SHRI RAMESH CHAND MITTAL, KOTA V. INCOME TAX OFFICER, WARD-2-2, KOTA

ITA 954/JPR/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 1606 (ITAT-JAIPUR)
• Duration Of Justice: 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-06-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 10-08-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KARNI DAN JCIT DHK
• Assessee Lawyers: B L BHOJWANI
• Keywords: Gift
• Section: 143(3); 68

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES B, JAIPUR JH JES'K LH 'KEKZ] YS[KK LNL; ,OA JH FOT; IKY JKO] U;KF;D LNL; DS LE{K BEFORE: SHRI RAMESH C SHARMA, AM & SHRI VIJAY PAL RAO, JM VK;DJ VIHY LA -@ ITA NO. 954/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2012-13 RAMESH CHAND MITTAL, 172, VALLABH BARI, KOTA-324007 (RAJASTHAN) CUKE VS. I.T.O., WARD 2(2), KOTA. LFKK;H YS[KK LA -@THVKBZVKJ LA-@ PAN/GIR NO.: ACTPM 0075 G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI B.L. BHOJWANI (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI KARNI DAN (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 31/05/2019 MN?KKS 'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 11/06/2019 VKNS'K@ ORDER PER: R.C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD.CIT(A), KOTA DATED 13/04/2018 FOR THE A.Y. 2012-13 IN THE MATTER OF ORDER PASSED U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT, THE ACT). FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE: 1. THAT THE LD. CIT(A), ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, HAS ERRED IN UPHOLDING THE ADDITION OF CASH GIFT OF RS. 4,00,000/- MADE BY THE ASSESSING OFFICER U/S 68 OF THE INCOME TAX ACT, 1961. 2. THAT THE LD. CIT(A), ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, HAS ERRED IN UPHOLDING THE DISALLOWANCE OF RS. ITA 954/JP/2018_ RAMESH CHAND MITTAL VS. ITO 2 1,56,538/- MADE BY THE ASSESSING OFFICER RELATING TO INTEREST PAID BY THE ASSESSEE ON UNSECURED LOANS. 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF WHOLESALE KIRANA BUSINESS. DURING THE COURSE OF SCRUTINY ASSESSMENT, THE A.O. OBSERVED THAT THE ASSESSEE HAD RECEIVED A CASH GIFT OF RS. 4,00,000 FROM HIS MOTHER-IN-LAW SMT. PREMI DEVI ON 31.05.2011. THE DONOR IS ASSESSABLE TO INCOME TAX. THE AO HAS ADDED THIS GIFT AS UNDISCLOSED INCOME OF THE ASSESSEE BY OBSERVING AS UNDER: (I) THE GIFT HAS BEEN MADE IN CASH. (II) THE GIFT IS SHOWN TO HAVE BEEN RECEIVED ON 31.05.2011 BUT IN THE GIFT DEED, THE DATE IS MENTIONED AS 28.09.2011. (III) THE ANNUAL INCOME OF THE DONOR WAS ONLY RS. 2,49,712. (IV) THE DONOR WAS NOT PRODUCED BEFORE THE AO FOR EXAMINATION. 3. BY THE IMPUGNED ORDER, THE LD. CIT(A) CONFIRMED THE ACTION OF THE A.O. AGAINST WHICH THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE ITAT. 4. IT WAS ARGUED BY THE LD. AR OF THE ASSESSEE THAT THE ADDITION MADE BY THE LD. AO IS BASED ON SUSPICION, PRESUMPTIONS AND ITA 954/JP/2018_ RAMESH CHAND MITTAL VS. ITO 3 ASSUMPTIONS AND NOT ON ANY CONCRETE EVIDENCE OR CIRCUMSTANCE. SUSPICION, HOWEVER STRONG, CANNOT TAKE PLACE OF PROOF. THERE IS NO BAR IN LAW ON CASH GIFTS. 5. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND FROM THE RECORD THAT DURING THE COURSE OF ASSESSMENT, IT WAS EXPLAINED TO THE AO THAT THE GIFT WAS RECEIVED ON 31.05.2011 BY THE ASSESSEE FROM HIS MOTHER IN LAW WHO WAS HAVING SUFFICIENT CASH IN HAND AT THE TIME OF GIVING GIFT AS PER INCOME RETURNED DURING THE YEAR. THE GIFT DEED WAS WRITTEN ON 28.09.2011 AND DUE TO OVERSIGHT, THIS VERY DATE WAS MENTIONED AS THE DATE OF GIFT IN THE GIFT DECLARATION. THE ASSESSEE ALSO FURNISHED A DULY SWORN AND AFFIRMED AFFIDAVIT, DATED 04.02.2015, TO THIS EFFECT. AN AFFIDAVIT IS AN IMPORTANT PIECE OF EVIDENCE TO PROVE OR TO DISPROVE A FACT WHICH CANNOT BE PROVED OR DISPROVED BY DOCUMENTARY EVIDENCE. THE AFFIDAVIT TOO HAS BEEN SUMMARILY REJECTED BY THE AO. 6. IT IS HELD IN THE UNDER-NOTED DECISIONS THAT IT IS NOT OPEN TO THE DEPARTMENT TO DISBELIEVE THE CONTENTS OF AN AFFIDAVIT UNLESS THE PERSON WHO GAVE THE AFFIDAVIT WAS PUT TO CROSS EXAMINATION AND, IF PUT TO CROSS EXAMINATION, NOT UNLESS THE ASSESSING OFFICER HAS FOUND FAULT WITH THE SAME : ITA 954/JP/2018_ RAMESH CHAND MITTAL VS. ITO 4 - MEHTA PARIKH & CO. V. CIT (1956) 30 ITR 181 (SC) - DILIP KUMAR ROY V. CIT (1974) 94 ITR 1 (BOM.) - RAJSHREE SYNTHETICS P. LTD. V. CIT (2002) 256 ITR 331 (RAJ.) 7. FROM THE RECORD WE FOUND THAT INCOME OF THE DONOR DURING THE YEAR WAS RS. 2,49,712/-. SHE WAS MOTHER IN LAW OF THE ASSESSEE HAVING SUFFICIENT CASH IN HAND AS ON 31/03/2011. FOR THIS EFFECT, THE ASSESSEE HAS ALSO FILED STATEMENT SHOWING AVAILABILITY OF CASH ON THE DATE OF GIFT. THE DONOR WAS AGED ABOUT 71 YEARS AT THAT TIME. HOWEVER, DUE TO POOR HEALTH, SHE COULD NOT APPEAR BEFORE THE A.O. MERE NON-APPEARANCE BEFORE THE A.O. COULD NOT BE MADE REASON TO DISBELIEVE THE GENUINENESS OF GIFT WHEN OTHER DOCUMENTARY EVIDENCES SO FILED SUPPORT THE FACT OF GIFT. FROM THE RECORD WE FOUND THAT THE CONFIRMATION FROM THE DONOR, COPY OF ACKNOWLEDGMENT OF RETURN OF INCOME AND COMPUTATION OF INCOME WERE SUBMITTED TO THE LD. AO DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS. 8. IN VIEW OF ABOVE DISCUSSION, WE RESTORE THE MATTER BACK TO THE FILE OF THE A.O. FOR DECIDING THE ISSUE AFRESH IN TERMS OF OUR ABOVE DIRECTION. 9. DURING THE COURSE OF ASSESSMENT, THE A.O. HAS ALSO DISALLOWED INTEREST OF RS. 1,56,538/- ON THE PLEA THAT INTEREST BEARING FUNDS HAVE ITA 954/JP/2018_ RAMESH CHAND MITTAL VS. ITO 5 BEEN DIVERTED FOR NON-BUSINESS PURPOSES. FROM THE RECORD, WE FOUND THAT BEFORE THE A.O. THE ASSESSEE HAS SUBMITTED STATEMENT OF INTEREST FREE FUND AVAILABLE WITH THE ASSESSEE IN THE FORM OF HIS CAPITAL TO THE TUNE OF RS. 26,08,598/- AND ALSO INTEREST FREE UNSECURED LOAN OF RS. 25,62,288/-. THUS, THE INTEREST FREE FUNDS AVAILABLE WITH THE ASSESSEE WAS MUCH MORE THAN THE INTEREST FREE AMOUNT GIVEN BY HIM. ACCORDINGLY, NO DISALLOWANCE OF INTEREST IS WARRANTED. WE DIRECT ACCORDINGLY. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH JUNE, 2019. SD/- SD/- FOT; IKY JKO JES'K LH 'KEKZ (VIJAY PAL RAO) (RAMESH C SHARMA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 11 TH JUNE, 2019 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI RAMESH CHAND MITTAL, KOTA. 2. IZR;FKHZ @ THE RESPONDENT- THE I.T.O., WARD 2(2), KOTA. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 954/JP/2018) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR