Sh. Anil Kumar Bhatia,, Delhi v. ACIT, New Delhi

ITA NO. 2665/D/2009 SH. ANIL KUMAR BHATIA PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A NEW DELHI BEFORE SHRI G.D. AGRAWAL HONBLE VICE PRESIDENT & SHRI SUDHANSHU SRIVASTAVA JUDICIAL MEMBER ITA NO.-2665/DEL/2009 ( ASSESSMENT YEAR: 2006-07) ANIL KUMAR BHATIA 2046 KATRA TOBACCO KHARI BAOLI DELHI. AAFPB4733N VS ACIT CENTRAL CIRCLE 17 NEW DELHI. ASSESSEE BY SH. NEERAJ JAIN CA SH. P.K. MISHRA CA REVENUE BY SH. RAVI JAIN CIT DR ORDER PER SUDHANSHU SRIVASTAVA JUDICIAL MEMBER : THIS APPEAL HAS BEEN REMITTED BY THE HONBLE DELHI HIGH COURT IN ITA NO. 2007/2010 WHEREIN THE HIGH COURT HAS ANSWERED THE QUESTIONS OF LAW IN FAVOUR OF THE REVENUE WITH THE ORDER OF THE REMIT. PARAS 2 & 3 OF THE HONBLE HIGH COURTS ORDER ARE BEING REPRODUCED FOR A READY REFERENCE AS UNDER: DATE OF HEARING 04.05.2016 DATE OF PRONOUNCEMENT 04.08.2016 ITA NO. 2665/D/2009 SH. ANIL KUMAR BHATIA PAGE 2 OF 6 2. WE HAVE EXAMINED THE ORDER DATED 01/01/2010 AN D IT IS NOTICED THAT THE ASSESSMENT ORDER IN RESPECT OF ASSESSMENT YEAR 2006-07 WAS CONSIDERED AS AN ORDER U/S 153A OF THE INCOME TAX A CT 1961(ACT FOR SHORT). A SEARCH NO DOUBT WAS CONDUCTED IN THE C ASE OF THE ASSESSEE ON 13.12.2005 BUT AS FAR AS THE ASSESSMENT ORDER FO R THE ASSESSMENT YEAR 2006-07 IS CONCERNED THE SAME WAS PASSED U/S 1 43(3) OF THE ACT. THE SAID ORDER WAS SUBJECT MATTER OF CHALLENGE BEFO RE THE CIT (APPEALS) AND THEN TAKEN IN APPEAL BEFORE THE TRIBU NAL BY THE ASSESSEE. THE TRIBUNAL HAS MADE AN ERROR IN TREATING THE APPE AL FOR ASSESSMENT YEAR 2006-07 AS ARISING OUT OF AN ORDER PASSED U/S 153A. AS RECORDED ABOVE THE ASSESSMENT ORDER WAS PASSED U/S 143(3) O F THE ACT. LD. COUNSEL FOR THE PARTIES THEREFORE AGREE THAT ORDE R DATED 01/01/2010 IN RESPECT OF ASSESSMENT YEAR 2006-07 SHOULD BE SET ASIDE. THE QUESTION OF LAW IS ACCORDINGLY ANSWERED IN FAVOUR O F THE REVENUE WITH AN ORDER OF REMIT. 3. ON THE SECOND QUESTION ALSO WE FIND THAT FINDIN G RECORDED BY THE TRIBUNAL ARE CRYPTIC AND IT HAS BEEN MERELY OBS ERVED THAT THE GIFT WAS FROM THE REAL BROTHER IN LAW. THE TRIBUNAL HAS NOT GONE INTO AND EXAMINED THE GENUINENESS OF GIFT AND CREDIT WORTHIN ESS OF THE DONOR. THE SECOND QUESTION OF LAW IS ALSO ANSWERED IN FAVO UR OF THE REVENUE WITH ORDER OF REMIT. 2. THE SOLE IS ISSUED FOR CONSIDERATION BY THE TRIB UNAL IS WHETHER THE LD. CIT (APPEALS) WAS INCORRECT AND UNJUSTIFIED IN CONF IRMING THE ADDITION OF RS. 518 631/- ON ACCOUNT OF GIFT INCORRECTLY AND UNJUST IFIABLY MADE BY THE AO. ITA NO. 2665/D/2009 SH. ANIL KUMAR BHATIA PAGE 3 OF 6 THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS THE PROPRIETOR OF M/S A.K. TRADERS AND ENGAGED IN THE BUSINESS OF HING TRADING. A SEARCH WAS UNDERTAKEN ON THE DEALERS/TRADERS ENGAGED IN THE TR ADING OF HING ON 13/12/2005. ASSESSEES RESIDENCE AND BUSINESS PREM ISES WERE ALSO SUBJECTED TO SUCH SEARCH. ASSESSEES LOCKERS WERE ALSO SEARC HED. A GIFT OF RS. 518 631/- WAS RECEIVED BY THE ASSESSEE FROM HIS BRO THER IN LAW DURING THE YEAR UNDER CONSIDERATION. DURING THE ASSESSMENT PR OCEEDINGS U/S 143(3) THE AO ENQUIRED ABOUT THE IMPUGNED GIFT. THE AO HAS NOT ED THAT THE IDENTITY OF THE DONOR HIS FINANCIAL CAPACITY AS WELL AS THE GE NUINENESS OF THE GIFT TRANSACTION COULD NOT BE ESTABLISHED. THE AO WAS O F THE OPINION THAT IT WAS THE ASSESSEES OWN MONEY WHICH WAS INTRODUCED IN TH E GARB OF THE GIFT. HE HAS ALSO NOTED THAT THE ASSESSEE HAD RECEIVED THE S IMILAR GIFT OF RS. 2 71 000/- IN A.Y. 03-04. THE AO TREATING THE SAME AS UNDISC LOSED INCOME ADDED THE AMOUNT TO THE INCOME OF THE ASSESSEE. AGGRIEVED T HE ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. THE L D. CIT (APPEALS) HELD THAT THE ASSESSEE HAD NOT FILED ANY CONFIRMATION FROM TH E ALLEGED DONOR. THE LD. CIT (APPEALS) WAS OF THE OPINION THAT IT WAS NOT SU FFICIENT TO TREAT ANY GIFT AS GENUINE MERELY ON THE BASIS OF RECEIPT OF AMOUNT TH ROUGH BANKING CHANNELS. THE LD. CIT (A) FURTHER HELD THAT IN THE INSTANT CA SE EXCEPT FOR TAKING THE NAME OF THE BROTHER IN LAW THE ASSESSEE WAS UNABLE TO LEAD ANY FURTHER ITA NO. 2665/D/2009 SH. ANIL KUMAR BHATIA PAGE 4 OF 6 GENUINE EVIDENCE IN SUPPORT OF THE GIFT RECEIVED FR OM THE BROTHER IN LAW WHO IS SAID TO BE STAYING IN USA. HE FURTHER HELD THAT THE RECEIPT OF MONEY THROUGH THE BANKING CHANNEL DOES NOT IPSO FACTO PROVE THE CREDITWORTHINESS OF THE DONOR UNLESS HIS ASSETS AND LIABILITIES AS WELL AS PARTICULARS OF INCOME ARE ALSO FURNISHED. HE FURTHER UNDERLINED THE FACT THA T THE ASSESSEE COULD NOT FILE FURTHER DETAILS EVEN IN THE APPELLATE PROCEEDINGS. THE ADDITION WAS ACCORDINGLY CONFIRMED BY THE LD. CIT (APPEALS). 3. THE LD. AR SUBMITTED THAT THE PERSON FROM WHOM T HE GIFT HAS BEEN RECEIVED IS IDENTIFIABLE. THE AMOUNT OF GIFT HAS B EEN RECEIVED THROUGH THE BANKING CHANNEL AND THE COPIES OF THE CHEQUE AS WEL L AS THE BANK STATEMENTS ARE ON RECORD. HE FURTHER SUBMITTED THAT THE DONOR IS THE REAL BROTHER IN LAW OF THE ASSESSEE AND THE IMPUGNED AMOUNT IS NOT SUCH A BIG AMOUNT WHICH COULD NOT HAVE BEEN GIVEN BY WAY OF GIFT. 4. THE LD. DR SUBMITTED THAT NO EVIDENCE WAS FILED BEFORE THE AO AS IS EVIDENT FROM PAGE 7 OF THE LD. CIT(A)S ORDER AND F URTHER NO EVIDENCES REGARDING THE CREDITWORTHINESS WAS FILED EVEN BEFOR E THE LD. CIT(APPEALS) AND HENCE THE ADDITION HAD RIGHTLY BEEN UPHELD BY THE LD. CIT(APPEALS). 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE DOCUMENTS ON RECORD. IT IS AN UNDISPUTED FACT THAT THE DISALLOW ANCE WAS INITIALLY MADE ITA NO. 2665/D/2009 SH. ANIL KUMAR BHATIA PAGE 5 OF 6 BECAUSE OF THE FAILURE ON PART OF THE ASSESSEE TO E STABLISH THE CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION BY PRODUCING THE RELEVANT DOCUMENTS. EVEN AT THE FIRST APPELLATE STAGE THE LD. CIT (APPE ALS) HAD TO UPHOLD THE DISALLOWANCE AS THE ASSESSEE COULD NOT FILE ANY FUR THER EVIDENCE IN SUPPORT OF HIS CLAIM EXCEPT FOR THE COPY OF CHEQUE AND BANK ST ATEMENT. BANK STATEMENT NO DOUBT MAY BE AN EVIDENCE TO PROVE THAT THE TRAN SACTION HAS BEEN ROUTED THROUGH THE BANKING CHANNEL AND MAY ALSO ESTABLISH THE PLACE OF ORIGINATION AND DESTINATION OF THE TRANSACTION. HOWEVER IN AB SENCE OF ANY FURTHER CORROBORATING EVIDENCE IT FAILS TO ESTABLISH THE C REDITWORTHINESS OF THE TRANSACTING PARTIES. THE ASSESSEE EVEN AFTER A LA PSE OF SEVEN YEARS FROM THE DATE OF PASSING OF THE ORDER BY THE LD. CIT (APPEAL S) HAS FAILED TO SUBSTANTIATE HIS CLAIM BY PROVIDING RELEVANT DOCUME NTS TO PROVE THE CREDITWORTHINESS OF THE DONOR. THE DONOR NO DOUBT MAY BE THE REAL BROTHER IN LAW OF THE ASSESSEE BUT THIS FACT DOES NOT LEND ANY CREDENCE TO THE ASSESSEES CLAIM ABOUT THE CREDITWORTHINESS OF THE DONOR. EVEN DURING THE PROCEEDINGS BEFORE US THE LD. AR COULD NOT SUBMIT ANY FURTHER EVIDENCE TO GIVE STRENGTH TO THE CLAIM OF THE ASSESSEE. HENCE WE FIND NO REASON TO INTERFERE WITH THE FINDING RECORDED BY THE LD. CIT (APPEALS) AND UPHOLD THE IMPUGNED ADDITION. ITA NO. 2665/D/2009 SH. ANIL KUMAR BHATIA PAGE 6 OF 6 6. IN THE RESULT THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 04.08.2016 SD/- SD/- (G.D. AGRAWAL) (SUDHANSHU SRIVASTAVA ) VICE PRESIDENT JUDICIAL MEMBER DATED: 04.08.2016 *KAVITA ARORA COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI