Jagdish Prasad Khandelwal, Paschim Medinipur v. ITO, Ward - 2(2), Midnapore, Midnapore

ITA 2263/KOL/2010 | 2005-2006
Pronouncement Date: 28-02-2011

Appeal Details

RSA Number 226323514 RSA 2010
Assessee PAN AEXPK7344C
Bench Kolkata
Appeal Number ITA 2263/KOL/2010
Duration Of Justice 2 month(s) 4 day(s)
Appellant Jagdish Prasad Khandelwal, Paschim Medinipur
Respondent ITO, Ward - 2(2), Midnapore, Midnapore
Appeal Type Income Tax Appeal
Pronouncement Date 28-02-2011
Appeal Filed By Assessee
Bench Allotted SMC
Tribunal Order Date 28-02-2011
Assessment Year 2005-2006
Appeal Filed On 24-12-2010
Judgment Text
IN THE INCOME-TAX APPELLATE TRIBUNAL SMC-B BENCH : KOLKATA BEFORE HON. SHRI C. D. RAO ACCOUNTANT MEMBER ITA NO. 2263 (KOL) OF 2010 : ASSESSMENT YEAR : 200 5-06 JAGDISH PRASAD KHANDELWAL -VS.- INCOME TAX OFFICER/WARD-2(2) MIDNAPORE [PAN : AEXPK 7344 C] MIDNAPORE. [APPELLANT] [RESPONDENT] APPELLANT BY : SHRI GAUTAM GHOSH RESPONDENT BY : SHRI P. KOHLE THE ASSESSEE HAS FILED THIS APPEAL FOR ASSESSMENT YEAR 2005-06 AGAINST THE ORDER OF LD. CIT(A)-XXXVI KOLKATA DATED 04.02.2008. THE ONLY IS SUE RAISED IN THIS APPEAL IS IN RELATION TO CONFIRMATION OF ADDITION OF RS.2 50 000/- ON ACCOUN T OF GIFT MADE BY SHRI SUNIL KUMAR KHANDELWA (SON OF THE ASSESSEE). 2. BRIEF FACTS OF THE CASE ARE THAT DURING THE YEAR ASSESSTE HAD RECEIVED A GIFT FOR RS.2 50 000/- FROM HIS SON SRI SWILL KHANDELWAL. A COPY OF AFFIDAVIT IN SUPPORT OF GIFT MADE BY SRI SUNIL KHANDELWAL WAS ATTACHED WITH THE RETURN. FROM THE AFFIDAVIT OF THE DONER FILED BY THE ASSESSEE IT IS FOUND THAT THE GIFT WAS MADE BY CHE QUE OUT OF SAVINGS BANK A/C. NO. 01150065307 MAINTAINED BY THE DONER WITH S.B.L. BELDA BRANCH. A COPY OF THE BANK STATEMENT WAS ALSO FILED BY THE LD. AUTHORISED REPRESENTATIVE FOR THE ASSESS EE AT THE TIME OF HEARING. FROM THE BANK STATEMENT IT WAS FOUND THAT SRI SUNIL KHANDELWAL DE POSITED CASH AMOUNT RS.50 000/- ON 31/5/04 RS.70 000/- ON 1/6/04 AND RS.1 30 000/- ON 5/6/04. THE TOTAL OF THE THREE BIG AMOUNT IS RS.2 50 000/-. THE DONER SRI SUNIL KHANDELWAL MAIN TAINS ONLY ONE BANK ACCOUNT AS PER STATEMENT FILED WITH HIS RETURN ON 25/7/05. FROM THE RETURN F LIED BY SRI SUNIL KHANDELWAL IT WAS FOUND THAT THE DONER HAD A TURNOVER OF RS.8 75 640/- DURING TH E YEAR 2004-05 AND HE MAINTAINS ONLY ONE SAVINGS BANK ACCOUNT I.E. WITH S.B.I. BELDA A/C. NO. 0115006537. BUT THERE ARE ONLY THREE SMALL ENTRIES RECORDED IN THE BANK STATEMENT EXCEPT THOSE PRECEDING THE GIFT. TWO OF THE ENTRIES ARE INTEREST CREDITED TO THE DONER AMOUNTING TO RS. 251/- AND RS.306/-. ANOTHER ONE IS A CHEQUE TRANSFER FOR RS.4 500/-. IT IS CLEAR THAT THE DONER SRI SUNIL KHANDELWAL DOES NOT MAINTAIN ANY BANK PASS BOOK FOR HIS BUSINESS I.E. HE RUNS HIS BUSINES S ON CASH BASIS. BUT IN THE BALANCE SHEET FILED ITA NO.2263/KOL/2010 2 BY THE DONER ALONG WITH HIS RETURN OF INCOME THERE WAS NO MENTION OF CASH IN HAND AT THE END OF THE YEAR. SO TO VERIFY THE SOURCE OF GIFT AMOUNT OF RS.50 000/ RS.70 000/- AND RS.1 30 000/- DEPOSITED IN THE ONLY BANK ACCOUNT MAINTAINED BY TH E DONER NOTICE U/S 131 ISSUED TO THE DONER ON 17/12/07 ASKING HIM TO PRODUCE CASH BOOK OR ANY OTH ER RELEVANT DOCUMENTS TO PROVE THE CREDITWORTHINESS OF THE GIFT MADE BY HIM. THE CASE WAS FIXED FOR HEARING ON 28/12/07. BUT ON 26/12/07 SRI GOUTAM GHOSH A/R OF THE ASSESSEE APPE ARED AND PRODUCED SOME PAPERS WHICH WERE ALREADY PRODUCED EARLIER EITHER IN THE I.T. RETURN OF THE ASSESSEE OR DURING THE COURSE OF ASSESSMENT PROCEEDINGS. BUT THE DONER SRI SUNIL KHNDE1WA1 DID NOT APPEAR WITH HIS CASH BOOK ON 28.12.07 TO PROVE THE GENUINENESS OF GIFT. SO IT CANNOT BE RULED OUT THAT THE AMOUNT OF RS. 50000/- RS. 70 000/- AND RS. 1 30 000/- DEPOSITED IN HIS ONLY B ANK ACCOUNT ON 31/5/04 ON 1/6/04 AND ON 5/6/04 RESPECTIVELY BEFORE MAKING THE GIFT OF RS.2 50000/- BY CHEQUE ON 8/6/04 ARE ACTUALLY THE MONEY RECEIVED FROM DONEE SRI JAGADISH PRASAD KHAN DELWAL. HENCE AS THE CREDITWORTHINESS OF THE DONER IS NOT PROVED THE GIFT IS TREATED AS BOG US ONE. THE ENTIRE AMOUNT OF GIFT RECEIVED FOR RS.2 50 000/- IS TREATED AS INCOME FROM UNDISCLOSED SOURCE BY THE ASSESSEE AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. ON APPEAL LD. CIT(A) HAS CONFIRMED THE SAME BY OBSERVING AS UNDER :- 5. THE SUBMISSION OF THE ASSESSEE HAS BEEN CONSIDE RED CAREFULLY IN THE LIGHT OF MATERIAL PLACED BEFORE ME AND THE CASE LAW REFERRED TO. THE PLEAS TAKEN BY THE LD. AUTHORISED REPRESENTATIVE FO R THE ASSESSEE IN SUPPORT OF HIS CASE THAT (I) THE DONER WAS AN INCOM E-TAX ASSESSEE (II) MADE THE GIFT TO HIS FATHER BY ACCOUNT PAYEE CHEQUE AND (III) ALSO FILED AN AFFIDAVIT CONFIRMING THAT THE GIFT WAS INDEED GIVEN TO HIS FATHER ARE ALL FINE BUT THE VERY ISSUE THAT SHRI SUNIL KHANDELWAL WAS N OT HAVING CREDITWORTHINESS TO MAKE SUCH GIFT TO HIS FATHER RE MAINED UNANSWERED. FROM THE FINANCIAL STATEMENTS OF SHRI SUNIL FILED F OR THE A.YS. 2004-05 AND 2005-06 IT CAN BE FOUND THAT HE WAS A MAN OF S MALL MEANS. FOR THE YEARS ENDING 31/03/2004 AND 31/03/2005 HE DISCLOSE D TURNOVER OF RS.8.25 LAKHS AND RS.8.75 LAKHS AND NET PROFIT OF RS.68 2L0 /- AND RS.74 428/- RESPECTIVELY. FOR BOTH THE YEARS HIS DRAWING WAS R S.24 000/- ONLY. HE DID NOT RESPONSE TO AOS SUMMONS TO EXPLAIN THE CASH DE POSITS OF RS.2 50 000- IN HIS BANK ACCOUNTS JUST BEFORE MAKIN G THE GIFT TO HIS FATHER. HE ALSO DID NOT PRODUCE THE CASH BOOK FOR VERIFICAT ION. APART FROM THE SAID THREE CASH DEPOSITS THERE WAS NO OTHER CASH DEPOSI T IN HIS BANK ACCOUNT. ALL THESE CRUCIAL POINTS SUGGEST THAT MAKING OF SUC H GIFT BY THE DONOR WAS AGAINST HUMAN PROBABILITY. THE AR OF THE APPELLANT HAS GIVEN EMPHASIS ON THE AFFIDAVIT FILED BY THE DONOR. AT POINT NO. 3 OF THE SAID AFFIDAVIT IT IS MENTIONED THAT THE SAID GIFT WAS MADE OUT OF THE FU NDS ACQUIRED AND WAS ABSOLUTELY OWNED BY ME... ; HOWEVER. THE DONOR COU LD NOT EXPLAIN EVEN NOW ABOUT THE SOURCE OF CASH DEPOSITS IN HIS BANK A CCOUNT. THUS THE ITA NO.2263/KOL/2010 3 AFFIDAVIT NEED NOT ALWAYS BE ACCEPTED AS CORRECT AS HELD IN THE CASE OF SRI KRISHNA VS.CIT REPORTED IN 142 ITR 618 (ALL). 5.1 SO FAR AS THE CASE LAWS REFERRED BY THE A.R. O F THE APPELLANT ARE CONCERNED THEY ARE NOT APPLICABLE IN THE CASE OF T HE APPELLANT AS THE FACTS ARE DISTINGUISHABLE. IN THE CASE OF CIT VS. ORISSA CORPORATION PVT. LTD. THE HONBLE APEX COURT DECIDED THE APPEAL AGAINST THE D EPARTMENT WITH THE COMMENTS THAT THE REVENUE DID NOT EXAMINE THE SOUR CE OF INCOME OF THE SAID ALLEGED CREDITORS TO FIND OUT WHETHER THEY WER E CREDITWORTHY. THE JURISDICTIONAL TRIBUNAL ALSO DECIDED THE CASE OF M/ S. SHIV SHAKTI FOOD PRODUCTS IN FAVOUR OF THE ASSESSEE ON THE BASIS OF THE ABOVE FINDINGS OF THE APEX COURT. IN THIS CASE THE AO HAS ESTABLISHE D BEYOND DOUBT THAT THE DONOR SON WAS NOT HAVING CREDITWORTHINESS TO MAKE S UCH GIFT. WHERE THE APPELLANT CLAIMED THAT THE GIFT WAS RECEIVED FROM T HE SON IT WAS FOR THE APPELLANT TO ESTABLISH THE CREDITWORTHINESS OF HIS SON BEYOND DOUBT. RELIANCE IS PLACED ON CIT VS. DURGA PRASAD MORE RE PORTED IN 82 ITR 540 (SC). 3. AGGRIEVED BY THIS NOW THE ASSESSEE IS IN APPEAL BEFORE US. 4. AT THE TIME OF HEARING LD. AUTHORISED REPRESENT ATIVE OF THE ASSESSEE HAS SUBMITTED THAT THE LD. CIT(A) WAS UNJUSTIFIED IN CONFIRMING THE AD DITION OF RS.2 50 000/- TOWARDS THE GIFT MADE BY SRI SUNIL KUMAR KHANDENLWAL (SON). HE FURTHER SU BMITTED THAT THE DONOR SHRI SUNIL KUMAR KHANDELWAL HAD MADE THE GIFT OF RS.2 50 000/- BY CH EQUE OUT OF THE DEPOSIT MADE TO BANK FROM HIS LAST YEAR CASH IN HAND OF RS.3 72 315/- AND THE DONOR HAD MADE THE GIFT OUT OF HIS OWN CASH AND HE HAD THE CAPACITY TO MAKE THE GIFT. THE LD. C IT(A) ALSO VERIFIED THE STATEMENT OF ACCOUNTS AND THE CASH BOOK PRODUCED AND ACCEPTED THE GIFT OF RS.2 50 000/-. THE LD. AUTHORISED REPRESENTATIVE FOR THE ASSESSEE MADE HIS SUBMISSION S THAT THE ADDITION MADE BY THE LD. CIT(A) OF RS.2 50 000/- TOWARDS GIFT IS BAD IN LAW AND REQUES TED TO SET ASIDE THE ORDERS OF THE REVENUE AUTHORITIES. IN SUPPORT OF HIS SUBMISSION HE FILED CASH FLOW STATEMENT FOR THE YEAR ENDING 31.03.2001 AND COPY OF BANK STATEMENT AND AFFIDAVIT . HE FURTHER RELIED ON THE FOLLOWING CASE LAWS:- (I) CIT VS. ORISSA CORPORATION PVT. LTD. [1986] 159 ITR 78 (SC) (II) M/S. SHIV SHAKTI FOOD PRODUCTS VS. ITO/WARD 2( 4) [ITA NO.1069/KOL/2009] OF I.T.A.T. KOL KATA. 5. ON THE OTHER HAND LD. DEPARTMENTAL REPRESENTATI VE RELIED ON THE ORDERS OF REVENUE AUTHORITIES AND FURTHER POINTED OUT THAT THE DONOR HAS NOT APPEARED BEFORE THE ASSESSING OFFICER ITA NO.2263/KOL/2010 4 ALONGWITH CASH BOOK TO PROVE THE GENUINENESS OF THE GIFT. THEREFORE HE REQUESTED TO UPHOLD THE ACTION OF THE REVENUE AUTHORITIES. 6. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREF UL PERUSAL OF THE MATERIAL AVAILABLE ON RECORD INCLUDING THE CASE LAWS RELIED ON BY THE LD . AUTHORISED REPRESENTATIVE FOR THE ASSESSEE IT IS OBSERVED THAT THOUGH IN THE CASH FLOW STATEMENT THE ASSESSEE HAS SHOWN AVAILABILITY OF CASH OF RS.2 50 000/- BUT IN MY CONSIDERED OPINION THIS IS NOT SUFFICIENT TO PROVE THAT THE DONOR HAS SUFFICIENT CASH IN HAND TO DEPOSIT RS.50 000/- ON 3 1.05.2004 RS.70 000/- ON 01.06.2004 & RS.1 30 000/- ON 05.06.2004 IN HIS BANK ACCOUNT. TH E ONUS LIES ON THE ASSESSEE TO PROVE THAT THE DONOR IS ACTUALLY HAVING THAT MUCH CASH BALANCE ON THE SPECIFIED DATES AS PER HIS BOOKS OF ACCOUNT. KEEPING IN VIEW OF THIS FACT AND IN THE IN TEREST OF JUSTICE I SET ASIDE THE MATTER TO THE FI LE OF THE ASSESSING OFFICER TO DECIDE AFRESH AFTER GIV ING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. I MAY STATE THAT IF THE ASSESSEE FAILS TO COOPERATE AND/OR TO ATTEND HEARING AS MAY BE FIXED ASSESSING OFFICER WILL BE AT LIBERTY TO DECI DE THE APPEAL ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORD AND CONSIDERING SUCH OTHER FACT S HE MAY CONSIDER IT NECESSARY. 5. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 28. 2. 2011. SD/- [ C. D. RAO ] JUDICI AL MEMBER DATED : 28TH FEBRUARY 2011. COPY FORWARDED TO THE - 1. JAGDISH PRASAD KHANDELWAL VILL & P.O. BELDA DIST. PASCHIM MEDINIPUR. 2. INCOME TAX OFFICER/WARD-2(2) SAHOO BHAWAN MI DNAPORE-721101. 3. CIT(A)- (4) C IT- 5. D.R. I.T.A.T. KOLKATA. [TRUE COPY] BY ORDER DEPUTY/ASSISTANT REGISTRAR (KKC) I .T.A.T. KOLKATA.