Shri Sanjay Mehra,, Indore v. The I.T.O., Indore

ITA 26/IND/2010 | misc
Pronouncement Date: 18-02-2010 | Result: Allowed

Appeal Details

RSA Number 2622714 RSA 2010
Assessee PAN AJLPJ3049E
Bench Indore
Appeal Number ITA 26/IND/2010
Duration Of Justice 1 month(s) 5 day(s)
Appellant Shri Sanjay Mehra,, Indore
Respondent The I.T.O., Indore
Appeal Type Income Tax Appeal
Pronouncement Date 18-02-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted SMC
Tribunal Order Date 18-02-2010
Date Of Final Hearing 17-02-2010
Next Hearing Date 17-02-2010
Assessment Year misc
Appeal Filed On 13-01-2010
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE SMC BENCH INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER ITA NO.26/IND/2010 ASSESSMENT YEAR 2006-07 SANJAY MEHRA 39/1 MIG COLONY INDORE (PAN AJLPJ 3049 E) .APPELLANT VS INCOME TAX OFFICER 3(2) INDORE .RESPONDENT APPELLANT BY : SHRI TRIBHUVAN SACHDEVA ADV. RESPONDENT BY : SMT. APARNA KARAN SR. DR O R D E R THIS APPEAL IS BY THE ASSESSEE AGAINST THE ORDER O F THE LEARNED FIRST APPELLATE AUTHORITY DATED 5.10.2009 ON THE GROUND THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMI SSIONER OF INCOME- TAX (APPEALS) ERRED IN CONFIRMING THE ADDITION U/S 68 OF RS.2 LACS RECEIVED AS GIFT FROM THE YOUNGER BROTHER. 2. DURING THE HEARING OF THE APPEAL I HAVE HEARD S HRI TRIBHUVAN SACHDEVA LD. COUNSEL FOR THE ASSESSEE AND SMT. APA RNA KARAN LD. SR. DR. THE CRUX OF ARGUMENTS ON BEHALF OF THE ASSESSEE IS THAT DURING THE RELEVANT PERIOD THE ASSESSEE RECEIVED THE AMOUNT O F RS.2 LACS AS GIFT FROM HIS YOUNGER BROTHER THROUGH BANKING CHANNEL AN D THE GIFT DEED WAS DULY SIGNED. IT WAS ALSO CLAIMED THAT THE RETURN OF THE DONOR I.E. YOUNGER 2 BROTHER ALONG WITH STATEMENT OF AFFAIRS WAS DULY FU RNISHED BEFORE THE ASSESSING OFFICER. EVEN THE RETURN/STATEMENT OF THE BROTHER OF EARLIER YEARS I.E. 2004-05 AND 2005-06 WAS ALSO FURNISHED B Y THE ASSESSEE. IT WAS POINTED OUT THAT THE BROTHER OF THE ASSESSEE IS FIL ING HIS RETURN SINCE 1990-91 AND THE RETURN FOR ASSESSMENT YEAR 1995-96 WAS FRAMED U/S 143(3) OF THE ACT. THE IDENTITY GENUINENESS OF TRA NSACTION AND CAPACITY OF THE DONOR WAS CLAIMED TO BE PROVED. IT WAS EXPLA INED THAT THE DONOR IS A SALARIED EMPLOYEE IN A COMPANY FOR WHICH MY ATTEN TION WAS INVITED TO VARIOUS PAGES OF THE PAPER BOOK. IT WAS EMPHATICALL Y CLAIMED THAT THE RETURN IN THE CASE OF THE BROTHER GIVING GIFT TO TH E ASSESSEE WAS DULY ACCEPTED BY THE DEPARTMENT FOR WHICH MY ATTENTION W AS INVITED TO PAGE 7 OF THE PAPER BOOK. AT PAGE 10 OF THE PAPER BOOK TH E ASSESSEE ALSO FURNISHED THE PHOTOCOPY OF GIFT DEED. IT WAS STRONG LY PLEADED THAT THE ASSESSEE IS NOT SUPPOSED TO PROVE SOURCE OF SOURCE ESPECIALLY WHEN REQUEST WAS MADE TO THE DEPARTMENT TO ISSUE THE SUM MONS TO THE DONOR. IT WAS CLAIMED THAT ALL THE NECESSARY EVIDENCE/DOCU MENTS WERE DULY FURNISHED BEFORE THE ASSESSING OFFICER AS WELL AS B EFORE THE LD. CIT(A). THE LD. COUNSEL FOR THE ASSESSEE ALSO PLACED RELIAN CE UPON CERTAIN JUDICIAL PRONOUNCEMENTS WHICH WILL BE CONSIDERED WHILE DECID ING THE ISSUE. ON THE OTHER HAND THE LD. SR. DR STRONGLY DEFENDE D THE IMPUGNED ORDER BY CONTENDING THAT A DETAILED WELL REASONED F INDING HAS BEEN GIVEN BY THE LD. FIRST APPELLATE AUTHORITY FOR WHICH MY A TTENTION WAS INVITED TO 3 PAGE 6 PARA 2 OF THE IMPUGNED ORDER. THE CRUX OF AR GUMENTS OF THE LD. SR. DR IS THAT CAPACITY OF DONOR WAS NOT PROVED AND PAY MENT THROUGH CHEQUE IS ALWAYS NOT SACROSANCT BY FURTHER PLEADING THAT I T WAS THE UNEXPLAINED MONEY OF THE ASSESSEE ITSELF. 3. I HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. R EPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATERIAL AVAILABLE ON TH E FILE. BRIEF FACTS ARE THAT THE ASSESSEE IS AN ADVOCATE RECEIVED GIFT OF R S.2 LACS FROM HIS BROTHER NAMELY SHRI SUNIL KUMAR MEHRA WHICH WAS DI SALLOWED BY INVOKING SEC. 68 OF THE ACT BY THE LD. ASSESSING OFFICER ON THE PLEA THAT THE CAPACITY OF THE DONOR IS NOT PROVED. THE ASSESSMENT ORDER WAS AFFIRMED BY THE LD. FIRST APPELLATE AUTHORITY WHICH IS UNDER CHALLENGED BEFORE THIS TRIBUNAL. IT IS A WELL-SETTLED PROPOSITION THAT THE ASSESSEE WAS SUPPOSED TO PROVE THE IDENTITY CAPACITY AND GENUINENESS OF THE TRANSACTION. THE AMOUNT OF RS.2 LACS WAS PAID THROUGH BANKING CHANNE L AND SINCE THE DONOR IS THE REAL BROTHER OF THE ASSESSEE THEREFOR E IT CAN BE SAID THE IDENTITY AND GENUINENESS OF THE TRANSACTION IS PROV ED. THE DEPARTMENT HAS ONLY DOUBTED THE CAPACITY OF THE DONOR. TO SUBS TANTIATE THE CLAIM THE LD. COUNSEL FOR THE ASSESSEE TOOK ME THROUGH VA RIOUS PAGES OF THE PAPER BOOK. IT WAS NOT CONTROVERTED BY THE REVENUE AS CLAIMED BY THE ASSESSEE THAT THE DONOR HAD BEEN FILING THE RETURN SINCE ASSESSMENT YEAR 1990-91. AS A TEST CHECK THE ASSESSEE HAS FILED TH E COPY OF RETURN FOR ASSESSMENT YEAR 2005-06 AS PER WHICH THE BROTHER OF THE ASSESSEE HAS 4 SHOWN INCOME OF RS.80 868/-AND AS PER STATEMENT OF AFFAIRS AS ON 31.3.2005 THE OPENING BALANCE WAS RS.2 59 134/-. L IKEWISE FOR ASSESSMENT YEAR 2006-07 THE TOTAL INCOME WAS RS.99 709/- AND AS PER STATEMENT OF AFFAIRS AS ON 31.3.2006 THE OPENING B ALANCE WAS RS.300137/- OUT OF WHICH THE DONOR BROTHER GIFTED R S.2 LACS TO HIS ASSESSEE BROTHER. IT IS PERTINENT TO MENTION HERE T HAT THIS RETURN WAS ACCEPTED BY THE DEPARTMENT. IF THE ASSESSING OFFICE R WAS HAVING ANY DOUBT NOTHING PREVENTED HIM TO SUMMON HIS BROTHER I .E. DONOR AND TO SATISFY HIMSELF BUT THAT WAS NOT DONE BY HIM FOR TH E REASONS BEST KNOWN TO HIM. I HAVE ALSO SEEN THE DECLARATION OF GIFT (P AGE 10 OF THE PAPER BOOK) WHICH IS DULY SIGNED BY THE WITNESS WHEREIN I T IS CATEGORICALLY DECLARED THAT THE DONOR GIFTED RS.2 LACS TO HIS ELD ER BROTHER VIDE CHEQUE NO. 671436 DATED 17.2.2006 ISSUED BY PNB INDORE FO R A SUM OF RS.2 LACS. THIS GIFT DEED HAS ALSO NOT BEEN CHALLENGED BY THE REVENUE. ADMITTEDLY THE DONOR IS REGULARLY ASSESSED TO TAX AND THE ASSE SSMENT RECORD/RETURN OF EARLIER THREE YEARS TO THE RELEVANT ASSESSMENT Y EAR WERE DULY FILED BEFORE THE ASSESSING OFFICER. THE STATEMENT OF AFFA IRS AND ALSO THE CAPITAL ACCOUNT REFLECTING THE GIFT MADE BY THE DONOR WERE ALSO FILED BY THE ASSESSEE. THE COPIES OF SAVING A/C PASSBOOK OF THE DONOR WERE ALSO PLACED DURING ASSESSMENT PROCEEDINGS. IT SEEMS THAT THE LD . ASSESSING OFFICER DOUBTED THE GENUINENESS OF THE DONOR ON THE PLEA TH AT THE AMOUNT OF RS.1 85 9000/- WAS DEPOSITED ON VARIOUS DATES IN CA SH INTO THE BANK A/C 5 OF THE DONOR BETWEEN 10.5.2005 TO 8.2.2006. HOWEVER FACTS REMAINS THAT ALL THESE FACTS WERE DULY DECLARED BY THE DONOR IN HIS RESPECTIVE INCOME- TAX RETURNS WHICH WERE ACCEPTED BY THE DEPARTMENT. IN VIEW OF THESE FACTS I AM OF THE CONSIDERED OPINION THAT ON THE O NE HAND THE DEPARTMENT HAD BEEN ACCEPTING THE STATEMENT OF AFFA IRS OF THE DONOR AND ON THE OTHER HAND SUSPECTING THE CAPACITY OF T HE DONOR IN MY VIEW THE DEPARTMENT IS NOT PERMITTED TO TAKE A U TURN UN LESS AND UNTIL IT IS SUBSTANTIATED WITH DOCUMENTARY EVIDENCES. EVEN OTHE RWISE SUSPICION AND PRESUMPTION CANNOT TAKE THE SHAPE OF EVIDENCE HOWE VER STRONG IT MAY BE. IT IS ALSO A WELL-SETTLED PROPOSITION THAT THE ASSESSEE IS NOT SUPPOSED TO PROVE THE SOURCE OF SOURCE FOR WHICH I AM SUPPOR TED BY THE RATIO LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT IN CI T VS. METACHEM INDUSTRIES (2000) (245 ITR 160) (MP) RAJENDRA BANS AL VS. ITO (6 ITJ 122) (INDORE) AND NEMICHAND KOTHARI VS. CIT (264 ITR 254 ) (GAU). EVEN THE DEPARTMENT HAS NOT DOUBTED THE GENUINENESS OF THE D OCUMENTS FILED DURING THE ASSESSMENT PROCEEDINGS FIRST APPELLATE STAGE AND ALSO BEFORE THE TRIBUNAL. IN THE CASE OF ARAWALI TRADING CO. VS . ITO (2008) [220 CTR 622] (RAJ) IT WAS HELD THAT ONCE THE EXISTENCE OF THE CREDITOR IS PROVED AND SUCH PERSON OWNS THE CREDITS WHICH ARE FOUND IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE THE ASSESSEES ONUS STAND S DISCHARGED AND IS NOT FURTHER REQUIRED TO PROVE THE SOURCE. IT WAS FURTHE R HELD THAT MERELY BECAUSE THE DEPOSITORS EXPLANATION ABOUT THE SOURC E OF MONEY WAS NOT 6 ACCEPTABLE TO THE ASSESSING OFFICER IT CANNOT BE P RESUMED THAT THE DEPOSIT MADE BY THE CREDITOR IS THE MONEY BELONGING TO THE ASSESSEE ITSELF. IT WAS FURTHER HELD THAT IF THE CREDITORS EXPLANATION ABOUT THE SOURCE OF DEPOSIT IS NOT FOUND ACCEPTABLE THE INVE STMENT OWNED BY SUCH PERSON MAY BE SUBJECTED TO PROCEEDINGS FOR INCLUSIO N OF THE AMOUNT AS THEIR INCOME FROM UNDISCLOSED SOURCES OR IF THEY AR E FOUND BENAMI THE REAL OWNER CAN BE BROUGHT TO TAX. IN THE ABSENCE OF ANYTHING TO ESTABLISH THAT THE SOURCE OF CREDITORS DEPOSIT FLEW FROM THE ASSESSEE THE CASH CREDIT CANNOT BE TREATED AS UNEXPLAINED INCOME OF T HE ASSESSEE. THE HONBLE COURT WHILE COMING TO THIS CONCLUSION ALSO CONSIDERED THE DECISION IN CIT VS. DAULAT RAM RAVATMAL (87 ITR 34 9) (SC) AND CONCLUDED AS UNDER: ONCE THE EXISTENCE OF THE CREDITORS IS PROVED AND SUCH PERSONS OWN THE CREDITS WHICH ARE FOUND IN THE BOOKS OF THE ASSESSEE THE ASSESSEES ONUS STANDS DISCHARGED AND THE LATTER IS NOT FURTHER REQUIRED TO PROVE THE SOURCE FROM WHICH THE CREDITORS COULD HAVE ACQUIRED THE MONEY DEPOSITED WITH HIM AND THEREFORE ADDITION UNDER S. 68 CANNOT BE SUSTAINED IN THE ABSENCE OF ANYTHING TO ESTABLISH THAT THE SOURCES OF THE CREDITORS DEPOSITS FLEW FROM THE ASSESSEE ITSELF. IDENTICAL RATIO WAS LAID DOWN IN KALYAN MEMORIAL A ND CHARITABLE TRUST VS. ACIT (2009) (121 ITD 525); 124 TTJ 883 (A GRA) (TM) KANHAIYALAL JANGID VS. ACIT (2008) 217 CTR 354 (RAJ) MURLIDHAR LAHORIMAL VS. CIT (280 ITR 512) (GUJ) NEK KUMAR VS. ACIT (274 ITR 57 5) (JAI) KULBIR SINGH 7 VS. ACIT [124 TTJ (AGRA) (TM) 1] AND ACIT VS. UJAGA R SINGH OBERAI (2009) (121 TTJ 228) (DEL). 4. IT IS ALSO AN ADMITTED FACT THAT TRANSACTION BY CHEQUE ALWAYS MAY NOT BE SACROSANCT HOWEVER ONCE THE ASSESSEE PROVE S THE IDENTITY OF THE CREDITOR GENUINENESS OF THE TRANSACTION AND CREDI TWORTHINESS OF THE CREDITORS HIS BURDEN STANDS DISCHARGED AND THEN IT SHIFTS TO THE REVENUE TO SHOW THAT THOUGH THE AMOUNTS WERE COVERED BY THE CHEQUE THE AMOUNTS IN QUESTION ACTUALLY BELONGS TO THE ASSESSE E HIMSELF AS WAS HELD BY THE HONBLE GAUHATI IN NEMICHAND KOTHARI (264 IT R 254). IN THE PRESENT APPEAL SINCE THE DONOR BROTHER HAD BEEN RE GULARLY FILING RETURNS SINCE 1990-91 (PRESENT ASSESSMENT YEAR BEING 2006-0 7) AND THE DEPARTMENT HAD BEEN ACCEPTING THE SAME AND ALSO THA T IN 2005-06 THE FACTUM OF DONATING THE IMPUGNED AMOUNT TO THE REAL BROTHER BEING ACCEPTED BY THE DEPARTMENT ON THE SAME FACTS AND A LSO ON THE SAME AMOUNT THE DEPARTMENT IS NOT PERMITTED TO TAKE A C ONTRARY STAND. EVEN OTHERWISE NOTHING PREVENTED THE ASSESSING OFFICER TO EXAMINE HIS BROTHER I.E. DONOR IF THERE WAS ANY DOUBT ABOUT CAPACITY O R GENUINENESS OF THE GIFT IN QUESTION BUT THAT OPTION NOT EXERCISED BY THE LD. ASSESSING OFFICER FOR THE REASONS BEST KNOWN TO HIM. THE DEPARTMENT H AS MERELY PRESUMED THAT IT WAS THE UNEXPLAINED MONEY OF THE ASSESSEE H IMSELF. HOWEVER I HAVE FOUND THAT NO SUCH EVIDENCE HAS BEEN ADDUCED B Y THE REVENUE ON RECORD. IN VIEW OF THESE FACTS AND JUDICIAL PRONOUN CEMENTS I AM OF THE 8 CONSIDERED OPINION THAT NO ADDITION IS WARRANTED U/ S 68 OF THE ACT THEREFORE THIS APPEAL OF THE ASSESSEE IS ALLOWED. FINALLY THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18.2.2010. (JOGINDER SINGH) JUDICIAL MEMBER FEBRUARY 18 TH 2010 COPY TO APPELLANT RESPONDENT CIT CIT(A) DR GU ARD FILE