ITO, Agra v. Shri Prem Chand Mohnani, Agra

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH AGRA BEFORE SHRI R.K. GUPTA JUDICIAL MEMBER AND SHRI P.K. BANSAL ACCOUNTANT MEMBER ITA NO.20/AGR/2009 ASST. YEAR: 1999-2000 INCOME-TAX OFFICER-4(3) VS. SHRI PREM CHAND MO HNANI AGRA. D-148 KAMLA NAGAR AGRA. (PAN : AEQPM 5322 P) C.O. NO.14/AGR/2009 (IN ITA NO.20/AGR/2009) ASST. YEAR: 1999-2000 SHRI PREM CHAND MOHNANI VS. INCOME-TAX OFFICER -4(3) D-148 KAMLA NAGAR AGRA. AGRA. (PAN : AEQPM 5322 P) ITA NO.21/AGR/2009 ASST. YEAR: 1999-2000 INCOME-TAX OFFICER-4(3) VS. SMT. RADHA MOHNANI AGRA. D-148 KAMLA NAGAR AGRA. (PAN : AFHPM 3034 L). C.O. NO.13/AGR/2009 (IN ITA NO.21/AGR/2009) ASST. YEAR: 1999-2000 SMT. RADHA MOHNANI VS. INCOME-TAX OFFICER-4(3 ) D-148 KAMLA NAGAR AGRA. AGRA. (PAN : AFHPM 3034 L). ITA NO.22/AGR/2009 ASST. YEAR: 1999-2000 INCOME-TAX OFFICER-4(3) VS. SMT. PUSHPA MOHNAN I AGRA. W/O. SHRI ISHWAR CHAND MOHNANI D-150 KAMLA NAGAR AGRA. (PAN : ACEPM 6003 F). C.O. NO.16/AGR/2009 (IN ITA NO.22/AGR/2009) ASST. YEAR: 1999-2000 2 SMT. PUSHPA MOHNANI VS. INCOME-TAX OFFICER-4(3 ) W/O. SHRI ISHWAR CHAND MOHNANI AGRA. D-150 KAMLA NAGAR AGRA. (PAN : ACEPM 6003 F). ITA NO.24/AGR/2009 ASST. YEAR: 1999-2000 INCOME-TAX OFFICER-4(2) VS. SHRI KANHAIYA LAL MOHNANI AGRA. D-15 KAMLA NAGAR AGRA. (PAN : AAZPL 4678 P). C.O. NO.15/AGR/2009 (IN ITA NO.24/AGR/2009) ASST. YEAR: 1999-2000 SHRI KANHAIYA LAL MOHNANI VS. INCOME-TAX OFFIC ER-4(2) D-15 KAMLA NAGAR AGRA. AGRA. (PAN : AAZPL 4678 P). ITA NO.25/AGR/2009 ASST. YEAR: 1999-2000 INCOME-TAX OFFICER-4(2) VS. SMT. KAVITA MOHNAN I AGRA. D-15 KAMLA NAGAR AGRA. (PAN : ACFPM 6005 D). (APPELLANT) (RESPONDENTS) REVENUE BY : SHRI R.C. SHARMA JR. D.R. ASSESSEE BY : SHRI ANURAG SINHA ADVOCATE ORDER PER BENCH : THESE FIVE APPEALS HAVE BEEN FILED BY THE REVENUE A ND FOUR CROSS OBJECTIONS HAVE BEEN FILED BY THE ASSESSEES AGAINST THE SEPARATE ORDERS OF THE CIT(A) DATED 12.11.2008 AND 14.11.2008 FOR ASSESSMENT YEAR 1999-2000. SINCE ALL THE APPEA LS AND CROSS OBJECTIONS INVOLVE COMMON GROUNDS EXCEPT CHANGE IN FIGURES FOR THE SAKE OF CONVENIENCE ALL THESE APPEALS AND CROSS OBJECTIONS ARE DISPOSED OF BY THIS COMMON ORDER. 3 2. AT THE OUTSET THE LD. A.R. DID NOT PRESS THE CR OSS OBJECTIONS FILED BY THE ASSESSEE. ACCORDINGLY ALL THE CROSS OBJECTIONS STAND DISMISS ED AS NOT PRESSED. 3. NOW WE ARE TAKING UP THE APPEALS FILED BY THE RE VENUE. BOTH THE PARTIES HAVE AGREED THAT THE FACTS INVOLVED IN THESE APPEALS ARE SIMILAR TO THE FACTS AS ARE IN ITA NOS.679 678 677 & 676/AGR/2008 IN THE CASE OF SHRI PIYUSH GOYAL & OTH ERS VS. ITO AND IT WAS CONTENDED THAT IN ALL THESE CASES THE GIFTS HAVE BEEN RECEIVED BY THE RES PECTIVE ASSESSEES FROM THE TRUST CONTROLLED BY SHI D..K. AGARWAL C.A. WHATEVER ARGUMENTS WERE TA KEN IN THOSE CASES THE SAME MAY BE TAKEN FOR THESE CASES ALSO. WHATEVER VIEWS THIS TRIBUNAL MAY TAKE IN THOSE CASES THE SAME MAY BE TAKEN IN THESE CASES ALSO. 4. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND PERUSED THE MATERIAL ON RECORD. WE NOTED THAT IN ALL THESE APPEALS EACH OF THE ASSE SSEE HAS RECEIVED THE GIFTS FROM TRUST IN WHICH SHRI D.K. AGARWAL WAS THE TRUSTEE. SIMILAR GROUNDS HAVE BEEN RAISED IN ITA NOS.676 TO 679/AGR/2008 WHICH HAS BEEN AGUED BY BOTH THE PARTI ES. IN THOSE CASES THIS TRIBUNAL UNDER PARAGRAPH NOS.18 TO 22 FOLLOWING THE DECISION OF T HIS TRIBUNAL IN THE CASE OF SHRI MUKESH KUMAR AGARWL IN ITA NO.312/AGR/2006 HAS HELD AS UN DER :- 18. WE HAVE ALSO GONE THROUGH THE DECISION IN THE CASE OF MUKESH KUMAR AGARWAL IN ITA NO.312/AGR/2006 ON WHICH THE LD. A.R. HAS VEHE MENTLY RELIED IN WHICH VIDE ORDER DATED 16.10.2009 IN RESPECT OF SIMILAR GIFT GIVEN B Y TRUST IN WHICH SHRI D.K. AGARWAL WAS THE TRUSTEE THIS TRIBUNAL HAS HELD AS UNDER :- WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED TH E FACTS OF THE CASE. THE ASSESSEE HAS SUBMITTED THE CONFIRMATION OF THE GIFT GIFT DEED BALANCE SHEET OF THE TRUST BANK ACCOUNT OF THE TRU ST AND INCOME TAX PARTICULARS OF THE TRUST. SHRI D K AGARWAL THE DO NOR WAS SUMMONED DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS AND THE STATEMENT WAS RECORDED AND HE HAS CONFIRMED OF HAVING GIVEN THE G IFT. THE SOURCE OF THE SAID GIFTS HAVE BEEN EXPLAINED TO BE AN ACCOUNT PAY EE CHEQUE GIVEN FROM 4 M/S. GIRRAJ JI TRUST. IN THE REMAND REPORT IT HAS BEEN STATED BY THE AO THAT THERE IS A DEPOSIT OF RS.5.20 LACS IN THE BANK ACCOUNT OF M/S. GIRRAJ JI TRUST ON 16.04.01 BEFORE THE SAID GIFT OF RS.4.00 L ACS WAS MADE. IT WAS ARGUED THAT THE SAID DEPOSIT OF RS.5.20 LACS IS A T RANSFER ENTRY AND NOT A DEPOSIT AND THE LD. CIT(A) HAS CONSIDERED THE SAME AS CASH DEPOSIT WHICH HAS VITIATED THE DECISION MAKING PROCESS OF THE LD. CIT(A) WAS ARGUED BY THE LD. A.R. THE ASSESSEE IS REQUIRED TO PROVE THE IDENTITY CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION S. AS REGARDS THE IDENTITY THERE IS NO DISPUTE SINCE THE DONOR SHRI D K AGARWAL HAS APPEARED IN PERSON IN RESPONSE TO SUMMON BY THE AO AND HAS CONFIRMED THE TRANSACTIONS IN THE STATEMENT RECORDED. THE SO URCES OF THE SAID AMOUNT ARE THE AVAILABILITY OF FUNDS IN THE TRUST WHICH HA VE BEEN TRANSFERRED IN THE TRUST AT RS.5.20 LACS BEFORE THE DATE OF THE GIFT. IT HAS BEEN STATED THAT THE TRUST IS REGULARLY ASSESSED TO TAX AND INCOME TAX P ARTICULARS OF THE TRUST ARE ON RECORD. THEREFORE THE CREDITWORTHINESS OF THE G IFT CANNOT BE IN DOUBT. AS REGARDS THE GENUINENESS OF THE TRANSACTIONS AS O BSERVED HEREINBEFORE THE SAID GIFT HAVING BEEN CONFIRMED BY THE DONOR AN D THE SOURCES HAVING BEEN EXPLAINED BUT THE DONOR COULD NOT STATE DURING THE COURSE OF THE STATEMENT THE FAMILY RELATIONSHIP WITH THE ASSESSEE OR THE OCCASION OF GIVING GIFT. IN THIS REGARD THE RELIANCE HAS BEEN PLACED BY SHRI ANURAG SINHA ADVOCATE THE LD. COUNSEL FOR THE ASSESSEE O N THE DECISION OF HONBLE DELI HIGH COURT IN THE CASE OF CIT VS. MRS. SUNITA VACHANE SUPRA HONBLE GUJARAT HIGH COURT IN THE CASE OF MU RLIDHAR LOHARMAL VS. CIT SUPRA ITAT MMRITSAR BENCH DECISION IN THE CAS E OF ACIT VS. MANOJ KUMAR SUPRA AND ITAT DELHI BENCH IN THE CASE OF MR S. MAYAWATI VS. DCIT SUPRA WHEREIN ALL THE CASES OCCASION AND REL ATIONSHIP OF THE GIFTS ARE NOT RELEVANT IF OTHERWISE THE TRIBUNAL FINDS SU FFICIENT EVIDENCE REGARDING GENUINENESS OF THE GIFT. IN THE PRESENT CASE WE ARE OF THE VIEW THAT THERE ARE SUFFICIENT EVIDENCES OF GENUINENESS OF THE GIFT AND THEREFORE IMPUGNED GIFT CANNOT BE SAID TO BE NON-GENUINE. TH EREFORE IN SUCH CIRCUMSTANCES AND FACTS OF HE CASE AND THE AUTHORI TIES RELIED UPON HEREINABOVE THE AO IS NOT JUSTIFIED IN TREATING TH E SAID GIFT AS BOGUS AND THE SAME CANNOT BE TREATED AS INCOME OF THE ASSESSE E. THEREFORE THE ORDER OF THE LD. CIT(A) IS REVERSED ON THIS ISSUE. THUS THE APPEAL OF THE ASSESSES IS ALLOWED. 19. WE HAVE ALSO GONE THROUGH THE FOLLOWING CASES R EGARDING THE DISCHARGE OF THE BURDEN ON THE PART OF THE ASSESSEE AS RELIED BY THE LD. A.R. OBSERVATIONS MADE IN THESE CASES ARE GIVEN AS UNDER :- (A) MRS. RANJANA KATIYAL VS. ACIT (2008) 113 TTJ (D ELHI) 479. THE ASSESSEE HAD FILED AFFIDAVIT FROM THE DONOR THEIR PAN COPIES O F RETURN OF INCOME AND BANK ACCOUNT. ON THESE EVIDENCES THE TRIBUNAL HELD THAT THE ASSESSEE HAD DISCHARGED THE INITIAL BURDEN AND THEREFORE THE AO SHOULD HAVE MADE FURTHER ENQUIRY TO PROVE THAT THE CONDITION OF SECTION 68 WERE NOT SAT ISFIED. 5 (B) IN MONNET ISPAT AND ENERGY LTD. VS. DCIT (2008) 171 TAXMAN 27 (DELHI) (MAZ.) THE TRIBUNAL ACCEPTED THE GENUINENESS OF CREDITS ON THE BASIS OF AFFIDAVIT CONFIRMATORY LETTER AND THE BANK ACCOUNT OF THE CRE DITORS. (C) IN KAMAL MOTORS VS. CIT (2003) 131 TAXMAN 155 THE RAJASTHAN HIGH COURT OBSERVED THAT THE ONUS IS ON THE ASSESSEE TO SHOW T HAT THE CREDITOR IS A MAN OF MEANS AND IDENTIFIABLE. WHEN A CREDITOR IS AN INCOM E TAX ASSESSEE IT CAN NOT BE SAID THAT HE CANNOT BE A MAN OF MEANS. THE CREDITWO RTHINESS IS THUS ESTABLISHED. (D) CIT VS. ORISSA CORP. (P) LTD (1986) 159 ITR 78 (S.C.). LETTERS OF CONFIRMATION PARTICULARS OF CREDITORS AND INCOME TAX NUMBERS WER E FURNISHED. ADDITION NOT JUSTIFIED. (E) CIT VS. KAMAL JEET SINGH (2005) 147 TAXMAN 18 ( ALL). THE ASSESSEE WAS HELD TO HAVE DISCHARGED THE ONUS BY PLACING CONFIRMATORY LE TTERS; THEIR AFFIDAVITS THEIR FULL ADDRESS AND GIR NO. (F) SANSAR AUTOMOBILE VS. ITO (2005) 96 TTJ (JODH) 368). A DEPOSIT THROUGH ACCOUNT PAYEE CHEQUE IS A VERY GOOD PIECE OF EVIDEN CE ESTABLISHING THE GENUINENESS OF THE TRANSACTION PROVIDED IDENTITY OF THE CREDITOR IS ESTABLISHED. WHEN THE IDENTITY OF THE CREDITOR IS VERY MUCH PROV ED OR IS OBVIOUS AND IS NOT DOUBTED BY THE AO THE PAYMENT RECEIVED THROUGH ACC OUNT PAYEE CHEQUE BECOMES SACROSANCT. (G) THE HONBLE ITAT AGRA BENCH AGRA IN THE CASE OF ITO WARD-2 MATHURA VS. SMT. SUKHO DEVI IN ITA NO.1991/DEL./1994 (PAPER BOO K PAGES 14 TO17) VIDE ORDER DATED 31/12/2003 HELD AS UNDER :- WE HAVE HEARD THE PARTIES AND PERUSED THE RECORDS OF THE CASE. WHEN A CASH CREDIT ENTRY APPEARS IN THE ASSESSEES BOOKS OF ACCOUNT IN AN ACCOUNTING YEAR THE ASSESSEE HAS OBLI GATION TO EXPLAIN THE TRANSACTION. IT WOULD APPEAR THAT IN TH E INSTANT CASE IDENTITY OF BOTH THE DONORS IS NOT IN DISPUTE. BOTH THE DONORS ARE ASSESSED TO TAX AND THE GIFT TAX RETURN FILED BY TH EM HAS ALSO BEEN ACCEPTED BY THE DEPARTMENT. THE FACT THAT THERE HAS BEEN CASH DEPOSIT IN THEIR BANK ACCOUNTS PRIOR TO ISSUE OF TH E CHEQUES TO THE ASSESSEE MAY BE A CAUSE FOR ENQUIRY IN THEIR HANDS. IN CASE THE A.O. WAS NOT SATISFIED WITH THE CASH DEPOSITS MADE BY THESE TWO PERSONS IN THEIR BANK THE PROPER COURSE WOULD HAVE TO MAKE ASSESSMENT IN THE CASE OF THESE DONORS BY TREATING CASH DEPOSITS IN THEIR BANK ACCOUNT AS UNEXPLAINED INVESTMENTS OF TH ESE DONORS UNDER SECTION 69 OF THE I.T. ACT. IN THE FACTS AND CIRCUMSTANCES OF THE CASE WE ARE OF THE VIEW THAT THE ASSESSEE HAS DISCHARGED INITIAL ONUS OF PROVING THE IDENTITY OF THE CREDITORS THEI R TRANSACTION AND THE REVENUE HAS NOT BROUGHT ANY MATERIAL TO REBUT T HE SAME. WE THEREFORE FIND NO INFIRMITY IN THE ORDER PASSED BY THE CIT(A). HENCE THE SAME IS UPHELD. 6 (H) FURTHER IN THE CASE OF KULDEEP GOGIA VS. ITO I N ITA NO.297/AGRA/2004 (PAPER BOOK PAGES 18 TO 21) FOR A.Y. 2001-2002 THE HONBL E ITAT VIDE ORDER DATED 31/01/2005 OBSERVED AS UNDER:- IN THE INSTANT CASE THE ASSESSEE HAS PRODUCED THE COPY OF GIFT DEED AFFIDAVIT OF THE DONOR DETAILS OF ITS ASSESS ING OFFICER SHOWING THAT THE DONOR IS AN EXISTING ASSESSEE. THE REFORE IN THE CIRCUMSTANCES WHEN SHE HAS CONFIRMED THE GIFT OF R S.1 00 000/- ADVANCED TO THE APPELLANT. COPY OF BANK ACCOUNT WAS ALSO FILED BEFORE THE ASSESSING OFFICER. COPY OF GIFT DEED AND AFFIDAVIT CONFIRMING THE ADVANCING OF GIFT WAS ALSO FILED. T HEREFORE IN THESE CIRCUMSTANCES AND HAVING REGARD TO THE DECISI ON OF ITAT AGRA BENCH AGRA WE ARE OF THE VIEW THAT THERE IS NO SCOPE FOR ADDITION OF RS.1 00 000/- IN THE HANDS OF THE APPEL LANT. HENCE THIS GROUND OF APPEAL IS ALLOWED. (I) HONBLE ITAT BANGALORE BENCH IN THE CASE OF IT O VS. N. SUNITHA REPORTED IN (2001) 70 TTJ (BANG.) 27 APPROVED THE ACTION OF THE LEARNED CIT(A) WHO DELETED THE ADDITION BY HOLDING THAT ASSESSEE RECEIVED GIF TS BY CHEQUES AND THE DEPARTMENT HAS NOT ADDUCED ANY MATERIAL TO SUGGEST THAT THE MONEY THAT WERE DEPOSITED IN THE BANK ACCOUNTS OF THE DONOR FLOWED FROM THE ASSESSEE. THE BENCH THEREFORE CONCLUDED THAT GIFT COULD NOT BE TREATED AS UNEXPLAINED IN THE HANDS OF THE ASSESSEE. ADDITION THEREFORE RIGHTLY DELETED B Y THE CIT(A). (J) SUPREME TYRES VS. ITO (2004) 1 SOT 406 (ASR). WHERE THE ASSESSEE HAD PRODUCED THE CREDITOR FOR EXAMINATION AND HIS STATE MENT WAS RECORDED THE ASSESSEE WAS NOT REQUIRED TO PROVE THE SOURCE OF TH E SOURCE. (K) BHAGWANDAS SHARDA VS. ACIT (2004) 82 TTJ (HYD) 982. THE LOAN TRANSACTION WAS THROUGH BANK BY ACCOUNT PAYEE CHEQUE. THE ASSES SEE WAS HELD TO HAVE DISCHARGED THE ONUS. IT IS NOT NECESSARY FOR THE AS SESSEE TO PROVE THE SOURCE OF THE SOURCE. (L) S. K. JAIN VS. ITO (2004) 2 SOT 579 (AGRA). AS KING FOR SOURCE OF DEPOSITS IN BANK ACCOUNT OF THE CREDITORS WOULD AMOUNT TO ASKIN G SOURCE OF THE SOURCE. 20. IN VIEW OF THE AFORESAID CASE LAWS AND THE PROV ISIONS OF SECTION 68 SECTION 68 LAYS DOWN THE RULE OF EVIDENCE THAT WHEN ANY SUM IS FOUND CREDITED IN THE BOOKS OF THE ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE OF SUCH CREDIT FOUND IN THE B OOKS OF THE ASSESSEE OR THE EXPLANATION OFFERED BY THE ASSESSEE IN THE OPINION OF THE A.O. IS NOT SATISFACTORY THE SAME SO CREDITED MAY BE CHARGED TO INCOME TAX AS THE INCOME IF THE A SSESSEE OF THAT PREVIOUS YEAR. BEFORE CHARGING THE CREDIT AS THE INCOME OF THE ASSESSEE THE AO HAS TO FORM AN OPINION. THIS OPINION IS SUBJECTIVE BUT IT HAS TO BE JUDICIOUS A ND BASED ON MATERIAL ON RECORD. AN OPINION IS AN INFERENCE OF FACTS FROM OBSERVED FACT S. IT IS NOT AN IMPRESSION. IT IS A CONVICTION BASED ON APPRAISAL OF EVIDENCE ON RECORD . IN V.L.S. FINANCE LTD. V CIT (2000) 246 ITR 707 THE HONBLE DELHI HIGH COURT OBSERVED AS UNDER: 7 OPINION MEANS SOMETHING MORE THAN MORE RETAILING OF GOSSIP OR HEARSAY; IT MEANS JUDGMENT OR BELIEF THAT IS A BELIEF OR A CO NVICTION RESULTING FROM WHAT ONE THINKS ON A PARTICULAR QUESTION. IT MEANS: JUDGMENT OR BELIEF BASED ON GROUNDS SHORT OF PROOF. IF A MAN IS TO FORM AN OPINION AND HIS OPINION IS TO GOVERN HE MUST FORM IT HIMSELF ON SUCH REASONS AND GROUNDS AS SEEM GOOD TO HIM. THUS BEFORE THE AO FORMS AN OPINION HE MUST CONSI DER THE MATERIAL BEFORE HIM. HE HAS BEFORE HIM THE MATERIAL SUBMITTED BY THE ASSESSEE W HILE GIVING AN EXPLANATION THEN HE MUST COLLECT HIS OWN MATERIAL AS AN ENQUIRY OFFICER WEIGH THE TWO MATERIALS AND AS A QUASI-JUDICIAL AUTHORITY FORM AN OPINION AS TO WHET HER EXPLANATION FURNISHED BY THE ASSESSEE IS SATISFACTORY OR NOT. IF THE AO DOES NOT APPLY HIS MIND IN EXAMINING THE DOCUMENTS FURNISHED BY THE ASSESSEE AND DOES NOT FI ND ANY SUBSTANTIVE ERROR IN THEM NOR HE COLLECTS ANY MATERIAL BY EXERCISING POWERS UNDER INCOME-TAX ACT THEN THE CLAIM OF THE ASSESSEE CANNOT BE STRAIGHTWAY REJECTED. IF HE DOES IT WOULD BE A VIOLATION OF PRINCIPLES OF NATURAL JUSTICE AND PROVISIONS OF SECTION 68. THE EXPRESSION THE ASSESSEE OFFERS NO EXPLANATION MEANS WHERE THE ASSESSEE OFFERS NO PROPER REASONABLE AND ACCEPTABLE EXPLANATION AS RE GARDS THE SUM FOUND CREDITED IN THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE. THE O PINION OF THE AO FOR NOT ACCEPTING THE EXPLANATION OFFERED BY THE ASSESSEE AS NOT SATI SFACTORY MUST BE BASED ON PROPER APPRECIATION OF THE MATERIAL AND OTHER SURROUNDING CIRCUMSTANCES AVAILABLE ON RECORD. THE OPINION OF THE AO IS TO BE BASED ON APPRECIATIO N OF THE MATERIAL ON RECORD. 21. THE WORD MAY USED IN SECTION 68 PROVIDES DISC RETION TO THE AO. IN GENERAL THE WORD MAY IS AN AUXILIARY VERB CLARIFYING THE MEAN ING OF ANOTHER VERB OF EXPRESSING AN ABILITY CONTINGENCY POSSIBILITY OR PROBABILITY. W HEN USED IN A STATUTE IN ITS ORDINARY SENSE THE WORD IS PERMISSIVE AND NOT MANDATORY. BUT WHERE CERTAIN CONDITIONS ARE PROVIDED IN THE STATUTE AND ON THE FULFILLMENT THER EOF A DUTY IS CAST ON THE AUTHORITY CONCERNED TO TAKE AN ACTION THEN ON FULFILLMENT OF THOSE CONDITIONS THE WORD MAY TAKE THE CHARACTER OF SHALL AND THEN IT BECOMES MANDAT ORY. IN SECTION 68 WE FIND THAT THERE ARE NO SUCH CONDITIONS ON THE FULFILLMENT OF WHICH THE AO IS DUTY BOUND TO MAKE THE ADDITION. THE WORD MAY DENOTES THE DISCRETION OF THE AO THAT HE CAN MAKE AN ADDITION OR CAN NOT MAKE AN ADDITION. THE HON'BLE SUPREME CO URT IN THE CASE OF CIT V SMT. P K NOORJAHAN 237 ITR 570 (SC) WHILE DEALING WITH THE WORD MAY IN SECTION 69 OB SERVED AS UNDER: 'IN THE CORRESPONDING CLAUSE OF THE BILL WHICH WAS INTRODUCED IN PARLIAMENT WHILE INSERTING SECTION 69 IN THE INCOME-TAX ACT 1 961 THE WORD 'SHALL' HAD BEEN USED BUT DURING THE COURSE OF CONSIDERATION OF THE BILL AND ON THE RECOMMENDATION OF THE SELECT COMMITTEE THE SAID WORD WAS SUBSTITU TED BY THE WORD 'MAY'. THIS CLEARLY INDICATES THAT THE INTENTION OF PARLIAMENT IN ENACTING SECTION 69 WAS TO CONFER A DISCRETION ON THE INCOME-TAX OFFICER IN TH E MATTER OF TREATING THE SOURCE OF INVESTMENT WHICH HAS NOT BEEN SATISFACTORILY EXP LAINED BY THE ASSESSEE AS THE INCOME OF THE ASSESSEE AND THE INCOME-TAX OFFICER I S NOT OBLIGED TO TREAT SUCH SOURCE OF INVESTMENT AS INCOME IN EVERY CASE WHERE THE EXPLANATION OFFERED BY 8 THE ASSESSEE IS FOUND TO BE NOT SATISFACTORY. THE Q UESTION WHETHER THE SOURCE OF THE INVESTMENT SHOULD BE TREATED AS INCOME OR NOT UNDER SECTION 69 HAS TO BE CONSIDERED IN THE LIGHT OF THE FACTS OF EACH CASE. IN OTHER WORDS A DISCRETION HAS BEEN CONFERRED ON THE INCOME-TAX OFFICER UNDER SECT ION 69 OF THE ACT TO TREAT THE SOURCE OF INVESTMENT AS THE INCOME OF THE ASSESSEE IF THE EXPLANATION OFFERED BY THE ASSESSEE IS NOT FOUND SATISFACTORY AND THE SAID DISCRETION HAS TO BE EXERCISED KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE PARTICULAR CASE. 22. THE EVIDENCE FILED BY THE ASSESSEE CLEARLY PROV ES THAT THE ASSESSEE HAS DULY DISCHARGED HIS ONUS SO FAR IT RELATES TO THE IDENTI TY CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION IS CONCERNED. THE ASSESSEE IS NOT REQUIRED TO PROVE SOURCE OF THE SOURCES. THERE IS NO EVIDENCE ON RECORD WHICH MAY PROVE THAT THE ASSESSEE HAS DEPOSITED THE CASH IN THE BANK ACCOUNT OF THE DONOR. APPARENT IS REAL . THE ONUS IS ON THE PARTY WHO ALLEGES THAT APPARENT IS NOT REAL. IN ANY CASE THE CASE O F THE ASSESSEE IS DULY COVERED BY THE DECISION OF THIS BENCH IN THE CASE OF SHRI MUKESH K UMAR AGARWAL IN ITA NO.312/AGR/2006 IN WHICH VIDE ORDER DATED 16.10.200 9 SIMILAR GIFTS GIVEN BY SHRI D.K. AGARWAL BEING TRUSTEE OF THE TRUST WERE ACCEPTED TO BE GENUINE IN THE HANDS OF THE DONEES. THE DECISION OF THE CO-ORDINATE BENCH IS B INDING ON US. RESPECTFULLY FOLLOWING THE DECISION OF THE CO-ORDINATE BENCH WE DELETE TH E ADDITION MADE BY THE A.O. UNDER SECTION 68 IN THE CASE OF EACH OF THE ASSESSEE. 5. RESPECTFULLY FOLLOWING THE AFORESAID DECISION OF THIS TRIBUNAL AS BOTH THE PARTIES HAVE AGREED THAT THE FACTS INVOLVED ARE THE SAME AS IN T HE AFORESAID CASES WE DISMISS THE APPEALS FILED BY THE REVENUE. 6. IN THE RESULT APPEALS FILED BY THE REVENUE ARE DISMISSED AND THE CROSS OBJECTIONS FILED BY THE ASSESSEES ARE ALSO DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 25.05.2010). SD/- SD/- (R.K. GUPTA) (P.K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: AGRA DATE: 25 TH MAY 2010. PBN/* 9 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