENTITY OF THE DONOR/ LENDER IS PROVED BEYOND DOUB T AND THEY HAVE ACCEPTED TO HAVE ADVANCED AMOUNT IN THE FORM OF GIF TS/ LOAN TO THE APPELLANT. 2.19] IN VIEW OF THE ABOVE, IT IS HUMBLY SUBMITTED THAT ADDITION OF RS. 31,10,000/- MAINTAINED BY THE ASSESSING OFFICER AND ENHANCEMENT OF RS. 34,64,150/- MADE BY THE LD CIT(A) WAS NEITHER LEGAL NOR PROPER AND DESERVES TO BE DELETED IN ENTIRETY. 3] GROUND NO. 4.2 CHALLENGING THE ENHANCEMENT MAD E BY THE LD CIT(A) ON ACCOUNT OF GIFTS RECEIVED FROM RELATIV ES AND OPENING BALANCE OF CAPITAL BY INVOKING THE PROVISIO NS OF SECTION 68 OF THE INCOME-TAX ACT, 1961 MORE SO WHEN SECTION 68 OF THE ACT TALKS ABOUT SATISFACTION OF THE AO AN D NOT OF THE CIT(A) 3.1] THE APPELLANT IN THIS GROUND OF APPEAL HAS CHA LLENGED THE ENHANCEMENT OF RS. 34,64,150/- AS MADE BY THE LD CI T(A) ON ACCOUNT OF GIFTS RECEIVED FROM RELATIVES AND OPENING BALANCE O F CAPITAL OF THE APPELLANT MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 43 BY INVOKING THE PROVISIONS OF SECTION 68 OF THE INC OME-TAX ACT, 1961 MORE SO WHEN SECTION 68 OF THE ACT TALKS ABOUT SATISFACT ION OF THE AO AND NOT OF THE CIT(A). 3.2.1] THE RELEVANT EXTRACT OF THE PROVISION OF SEC TION 68 AND SECTION 2(7A) OF THE INCOME-TAX ACT, 1961 IS REPRODUCED HEREUNDER FOR YOUR READY REFERENCE: CASH CREDITS. 68. WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANAT ION OFFERED BY HIM IS NOT, IN THE OPINION OF THE ASSESSING OFFICER, SATIS FACTORY, THE SUM SO CREDITED MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR: DEFINITIONS. 2. IN THIS ACT, UNLESS THE CONTEXT OTHERWISE REQUIR ES, . (7A) 'ASSESSING OFFICER' MEANS THE ASSISTANT COMMIS SIONER OR DEPUTY COMMISSIONER OR ASSISTANT DIRECTOR OR DEPUTY DIRECT OR OR THE INCOME-TAX OFFICER WHO IS VESTED WITH THE RELEVANT JURISDICTIO N BY VIRTUE OF DIRECTIONS OR ORDERS ISSUED UNDER SUB-SECTION (1) OR SUB-SECTION (2) OF SECTION 120 OR ANY OTHER PROVISION OF THIS ACT, AND THE ADDITIONAL COM MISSIONER OR ADDITIONAL DIRECTOR OR JOINT COMMISSIONER OR JOINT DIRECTOR WH O IS DIRECTED UNDER CLAUSE (B) OF SUB-SECTION (4) OF THAT SECTION TO EX ERCISE OR PERFORM ALL OR ANY OF THE POWERS AND FUNCTIONS CONFERRED ON, OR ASSIGN ED TO, AN ASSESSING OFFICER UNDER THIS ACT [EMPHASIS SUPPLIED] 3.2.2] ON A CONJOINT READING OF THE PROVISIONS OF S ECTION 68 AND SECTION 2(7A) OF THE INCOME-TAX ACT, 1961, IT BECOMES ABUND ANTLY CLEAR THAT PROVISION OF SECTION 68 OF THE ACT CAN BE INVOKED O NLY IF THE ASSESSING OFFICER IS NOT SATISFIED WITH THE EXPLANATION PROVI DED BY THE ASSESSEE REGARDING THE SUM CREDITED IN THE BOOKS OF ACCOUNTS . FURTHER, THE DEFINITION OF ASSESSING OFFICER AS PER SECTION 2(7A) OF THE AC T MAKES IT QUITE CLEAR THAT CIT(A) IS NOT AN ASSESSING OFFICER AS PER THE PROVI SIONS OF SECTION 2(7A) OF THE ACT. HENCE, IT CAN BE SATISFACTORILY CONCLUDED THAT PROVISIONS OF SECTION 68 OF THE ACT CAN BE INVOKED ONLY UPON THE SATISFAC TION OF THE ASSESSING OFFICER AND NOT UPON THE SATISFACTION OF THE LD CIT (A). 3.3] IN THE FACTS OF THE PRESENT CASE, THE LD CIT(A ) ENHANCED THE TOTAL INCOME OF THE APPELLANT BY AN AMOUNT OF RS. 34,64,1 50/- BY INVOKING THE PROVISIONS OF SECTION 68 OF THE INCOME-TAX ACT, 196 1 WHICH IS TOTALLY ILLEGAL MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 44 AND BAD IN LAW IN VIEW OF THE FACT THAT CIT(A) IS N OT AN ASSESSING OFFICER WHOSE SATISFACTION IS MANDATORY PRIOR TO INVOKING T HE PROVISIONS OF SECTION 68 OF THE ACT. HENCE, ENHANCEMENT OF RS. 34,64,150/ - AS MADE BY THE LD CIT(A) BY INVOKING THE PROVISIONS OF SECTION 68 OF THE ACT IS GROSSLY UNJUSTIFIABLE AND WHOLLY UNWARRANTED AND REQUIRES T O BE DELETED IN ENTIRETY ON THIS COUNT ITSELF. 3.4] THE AFORESAID VIEW IS CONCURRED BY THE HONBLE ITAT JAIPUR BENCH IN ITS LANDMARK JUDGMENT IN THE CASE OF M/S MOTISONS E NTERTAINMENT (INDIA) PVT. LTD. VS. THE ACIT, CENTRAL CIRCLE-2, JAIPUR [I TA NO. 386 & 387/JP/2017] WHEREIN IT HAS BEEN HELD THAT: 12.4 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE MATERIALS AVAILABLE ON RECORD. IT IS PERTINENT TO MENTION THA T THE SIMILAR ISSUE HAS BEEN DEALT WITH AND DECIDED BY THIS BENCH OF ITAT I N THE CASE OF MOTISONS BUILDTECH PVT. LTD VS ACIT, CENTRAL CIRCLE-2,JAIPUR VIDE ITS ORDER DATED 30- 10-2017 IN ITA NO.385/JP/2017 (ASSESSEE'S APPEAL) F OR THE ASSESSMENT YEAR 2012-13 BY OBSERVING AS UNDER:- 8.4 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE MATERIALS AVAILABLE ON RECORD. IN THIS GROUND, IT IS NOTED TH AT THE AO MADE THE ADDITION OF RS.3,68,27,500/- OUT OF WHICH THE LD CI T(A) DELETED THE ADDITION OF RS. 2,86,27,500/- AND SUSTAINED THE ADD ITION OF RS.82.00 LACS AS MENTIONED AT PARA 3.2.2. AND 2.1.4.6 & 2.1.4.7 O F THE LD. CIT(A)S ORDER (SUPRA). THE QUESTION ARISES AS TO WHETHER THE LD C IT(A) CAN MAKE THE ADDITION U/S 68 OF THE ACT OR NOT. FOR THIS PURPOSE , THE DEFINITION OF SECTION 68 OF THE ACT IS AS UNDER:- WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF A N ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANAT ION OFFERED BY HIM IS NOT, IN THE OPINION OF THE [ASSESSING] OFFICER, SAT ISFACTORY, THE SUM SO CREDITED MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. FROM THE ABOVE DEFINITION, IT IS NOTED THAT SECTION 68 OF THE ACT DOES NOT EMPOWER THE LD. CIT(A) TO MAKE ADDITION UNDER THIS ACT. THUS THE ADDITION U/S 68 CAN ONLY BE MADE BY THE ASSESSING OFFICER. T HE DEFINITION OF THE ASSESSING OFFICER HAS BEEN PROVIDED IN SECTION 2(7A ) OF THE ACT WHICH READS AS UNDER:- [(7A) ASSESSING OFFICER MEANS THE ASSISTANT COMMI SSIONER [OR DEPUTY COMMISSIONER] [OR ASSISTANT DIRECTOR] [OR DEPUTY DI RECTOR] OR THE INCOME-TAX OFFICER WHO IS VESTED WITH THE RELEVANT JURISDICTIO N BY VIRTUE OF DIRECTIONS OR ORDERS ISSUED UNDER SUB-SECTION (1) OR SUB-SECTION (2) OF SECTION 120 OR ANY OTHER PROVISION OF THIS ACT, AND THE [ADDITIONAL CO MMISSIONER OR] [ADDITIONAL DIRECTOR OR] [JOINT COMMISSIONER OR JOINT DIRECTOR] WHO IS DIRECTED UNDER CLAUSE (B) OF SUB-SECTION (4) OF THAT SECTION TO EX ERCISE OR PERFORM ALL OR ANY MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 45 OF THE POWERS AND FUNCTIONS CONFERRED ON, OR ASSIGN ED TO, AN ASSESSING OFFICER UNDER THIS ACT ;] THUS THE LD. CIT(A) IS NOT THE ASSESSING OFFICER AS PER INCOME-TAX ACT. THEREFORE, THE LD. CIT(A) DOES NOT HAVE ANY LEGAL S ANCTION TO MAKE THE ADDITION U/S 68 OF THE ACT. LD. CIT(A) IN HIS ORDER AT PARA 2.1.4.6 HAD CLEARLY HELD THAT THE IDENTITY, CREDITWORTHINESS AN D GENUINENESS OF TRANSACTIONS OF THESE COMPANIES CANNOT BE HELD DOUB TFUL AND ADDITION BY APPLYING THE PROVISION OF SEC 68 OF THE ACT CANNOT BE UPHELD. THE LD. CIT(A) HAS SUSTAINED THE ADDITION OF RS. 82.00 LACS WITHOU T SPECIFYING ANY PROVISION OF INCOME TAX ACT. NO SUCH ADDITION CAN B E SUSTAINED WITHOUT INVOKING THE RELEVANT PROVISIONS OF THE ACT. MOREOV ER, THE ADDITION HAS BEEN SUSTAINED IN THE HANDS OF THAT ASSESSEE WHERE CASH /DD WAS DEPOSITED AT 4TH CHANNEL. HON'BLE RAJASTHAN HIGH COURT AND OTHER HON'BLE COURTS HELD THAT ASSESSEE CANNOT BE ASKED TO EXPLAIN THE SOURCE OF THE SOURCE. IT MAY BE FURTHER NOTED THAT THE ISSUE RAISED BY TH E ASSESSEE IN GROUND NO.1 OF THE PRESENT APPEAL IS SAME AND THE DECISION TAKEN IN THE APPEAL OF THE ASSESSEE IN ITA NO. 385/JP/2017 FOR THE ASSESSM ENT YEAR 2012-13 IN THE CASE OF MOTISONS BUILTECH VS ACIT, CENTRAL CIRC LE-2, JAIPUR (SUPRA) SHALL APPLY MUTATIS MUTANDIS IN THE PRESENT GROUND OF APP EAL NO. 1 OF THE ASSESSEE. THUS GROUND NO. 1 OF THE ASSESSEES APPEA L IN ITA NO. 387/JP/2017 IS ALLOWED. [EMPHASIS SUPPLIED] 3.5] IN VIEW OF THE ABOVE DISCUSSION AND FINDING RE ITERATED IN THE JUDICIAL PRECEDENT CITED SUPRA, IT IS HUMBLY SUBMITTED THAT ENHANCEMENT OF RS. 34,64,150/- AS MADE BY THE LD CIT(A) ON ACCOUNT OF GIFTS RECEIVED FROM RELATIVES AND OPENING BALANCE OF CAPITAL BY INVOKIN G THE PROVISIONS OF SECTION 68 OF THE ACT IS TOTALLY UNJUSTIFIABLE AND UNCALLED FOR IN VIEW OF THE SETTLED LEGAL POSITION THAT CIT(A) IS NOT AN ASSESS ING OFFICER AS PER THE PROVISION OF SECTION 2(7A) OF THE ACT AND PROVISION OF SECTION 68 OF THE ACT TALKS ABOUT THE SATISFACTION OF THE ASSESSING OFFIC ER AND CIT(A) NOT BEING AN ASSESSING OFFICER CANNOT RESORT TO MAKING ENHANC EMENT BY INVOKING THE PROVISIONS OF SECTION 68 OF THE ACT. THE ENHANCEMEN T OF RS. 34,64,150/- AS MADE BY THE LD CIT(A) DESERVES TO BE QUASHED AND SE T-ASIDE ON THIS COUNT ITSELF. 4] GROUND NO. 7 CHALLENGING THE ADDITION MAINTAIN ED BY THE ASSESSING OFFICER AND ENHANCEMENT MADE BY THE LD CI T(A) ON ACCOUNT OF GIFTS/ LOAN RECEIVED FROM RELATIVES/ FRI END IN LIGHT OF THE DECISION OF HONBLE SUPREME COURT IN T HE CASE OF SMT. P.K. NOORJAHAN MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 46 4.1] THE APPELLANT IN THIS GROUND OF APPEAL HAS CHA LLENGED THE ADDITION OF RS. 31,10,000/- MAINTAINED BY THE ASSESSING OFFICER AND ENHANCEMENT OF RS. 34,64,150/- MADE BY THE LD CIT(A) ON ACCOUNT OF GIFTS/ LOAN RECEIVED FROM RELATIVES/ FRIEND IN LIGHT OF THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF SMT. P.K. NOORJAHAN. 4.2] AT THE OUTSET, IT IS PERTINENT TO MENTION THAT THE APPELLANT IS A CHARTERED ACCOUNTANT IN SERVICE WHO QUALIFIED AS A CHARTERED ACCOUNTANT IN THE MONTH OF JANUARY, 2009 ONLY. THE APPELLANT R ECEIVED SALARY INCOME TO THE TUNE OF RS. 2,02,437/- DURING THE YEAR UNDER CONSIDERATION. 4.3] APART FROM THE SALARY INCOME SHOWN BY THE APPE LLANT, THE DEPARTMENT HAS NOT BROUGHT ON RECORD ANY OTHER SOURCE OF INCOM E OF THE APPELLANT. 4.4] A SUMMARY SHOWING THE AMOUNT OF TOTAL INCOME D ECLARED BY THE APPELLANT DURING THE PREVIOUS YEARS 2011-12 TO 201 3-14 RELEVANT TO THE ASSESSMENT YEARS 2012-13 TO 2014-15 IS AS UNDER FOR YOUR READY REFERENCE: S. NO ASSESSMENT YEAR DATE OF FILING INCOME-TAX RETURN TOTAL INCOME DECLARED IN THE INCOME- TAX RETURN [IN RS.] 1 2012 - 13 27 - 07 - 2012 2,02,437 2 2013 - 14 20 - 12 - 2013 2,12,630 3 2014 - 15 11 - 10 - 2014 2,11,840 4.5] THE TOTAL INCOME SHOWN BY THE APPELLANT IN DIF FERENT YEARS AND AS SUMMARIZED HEREINABOVE SUBSTANTIATES THE CONTENTION S OF THE APPELLANT THAT HE EARNED ONLY NOMINAL INCOME BEING A CHARTERE D ACCOUNTANT IN SERVICE. THE ONUS IS ON THE DEPARTMENT TO PROVE THE IMPOSSIBLE AS TO HOW A MAN WITH SUCH LIMITED RESOURCES AND WITH INCOME RAN GING BETWEEN RS. 2,00,000/- TO RS. 5,00,000/- CAN HAVE UNACCOUNTED/ UNDISCLOSED INCOME TO THE TUNE OF RS. 65,74,150/- DURING THE PREVIOUS YEA R 2011-12 RELEVANT TO THE ASSESSMENT YEAR 2012-13 MORE SO WHEN THE APPELL ANT HAD QUALIFIED AS A CHARTERED ACCOUNTANT ONLY IN THE MONTH OF JANUARY , 2009. 4.6] THE TEST OF HUMAN PROBABILITY AND CIRCUMSTANTI AL EVIDENCE AS RELIED UPON BY THE DEPARTMENT IN SEVERAL CASES OF LATE SHO ULD DEFINITELY COME TO THE RESCUE OF THE APPELLANT IN THE PRESENT CASE MOR E SO WHEN THE APPELLANT HAD SATISFACTORILY DISCHARGED THE ONUS CAST UPON HI M TO ESTABLISH THE IDENTITY OF THE DONORS/ LENDER AND GENUINENESS OF T HE TRANSACTION ENTERED INTO WITH THEM AND THERE WAS NO EVIDENCE WITH THE D EPARTMENT THAT THE AMOUNT RECEIVED BY THE APPELLANT BY WAY OF GIFTS/ L OAN ACTUALLY REPRESENTED HIS UNACCOUNTED/ UNDISCLOSED INCOME. MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 47 4.7] IT IS ALSO A WELL SETTLED POSITION OF LAW THAT THE PROVISION OF SECTION 68 OF THE ACT CONTAINS THE WORD MAY AND NOT SHALL WHI CH IMPLIES THAT EVEN IF THE EXPLANATION OFFERED BY THE ASSESSEE IS NOT FOUN D TO BE SATISFACTORY, EVEN THEN THE ASSESSING OFFICER IS NOT OBLIGED TO T REAT SUCH CREDIT AS INCOME IN EVERY CASE. 4.8] THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF CIT V. SMT. P.K. NOORJAHAN AS REPORTED IN [1999] 237 ITR 570 (SC) HA S CATEGORICALLY HELD THAT: 2. THE APPEALS RELATE TO THE ASSESSMENT YEARS 1968 -69 AND 1969-70. THE ASSESSEE IS A MUSLIM LADY WHO WAS AGED ABOUT 20 YEA RS DURING THE PREVIOUS YEAR RELEVANT FOR THE ASSESSMENT YEAR 1968 -69. ON 15-11-1967 SHE HAD PURCHASED 16 CENTS OF LAND IN ERNAKULAM AND THE AMOUNT SPENT BY HER, INCLUSIVE OF STAMP AND REGISTRATION CHARGES , FOR THIS PURCHASE WAS RS. 34,628. ON 27-11-1968, SHE PURCHASED ANOTHER 12 CENTS OF LAND AT ERNAKULAM AND THE TOTAL INVESTMENT FOR THIS PURCHAS E WAS RS. 25,902, THE EXPLANATION OF THE ASSESSEE REGARDING THE SOURCE OF THE PURCHASE MONEY FOR THESE INVESTMENTS WAS THAT THE SAME WERE FINANCED F ROM OUT OF THE SAVINGS FROM THE INCOME OF THE PROPERTIES WHICH WERE LEFT B Y HER MOTHER'S FIRST HASBAND. THE SAID EXPLANATION OFFERED BY THE ASSESS EE WAS REJECTED EXCEPT TO THE EXTENT OF RS. 2,000 BY THE ITO WHO MADE AN A DDITION OF RS. 32,628 AS INCOME FROM OTHER SOURCES IN THE ASSESSMENT YEAR 1968-69 AND AN ADDITION OF RS. 25,902 IN THE ASSESSMENT YEAR 1969- 70. THE SAID ORDERS WERE AFFIRMED IN APPEAL BY THE AAC. THE TRIBUNAL, H OWEVER, HELD THAT EVEN THOUGH THE EXPLANATION ABOUT THE NATURE AND SOURCES OF THE PURCHASE MONEY WAS NOT SATISFACTORY BUT IN THE FACTS AND CIR CUMSTANCES OF THE CASE, IT WAS NOT POSSIBLE FOR THE ASSESSEE TO EARN THE AM OUNT INVESTED IN THE PROPERTIES AND THAT BY THE STRETCH OF IMAGINATION C OULD THE ASSESSEE BE CREDITED WITH HAVING EARNED THIS INCOME IN THE COUR SE OF THE ASSESSMENT YEAR OR WAS EVEN IN A POSITION TO EARN IT FOR A DEC ADE OR MORE. THE TRIBUNAL TOOK THE VIEW THAT ALTHOUGH THE EXPLANATION OF THE ASSESSEE WAS LIABLE TO BE REJECTED. SECTION 69 OF THE INCOME-TAX ACT, 1961 (' THE ACT') CONFERRED ONLY A DISCRETION ON THE ITO TO DEAL WITH THE INVESTMENT A S INCOME OF THE ASSESSEE AND THAT IT DID NOT MAKE IT MANDATORY ON HIS PART T O DEAL WITH THE INCOME AS INCOME OF THE ASSESSEE AS SOON AS THE LATTER'S E XPLANATION HAPPENED TO BE REJECTED. ON THAT VIEW THE TRIBUNAL ALLOWED THE APPEALS OF THE ASSESSEE AND CANCELLED THE ASSESSMENT MADE BY THE ITO. THERE AFTER THE TRIBUNAL AT THE INSTANCE OF THE REVENUE REFERRED THE QUESTION A BOVEMENTIONED TO THE HIGH COURT FOR ITS OPINION. THE HIGH COURT HAS AGRE ED WITH THE SAID VIEW OF THE TRIBUNAL AND HAS HELD THAT IN THE INSTANT CASE, IT COULD NOT BE SAID THAT THE TRIBUNAL WAS WRONG IN HAVING DIFFERED FROM THE ITO AND THE AAC IN THE MATTER OF EXERCISING JUDICIAL DISCRETION AS TO WHET HER EVEN AFTER REJECTING THE EXPLANATION OF THE ASSESSEE THE VALUE OF THE INVEST MENTS WERE TO BE TREATED AS THE INCOME OF THE ASSESSEE. ACCORDING TO THE HIG H COURT, THE TRIBUNAL MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 48 HAD NOT COMMITTED ANY ERROR IN TAKING INTO ACCOUNT THE COMPLETE ABSENCE OF RESOURCES OF THE ASSESSEE AND ALSO THE FACT THAT HA VING REGARD TO HER AGE AND THE CIRCUMSTANCES IN WHICH SHE WAS PLACED SHE C OULD NOT BE CREDITED WITH HAVING MADE ANY INCOME OF HER OWN AND IN THESE CIRCUMSTANCES, THE TRIBUNAL WAS RIGHT IN REFUSING TO MAKE AN ADDITION OF THE VALUE OF THE INVESTMENTS TO THE INCOME OF THE ASSESSEE. 3. SHRI RANBIR CHANDRA, THE LEARNED COUNSEL APPEARI NG FOR THE REVENUE, HAS URGED THAT THE TRIBUNAL AS WELL AS THE HIGH COURT W ERE IN ERROR IN THEIR INTERPRETATION OF SECTION 69. THE SUBMISSION IS THA T ONCE THE EXPLANATION OFFERED BY THE ASSESSEE FOR THE SOURCES OF THE INVE STMENTS FOUND TO BE NON- ACCEPTABLE THE ONLY COURSE OPEN TO THE ITO WAS TO T REAT THE VALUE OF THE INVESTMENTS TO BE THE INCOME OF THE ASSESSEE. THE S UBMISSION IS THAT THE WORD 'MAY' IN SECTION 69 SHOULD BE READ AS 'SHALL'. WE ARE UNABLE TO AGREE. AS POINTED OUT BY THE TRIBUNAL, IN THE CORRESPONDIN G CLAUSE IN THE BILL WHICH WAS INTRODUCED IN THE PARLIAMENT, THE WORD 'SHALL' HAD BEEN USED BUT DURING THE COURSE OF CONSIDERATION OF THE BILL AND ON THE RECOMMENDATION OF THE SELECT COMMITTEE, THE SAID WORD WAS SUBSTITUTED BY THE WORD 'MAY'. THIS CLEARLY INDICATES THAT THE INTENTION OF THE PA RLIAMENT IN ENACTING SECTION 69 WAS TO CONFER A DISCRETION ON THE ITO IN THE MAT TER OF TREATING THE SOURCE OF INVESTMENT WHICH HAS NOT BEEN SATISFACTORILY EXP LAINED BY THE ASSESSEE AS THE INCOME OF THE ASSESSEE AND THE ITO IS NOT OB LIGED TO TREAT SUCH SOURCE OF INVESTMENT AS INCOME IN EVERY CASE WHERE THE EXPLANATION OFFERED BY THE ASSESSEE IS FOUND TO BE NOT SATISFACTORY. TH E QUESTION WHETHER THE SOURCE OF THE INVESTMENT SHOULD BE TREATED AS INCOM E OR NOT UNDER SECTION 69 HAS TO BE CONSIDERED IN THE LIGHT OF THE FACTS O F EACH CASE. IN OTHER WORDS, A DISCRETION HAS BEEN CONFERRED ON THE ITO U NDER SECTION 69 TO TREAT THE SOURCE OF INVESTMENT AS THE INCOME OF THE ASSES SEE IF THE EXPLANATION OFFERED BY THE ASSESSEE IS NOT FOUND SATISFACTORY A ND THE SAID DISCRETION HAS TO BE EXERCISED KEEPING IN VIEW THE FACTS AND C IRCUMSTANCES OF THE PARTICULAR CASE. 4. IN THE INSTANT CASE, THE TRIBUNAL HAS HELD THAT THE DISCRETION HAD NOT BEEN PROPERLY EXERCISED BY THE ITO AND THE AAC IN T AKING INTO ACCOUNT THE CIRCUMSTANCES IN WHICH THE ASSESSEE WAS PLACED AND THE TRIBUNAL HAS FOUND THAT THE SOURCES OF INVESTMENTS COULD NOT BE TREATED AS INCOME OF THE ASSESSEE. THE HIGH COURT HAS AGREED WITH THE SAID V IEW OF THE TRIBUNAL. WE ALSO DO NOT FIND ANY ERROR IN THE SAID FINDING R ECORDED BY THE TRIBUNAL. THERE IS, THUS, NO MERIT IN THESE APPEALS AND THE S AME ARE, ACCORDINGLY, DISMISSED. NO ORDER AS TO COSTS. [EMPHASIS SUPPLIED] 4.9] THE DECISION RENDERED BY THE HONBLE SUPREME C OURT OF INDIA IN THE CASE OF SMT. P.K. NOORJAHAN IS SQUARELY APPLICABLE TO THE FACTS OF THE PRESENT CASE. IN THE FACTS OF THE PRESENT CASE, APP ELLANT HAD QUALIFIED AS A CHARTERED ACCOUNTANT JUST RECENTLY IN THE MONTH OF JANUARY, 2009. IT WAS NOT AT ALL PRACTICAL FOR A CHARTERED ACCOUNTANT IN SERVICE WITH INCOME MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 49 AROUND 2-2.50 LAKHS DURING THE PREVIOUS YEAR 2011-1 2 TO SUDDENLY HAVE SUCH EXORBITANT INCOME OF RS. 65,74,150/- IN ONE GO AND THAT TOO ONLY IN A PARTICULAR YEAR WITHOUT THERE BEING ANY OTHER SOURC E OF INCOME BROUGHT ON RECORD BY THE ASSESSING OFFICER OR THE LD CIT(A). I F IT IS CONSIDERED FOR A MOMENT THAT EXPLANATION OFFERED BY THE APPELLANT WI TH REGARD TO SOURCE OF INVESTMENT MADE IN LAND WAS NOT FOUND TO BE SATISFA CTORY, EVEN IN THAT CASE, IT IS WORTH NOTING THAT PROVISION OF SECTION 68 OF THE ACT CONTAINS THE WORD MAY AND NOT SHALL WHICH IN ITSELF IMPLIES THAT THE ASSESSING OFFICER IS NOT DUTY BOUND TO TREAT THE SUM SO CREDITED IN T HE BOOKS OF ACCOUNTS OF THE APPELLANT AS HIS INCOME MORE SO WHEN THE APPELL ANT WAS NOT A MAN OF MEANS WHO COULD HAVE EARNED INCOME TO THE TUNE OF R S. 65,74,150/- IN A SINGLE YEAR. IT IS THEREFORE QUITE EVIDENT THAT THE DISCRETION VESTED IN THE ASSESSING OFFICER WAS EXERCISED ARBITRARILY IN THE FACTS OF THE PRESENT CASE KEEPING A CLOSED EYE TOWARDS THE LIVING STANDARD OF THE APPELLANT AND HIS NOMINAL AND LIMITED SOURCES OF INCOME. HENCE, THE A DDITION OF RS. 31,10,000/- MAINTAINED BY THE ASSESSING OFFICER AND ENHANCEMENT OF RS. 34,64,150/- MADE BY THE LD CIT(A) ON ACCOUNT OF GIF TS/ LOAN RECEIVED FROM RELATIVES/ FRIEND IS GROSSLY UNREASONABLE AND REQUI RES TO BE DELETED ON THIS COUNT ITSELF. 9. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN MAKING THE ADD ITION AND SUSTAINING THE SAME. FURTHER, THE LD. CIT(A) HAS GROSSLY ERRED ENHANCING THE INCOME OF THE ASSESSEE HAD GIVEN SUFFICIENT DOCUMENTARY EVIDENCES IN SUPPORT OF THE GIFT RECEIVED FROM THE RELATIVES. WE FIND THAT THE LD . CIT(A) HAS DECIDED THIS GROUND IN HIS ORDER BY OBSERVING AS UNDER: GROUND NO.2:- THROUGH THIS GROUND OF APPEAL THE AP PELLANT HAS CHALLENGED THE ADDITION OF RS.31,10,000/- U/S 68 OF THE I.T. ACT. A NOTICE U/S 148 WAS ISSUED TO THE APPELLANT ON 03.06.2015. IN RESPONSE TO THE NOTICE U/S 148 THE APPELLANT FILED THE RETURN OF IN COME DECLARING TOTAL INCOME OF RS.33,12,440/- ON 02.07.2015. THE AO ASSE SSED THE INCOME OF THE APPELLANT AT RS.34,12,440/- AFTER MAKING AN ADD ITION OF RS.1,00,000/- ON ACCOUNT OF MARRIAGE EXPENSES. THE AO HAS NOT MAD E ANY ADDITION OF RS.31,10,000/-. THEREFORE, THE APPEAL ON THIS GROUN D IS DISMISSED. MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 50 4.4 ENHANCEMENT OF INCOME: A NOTICE U/S 251(2) OF T HE I.T. ACT DATED 30.08.2017 WAS GIVEN TO THE APPELLANT STATING THAT WHY THE INCOME OF RS.34,64,150/- (RS.65,74,150/-- RS.31,10,000/-) CAN NOT BE ENHANCED ON ACCOUNT OF INCOME FROM UNDISCLOSED SOURCES. IN RESP ONSE TO THE ABOVE SHOW CAUSE, THE APPELLANT FURNISHED THE WRITTEN SUB MISSION DATED 06.12.2017. THE APPELLANT IS IN RECEIPT OF THE GIFT FROM FOLLOW ING PERSONS: 4.4.1 (1) GOPAL SINGH TOMAR GIFT OF RS.17,00,000/- THE APPELLANT HAS ALLEGEDLY RECEIVED THE GIFT OF RS .17,00,000/- FROM SHRI GOPAL SINGH TOMAR. THE AO MADE THE ADDITION OF RS.1 1,00,000/- ONLY. THE APPELLANT WAS REQUESTED TO SHOW CAUSE WHY AN ENHANC EMENT OF RS.6,00,000/- CANNOT BE MADE CONSIDERING THE REMAIN ING AMOUNT AS INCOME FROM UNDISCLOSED SOURCES. THE APPELLANT WAS REQUESTED TO FURNISH THE DOCUMENTARY EVIDENCES IN SUPPORT OF CLAIM OR THE GIFT LIKE BANK STATEMENT OF SHRI GOPAL SINGH TO MAR AND CORRESPONDING ENTRY IN APPELLANT'S BANK STATEMENT, REGISTERED GIRT DEED OCCASION OF THE GIFT, CREDITWORTHINESS OF THE DONOR ETC. AND OTHER DOCUMENTS ON WHICH APPELLANT RELY. THE APPELLANT WAS ALSO REQUESTED TO EXPLAIN WHY PART GIFT IS CONSIDERED AS GENUINE AND PAN AS NON-GENUINE. AS PE R LAW EITHER GIFT IS GENUINE OR NON GENUINE. THERE IS NO CONCEPT OF PART GIFT AS GENUINE AND PART GIFT AS NON-GENUINE. THE APPELLANT HAS NOT FUR NISHED THE ABOVE ASKED DOCUMENTS IN RESPECT OF THE GIFT . THE APPELLANT ONLY FURNISHED THE NOTARIZED CONFIRMATION OF GIFT ONLY. THE OTHER DOCUMENTS ASKED HAY NOT E N FURNISHED. THE APPELLANT FAILED TO ESTABLISH THE G ENUINENESS 0F THE TRANSACTION AND CREDITWORTHINESS OF THE DONOR. THE AO HIMSELF HAS CONSIDERED THE RS.11,00,000/- AS NON GENUINE GIFT T HERE IS NO REASON TO CONSIDER THE GIFT OF RS.6,00,000/- AS GENUINE. THERE IS NO CONCEPT O F PART GENUINE AND PART NON-GENUINE GIFT. SECTION 68 PROVIDES THAT ANY CASH CREDIT FOUND IN T HE BOOKS RELATING TO WHICH APPELLANT OFFERS NO EXPLANATION ABOUT THE NAT URE AND SOURCE THEREOF OR SUCH EXPLANATION IS UNSATISFACTORY, SUCH CREDITS COULD BE CHARGED TO TAX AS INCOME OF THE APPELLANT. THE PRINCIPLE EMBODIED IN SECTION 68 IS ONLY A STATUTORY RECOGNITION OF WHAT WAS ALWAYS UNDERSTOOD TO BE THE LAW BASED UPON THE RULE THAT B URDEN OF PROOF IS ON THE TAXPAYER TO PROVE THE GENUINENESS OF BORROWINGS OR OTHER CREDITS IN HIS BOOKS, SINCE THE RELEVANT FACTS ARE EXCLUSIVELY WIT HIN HIS KNOWLEDGE. THE EXPRESSION 'NATURE AND SOURCE' HAS TO BE UNDERS TOOD TOGETHER AS 1 REQUIREMENT OF IDENTIFICATION OF THE SOURCE AND THE NATURE OF THE SOURCE, SO THAT THE GENUINENESS OR OTHERWISE COULD BE INFERRED . IT IS SETTLED LAW THAT WHILE CONSIDERING THE QUESTI ON WHETHER THE ALLEGED GIFT TAKEN BY THE APPELLANT WAS A GENUINE TRANSACTION, T HE INITIAL ONUS IS ALWAYS UPON THE APPELLANT AND IF NO EXPLANATION IS GIVEN OR THE EXPLANATION GIVEN BY THE MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 51 APPELLANT IS NOT SATISFACTORY. THE INCOME TAX AUTHORITY CAN DISBELIEVE THE ALLEGED TRANSACTION OF GIFT. BUT THE LAW IS EQUALLY SETTLED THAT IF THE INITIAL BURDEN IS DISCHARGED BY THE APPELLANT BY PRODUCING SUFFICIENT MATERIALS IN SUPPORT OF THE GIFT THE ONUS SHIFTS UPON THE INCOME TAX AUTHORITY AND AFTER VERIFICATION. THE CAN' CALL FOR FURTHER EXPLANATION FROM THE APPELLANT AND IN THE PROCESS, THE ONUS MAY AGAIN SHIFT FROM THE INCOME 'TAX AUTHORITY TO THE APPELLANT. THEREFORE, THE APPELLANT FAILED TO DISCHARGE THE BURDEN OF PROOF BY NOT ESTABLISHING THE GENUINENESS OF TRANS ACTION AND CREDIT WORTHINESS OF THE DONOR. (2) SMT.KIRTI SINGH TOMAR GIFT OF RS.4,15.000/- THE APPELLANT HAS ALLEGEDLY RECEIVED THE GIFT OF RS.4,15,OOO/- FROM SMT. KIRTI SINGH TOMAR. THE AO MADE THE ADDITION OF RS.2,94,000/- ONLY. THE APPELLANT WAS REQUESTED TO SHOW 'CAUSE WHY AN ENHANCEMENT OF RS.1,21 ,000/- CANNOT BE MADE C ONSIDERING THE REMAINING AMOUNT AS INCOME FROM UNDISCLOSED SOURCES . THE APPELLANT WAS REQUESTED TO FURNISH THE DOCUMENTARY EVIDENCES IN SUPPORT OF THE CLAIM OF THE GIFT LIKE BANK STATEMENT OF SMT. KIRTI SINGH TOMAR AND CORRESPONDING ENTRY IN APPELLANT'S BANK STATEMENT, REGISTERED GIF T DEED. OCCASION OF THE GIFT, SOURCE OF INCOME OF SMT. KIRTI SINGH TOMAR AND COPY OF INCOME TAX RETURN FILED BY SMT, KIRTI SINGH TOMAR, CREDITWORTHINESS OF THE DONOR ETC. AND ANY OTHER DOCUMENTS';' ON WHICH APPELLANT RELY. THE APPELLANT WAS ALSO REQUESTED TO EXPLAIN WHY PART GIFT IS CONS IDERED AS GENUINE AND PART AS NON GENUINE. AS PER LAW EITHER GIFT IS GENUINE OR NON GENUINE. THERE IS NO CONCEPT OF PART GIFT AS GENUINE AND PART GIFT AS NON-GENUINE. THE APPELLANT HAS NOT FURNISHED THE ABOVE ASKED DOCUMENTS IN RESP ECT OF THE GIFT. THE APPELLANT ONLY FURNISHED THE NOTARIZED CONFIRMATION OF GIFT ONLY. THE OTHER DOCUMENTS ASKED HAVE NOT BEEN FURNISHED. THE APPELLANT FAILED TO ESTABLISH THE GENUINENESS OF THE TRANSACTION AND CREDITWORTHY MESS THE DONOR. THE AO HIMSELF HAS CONSIDERED THE RS.2,94,OOOL- AS NON GENUINE GIFT. THERE IS NO REASON TO CONSIDER THE GIFT OF RS.1,21,000/- IS GENUINE. THERE IS NO CONCEPT OF PART GENUINE AND PART NON-GENUINE GIFT. SECTION 68 PROVIDES THAT ANY CASH CREDIT FOUND IN T HE BOOKS RELATING TO WHICH APPELLANT OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR SUCH EXPLANATION IS UNSATISFA CTORY SUCH CREDITS COULD HE CHARGED TO TAX AS INCOME OF THE APPELLANT. THE PRINCIPLE EMBODIED IN SECTION 68 IS ONLY A STATUTORY, RECOGNITION OF WHAT WAS ALWAY S UNDERSTOOD TO BE THE LAW BASED UPON THE RULE THAT ROOF IS ON THE TAXPAYER TO PROVE THE GENUINENESS OF BORROWING OR OTHER CREDITS IN HIS BOOKS, SINCE THE RELEVANT FACTS ARE EXCLUSIVELY WITHIN HIS KNOWLEDGE. THE EXPRESSION 'NATURE AND SOURCE' BAS TO BE UNDERS TOOD TOGETHER AS A REQUIREMENT OF IDENTIFICATION OF THE SOURCE AND THE NATURE OF THE SOURCE, SO THAT THE GENUINENESS OR OTHERWISE COULD BE INFERRED . IT IS SETTLED LAW THAT WHILE CONSIDERING THE QUESTION WHETHER THE ALLEGED GIFT TAKEN BY THE APPELLANT WAS A GENUINE TRANSACTION, T HE INITIAL ONUS IS ALWAYS UPON THE APPELLANT AND IF NO EXPLANATION IS GIVEN OR THE EXPLANATION GIVEN BY THE APPELLANT IS NOT SATISFACT ORY. THE INCOME TAX MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 52 AUTHORITY CAN DISBELIEVE THE ALLEGED TRANSACTION OF GILT BUT THE LAW IS EQUALLY SETTLED THAT IF THE INITIAL BURDEN IS DISCH ARGED BY THE APPELLANT BY PRODUCING SUFFICIENT MATERIALS IN SUPPORT OF THE GI FT THE ONUS SHIFTS UPON THE INCOME TAX AUTHORITY AND AFTER VERI FICATION, HE CAN CALL FOR FURTHER EXPLANATION FROM THE APPELLANT AND IN THE PROCESS, THE ONUS MAY AGAIN SHIFT FROM THE INCOME TAX AUTHORITY TO THE APPELLANT. THEREFORE, THE APPELLANT FAILED TO DISCHARGE THE BURDEN 0 F PROOF BY NOT ESTABLISHING THE GENUINENESS OF TRANSACTION AND CREDIT WORTHINESS OF THE DONOR. (3) SMT, NILIMA TOMAR GIFT OF RS.5,26,OOO/- THE APPELLANT HAS ALLEGEDLY RECEIVED THE GIFT OF RS.5,26,OOO/- F ROM SMT. NILIMA TOMAR. THE AO MADE THE ADDITION OF RS.3,26,OOO/- ONLY. THE APPELLANT WAS REQUESTED TO SHOW CAUSE WHY AN ENHANCEMENT OF RS.2,OO,OOO/- CANNOT BE MADE CONSIDERING THE REMAINING AMOUNT AS INCOME FROM UNDISCLOSED SOURCES. THE APPELLANT'S BA NK STATEMENT, REGISTERED GIFT DEED, 0 CAS 'ION OF THE GI FT. SOURCE OF INCOME OF SMT. NILIRNA TOMAR AND C 0P Y OF INCOME TAX RETURN FILED BY SMT.NILIMA TOMAR, CREDITWORTHINESS OF THE DONOR ETC. AND ANY OTHER DO CUMENTS ON WHICH APPELLANT RELY. THE APPELLANT WAS ALSO REQUESTED TO EXPLAIN WHY PART GIFT IS CONSIDERED AS GENUINE AND PART AS NON GENUINE. A S PER LAW EITHER GIFT IS GENUINE OR NON GENUINE. THERE IS NO CONCEPT 0 F PART GIFT AS GENUINE AND PART GI FT AS NON-GENUINE. THE APPELLANT HAS NOT FURNISHED THE ABOVE ASKED DOCUMENTS IN RESPECT OF THE GIFT. THE APPELLANT ONL Y FURNISHED THE NOTARIZED CONFIRMATION OF GIFT ONLY. THE OTHER DOCU MENTS ASKED HAVE NOT BEEN I FURNISHED. THE APPELLANT FAILED TO ESTABLISH THE GE NUINENESS TRANSACTION AND CREDITWORTHINESS OF THE DONOR. THE AO HIMSEL F HAS CONSIDERED THE RS.3,26,OOO/- AS NON GENUINE GIFT. T HERE IS NO REASON TO CONSIDER THE GIFT OF RS.2,OO,OOO/- AS GENUINE. THER E IS NO CONCEPT OF PART GENUINE AND PART NON-GENUINE GIFT. SECTION 68 PROVIDES THAT ANY CASH CREDIT FOUND IN T HE BOOKS RELATING TO WHICH APPELLANT OFFERS NO EXPLANATION ABOUT THE NAT URE AND SOURCE HEREOF OR SUCH EXPLANATION IS UNSATISFACTORY, SUCH CREDITS COULD BE CHARGED TO TAX AS INCOME OF THE APPELLANT. THE PRINCIPLE EMBODIED IN SECTION 68 IS ONLY A STATUTORY RECOGNITION OF WHAT WAS ALWAYS UNDERSTOOD TO BE THE LAW BASED UPON THE RULE THAT BURDEN OF PROOF IS ON THE TAXP AYER TO PROVE THE GENUINENESS OF BOR ROWINGS OR OTHER CREDITS IN HIS BOOKS. SINCE THE RE LEVANT FACTS ARE EXCLUSIVELY WITHIN HIS KNOWLEDGE. THE EXP RESSION 'NATURE AND SOURCE' HAS TO BE UNDERSTOOD TOGETHER AS A REQUIREM ENT OF IDENTIFICATION OF THE SOURCE AND THE NATURE OF THE SOURCE, SO THAT TH E GENUINENESS OR OTHERWISE COULD BE INFERRED. IT IS SETTLED LAW THAT WHILE CONSIDERING THE QUESTI ON WHETHER THE ALLEGED GIFT TAKEN BY THE APPELLANT WAS A GENUINE TRANSACTI ON, THE INITIAL ONUS IS ALWAYS UPON THE APPELLANT AND IF NO EXPLANATION IS GIVEN OR THE EXPLANATION GIVEN BY THE APPELLANT IS NOT SATISFACT ORY, THE INCOME TAX AUTHORITY CAN DISBELIEVE THE ALLEGED TRANSACTION OF GIFT . BUT THE LAW IS EQUALLY SETTLED THAT IF THE INITIAL BURDEN IS DISCHARGED BY THE APPELLANT B Y MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 53 PRODUCING SUFFICIENT MATERIALS IN SUPPORT OF THE GILT THE ONUS SHIFTS UPON THE INCOME TAX AUTHORITY AND AFTER VERIFICATION, HE CAN CALL FOR FURTHER EXPLANATION FROM THE APPELLANT AND IN THE PROCESS, THE ONUS MAY AGAIN SHIFT FROM THE INCOME TAX AUTHORITY TO THE APPELLAN T. THEREFORE, THE APPELLANT FAILED TO DISCHARGE THE BU RDEN OF PROOF BY NOT ESTABLISHING THE GENUINENESS OF TRANSACTION AND CRE DIT WORTHINESS OF THE DONOR. (4) SMT. JASODA BAI TOMAR GIFT OF RS.6,00,000/- THE APPELLANT HAS ALLEGEDLY RECEIVED THE GIFT OF RS .6,00,000/- FROM SMT. JASODA BAI TOMAR. THE AO MADE THE ADDITION OF RS.4, 00,000/- ONLY. THE APPELLANT WAS REQUESTED TO SHOW CAUSE WHY AN ENHANC EMENT OF RS.2,00,000/- CANNOT BE MADE CONSIDERING THE REMAIN ING AMOUNT AS INCOME FROM UNDISCLOSED SOURCES. THE APPELLANT WAS REQUESTED TO FURNISH THE DOCUMENTARY EVIDENCES IN SUPPORT OF THE CLAIM O F THE GIFT LIKE BANK STATEMENT OF SMT. JASODA BAI TOMAR AND CORRESPONDIN G ENTRY IN APPELLANT'S BANK STATEMENT. REGISTERED GIFT DEED, OCCASION OF THE GIFT SOURCE OF INCOME OF SMT JASODA BAI TOMAR AND COPY O F INCOME TAX RETURN FILED BY SMT. JASODA BAI TOMAR , CREDITWORTHINESS O F THE DONOR ETC. ANY OTHER DOCUMENT ON WHICH APPELLANT RELY. THE APPELL ANT HAS NOT FURNISHED THE ABOVE ASKED DOCUMENTS IN RESPECT OF THE GIFT. T HE APPELLANT ONLY THERE IS NO CONCEPT OF PAN GIFT AS GENUINE AND PART GIFT AS NON-GENUINE. THE APPELLANT HAS NOT FURNISHED THE ABOVE ASKED DOCUMENTS IN RESPECT OF THE GIN. THE APPELLANT ONLY FURNISHED THE NOTARIZED CONFIRMA TION OF GIFT ONLY. THE OTHER DOCUMENTS ASKED HAVE NOT BEEN FURNISHED. THE APPELLANT FAILED TO ESTABLISH THE GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OR THE DONOR. THE AO HIMSELF HAS CONSIDERED THE RS4,OO,OOO/- AS NON GENUINE GIFT. THERE IS 110 REASON TO CONSIDER THE GIFT OF RS.2.00,OOO/ AS GENUINE. THERE IS NO CONCEPT OF PART GENUINE AND PART NON-GENUINE GIF T. SECTION 68 PROVIDES THAT ANY CASH CREDIT FOUND IN THE BOOKS RELATING TO WHICH APPELLANT OFFERS NO EXPLANATION ABOUT THE NATURE AN D SOURCE THEREOF OR SUCH EXPLANATION IS UNSATISFACTORY, SUCH CREDITS COULD CHARGE TO TAX AS INCOME OF THE APPELLANT. THE PRINCIPLE EMBODIED IN SECTION 68 IS ONLY A STATUTORY RECOGNITION OF WHAT WAS ALW AYS UNDERSTOOD TO BE THE LAW BASED UPON THE RULE THAT BURDEN OF PROOF IS ON THE TAXPAYER TO PROVE THE GENUINENESS OF BORROWINGS OR OTHER CREDITS IN HIS BOOKS, SINCE THE RELEVANT FACTS ARE EXCLUSIVELY WITHIN HIS KNOWLEDGE. THE EXPRESSION 'NATURE AND SOURCE' HAS TO BE UNDERS TOOD TOGETHER AS A REQUIREMENT OF IDENTIFICATION OF THE SOURCE AND THE NATURE OF THE SOURCE, SO THAT THE GENUINENESS OR OTHERWISE COULD BE INFERRED . IT IS SETTLED LAW THAT WHILE CONSIDERING THE QUESTION WHETHER THE ALLEGED GIFT TAKEN BY THE APPELLANT WAS A GENUINE TRANSACTION INITIAL ONUS IS ALWAYS UPON THE APPELLANT AND IF NO EXPLANATION IS GIVEN OR THE EXPLANATION GIVEN BY THE APPELLANT IS NO SATISFACTORY. T HE INCOME TAX AUTHORITY CAN DISBELIEVE THE ALLEGED RAN ACTION OF GILT. BUT THE LAW IS EQUALLY SETTLED THAT IF THE INITIAL MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 54 BURDEN IS DISCHARGED BY THE APPELLANT BY PRODUCING SUFFICIENT MATERIALS IN SUPPORT OF THE GI FT, THE ONUS SHIFTS UPON THE INCOME TAX AUTHORITY AND A LTER VERIFICATION HE CAN CALL FOR FURTHER EXPLANATION FROM THE APPELLANT AND IN THE PROCESS, THE ONUS MAY AGAIN SHIFT FROM THE INCOME TAX AUTHORITY TO THE APPELLANT. THEREFORE, THE APPELLANT FAILED TO DISCHARGE THE BU RDEN OF PROO F BY NOT E STABLISHING THE GENUINENESS OF TRANSACTION AND CRED IT WORTHINESS OF THE DONOR. (5) SMT. MADHUBALA RAJPUT GIFT OF RS.5,OO,OOO/- THE APPELLANT HAS ALLEGEDLY RECEIVED THE GIFT OF RS.5,OO,OOOL- FROM ,SMT. MADHUBALA RAJPUT. THE AO HAS NOT MADE ANY ADDITION IN THIS REGARD. THE APPELLANT WAS REQUESTED TO SHOW CAUSE WHY AN ENHANC EMENT OF RS.5,OO,OOO/- CANNOT BE MADE CONSIDERING THE AMOUNT AS INCOME FROM UNDISCLOSED SOURCES. THE APPELLANT WAS REQUESTED TO FURNISH THE DOCUMENTARY EVIDENCES IN SUPPORT OF THE CLAIM OF TH E GIFT LIKE BANK STATEMENT OF SMT. MADHUBALA RAJPUT AND CORRESPONDING ENTRY IN APPELLANT'S BANK STATEMENT, REGISTERED GIFT DEED, OCCASION OF THE GIFT, SOURCE OF INCOME OF SMT MADHUBALA RAJPUT AND COPY OF INCOME TAX RETURN FILED BY SRNT. MADHUBALA RAJPUT, CREDITWORTHINESS OF THE DONOR ETC. AND ANY OTHER DOCUMENTS ON WHICH APPELLANT RELY. WHETHER THE DONO R FALLING IN THE DEFINITION OF RELATIVE AS PER INCOME TAX ACT FROM WHO GIFT CAN BE RECEIVED. THE APPELLANT HAS NOT FURNISHED THE ABOVE DOCUMENTS IN RESPECT OF THE GIFT. THE APPELLANT ONLY FURNIS HED THE NOTARIZED CONFIRMATION OF GIFT ONLY. THE OTHER DOCUMENTS ASKED HAVE NOT BEEN FURNISHED. THE APPELLANT FAILED TO ESTABLISH THE GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE DONOR. THERE IS NO REASON TO CONSIDER THE GIF T OF RS.5,OO,OOOI- AS GENUINE. SECTION 68 PROVIDES THAT ANY CASH CREDIT FOUND IN T HE BOOKS RELATING TO WHICH APPELLANT OFFERS NO EXPLANATION ABOUT THE NAT URE AND SOURCE THEREOF OR SUCH EXPLANATION IS UNSATISFACTORY, SUCH CREDITS COULD BE CHARGED TO TAX AS INCOME OF THE APPELLANT. THE PRINCIPLE EMBODIED IN SECTION 68 IS ONLY A STATUTORY RECOGNITION OF WHAT WAS UNDERSTOOD TO BE THE LAW BASED UPON THE RULE THAT BURDEN OF PROOF IS ON THE TAXPAYER TO PROVE THE GENUINENESS O F BORROWINGS OR OTHER CREDITS IN HIS BOOKS, SINCE THE RELEVANT FACTS ARE EXCLUSIVELY WITHIN HIS KNOWLEDGE. THE EXPRESSION 'NATURE AND SOURCE' HAS TO BE UNDERS TOOD TOGETHER AS A REQUIREMENT OF IDENTIFICATION OF THE SOURCE AND THE NATURE OF THE SOURCE, SO THAT THE GENUINENESS OR OTHERWISE COULD BE INFERRED. IT IS SETTLED LAW THAT WHILE CONSIDERING THE QUESTION WHETHER THE ALLEGED GIFT TAKEN BY THE APPELLANT WAS A GENUINE TRANSACTION, THE INI TIAL ONUS IS ALWAYS UPON THE APPELLANT AND IF NO EXPLANATION IS GIVEN OR THE EXPLANATION GIVEN BY THE APPELLANT IS NOT SATISFACTORY. THE INCOME TAX AUT HORITY CAN DISBELIEVE THE ALLEGED TRANSACTION OF GIFT. BUT THE LAW IS EQUALLY SETTLED THAT IF INITIAL BURDEN IS DISCHARGED BY THE APPELLANT BY PRODUCING SUFFICIE NT MATERIALS IN SUPPORT OF THE GILT THE ONUS SHIFTS UPON THE INCOME TAX AUTHORITY AND A FTER VERIFICATION, HE CAN CALL FOR FURTHER EXPLANATION FROM THE APPE LLANT AND IN THE PROCESS, THE ONUS MAY MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 55 AGAIN SHIFT FROM THE INCOME TAX AUTHORITY TO THE APPELLANT. THEREFORE, THE APPELLANT FAILED TO DISCHARGE THE BU RDEN OF PROOF BY NOT ESTABLISHING THE GENUINENESS OF TRANSACTION AND CREDIT WORTHINESS OF THE DONOR. (6) SHRI VIRENDRA SINGH RAJPUT - GIFT OF RS.7 ,00,000/- THE APPELLANT HAS ALLEGEDLY RECEIVED THE GIFT OF RS.7,OO.OOO/- FROM SHRI VIRENDRA SINGH RAJ PUT. THE AO HAS NOT MADE ANY ADDITION IN THIS REGARD. THE APPELLANT WAS REQUESTED TO SHOW CAUSE WHY AN ENHANCEMENT OF RS.7,OO,OOO/- CANNOT BE MADE CONSIDERING THE AMOUNT AS INCOME FRO M UNDISCLOSED SOURCES. THE APPELLANT WAS REQUESTED TO FURNISH THE DOCUMENTARY EVIDENCES IN SUPPORT OF THE CLAIM OR THE GIFT LIKE BANK STATEMENT OF SHRI VIRENDRA SINGH RAJPUT AND CORRESPONDING ENTRY IN YOUR BANK STATEMENT, REGISTERED GIFT DEED, OCCASION OF THE GIFT, SOURCE OF INCOME OF SHRI VIRENDRA SINGH RAJPUT AND COPY OF INCOME TAX RETURN FILED BY SHRI VIRENDRA SINGH RAJPUT, WORTHINESS OF THE DONOR ETC. AND ANY OTHER DOCUMENTS ON WHICH YO UR RELY .WHETHER THE DONOR IS FAILING IN THE DEFINITION OF RELATIVE AS PER INCOME TAX ACT FROM WHOM GIFT CAN BE RECEIVED. THE APPELLANT HAS NOT FURNISHED THE ABOVE ASKED DOCUMENTS IN RESPECT OF THE (1.. THE APPELLANT ONLY FURNISHED THE NOTARIZED CONFIRMATION OF GIN ONLY. THE OTHER DOCUMENTS ASKED HAVE NOT BEEN FURNISHED. THE APPELLANT FAILED TO ESTABLISH THE GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE DONOR. THERE IS NO REASON TO CONSIDER THE GIFT OF RS.7 OOOOO/- AS GENUINE. SECTION 68 PROVIDES THAT ANY CASH CREDIT FOUND IN T HE BOOKS RELATING TO WHICH APPELLANT OFFERS NO EXPLANATION ABOUT THE NAT URE AND SOURCE THEREOF OR SUCH EXPLANATION IS UNSATISFACTORY. SUCH CREDITS COULD BE CHARGED TO TAX AS INCOME OF THE APPELLANT. THE PRINCIPLE EMBODIED IN SECTION 68 IS ONLY A STATUTORY RECOGNITION OF WHAT WAS ALWAYS UNDERSTOOD TO BE THE LAW BASED UPON THE RULE THAT BURDEN OF PROOF IS ON THE TAXPAY ER TO PROVE THE GENUINENESS OF BORROWINGS OR OTHER CREDITS IN HIS B OOKS, SINCE THE RELEVANT FACTS ARE EXCLUSIVELY WITHIN HIS KNOWLEDGE. THE EXPRESSION 'NATURE AND SOURCE' HAS TO BE UNDERS TOOD TOGETHER AS A REQUIREMENT OF IDENTIFICATION OF THE SOURCE AND THE NATURE OF THE SOURCE, SO THAT THE GENUINENESS OR OTHERWISE COULD BE INFER RED. IT IS SETTLED LAW THAT WHILE CONSIDERING THE QUESTION WHETHER THE ALLEGED GIFT TAKEN BY THE APPELLANT WAS A GENUINE TRANSACTION, T HE INITIAL ONUS IS ALWAYS UPON THE APPELLANT AND IF NO EXPLANATION GIVEN OR THE EXPLANATION GIVEN BY THE APPELLANT IS NOT SATISFACTORY. T HE INCOME TAX AUTHORITY CAN DISBELIEVE THE ALLEGED TRANSACTION OF GIFT. BUT THE LAW IS EQUALLY SETTLED THAT IF THE INITIAL BURDEN IS DISCHARGED BY THE APPELLANT BY PRODUCING SUFFICIENT MATERIALS IN SUPPORT OF THE 'IT THE ONUS SHIFTS UPON THE INCOME TAX AUTHORITY AND AFTER VERI FICATION, HE CAN CALL FOR FURTHER EXPLANATION FROM THE APPELLANT AND IN THE PROCESS, THE ONUS MAY AGAIN SHIFT FROM THE INCOME TAX AUTHORITY OF THE APPELLANT. THEREFORE, THE APPELLANT FAILED TO DISCHARGE THE BU RDEN OF PROOF BY NOT ESTABLISHING THE GENUINENESS OF TRANSACTION AND CREDIT WORTHINESS OF THE MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 56 DONOR. (7) SHRI AWADESH SINGH RAJPUT - GIFT OF RS.3,OO,OOO/- THE APPELLANT HAS ALLEGEDLY RECEIVED THE GIVE OF ',3, 00,000/- FROM SHRI AWADESH SINGH RAJPUT, TH AO HAS MADE 'MY ADDITION IN THIS REGARD. THE APPELLANT WAS REQUE ST ED TO FURNISH CAUSE WHV AN ENHANCEMENT OF RS.3;OO,OOO/- CANNOT BE MADE CONSIDERING THE AMOUNT AS INCOME FROM UNDISCLOSED SOUR E . THE APPELLANT WAS REQUESTED TO FURNISH THE DOCUMENTARY EVIDENCES IN SUPPORT OF THE CLAIM OF TH E GI FT LIKE BANK STATEMENT OF SHRI AWADESH SINGH RAJPUT AND CORRESPONDING ENTRY IN YOUR BANK STATEMENT, REGISTERED GIFT DEED. OCCASION OF T HE GIFT. SOURCE OF INCOME OF SHRI AWADESH SINGH RAJPUT AND COPY OF INCOME TAX RETURN FILED BY SH AWADESH SINGH RAJPUT. CREDITWORTHINESS OF THE DONOR ETC. AND ANY OTHER DOCUMENTS 011 WHICH YOU RELY. WHETHER THE DONOR IS FALLING IN THE DEFINITION OF RELATIVE AS PER INCOME TAX ACT FROM W HOM GIFT CAN BE RECEIVED. THE APPELLANT HAS NOT FURNISHED THE ABOVE ASKED DOC UMENTS IN RESPECT OF THE GI N. THE APPELLANT ONLY FURNISHED THE NOTARIZED CONFIRMA TION OF GIFT ONLY. THE OTHER DOCUMENTS ASKED HAVE NOT BEEN FURNI SHED. THE APPELLANT FAILED TO ESTABLISH THE GENUINENESS OF THE TRANSACT ION AND CREDITWORTHINESS OF THE DONOR. THERE IS NO REASON TO CONSIDER THE GI FT OF RS.3,OO,OOO/- AS GENUINE. SECTION 68 PROVIDES THAT ANY CASH CREDIT FOUND IN THE BOOKS RELATING TO WHICH APPELLANT OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR SUCH EXPLANATION IS UNSATISFACTORY, SUCH CREDITS COULD B E CHARGED TO TAX AS INCOME OF THE APPELLANT THE PRINCIPLE EMBODIED IN SECTION 68 IS ONLY A STATUTORY RECOGNITION OF WHAT WAS ALWAYS UNDERSTOOD TO BE THE LAW BASED UPON THE RULE THAT BURDEN OF PROOF IS ON THE TAXPAYER TO PROVE THE GENUINENESS OF BORROWINGS OR OTHER CREDITS IN HIS BOOK', SINCE THE RELEVANT FACTS ARE EXCLUSIVELY WITHIN HIS KNOWLEDGE . THE EXPRESSION 'NATURE AND SOURCE HAS TO BE UNDERSTOOD TOGETHER AS A REQUIREMENT OF IDENTIFICATION OF THE SOURCE AND THE NATURE OF THE SOURCE, 0F THAT THE BE INFERRED. IT IS SETTLED LAW THAT WHILE CONSIDERING THE QUESTI ON WHETHER THE ALLEGED GIFT TAKEN BY THE APPELLANT WAS A GENUINE TRANSACTION, THE INI TIAL ONUS IS ALWAYS UPON THE ALLEGED GIFT TAKEN BY THE APPELLANT WAS A GENUINE T RANSACTION, THE INITIAL ONUS IS ALWAYS UPON THE APPELLANT AND IF NO EXPLANATION IS GIVEN OR THE EXPLANATION GIVEN BY THE APPELLANT IS NOT SATISFACTORY, THE INCOME TAX AUTHORITY CAN D ISBELIEVE THE ALLEGED TRANSACTION OF GIFT. BUT THE LAW IS EQU ALLY SETTLED THAT IF THE INITIAL BURDEN IS DISCHARGED BY THE APPELLANT BY PRODUCING SUFFICIENT MATERIALS IN SUPPORT OF THE GIFT, THE ONUS SHIFTS UPON THE INCOME TAX AUTHORITY AND A FTER VERIFICATION, HE CAN CALL FOR FURTHER EXPLANATION F ROM THE APPELLANT AND IN THE PROCESS, THE ONUS MAY AGAIN SHIFT FROM THE INCOME T AX AUTHORITY TO THE APPELLANT. THEREFORE, THE APPELLANT FAILED TO DISCHARGE THE BU RDEN OF PROOF BY NOT ESTABLISHING THE GENUINENESS OF TRANSACTION AND CRE DIT WORTHINESS OF THE DONOR. THEREFORE, THE INCOME OF THE APPELLANT IS ENHANCED BY RS.34,64,150/- (RS.65,74,150/- - RS.31,10,000/-). PENALTY PROCEEDI NGS U/S 271(1)(C) ARE SEPARATELY INITIATED ON THIS ENHANCEMENT. MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 57 10. ON THE CONTRARY, LD. SR.-DR OPPOSED THE SUBMISSI ON MADE BY THE LD. COUNSEL FOR THE ASSESSEE, AND SUPPORT ED THE ORDERS OF AUTHORITIES BELOW. FURTHER, LD. SR. DR CONTENDED THAT THE ASSESSEE FAILED TO PROVE GENUINENES S OF GIFT AND CREDITWORTHINESS OF DONORS. SHE CONTENDED T HAT UNDER THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE THE AUTHORITIES BELOW WERE JUSTIFIED IN MAKING THE IMPUGN ED ADDITIONS. 11. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE MATERIALS AVAILABLE ON RECORD. THE CONTENTION OF THE ASSESSEE IS THAT REQUISITE MATERIAL WAS PLACED ON RECORD BEFORE THE LOWER AUTHORITIES BUT THE LOWER AUTHORITIE S DID NOT CONSIDER THE SAME. HE SUBMITTED THAT IN RESPONSE TO THE NOTICE U/S 148 OF THE ACT THE ASSESSEE HAD SUBMIT TED THAT THE SOURCE OF INVESTMENT WAS GIFT/LOAN RECEIVED F ROM FAMILY MEMBERS AND FRIENDS. THE SUPPORTING EVIDENCES OF THE INVESTMENT WAS PLACED BEFORE THE LD. CIT(A) AND AL SO THE ASSESSING OFFICER. HOWEVER, THE LD. CIT(A) SUSTAI NED THE ADDITION AND IN ADDITION TO THAT ENHANCED THE INCOME OF THE ASSESSEE WITHOUT CONSIDERING MATERIAL PLACED BEFORE HIM . LOOKING TO THE FACTS OF THE PRESENT CASE WHEN THE ASSE SSEE IS CLAIMING THAT THE SOURCE OF INVESTMENT WAS FROM THE GIFTS MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 58 GIVEN BY THE FAMILY MEMBERS AND CONSIDERING THE FACTS THAT THE ASSESSING OFFICER HAS VERIFIED THE FACTUM OF GIFTS RECEIVED BY THE ASSESSEE AND PARTLY GRANTED THE RELIEF. THERE WAS NO CREDIBLE EVIDENCE BEFORE THE LD. CIT(A) TO REBUT THE FINDINGS OF ASSESSING OFFICER. THE ASSESSE E PLACED DOCUMENTS RELATED TO SALE OF PROPERTY BY FATHER-IN-LA W AND MOTHER-IN-LAW. HENCE, THE ENTIRE EVIDENCE COULD NOT BE BRUSHED ASIDE WITHOUT MAKING PROPER VERIFICATION. THE LD. CIT(A) WAS NOT JUSTIFIED ENHANCING THE INCOME. THEREF ORE, WE DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITIO N OF RS.34,64,150/- AS MADE BY THE LD. CIT(A). NOW COMING TO THE ISSUE ABOUT SUSTAINING OF THE ADDITION OF RS.31,10,000/- AS DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME. IT IS CONTENDED THROUGHOUT BY THE ASSESSEE THAT THE DECLARATION MADE IN THE RETURN WAS WRONGLY MADE. THE ASSESSEE HAD PLACED ON RECORD ALL EVIDENCES REGARDING RECEIPT OF GIFTS ETC. FROM THE F AMILY MEMBERS BEFORE THIS TRIBUNAL ALSO THE ASSESSEE HAS PLACE D A CHART ALONG WITH WRITTEN SYNOPSIS MENTIONING THE QUANTUM OF GIFT RECEIVED FROM VARIOUS PERSONS AS FROM T HE FATHER OF ASSESSEE HAD RECEIVED RS. 17,00,000/- FROM MOTHER OF ASSESSEE RECEIVED GIFT OF RS.5,26,000/- FR OM MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 59 GRANDMOTHER OF ASSESSEE RECEIVED GIFT OF RS.6,00,000/ - FROM WIFE HE RECEIVED GIFT OF RS.4,15,000/- AND OTHER REL ATIVES SMT. MADHU BALA RAJPUT, MOTHER-IN-LAW OF THE ASSESSEE G IFT OF RS.5,00,000/-, SHRI VIRENDRA SINGH RAJPUT FATHER-I N-LAW OF THE ASSESSEE GIFT OF RS.7,00,000/-, SHRI AWADESH S INGH RAJPUT, BROTHER-IN-LAW OF ASSESSEE GIFT OF RS. 3,00 ,000/- AND FRIEND RAVI GURJAR LOAN OF RS.9,90,000/-. LOOKING T O THE MATERIAL PLACED BEFORE US, WE FIND THAT THE ASSESSEE HAS PLACED SUFFICIENT EVIDENCE TO PROVE THE RECEIPT OF G IFT RECEIVED FROM HIS FATHER AMOUNTING TO RS.17,00,000/-. FURTHER, THE FINDING OF ASSESSING OFFICER REGARDING G IFT RECEIVED FROM GRAND-MOTHER AND MOTHER OF THE ASSESSEE RESPECTIVELY. WE FIND THAT THE ASSESSING OFFICER HAS P ARTLY ACCEPTED THE GIFT OF RS.2,00,000/- EACH FROM MOTHER AN D GRANDMOTHER OF THE ASSESSEE. LOOKING TO THE FAMILY BACKGROUND AND IN THE ABSENCE OF SPECIFIC EVIDENCES WE MODIFY THE FINDING OF ASSESSING OFFICER AND ALLOW THE GIFT RECEIVED FROM GRANDMOTHER OF RS.3,00,000/- AND MOTHE R OF RS. 2,50,000/-. REST OF THE ADDITION MADE ON ACCOUNT OF GIFTS RECEIVED FROM MOTHER AND GRANDMOTHER OF THE ASSE SSEE ARE SUSTAINED. THUS, ASSESSEE GETS RELIEF OF RUPEES T WENTY TWO LAC FIFTY THOUSANDS (RS.17,00,000/- + 3,00,000/- + 2,50,000/-) IS GIFT RECEIVED FROM PARENT AND GRANDMOTH ER. MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 60 NOW COMING TO THE GIFT RECEIVED FROM OTHER PERSONS. THE ASSESSEE CLAIMED TO HAVE RECEIVED GIFT FROM HIS W IFE, FATHER-IN-LAW, MOTHER-IN-LAW, BROTHER-IN-LAW AND HIS FRIEND. THESE GIFTS NEED VERIFICATION AT THE END OF THE ASSESS ING OFFICER. THE ASSESSEE IS HEREBY DIRECTED TO FURNISH THE REQUISITE EVIDENCES IN SUPPORT OF THE GIFT RECEIVED FROM OTHER RELATIVES AND FRIENDS MORE PARTICULARLY MENTIONED IN THE ASSESSMENT ORDER. THIS GROUND OF THE ASSESSEE IS PARTLY ALLOWED. FURTHER, IT WAS POINTED OUT BY THE SR. DR TH AT THE ASSESSEE HIMSELF HAD DISCLOSED INCOME OF RS.31,10,000 /- IN HIS RETURN OF INCOME. HOWEVER, DURING THE COURSE OF ASSESSMENT PROCEEDINGS ITSELF ASSESSEE HAD RETRACTED FR OM THE INCOME DISCLOSED IN THE RETURN OF INCOME. IT IS ALSO SEEN THAT IN RESPONSE TO THE NOTICE U/S 148 THE ASSESSEE H AS TAKEN STAND THAT SUBSTANTIAL SOURCE OF INVESTMENT WAS GIF T FROM DIFFERENT PERSONS. IF IT IS PROVED THAT THE INV ESTMENT IS MADE OUT OF GIFTS RECEIVED, ADMITTEDLY NO OTHER SOUR CE OF INCOME IS UNEARTHED BY THE REVENUE. IT IS SETTLED L AW THAT ONLY THE RECEIPT THAT PARTAKE CHARACTER OF INCOME IS REQUIRED TO BE TAXED. IF RECEIPT IS IN THE NATURE OF GIFT WHICH DOES NOT PARTAKE CHARACTER OF INCOME WOULD CERTAINLY BE NOT TAXABLE. THEREFORE, LOOKING TO THE PECULIARITY O F THE FACTS OF THE PRESENT CASE THE ISSUE RELATED TO GIFT/LOAN REC EIVED MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 61 FROM WIFE, RELATIVES AND FRIEND IS RESTORED TO THE FI LE OF THE ASSESSING OFFICER FOR VERIFICATION OF VERACITY OF THE CLAIM OF THE ASSESSEE. THE AO IS HEREBY DIRECTED TO RE-EXAMINE THE ISSUE OF GIFT AND LOAN OF THE AFORESAID PERSONS. IF THE CLAIM OF THE ASSESSEE IS FOUND CORRECT HE WOULD DELETE THE REMAINING ADDITION MADE IN THIS RESPECT. THE GROUNDS OF THE ASSESSEE ARE PARTLY ALLOWED IN THE TERMS INDICATED HEREINABOVE. 12. GROUND NO.5 IS AGAINST THE DISALLOWANCE OF OPENING BALANCE OF CAPITAL. LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN SUBMISSIONS. THE SUBMISSIONS OF THE ASSESSEE ARE REPRODUCED AS UNDER: 5] GROUND NO. 5 CHALLENGING THE ENHANCEMENT OF RS . 8,43,150/- MADE BY THE LD CIT(A) ON ACCOUNT OF OPEN ING BALANCE OF CAPITAL OF THE APPELLANT 5.1] THE APPELLANT IN THIS GROUND OF APPEAL HAS CHA LLENGED THE ENHANCEMENT OF RS. 8,43,150/- MADE BY THE LD CIT(A) ON ACCOUNT OF OPENING BALANCE OF CAPITAL OF THE APPELLANT. 5.2] A TABLE SUMMARIZING THE ADDITION OF RS. 31,10, 000/- MADE BY THE ASSESSING OFFICER AND ENHANCEMENT OF RS. 34,64,150/ - MADE BY THE LD CIT(A) IS AS UNDER: S. NO NAME OF THE PARTY NATURE OF RECEIPT GROSS AMOUNT [IN RS.] AMOUNT NOT ACCEPTED AS GENUINE BY AO/ ADDITION MAINTAINED BY AO AMOUNT ACCEPTED AS GENUINE BY AO WHICH WAS ENHANCED BY LD MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 62 [IN RS.] CIT(A) [IN RS.] 1 SHRI GOPAL SINGH TOMAR GIFT 17,00,000 11,00,000 6,00,000 2 SMT NILIMA TOMAR GIFT 5,26,000 3,26,000 2,00,000 3 SMT JASODA BAI TOMAR GIFT 6,00,000 4,00,000 2,00,000 4 SMT KIRTI TOMAR GIFT 4,15,000 2,94,000 1,21,000 5 SMT MADHU BALA RAJPUT GIFT 5,00,000 NIL 5,00,000 6 SHRI VIRENDRA SINGH RAJPUT GIFT 7,00,000 NIL 7,00,000 7 SHRI AWADESH SINGH RAJPUT GIFT 3,00,000 NIL 3,00,000 8 SHRI RAVI GURJAR LOAN 9,90,000 9,90,000 NIL 9 OPENING BALANCE OF CAPITAL OPENING CAPITAL 8,43,150 NIL 8,43,150 TOTAL 65,74,150 31,10,000 34,64,150 5.3] ON PERUSAL OF THE ABOVE TABLE, IT IS QUITE CLE AR THAT ENHANCEMENT OF RS. 34,64,150/- MADE BY THE LD CIT(A) INCLUDED ENHANCEM ENT OF RS. 8,43,150/- ON ACCOUNT OF OPENING BALANCE OF CAPITAL OF THE APP ELLANT. 5.4] HENCE, FURTHER ENHANCEMENT OF RS. 8,43,150/- A S MADE BY THE LD CIT(A) ON ACCOUNT OF OPENING BALANCE OF CAPITAL LED TO DOU BLE TAXATION OF THE SAME AMOUNT WHICH IS GROSSLY UNJUSTIFIABLE AND WHOLLY UN WARRANTED. THEREFORE, IT IS HUMBLY SUBMITTED THAT FURTHER ENHANCEMENT OF RS. 8,43,150/- MADE BY THE LD. CIT(A) ON ACCOUNT OF OPENING BALANCE OF CAPITAL REQUIRES TO BE DELETED IN ENTIRETY. 13. ON THE CONTRARY, LD. SR. DR OPPOSED THE SUBMISSI ON MADE BY THE LD. COUNSEL FOR THE ASSESSEE 14. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE MATERIALS AVAILABLE ON RECORD. IT IS CONTENDED ON BEHALF OF MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 63 THE ASSESSEE THAT THE LD. CIT(A) DID NOT CONSIDER OPE NING CAPITAL OF RS.8,43,150/-. THIS OPENING CAPITAL WAS OUT O F GIFT FROM FATHER AND OTHER FAMILY MEMBERS. LD. CIT(A) OUGHT TO HAVE CONSIDERED THIS. WE FIND THAT THE LD. CIT(A) HAD DECIDED THIS ISSUE IN PARA 4.8 OF THE IMPUGNED ORDER AS UNDER: OPENING CAPITAL RS.8,43,150/- THE APPELLANT HAD SHOWN THE OPENING BALANCE OF RS.8,43,150/-. THE APPELLANT WAS REQUESTED TO FURNI SH THE DOCUMENTARY EVIDENCES IN SUPPORT OF HIS CLAIM. THE APPELLANT SUBMITTED THAT HE IS EARNING FROM 2004 REGULARLY A SEMI-QUALIFIED AND FROM 2009 AS QUALIFI ED CHARTERED ACCOUNTANT. THE APPELLANT HAS NOT FURNISH ED THE DOCUMENTARY EVIDENCES LIKE SALARY CERTIFICATE A ND PROOF OF FILING OF RETURN OF INCOME IN THE EARLIER YEARS. THE APPELLANT FAILED TO ESTABLISH THAT HE WAS EARNI NG ANY INCOME AND PAYING TAXES. IN THE ABSENCE OF ANY EVIDENCES, THEREFORE, THE INCOME OF THE APPELLANT I S ENHANCED BY RS.8,43,150/-. PENALTY PROCEEDINGS U/S 271(1)(C) ARE SEPARATELY INITIATED ON THIS ENHANCEM ENT. FROM THE ABOVE, IT IS CLEAR THAT THE OPENING BALANCE WAS PART OF THE ENHANCEMENT MADE BY THE LD. CIT(A) AS WE HAVE DELETED THE ENHANCEMENT. THEREFORE, THIS GROUND OF THE ASSESSEEES APPEAL IS ALLOWED. MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 64 15. GROUND NO. 3 IS AGAINST THE ADDITION OF RS.1,00,00 0/- MADE ON ACCOUNT OF LOW MARRIAGE EXPENSES. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSION AS MADE IN THE WRITTEN SUBMISSION. THE SUBMISSIONS OF THE AS SESSEE ARE REPRODUCED AS UNDER: 6] GROUND NO. 3 CHALLENGING THE ADDITION OF RS. 1 ,00,000/- MADE TO THE TOTAL INCOME ON ACCOUNT OF LOW MARRIAGE EXPE NSES 6.1] THE APPELLANT IN THIS GROUND OF APPEAL HAS CHA LLENGED THE ADDITION OF RS. 1,00,000/- MADE TO THE TOTAL INCOME ON ACCOUNT OF L OW MARRIAGE EXPENSES. 6.2] THE APPELLANT GOT MARRIED ON 05-05-2011 I.E. D URING THE PREVIOUS YEAR 2011-12 RELEVANT TO THE ASSESSMENT YEAR 2012-13. TH E APPELLANT CATEGORICALLY STATED DURING THE COURSE OF REASSESSM ENT PROCEEDINGS THAT MARRIAGE CEREMONY WAS CONDUCTED AS PER THE RITUALS OF GAYATRI PARIWAR FROM THE NATIVE PLACE OF HIS SPOUSE, GANJ BASODA, VIDISH A. IT WAS FURTHER STATED THAT MAJOR EXPENSES OF MARRIAGE WERE BORNE BY THE I N-LAWS OF THE APPELLANT AND THEREFORE, AMOUNT OF RS. 1,75,000/- WAS INCURRE D BY THE APPELLANT ON ACCOUNT OF MARRIAGE RELATED EXPENSES. 6.3] HOWEVER, THE ASSESSING OFFICER DID NOT ACCEPT THE CONTENTIONS PUT FORTH BY THE APPELLANT AND MADE LUMP SUM ADDITION OF RS. 1,0 0,000/- TO THE TOTAL INCOME OF THE APPELLANT ON ACCOUNT OF MARRIAGE EXPE NSES WHICH IS AGAIN VERY HIGH-HANDED LOOKING AT THE INCOME OF THE APPELLANT AND HIS LIVING STANDARDS. 6.4] IT HAS BEEN IN VARIOUS JUDICIAL PRECEDENTS THA T LUMP SUM ADDITION MADE ON ACCOUNT OF MARRIAGE EXPENSES MERELY ON THE BASIS OF GUESS WORK WITHOUT BRINGING ON RECORD ANY SUCH EVIDENCE THAT ACTUAL EX PENDITURE WAS MUCH MORE AS SHOWN BY THE ASSESSEE IS NOT SUSTAINABLE. RELEVANT EXTRACTS FROM FEW OF THE JUDICIAL PRECEDEN TS WHICH HAVE ENUNCIATED THE ABOVE-MENTIONED PRINCIPLES ARE REPRODUCED HEREU NDER FOR YOUR READY REFERENCE: 6.5.1] THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT CENT. II, CHENNAI V/S A.N. DYANESWARAN [TAX CASE (APPEAL) NO.150 OF 2004] HAS HELD THAT: THE ADDITION IN RESPECT OF THE ESTIMATED EXPENSES TOWARDS MARRIAGE OF THE ASSESSEE'S SON SRI.SENTHURESWARAN IS OF RS.7,50,000 /-. THE ASSESSEE'S MOTHER HAD FILED AN AFFIDAVIT IN WHICH IT WAS STATE D THAT SHE INCURRED THE MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 65 EXPENDITURE FOR THE MARRIAGE OF HER GRANDSON. LIKEW ISE, THE ASSESSEE'S SON ACCEPTED THAT HE HAD MET THE EXPENSES INCURRED FOR THE SINGAPORE TRIP. IN HER WILL WHICH WAS PROBATED, THE ASSESSEE'S MOTHER HAD MENTIONED ABOUT THIS AFFIDAVIT SWORN IN JANUARY 1996. IT WAS ALSO BROUGH T ON RECORD THAT THE MARRIAGE EXPENDITURE IN RESPECT OF BOOKING THE HALL WAS MADE BY DHARMAMBAL NAMASIVAYAM TRUST. THESE EXPLANATIONS WE RE ACCEPTED BY THE TRIBUNAL. THE ADDITION MADE BY THE ASSESSING OFFICE R IS PURELY A GUESS WORK AND THE TRIBUNAL HAS RIGHTLY DELETED THE ADDITION M ADE BY THE ASSESSING OFFICER. [EMPHASIS SUPPLIED] 6.5.2] THE HONBLE ITAT INDORE BENCH IN THE CASE OF SHRI RAJAT MAHESHWARI V. DCIT AS REPORTED IN (2019) 34 ITJ 557 (TRIB. - INDO RE) HAS HELD THAT: 8. LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE ADDITION IS MERELY ESTIMATED BECAUSE NUMBER OF GUESTS WERE MUCH LESS A ND THE LIST WAS A PROPOSED LIST AND NOT A FINAL LIST OF THE INVITEES WHO ATTENDED THE CEREMONY. ON GOING THROUGH THE SUBMISSION MADE BY LD. COUNSEL FOR THE ASSESSEE BEFORE THE LOWER AUTHORITIES AS WELL AS THE LOOSE P APERS IMPOUNDED DURING THE COURSE OF SEARCH WE OBSERVE THAT AT PAGE 1 TO57 OF BS-4 AND PAGE 1 TO 97 OF BS-12 LIST OF TENTATIVE INVITEES WERE 1589 PERSONS BUT IN THE VERY SAME SET OF SEIZED DOCUMENTS AT ITEM 15 OF BS-1 THERE WAS INVOI CE DATED 18.2.2004 FOR PRINTING OF 1000INVITATION CARD. FURTHER THE PROOF OF PAYMENT TO THE CATERERS WERE ALSO PART OF SEIZED RECORDS. THE ADDITION MADE BY LD. AO SEEMS TO BE MERELY ESTIMATED BECAUSE OTHER THAN THE LIST OF INV ITEES NO OTHER MATERIAL EVIDENCE WAS UNEARTHED BY THE SEARCH TEAM WHICH COU LD PROVE THAT 1589 INVITEES ATTENDED THE CEREMONY. THEREFORE IN ABSENC E OF NO OTHER EVIDENCE PLACED BEFORE US BY REVENUE AUTHORITIES AND IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE IT WILL NOT BE JUSTIFIED TO SUSTAIN THE ESTIMATED ADDITION U/S 69C OF THE ACT MERELY ON THE BASIS OF LIST OF INVITEES. IN THE RESULT THE ADDITION OF RS. 12,19,550/- U/S. 69C OF THE ACT STANDS DELETED. GROUND NO. 2 OF ASSESSEES APPEAL IS ALLOWED. [EMPHASIS SUPPLIED] 6.5.3] THE HONBLE ITAT CHANDIGARH BENCH IN THE CAS E OF SUBHASH CHANDER GOEL V. ITO AS REPORTED IN (2019) 1 ITJ ONLINE 187 (TRIB. - CHANDIGARH) HAS HELD THAT: 19(II) THE ASSESSING OFFICER IN THE ASSESSMENT ORD ER, CONSIDERING THE STATUS OF THE ASSESSEE HAS PRESUMED THAT ASSESSEE MIGHT HA VE INCURRED SO MANY EXPENDITURE ON DIFFERENT OCCASIONS BUT NOTHING WAS BROUGHT ON RECORD WHETHER ASSESSEE HAS PERFORMED ANY OF SUCH CEREMONIES WHICH ARE LARGE IN NUMBER NOTED IN THE ASSESSMENT ORDER. THEREFORE, THE ORDER OF THE ASSESSING OFFICER WAS WHOLLY BASED UPON ASSUMPTIONS ON CERTAIN FACTS WHICH DID NOT EXIST. IN THIS CASE, AT THE TIME OF HEARING OF THE APPEAL, TH E ASSESSMENT RECORD WAS MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 66 AVAILABLE WITH LD. DR BUT NO TAX EVASION PETITION W AS CONTAINING. FROM THE SETTLEMENT ARRIVED AT BETWEEN THE HUSBAND AND WIFE BEFORE HON'BLE HIGH COURT, AS NOTED ABOVE, WHICH CONTAINED THE DISPOSAL OF THE INCOME TAX MATTER, WOULD CLEARLY REVEAL THAT FROM THE SIDE OF IN-LAWS OF MS. MEGHA GARG, DAUGHTER OF THE ASSESSEE, SAME INFORMATION MIGHT HA VE BEEN PROVIDED TO THE INCOME TAX DEPARTMENT SO AS TO INITIATE THE ABOVE P ROCEEDINGS BUT THE ASSESSING OFFICER DID NOT RECORD STATEMENT OF ANY O F THE IN-LAWS OF MS. MEGHA NOR ARRIVED AT FAIR ESTIMATE OF MARRIAGE EXPENSES. IT IS, THEREFORE, A CLEAR CASE OF ADDITIONS MADE MERELY ON ASSUMPTIONS AND PRESUMP TIONS. THUS, THERE WERE NO BASIS, WHAT-SO-EVER TO ESTIMATE HIGHER MARR IAGE EXPENDITURE AS AGAINST THE EXPLANATION GIVEN BY THE ASSESSEE. MAY BE THERE IS SOME VAGUE EXPLANATION GIVEN BY ASSESSEE BEFORE ASSESSING OFFI CER BUT IT WOULD NOT PROVE THE CASE OF THE ASSESSING OFFICER TO MAKE HIGHER ES TIMATE OF MARRIAGE EXPENSES. 20. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCU MSTANCES NOTED ABOVE, WE DO NOT SUSTAIN THE ADDITIONS MADE BY THE AUTHORITIE S BELOW. WE, ACCORDINGLY, SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND DELET E THE ADDITION OF RS. 8LACS ON ACCOUNT OF MARRIAGE EXPENSES. [EMPHAS IS SUPPLIED] 6.6] IN VIEW OF THE ABOVE, IT IS HUMBLY SUBMITTED T HAT LUMP SUM ADDITION OF RS. 1,00,000/- MADE BY THE ASSESSING OFFICER ON ACC OUNT MARRIAGE EXPENSES WAS WHOLLY BASED UPON ASSUMPTIONS AND GUES S WORK AND THEREFORE, IT REQUIRES TO BE DELETED IN ENTIRETY 16. ON THE CONTRARY, LD. SR. DR OPPOSED THE SUBMISSI ON MADE BY THE LD. COUNSEL FOR THE ASSESSEE 17. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE MATERIALS AVAILABLE ON RECORD. LOOKING TO THE FACTS OF TH E CASE, WE DO NOT SEE ANY INFIRMITY INTO THE FINDING OF THE AUTHORITIES BELOW. THE ADDITION MADE ON ACCOUNT OF LOW MARRIAGE EXPENSES IS HEREBY SUSTAINED. 18. GROUND NO.8 OF THE ASSESSEES APPEAL IS AGAINST CHARGING OF INTEREST IS CONSEQUENTIAL, WE HOLD ACCORDIN GLY. MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 67 19. GROUND NO.9 IS GENERAL IN NATURE WHICH NEED NO SEPARATE ADJUDICATION. 20. NOW COMING TO THE PENALTY APPEAL IN ITANO.584/IND/2018, THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1.1 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD CIT[AJ ERRED IN LEVIED PENAL TY ON THE AMOUNT OF ADDITION AS MADE BY HIM THROUGH ENHANCEMENT IN THE APPELLATE ORDER EVEN V HEN NO SPECIFIC CHARGE WAS FRAMED BY THE ASSESSING OFFICER IN THE SHOW CAUSE NOTICE AS ISSUED FOR PENALTY. 1.2J THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT[AJ ERRED IN LEVIED PENA LTY U/S 271[1][C) OF THE ACT ON BOTH THE CHARGES AND FA ILED TO FRAMED ANY SPECIFIC CHARGES AGAINST THE ASSESSEE WHICH IS CONTRARY TO THE SETTLED LEGAL POSITION. 2J THAT ON THE FACTS OF THE CASE AND IN LAW THE LD CIT[AJ ERRED IN LEVIED PENALTY U / S 271 [1)(C) OF THE ACT OF RS 11,38,760/- ON THE AMOUNT OF ADDITION AS MADE BY THE LD CIT [A) IN THE APPEAL THROUGH ENHANCEMENT EVEN WHEN THE ASSESSEE HAD PROPERLY EXPLAINED THE SOURCE WHICH WAS DULY ACCEPTED BY THE ASSESSING OFFICER. 3) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW THE LD CIT[A) ERRED IN LEVIED PENAL TY ON THE AMOUNT OF ADDITION AS MADE BY HIM THROUGH ENHANCEMENT WITHOUT DISPROVING THE DOCUMENTS AS FIL ED BY THE ASSESSEE. 4) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW THE LD CIT[A) ERRED IN LEVIED PENAL TY U/S 271[1][C] OF THE ACT OF RS 13,30,955/- . THE SA ID PENALTY SO LEVIED IS UNSUSTAINABLE, THE SAME NOW REQUIRES TO BE DELETED IN FULL. 1. MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 68 21. THE FACTS GIVING RISE TO THE PRESENT APPEAL ARE THAT WHILE FRAMING THE ASSESSMENT, THE ASSESSING OFFICER ALS O INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE AC T. THEREAFTER, THE ASSESSING OFFICER ISSUED A NOTICE U/S 271(1)(C) ON 29.12.2016. SUBSEQUENTLY, SHOW CAUSE NOT ICE WAS ISSUED ON 12.04.2017 AND 16.05.2017. THEREAFTER, T HE ASSESSING OFFICER IMPOSED PENALTY AMOUNTING TO RS.9,60,990/-. 22. AGGRIEVED AGAINST THIS THE ASSESSEE PREFERRED AN AP PEAL BEFORE THE LD. CIT(A) DISMISSED THE APPEAL AND ALSO IMPOSED PENALTY OF RS.13,30,955/- INCLUDING THE PENAL TY ON THE ENHANCED INCOME. AGAINST THIS ASSESSEE PREFERRE D PRESENT APPEAL BEFORE THIS TRIBUNAL. 23. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN IMPOSING THE PENALTY. UNDER THE FACTS OF THE PRESENT CASE AS SUCH T HERE IS NO CONCEALMENT OF FILING OF INACCURATE PARTICULAR OF INCOME. THE ASSESSMENT WAS REOPENED PURELY ON THE BASI S OF VERIFICATION OF SOURCE OF INVESTMENT MADE IN THE IMMOVABLE PROPERTY. HE SUBMITTED THAT THE REQUIREMENT OF MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 69 LAW IS NOT SATISFIED AS THE AUTHORITIES BELOW HAVE NOT MADE SPECIFIC CHARGE WHETHER THE ASSESSEE WAS GUILTY OF FURNISHING OF INACCURATE PARTICULARS OF INCOME OR CONCEALING OF THE PARTICULARS OF INCOME. 24. ON THE CONTRARY, LD. SR. DR OPPOSED THE SUBMISSI ON AND SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. LD. SR. DR SUBMITTED THAT THE AUTHORITIES BELOW WERE JUSTIFIE D IN INITIATING THE PENALTY PROCEEDINGS AND IMPOSING THE PENALTY. 25. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IN THIS CASE IN QUANTUM APPEAL (ITANO.86/IND/2018) SUBSTANTIAL ADDITION MADE BY THE ASSESSING OFFICER HAS BEEN DELETED AND REST OF THE ADDI TIONS MADE HAS BEEN SET ASIDE FOR VERIFICATION OF THE ASSESSIN G OFFICER. UNDER THESE FACTS, WE HEREBY SET ASIDE THE P ENALTY ORDER AND DIRECT THE AO TO DELETE PENALTY IN RESPECT OF ADDITIONS DELETED AND ADDITIONS IN RESPECT OF ISSUES W HICH HAVE BEEN SET ASIDE IN ITANO.86/IND/2018 TO THE FILE OF ASSESSING OFFICER FOR VERIFICATION. THUS, GROUNDS RAI SED IN THIS APPEAL ARE ALLOWED IN TERMS INDICATED ABOVE. MAHENDRA SINGH TOMAR /ITANO.86 & 584/IND/2018 70 26. IN RESULT, BOTH APPEALS FILED BY THE ASSESSEE ARE P ARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 11.11.202 0. SD/- (MANISH BORAD) SD/- (KUL BHARAT) A CCOUNTANT MEMBER JUDICIAL MEMBER INDORE; DATED :11/11/2020 PATEL/PS COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR, INDORE