ROBIN AGARWAL,SILIGURI V. I.T.O., WARD - 1(2), SILIGURI

ITA 1910/KOL/2024

AI Insights

The case involves Robin Agarwal, the appellant, who contested the additions made to his income for the Assessment Year 2013-14 by the AO and confirmed by the CIT(A). The additions included Rs. 10,04,754, which was the premium for a LIC policy purchased shortly after his marriage, claimed to be funded by cash gifts from relatives and friends, and Rs. 10,95,712, representing the closing capital balance as of 31.03.2013. The Tribunal found procedural inadequacies in how the AO handled the verification of the gifts and the assessment of the capital balance, leading to the decision to allow the appeal partially and restore some matters for further examination.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 298964 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Gift; Principle of natural justice; Bogus
• Section: 250; 68; 69A

Judgement Text

"आयकर अपीलीय अिधकरण, कोलकाता पीठ ‘C(SMC)’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “C(SMC)” BENCH KOLKATA Before Shri Sanjay Garg, Judicial Member I.T.A. No.1910/Kol/2024 Assessment Year: 2013-14 Robin Agarwal .………. Appellant Block-7, Ground Floor, Akshaytara Complex, Sevoke Road, Siliguri-734001. (PAN: AIVPA4487C) vs. ASSESSING OFFICER, NFAC, DELHI ……..… Respondent (ITO, Ward-1(2), Siliguri. Appearances by: Shri Sujit Basu & Shri Rajiv Mukherjee, Advocates appeared on behalf of the Appellant Shri Manas Mondal, Addl. CIT, Sr. DR appeared on behalf of the Respondent Date of concluding the hearing: December 23, 2024 Date of pronouncing the order: December 30, 2024 आदेश / ORDER The captioned appeal has been preferred by the assessee against the order dated 30.07.2024 of the Ld. Commissioner of Income Tax, (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the “Ld. CIT(A)”] passed u/s. 250 of the Income-tax Act, 1961 (hereinafter referred to as the “Act”) for AY 2013-14. 2. The assessee in this appeal has taken the following grounds of appeal: “1. For that on the facts and circumstances & legal position of the case, the order u/s 250 passed by the Hon'ble CIT(A) is against the principle of natural justice. 2. For that on the facts and circumstances & legal position of the case, the addition of marriage gifts of Rs.10,04,754/- made by the Ld. AD u/s 69A of the Income Tax Act, 1961 without considering the details 2 ITA No. 1910/Kol/2024 Robin Agarwal AY 2013-14 furnished before him and without reference to any books of accounts maintained by the appellant was bad in law. The Ld. CIT(A) ought not to have confirmed the addition made by the Ld. AO. 3. For that on the facts and circumstances & legal position of the case, the addition of Rs.l0,95,712/-, being closing capital balance of the appellant as on 31.3.2023, made by the Ld. AO u/s 68 of the Income Tax Act, 1961 on the basis of the balance-sheet as at 31.3.2013 without considering the opening capital of Rs.9,31,714/- as on 1.4.2012 and without reference to any books of accounts maintained by the appellant was bad in law. The Ld. CIT(A) ought not to have confirmed the addition made by the Ld. AO. 4. That the appellant craves permission to add, amend, alter or vary all or any of the ground of appeal on or before the date of hearing of the appeal.” 3. Vide Ground no.1, the assessee has contested the action of the lower authorities in making / confirming the addition of Rs. 10,04,754/-. 4. The AO noted that the assessee had purchased a LIC policy of single premium of Rs.10,04,754/- on 24.01.2013. On being asked to explain the source of the said amount, the assessee explained before the Assessing Officer (in short “AO”) that the assessee got married on 14.06.2012. That the aforesaid amount was out of the cash gifts received from relatives and friends. The assessee submitted that as per the custom prevailing in his community, the relatives and friends make cash gifts to the newly married couple for their future wellbeing. On being asked to further explain in this respect, the assessee filed a list of 138 persons along with their names and addresses to the AO who had given small gifts ranging from Rs.9,000/- to Rs. 50,000/- per person to the assessee. Only one gift of Rs.3,00,000/- was alleged to have been given by his grand mother. The AO, however, observed that the aforesaid contention of the assessee was not satisfactory, he, therefore, treated the aforesaid amount as income of the assessee from unexplained sources. The Ld. CIT(A) confirmed the addition as made by the AO. 3 ITA No. 1910/Kol/2024 Robin Agarwal AY 2013-14 5. I have heard the rival contentions and gone through the records. In this case, there is no denial of the fact that the assessee got married during the Financial Year (FY) 2012-13 relevant to the assessment year (AY) 2013-14 under consideration. It is a common practice in India that invitees which included relatives and friends coming even from far flung areas give financial gifts to the married couple. The assessee has given list of 138 persons in this respect to the AO. However, the AO did not call for any verification from a single person and simply rejected the contentions of the assessee, which, in my view, was not justified. There is no denial of the fact that the assessee has got married during the year under consideration and the assessee might have received gifts from his relatives and friends on the said occasion. Considering that the assessee has given a large list of the relatives who had given gifts to the assessee and which evidence remained unrebutted in the assessment proceedings, therefore, I do not find justification on the part of the AO in making the impugned addition, the same is accordingly ordered to be deleted. 6. Vide ground no. 2, the assessee has contested the action of the lower authorities in making/confirming the addition of Rs.10,95,712/- being the closing capital balance of the assessee as on 31.03.2013. The plea of the assessee is that the AO while making the impugned addition of the aforesaid closing balance has ignored the opening balance of the year of Rs.9,31,714/- as on 01.04.2012. The Ld. Counsel for the assessee has submitted that the aforesaid opening balance of the assessee was coming out from the past assessment years and that even some of the amounts 4 ITA No. 1910/Kol/2024 Robin Agarwal AY 2013-14 were invested in the earlier years which shows that the aforesaid amount of opening balance was not a bogus figure. In view of the above submission of the assessee, the issue is restored to the file of the AO. The assessee will demonstrate before the AO about the opening balance and thereafter the AO will decide the issue after considering the details and submissions of the assessee. This ground of appeal of the assessee is, therefore, allowed fin the terms as indicated above. 7. In the result, appeal of the assessee treated as allowed for statistical purposes. Order is pronounced in the open court on 30.12.2024. Sd/-[Sanjay Garg] Ɋाियक सद˟/Judicial Member Dated: 30.12.2024. JD Sr. P.S Copy of the order forwarded to: 1. Appellant – Shri Rabin Agarwal 2. Respondent – ITO, Ward-1(2), Siliguri/AO, NFAC, Delhi. 3. CIT (A), NFAC, Delhi. 4. CIT, 5. CIT(DR), True Copy By Order Assistant Registrar, ITAT, Kolkata "