Smt. Kabita Roy, Asansol v. ITO, Ward - 2(3), Asansol, Asansol

ITA 1049/KOL/2008 | 2003-2004
Pronouncement Date: 18-03-2010

Appeal Details

RSA Number 104923514 RSA 2008
Bench Kolkata
Appeal Number ITA 1049/KOL/2008
Duration Of Justice 1 year(s) 9 month(s) 8 day(s)
Appellant Smt. Kabita Roy, Asansol
Respondent ITO, Ward - 2(3), Asansol, Asansol
Appeal Type Income Tax Appeal
Pronouncement Date 18-03-2010
Appeal Filed By Assessee
Bench Allotted B
Tribunal Order Date 18-03-2010
Assessment Year 2003-2004
Appeal Filed On 09-06-2008
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL : B BENCH : KOLKATA [ BEFORE SHRI D.K. TYAGI J.M. & SHRI B.C. MEENA A .M. ] I.T.A.NO. 1049 (KOL) OF 2008 ASSESSMENT YEAR 2002-03 SMT. KABITA ROY -VS- INCOME -TAX OFFICER WARD-2(3) ASANSOL (PAN-ADEPR2825F) ASANSOL. ( APPELLANT ) ( RESPONDE NT ) APPELLANT BY : SHRI A.K. GHOSH RESPONDENT BY : SHRI PIYUSH KOLHE O R D E R PER B.C.MEENA A.M. : THE APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 20 03-04 IS DIRECTED AGAINST THE ORDER DATED 13.3.2008 OF C.I.T .(A) ASANSOL. THE FIRST DISPUTE AGITATED IN THIS APPEAL IS AGAINST THE ADDITION OF RS.52 50 000/- AS CASH CREDIT U/S. 68 OF THE ACT. THE GROUNDS RAISED IN THIS RESPECT ARE AS UNDER :- 1. FOR THAT THE LD. CIT(A) AS WELL AS THE L D. ASSESSING AUTHORITY ABSOLUTELY WRONG WHILE TREATING THE ENTIRE GIFT AMOUNT OF RS.5250000/- AS INCOME OF YOUR APPELLANT PETITIONER FOR THE MATERIAL PERIOD. 2. FOR THAT THE ENTIRE GIFTS ARE DULY SUPPO RTED BY PROPER DOCUMENTS AND THE SAME CANNOT SIMPLY BE DISALLOWED AND TREATED AS INCOME OF THE A PPELLANT PETITIONER FOR MATERIAL PERIOD. 4. FOR THAT YOUR PETITIONER WAS NOT GIVEN RE ASONABLE TIME AND OPPORTUNITY TO SUBSTANTIATE THE AUTHENTICITY AND GENUINENESS OF THE GIFTS SO RE CEIVED AND ALSO THE GENUINENESS OF LOAN AS HAS BEEN RECEIVED DURING THE MATERIAL PERIOD. 2. THE FACTS OF THE CASE ON THE FIRST ISSUE ARE T HAT THE ASSESSEE IN HIS REVISED RETURN CLAIMED TO HAVE RECEIVED GIFTS FROM DIFFERENT 29 DO NORS TOTALLING TO RS.52 50 000/-. THE A.O. WITH A VIEW TO OBTAIN INFORMATION REGARDING TH E CLAIM OF GIFT ISSUED NOTICE ON 20/9/2006 U/S. 133(6) TO ALL THE DONORS AT THE ADDR ESSES PROVIDED BY THE ASSESSEE. NOTICES WERE SERVED UPON SOME OF THE PARTIES AND REST OF TH E NOTICES WERE RETURNED WITH THE POSTAL REMARK NOT KNOWN OR NOT FOUND. HOWEVER THE A. O. DID NOT RECEIVE ANY REPLY FROM THOSE DONORS WHO RECEIVED THE NOTICE EXCEPTING ONE SMT. USHA SUREKA WHO DEPOSITED CASH OF RS.1 50 500/- IN HER BANK ACCOUNT ON 16/7/2 002 AND TRANSFERRED ON THE SAME DAY 2 BY A DEMAND DRAFT OF RS.1 50 360/- IN FAVOUR OF THE ASSESSEE AND CONFIRMED BY HER AS GIFT TO THE ASSESSEE. ON 13/11/2007 THE A.O. AGAIN ISS UED NOTICE U/S. 133(6) TO ALL THE DONORS AND ALSO U/S. 131 ON 30/11/2007 REQUIRING THEM TO A PPEAR IN PERSON BEFORE HIM WITH ALL THE EVIDENCES IN SUPPORT OF GIFT. OUT OF THE 29 PA RTIES NOTICES COULD BE SERVED ONLY ON 18 PARTIES WHO ALTHOUGH DID NOT APPEAR BEFORE THE A.O . IN PERSON BUT SENT COPIES OF BALANCE SHEETS BANK STATEMENTS ACKNOWLEDGEMENT OF I.T. RE TURNS ETC. AND THE REMAINING NOTICES COULD NOT BE SERVED BY THE POSTAL AUTHORITIES. THE A.O. BROUGHT THIS FACT TO THE KNOWLEDGE OF THE ASSESSEE VIDE LETTERS DATED 4/12/2 007 & 11/12/2007 AND ASKED THE ASSESSEE TO FURNISH THE CORRECT ADDRESS OF THE PART IES. IN RESPONSE THE ASSESSEE VIDE LETTER DATED 13/12/2007 ASKED FOR 10 DAYS TIME WHICH WAS G RANTED AND ON 27/12/2007 THE ASSESSERES A/R APPEARED AND SUBMITTED BEFORE THE A .O. THAT THE ENTIRE GIFTS WAS GENUINE AND SHOULD BE ACCEPTED. ACCORDING TO THE A.O. 18 D ONORS ACKNOWLEDGED THE NOTICE AND THEY SENT XEROX COPIES OF BALANCE SHEETS BANK STAT EMENT ACKNOWLEDGEMENT OF I.T. RETURN ETC. WHICH WERE UNSIGNED. THE A.O. HAS REC ORDED HIS FINDING ON THESE EVIDENCES ON PAGES 3 TO 7 OF ASSESSMENT ORDER IN RESPECT OF 1 8 PARTIES AND OBSERVED THAT THE MODUS OPERANDI OF THE ASSESSEE WAS THAT SHE USED TO GIVE MONEY TO THE VARIOUS PARTIES AND THE PARTIES USED TO DEPOSIT IT PARTLY IN CASH AND PARTL Y BY TRANSFER FROM SOME OTHER ACCOUNT AND ISSUED CHEQUE FOR MAKING DEMAND DRAFT IN THE AS SESSEES NAME TO GIVE IT A COLOUR OF GIFT. HE FURTHER OBSERVED THAT IN ALMOST ALL THE CA SES THE ADDRESS OF THE DONORS WAS SAME WHEREAS THE ADDRESS MENTIONED IN I.T. RETURN AND BA NK PASS BOOK WAS DIFFERENT. THE A.O. FURTHER POINTED OUT THAT IN SOME CASES WHEN NOTICE U/S. 133(6)/131 WAS RETURNED UNSERVED WITH THE REMARK NOT KNOWN/NOT FOUND BUT SUBSEQUENT LY REPLIES WERE RECEIVED FROM THEM WITHOUT ANY SIGNATURE ON IT AND ALMOST ALL THE PERS ONS HAVE SAME SOURCE OF INCOME THAT TOO AROUND RS.45 000/-. THE A.O. FURTHER OBSERVED THAT THESE PARTIES ARE MAINTAINING BANK ACCOUNT WITH THE SAME BANKS VIZ. STATE BANK O F BIKANER & JAIPUR BHAWANIPUR BRANCH AND ING VAISAYA BANK KOLKATA AND ALL THE TR ANSACTIONS BY THEM WERE DONE ON SOME COMMON DATES IN THE MONTHS OF FEBRUARY AND MAR CH 2003. THE A.O. ALSO ISSUED LETTERS TO THESE BANKS TO VERIFY THE SOURCE OF DEPO SITS BUT HE DID NOT RECEIVE ANY REPLY FROM BANKS. THE A.O. THEREFORE HELD THAT THE ASSE SSEE COULD NOT ESTABLISH THE IDENTITY OF THE ALLEGED DONORS AND TREATED THE ENTIRE SUM OF RS .52 50 000/- AS INCOME FROM OTHER SOURCES AND ADDED THE SAME TO THE TOTAL INCOME U/S. 68 OF THE ACT. 3 3. ON APPEAL THE LD. C.I.T.(A) ENDORSED THE REASO NINGS OF THE A.O. TO HOLD THAT THE ASSESSEE HAD FAILED TO ESTABLISH WITH EVIDENCE THE GENUINENESS OF THE TRANSACTIONS AND CREDITWORTHINESS OF THE DONORS AND THUS TREATMENT O F THE ALLEGED GIFT OF RS.52 50 000/- AS UNDISCLOSED CASH CREDIT U/S. 68 OF THE ACT AND ADDI TION THEREOF TO THE ASSESSEES TOTAL INCOME BY THE A.O. BASED ON EVIDENCE WAS UPHELD. IN THIS REGARD THE LD. C.I.T.(A) RELIED UPON THE FOLLOWING DECISIONS :- I) RAKESH KALIA VS. CIT [286 ITR 357 (DEL)] II) RAMLAL AGARWAL VS. CIT [280 ITR 547 (ALL)] III) TECHNICAL GLASS INDUSTRIES VS. CIT [281 ITR 61 (ALL)] IV) ACIT VS. VISWANATH & CO. [292 ITR 225 (KARN)] V) M.S. SRINIVASA NAICKER VS. ITO [292 ITR 481 (MAD)] VI) CIT VS. BIJU PATNAIK [160 ITR 674 (SC)] 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT DURING THE YEAR UNDER APPEAL THE ASSESSEE RECEIVED GIFTS FROM 29 PERSONS OF A TO TAL SUM OF RS.52 50 000/-. THE NAMES & ADDRESSES OF THESE DONORS WERE MADE AVAILABLE TO THE REVENUE AUTHORITIES. HE FURTHER SUBMITTED THAT THE GIFTS WERE MADE BY EACH OF THE D ONORS BY CHEQUES/DEMAND DRAFTS AND THEY ARE ASSESSED TO TAX IN THEIR RESPECTIVE FILES. CONFIRMATIONS BALANCE SHEETS I.T. ACKNOWLEDGEMENTS OF THE DONORS WERE FILED BEFORE TH E A.O. THE A.O. UNJUSTIFIABLY DISBELIEVED THE GIFTS AND ADDED THE ENTIRE GIFTED A MOUNT U/S. 68 OF THE ACT. THE ASSESSEE DOES NOT MAINTAIN REGULAR BOOKS OF ACCOUNTS. THERE FORE PROVISIONS OF SEC. 68 DOES NOT ATTRACT TO THE CASE OF THE ASSESSEE. RELIANCE IN T HIS CONNECTION WAS PLACED ON THE DECISION OF ITAT DELHI BENCH IN THE CASE OF MS. MAYAWATI VS . DCIT [19 SOT 460 (DEL)]. HE FURTHER SUBMITTED THAT THE A.O. COULD NOT ESTABLISH HIS SUSPICION BY ANY EVIDENCE THAT THE AMOUNTS OF GIFT WERE THE MONEY GIVEN BY THE ASSESSE E IN ANY FORM AT ANY TIME TO THE DONORS. IN THE ABOVE CIRCUMSTANCES IDENTITY CREDI TWORTHINESS OF THE DONORS AS WELL AS GENUINENESS OF THE TRANSACTIONS ARE ALL ESTABLISHED . THEREFORE THERE WAS NO JUSTIFICATION FOR NOT ACCEPTING THE GIFTS RECEIVED BY THE ASSESSE E. 5. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTH ER HAND RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. HE HAS ALSO FILED A WRITTEN SUBMISSION WHEREIN HE HAS SUMMARIZED 4 THE REASONS ADOPTED BY THE A.O. AS WELL AS THE C.I. T.(A) FOR TREATING THE GIFTS AS UNEXPLAINED INCOME. HE FURTHER SUBMITTED THAT IN R ESPONSE TO NOTICES ISSUED BY THE A.O. TO ALL THE ALLEGED 29 DONORS NONE APPEARED BEFORE HIM. THAT UNSIGNED PHOTOCOPIES OF BALANCE SHEET I.T. RETURN ACKNOWLEDGEMENT ETC. WE RE SENT TO THE A.O. IN RESPECT OF ONLY 18 PARTIES. THAT IN RESPECT OF REMAINING 11 PARTIE S THE ASSESSEE HAD ONLY FILED AFFIDAVITS CONFIRMING THE GIFTS MADE BY THEM. HE FURTHER SUBMI TTED THAT ALL THE PERSONS WHO HAVE ALLEGEDLY GIVEN THE GIFTS TO THE ASSESSEE ARE STRAN GERS AND NOT RELATIVES OF THE ASSESSEE. THEREFORE IT CANNOT BE SAID THAT THE GIFTS WERE MA DE OUT OF NATURAL LOVE AND AFFECTION TOWARDS THE ASSESSEE. ALL THE ALLEGED DONORS WERE P ERSONS OF SMALL MEANS WHICH WOULD BE EVIDENT FROM THE BALANCE SHEETS SUBMITTED BY THE ASSESSEE HERSELF AND MOST OF THEM HAVE ANNUAL INCOME OF ABOUT RS.45 000/- AND CLAIMED TO HAVE MADE GIFTS RUNNING INTO LAKHS OF RUPEES. MOREOVER JUST BEFORE MAKING GIFTS THE ALLEGED DONORS MADE CASH DEPOSITS IN THEIR RESPECTIVE BANK ACCOUNTS AND THEN ISSUED CROSSED CHEQUES/DEMAND DRAFTS AND FURTHER BEFORE AND AFTER THE CASH DEPOSITS THE RE WAS HARDLY ANY MONEY LYING IN THESE BANK ACCOUNTS. HE SUBMITTED THAT MERE PAYMENT THROU GH BANKING CHANNEL IS NOT SACROSANCT NOR CAN IT MAKE A NON-GENUINE TRANSACTIO N GENUINE. HE THEREFORE SUBMITTED THAT THE ADDITION OF RS.52 500/- CONFIRMED BY THE L D. C.I.T.(A) SHOULD BE UPHELD. THE LD. DEPARTMENTAL REPRESENTATIVE IN SUPPORT HIS SUBMISSI ONS AND ACTION OF THE REVENUE AUTHORITIES RELIED ON THE FOLLOWING DECISIONS :- I) DCIT VS. PHOOLWATI DEVI [314 ITR (AT) 1 (DEL (0] II) CIT VS. KORLAY TRADING CO. [232 ITR 820 (CA L)] III) MANGILAL JAIN VS. ITO [315 ITR 105 (MAD)] IV) UNITED COMMERCIAL & INDUSTRIAL CO. P. LTD. [187 ITR 596 (CAL)] V) PRECISION FINANCE P. LTD. [208 ITR 465 (CAL)] VI) P. MOHANAKALA [291 ITR 278 (SC)] 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF THE PART IES AND PERUSED THE MATERIAL PLACED BEFORE US. THE FACTS OF THE CASE AS FOUND FROM THE RECORD HAVE BEEN DISCUSSED ABOVE. HOWEVER TO REPEAT THE UNDISPUTED FACTS ARE THAT T HE ASSESSEE CLAIMED TO HAVE RECEIVED GIFTS FROM 29 PERSONS RANGING BETWEEN RS.1 LAKH AND RS.2 50 000/- EXCEPTING TWO PERSONS WHO MADE GIFTS AROUND RS.45 000/-. THE A.O . AT THE FIRST INSTANCE ISSUED NOTICE 5 U/S. 133(6) TO ALL THE DONORS AT THE ADDRESSES PROV IDED BY THE ASSESSEE AND SAID NOTICES WERE SERVED UPON 22 PERSONS AND REMAINING 7 WERE RE TURNED UNSERVED WITH THE POSTAL REMARK NOT KNOWN/NOT FOUND. HOWEVER IN RESPONSE TO THE SAID NOTICE ONLY ONE DONOR SMT. USHA SUREKA SENT SOME DOCUMENTS IN SUPPORT OF HER MAKING GIFT OF RS.1 50 360/-. THE A.O. AGAIN ON 13/11/2007 & 30/11/2007 ISSUED NO TICES U/S. 133(6) & 131 TO ALL THE DONORS FOR PERSONAL APPEARANCE WITH SUPPORTING DOCU MENTS. THE SAID NOTICES COULD HAVE BEEN SERVED ONLY UPON 18 DONORS AND REMAINING NOTIC ES UPON 11 DONORS WERE RETURNED BY POSTAL AUTHORITIES AS EITHER THEY WERE NOT KNOWN OR NOT FOUND. THESE FACTS WERE BROUGHT TO THE KNOWLEDGE OF THE ASSESSEE BY THE A.O. VIDE HIS TWO LETTERS DATED 4/12/2007 & 11/12/2007 BUT THE ASSESSEE ALSO COULD NOT PRODUCE THESE PERSONS BEFORE A.O. EXCEPT CLAIMING THAT THE GIFTS WERE GENUINE. ON THE ABOVE FACTUAL POSITION IT IS EVIDENT THAT THE A.O. DURING ASSESSMENT PROCEEDINGS HAD OFFERED AMPL E OPPORTUNITIES TO THE ASSESSEE TO SUBSTANTIATE ITS CLAIM OF GENUINE GIFTS BY PRODUCIN G THE DONORS IN PERSONS AND THE EVIDENCES IN SUPPORT OF SUCH GIFTS. THEREFORE THE ALLEGATION OF THE ASSESSEE RAISED IN GROUND NO.4 ABOVE THAT REASONABLE TIME AND OPPORTUN ITY HAD NOT BEEN PROVIDED TO SUBSTANTIATE THE AUTHENTICITY AND GENUINENESS OF GI FT BEARS NO MERIT. 6.1. NOW COMING TO THE MERIT OF THE ADDITION IT I S A SETTLED LAW THAT THE ONUS TO PROVE THE GENUINENESS OF THE GIFT IS UPON THE ASSESSEE. TO DISCHARGE SUCH ONUS THE ASSESSEE HAS TO ESTABLISH THE IDENTITY OF THE DONOR THE CREDITW ORTHINESS OF THE DONOR AND THE GENUINENESS OF THE TRANSACTION. IN THIS CASE IDEN TITY OF THE DONORS IS NOT IN DISPUTE AS THE ASSESSEE HAS SUBMITTED THEIR AFFIDAVITS/DECLARATION S AND THE TRANSACTIONS WERE THROUGH BANKING CHANNEL. THEREFORE LET US EXAMINE WHETHER THE CREDITWORTHINESS OF THE DONORS AND THE GENUINENESS OF THE TRANSACTIONS ARE PROVED OR NOT. FROM THE DETAILS FURNISHED BY THE ASSESSEE WHICH ARE ONLY AFFIDAVITS/DECLARATION S OF THE DONORS CONFIRMING GIFTS IT IS SEEN THAT EXCEPT ONE OR TWO CASES ONLY I.T. FILE N O./GIR NO. HAS BEEN MENTIONED AGAINST THE DONORS WHEREAS PAN HAS BEEN INTRODUCED IN THE YEAR 1998 AND THE TRANSACTIONS TOOK PLACE IN THE YEAR 2002-03. APART FROM THESE DECLARA TIONS BY THE DONORS THE ASSESSEE COULD NOT PRODUCE BEFORE US ANY EVIDENCE BY WAY OF ANY I. T. ACKNOWLEDGEMENT OR ASSESSMENT ORDER OF ANY YEAR EVEN FOR THE YEAR UNDER CONSIDERA TION. THEREFORE IT IS NOW KNOWN WHETHER THE DONORS HAVE AT ALL FILED THEIR RETURNS OR NOT SHOWING THE TRANSACTION. IN THIS CONNECTION WE MAY REFER TO THE DECISION OF HONBLE CALCUTTA HIGH COURT IN THE CASE OF 6 NORTHERN BENGAL JUTE TRADING CO. LTD. VS. CIT [70 I TR 407 (CAL)] WHEREIN IT HAS BEEN HELD THAT WHEN CASH CREDIT ENTRY APPEARS IN THE ASS ESSEES BOOKS IN AN ACCOUNTING YEAR THE ASSESSEE HAS THE LEGAL OBLIGATION TO EXPLAIN TH E SOURCE OF SUCH RECEIPT. THE INITIAL ONUS IS ENTIRELY ON THE ASSESSEE BUT THE QUESTION WHETH ER SUCH ONUS HAS BEEN DULY DISCHARGED BY THE ASSESSEE OR HAS BEEN SHIFTED TO THE REVENUE CAN ONLY BE DETERMINED AFTER THE EVALUATION OF ALL THE SURROUNDING CIRCUMSTANCES. F OR DISCHARGING THE INITIAL ONUS TO PROVE GENUINENESS OF CASH CREDITS IT WAS NOT SUFFICIENT MERELY TO PRODUCE CONFIRMATORY LETTERS. 6.2. ACCORDING TO THE ORDERS OF THE AUTHORITIES BE LOW OUT OF 29 PERSONS ONLY 18 PERSONS SENT SOME PAPERS IN SUPPORT OF THEIR MAKING GIFTS TO THE ASSESSEE AND NOTICES UPON REMAINING 11 PERSONS COULD NOT BE SERVED AS THEY WE RE EITHER NOT KNOWN OR NOT FOUND. ON PAGES 3 TO 7 OF THE ASSESSMENT ORDER THE A.O. H AS GIVEN THE DETAILS OF THESE 18 DONORS BASED ON DOCUMENTS MADE AVAILABLE TO HIM. ON PERUS AL OF THE SAME IT IS FOUND THAT IN ALMOST ALL THE CASES THE DONORS HAVE DECLARED THEI R TOTAL INCOME DURING THE F.Y. 2002-03 ON AVERAGE OF RS.45 000/- OR SO AND IN ONE CASE IT WAS RS.1 02 000/- WHILE THE GIFT MADE BY EACH OF THEM AMOUNTED TO RS.1 LAKH TO RS.2 50 00 0/- EXCEPTING TWO PERSONS WHO MADE GIFTS AROUND RS.45 000/- AND THAT TOO TO AN O UTSIDER.AS STATED ABOVE THE DONORS WERE NOT RELATIVES OF THE ASSESSEE I.E. THEY WERE OUTSIDERS. IN THE CASE OF C.I.T. VS. ANIL KUMAR [292 I.T.R. 552] THEIR LORDSHIPS OF DELHI HI GH COURT HELD AS UNDER :- IN THE CASE OF GIFTS MERE IDENTIFICATION OF THE DON OR AND SHOWING THE MOVEMENT OF THE GIFT AMOUNT THROUGH BANKING CHANNELS IS NOT SUF FICIENT TO PROVE THE GENUINENESS OF THE GIFT. SINCE THE CLAIM OF GIFT I S MADE BY THE ASSESSEE THE ONUS LIES ON HIM NOT ONLY TO ESTABLISH THE IDENTITY OF T HE PERSON MAKING THE GIFT BUT ALSO HIS CAPACITY TO MAKE SUCH A GIFT. THAT THERE WAS NOTHING ON RECORD TO SHOW AS TO WH AT WAS THE FINANCIAL CAPACITY OF THE DONORS WHAT WAS THE CREDIT-WORTHINESS OF THE D ONORS WHAT KIND OF RELATIONSHIP THE DONORS HAD WITH THE ASSESSEE WHAT WERE THE SOURCES OF FUNDS GIFTED TO THE ASSESSEE AND WHETHER THEY HAD THE CAP ACITY OF GIVING LARGE AMOUNTS OF GIFT TO THE ASSESSEE. FURTHER THE ASSESSEE WAS ASKED TO APPEAR IN PERSONAL BEFORE THE ASSESSING OFFICER BUT NEVER APPEARED. THE ADDITION OF RS.20 LAKHS WAS JUSTIFIED. 6.3. IN THE LIGHT OF THE ABOVE DECISION AND ALSO KEEPING IN VIEW OF THE QUANTUM OF GIFT BY EACH OF THE DONORS IN COMPARISON TO THEIR INCOME IT IS UNBELIEVABLE THAT A PERSON HAVING SO MEAGER INCOME FOR THE WHOLE YEAR AND AFTE R HIS MEETING HOUSEHOLD EXPENSES 7 WILL BE MAKING GIFT OF RS.1 LAKH TO RS.2.5 LAKHS TO AN OUTSIDER. IT IS ALSO PERTINENT TO MENTION HERE AS IS EVIDENT FROM THE ASSESSMENT ORD ER AND WHICH THE ASSESSEE COULD NOT EXPLAIN THAT BEFORE MAKING GIFTS BY CHEQUES/DEMAND DRAFTS THE DONORS HAD DEPOSITED CASH IN THEIR RESPECTIVE BANK ACCOUNTS AND IMMEDIAT ELY THEREAFTER THEY TRANSFERRED THE AMOUNT TO THE ASSESSEE AND CLAIMED THE SAME TO BE G IFT. IN THE ABOVE CIRCUMSTANCES IN OUR CONSIDERED OPINION THE CREDITWORTHINESS OF THE DONORS AND THE GENUINENESS OF THE TRANSACTION ARE NOT SATISFACTORILY EXPLAINED TO DIS CHARGE THE ONUS OF THE ASSESSEE THAT THE DONORS WERE ACTUALLY CAPABLE OF MAKING GIFT OF SUCH HUGE AMOUNT IN COMPARISON TO THEIR OWN FINANCIAL CAPACITY. IN THIS CONNECTION WE MAY REFER TO THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF SUMATI DAYAL VS. CIT [ 214 ITR 801 (SC)]. IN THAT CASE THE ASSESSEE CLAIMED TO HAVE RECEIVED THE AMOUNTS FROM HORSE RACES WHICH WERE NOT ACCEPTED BY THE REVENUE AUTHORITIES. IT WAS HELD THAT FOR C ONSIDERING WHETHER THE APPARENT IS REAL MATTER HAS TO BE CONSIDERED BY APPLYING THE TEST OF HUMAN PROBABILITIES. HAVING REGARD TO THE CONDUCT OF THE ASSESSEE AND THE MATERIAL ON REC ORD THEIR LORDSHIPS HAVE DRAWN THE INFERENCE THAT THE WINNING TICKETS WERE PURCHASED B Y THE ASSESSEE AFTER THE EVENT AND THE MAJORITY OPINION OF THE SETTLEMENT COMMISSION APPLY ING THE TEST OF HUMAN PROBABILITIES WAS RIGHT THAT THE ASSESSEES CLAIM ABOUT THE AMOUN T BEING HER WINNINGS FROM RACES IS NOT GENUINE. RESPECTFULLY FOLLOWING THE RATIO OF THE AF ORESAID DECISION OF HONBLE SUPREME COURT AND KEEPING IN VIEW THE EVIDENCE ON RECORD W E ARE OF THE OPINION THAT APPLYING THE TEST OF HUMAN PROBABILITIES IT CANNOT BE BELIEVED T HAT A PERSON WHOSE TOTAL INCOME DURING THE YEAR DOES NOT WARRANT ANY SPARABLE AMOUNT FOR M AKING HUGE AMOUNT OF GIFT AFTER MEETING HIS HOUSEHOLD EXPENDITURE OF WHOLE YEAR WI LL GIVE GIFT OF RS.1 LAKH TO RS.2.5 LAKHS THAT TOO TO AN OUTSIDER. IN VIEW OF ABOVE WE HOLD THAT THE ASSESSEE IN THE PRESENT CASE HAS NOT BEEN ABLE TO ESTABLISH THE CREDITWORTH INESS OF THE DONORS AND THE GENUINENESS OF THE TRANSACTIONS. 6.4. THE LD. DEPARTMENTAL REPRESENTATIVE RELIED ON SEVERAL DECISIONS IN SUPPORT OF HIS SUBMISSION AND ONE OF SUCH DECISION WAS IN THE CASE OF CIT VS. P. MOHANAKALA (SUPRA). IN THIS CASE THEIR LORDSHIPS OF HONBLE SUPREME COU RT OBSERVED THAT THE A.O. C.I.T.(A) AND THE TRIBUNAL IN ONE VOICE HELD THAT THE EXPLANA TION OFFERED BY THE ASSESSEE AS REGARDS CASH CREDIT ENTRIES IS NOT ACCEPTABLE. THE MATERIA L AND THE EVIDENCE AVAILABLE ON RECORD ACCORDING TO EACH ONE OF THE AUTHORITIES LEAD TO ON E AND ONLY POSSIBLE INFERENCE THAT THE 8 SO-CALLED GIFTS RECEIVED BY THE ASSESSEE IN REALITY ARE NO GIFTS. THE RELEVANT PORTION OF THE CONCLUSION READS AS UNDER :- THE FINDINGS OF FACTS ARRIVED AT BY THE AUTHORITIES BELOW ARE BASED ON PROPER APPRECIATION OF THE FACTS AND THE MATERIAL AVAILABL E ON RECORD AND SURROUNDING CIRCUMSTANCES. THE DOUBTFUL NATURE OF THE TRANSACT ION AND THE MANNER IN WHICH THE SUMS WERE FOUND CREDITED IN THE BOOKS OF ACCOUN TS MAINTAINED BY THE ASSESSEE HAVE BEEN DULY TAKEN INTO CONSIDERATION BY THE AUTH ORITIES BELOW. THE TRANSACTIONS THOUGH APPARENT WERE HELD TO BE NOT RE AL ONES. MAY BE THE MONEY CAME BY WAY OF BANK CHEQUES AND WAS PAID THROUGH TH E PROCESS OF BANKING TRANSACTION BUT THAT ITSELF IS OF NO CONSEQUENCE. THAT BEING SO CONSIDERING THE FACTS AND CIRCUMSTAN CES OF THE CASE AND RESPECTFULLY FOLLOWING THE AFORESAID JUDICIAL PRONOUNCEMENTS WE FIND NO REASON TO INTERFERE WITH THE ORDER OF THE C.I.T.(A) UPHOLDING THE ADDITION OF RS .52 50 000/- TO THE INCOME OF THE ASSESSEE UNDER THE HEAD INCOME FROM OTHER SOURCES CLAIMED UNDER THE HEAD GIFT. HIS ORDER ON THIS ISSUE IS THEREFORE UPHELD AND THE G ROUNDS OF APPEAL OF THE ASSESSEE IN THIS RESPECT ARE REJECTED. 6.5. BEFORE PARTING WITH WE MAY MENTION THAT THE ASSESSEES LEARNED COUNSEL HAS ARGUED THAT THE ASSESSEE DOES NOT MAINTAIN ANY BOOK S OF ACCOUNT AND THEREFORE PROVISIONS OF SEC. 68 ARE NOT APPLICABLE TO THE CAS E OF THE ASSESSEE. BE THAT AS IT MAY IT IS UNDISPUTED FACT THAT IN THE ASSESSEE BANK ACCOUNT A MOUNTS ON DIFFERENT DATES FROM SEVERAL PERSONS WERE DEPOSITED THROUGH CHEQUES/ DEMAND DRAF TS WHICH SHE REFLECTED IN HER STATEMENT OF AFFAIRS AND COMPUTATION FILED ALONG WI TH THE RETURN OF INCOME. THESE CREDITS IN HER BANK ACCOUNT IN OUR CONSIDERED OPINION COU LD NOT BE SATISFACTORILY EXPLAINED BY PRODUCING ANY CORROBORATIVE AND CONCRETE EVIDENCE E ITHER BEFORE THE AUTHORITIES BELOW OR EVEN BEFORE US. THE EXPLANATION OF THE ASSESSEE IN SUPPORT OF SUCH RECEIPT OF AMOUNTS WAS ALSO FOUND TO BE NOT CONVINCING. THEREFORE CONSID ERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE WE HAVE NO OTHER ALTERNA TIVE BUT TO HOLD THAT THE ASSESSEE HAS FAILED TO PROVE THE SOURCE OF THESE CREDITS IN HER BANK ACCOUNT. IN THAT VIEW OF THE MATTER THESE CREDITS WERE NOTHING ELSE BUT ASSESSEES INCO ME FROM UNDISCLOSED SOURCES. ON THIS GROUND ALSO THE ASSESSEES CLAIM CANNOT BE ENTERTA INED AND THE ADDITION MADE IN HER TOTAL INCOME ON THIS ACCOUNT IS SUSTAINED. 9 7. THE NEXT GROUND OF THE ASSESSEE RELATES TO DISA LLOWANCE OF LOAN OF RS.4 25 163/- AND ADDITION THEREOF TO HER TOTAL INCOME. THE GROU ND READS AS UNDER :- 3. FOR THAT THE LD. CIT(A) AND THE LD. ASSESSING AUTHORITY WAS EQUALLY WRONG IN DISALLOWING THE LOAN AMOUNTING TO RS.425163/- AND T REATING THE SAME AS INCOME SINCE ALL THE LOANS ARE DULY SUPPORTED BY PROPER DO CUMENTARY EVIDENCES AND YOUR APPELLANT PETITIONER ALSO PRODUCE THE SAME DURING T HE COURSE OF HEARING. THE ENTIRE AMOUNT IS LIABLE TO BE DELETED. 7.1. THE ASSESSEE HAD SHOWN TOTAL AMOUNT OF LOAN F ROM 20 PARTIES OF RS.62 61 021/- IN HER BALANCE SHEET OF THE YEAR UNDER CONSIDERATION. ON VERIFICATION OF THE DETAILS FURNISHED BY THE ASSESSEE AND EVIDENCED PRODUCED BY THE LOAN CREDITORS THE A.O. FOUND THAT MOST OF THE LOANS WERE BROUGHT FORWARD LOANS FROM EARLIER Y EARS EXCEPTING THE FOLLOWING LOANS WHICH WERE OBTAINED DURING THE YEAR UNDER APPEAL :- I) OMPRAKASH SHARDA RS.1 35 927 II) ANJANI PODDAR RS.1 37 204 III) SHARDA TRADING CORPN. RS.1 35 927 RS.4 09 058/- THE A.O. DISALLOWED THIS LOAN AND ADDED BACK THE SA ME TO THE TOTAL INCOME ON THE GROUND THAT THE ASSESSEE AS WELL AS THE ABOVE THREE CREDIT ORS FAILED TO PROVE THE GENUINENESS OF THE LOAN. IN ADDITION TO THE ABOVE THE A.O. ALSO FOUND DIFFERENCE OF RS.16 105/- IN THE LOAN ACCOUNT WITH M/S. ASANSOL SUPPLY AGENCY WHICH HE ADDED TO THE TOTAL INCOME OF THE ASSESSEE. IN THIS WAY THE A.O. ADDED BACK RS.4 25 163/- AS CASH CREDIT U/S. 68 OF THE ACT. ON APPEAL THE C.I.T.(A) UPHELD THE ADDITION OF RS.4 25 163/- [WRONGLY MENTIONED AS RS.4 21 163] MADE BY THE A.O. 7.2. WE HAVE HEARD THE PARTIES AND PERUSED THE REC ORDS AVAILABLE TO US. IN THE PAPER BOOK THE ASSESSEE HAS FILED COPIES OF I.T. RETURNS REPLIES OF THE CREDITORS TO THE A.O. IN RESPONSE TO NOTICE U/S. 133(6) BALANCE SHEETS AND CONFIRMATION OF ACCOUNTS. THESE WERE AS WELL PRODUCED BEFORE THE AUTHORITIES BELOW. ON PERUSAL OF THESE DOCUMENTS IT IS FOUND THAT ALL THE CREDITORS ARE ASSESSED TO TAX AND THEY HAVE GIVEN THE JURISDICTION OF THEIR RESPECTIVE ASSESSING AUTHORITY WHERE THEY ARE ASSES SED. TRANSACTIONS ARE THROUGH BANKING CHANNEL AND THE SAME ARE DULY RECORDED IN THE ACCOU NTS OF THE ASSESSEE AS WELL AS CREDITORS. THE CREDITORS HAVE ALSO CHARGED INTEREST ON THE LOANS ADVANCED BY THEM WHICH IS EVIDENT FROM THEIR CONFIRMATION OF ACCOUNTS. THE REFORE CONSIDERING THE TOTALITY OF THE 10 FACTS OF THE CASE AND SUPPORTING DOCUMENTS WE FIND NO JUSTIFICATION TO DISBELIEVE THE LOAN OF RS.4 09 058/- TAKEN BY THE ASSESSEE FROM THE AFO RESAID THREE CREDITORS. THAT BEING SO WE DELETE THE ADDITION MADE BY THE A.O. AND ALLOW T HE CLAIM OF THE ASSESSEE. 7.3. IN REGARD TO REMAINING ADDITION OF RS.16 105/ - BEING THE DIFFERENCE IN LOAN ACCOUNT WITH M/S. ASANSOL SUPPLY AGENCY THE A.O. ON PERUSA L OF STATEMENT OF OTHER INTEREST TO CREDITORS FOUND THAT AS ON 31/3/2002 LOAN FROM THE SAID CONCERN WAS RS.1 78 767/- AND INTEREST WAS FOR RS.19 487/-. THEREFORE THE LOAN ACCOUNT IN RESPECT OF M/S. ASANSOL SUPPLY AGENCY AS ON 31/3/2003 WOULD BE RS.1 98 254/ - [RS.1 78 767 + RS.19 487]. BUT IN THE STATEMENT OF INTEREST PREPARED BY THE ASSESS EE THE LOAN AS ON 31/3/2003 WAS SHOWN AT RS.2 14 359/- RESULTING IN DIFFERENCE (EXCESS) OF RS.16 105/-. THE ASSESSEE COULD NOT EXPLAIN SATISFACTORILY THE SAID DIFFERENCE. THAT B EING SO WE FIND NO REASON TO INTERFERE WITH THE ORDER OF THE A.O. ON THIS ISSUE AND AS UPH ELD BY THE C.I.T.(A). THE SAME IS SUSTAINED. 8. IN THE RESULT THE APPEAL BY THE ASSESSEE IS PA RTLY ALLOWED. ORDER IS PRONOUNCED IN THE COURT ON 18.3.10. SD/- SD/- [D.K. TYAGI] [B.C. MEENA] JUDICIAL MEMBER ACCOUNTANT ME MBER DATED : 18-03-2010 COPY FORWARDED TO : 1. SMT. KABITA ROY UPPER HILL VIEW PARK ASANSOL-713 304. 2. I.T.O. WARD-2(3) SAHANA APARTMENT LOWER CHELIDAN GA ASANSOL-713 304. 3. THE C.I.T.(A) ASANSOL SAHANA APARTMENT LOWER CHE LIDANGA ASANSOL-713 304. 4. C.I.T. ASANSOL. (5) THE D EPARTMENTAL REPRESENTATIVE ITAT KOLKATA. TRUE COPY B Y ORDER [DKP] DY. REGISTRAR.