Smt. Anju R.Agarwal, Dahod V. The ACIT.,Cent.Circle-1, Baroda

ITSSA 551/AHD/2010

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9396 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 5 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 13-09-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 04-09-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 08-06-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIMALENDU VERMA
• Keywords: Gift; Opportunity of being heard
• Section: 143(3); 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMEDABAD BEFORE SHRI G.C.GUPTA , VICE PRESIDENT AND SHRI T.R. MEENA, ACCOUNTANT MEMBER IT(SS)A NO. 551 & 552/AHD/2010 ASSESSMENT YEARS : 03-04 & 05-06 RESP. SMT. ANJU R AGRAWAL 4, MEGHDOOT SOCIETY, CHAKALIYA ROAD, DAHOD V/S . ACIT, CENTRAL CIRCLE-1, BARODA PAN NO. A CICPA4028Q (APPELLANT) .. (RESPONDENT) BY REVENUE SHRI VIMALENDU VERMA, CIT D.R. /BY ASSESSEE SMT. URVASHI SODHAN, A.R. /DATE OF HEARING 04.09.2013 /DATE OF PRONOUNCEMENT 13.09.2013 O R D E R PER : SHRI T.R.MEENA, ACCOUNTANT MEMBER THESE TWO APPEALS FILED BY THE ASSESSEE WHICH HAVE EMANATED FROM THE ORDERS OF LD. COMMISSIONER OF INCOME-TAX (APPEA LS)-IV, AHMEDABAD, DATED 19.03.2010 FOR 03-04 & 22.03.2010 FOR A.Y. 05 -06. ARGUMENTS IN BOTH APPEALS ARE SAME. THEREFORE, WE ARE DECIDING BOTH APPEALS IN A CONSOLIDATE ORDER FOR THE SAKE OF CONVENIENCE. THE GROUNDS OF ALL APPEALS ARE AS UNDER:- IT(SS)A NO. 551/AHD/2010 (A.Y. 03-04) 1. THE LEARNED CIT (APPEALS) ERRED IN HOLDING THAT THE CAPITAL INTRODUCTION OF RS.15180 WAS UNEXPLAINED AND FURTHE R ERRED IN IT(SS)A NOS. 551 & 552/AHD/2010 A.YS. 03-04 & 05-06 RESPECTIVELY PAGE 2 HOLDING THAT THE ASSESSING OFFICER WAS JUSTIFIED IN MAKING ADDITION IN THE ASSESSMENT ORDER PASSED U/S 153A R.W.S. 143(3) OF THE ACT. 2. THE LEARNED CIT (APPEALS) ERRED IN HOLDING THAT YOUR APPELLANT HAD NOT EXPLAINED THE CREDITWORTHINESS IN RESPECT OF THE GIFTS RECEIVED FROM VARIOUS PARTIES AMOUNTING TO RS .435000/- AND FURTHER ERRED IN CONFIRMING THE ADDITION. 3. THE LEARNED CIT (APPEALS) ERRED IN NOT AFFORDING PROPER OPPORTUNITY TO THE APPELLANT FOR EXPLAINING THE CRE DITWORTHINESS AND GENUINENESS OF THE GIFTS. THE LD. CIT(APPEALS) ERR ED IN ACCEPTING OBSERVATION / FINDINGS OF THE ASSESSING OFFICER WHI CH WERE WITHOUT ANY BASIS OR SPECIFIES. IT(SS)A NO. 552/AHD/2010 (A.Y. 05-06) 1. THE LEARNED CIT (APPEALS) ERRED IN HOLDING THAT THE AMOUNT OF RS.2,59,000/- INTRODUCED IN THE CAPITAL ACCOUNT OF THE PROPRIETARY FIRM WAS UNEXPLAINED AND FURTHER ERRED IN CONFIRMIN G THE ADDITION OF RS.259000/-. 2. THE LEARNED CIT (APPEALS) ERRED IN HOLDING THAT THE ASSESSING OFFICER WAS JUSTIFIED IN MAKING ADDITION IN THE ASSESSMENT ORDER PASSED U/S. 153A R.W.S. 143 (3) OF THE ACT. 2. FIRST WE TAKE IT(SS)A NO. 551/AHD/2010 FOR A.Y. 20 03-04 GROUND NO. 1 IS AGAINST CONFIRMING THE ADDITION OF RS.15,180/- AS UNEXPLAINED CAPITAL. THE A.O. FOUND THAT THERE WAS A CAPITAL ADDITION OF RS.15,180/- IN CASH AS A CASH INTRODUCED OUT OF SAV INGS. THE A.O. GAVE REASONABLE OPPORTUNITY OF BEING HEARD ON THIS ISSUE , WHICH WAS REPLIED BUT THE EXPLANATION WAS NOT FOUND SATISFACTORY TO THE A.O. THUS, HE MADE ADDITION OF IT(SS)A NOS. 551 & 552/AHD/2010 A.YS. 03-04 & 05-06 RESPECTIVELY PAGE 3 RS. 15,180/- AS UNDISCLOSED INCOME. THE CIT(A) CON FIRMED THE ADDITION BY OBSERVING THAT THE APPELLANT HAD NOT ESTABLISHED SO URCE OF CASH INTRODUCED IN CAPITAL BEFORE THE A.O. AS WELL AS BEFORE ME. THE LD. COUNSEL FOR THE APPELLANT ARGUED THAT THIS CASH WAS DEPOSITED IN THE CAPITAL ACCOUNT FROM THE PAST SAVINGS. THIS IS THE SMALL AMOUNT AND IS EXPLAINAB LE DUE TO PAST SAVINGS. AT THE OUTSET, LD. CIT D.R. VEHEMENTLY RELIED UPON THE ORDER OF THE CIT(A). KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE CASE AND BEING SMALL AMOUNT, WE TREAT THIS AMOUNT AS EXPLAINED AS THE AS SESSEE MADE WITHDRAWAL FOR THE HOUSEHOLD AND OTHER PURPOSES. 3. THE SECOND AND THIRD GROUNDS OF APPEAL ARE AGAIN ST CONFIRMING THE ADDITION OF RS.4,35,000/- ON ACCOUNT OF GIFTS. THE A.O. FOUND THAT THE ASSESSEE HAS SHOWN GIFT OF RS.4,35,000/- FROM THREE PERSONS. THE A.O. GAVE REASONABLE OPPORTUNITY OF BEING HEARD TO EXPLAIN TH E GIFT WITH EVIDENCE. ON THIS EVIDENCE, HE HAD CONCLUDED THAT THE CREDITWORT HINESS OF THE DONOR WAS NOT ESTABLISHED. THE RETURNS WERE FILED BY THE DON OR BELOW TAXABLE LIMIT. THE CASH AVAILABLE WITH THE ASSESSEE WAS NOT CONVINCING TO PROVE THE GIFT AS GENUINE. THUS, HE MADE ADDITION OF RS.4,35,000/-. THE CIT(A) ALSO CONFIRMED THE ADDITION BY OBSERVING THAT THE APPELL ANT HAD CHANGED THE DATE OF GIFTS AND AMOUNT IN CASE OF MANJU AND ALSO ADDED ON NEW DONOR RAMGOPAL VYAS. THE GIFTS BEFORE THE ASSESSING OFFICER WERE FOR RS.4,35,000/-. SHRI RAMGOPAL VYAS HAD STATED TO BE GIVEN GIFT OF RS.1,0 1,000/- VIDE DEMAND DRAFT NO. 940205 DATED 28.09.02 BUT NO SUCH CREDIT WAS AP PEARING IN THE COPY OF BANK ACCOUNT OF THE APPELLANT. ALL THE DECLARATION S WERE NOTARIZED BY ONE IT(SS)A NOS. 551 & 552/AHD/2010 A.YS. 03-04 & 05-06 RESPECTIVELY PAGE 4 NOTARY IN ALL THE CASES. LD. COUNSEL HAD NOT FILE D THE COPY OF INCOME TAX RETURN FOR A.Y. 03-04 ALONG WITH BALANCE SHEETS IN CASE OF DONOR. THE DONORS DID NOT HAVE PAN EXCEPT ONE CASE. THERE IS NO RELA TIONSHIP BETWEEN DONOR AND DONEE. THERE IS NO OCCASION TO GIVE GIFT AND C REDITWORTHINESS OF DONORS HAD NOT BEEN ESTABLISHED. THERE IS A NOMINAL DEPOS IT BEFORE THE GIFT OR AFTER THE DATE OF GIFT IN THE BANK ACCOUNT. HE RELIED UP ON VARIOUS CASE LAWS AND FINALLY CONFIRMED THE ADDITION. 4. NOW THE ASSESSEE IS BEFORE US. LD. COUNSEL FOR THE APPELLANT CONTENDED THAT PAGE NO.1 TO 35 OF THE PAPER BOOK SU BMITTED BEFORE THE A.O. & CIT(A) AND OUT OF THESE, PAGE NO.18 PERTAINED TO DE CLARATION OF GIFT FROM BIMLA DEVI AGRAWAL FOR RS.1 LAC, THE COPY OF RETURN OF IN COME, COPY OF BANK ACCOUNT AND MANJU DEVI AGRAWAL FOR RS.1,25,000/-, COPY OF R ETURN, SUSHILA BISSA FOR RS.1,10,000/-, COPY OF RETURN, COPY OF BANK ACCOUNT , DECLARATION FROM SHRI RAMGOPAL VYAS FOR RS. 1,01,000/-, COPY OF RETURN, C OPY OF BANK ACCOUNT, BUT THESE EVIDENCES WERE NOT PROPERLY ENTERTAINED BY TH E CIT(A). THEREFORE, SHE REQUESTED TO SET ASIDE THE CASE. LD. CIT D.R. FAI RLY ACCEPTED THE ASSESSEES PROPOSAL. ACCORDINGLY, WE SET ASIDE THIS GROUND OF APPEAL TO THE A.O. FOR DE NOVO AND TO DECIDE THE ISSUE AFTER PROVIDING REASON ABLE OPPORTUNITY TO THE ASSESSEE. 5. IN THE RESULT, THE ASSESSEES APPEAL IS PARTLY A LLOWED. IT(SS)A NOS. 551 & 552/AHD/2010 A.YS. 03-04 & 05-06 RESPECTIVELY PAGE 5 6. NOW WE TAKE IT(SS)A NO. 552/AHD/2010 FOR A.Y. 2005 -06 THE GROUND OF APPEAL IS AGAINST CONFIRMING THE ADD ITION OF RS. 2,59,000/- AS A CAPITAL ACCOUNT OF THE PROPRIETARY FIRM. THE A.O. OBSERVED THAT THERE WAS A CAPITAL ADDITION OF RS.2,59,000/- IN CA SH AS A CASH INTRODUCED OUT OF SAVING. THE A.O. HAVE REASONABLE OPPORTUNITY OF BEING HEARD WHICH WAS AVAILED BY THE ASSESSEE BUT THE EXPLANATION WAS NOT FOUND SATISFACTORY TO THE A.O. THUS, HE MADE ADDITION OF RS.2,59,000/- AS UN DISCLOSED INCOME. THE LD. CIT(A) ALSO CONFIRMED THE ADDITION BY OBSERVING THA T VIRTUALLY THERE IS NO EXPLANATION WITH THE APPELLANT FOR THE CASH INTRODU CTION IN THE CAPITAL ACCOUNT. THE APPELLANT HAD NOT ESTABLISHED THE SOURCE OF CAS H INTRODUCED IN HER CAPITAL ACCOUNT. THE LD. COUNSEL FOR THE APPELLANT CONTEND ED THAT THIS CAPITAL ADDITION WAS MADE OUT OF THE PAST SAVINGS AVAILABLE WITH THE ASSESSEE FOR WHICH THEY HAVE FILED THE COPY OF LEDGER FOR THE PERIOD A.Y. 0 5-06. COPY OF P&L ACCOUNT FOR THE YEAR UNDER CONSIDERATION OF M/S.PARTH INDUS TRIES, PROPRIETARY CONCERN OF THE APPELLANT AND BALANCE SHEET AND CLAIMED THAT TH IS CASH IS EXPLAINED. HOWEVER, LD. CIT D.R. VEHEMENTLY OPPOSED AND ARGUED THAT THERE IS NO SOURCE OF THIS CASH AND PRAYED TO CONFIRM THE ADDIT ION. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. WHATEVER EVIDENCES FILED BEFORE US WERE NE VER SUBMITTED BEFORE THE LOWER AUTHORITIES. THEREFORE, IN THE INTEREST OF J USTICE, THE CASE IS SET ASIDE TO CIT(A) FOR DE NOVO. THUS, ASSESSEES APPEAL IS ALL OWED FOR STATISTICAL PURPOSES. IT(SS)A NOS. 551 & 552/AHD/2010 A.YS. 03-04 & 05-06 RESPECTIVELY PAGE 6 8. IN THE COMBINED RESULT, ASSESSEES APPEAL IN IT( SS)A NO. 551/AHD/2010 FOR A.Y. 03-04 IS PARTLY ALLOWED AND IN IT(SS)A NO. 552/AHD/2010 FOR A.Y. 05- 06 IS ALLOWED FOR STATISTICAL PURPOSES. THESE ORDERS PRONOUNCED IN OPEN COURT ON 13.09.2013 SD/- SD/- (G.C.GUPTA) (T.R. MEENA) VICE PRESIDENT ACCOUNTANT MEMBER TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- 1. '#$ / APPELLANT 2. &'#$ / RESPONDENT 3. )*)+ ' ', / CONCERNED CIT 4. ' ',- ' / CIT (A) 5. 01'' +, ' ''' +, 34 * / DR, ITAT, AHMEDABAD 6. 167 89 / GUARD FILE. BY ORDER/ , :/3' )' ' ''' +, 34 * <