M/s Ravi Prakesh Agarwal, Gwalior v. ITO, Gwalior

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH SMC AGRA BEFORE SHRI P.K. BANSAL ACCOUNTANT MEMBER ITA NO.12/AGR/2010 ASST. YEAR: 2000-01 M/S. RAVI PRAKESH AGARWAL VS. THE INCOME-TAX OFFICER 2(2) JINSHI NALA NO.2 GWALIOR. LOHIYA BAZAR LASHKER GWALIOR. (PAN: AEQPA 7201 R). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.K. AGARWAL ADVOCATE RESPONDENT BY : NONE (APPLICATION REJECTED) ORDER THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) DATED 07.12.2009. 2. GROUNDS NO.1 & 2 SINCE NOT PRESSED THEREFORE T HE ONLY ISSUE WHICH SURVIVES RELATES TO THE ADDITION OF RS.40 000/- ON ACCOUNT OF THE GIFT RECEIVED BY THE ASSESSEE. 3. THE BRIEF FACTS RELATING TO THIS GROUND ARE THAT THE ASSESSEE RECEIVED A GIFT OF RS.40 000/- FROM SHRI MAHAVEER PRASAD JAIN S/O. LATE SHRI SHRE E RAM JAIN R/O. CHHOTA BAZAR SHITLA GALI GHAAS MANDI GWALIOR. THE DONOR WAS PRODUCED BEFOR E THE A.O. ON 24.11.2005 WHO CONFIRMED THAT HE HAS GIVEN THE GIFT TO THE ASSESSEE. THE AS SESSEE SUBMITTED THE CAPITAL ACCOUNT AND BALANCE SHEET OF THE DONOR ALONG WITH ACKNOWLEDGMENT OF THE RETURN FILED FOR THE A.Y. 2000-01 AT AN INCOME OF RS.60 000/-. THE A.O. WAS NOT SATISFIED WITH THE CREDITWORTHINESS OF THE DONOR AND 2 ACCORDINGLY HE ADDED THE GIFT OF RS.40 000/- AS INC OME OF THE ASSESSEE. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A) AND THE CIT(A) CONFIRMED T HE ORDER OF THE A.O. 4. BEFORE US THE LEARNED A.R. CONTENDED THAT THE D ONOR IS AN INCOME TAX ASSESSEE AND HAS SUBMITTED ALONG WITH HIS INCOME TAX RETURN THAT HE HAS GIVEN THE GIFT WHICH IS APPARENT IN THE CAPITAL ACCOUNT AS WELL AS IN THE BALANCE SHEET. T HE GIFT WAS GIVEN VIDE CHEQUE NO.336804 DATED 25.01.2000 ON WESTERN BANK. THE GIFT DEED TO THAT EFFECT WAS FILED BEFORE THE A.O. THE ASSESSEE IS THE NEPHEW OF THE DONOR. THUS IT WAS CONTENDED THAT THE IDENTITY CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION IS PROVED. WHEN COUNTERED THE A.O. HAS POINTED OUT THAT THE ASSESSEE HAS DEPOSITED A SUM OF RS.30 000/- AS CASH PRIOR TO THE ENCASHMENT OF THE CHEQUE FOR THE GIFT. 5. LD A.R. WAS FAIR ENOUGH TO CONCEDE THAT THE DONO R HAS DEPOSITED CASH AND THIS FACT IS APPARENT FROM THE BANK ACCOUNT OF THE DONOR. THE C ASH HAS BEEN DEPOSITED BY THE DONOR OUT OF HIS TAILORING INCOME WHICH HE HAS EARNED DURING THE YEAR AS WELL AS OPENING CASH IN HAND. 6. NONE APPEARED ON BEHALF OF THE DEPARTMENT EVEN T HOUGH THE CASE WAS ADJOURNED TWICE ON 08.04.2010 AND 26.04.2010 AT THE REQUEST OF THE LD. D.R. THE CONSOLIDATED APPLICATION FOR THE ADJOURNMENT WAS SENT. IN THE ABSENCE OF ANY PLAUSI BLE REASON I DECIDED TO DISPOSE OF THIS APPEAL ESPECIALLY ON THE FACTS THAT THE ASSESSEE I S FROM OUTSTATION AND EXPENSES ON TRAVELING HAVE TO BE INCURRED BY THE ASSESSEE AND WHICH IS ULTIMAT ELY DEBITED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE AS AN EXPENDITURE. ONCE THE ASSESSEE CLAI MS THESE EXPENSES AS A DEDUCTION 30% OF THESE EXPENSES ARE BORN BY THE GOVERNMENT IN CASE T AX IS IMPOSSIBLE @ 30%. I THEREFORE DECIDED TO DISPOSE OF THIS APPEAL AFTER HEARING THE LD. A.R. 3 7. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MADE BY THE LD. A.R. ALONG WITH THE PAPERS FILED AS WELL AS THE ORDERS OF THE TAX AUTHORITIES BELOW. SECTION 68 OF THE INCOME-TAX ACT 1961 LAYS DOWN THE RULE OF EVIDENCE. THE ONUS IS ON THE ASSESSEE TO PROVE THE CASH CREDIT IN ITS BOOKS OF ACCOUNTS TO THE SATISFACTION OF THE A.O. THE AS SESSEE IN THIS CASE HAS SUBMITTED THE AFFIDAVIT GIFT DEED COMPUTATION OF INCOME AS WELL AS ACKNOWL EDGEMENT OF FILING THE RETURN IN THE CASE OF THE DONOR. ALL THESE EVIDENCES LEAD TO THE FACT TH AT THE ASSESSEE HAS PROVED THE IDENTITY AS WELL AS GENUINENESS OF THE TRANSACTION. THE CREDITWORTHINE SS OF THE DONOR HAS ALSO BEEN PROVED BY THE ASSESSEE. FROM THE BANK ACCOUNT OF THE DONOR IT I S APPARENT THAT THE DONOR HAS DEPOSITED CASH AMOUNTING TO RS.30 000/- ON 25.01.2000 WHILE THE GI FT WAS GIVEN BY HIM VIDE CHEQUE NO.336804 DATED 25.01.2000. NO EVIDENCE WAS BROUGHT ON RECOR D BY WAY OF BALANCE SHEET AS ON 31.03.1999 THAT THE DONOR WAS HAVING CASH IN HAND TO THAT EXTE NT. TO THAT EXTENT THE SOURCE OF INCOME OF THE DONOR HAS BEEN SHOWN THAT OF TAILORING INCOME AS WE LL AS SALARY INCOME. THE NAME OF THE EMPLOYER HAS NOT BEEN MENTIONED. THERE WAS OPENING BALANCE IN THE BANK ACCOUNT OF THE DONOR AMOUNTING TO RS.11 400/- ON 25.01.2000. UNDER THES E FACTS AND CIRCUMSTANCES OF THE CASE IN MY OPINION THE DONOR MIGHT HAVE SPARED ONLY RS.15 000 /- OUT OF THE CURRENT INCOME AS WELL AS OPENING CASH IN HAND. I THEREFORE ACCEPT THE CRE DITWORTHINESS OF THE DONOR TO THE EXTENT OF RS.25 000/- AND SUSTAIN THE ADDITION TO THE EXTENT OF RS.15 000/-. THUS THE ADDITION OF RS.40 000/- IS REDUCED TO RS.15 000/-. 8. IN THE RESULT APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 04.05.2010) . SD/- (P.K. BANSAL) ACCOUNTANT MEMBER PLACE: AGRA DATE: 4 TH MAY 2010. 4 PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT BY ORDER 3. CIT CONCERNED 4. CIT (APPEALS) CONCERNED 5. DR ITAT AGRA BENCH AGRA 6. GUARD FILE ASSIST ANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL AGRA TRUE COPY