The ACIT, 2 (1), v. Shri Balkishan Agrawal,

ITA 434/IND/2008 | 2004-2005
Pronouncement Date: 16-04-2010 | Result: Dismissed

Appeal Details

RSA Number 43422714 RSA 2008
Bench Indore
Appeal Number ITA 434/IND/2008
Duration Of Justice 1 year(s) 6 month(s) 23 day(s)
Appellant The ACIT, 2 (1),
Respondent Shri Balkishan Agrawal,
Appeal Type Income Tax Appeal
Pronouncement Date 16-04-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 16-04-2010
Date Of Final Hearing 12-04-2010
Next Hearing Date 12-04-2010
Assessment Year 2004-2005
Appeal Filed On 23-09-2008
Judgment Text
PAGE 1 OF 8 - I.T.A.NO. 434/IND/2008 SHRI BALKISHAN AGARWAL INDORE. IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH : INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI V.K. GUPTA ACCOUNTANT MEMBER PAN NO. : N.A. I.T.A.NO.434/IND/2008 A.Y. : 2004-05 ACIT SHRI BAL KISHAN AGARWAL 2(1) VS 45-A GULMOHAR COLONY INDORE. INDORE. APPELLANT RESPONDENT APPELLANT BY : SMT.APARNA KARAN SR.DR RESPONDENT BY : SHRI P. D. NAGAR C. A. DATE OF HEARING : 12.04.2010 O R D E R PER V.K. GUPTA A.M. THIS APPEAL FILED BY THE REVENUE ARISES OUT OF ORDE R OF THE LD. CIT(A)-II INDORE DATED 09.05.2008 FOR THE ASSESS MENT YEAR 2004-05. 2. WE HAVE HEARD BOTH THE PARTIES AND HAVE ALSO PERUSE D THE MATERIAL AVAILABLE ON RECORD. 3. GROUND NOS. 1 & 2 READ AS UNDER :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) HAS ERRED IN DIRECTING TO DELETE THE ADD ITION OF RS. 46 87 383/- U/S 68 OF THE INCOME-TAX ACT 1961. PAGE 2 OF 8 - I.T.A.NO. 434/IND/2008 SHRI BALKISHAN AGARWAL INDORE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) HAS ERRED IN DIRECTING TO DELETE THE ADD ITION OF RS. 68 000/- U/S 68 WITHOUT APPRECIATING THE FACT T HAT THE AMOUNT ON MATURITY OF RBI BONDS WAS ACTUALLY CREDIT ED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE IN THE PREVIOU S YEAR 2003-04 RELEVANT TO ASSESSMENT YEAR 2004-05. 4. THE FACTS IN BRIEF ARE THAT IN THE CAPITAL ACCOUN T OF THE ASSESSEE THERE WAS A CREDIT ENTRY OF RS. 46 87 382.70 WHICH WAS ON ACCOUNT OF ENCASHMENT OF RESURGENT INDIA BOND ON ITS MATURITY. THE A.O. REQUIRED THE ASSESSEE TO EXPLAIN SOURCE OF RECEIPT OF RESURG ENT INDIA BOND WHICH REVEALED THAT SUCH BONDS HAVE BEEN RECEIVED BY THE ASSESSEE AS THE GIFTS FROM SHRI TRIBHOVAN JAIN AND SHRI ANIL R. JAIN ON 2 7.1.2003 & 24.03.2003 WHICH GOT MATURED ON 1.10.2003. THE ASS ESSEE ALSO SUBMITTED THE GIFT DEEDS AND OTHER DETAILS TO PROVE THE GENUINENESS OF THE GIFTS. IT WAS ALSO SUBMITTED THAT THE DONORS WERE O LD FAMILY FRIENDS AND SINCE THE ASSESSEES FORE-FATHERS HAD OBLIGED THE D ONORS FAMILY IN THE PAST THE DONORS WANTED TO GIFT THE BONDS TO THE TR UST. HOWEVER THEY GAVE THE GIFTS TO THE ASSESSEE ON THE CONDITION THAT MON EY WOULD BE ULTIMATELY TRANSFERRED TO THE TRUST. THE A.O. THEREAFTER MAD E FURTHER ENQUIRIES WHICH WERE REPLIED BY THE ASSESSEE IN DETAIL. THE A .O. RECORDED THE STATEMENT OF THE ASSESSEE U/S 131 WHEREIN IT EMERG ED THAT THE ASSESSEE PAGE 3 OF 8 - I.T.A.NO. 434/IND/2008 SHRI BALKISHAN AGARWAL INDORE. WAS NOT AWARE ABOUT THE COMPLETE ADDRESS OF THE DON ORS. THEREAFTER THE A.O. ALSO EXAMINED THE ASPECT OF CAPACITY AS WELL A S GENUINENESS OF THE TRANSACTION. THE A.O. ACCORDINGLY REACHED TO THE FOLLOWING CONCLUSION :- THUS IN THE LIGHT OF THE ABOVE FINDINGS IT IS CRYS TAL CLEAR THAT THE THEORY OF GIFT CANNOT BE ACCEPTED BECAUSE:- (I) THE DONORS ARE UNRELATED TO THE ASSESSEE. (II) CREDITWORTHINESS OF THE DONOR HAS NOT BEEN ESTABLISHED. (III) THERE IS ABSOLUTELY NO EXPLANATION WHEN THERE IS A SEPARATE BANK ACCOUNT FOR THE TRUST WHY THE MATURI TY AMOUNT TRANSFERRED TO ASSESSEES OWN BANK ACCOUNT. (IV) THE ASSESSEE NEITHER MAINTAINING ANY CONTRACT WITH THE DONORS NOR AWARE OF THE FAMILY MEMBERS OF THE DONORS NOR HAD GIVEN ANY GIFT TO THE DONORS IN THE PAST. IT GOES AGAINST THE NORMAL HUMAN PROBABILITIES TEST ED BY THE RATIO OF HON'BLE SUPREME COURTS DECISION I N THE CASE OF DURGA PD. MORE ( 82 ITR 540/AND ALSO OF SUMATI DAYAL VS. CIT 201 ITR 801). (V) THE ALLEGED GIFTS ARE AN ARRANGED AFFAIR. (VI) THE CREDIT IN THE CAPITAL ACCOUNT BY RS. 46 87 382. 70 ON ACCOUNT OF ALLEGED NRI GIFT IS NOTHING BUT THE PAGE 4 OF 8 - I.T.A.NO. 434/IND/2008 SHRI BALKISHAN AGARWAL INDORE. ASSESSEES OWN UNACCOUNTED MONEY ROUTED BACK TO CAPITAL A/C IN THE GARB OF GIFT. 5. THE A.O. THUS TREATED THE IMPUGNED SUM AS UNDISCL OSED INCOME OF THE ASSESSEE AND ADDED THE SAME TO THE TO TAL INCOME OF THE ASSESSEE U/S 68 OF THE INCOME-TAX ACT 1961. 6. AGGRIEVED BY THIS THE ASSESSEE CARRIED THE MATTER INTO APPEAL BEFORE THE LD. CIT(A) WHO FOUND THAT RBI BOND WERE ACTUALLY RECEIVED IN FINANCIAL YEAR 2002-03 RELEVANT TO ASSESSMENT Y EAR UNDER CONSIDERATION 2003-04 HENCE COULD NOT BE CONSIDERED IN THE YEAR UNDER CONSIDERATION . ACCORDINGLY HE DELETED THE ADDITION MADE BY THE AS SESSING OFFICER. THE RELEVANT FINDINGS OF THE LD. CIT(A) ARE AS UNDER :- 3.2 THE ISSUE IS CONSIDERED. THE UNDISPUTED FACTS ARE THAT THE GIFT OF THE RIB BONDS WAS RECEIVED IN THE FINAN CIAL YEAR 2002-03 RELEVANT TO ASSESSMENT YEAR 2003-04. THE A. OS CLAIM IS THAT THE APPELLANT ACQUIRED THESE BONDS FR OM HIS UNACCOUNTED MONEY. IF THAT BE SO THEN APPROPRIATE YEAR OF TAXATION OF SUCH AMOUNT WOULD BE THE ASSESSMENT YEA R RELEVANT TO THE FINANCIAL YEAR IN WHICH SUCH BONDS WERE ACQUIRED/RECEIVED. SO ALSO THE EXPENSES FOR ACQUIR ING THESE BONDS BY WAY OF PREMIUM MONEY WOULD ALSO HAVE BEEN INCURRED DURING THAT FINANCIAL YEAR ONLY AND NOT IN THE YEAR PAGE 5 OF 8 - I.T.A.NO. 434/IND/2008 SHRI BALKISHAN AGARWAL INDORE. UNDER CONSIDERATION . THUS THE A.OS ACTION BRINGI NG TO TAX THE AMOUNT OF RS. 4687382/- BESIDES THE PREMIUM OF RS. 105466/- U/S 68 OF THE ACT IN THE YEAR UNDER CONSID ERATION I.E. ASSESSMENT YEAR 2004-05 CANNOT BE SUSTAINED. ACCORDINGLY BOTH THESE ADDITIONS ARE HEREBY DIRECT ED TO BE DELETED. 3.3 HAVING HELD THAT THE AMOUNT ADDED BY THE ASSESS ING OFFICER IS NOT TAXABLE IN THE YEAR UNDER CONSIDERAT ION THE GROUND OF APPEAL 1 TO 3 ARE ACCORDINGLY DECIDED. FU RTHER NO ADJUDICATION IS CONSIDERED NECESSARY WITH REFERENCE TO THE APPLICATION OF THE APPELLANT FOR ENTERTAINING THE A DDITIONAL EVIDENCES. 7. AGGRIEVED BY THIS THE REVENUE IS IN APPEAL BEFORE US. 8. THE LD. DEPARTMENTAL REPRESENTATIVE NARRATED THE FA CTS AND PLACED STRONG RELIANCE ON THE ORDER OF THE A.O. 9. THE LEARNED COUNSEL FOR THE ASSESSEE ON THE OTHER HAND BEDSIDES RELYING ON THE ORDER OF THE LD. CIT(A) ALS O SUBMITTED THAT EVEN ON MERITS THE CAPACITY AND CREDITWORTHINESS OF THE DONORS WAS PROVED BEYOND DOUBT AND AS SUCH BONDS WERE RECEIVED BY THE ASSESSEE FOR ITS ONWARD DONATION TO TRUST FOR CHARITABLE PURPOSE ONL Y AS THE ASSESSEE WAS TRUSTEE OF MORE THAN 15 CHARITABLE TRUSTS ENGAGED I N THE CHARITIES FOR PAGE 6 OF 8 - I.T.A.NO. 434/IND/2008 SHRI BALKISHAN AGARWAL INDORE. BENEFIT OF PUBLIC AT LARGE. IT WAS ALSO EMPHASIZED THAT THE ASSESSEE IN FACT TRANSFERRED ENTIRE RECEIPTS AS RESURGENT BOND TO A CHARITABLE TRUST AS PER THE DESIRE OF THE DONOR. THE LEARNED COUNSEL FURTHE R SUBMITTED THAT SUCH RESURGENT INDIA BONDS WERE IMMUNED FROM TAX AND SUC H BENEFITS WERE ALSO AVAILABLE TO THE DONEES. HENCE REALIZATION OF MONEYS ON THE MATURITY OF SUCH BONDS COULD NOT BE TAXED IN INDIA. IN THE A SSESSMENT YEAR 2003-04 BY WAY OF GIFT AND COPIES OF GIFT DEEDS WITH TRANSF ER LETTERS WERE ALSO ANNEXED ALONGWITH THE RETURN OF INCOME FILED FOR TH E SAID ASSESSMENT YEAR. 10. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIE S BELOW. 11. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE HAS RECE IVED SUCH RESURGENT INDIA BONDS BY WAY OF GIFT IN FINANCIAL Y EAR 2002-03 RELEVANT TO ASSESSMENT YEAR 2003-04. THE ASSESSEE HAS ALSO G IVEN A NOTE IN THE RETURN OF INCOME OF THAT ASSESSMENT YEAR TO THIS EF FECT ALONGWITH DOCUMENTARY EVIDENCES. THUS THIS ACTION OF THE ASS ESSEE SHOWS THE TRANSPARENT CONDUCT OF THE ASSESSEE AND NOTHING PRE VENTED THE A.O. TO LOOK INTO THE MATTER IN THAT YEAR AT THAT TIME. HOW EVER AS PER THE PROVISIONS OF THE LAW THE RECEIPTS OF SUCH BONDS O N MATURITY CANNOT BE TAXED U/S 68 OF THE ACT IN ASSESSMENT YEAR 2004-05 AS SOURCE OF SUCH RECEIPTS LIES IN THE EARLIER ASSESSMENT YEAR. IT IS FURTHER NOTED THAT THE SAID PAGE 7 OF 8 - I.T.A.NO. 434/IND/2008 SHRI BALKISHAN AGARWAL INDORE. AMOUNT HAS BEEN GIFTED TO THE ASSESSEE FOR UTILIZAT ION THEREOF IN CHARITABLE ACTIVITIES THROUGH TRUST WHERE THE ASSESSEE IS A TR USTEE AND IN FACT SUBSEQUENTLY THE MONEYS SO RECEIVED HAVE BEEN UTIL IZED AS DESIRED BY THE DONORS. THOUGH THE LD. CIT(A) HAS NOT DECIDED THE I SSUE ON MERIT HOWEVER FROM THE MATERIAL ON RECORD WE FIND SUFFI CIENT FORCE IN THE CLAIMS OF THE ASSESSEE ON MERITS. HOWEVER WE REFRA IN OURSELVES FROM GIVING DETAILED FINDINGS ON THIS ASPECT AS ON THE P RELIMINARY CONDITION ONLY THE ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE . THUS WE DO NOT FIND ANY MERIT IN BOTH THESE GROUNDS OF THE REVENUE. THE SAME ARE THEREFORE DISMISSED. 12. GROUND NO. 3 READS AS UNDER :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN DIRECTING TO DELETE THE EXPENDI TURE OF RS. 1 05 466/- INCURRED FOR PROCURING THE RBI BONDS. 13. IT IS OF CONSEQUENTIAL NATURE AS THE IMPUGNED AMOUN T HAD BEEN ADDED BY THE ASSESSING OFFICER U/S 69B ON ACCOUNT O F EXPENDITURE INVOLVED TO PURCHASE SUCH RESURGENT INDIA BONDS. SI NCE THE ADDITION MADE BY THE ASSESSING OFFICER IN RESPECT OF THE GIF TS HAS BEEN DELETED HENCE THERE REMAINS NO MERIT IN THIS ADDITION ALSO . CONSEQUENTLY THIS IS ALSO DELETED. THUS THIS GROUND OF THE REVENUE IS A LSO DISMISSED. 14. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS D ISMISSED. PAGE 8 OF 8 - I.T.A.NO. 434/IND/2008 SHRI BALKISHAN AGARWAL INDORE. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 16 TH APRIL 2010. SD/- SD/- (JOGINDER SINGH) (V. K. GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED :_16 TH APRIL 2010. CPU* 13154