SHRI ANIL AGARWAL, Bhopal V. THE ACIT-1(2), Bhopal

ITSSA 212/IND/2015

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 2541 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 4 month(s) 10 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 16-11-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 16-11-2016
• Assessment Year: 2003-2004
• Appeal Filed On: 06-07-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: LALCHAND
• Assessee Lawyers: GIRISH AGARWAL
• Keywords: Unexplained cash credit; Gift; Salary income; Block assessment
• Section: 143(3); 142(1); 153A; 234B; 68; 69; 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER SHRI ANIL AGARWAL E-2,126, AREA COLONY, BHOPAL VS. ACIT 1(2) BHOPAL APPELLANT RESPONDENT PAN:AAUPA 0002 E APPELLANT BY SHRI GIRISH AGARWAL, CA RESPONDENT BY SHRI LAL CHAND, CIT(DR) DATE OF HEARING 16.11.2016 DATE OF PRONOUNCEMENT 16.11.2016 O R D E R PER O.P. MEENA, ACCOUTANT MEMEBR. THE ABOVE APPEALS ARE FILED BY THE ASSESSEE AGAINST THE COMMON ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-I, DTD. 21.05.20 15 FOR THE ASSESSMENT YEAR 2001-02, 2002-03 AND 2003-04. ITA (SS) NO.210 & 211 FOR THE ASSESSMENT YEAR 2001- 02 & 2002-03. 2. THE ASSESSEE HAS TAKEN THE GROUND NO. 1 TO 5 FOR T HE ASSESSMENT YEAR 2001-02 AND 2002-03 THAT AS ON DATE OF SEARCH, AS NO ASSES SMENT WAS PENDING, HENCE IT IS A CASE OF NON- ABATED ASSESSMENT AND THE REFORE, IN ABSENCE OF ANY INCRIMINATING MATERIAL THE ADDITION OF RS. 1 LAK H MADE UNDER SECTION 68 OF THE ACT FOR A.Y. 2001-02 AND RS. 2 LAKH ON ACCOUNT OF UNEXPLAINED GIFTS FOR I.T.A.(SS) NO.210, 211 &212/IND/2015 ASSESSMENT YEAR:2001-02, 2002-03 & 2003-04 SHRI ANIL AGARWAL/ITA (SS) NO.210, 211 &212/IND/201 5/A.Y. 01-02-02-03-&03-04 PAGE 2 OF 11 A.Y. 2002-03 MAY BE DELETED, AND, CONSEQUENTIAL CHARGI NG OF INTEREST UNDER SECTION 234A, 234B, 234C AND 234D MAY ALSO BE DELETED AS TAKEN IN GROUND NO. 6 OF APPEAL. 3. BRIEFLY, STATED THE FACTS ARE THAT THE ASSESSEE IS AN INDIVIDUAL, DERIVES INCOME FROM SALARY, INCOME FROM HOUSE PROPERTY AND INCOME FROM INTEREST. THE ASSESSEE FURNISHED HIS ORIGINAL RETURN OF INCOME, PER TAINING TO THE ASSESSMENT YEAR 2001-02 ON 31.10.2001 AND FOR A.Y. 2002-03 ON 20.01.2003 U/S. 139 OF THE INCOME-TAX ACT, 1961, DECLARING AN INCOME OF RS.1,42, 120/- AND RS. 1,38,180/- RESPECTIVELY, WHICH WERE DEEMED TO HAVE BEEN ACCEPTED U NDER SECTION 143(1) OF THE ACT AS NO ACTION WAS TAKEN BY WAY OF I SSUE OF NOTICE UNDER SECTION 143(2) OR 142(1) OF THE ACT, WITHIN THE TIM E LIMIT AVAILABLE. A SEARCH U/S 132 (1) WAS CONDUCTED ON 02.11.2004 IN THE CASE OF THE ASSESSEE. ACCORDINGLY, NOTICE UNDER SECTION 153C WAS ISSUED O N 21.4.2005. IN COMPLIANCE, TO THE NOTICE UNDER SECTION 153C, THE A SSESSEE, FURNISHED HIS RETURN OF INCOME ON 22.08.2005 FOR A.Y. 2001-02, D ECLARING THE SAME INCOME OF RS.1,42,210/- AS WAS DECLARED BY HIM IN THE ORIGI NAL RETURN FURNISHED U/S. 139 ON 31.10.2001, AND RETURN OF INCOME FOR A.Y. 200 2-03 WAS FILED ON 22.08.2005 DECLARING TOTAL INCOME OF RS. 1,38,180/- AS DECLARED IN ORIGINAL RETURN OF INCOME FILED ON 20.01.2003. THE ASSESSMEN T WAS MADE UNDER SECTION 153C READ WITH SECTION 143(3) OF THE ACT BY DETERMINING TOTAL INCOME AT RS.2,42,120/- BY MAKING ADDITION OF RS. 1 LAKH ON ACCOUNT OF UNEXPLAINED CASH CREDIT FOR A.Y. 2001-02 AND FOR A.Y. 2002-02 AT RS. 3,38,180/- BY MAKING ADDITION OF RS. 2 LAKHS ON ACCOUNT OF NON-GENUINE G IFTS RECEIVED BY THE SHRI ANIL AGARWAL/ITA (SS) NO.210, 211 &212/IND/201 5/A.Y. 01-02-02-03-&03-04 PAGE 3 OF 11 ASSESSEE. THE ASSESSEE CARRIED MATTER BEFORE THE LD. CIT (A), WHO HAS UPHELD THE FINDING OF THE AO FOR BOTH ASSESSMENT YEARS. 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ADDITION OF RS. 1 LAKH WAS MADE IN RESPECT LOAN OF RS. 1 LAKH TAKEN FROM SHR I A R SIDDIQUI, WHICH WAS MADE WITHOUT ANY REFERENCE TO SEIZED MATERIAL. THE LEARNED COUNSEL SUBMITTED THAT THE AO MENTIONED IN THE ASSESSMENT ORDE R THAT THE ASSESSEE WAS ASKED TO FURNISH CONFIRMATION LETTER OF THE LEN DER AS APPEARING IN THE BALANCE SHEET OF THE ASSESSEE. THUS, THE AO MADE ADDITION ONLY BASED ON NON-GENUINE LOAN AS APPEARING IN BALANCE SHEET FILED WITH REGULAR RETURN OF INCOME. IN THE COURSE OF SEARCH PROCEEDINGS, NOTHING HAS BEEN FOUND RELATING TO LOAN FROM SHRI A R SIDDIQUI. WITHOUT PREJU DICE, IT WAS STATED THAT THE ASSESSEE FILED CONFIRMATION LETTER AND COPY OF BANK A CCOUNT FROM SHRI A R SIDDIQUI TO EXPLAIN THE GENUINENESS OF LOAN. SIMILARLY , THE ADDITION OF RS. 2 LAKH FOR A.Y. 2002-03 IS MADE ON ACCOUNT GIFTS TAKEN FROM 4 PERSON IS ALSO WITHOUT ANY BASIS OF SEIZED MATERIAL. THE LEARNED CO UNSEL SUBMITTED THE ASSESSEE AT PAGE 1 LAST LINE OF ASSESSMENT ORDER THE AO MENTIONED THE ASSESSEE SUBMITTED FOUR GIFT DEEDS ACCORDING TO WHI CH.. THE ASSESSEE WAS ASKED TO PRODUCE THE BANK ACCOUNTS OF ALL THE A BOVE FOUR DONORS. THE ASSESSEE HAS SUBMITTED 4 GIFT DEEDS, AS PER BALANCE S HEET. THE AO ASKED THE ASSESSEE TO PRODUCE THE DONORS. WHEREAS NO MATERIAL F OUND AND SEIZED DURING THE COURSE OF SEARCH. THE LEARNED COUNSEL FO R THE ASSESSEE, SUBMITTED THAT AS PER SECTION 153A OF THE ACT, THE ASSESSMENT I N THE CASE OF ASSESSMENT YEARS THAT HAVE ATTAINED FINALITY CAN BE INTERFERED ONLY ON BASIS OF SOME INCRIMINATING MATERIAL, DOCUMENTS UNEARTHED DURING S EARCH OR REQUISITION OF SHRI ANIL AGARWAL/ITA (SS) NO.210, 211 &212/IND/201 5/A.Y. 01-02-02-03-&03-04 PAGE 4 OF 11 DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH WHICH WAS NOT PRODUCED OR NOT ALREADY DISCLOS ED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. IN SUPPORT OF THIS PROPOSITION, THE LEARNED COUNSEL HAS PLACED RELIANCE IN THE CASE OF ANIL KATA RIA [IT (SS) NO.10/IND/2016 DTD. 14.07.2016] OF INDORE TRIBUNAL, KALANI BROTHERS [IT (SS)NO.71/IND/2014], ANANT STEEL PVT. LTD. [IT (SS) 28 TO 31/IND/2010], A GGARWAL ENTERTAINMENT (P.) LTD. [2016] 72 TAXMANN.COM 340 (DEL-TRIB) AND HON`BLE DELHI HIGH COURT IN THE CASE OF KABUL CHAWLA [2016] 380 ITR 573 (DEL.)/ [20 15] 61 TAXMANN.COM 412(DEL). 5. THE LD. DR RELIED ON THE ORDERS OF LOWER AUTHORITIE S. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PERUSED T HE MATERIAL AVAILABLE ON RECORD. THE CONTENTION OF THE LD. COUNS EL FOR THE ASSESSEE IS THAT FOR THE YEARS 2001-02 AND 2002-03, ASSESSMENT ORDERS ARE BAD IN LAW SINCE NO INCRIMINATING DOCUMENTS WERE FOUND DURING THE COURSE OF SEARCH. UP TO THE ASSESSMENT YEAR 2002-03, THE ASSESSMENTS ARE NOT ABAT ED AS THE TIME LIMIT FOR ISSUANCE OF NOTICE U/S 143(2)/142(1) HAD ALREADY EXPI RED. THE ASSESSEE HAD ALREADY FILED THE RETURNS FOR VARIOUS YEARS IN TIME AND SUBMITTED ALL THE DETAILS. FOR AND UP TO THE ASSESSMENT YEAR 2001-02 AND 2002-03 , WITHOUT FINDING ANY INCRIMINATING MATERIAL DURING THE COURSE OF SEARCH, NO ADDITIONS CAN BE MADE BASED ON ENTRIES IN THE BOOKS OF ACCOUNT, WHICH W ERE ALREADY RECORDED AND INCORPORATED IN THE BALANCE SHEET. IN T HE PRESENT APPEALS, WE FIND THAT THE ASSESSING OFFICER HAS MADE ADDITIONS BY INVOKING PROVISIONS OF SECTION 68 OF THE ACT BASED ON P & L ACCOUNT, CAPITA L ACCOUNT AND BALANCE SHEET, WHICH WERE ALREADY ON RECORD OF THE DEPARTMENT HAVING BEEN FILED BY SHRI ANIL AGARWAL/ITA (SS) NO.210, 211 &212/IND/201 5/A.Y. 01-02-02-03-&03-04 PAGE 5 OF 11 THE PRESENT ASSESSEES ALONG WITH ORIGINAL RETURNS OF INCOME. IN OTHER WORDS, IT IS NOT THE CASE OF THE ASSESSING OFFICER THAT ANY INCR IMINATING MATERIAL WAS FOUND BY HIM DURING THE COURSE OF SEARCH PROCEEDINGS W HICH COULD HAVE BEEN MADE A VALID BASIS FOR MAKING ANY ADDITION. ON THE OTHER HAND, LD. DRS HAVE DEFENDED THE ACTION OF THE REVENUE AUTHORITIES AS ABOVE BUT COULD NOT CONTROVERT THE FACTUAL SUBMISSION MADE BY THE LEA RNED COUNSEL OF THE ASSESSEE. 7. THE LEARNED COUNSEL FOR THE ASSESSEE RELIED IN THE CASE OF KALANI BROS. IN IT(SS)A NO.71/IND/2014 AND OTHERS WHEREIN THIS BENCH O F TRIBUNAL HAS DECIDED THAT IN THE ABSENCE OF INCRIMINATING MATERIAL DURING THE COURSE OF SEARCH, THE ASSESSING OFFICER CANNOT PASS ORDER U/S 153A R.W.S. S EC. 143(3) OF THE I.T. ACT. THE RELEVANT PORTION OF THE ORDER IS REPRODUCED HEREU NDER: 8. IN RESPECT OF 153A BAD IN LAW ON THE GROUND THA T ORIGINAL ASSESSMENT PROCEEDINGS U/S 143(3) WAS COMPLETED ON 29.12.2006 (HEREINAFTER REFERRED AS ORIGINAL ASSESSMENT ORDER FOR EASE OF REFERENCE), THE AO TREATED THE SAID LEASE TRANSACTION AS SALE TRANSACTION AND TAXED THE TOTAL SECURITY DEPOSIT RECEIVABLE AS SALE CONSIDERATION OF SALE OF LAND. THE ADDITION MA DE IN THE SEARCH ASSESSMENT ORDER PERTAINED TO THE ISSUE ALREADY DEALT IN THE ORIGINA L ASSESSMENT ORDER I.E. LEASE TRANSACTION CATEGORIZED AS SALE TRANSACTION. THE FA CT THAT THE AFORESAID ISSUE BEARS NO RELATION TO THE ANY OF THE MATERIAL / DOCUMENTS / RECORDS FOUND AND SEIZED DURING THE SEARCH ACTION ON 16.04.2009. LD. CIT (A) HAS RE LIED UPON THE CIRCULAR NO. 7 OF 2003, WHICH CLARIFIES THE POSITION OF THE PENDING A PPEALS AS ON THE DATE OF THE SEARCH. THE RELEVANT PORTION IS PRODUCED HEREWITH 9.'THE ASSESSING OFFICER SHALL ASSESS OR REASSESS T HE TOTAL INCOME OF EACH OF THESE SIX ASSESSMENT YEARS. ASSESSMENT OR REASSESSMENT, IF ANY, RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF SIX AS SESSMENT YEARS PENDING ON THE DATE OF INITIATION OF THE SEARCH UNDER SECTION 132 OR REQUISITION UNDER SECTION 132A, AS THE CASE MAY BE, SHALL ABATE. IT IS CLARIF IED THAT THE APPEAL, REVISION OR RECTIFICATION PROCEEDINGS PENDING ON THE DATE OF IN ITIATION OF SEARCH UNDER SECTION 132 OR REQUISITION SHALL NOT ABATE..' 10. ACCORDINGLY, AS FAR AS COMPLETED ASSESSMENTS AR E CONCERNED, THEY DO NOT ABATE. THE AO CANNOT PROCEED TO MAKE THE SAME ADDIT ION IN THE BLOCK ASSESSMENT WITHOUT ANY INCRIMINATING MATERIAL FOUND IN THE COU RSE OF SEARCH. THE SAID VIEW PREVENTS THE AO TO UNDO WHAT HAS ALREADY BEEN COMPL ETED AND HAS BECOME FINAL IN THE ORIGINAL ASSESSMENT PROCEEDINGS. SHRI ANIL AGARWAL/ITA (SS) NO.210, 211 &212/IND/201 5/A.Y. 01-02-02-03-&03-04 PAGE 6 OF 11 11. WE HAVE HEARD BOTH THE SIDES. WE HAVE ALSO GON E THROUGH THE CASE LAWS RELIED UPON BY BOTH THE SIDES. WE HAVE ALSO CONSIDERED VAR IOUS RELEVANT FACTS OF THE CASE. IT IS A SETTLED LEGAL POSITION THAT ONCE A SEARCH A ND SEIZURE ACTION HAS TAKEN PLACE U/S 132 OF THE ACT OR A REQUISITION HAS BEEN MADE U /S 132A, THE PROVISIONS OF SECTION 153A TRIGGED AND ASSESSING OFFICER IS BOUND TO ISSU E NOTICE U/S 153A OF THE ACT. ONCE NOTICES ARE ISSUED U/S 153A OF THE ACT THEN AS SESSEE IS LEGALLY OBLIGED TO FILE RETURN OF INCOME FOR SIX YEARS. THE ASSESSMENT AND REASSESSMENT FOR SIX YEARS SHALL BE FINALISED BY THE ASSESSING OFFICER. IT IS ALSO HEL D BY VARIOUS COURTS THAT ONCE NOTICE U/S 153A OF THE ACT ISSUED, THEN ASSESSMENT FOR SIX YEARS SHALL BE AT LARGE BOTH FOR ASSESSING OFFICER AND ASSESSEE HAVE NO WARRANT OF L AW. IT HAS BEEN ALSO HELD THAT IN THE ASSESSMENT YEARS WHERE ASSESSMENTS HAVE BEEN AB ATED IN TERMS OF SECOND PROVISO TO SECTION 153A THEN ASSESSING OFFICER ACTS UNDER ORIGINAL JURISDICTION AND ONE ASSESSMENT IS MADE FOR TOTAL INCOME INCLUDING THE A DDITION MADE ON THE BASIS OF SEIZED MATERIAL. BUT WHERE THERE IS NO ABATEMENT OF ASSESSMENTS AND ASSESSMENTS WERE COMPLETED ON THE DATE OF SEARCH THEN ADDITION CAN BE MADE ONLY ON THE BASIS OF INCRIMINATING DOCUMENTS OR UNDISCLOSED ASS ETS, ETC. IN THESE CASES THERE WAS NO INCRIMINATING DOCUMENT FOUND AND SEIZED. NO ASSE SSMENT PROCEEDINGS WERE ABATED IN THESE ASSESSEES. THUS ASSESSMENTS FOR TH ESE ASSESSMENT YEARS WERE COMPLETED ON THE DATE OF SEARCH. THE ASSESSMENTS WE RE COMPLETED U/S 143(3) OF THE ACT READ WITH SECTION 153A/153C OF THE ACT AFTE R THE SEARCH. THERE WAS NO ABATEMENT OF ANY PROCEEDINGS IN THESE CASES FOR THE SE ASSESSMENT YEARS IN TERMS OF SECOND PROVISO TO SECTION 153A OF THE ACT. THERE IS NO SEIZED MATERIAL BELONGING TO THE ASSESSEE WHICH WAS FOUND AND SEIZED IN RELATION TO ADDITIONS MADE. IN A RECENT DECISION, HON'BLE DELHI HIGH COURT IN THE CASE OF C IT VS. KABUL CHAWLA (SUPRA) HAS HELD THAT COMPLETED ASSESSMENTS CAN BE INTERFERED W ITH BY THE ASSESSING OFFICER WHILE MAKING ASSESSMENT U/S 153A OF THE ACT, ONLY O N THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR R EQUISITION OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE CO URSE OF SEARCH WHICH WAS NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. IN ALL THESE CASES NO ASSESSMENTS WERE PENDING ON THE DATE OF SEARCH FOR THESE ASSESSMENT YEARS. NO ASSESSMENTS WERE ABA TED IN TERMS OF SECOND PROVISO TO SECTION 153A OF THE ACT. HON'BLE DELHI HIGH COU RT IN THE CASE OF CIT VS. KABUL CHAWLA (SUPRA) HAS CONSIDERED VARIOUS HIGH COURT DE CISIONS RELIED UPON BY THE LEARNED DR. THE HON'BLE DELHI HIGH COURT HAS CONSID ERED THE CASES OF CANARA HOUSING DEVELOPMENT CO. VS. DCIT; MADUGULA VS. DCIT ; CIT VS. CHETANDAS LAXMANDAS AND CIT VS. ANIL KUMAR BHATIA (SUPRA). T HE ONLY DECISION OF THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. RAJ KUM AR ARORA; 367 ITR 517 RELIED ON BY THE LEARNED DR WAS NOT CONSIDERED BY HON'BLE DELHI HIGH COURT WHILE DECIDING THE ISSUE IN THE CASE OF KABUL CHAWLA. THE HON'BLE ALLA HABAD HIGH COURT HAS REVERSED THE ORDER OF THE TRIBUNAL AND REMANDED THE ISSUE TO THE TRIBUNAL TO CONSIDER THE APPEAL OF THE DEPARTMENT ON MERITS. IT IS A SETTLED LEGAL POSITION THAT WHEN TWO VIEWS ARE POSSIBLE ON A PARTICULAR ISSUE THEN THE VIEW FA VOURABLE TO THE ASSESSEE SHOULD BE FOLLOWED AS HELD BY THE HON'BLE APEX COURT IN THE C ASE OF CIT VS. VEGETABLE PRODUCTS; 88 ITR 192. RESPECTFULLY FOLLOWING THE D ECISION OF THE HON'BLE APEX COURT, WE DISMISS THE GROUND OF APPEALS OF THE REVENUE. DE PARTMENTAL APPEALS ARE DISPOSED ACCORDINGLY. 8. WE, HAVE CONSIDERED THE ABOVE CASE LAWS AND FOLLOWIN G THE ABOVE ORDER OF THIS BENCH, ALLOW THE APPEALS FILED BY THE ASSESSEES O N THE ISSUE OF SECTION SHRI ANIL AGARWAL/ITA (SS) NO.210, 211 &212/IND/201 5/A.Y. 01-02-02-03-&03-04 PAGE 7 OF 11 153C R.W.S. SECTION 143(3) OF THE I.T. ACT WHEREIN WE HAVE ALREADY HELD THAT IN ABSENCE OF ANY INCRIMINATING DOCUMENTS FOUND AND SEI ZED DURING THE COURSE OF SEARCH, THE ASSESSING OFFICER IS NOT JUSTIFIED I N MAKING THE ADDITIONS IN NON- ABATED ASSESSMENT ORDERS WHILE PASSING THE ORDERS U/S 1 53A R.W.S. 143(3) OF THE ACT. THUS, WE QUASH THE NON-ABATED ASSESSMENT ORD ERS FOR THE A.YS.2001- 02 AND 2002-03. ACCORDINGLY, THE ASSESSEES APPEALS F OR A.Y. 2002-03 AND 2002-03 IS ALLOWED. I T A (SS) NO. 212/IND/2015[ A.Y. 2003-04] 9. HOWEVER, SINCE THE ASSESSMENT FOR THE A.Y. 2003-04 I S ABATED, THE PRESENT ISSUE IN ASSESSEES APPEAL IT (SS) A NO.212/IND/2015 F OR THE A.Y. 2003-04 IS DISCUSSED HEREUNDER. 10. GROUND NO. 1 RELATES TO NON ABATED ASSESSMENT, THE LEARNED COUNSEL FOR THE ASSESSEE, FAIRLY CONCEDED VIDE HIS WRITTEN SUBMISSION S FILED DURING THE COURSE OF HEARING BEFORE US, THAT THE ASSESSMENT FOR A.Y. 20 03-04 IS ABATED. THEREFORE, THIS GROUND OF APPEAL IS DISMISSED. 11. THE GROUND NO. 2 TO 5 ARE RELATES TO THE ADDITION OF RS. 2 LAKH MADE ON ACCOUNT OF GIFT RECEIVED FROM 4 PERSONS NAMELY SHRI S UBHASH KUMAR (RS. 50,000), SMT. LATA DEVI (RS. 50,000), SMT. SARLA DH AR (RS. 40,000) AND SHRI SITNDER KUMAR SEHGAL (RS. 60,000). 12. BRIEFLY, FACTS ARE THAT IN THE CASE OF SHRI SUBHASH AND SMT. LATA BOTH OF GWALIOR FROM WHOM THE GIFTS OF RS. 50,000/ EACH IS CL AIMED TO HAVE RECEIVED THROUGH DEMAND DRAFT PREPARED IN SAME BRANCH OF SAME BAN K HAVING CONSECUTIVE SERIAL NUMBER. SIMILARLY IN THE CASE OF SMT . SARLA RS. 40000/- AND SHRI SATINDER RS. 60,000/- BOTH OF JABALPUR. THE AO AS KED THE ASSESSEE TO SHRI ANIL AGARWAL/ITA (SS) NO.210, 211 &212/IND/201 5/A.Y. 01-02-02-03-&03-04 PAGE 8 OF 11 PRODUCE ALL THE FOUR DONORS WITH THEIR BANK ACCOUNT, BUT THE ASSESSEE HAS FAILED TO PRODUCE THE DONORS ON THE PRETEXT OF SHORT OF TIME EVEN THOUGH SUFFICIENT TIME ALLOWED TO THE ASSESSEE. THE ASSESSE E ASKED THE AO TO ISSUE SUMMONS TO THE DONORS AT THE FAG END TIME BARRING DA TE OF THE ASSESSMENT. THUS, THE ASSESSEE HAS FAILED TO PROVE GENUINENESS O F GIFTS THE AO ADDED THE SAME AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT. 13. THE LD. CIT (A) ALSO UPHELD THE ACTION OF THE AO BY O BSERVING THAT THERE IS NO DIRECT BLOOD RELATIONSHIP BETWEEN THE DONORS AND THE A PPELLANT. THERE WAS NO OCCASION ON THE DATES OF GIFT RECEIVED. THE GIFT S WERE STATED TO HAVE GIVEN OUT OF LOVE AND AFFECTION BUT THE EXTENT OF IN TENSITY OF LOVE AND AFFECTION IS THAT THE ASSESSEE COULD NOT PRODUCE THE SO-CALLED DONORS. THUS, THE GENUINENESS OF TRANSACTION NOT PROVED AND LOOKI NG THE SURROUNDING CIRCUMSTANCES AND HUMAN PROBABILITY THE GIFTS SHOWN BY TH E APPELLANT WERE NOT FOUND TO BE GENUINE. THE CLAIM OF THE ASSESSEE T HAT NO ADDITION UNDER SECTION 68 CANNOT BE MADE WHERE BOOKS OF ACCOUNTS ARE NOT MAINTAINED, HOWEVER THE LD. CIT (A) RELAYING ON THE DECISION I N THE CASE OF P. V. AJAY NARAYAN VS. ITO 57 TTJ 159(ITAT-BANG) HELD THAT WHE RE NO BOOKS OF ACCOUNTS WERE MAINTAINED BY THE ASSESSEE THOUGH ADDITION MAY N OT BE POSSIBLE UNDER SECTION 68 OF THE ACT, THAT TRIBUNAL CAN SUSTAIN TH E ADDITION U/S. 69 OF THE ACT. IN THE INSTANT CASE ALSO, THE ADDITION ON ACCO UNT OF UNEXPLAINED GIFTS CREDITED IN THE APPELLANT`S BANK ACCOUNT CAN BE MADE U/S . 69 OF THE ACT. THE LD. CIT (A) FURTHER STATED THE ASSESSEE HAS FUR NISHED A STATEMENT OF AFFAIRS AS WELL AS BALANCE SHEETS. THE HON`BLE ITAT DELHI IN THE CASE OF NAUSHABA RANA VS. ACIT (2007) 109 ITD 288(DEL-ITAT) OBSERVED THAT SINCE THE ASSESSEE SHRI ANIL AGARWAL/ITA (SS) NO.210, 211 &212/IND/201 5/A.Y. 01-02-02-03-&03-04 PAGE 9 OF 11 HAD FURNISHED HER STATEMENT OF AFFAIRS, ADDITION OF GIFTS RECEIVED DURING THE YEAR CAN BE U/S. 68 AS WELL AS U/S69 OF THE ACT. 14. BEING, AGGRIEVED THE ASSESSEE FILED THIS APPEAL BEFORE THE TRIBUNAL. THE LEARNED COUNSEL FOR THE ASSESSEE, SUBMITTED THE ASSES SEE HAS NOT MAINTAINING ANY BOOKS OF ACCOUNTS, NOR REQUIRED TO MAINTAIN THE S AME, HENCE, SECTION 68 DOES NOT APPLY. WITHOUT PREJUDICE, THE ASSESSEE DISCHA RGED INITIAL BURDEN BY SUBMITTING DOCUMENTS AND DETAILS ABOUT GIFT RECEIVED. THE LEARNED COUNSEL ALSO CITED SOME CASE LAWS IN SUPPORT OF HIS VIEW. 15. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PERUSED T HE MATERIAL AVAILABLE ON RECORD AND FIND THAT THE ASSESSEE HAS F AILED TO PRODUCE THE SO- CALLED DONORS BEFORE THE AO IN SPITE HAVING ALLOWED S UFFICIENT TIME TO HIM. FURTHER, THERE WAS NO OCCASION ON WHICH DATE THE GI FTS WERE GIVEN NOR THE DONORS HAVE BLOOD RELATIONSHIP WITH THE ASSESSEE. THE ASSESSEE HAS TRIED TO SHIFT HIS BURDEN ON THE AO FOR ASKING TO ISSUE SUMMO NS TO DONORS WHEN THERE WAS NO TIME WAS LEFT. THE ASSESSEE HAS ALSO FAILED T O FURNISH REQUIRED DOCUMENTS AND REQUIRED DETAILS TO PROVE GENUINENESS OF GIFTS. FURTHER THE LD. CIT (A)RELIED IN THE CASE OF NAUSHABA RANA VS. ACIT (2007) 109 ITD 288(DEL- ITAT) OBSERVED THAT SINCE THE ASSESSEE HAD FURNISHED HER STATEMENT OF AFFAIRS, ADDITION OF GIFTS RECEIVED DURING THE YEAR CAN BE U /S. 68 AS WELL AS U/S69 OF THE ACT. SIMILARLY ADDITION OF GIFTS CAN BE MADE U/S. 69 OF THE ACT AS HELD BY TRIBUNAL IN THE CASE OF P. V. AJAY NARAYAN VS. ITO 5 7 TTJ 159(ITAT-BANG) HELD THAT WHERE NO BOOKS OF ACCOUNTS WERE MAINTAINED BY TH E ASSESSEE THOUGH ADDITION MAY NOT BE POSSIBLE UNDER SECTION 68 OF THE A CT, THAT TRIBUNAL CAN SUSTAIN THE ADDITION U/S. 69 OF THE ACT. HOWEVER WE FIND THAT DONOR SHRI SHRI ANIL AGARWAL/ITA (SS) NO.210, 211 &212/IND/201 5/A.Y. 01-02-02-03-&03-04 PAGE 10 OF 11 SUBHASH KUMAR, AND SMT. LATA DEVI ARE CLAIMED TO BE RELA TIVE OF THE ASSESSEE, WHO ARE ASSESSED TO INCOME TAX, WHO HAVE FILED DECLARATION OF GIFT, DEED OF GIFTS ACCEPTANCE AND COPY OF INCOME TAX RETURN ACT., AND GIFT IS BY BANKING CHANNEL, THE SAME CAN BE TREATED AS GEN UINE AS THE IDENTITY, GENUINENESS OF TRANSACTION AND CREDITWORTHINESS HAS ESTABLISHED, THEREFORE, CONSIDERING THE CIRCUMSTANCES OF THE CASE, GIFTS OF RS. 50,000/ EACH RECEIVED FROM SHRI SUBHASH KUMAR AND SMT. LATA DEVI BEING REL ATIVE OF THE ASSESSEE IS HELD TO BE GENUINE, HENCE, ADDITION OF RS. 1 LAKH IS DELETED, AND BALANCE ADDITION RS. 1 LAKH IN RESPECT OF SHRI SATINDER AN D SMT. SARLA IS CONFIRMED AS THE ASSESSEE HAS FAILED TO FURNISH REQUIRED DOCUMENT S TO PROVE GENUINENESS OF GIFTS. HENCE, THE GROUND NOS. 2 TO 5 OF APPEAL ARE PARTLY ALLOWED. 16. SO FAR GROUND NO. 6 RELATING TO CHARGING OF INTERES T UNDER SECTION 234A, 234B 234C AND 234D IS CONCERNED, WE ARE OF THE VIEW THAT IT IS MANDATORY AS HELD IN THE CASE OF ANJUM M. H. GHASWALA 252 ITR 1 (SC) , THEREFORE, IT IS UPHELD. HOWEVER, THE AO WILL ALLOW CONSEQUENTIAL RELIEF ON G IVING EFFECT TO THIS ORDER. THIS GROUND OF APPEAL IS THEREFORE, PARTLY ALLOWED. 17. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR THE ASSESSMENT YEAR 2001-02 AND 2002-03 AND APPEAL FOR THE ASSESSMENT YE AR 2003-04 IS PARTLY ALLOWED. 18. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 16 .11.2016. SD/- (D.T.GARASIA) JUDICIAL MEMBER SD/- (O.P.MEENA) ACCOUNTANT MEMBER SHRI ANIL AGARWAL/ITA (SS) NO.210, 211 &212/IND/201 5/A.Y. 01-02-02-03-&03-04 PAGE 11 OF 11 DATED :16 TH NOVEMBER, 2016.