Sh. Rajesh Kumar Agarwal, Hisar v. ITO, Hisar

ITA 2829/DEL/2010 | 2005-2006
Pronouncement Date: 20-01-2011 | Result: Allowed

Appeal Details

RSA Number 282920114 RSA 2010
Assessee PAN AABPA4022B
Bench Delhi
Appeal Number ITA 2829/DEL/2010
Duration Of Justice 7 month(s) 12 day(s)
Appellant Sh. Rajesh Kumar Agarwal, Hisar
Respondent ITO, Hisar
Appeal Type Income Tax Appeal
Pronouncement Date 20-01-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted F
Tribunal Order Date 20-01-2011
Date Of Final Hearing 14-01-2011
Next Hearing Date 14-01-2011
Assessment Year 2005-2006
Appeal Filed On 07-06-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `F: NEW DELHI BEFORE SHRI G.E. VEERABHADRAPPA VICE PRESIDENT AND SHRI C.L.SETHI JUDICIAL MEMBER. I.T. A. NOS.2829 & 2830/DEL/2010 ASSESSMENT YEAR: 2005-06 SHRI RAJESH KUMAR AGARWAL INCOME-TAX OFFICER C/O ECONOMIC TRANSPORT CARRIERS VS. WARD-3 HISSA R (HARYANA). SHAKTI NAGAR HISSAR (HARYANA). PAN: AABPA4022B (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI G.R. AGNIHOTRI ADVOCATE. RESPONDENT BY: SHRI H.K. LAL SR. DR. O R D E R PER C.L. SETHI JUDICIAL MEMBER: THE ASSESSEE IS IN APPEAL AGAINST TWO SEPARATE ORDE RS DATED 26.11.2008 AND 30.03.2010 PASSED BY THE LEARNED COMMISSIONER O F INCOME-TAX (APPEALS) IN THE MATER OF AN ASSESSMENT MADE BY THE ASSESSING OFFICER UNDER SEC. 143(3) OF THE INCOME-TAX ACT 1961 (THE ACT) AND ORDER OF PENALTY UNDER SEC. 271(1)(C) BY THE ASSESSING OFFICER RESPE CTIVELY PERTAINING TO THE ASSESSMENT YEAR 2005-06. 2. THE VARIOUS GROUNDS OF APPEAL RAISED IN ITA NO.2 829/DEL/2010 ARISING FROM THE ASSESSMENT ORDER MADE BY THE ASSES SING OFFICER REVOLVE AROUND THE ADDITION MADE BY THE AO ON ACCOUNT OF GI FTS OF RS.1 51 000/- 2 EACH CLAIMED TO HAVE BEEN RECEIVED BY THE ASSESSEE FROM HIS SISTER SMT. SAROJ AGGARWAL AND HER HUSBAND SHRI JITENDRA AGGARW AL. 3. THE ASSESSEE IS A PARTNER IN THE PARTNERSHIP FIR M M/S. ECONOMIC TRANSPORT CARRIERS. HE ALSO RECEIVED SALARY INCOME OF RS.96 000/- AS A DIRECTOR FROM M/S. ECONOMIC FREIGHT CARRIERS LTD. THE ASSESSEE HAD ALSO SHOWN LONG TERM CAPITAL GAIN AND INTEREST FROM BANK S AND FDRS. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAD PURCHASE D ONE FLAT FOR RS.26 44 965/- PARTLY WITH THE HELP OF THE BANK LOA N OF RS.12 43 631/- AND SOME PRIVATE LOAN OF RS.6 52 000/- WHICH WAS ACCEPT ED TO BE GENUINE BY THE AO. APART FROM THIS THE ASSESSEE ALSO CLAIMED TO HAVE RECEIVED GIFT FROM HIS CLOSE RELATIVES FOR THE PURCHASE OF THE SAID FL AT. THE ASSESSEE CLAIMED THAT HE RECEIVED GIFT OF RS.2 51 000/- FROM HIS SISTER-I N-LAW SMT. SUMAN AGGARWAL WHICH HAS BEEN ACCEPTED TO BE GENUINE BY T HE AO. THE ASSESSEE ALSO CLAIMED THAT HE HAD RECEIVED TWO GIFTS EACH OF RS.1 51 000/- FROM HIS SISTER SMT. SAROJ AGGARWAL AND HER HUSBAND SHRI JIT ENDRA AGGARWAL. THE ASSESSEES SISTER-IN-LAW SMT. SUMAN AGGARWAL AS WEL L AS HIS SISTER SMT. SAROJ AGGARWAL AND HER HUSBAND SHRI JITENTRA AGGARW AL ARE ALL ASSESSED TO INCOME-TAX AND THEY HAD FILED THEIR INCOME-TAX RETU RNS FOR THE ASSESSMENT YEAR 2005-06. THE SAID THREE GIFTS HAVE BEEN RECEI VED BY THE ASSESSEE BY ACCOUNT PAYEE CHEQUES. COPIES OF BANK ACCOUNT WERE FILED BEFORE THE AO. 3 SHRI JITENDRA AGGARWAL APPEARED BEFORE THE AO AND W HOSE STATEMENT WAS RECORDED BY THE AO ON 24.09.2007. SHRI JITENDRA AG GARWAL DEPOSED THAT HE HAS BEEN EMPLOYED WITH M/S. ECONOMIC TRANSPORT CARR IERS (NORTH) AND HAS BEEN LOOKING AFTER THEIR BRANCH OFFICE AT DELHI. HE FURTHER DEPOSED THAT HE HAD RECEIVED SALARY OF RS.1 08 000/- IN THE PREVIOU S YEAR ENDING ON 31.03.2005. APART FROM THE SALARY INCOME SHRI JIT ENDRA AGGARWAL RECEIVED INCOME FROM THE BUSINESS OF SUPPLY OF UNIFORMS FOR THE SCHOOL CHILDREN. THE INCOME FROM BUSINESS WAS ABOUT RS.50 000/- PER ANNU M. HE STATED THAT HIS WIFE SMT. SAROJ AGGARWAL WAS ALSO ENGAGED IN THE PR EPARATION OF SCHOOL CHILDRENS UNIFORMS BESIDES SALARY FROM ECONOMIC T RANSPORT CARRIERS (NORTH) FOR HER SERVICES RENDERED AT THE BRANCH OFF ICE OF THE SAID EMPLOYER AT DELHI. COPIES OF THEIR INCOME-TAX RETURNS BALANCE -SHEETS AND STATEMENT OF INCOME FOR THE ASSESSMENT YEAR 2005-06 WERE FILED B EFORE THE AO. BOTH THE PERSONS NAMELY SHRI JITENDRA AGGARWAL AND HIS WIF E SMT. SAROJ AGGARWAL EXECUTED GIFT DEEDS WHICH WERE FURNISHED BEFORE THE AO. HOWEVER THE AO TREATED BOTH THE GIFTS FROM SHRI JITENDRA AGGARWAL AND SMT. SAROJ AGGARWAL TO BE NON-GENUINE BY OBSERVING THAT IN THE LIGHT OF THE FACT THAT HOUSEHOLD EXPENSES OF SHRI JITENDRA AGGARWAL WERE RS.96 000/- AND HE ALSO SPENT RS.40 000/- TOWARDS EDUCATIONAL EXPENSES OF HIS SON AND HE MIGHT HAVE SPENT SOME AMOUNT ON BOOKS POCKET MONEY AND DRESSE S ETC. AND THEREFORE 4 HIS TOTAL EXPENDITURE WAS RS.1 63 600/- AND THERE FORE NOTHING WAS LEFT WITH HIM FOR MAKING GIFT OF RS.1 51 000/-. THE AO FURTH ER OBSERVED THAT SHRI JITENDRA AGGARWAL DEPOSITED RS.54 000/- RS.50 000/ - AND RS.54 000/- ON 19.02.2005 01.03.2005 AND 03.03.2005 RESPECTIVELY INTO HIS BANK ACCOUNT MAKING HIS TOTAL CREDIT BALANCE IN THE BANK ACCOUNT TO RS.1 63 408/- OUT OF WHICH HE CLAIMED TO HAVE GIVEN A GIFT OF RS.1 51 00 0/- TO THE ASSESSEE ON 08.03.2005. WITH REGARD TO THE DEPOSITS OF RS.54 0 00/- RS.50 000/- AND RS.54 000/- SHRI JITENDRA AGGARWAL EXPLAINED THAT AMOUNTS OF RS.54 000/- EACH WERE RECEIVED ON ACCOUNT OF SALARY AND DEPOSIT OF RS.50 000/- WAS MADE OUT OF HIS PAST SAVINGS. THE ASSESSING OFFICE R THEREFORE DOUBTED THE CREDITWORTHINESS OF THE DONOR AND TREATED THE AMOUN T OF RS.1 51 000/- ALLEGED TO HAVE BEEN GIVEN BY SHRI JITENDRA AGGARWA L TO BE UNACCOUNTED MONEY OF THE ASSESSEE. SIMILARLY HE ALSO TREATED THE GIFT ALLEGED TO HAVE BEEN GIVEN BY SMT. SAROJ AGGARWAL TO BE NON-GENUINE BY GIVING A REASON THAT SHE HAD SHOWN SALARY INCOME OF RS.1 08 000/- F ROM ECONOMIC TRANSPORT COMPANY AND INTEREST INCOME OF RS.22 272/- AND SHE HAD SHOWN WITHDRAWAL OF RS.1 63 600/- FOR GIVING GIFT OF RS.1 51 000/-. THE AO FURTHER OBSERVED THAT HER HUSBAND DEPOSED IN HIS STATEMENT THAT HIS WIFE DERIVES PETTY INTEREST INCOME AND SHE HAS NO OTHER INCOME EXCEPT PETTY INT EREST INCOME. THE AO DISBELIEVED THE CREDITWORTHINESS OF SMT. SAROJ AGGA RWAL. 5 4. ON BEING AGGRIEVED THE ASSESSEE PREFERRED AN AP PEAL BEFORE THE CIT(A). THE CIT(A) IN A VERY SHORT ORDER HAS CONF IRMED THE ASSESSING OFFICERS ACTION BY OBSERVING AND HOLDING AS UNDER: - 3. FOR A GIFT TO BE TREATED AS GENUINE PASSING OF THE MONEY THROUGH BANKING CHANNELS IS NOT SUFFICIENT THE IDE NTITY OF THE DONOR CREDITWORTHINESS AND GENUINENESS OF THE TRAN SACTION ARE ALSO REQUIRED TO BE PROVED. IT HAS ALSO BEEN HELD BY VARIOUS COURTS THAT THERE SHOULD BE SOME OCCASION FOR GIFTS BEING MADE. A PERUSAL OF THE ASSESSMENT ORDER CLEARLY SHOWS THA T ALTHOUGH THE IDENTITY OF THE DONORS SMT. SAROJ AGGARWAL AND SH. JITENDRA AGGARWAL STANDS PROVED THE MONEY PASSED THROUGH BA NKING CHANNELS YET THEIR CREDITWORTHINESS DOES NOT STAND THE TEST OF GIVING SO MUCH MONEY IN GIFT; ALSO THERE HAS BEEN N O OCCASION FOR THE AMOUNTS GIVEN BY THE AFORESAID PERSONS TO B E TREATED AS GIFT. IN VIEW OF THE AFORESAID THE ADDITION MADE B Y THE AO KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES DISCUSS ED IN THE ASSESSMENT ORDER IS CONFIRMED AND THE APPEAL IS DIS MISSED. 5. HENCE THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 6. WE HAVE CONSIDERED RIVAL CONTENTIONS OF BOTH THE PARTIES AND HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BEL OW. 7. IN THIS CASE THE IDENTITY OF THE DONOR SHRI JIT ENDRA AGGARWAL AND HIS WIFE SMT. SAROJ AGGARWAL WHO ARE THE ASSESSEES BR OTHER-IN-LAW AND SISTER RESPECTIVELY IS NOT IN DOUBT. IT IS ALSO NOT IN D ISPUTE THAT THE ASSESSEE HAS RECEIVED THE SUM OF RS.1 51 000/- EACH FROM HIS SIS TER SMT. SAROJ AGGARWAL AND HER HUSBAND SHRI JITENDRA AGGARWAL BY WAY OF AC COUNT PAYEE CHEQUES. THE BANK STATEMENTS OF SHRI JITENDRA AGGARWAL AND S MT. SAROJ AGGARWAL HAVE BEEN FURNISHED TO THE ASSESSING OFFICER. THE A SSESSEES BANK STATEMENT 6 WAS ALSO FURNISHED. A PHOTO COPY OF GIFT DEED DATE D 02.03.2005 EXECUTED BY SHRI JITENDRA AGGARWAL AND SMT. SAROJ AGGARWAL HAS ALSO BEEN FILED. IN THE GIFT DEED THE DONORS HAVE CLEARLY STATED THAT THEY HAD GIVEN GIFT OF RS.1 51 000/- EACH THROUGH CHEQUE OUT OF LOVE AND AFFECTION WHICH THEY HAD TOWARDS DONEE. IN THE GIFT DEED IT HAS ALSO BEEN CLEARLY STATED THAT THE DONOR HAD MADE THE GIFT FROM THEIR SAVINGS AND INCOME FRO M TIME TO TIME AND THE GIFT MADE WAS IRREVOCABLE ONE. IT IS ALSO NOT IN D ISPUTE THAT THE DONOR SHRI JITENDRA AGGARWAL HAD APPEARED BEFORE THE ASSESSING OFFICER AND HIS STATEMENT WAS RECORDED BY THE ASSESSING OFFICER ON 24.09.2007. IN HIS STATEMENT HE HAS CLEARLY EXPLAINED THE SOURCE OF H IS INCOME DETAILS OF HIS FAMILY SUCH AS SIZE OF FAMILY NUMBER OF SCHOOL GOI NG CHILDREN AND DETAILS ABOUT HOUSEHOLD EXPENSES INCURRED ANNUALLY. HE HA S ALSO STATED THAT HE KNOWS THE ASSESSEE WHO IS HIS BROTHER-IN-LAW I.E. OWN BROTHER OF HIS WIFE. IN THE STATEMENT HE HAS FURTHER STATED THAT HE HAD NOT ANY BUSINESS TRANSACTIONS WITH THE ASSESSEE. HE FURTHER STATE D THAT HE HAD GIVEN GIFT OF RS.1 51 000/- TO THE ASSESSEE. AS TO THE SOURCE OF THE MONEY GIVEN BY WAY OF GIFT TO THE ASSESSEE HE HAS CLEARLY STATE D THAT THE AMOUNT WAS ADVANCED OUT OF HIS SAVINGS AND AS WELL CURRENT YEARS INCOME AND THE AMOUNT WAS PAID THROUGH CHEQUE. THE OCCASION FOR G IVING THE GIFT WAS ALSO EXPLAINED THAT THE GIFT WAS GIVEN TO THE ASSESSEE A S HE WAS IN NEED OF THE 7 MONEY FOR THE PURPOSE OF PURCHASE OF PLOT/PROPERTY. HE FURTHER STATED THE SOURCE OF VARIOUS CREDITS IN HIS BANK ACCOUNT. HE E XPLAINED THAT THE AMOUNT OF RS.54 000/- DEPOSITED ON 19.02.2005 RS.54 000/- DEPOSITED ON 03.02.2005 REPRESENTED HIS SALARY INCOME AND RS.50 000/- DEPOSITED ON 01.03.2005 WAS OUT OF HIS PAST SAVINGS. HE FURTHER EXPLAINED THAT THE SALARY WAS BEING PAID TO HIM ON HALF YEARLY BASIS AND ACCO RDINGLY RS.54 000/- EACH WERE DEPOSITED OUT OF THE ANNUAL SALARY RECEIVABLE BY HIM FROM EMPLOYER. HE HAS ALSO FURNISHED A COPY OF ACKNOWLEDGEMENT OF RETURN OF INCOME FILED BY HIM FOR THE ASSESSMENT YEAR 2005-06. THE AO HAS REJECTED THE CREDITWORTHINESS OF SHRI JITENDRA AGGARWAL MERELY O N THE BASIS OF THE CURRENT YEARS INCOME. HE HAS NOT TAKEN INTO ACCOUNT THE P AST SAVINGS AVAILABLE WITH SHRI JITENDRA AGGARWAL AS IS CLEAR FROM HIS BALANCE -SHEET-CUM-CAPITAL ACCOUNT AS ON 31.03.2005. SHRI JITENDRA AGGARWAL H AS OPENING CAPITAL OF RS.1 43 986/- AND FURTHER RECEIVED SALARY OF RS.1 6 8 000/- BUSINESS INCOME OF RS.21 600/- AND INTEREST INCOME OF RS.156/- AG GREGATING TO RS.2 73 742/- OUT OF WHICH SUM OF RS.1 63 600/- INCLUDING GIFT AM OUNT OF RS.1 51 000/- WAS WITHDRAWN. IT IS A CASE WHERE THE GIFT HAS BEE N CLAIMED TO HAVE BEEN RECEIVED FROM NEAR RELATIVE AND NOT FROM ANY OUTSID ER OR UNRELATED PARTY. MAKING OF GIFT BY SISTER TO BROTHER AND VICE-VERSA OR HUSBAND/WIFE IS WIDELY COMMON IN THE SOCIETY AND IS NOT AGAINST HUMAN PROB ABILITIES. THE OCCASION 8 AT WHICH THE GIFT WAS GIVEN HAS ALSO BEEN EXPLAINED . THE DONOR IS AN INCOME- TAX PAYEE AND HAS FURNISHED HIS STATEMENT OF AFFAIR S. IN SO FAR AS THE PRESENT ASSESSEE IS CONCERNED THE ASSESSEE HAS BEEN ABLE T O PROVE THE IDENTITY OF THE DONOR GENUINENESS OF THE TRANSACTION AND HIS CREDI TWORTHINESS. IF THERE WAS ANY DOUBT AS TO THE SOURCE OF MONEY GIVEN BY THE DO NOR TO THE ASSESSEE THE ASSESSING OFFICER COULD HAVE PROCEEDED AGAINST THE DONOR TO EXPLAIN THE SOURCE OF INVESTMENT BUT THAT BY ITSELF CANNOT BE A BASIS TO HOLD THAT THE ASSESSEE HAS NOT BEEN ABLE TO PROVE AND ESTABLISH T HE GENUINENESS OF GIFT TRANSACTION. 8. SIMILARLY SMT. SAROJ AGGARWAL SISTER OF THE AS SESSEE IS ALSO INCOME- TAX ASSESSEE AND HAS GIVEN HER BALANCE-SHEET AS ON 31.03.2005 SHOWING OPENING CAPITAL BALANCE OF RS.1 81 848/- SALARY IN COME OF RS.1 08 000/- AND INTEREST INCOME OF RS.22 772/- AGGREGATING TO RS.3 12 620/- OUT OF WHICH SUM OF RS.1 59 600/- WAS WITHDRAWN INCLUDING GIFT O F RS.1 51 000/- TO THE ASSESSEE. 9. IN THE LIGHT OF THE DISCUSSION MADE ABOVE WE AR E THEREFORE SATISFIED THAT THE ASSESSEE HAS BEEN ABLE TO ESTABLISH THE ID ENTITY OF THE DONORS GENUINENESS OF THE GIFT TRANSACTIONS AS WELL AS THE CREDITWORTHINESS OF THE DONORS. THE LEARNED CIT(A) HAS CONFIRMED THE AOS ORDER MERELY BY OBSERVING THAT CREDITWORTHINESS OF THE DONORS DOES NOT STAND THE TEST OF 9 GIVING SO MUCH MONEY IN GIFT BUT THE CIT(A) HAS FAI LED TO GIVE REASON AS TO WHY THE GIFT OF RS.1 51 000/- EACH GIVEN BY THE ASS ESSEES SISTER SMT. SAROJ AGGARWAL AND HER HUSBAND SHRI JITENDRA AGGARWAL IS AGAINST THE HUMAN PROBABILITY AND IS NOT PREVALENT IN THE CUSTOM OF T HE SOCIETY. IT IS A CASE WHERE THE GIFT HAS BEEN GIVEN BY THE ASSESSEES SIS TER AND HER HUSBAND AND GIFT OF RS.1 51 000/- EACH BY THEM CANNOT BE SAID T O BE IN THE FACTS AND CIRCUMSTANCES OF THE CASE UNBELIEVABLE ONE. THE C IT(A) HAS FURTHER STATED THAT THERE WAS NO OCCASION FOR THE GIFT GIVEN BY TH E DONOR BUT HE HAS FAILED TO TAKE INTO ACCOUNT THE STATEMENT OF SHRI JITENDRA AG GARWAL WHERE HE HAS CATEGORICALLY STATED THAT HIS BROTHER-IN-LAW WAS IN NEED OF MONEY FOR PURCHASE OF PLOT/PROPERTY AND IT IS NOT UNCOMMON I N THE SOCIETY THAT AT THE TIME OF NEED OF MONEY ONE DO RECEIVE GIFT FROM NEA R RELATIVES. WE HAVE ALREADY OBSERVED ABOVE THAT IT IS NOT A CASE WHERE AN OUTSIDER HAS GIVEN THE GIFT TO THE ASSESSE. 10. FOR THE FOREGOING REASONS WE THEREFORE HOLD THAT THE ASSESSEE HAS BEEN ABLE TO EXPLAIN THE SOURCE OF GIFT AND PROVED THE GENUINENESS OF THE GIFT OF RS.1 51 000/- EACH FROM HIS SISTER SMT. SAROJ AG GARWAL AND HER HUSBAND SHRI JITENDRA AGGAREWAL BY ADDUCING SUFFICIENT EVID ENCES AND THE SAME CAN NOT SAID TO BE UNDISCLOSED INCOME OF THE ASSESSEE. WE THEREFORE DELETE THE ADDITION OF RS.3 02 000/- ON ACCOUNT OF GIFTS RECEI VED FROM ASSESSEES SISTER 10 AND HER HUSBAND AND DIRECT THE ASSESSING OFFICER TO MAKE THE ASSESSMENT ACCORDINGLY. IN OTHER WORDS THE ADDITION OF RS.3 02 000/- ON ACCOUNT OF GIFTS FROM SMT. SAROJ AGGARWAL AND HER HUSBAND SHRI JITENDRA AGGARWAL STANDS DELETED. 11. NOW WE SHALL COME TO ITA NO.2830/DEL/2010 DIRE CTED AGAINST THE CIT(A)S ORDER DATED 30.03.2010 CONFIRMING THE PENA LTY LEVIED BY THE AO UNDER SEC. 271(1)(C) OF THE ACT IN RESPECT OF THE A DDITION ON ACCOUNT OF GIFTS CLAIMED TO HAVE BEEN RECEIVED BY THE ASSESSEE FROM HIS SISTER SMT. SAROJ AGGARWAL AND HER HUSBAND SHRI JITENDRA AGGARWAL. I N THE LIGHT OF OUR ORDER PASSED IN QUANTUM APPEAL WHEREBY WE HAVE DELETED T HE ADDITION THE PENALTY LEVIED UNDER SEC. 271(1)(C) BY THE AO DOES NOT SURV IVE. WE THEREFORE DELETE THE PENALTY LEVIED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE ACT AND THE ORDERS OF THE AUTHORITIES BELOW IN THAT RES PECT ARE HEREBY CANCELLED. 12. IN THE RESULT BOTH THE APPEALS FILED BY THE AS SESSEE ARE ALLOWED. 13. THIS DECISION IS PRONOUNCED IN THE OPEN COURT O N 20 TH JANUARY 2011. SD/- SD/- (G.E. VEERABHADRAPPA) (C.L. SETHI) VICE PRESIDENT JUDICIAL MEMBER DATED: 20 TH JANUARY 2011. 11 ITA NOS.2829 & 2830/DEL/2010 COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR BY ORDER *MG DEPUTY REGISTRAR ITAT.