KUNAL ASHOK KUMAR PUROHIT, MUMBAI v. ACIT 8(1)(2), MUMBAI

ITA 2456/MUM/2010 | 2006-2007
Pronouncement Date: 07-09-2011 | Result: Partly Allowed

Appeal Details

RSA Number 245619914 RSA 2010
Assessee PAN AFXPP5532J
Bench Mumbai
Appeal Number ITA 2456/MUM/2010
Duration Of Justice 1 year(s) 5 month(s) 8 day(s)
Appellant KUNAL ASHOK KUMAR PUROHIT, MUMBAI
Respondent ACIT 8(1)(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 07-09-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 07-09-2011
Assessment Year 2006-2007
Appeal Filed On 29-03-2010
Judgment Text
1 ITA 2456/ M/10 & 2492/M/10 MR. KUNAL A. PURO HIT IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A BEFORE SHRI N.V. VASUDEVAN J.M. AND SHRI R.K. PAND A A.M. ITA NO. 2456/MUM/2010 ASSESSMENT YEAR 2006-07 MR. KUNAL ASHOK KUMAR PUROHIT G-5 GROUND FLOOR MARINE CHAMBERS 43 NEW MARINE LINES MUMBAI -400 026. PAN AFXPP 5532J VS. INCOME TAX OFFICER 8(1)(2) AAYAKAR BHAWAN 2 ND FLOOR MUMBAI- 20. APPELLANT RESPONDENT ITA NO. 2492/MUM/2010 ASSESSMENT YEAR 2006-07 INCOME TAX OFFICER 8(1)(2) AAYAKAR BHAWAN 2 ND FLOOR MUMBAI- 20. VS. MR. KUNAL ASHOK KUMAR PUROHIT G-5 GROUND FLOOR MARINE CHAMBERS 43 NEW MARINE LINES MUMBAI -400 026. PAN AFXPP 5532J APPELLANT RESPONDENT ASSESSEE BY SHRI K. GOPAL RESPONDENT BY SHRI P.K.B. MENON DATE OF HEARING 21.7.2011 DATE OF PRONOUNCEMENT ORDER PER R.K. PANDA A.M. THESE ARE CROSS APPEALS THE FIRST ONE FILED BY THE ASSESSEE AND THE SECOND ONE FILED BY THE REVENUE AND ARE DIRECTED AGAINST T HE ORDER DT. 18.01.2010 OF 2 ITA 2456/ M/10 & 2492/M/10 MR. KUNAL A. PURO HIT THE CIT(A)- 16 MUMBAI RELATING TO A.Y. 2006-07. TH ESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON O RDER FOR THE SAKE OF CONVENIENCE. 2. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE DERIVED INCOME FROM SALARY SPECULATION LOSS CLAIMED UNDER BUSINESS HEA D CAPITAL GAINS AND INCOME FROM OTHER SOURCES. THE A.O. NOTED FROM THE AIR INF ORMATION GENERATED THROUGH CASS THAT THE ASSESSEE HAS PURCHASED TWO IM MOVABLE PROPERTIES ON 21.02.06 FOR ` 31 00 117/- EACH. HOWEVER ON VERIFICATION OF RE CORDS OF THE ASSESSEE THE A.O. NOTED THAT THE ASSESSEE HAS NEIT HER FILED THE CAPITAL ACCOUNT NOR BALANCE SHEET FOR THE YEAR ENDED 31 ST MARCH 2006 ALONG WITH THE RETURN OF INCOME. FROM THE VARIOUS DETAILS FILED DURING THE C OURSE OF SCRUTINY ASSESSMENT PROCEEDINGS THE A.O. NOTED THAT THE ASSESSEE HAS F URNISHED THE COPIES OF TWO DECLARATIONS OF GIFTS ON ` 20/- STAMP PAPER DTD. 29.01.99 RECEIVED FROM SHRI SURENDRA KUMAR PUROHIT AND SHRI SUNILKUMAR PUROHIT. THE DETAILS OF MOVABLE ASSETS GIFTED BY THE ABOVE TWO DONORS ARE AS UNDER: - 1. SHRI SURENDRA KUMAR PUROHIT 1) BALANCE IN CANARA BANK S.B. A/C NO. 5710 ` 8 24 870/- 2) BALANCE IN PPF A/C NO. 64 WITH STATE BANK OF INDIA ` 8 74 766/- 3. D.D. TOGETHER WITH INTEREST ACCRUED WITH DIWAN HOUSING FINANCE CORPORATION LTD. HAVING FACE VALUE OF ` 50 000/- TOTAL ` 17 49 636/- ============ 2. SHRI SUNILKUMAR PUROHIT 1. GOLD ORNAMENT WEIGHING 15 TOLAS M.V. APPRE ` 70 000/- 2. SILVER ARTICLES AND UTENSILS WEIGHT ABOUT 1 KG M.V. APPR. ` 8 000/- 3. BALANCE IN CANARA BANK A/C NO. 10969 ` 4 75 410/- 4. BALANCE IN PPF A/C NO.66 WITH STATE BANK OF PATIALA ` 3 34 344/- 5. F.D. TOGETHER WITH INTEREST ACCRUED WITH DIWAN HOUSING FINANCE CORPORATION LTD. HAVING FACE VALUE OF ` 50 000/- ` 50 000/- ========= TOTAL ` 9 37 754/ - 3 ITA 2456/ M/10 & 2492/M/10 MR. KUNAL A. PURO HIT 2.1 ON THE VERIFICATION OF UNION BANK OF INDIA A/C NO. 6031 THE A.O. NOTED THAT THERE WERE TWO DEPOSITS OF GIFTS I.E. ` 16 84 995/- RECEIVED FROM SHRI SURENDRAKUMAR PUROHIT AND ` 6 44 760/- RECEIVED FROM SHRI SUNILKUMAR PUROHIT BOTH TOTALING TO ` 23 29 755/- DURING THE YEAR AS DECLARED BY THE ASSESSEE. ON BEING FURTHER QUESTIONED BY THE A.O. TO FILE THE CONFIRMATION LETTERS OF GIFTS FROM THE DONORS SHOWING THE NAMES AND ADDRESSES DATES MODES OF PAYMENTS NATURE OF GIFT PAN AMOUNT OF GIFT AN D RELATIONSHIP OF DONOR TO DONE THE ASSESSEE FURNISHED CERTAIN DETAILS. THE A.O. ALSO ASKED THE ASSESSEE TO FURNISH VARIOUS PASS BOOKS OF THE DONORS FROM WH ERE THE PPF AMOUNTS AND THE FIXED DEPOSITS WERE TRANSFERRED. THE A.O. NOTED THAT THE PHOTOCOPY OF CONFIRMATION LETTER DATED 10.11.2008 OF SHRI SUREND RAKUMAR PUROHIT READS AS UNDER:- THIS WAS TO CONFIRM THAT I DR. SURENDRAKUMAR PUROH IT GIFTED THE FOLLOWING AMOUNT BEING ITEM NO. 2 OF THE DECLARATION OF GIFT MADE BY ME ON 29 TH JANUARY 1999 UPON MATURITY/REDEMPTION OF THE SAME. DD DAT ED 11.04.2005 CANARA BANK FOR ` 16 88 709/- ( ` 9 00 000 7 84 995 + DD COMMISSION 3714) MY SAVINGS BANK A/C NO IN WHICH THE REDEMPTION PROCEED S WERE RECEIVED AND THEN THE AMOUNT WAS WITHDRAWN FOR THE PURPOSES OF ABOVE DEMAND DRAFT IS 5710 WITH CANARA BANK SITABARDI NAGPUR 440012. MY A DDRESS WHILE I STAY IN INDIA IS PUROHIT HOUSE 63 WEST HIGH COURT ROAD NAG PUR 44 00 10 AND PAN IS ACGPP3381F. IN SIMILAR WAY THE CONFIRMATION LETTER WAS GIVEN BY SHRI SUNILKUMAR DATED 10.11.2008. 2.2 THE A.O. NOTED FROM CANARA BANK S.B. A/C NO. 57 10 THAT AN AMOUNT OF ` 16 88 709/- WAS DEPOSITED ON 08.04.2005 AND AN AMOU NT OF ` 16 88 709/- WAS WITHDRAWN ON 11.04.2005 FOR DD AND THERE WAS CR EDIT BALANCE OF ` 1 059/- ONLY ON 01.02.2005 BEFORE DEPOSITING THE A MOUNT OF ` 16 88 709/-. THE AMOUNT OF ` 16 88 709/- WAS TRANSFERRED FROM PPF A/C NO. 64 AF TER CLOSING THE SAID ACCOUNT. 2.3 IN CASE OF SHRI SUNILKUMAR PUROHIT THE A.O. NOT ED THAT IN CANARA BANK S.B. A/C NO. 10969 AN AMOUNT OF ` 6 46 171/- WAS DEPOSITED ON 08.04.2005 AND AN AMOUNT OF ` 6 44 750/- WAS WITHDRAWN ON 11.04.2005 FOR DD. BEF ORE 4 ITA 2456/ M/10 & 2492/M/10 MR. KUNAL A. PURO HIT DEPOSITING AN AMOUNT OF ` 6 46 171/- THERE WAS CREDIT BALANCE OF ` 1 105/- ONLY AS ON 01.02.2005. AN AMOUNT OF ` 6 46 171/- WAS TRANSFERRED FROM PPF A/C NO. 63 AFTER CLOSING THE SAID ACCOUNT. THUS AC CORDING TO THE A.O. IN CANARA BANK A/C NO. 6710 & 10969 OF SHRI SURENDRAKU MAR PUROHIT AND SHRI SUNILKUMAR PUROHIT RESPECTIVELY THERE WERE NO BALA NCES OF ` 8 24 870/- & ` 4 75 410/- ALONG WITH ACCRUED INTEREST AS SHOWN IN THE GIFT DEED DATED 29.01.1999. 2.4 HOWEVER THE A.O. WAS NOT CONVINCED WITH THE EX PLANATION GIVEN BY THE ASSESSEE AND THE VARIOUS DOCUMENTS FILED BEFORE HIM ON THE GROUND THAT THE ASSESSEE HAS NEITHER DECLARED THE ALLEGED GIFT IN T HE PRECEDING ASSESSMENT YEAR NOR FILED THE CAPITAL ACCOUNT AND BALANCE SHEET FOR VERIFICATION. THE ASSESSEE HAD NEITHER ESTABLISHED THE RELATIONSHIP WITH SUPPO RTING EVIDENCES NOR FILED THE COPIES OF INCOME-TAX RETURNS OF DONORS IN ORDER TO VERIFY THE IDENTITY CAPACITY AND GENUINENESS OF GIFTS MADE. THE ASSESSEE HAS NO T FILED ANY SUPPORTING EVIDENCE OF FIXED DEPOSIT OF ` 50 000/- EACH WITH DIWAN HOUSING FINANCE CORPORATION OF INDIA AS SHOWN IN THE GIFT DEED BY T HE 2 DONORS. FURTHER NO GIFT TAX WAS PAID BY THE DONORS DURING THE YEAR 1999 WHE N GIFT TAX WAS PAYABLE. THE ASSESSEE HAS NOT FILED HIS OWN PERSONAL CAPITAL ACCOUNT AND BALANCE SHEET FOR ASSESSMENT YEAR 2005-06 AND 2006-07 THOUGH SPEC IFICALLY WERE ASKED FOR. ACCORDING TO THE A.O. MERE FILING OF PHOTOCOPIES O F FILING LETTERS/DECLARATION OF DEED OF THE DONORS WITHOUT PROVING THE RELATIONSHIP IDENTITY CAPACITY OF THE DONORS THE GENUINENESS OF THE GIFTS OF SUCH HUGE A MOUNTS CANNOT BE ACCEPTED. REJECTING THE VARIOUS EXPLANATIONS GIVEN BY THE ASS ESSEE HE TREATED THE GIFT OF ` 52 86 305/- RECEIVED BY THE ASSESSEE THE DETAILS O F WHICH ARE AS UNDER AS INCOME FROM UNDISCLOSED SOURCES:- SR NO. AS PER GIFT DEED THE ASSETS AMOUNT( ` ) THE GIFT AMT TAKEN INCLUDING ACCRUED AS UNDER: REMARKS A) THE GIFTS RECEIVED FROM SHRI SURENDRAKUMAR PUROHIT: 1 BALANCE IN CANARA BANK 8 24 870 16 49 740 - 5 ITA 2456/ M/10 & 2492/M/10 MR. KUNAL A. PURO HIT S.B. A/C 5710 2 BALANCE IN PPF A/C NO. 64 WITH STATE BANK OF PATIALA 8 74 766 16 84 995 AS SHOWN IN THE BANK SUMMARY 3 F.D. TOGETHER WITH INTEREST ACCRUED WITH DIWAN HOUSING FINANCE CORPORATION LTD. 50 000 1 00 000 - B) THE GIFTS RECEIVED FROM SHRI SUNILKUMAR PUROHIT: 4 GOLD ORNAMENT WEIGHING 15 TOLAS AS M.V. APPR. 70 000 1 40 000 - 5 SILVER ARTICLES AND UTENSILS WEIGHT ABOUT 1 KG M.V. APPR. 8 000 16 000 - 6 BALANCE IN CANARA BANK A/C NO. 10969 4 75 410 9 50 820 - 7 BALANCE IN PPF A/C NO. 63 WITH STATE BANK OF PATIALA 3 34 344 6 44 750 AS SHOWN IN THE BANK SUMMARY 8 FD TOGETHER WITH INTEREST ACCRUED WITH DIWAN HOUSING FINANCE CORPORATION LTD. 50 000 1 00 000 TOTAL GIFTS AMOUNT ` `` ` 52 86 305 2.6 BEFORE THE LD. CIT(A) THE ASSESSEE SUBMITTED TH AT THE ABOVE GIFTS WERE RECEIVED IN THE FINANCIAL YEAR 1998-99. THE BALANC E LYING IN SAVING ACCOUNT WERE RECEIVED IN THE YEAR 1999 ITSELF. SIMILARLY O THER GIFTS OF GOLD SILVER UTENSILS WERE ALSO RECEIVED IN 1999. SINCE BALANCE IN PPF ACCOUNT IS NOT ALLOWED TO BE WITHDRAWN AT THAT POINT OF TIME THE ASSESSEE COULD NOT MAKE WITHDRAWAL OF THE SAME. DURING THE YEAR PPF ACCOU NT OF SHRI SURENDRA KUMAR PUROHIT AND SHRI SUNIL KUMAR PUROHIT ATTAINED MATUR ITY. THE AMOUNT WHICH WAS ` 8 74 766/- AND ` 4 75 410/- RESPECTIVELY IN 1999 HAS GROWN TO ` 16 88 709/- AND ` 6 46 171/- RESPECTIVELY AND WITHDRAWAL HAS BEEN PE RMITTED DURING THE YEAR. THEREAFTER THE DONORS OBTAINED DE MAND DRAFT OUT OF THEIR SAVINGS ACCOUNT DEPOSITED THE SAME IN THEIR S.B. A /C AND OUT OF THAT DEMAND DRAFTS WERE ISSUED IN FAVOUR OF THE ASSESSEE. COPI ES OF PPF PASS BOOK AND SAVING PASS BOOK OF BOTH THE DONORS WERE PRODUCED. IT WAS SUBMITTED THAT SHRI SURENDRA KUMAR PUROHIT AND SHRI SUNIL KUMAR PUROHIT HAS ALSO GIFTED WHATEVER BALANCE LYING IN THEIR PPF ACCOUNT WITH ST ATE BANK OF PATIALA IN 1999. 6 ITA 2456/ M/10 & 2492/M/10 MR. KUNAL A. PURO HIT SINCE WITHDRAWAL OUT OF SUCH PPF ACCOUNT WAS NOT PE RMISSIBLE AS THE PPF A/C HAS NOT COMPLETED THE MANDATORY PERIOD OF 15 YEARS THE ASSESSEE HAS OPTED TO CLOSE THE PPF A/C OF SHRI SURENDRAKUMAR PUROHIT AND SHRI SUNILKUMAR PUROHIT AFTER THE STATUTORY PERIOD. THE SAME PPF PROCEEDS H AVE BEEN RECEIVED BY THE ASSESSEE WHICH IS CREDITED IN THE BANK ACCOUNT. 2.7 THE QUESTION BEFORE THE LD. CIT(A) WAS AS TO WH ETHER THE GIFT ON ACCOUNT OF MATURITY OF FIXED DEPOSITS WILL BE TREATED AS GI FTS AS PER DECLARATION OF GIFTS ON 29.1.99 OR ON THE DATE OF ITS MATURITY. ACCORDING TO HIM ALL THE AMOUNTS HAVE BEEN TRANSFERRED TO THE ACCOUNT OF THE ASSESSEE DUR ING THE YEAR UNDER CONSIDERATION ONLY ON MATURITIES OF THE FDS AND PPF ACCOUNTS OF BOTH THE DONORS. THEREFORE THE TRANSFER OF THE AMOUNT IN TH E ACCOUNT OF THE ASSESSEE IS THE DETERMINING FACTOR SINCE ALL THESE AMOUNTS WERE RECEIVED DURING THE YEAR UNDER CONSIDERATION OR DATE OF DECLARATION OF GIFT I.E. 29.1.99. HE HELD THAT THE GIFTS WERE RECEIVED IN THE A.Y. 2006-07. SO FAR AS THE GENUINENESS OF THE GIFTS ARE CONCERNED HE NOTED THAT THE ASSESSEE BEFORE TH E A.O. HAS FILED ONLY LETTER OF CONFIRMATION ALONG WITH PHOTOCOPIES OF THE BANK ACCOUNTS OF THE DONORS MAINTAINED WITH STATE BANK OF PATIALA AND CANARA BA NK NAGPUR. THESE DOCUMENTS NEITHER PROVED THE IDENTITY OF THE DONOR RELATIONSHIP WITH THE DONOR AND GENUINENESS OF THE TRANSACTION. THE ELEMENT OF HUMAN PROBABILITY AND SURROUNDING CIRCUMSTANCES PROVE THAT THE ASSESSEE H AS FAILED TO SUBMIT THE RELATIONSHIP WITH THE DONOR AND OCCASION OF GIFT. RELYING ON A COUPLE OF DECISIONS HE HELD THAT A MERE IDENTIFICATION OF TH E DONOR AND SHOWING MOVEMENT OF GIFT AMOUNT THROUGH BANKING CHANNEL IS NOT SUFFICIENT TO PROVE THE GENUINENESS OF THE GIFT. HOWEVER SINCE THE ASSESS EE HAS RECEIVED GIFT OF ` 8 24 870/- FROM SHRI SURENDRAKUMAR PUROHIT FROM HIS BANK ACCOUNT MAINTAINED WITH CANARA BANK SAVING A/C NO. 5710 AS PER GIFT DEED DTD. 29.1.99 AND SINCE GIFT OF ` 70 000/- ON ACCOUNT OF GOLD ORNAMENTS WEIGHING 15 TOLAS SILVER ARTICLES AND UTENSILS WEIGHING 1 KG O F ` 8 000/- AND BANK BALANCE OF ` 4 75 410/- MAINTAINED WITH CANARA BANK SAVING NO. 10169 FROM SHRI 7 ITA 2456/ M/10 & 2492/M/10 MR. KUNAL A. PURO HIT SUNILKUMAR PUROHIT VIDE GIFT DEED DTD. 29.1.99 HE HELD THAT THOSE ITEMS CANNOT BE CONSIDERED AS UNDISCLOSED INCOME OF THE A SSESSEE IN THE YEAR UNDER CONSIDERATION. HE ACCORDINGLY DIRECTED THE A.O. TO DELETE THE ABOVE AMOUNTS FROM THE TOTAL ADDITION OF ` 52 86 305/-. 2.7 AGGRIEVED WITH SUCH PART RELIEF ALLOWED BY THE LD. CIT(A) BOTH THE ASSESSEE AND THE REVENUE ARE IN APPEAL BEFORE US. 3. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES PERUSED THE ORDERS OF A.O. AND THE LD. CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECIS IONS CITED BY BOTH THE PARTIES. IT IS THE SETTLED PROPOSITION OF LAW THAT IN CASE OF ANY GIFT TRANSACTION THE ASSESSEE HAS TO PROVE THE IDENTITY AND CAPACITY OF THE DONOR AND THE GENUINENESS OF THE TRANSACTION. THE ONUS IS ALWAYS ON THE ASSESSEE TO DISCHARGE THE SAME TO THE SATISFACTION OF THE A.O. IN THE INSTANT CASE THE ASSESSEE ADMITTEDLY HAS FAILED TO DISCHARGE THE ONU S CAST ON HIM. MERELY PRODUCING THE PHOTOCOPIES OF GIFT DECLARATION/AFFID AVIT AND COPIES OF BANK ACCOUNTS WILL NOT ABSOLVE THE ASSESSEE FROM DISCHAR GING THE ONUS CAST ON HIM. THE OCCASION FOR GIVING SUCH HUGE AMOUNT OF GIFT HA S ALSO NOT BEEN DISCHARGED BY THE ASSESSEE FOR WHICH THE ELEMENT OF HUMAN PROB ABILITY AND SURROUNDING CIRCUMSTANCES ARE AGAINST THE ASSESSEE. HOWEVER C ONSIDERING THE TOTALITY OF THE FACTS OF THE CASE AND IN THE INTERESTS OF JUSTI CE WE DEEM IT PROPER TO RESTORE THE MATTER BACK TO THE FILE OF THE A.O. WITH A DIRE CTION TO ADJUDICATE THE ISSUE AFRESH BY GIVING ONE MORE OPPORTUNITY TO THE ASSESS EE TO SUBSTANTIATE WITH EVIDENCE TO HIS SATISFACTION REGARDING THE IDENTITY AND CAPACITY OF THE DONORS AND THE GENUINENESS OF THE TRANSACTIONS. WE HOLD A ND DIRECT ACCORDINGLY. THE GROUNDS RAISED BY THE ASSESSEE AND THE REVENUE ARE ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSE. 8 ITA 2456/ M/10 & 2492/M/10 MR. KUNAL A. PURO HIT 4. IN THE RESULT BOTH THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON 07.09.2011. SD/- SD/- (N.V. VASUDEVAN) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DATED 07.09.2011. RK COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 16 MUMBAI 4. THE CIT VIII MUMBAI 5. THE DR BENCH A 6. MASTER FILE // TUE COPY// BY ORDER DY/ASSTT. REGISTRAR ITAT MUMBAI 9 ITA 2456/ M/10 & 2492/M/10 MR. KUNAL A. PURO HIT DATE INITIALS 1 DRAFT DICTATED ON 2.9.2011 6.9.2011 SR. PS 2 DRAFT PLACED BEFORE THE AUTHOR 5.9.2011 6.9.11 SR. PS 3 DRAFT PLACED BEFORE THE SECOND MEMBER 4 APPROVED DRAFT COMES TO THE SR. PS SR. PS 5 KEPT FOR PRONOUNCEMENT ON SR. PS 6 FILE SENT TO THE BENCH CLERK SR. PS 7 DATE ON WHICH FILE GOES TO THE HEAD CLERK 8 DATE ON WHICH FILE GOES TO THE AR 9 DATE OF DISPATCH OF ORDER