Arehalli Byregowda Gangadharagowda, Ramanagara v. Income Tax Officer, Ward- 1, Ramanagar

ITA 1675/BANG/2019 | 2016-2017
Pronouncement Date: 11-11-2019 | Result: Partly Allowed

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Appeal Details

RSA Number 167521114 RSA 2019
Assessee PAN APBPG4073M
Bench Bangalore
Appeal Number ITA 1675/BANG/2019
Duration Of Justice 3 month(s) 18 day(s)
Appellant Arehalli Byregowda Gangadharagowda, Ramanagara
Respondent Income Tax Officer, Ward- 1, Ramanagar
Appeal Type Income Tax Appeal
Pronouncement Date 11-11-2019
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 11-11-2019
Last Hearing Date 25-09-2019
First Hearing Date 25-09-2019
Assessment Year 2016-2017
Appeal Filed On 23-07-2019
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL SMC B BENCH : BANGALORE BEFORE SHRI B.R BASKARAN ACCOUNTANT MEMBER ITA NO.1675/BANG/2019 ASSESSMENT YEAR : 2016-17 SHRI AREHALLI BYREGOWDA GANGADHARAGOWDA NO.42/4 M/S MOHITH ENTERPRISES KEMPEGOWDA CIRCLE RAMANAGARA-562 159. PAN APBPG 4073 M VS. THE INCOME-TAX OFFICER WARD-1 BENGALURU. APPELLANT RESPONDENT APPELLANT BY : SHRI AKSHAY MEHTA C.A RESPONDENT BY : SHRI GANESH R GHALE ADVOCATE STANDING COUNSEL TO D EPT. DATE OF HEARING : 06.11.2019 DATE OF PRONOUNCEMENT : 11.11.2019 O R D E R PER B.R BASKARAN ACCOUNTANT MEMBER THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 27/5/2019 PASSED BY LD CIT(3) BENGALURU AND IT RELATES TO THE ASST. YEAR 2016-17. 2. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN CONFIRMING THE ADDITION OF RS.20 LAKHS MADE BY THE AO U/S 68 OF THE ACT. 3. THE FACTS RELATING TO THE ISSUE ARE THAT THE ASS ESSEE HAD INTRODUCED THE SUM OF RS.20 LAKHS ON 1/4/2015 AS HI S CAPITAL IN ITA NO.1675 /BANG/2019 PAGE 2 OF 7 THE BOOKS OF ACCOUNT. WHEN QUESTIONED ABOUT THE SO URCES OF THE FUNDS THE ASSESSEE SUBMITTED THAT HE HAS RECEIVED THE ABOVE SAID AMOUNT AS GIFT FROM HIS FATHER. 4. THE FACTS RELATING TO THE ADDITION ARE NARRATED AS UNDER BY LD CIT(A):- 4.1 IN RELATION TO THE SAME THE APPELLANT SUBMITTE D THAT THE AMOUNT OF RS.20 00 000/- WAS GIFTED TO HIM BY HIS FATHER IN CASH AND THE SAME WAS INTRODUCED B Y HIM IN HIS CAPITAL AND AS SUCH GETS REFLECTED IN TH E CASH BOOK AS ON 01.04.2015. THE APPELLANT SUBMITTED THAT HIS FATHER WAS AN AGRICULTURIST AND HE HAD GIV EN HIM GIFT OUT OF HIS PAST SAVINGS. THE APPELLANT ALS O SUBMITTED AN AFFIDAVIT FROM HIS FATHER IN THIS REGA RD . ACCORDINGLY THE AU ASKED THE APPELLANT TO PROVE THE CREDITWORTHINESS OF THE DONOR AND GENUINENESS OF TH E TRANSACTION. THE APPELLANT WAS ALSO ASKED TO SHOW CAUSE AS TO WHY ADDITION UNDER SECTION 68 SHOULD NO T BE MADE IN HIS CASE. 4.2 IN RESPONSE TO THE SAME THE APPELLANT SUBMITTED THAT HIS FATHER OWNED I ACRE 18 GUNTAS AND 6 ACRE 5 GUNTAS OF LAND AT TWO DIFFERENT LOCATIONS. THE APPELLANT FURTHER SUBMITTED THAT THE SAVINGS OF HIS FATHER WERE IN CASH AND HE HAD USED THE SAME TO CREATE A FIXED DEPOSIT ACCOUNT ON 05.03.20 13 AND T HE AMOUNT WAS WITHDRAWN ON MATURITY OIL THE APPELLANT SUBMITTED THAT THE AFFIDAVIT GIVEN BY HIS FATHER ILL REGARD SHOULD HE ACCEPTED AND NO ADDITIO N SHOULD BE MADE IN HIS CASE. HOWEVER THIS CONTENTION OF THE APPELLANT WAS NOT ACCEPTED BY THE AO. THE AO NOTED THAT RTC OF THE LAND FURNISHED BY THE APPELLA NT SHOWED THAT HIS FATHER OWNED LAND OF 1 ACRE 20 GUNTAS AND 14 GUNTAS ONLY AS AGAINST THE APPELLANT CLAIM OF LAND HOLDING OF ABOUT 7 ACRE. THE AO FURTH ER NOTED THAT WITH A LAND HOLDING OF 1 ACRE 20 GUNTAS THE ANNUAL INCOME FROM CULTIVATION OF MULBERRY LEAVES ITA NO.1675 /BANG/2019 PAGE 3 OF 7 COULD NOT EXCEED RS.10 000/- PER ACRE PER YEAR. EVE N IF THERE WAS SERICULTURE AND SALE OF COCOONS THE INCOME COULD NOT EXCEED RS 50 000/- PER ACRE PER ANNUM. THE AU ALSO OBSERVED THAT APPELLANT HAD NOT GIVEN ANY PROOF OF ANY AGRICULTURE ACTIVITIES HAVIN G BEEN CARRIED OUT BY HIS FATHER SO AS TO ESTIMATE TH E ACTUAL AGRICULTURE INCOME EARNED BY HIM. THE AO ALS O NOTED THAT IF THE APPELLANT'S FATHER HAD SOLD COCOO NS THE SAME BEING NOT AN AGRICULTURE ACTIVITY HIS FAT HER WOULD HAVE EARNED NON-AGRICULTURE INCOME HOWEVER NO EVIDENCE IN THAT REGARD WAS FURNISHED BY THE APPELLANT. AS REGARDS CASH WITHDRAWALS MADE BY THE FATHER FROM THE BANK ACCOUNT THE AO OBSERVED THAT THE SOURCE OF SUCH DEPOSITS WAS NOT EXPLAINED AND FURTHER THE SAID WITHDRAWALS WERE MADE FROM THE BANK ACCOUNT ON 06.03.2014 WHEREAS THE APPELLANT HAD SHOWN THE RECEIPT OF CASH OF RS.20 00 000/- ON 01.04.2015 I.E. AFTER A GAP OF MORE THAN ONE YEAR. THE APPELLANT WAS NOT ABLE TO EXPLAIN SUCH A HUGE GAP BETWEEN THE CASH WITHDRAWALS AND THE RECEIPT OF THE GIFT FROM THE ' FATHER. THE AU THUS HELD THAT CAPACITY OF THE APPELLANT'S FATHER TO GIFT AN AMOUNT OF RS.20 00.000/- AND GENUINENESS OF THE TRANSACTION WAS NOT PROVED. CONSIDERING THIS ASPECT THE AO TREATED THE AMOUNT OF RS.20 00 000/- AS UNDISCLOSED INCOME OF THE APPELLANT. 5. BEFORE LD CIT(A) THE ASSESSEE SUBMITTED THAT HI S FATHER EARNED ABOUT 1.5 LAKHS TO 2 LAKHS P.A AND WAS SAVIN G RS.50 000/- P.A FOR THE LAST 35 YEARS. IT WAS SUBMITTED THAT T HE FATHER OF THE ASSESSEE HAS USED THE SAME TO MAKE GIFT OF RS.20 LA KHS. SINCE THE SAID CLAIM WAS NOT SUBSTANTIATED THE LD CIT(A) REJ ECTED THE SAME. THE ASSESSEE FURTHER SUBMITTED THAT HIS FATHER HAS MADE DEPOSITS IN THE BANK ACCOUNTS TO THE TUNE OF RS.10 LAKHS IN MARCH 2013 AND THOSE MATURED ON MARCH 2014. IT WAS SUBMITTED THAT THE FATHER OF THE ASSESSEE HAD WITHDREW A SUM OF RS.10 LAKHS FROM THE BANK ITA NO.1675 /BANG/2019 PAGE 4 OF 7 ACCOUNT IN MARCH 2014 AND USED THE SAME TO MAKE GIF T OF RS.20.00 LAKHS TO THE ASSESSEE. SINCE THERE WAS A GAP OF ON E YEAR FROM THE DATE OF WITHDRAWAL OF THE CASH TO THE DATE OF MAKIN G GIFT THE LD CIT(A) REJECTED THE ABOVE SAID EXPLANATION ALSO. L D CIT(A) HELD THAT THE ASSESSEE HAS FAILED TO PROVE THE ONUS PLACED UP ON HIM U/S 68 OF THE ACT AND ACCORDINGLY CONFIRMED THE ADDITION O F RS.20 LAKHS MADE U/S 68 OF THE ACT. 6. BEFORE ME THE LD AR REITERATED THE SUBMISSIONS MADE BEFORE LD CIT(A). THE LD AR INVITED MY ATTENTION TO THE B ANK ACCOUNT COPIES PLACED AT PAGE 17 AND 18 OF THE PAPER BOOK A ND SUBMITTED THAT THE FATHER OF THE ASSESSEE HAD MADE FIXED DEPO SITS IN MARCH 2013 AND SAME WERE ENCASHED IN MARCH 2014 AND HE HA S WITHDRAWN RS.10 LAKHS FROM THE SAID MATURITY PROCEE DS AND USED THE SAME ALONG WITH THE OTHER SAVINGS TO MAKE THE G IFT TO THE ASSESSEE. WITH REGARD TO THE REMAINING AMOUNT OF R S.10 LAKHS CLAIMED TO HAVE BEEN AVAILABLE WITH THE FATHER OF T HE ASSESSEE THE LD AR SUBMITTED THAT THE FATHER OF THE ASSESSEE USE D TO SAVE RS.50 000/- P.A OUT OF HIS AGRICULTURAL INCOME AND THE SAME HAS BEEN ACCUMULATED OVER THE YEARS. 7. ON THE CONTRARY THE LD DR SUBMITTED THAT THE ASS ESSEE IS MAKING SELF SERVING STATEMENTS WITHOUT ANY SUPPORTI NG EVIDENCES. 8. I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED T HE RECORD. THERE SHOULD NOT BE ANY DISPUTE THAT THE INITIAL RE SPONSIBILITY TO PROVE THE CASH CREDIT U/S 68 OF THE ACT IS PLACED U PON THE SHOULDER OF THE ASSESSEE. IT IS WELL SETTLED PROPOSITION TH AT THE ASSESSEE HAS ITA NO.1675 /BANG/2019 PAGE 5 OF 7 TO PROVE THREE MAIN INGREDIENTS VIZ. THE IDENTITY O F THE CREDITOR THE CREDIT WORTHINESS OF THE CREDITOR AND GENUINENESS O F THE TRANSACTIONS. IN THE INSTANT CASE SINCE THE ASSES SEE HAS RECEIVED GIFT FROM HIS FATHER THE IDENTITY OF THE DONOR STA NDS PROVED. HOWEVER THE ASSESSEE COULD NOT ENTIRELY PROVE THAT HIS FATHER WAS HAVING CREDIT WORTHINESS TO MAKE GIFT TO THE TUNE O F RS.20 LAKHS TO THE ASSESSEE. FROM THE BANK STATEMENTS OF THE FATH ER OF THE ASSESSEE I NOTICED THAT HIS FATHER HAD HELD FIXED DEPOSITS WHICH GOT MATURED IN MARCH 2014. THE MATURITY PROCEEDS HAVE BEEN CREDITED TO THE BANK ACCOUNT OF THE FATHER AND HE HAS WITHDR AWN A SUM OF RS.10 LAKHS THERE FROM IN MARCH 2014. THOUGH THE ASSESSEE HAS INTRODUCED THE CAPITAL IN HIS BOOKS ON 01/4/2015 T HAT DOES NOT MEAN THAT THE ASSESSEE HAS RECEIVED GIFTS FROM HIS FATHER ONLY ON THAT DATE. THE POSSIBILITY OF RECEIVING GIFTS EARL IER TO THAT DATE CANNOT BE RULED OUT. ACCORDINGLY I AM OF THE VIEW THAT THE AMOUNT OF RS.10 LAKHS WITHDRAWN BY THE FATHER OF THE ASSES SEE FORM HIS BANK ACCOUNT COULD HAVE BEEN UTILIZED FOR MAKING GI FT TO THE ASSESSEE. ACCORDINGLY I AM OF THE VIEW THAT THE AS SESSEE CAN BE CONSIDERED TO HAVE ESTABLISH THE SOURCES OF GIFT TO THE EXTENT OF RS.10 LAKHS. 9. WITH REGARD TO REMAINING AMOUNT OF RS.10.00 LAKHS I NOTICE THAT THE ASSESSEE HAS NOT FURNISHED ANY DOCUMENTARY PROOF TO PROVE THE SOURCES THEREOF FOR HIS FATHER. HENCE MERELY O RAL STATEMENT THAT THE FATHER OF THE ASSESSEE WAS SAVING A SUM OF RS.5 0 000/- AND WAS KEEPING THE SAME AS CASH WITH HIM IS NOT RELIABLE AS IT LACKS SUBSTANCE AND NOT SUPPORTED BY ANY MATERIAL. ACCOR DINGLY I ITA NO.1675 /BANG/2019 PAGE 6 OF 7 CONFIRM THE ADDITION TO THE EXTENT OF RS.10 LAKHS A ND GRANT RELIEF TO THE TUNE OF RS.10 LAKHS. I ORDER ACCORDINGLY. 10. IN THE RESULT THE APPEAL OF THE ASSESSEE I S PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH NOVEMBER 2019. SD/ - (B.R BASKARAN) ACCOUNTANT MEMBER BANGALORE DATED THE 11 TH NOVEMBER 2019. /VMS/ COPY TO: 1. APPELLANT (S) / CROSS OBJECTOR(S) 2. RESPONDENT(S) 3. CIT 4. CIT(A) 5. DR ITAT BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR ITAT BANGALORE ITA NO.1675 /BANG/2019 PAGE 7 OF 7 1. DATE OF DICTATION 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO SR.P.S .. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER .. 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S. .. 6. DATE OF UPLOADING THE ORDER ON WEBSITE.. 7. IF NOT UPLOADED FURNISH THE REASON FOR DOING SO .. 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. DICTATION NOTE ENCLOSED DATE ON WHICH ORDER GOES FOR XEROX & ENDORSEMENT 10. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 11. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER . 12. THE DATE ON WHICH THE FILE GOES TO DISPATCH SEC TION FOR DISPATCH OF THE TRIBUNAL ORDER . 13. DATE OF DESPATCH OF ORDER. .. 14. DICTATION NOTE ENCLOSED