THE ITO 14(2)-3, MUMBAI v. SHRI NARESHKUMAR BAVULAL SHAH, MUMBAI

ITA 5770/MUM/2007 | 2003-2004
Pronouncement Date: 12-01-2011 | Result: Dismissed

Appeal Details

RSA Number 577019914 RSA 2007
Assessee PAN AMFPS7876K
Bench Mumbai
Appeal Number ITA 5770/MUM/2007
Duration Of Justice 3 year(s) 4 month(s) 6 day(s)
Appellant THE ITO 14(2)-3, MUMBAI
Respondent SHRI NARESHKUMAR BAVULAL SHAH, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 12-01-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted I
Tribunal Order Date 12-01-2011
Date Of Final Hearing 01-12-2010
Next Hearing Date 01-12-2010
Assessment Year 2003-2004
Appeal Filed On 06-09-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH I MUMBAI BEFORE SHRI J. SUDHAKAR REDDY(AM) AND SMT ASHA VIJAYARAGHAVAN (JM) ITA NO. 5770/MUM/2007 (ASSESSMENT YEAR- 2003-04) AND ITA NO. 3896/MUM/2008 (ASSESSMENT YEAR- 2004-05) THE ITO 14(2)-3 14(2)-3 EARNEST HOUSE 3 RD FLOOR NARIMAN POINT MUMBAI-400 021 VS. SHRI NARESHKUMAR B. SHAH 173 PRATAP BLDG. 2 ND FLOOR DADI SETH AGIARY LANE MUMBAI-400 002 PAN-AMFPS 7876K (APPELLANT) (RESPONDENT) ITA NO. 5158/MUM/2007 (ASSESSMENT YEAR- 2003-04) SHRI NARESHKUMAR B. SHAH 173 PRATAP BLDG. 2 ND FLOOR DADI SETH AGIARY LANE MUMBAI-400 002 PAN-AMFPS 7876K VS. THE ITO 14(2)-3 14(2)-3 EARNEST HOUSE 3 RD FLOOR NARIMAN POINT MUMBAI-400 021 (APPELLANT) (RESPONDENT) ASSESSEE BY: S/SHRI K. GOPAL/ JITENDRA SINGH DEPARTMENT BY: SHRI S.K. SINGH O R D E R PER SMT. ASHA VIJAYARAGHAVAN (JM) TWO APPEALS FILED BY THE REVENUE AND THE CROSS APP EAL FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDERS OF THE LD. CIT(A)-XIV MUMBAI FOR THE A.YRS.2003-04 & 2004-05. NARESH KUMAR SHAH 2 ITA NO. 5770/M/07- A.Y. 2003-04 2. DURING THE COURSE OF ASSESSMENT PROCEEDINGS A N OTICE U/S. 133(6) OF THE I.T. ACT WAS ISSUED TO M/S. MAHAVIR S YNTHETICS FROM WHOM THE ASSESSEE HAD SHOWN PURCHASES OF RS. 2 77 8 86/-. THE SAME WAS RETURNED UNSERVED BY THE POSTAL AUTHORITIE S. THE AO ASKED THE ASSESSEE TO PROVIDE THE CONFIRMATIONS ALONGWITH THE PERMANENT ACCOUNT NUMBERS. HOWEVER NO DETAILS WERE FILED T HE CLAIM FOR PURCHASES FROM THE ABOVE PARTY AT RS. 2 77 886/- WA S TREATED AS BOGUS AND ADDITION OF THE SAME WAS MADE TO THE TOTA L INCOME OF THE ASSESSEE. 3. AT THE TIME OF APPELLATE HEARING THE AR FURNISH ED SOME ADDITIONAL EVIDENCE ALONGWITH WRITTEN SUBMISSIONS S TATING THAT IN VIEW OF THE TIME CONSTRAINTS REQUISITE CONFIRMATION ALO NGWITH OTHER DETAILS WAS NOT FILED AND THE SAME DESERVED TO BE CONSIDERE D. THE ADDITIONAL EVIDENCE WAS FORWARDED TO THE AO FOR HIS OBJECTIONS ON ITS ADMISSIBILITY IF ANY ALONGWITH COMMENTS ON MERITS . 4. DURING THE ASSESSMENT PROCEEDINGS THE AO ISSUED NOTICES U/S. 133(6) TO SOME OF THE PARTIES FROM WHOM LOANS WERE RECEIVED. IT WAS NOTICED BY THE AO THAT PRIOR TO ISSUE OF CHEQUES FR OM THEIR RESPECTIVE BANK ACCOUNTS THESE PARTIES HAD DEPOSITED CASH IN THEIR BANK ACCOUNTS. THE AO ASKED THESE PARTIES TO EXPLAIN/PR OVIDE THE SOURCE OF CASH DEPOSITS APPEARING IN THEIR RESPECTIVE BANK AC COUNTS PRIOR TO ISSUE OF CHEQUES TO THE ASSESSEE. HOWEVER SINCE N O COMMUNICATION/DETAILS WERE PROVIDED BY THE LENDERS THE AO TREATED THE UNSECURED LOANS TAKEN FROM FOUR PARTIES VIZ. M /S. SHIVRAJ JAIN (HUF)- RS. 8 80 000/- ASHA JAIN RS. 9 50 000/- MISS HONEY JAIN RS. 1 87 000 AND MISS SWETA JAIN RS. 1 87 000/- A S UNEXPLAINED AS NARESH KUMAR SHAH 3 THE SOURCE AND GENUINENESS OF CASH CREDITS APPEARIN G IN THE BANK ACCOUNTS OF THE LENDERS DID NOT STAND PROVED EITHER BY THE LENDERS OR BY THE ASSESSEE. BESIDES THE INTEREST DEBITED AT RS. 1 38 009/- IN RESPECT OF THESE LOANS WAS ALSO DISALLOWED AND ADDE D TO THE TOTAL INCOME OF THE ASSESSEE. 5. AGGRIEVED THE ASSESSEE PREFERRED AND APPEAL BEFO RE THE LEARNED CIT(A). AT THE TIME OF APPELLATE HEARING THE AR CO NTENDED THAT THE ASSESSEE WAS CONFRONTED WITH THE FACT OF CASH DEPOS ITS ON 10.2.2006 AND WITHOUT GIVING PROPER TIME AND OPPORTUNITY TO R EBUT THE INFERENCES ASSESSMENT ORDER WAS PASSED ON 28.2.200 6. ALL THE NECESSARY DETAILS SUCH AS LOAN CONFIRMATION LETTERS WITH COMPLETE AND CORRECT ADDRESSES PERMANENT ACCOUNT NUMBERS ALONGW ITH COPIES OF RETURNS BALANCE SHEET CAPITAL ACCOUNT AND BANK ST ATEMENTS WERE SUBMITTED. IT WAS SUBMITTED THAT THE ASSESSEE WAS NOT SUPPOSED TO EXPLAIN THE SOURCE OF THE SOURCE. 6. THE AR RELIED ON FOLLOWING THE CASE LAWS: I) CIT VS ORISSA CORPN. LTD. 159 ITR 78(APEX COURT) II) CIT VS MADHAVNAGAR COTTON MILLS LTD. (BOMBAY HIGH COURT) III) CIT VS STELLAR INVESTMENT LTD. 192 ITR 287 7. THE AR FURTHER SUBMITTED AS FOLLOWS: IT WAS ALSO SUBMITTED THAT THE AO HAD DETECTED THE CASH DEPOSITS AT RS. 9 LAKHS IN ALL THE FOUR CASES. HOW EVER THE CASH DEPOSITS ACTUALLY MADE STOOD ONLY TO THE TUNE OF RS. 8.25 LAKHS AND IN THE CASE OF HONEY JAIN RS. 75 000 /- WAS A DEPOSIT THROUGH CHEQUE AND NOT CASH DEPOSIT AS OB SERVED BY THE AO. ON THE BASIS OF THE ABOVE SUBMISSION AN D COURT JUDGEMENTS THE AR ARGUED THAT THE ADDITIONS MADE U /S. 68 BY TREATING THE LOANS AS UNEXPLAINED CASH CREDITS A T RS. 22 04 000/- WAS NOT JUSTIFIED AND THEREFORE ADDITIO N ON ACCOUNT OF UNEXPLAINED LOAN AT RS. 22 04 000/- AND INTEREST CLAIM THEREON AT RS. 1 38 009/- DESERVES TO BE DELE TED. NARESH KUMAR SHAH 4 8. AGGRIEVED ASSESSEE PREFERRED AN APPEAL BEFORE THE L D. CIT(A). THE LD. CIT(A) HELD AS FOLLOWS: THE FOUR PARTIES HAVE FILED THEIR COPY OF RETURN F ILED CAPITAL ACCOUNT BALANCE SHEET AND BANK STATEMENT. FROM TH E PERUSAL OF BANK STATEMENT FILED BY SOME OF THE PART IES IT WAS LEARNT THAT BEFORE ISSUING OF CHEQUES TO THE AS SESSEE THERE ARE CASH DEPOSITS IN THEIR ACCOUNTS. HENCE AGAIN NOTICE U/S. 133(6) DT. 20.12.005 WAS ISSUED CALLING FOR SOURCE OF CASH DEPOSITS. HOWEVER THESE PARTIES HA VE NOT EXPLAINED THE SOURCE OF SAID CASH DEPOSITS IN THEIR ACCOUNTS. MOREOVER THE CASH BOOK WAS NOT PRODUCED DURING THE COURSE OF HEARING. THE CASH BOOK OF THE 4 PERSONS WAS NOW PRODUCED BEFORE ME DURING THE REMAND PROCEEDINGS SH OWING THE SOURCE OF DEPOSITS OF CASH OF RS. 8 25 000/-. FURTHER THE COPY OF BALANCE-SHEET FOR THE A.Y. 2002-03 HAVE BEEN OBTAINED FOR VERIFICATION OF OPENING CASH BALANCE. HOWEVER IT IS NOT UNDERSTOOD AS TO WHY ALL THESE PERSONS HA VE ADOPTED THE SAME MODUS OPERANDI BEFORE ISSUING THE CHEQUE (LOAN) TO OUR ASSESSEE I.E. WHY THE CASH OF ALMOST EQUIVALENT AMOUNT HAS BEEN DEPOSITED IN THE BANK ACCOUNT JUST BEFORE THE CHEQUE WAS ISSUED TO THE ASSESSEE. IT CREATES DOUBT REGARDING THE GENUINENESS OF TRANSACTION. IN HIS COUNTER SUBMISSIONS THE AR HAS SUBMITTED TH AT THE AO HAS VERIFIED THE SOURCE OF CASH DEPOSITS AND HAS NO DOUBT ABOUT THE SOURCE OF THE SAME. IT WAS PLEADED THAT JUST BY DOUBTING THE TRANSACTIONS THE ADDITION CANNOT B E MADE ON THE WHIMS AND FANCIES OF THE AO. RELIANCE WAS P LACED ON THE COURT JUDGEMENTS AS DISCUSSED ABOVE. I HAVE CAREFULLY CONSIDERED THE FACTS AND SUBMISSI ONS AND HAVE PERUSED THE AOS COMMENTS. IT IS CLEAR TH AT THE APPELLANT HAS PRODUCED ALL THE NECESSARY DETAILS FO R VERIFICATION WITH REGARD TO THE LOANS TAKEN FROM TH E FOUR PARTIES. THE AO HAS SIMPLY OBSERVED THAT THE FACT THAT CASH HAS BEEN DEPOSITED IN THE SAME MANNER JUST BEFORE I SSUE OF CHEQUE TO THE ASSESSEE IT CREATES DOUBT REGARDING THE GENUINENESS OF THE TRANSACTION. HOWEVER THE AO HA S NOT FOUND OUT ANY DISCREPANCY IN THE CASH BOOKS WHICH W ERE PRODUCED BEFORE HIM. SINCE NOW THE AO HAD VERIFIED THE CASH BOOKS WITH REGARD TO THE SOURCE OF CASH DEPOSI TS AND NARESH KUMAR SHAH 5 NO DISCREPANCY HAS BEEN FOUND OUT A MERE DOUBT EXI STING IN THE AOS MIND WITH REGARD TO THE MODUS OPERANDI CAN NOT BE A GROUND FOR SUSTAINING THE ADDITION. IN THE CIRCU MSTANCES I HOLD THAT SINCE ALL NECESSARY EVIDENCE IN THE FORM OF CONFIRMATIONS PANS BANK STATEMENTS BALANCE SHEET AND ALSO CASH BOOKS WAS SUBMITTED BEFORE THE AO TO EXPL AIN THE SOURCE OF DEPOSITS THERE WAS NO JUSTIFICATION FOR TREATING THE UNSECURED LOANS AT RS. 22 04 000/- AS UNEXPLAINED U /S. 68 OF THE I.T. ACT. SINCE UNSECURED LOANS AT RS. 22 0 4 000/- STOOD VERIFIED DISALLOWANCE MADE ON ACCOUNT OF INT EREST AT RS. 1 38 009 ALSO DESERVES TO BE DELETED. THEREFOR E THE ADDITION MADE AT RS. 22 04 000/- ON ACCOUNT OF UNSE CURED LOANS AND RS. 1 38 009/- ON ACCOUNT OF INTEREST IS HEREBY DELETED. ACCORDINGLY THE APPELLANT GETS A RELIEF OF RS. 23 42 009/- 9. AGGRIEVED REVENUE IS IN APPEAL BEFORE US AND RA ISED THE FOLLOWING GROUNDS: 1. THE ORDER OF THE CIT(A) IS OPPOSED TO LAW AND F ACTS OF THE CASE. 2. THE CIT(A) ERRED IN DIRECTING THE AO TO DELETE THE ADDITION OF RS. 22 04 000/- ON ACCOUNT OF UNSECURED LOANS AND OF RS. 1 38 009/- ON ACCOUNT OF INTEREST THEREON IN THE COMPUTATION OF TOTAL INCOME. 3. THE CIT(A) OUGHT TO HAVE NOTED THAT THE ASSESSEE HA D NOT PROVED THE CREDITWORTHINESS OF THE CREDITORS AN D GENUINENESS OF THE TRANSACTIONS IN RESPECT OF THE UNSECURED LOANS. 4. THE CIT(A) OUGHT TO HAVE NOTED THAT APPLYING THE TE ST OF HUMAN PROBABILITIES ENUNCIATED BY THE SUPREME COUR T IN THE CASE OF SUMATI DAYAL VS CIT REPORTED IN 214 ITR 801 THE GENUINENESS OF THE LOANS REMAINED UNPROVED . 10. THE LD. DEPARTMENTAL REPRESENTATIVE SHRI S.K. S INGH RELIED ON THE ORDER OF THE AO AND SUBMITTED THAT CASH WAS DEP OSITED BY THE PARTIES JUST BEFORE ISSUING CHEQUE TO THE ASSESSEE. HE RELIED ON THE DECISIONS IN THE CASES OF GYAN CHAND ANIL KUMAR VS ITO 251 ITR 559 (M.P) AND ITO VS SETH ABDUL GAFFAR HAJI SHUKOOR 24 ITD 459 (HYD.) NARESH KUMAR SHAH 6 11. IN THE CASE OF GYAN CHAND ANIL KUMAR VS ITO 251 ITR 559 (M.P) IT HAS BEEN HELD AS FOLLOWS: INCOME FROM UNDISCLOSED SOURCES THE FINDING THAT A MOUNT SHOWN AS LOAN IN ACCOUNTS REPRESENTED INCOME FROM UNDISCL OSED SOURCES IS FINDING OF FACT AND AMOUNT ASSESSABLE. THE COUR T FURTHER HELD THAT NO SUBSTANTIAL QUESTION OF LAW ARISES UNDER TH E I.T. ACT 1961. 12. THE LD. COUNSEL FOR THE ASSESSEE SHRI K. GOPAL VEHEMENTLY ARGUED THAT SINCE THE NOTICES WERE ISSUED BY THE AO ONLY TO FOUR PARTIES OUT OF THE 7 CREDITORS THE PRESUMPTION IS THAT THE AO IS SATISFIED WITH THE CAPACITY AND GENUINENESS OF THE OTHER PARTIES. HE INSISTED THAT THE AO CANNOT DISALLOW WITH RESPECT T O THE OTHER 3 PARTIES WITHOUT ISSUING NOTICES. HE FURTHER SUBMITTED THAT ALL THE NECESSARY DETAILS SUCH AS LOAN CONFIRMATION LETTERS WITH COMP LETE AND CORRECT ADDRESSES PERMANENT ACCOUNT NUMBERS ALONGWITH COPI ES OF RETURNS BALANCE SHEET CAPITAL ACCOUNT AND BANK STATEMENTS WERE SUBMITTED. FURTHER THE CASH BOOKS WERE PRODUCED BEFORE THE FIR ST APPELLATE AUTHORITY. THE LEARNED COUNSEL RELIED ON THE DECIS ION IN THE CASE CIT VS ORISSA CORPN. (P) LTD. 159 ITR 78(SC). 13. THE LEARNED COUNSEL FURTHER ARGUED THAT THE SO URCE OF THE SOURCE CANNOT BE QUESTIONED MEAN IT TO SAY THAT ONC E THE PARTIES ARE GIVEN THE CHEQUE FROM THE BANK ACCOUNT AND THEY HA VE THE BALANCE IN THEIR BANK ACCOUNT TO ISSUE THE SAME THE SOURCE OF SUCH AMOUNTS IN THEIR BANK ACCOUNTS CANNOT BE GONE INTO INVESTIGATE D. IN SUPPORT OF THIS ARGUMENT THE LEARNED COUNSEL RELIED ON THE DE CISION IN THE CASE OF SAROGI CREDIT CORPN. VS CIT 103 ITR 344 (PAT.) NARESH KUMAR SHAH 7 14. WE HEARD BOTH THE PARTIES. SINCE ALL THE NECES SARY EVIDENCES IN THE FORM OF CONFIRMATION PAN BANK STATEMENT BALA NCE SHEET AND CASH BOOKS HAVE BEEN SUBMITTED TO EXPLAIN THE SOUR CE OF DEPOSIT WE ARE OF THE OPINION THAT THE ASSESSEE HAS DISCHARGED THE ONUS CAST ON HIM U/S. 68 BY ESTABLISHING THE IDENTITY OF THE CR EDITORS CAPACITY OF THE CREDITORS AND GENUINENESS OF THE TRANSACTION. ALL THE PARTIES HAVE APPEARED BEFORE THE AO AND FURNISHED THE REQUISITE DETAILS. THEREFORE THERE IS NO JUSTIFICATION IN TREATING THE UNSECURED LOANS AT RS. 22 04 000/- AS UNEXPLAINED CREDIT U/S. 68 OF THE I. T. ACT. HENCE WE DELETE THE SAME. IN CONSEQUENCE TO THE DELETION OF RS. 22 04 000/- WE ALSO DELETE THE INTEREST OF RS. 1 38 009/-. 15. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DISMISSED. ITA NO. 3896/M/08-A.Y. 2004-05 16. THE GROUNDS RAISED BY THE REVENUE READ AS FOLLO WS: 1) THE ORDER OF THE CIT(A) IS OPPOSED TO LAW AND FACTS OF THE CASE. 2) A) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) ERRED IN DELETING THE DISALLOWANCE OF IN TEREST RS. 3 19 975/-. B) THE CIT(A) OUGHT TO HAVE NOTED THAT THE DEPAR TMENT HAS NOT ACCEPTED THE CIT(A)S ORDER FOR THE A.Y. 2003-0 4 ON A SIMILAR ISSUE AND AN APPEAL TO THE ITAT HAS BEEN FI LED. 17. SIMILAR ISSUE HAS BEEN CONSIDERED ABOVE IN IT A NO. 5770/M/07 WHEREIN THE UNEXPLAINED CREDIT U/S. 68 OF RS.22 04 000/-AND INTEREST THEREON AT RS.1 38 009 HAS BEEN DELETED. FOR THE RE ASONS MENTIONED IN PARA-12 ABOVE WE DELETE INTEREST OF RS. 3 19 9 75/- FOR THE A.Y. NARESH KUMAR SHAH 8 2004-05. HENCE THE REVENUES APPEAL FOR A.Y. 2004-0 5 IS ALSO DISMISSED. 18. IN THE RESULT BOTH THE REVENUES APPEALS FOR A .Y. 2003-04 & 2004-05 ARE DISMISSED. ITA NO. 5158/M/2007- A.Y. 2003-04- ASSESSEES APPEA L 19. THE GROUNDS RAISED BY THE ASSESSEE READ AS FOLL OWS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) HAS ERRED IN UPHOLDING THE ADDITION MADE BY THE ITO OF THE GIFTS RECEIVED FROM SEVEN PARTIES AMOUNTING TO RS. 8 00 000/- WITHOUT APPRECIATING THE FACT THAT YOUR APPELLANT HAS PROVE D THE IDENTITY OF THE PARTIES GENUINENESS OF THE GIF T AND THE CAPACITY OF THE DONORS WHEREVER IT WAS REQUIRED BY THE ITO. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) HAS ERRED IN UPHOLDING THE ADDITION MADE BY THE ITO OF THE GIFTS RECEIVED FROM SEVEN PARTIES AMOUNTING TO RS. 8 00 000/- WITHOUT GIVING ANY FINDING ON THE GROUND OF VIOLATION BY TH E AO OF THE PROVISIONS OF NATURAL JUSTICES AS TO NOT GIV ING ANY OPPORTUNITY TO YOUR APPELLANT.' 20. THE FACTS OF THE CASE ARE THAT DURING THE IMPUG NED ASSESSMENT YEAR THE ASSESSEE HAD SHOWN CREDITS IN THE CAPITAL ACCOUNT BY WAY OF RECEIPT OF GIFTS FROM 7 PARTIES. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS THE AO HAS ASKED THE ASSESSEE TO FURNIS H THE DETAILS OF GIFTS RECEIVED AND ALSO ISSUED NOTICES U/S. 133(6) TO FOUR DONORS NAMELY SEEMA JAIN J.L. SURANA BASANT RAJ SANGHAVI AND RAJESH CHOPRA OUT OF THE ABOVE SEVEN DONORS. 21. BEFORE THE LOWER AUTHORITIES THE LEARNED COUNS EL SUBMITTED AS FOLLOWS: NARESH KUMAR SHAH 9 THE NOTICES ISSUES U/S. 133(6) TO SHRI RAJESH CHOP RA AND J.L. SURANA WERE RETURNED UNSERVED FROM THE POSAL AUTHORITIES. HOWEVER SINCE THE AO HAS ASKED THE APPELLANT TO FURNISH THE DETAILS OF GIFTS RECEIVED THE APPEL LANT HAS INFORMED THE SAME TO THEM. HENCE THEY HAVE FILED T HE DETAILS DIRECTLY IN TAPAL. THE APPELLANT ALSO FURNI SHED AFFIDAVIT COPY OF CHEQUE BANK STATEMENTS CAPITAL ACCOUNT AND COPY OF RETURNS OF THE DONORS WERE FILED DURING THE COURSE OF THE REMAND PROCEEDINGS. THE AO ALSO ISSU ED NOTICES U/S. 133(6) TO SMT. SEEMA JAIN AND SHRI BAS ANT RAJ SANGHVI IN REPLY TO WHICH THEY HAVE FILED THE DETAI LS ON 9.1.2006. THE AO HAS NOT DISPUTED THE DETAILS FURN ISHED BEFORE HIM IN THE REMAND PROCEEDINGS. THE APPELLAN T HAS DISCHARGED THE PRIMARY ONUS CAST UPON HIM TO PROVE THE IDENTITY CAPACITY AND GENUINENESS OF THE GIFTS REC EIVED. 22. THE AO TREATED ALL THE GIFTS AS UNEXPLAINED AS THE CREDIT WORTHINESS OF THE DONORS AND PROOF OF THEIR IDENTIT Y WAS NOT DISCHARGED. 23. AGGRIEVED BY THE ORDER OF THE AO ASSESSEE PRE FERRED AN APPEAL BEFORE THE LEARNED CIT(A). THE LEARNED CIT(A) HELD AS FOLLOWS: I HAVE CAREFULLY CONSIDERED THE FACTS AND SUBMISSI ONS. ON PERUSAL OF THE DETAILS I FIND THAT THE DONORS IN A LL THESE CASES ARE STATED TO BE FAMILY FRIENDS AND NONE OF T HEM ARE CLOSE RELATIVES OF THE APPELLANT. THE OCCASION ON WHICH THE GIFTS HAVE BEEN RECEIVED WAS STATED BY THE AR THE WEDDING ANNIVERSARY AT THE TIME OF HEARING. ON PERUSAL OF DETAILS SUBMITTED BEFORE ME MOST OF THE DONORS BELONG TO T HE LOW INCOME GROUP INASMUCH AS THE ANNUAL INCOME EARNED B Y SOME OF THEM IS NOT SUFFICIENT ENOUGH TO COVER THE AMOUNT OF GIFTS MADE DURING THE YEAR. AGE OF MOST OF THE DON ORS IS MUCH LESS COMPARED TO THE AGE OF THE APPELLANT. AL L THE CHEQUES OF GIFTS ISSUED BY DONORS J.L. SURANA MANJ U JAIN SEEMA JAIN BASANT RAJ SANGHVI MAHAVEER PRASAD MEH TA RAJESH CHOPRA AND AJAY THAKKAR HAVE BEEN FILLED UP IN THE SAME HANDWRITING. THIS SEEMS VERY STRANGE AS TO HO W THE DIFFERENT DONORS HAVING BANK ACCOUNTS IN DIFFERENT BANKS/BRANCHES COULD HAVE GOT THE CHEQUES FILLED UP BY THE SAME PERSON. THIS CAN NEVER OCCUR BY SHEER COINCID ENCE. IN MY OPINION THIS ITSELF IS A VERY STRONG INDICATION THAT ALL THE NARESH KUMAR SHAH 10 GIFTS WERE ARRANGED BY THE APPELLANT WHO WAS ACTIVE LY INVOLVED IN GETTING THE CHEQUES FILLED UP BY ONE PE RSON. THE PHOTOCOPIES OF THE CHEQUES BEING A RELEVANT EVIDENC E IS ANNEXED HEREWITH AND WILL FORM PART OF THE ORDER. IT IS AGAIN VERY STRANGE THAT THE APPELLANT HAD BEEN GIFTED SUC H HUGE SUMS BY THE FRIENDS BELONGING TO LOWER INCOME CATEG ORY ON HIS WEDDING ANNIVERSARY WHEREAS NO SUCH GIFT HAVE BEEN RECEIVED FROM HIS FAMILY. THEREFORE CONSIDERING A LL THE CIRCUMSTANCES AND THE FACTS NONE OF THE ALLEGED GI FTS RECEIVED BY THE APPELLANT SEEM TO BE REALLY GENUINE AND THE ENTIRE EVIDENCES AND FACTS IF SEEN IN TOTALITY DO NOT FIT IN THE NATURAL COURSE OF HAPPENINGS. IT IS UNTHINKABLE AS TO WHY PERSON OF LESSER AGE HAVING LESSER INCOME THAN THE APPELLANT WOULD LIKE TO GIFT SUBSTANTIAL AMOUNT ON HIS WEDDIN G ANNIVERSARY AND HOW THE VARIOUS CHEQUES OF SUCH GIF TS WOULD GET FILLED UP IN THE HANDWRITING OF ONE PERSO N. CONSIDERING ALL THE FACTS/EVIDENCES I AM OF THE FI RM VIEW THAT ALL THESE GIFTS HAVE BEEN ARRANGED BY THE APPE LLANT FOR PURPOSES OF INCREASING HIS ACCOUNTED CAPITAL. IN T HE CIRCUMSTANCES THE AO WAS JUSTIFIED TO TREAT THEM A S BOGUS AND NON GENUINE. RELIANCE PLACED BY THE AO ON THE VARIOUS JUDGEMENTS LENDS FULL SUPPORT TO THE AOS FINDINGS. ACCORDINGLY THE ADDITION MADE ON ACCOUNT OF GIFTS OF RS. 8 LAKHS IS HEREBY UPHELD. THEREFORE THIS GROUND OF APPEAL IS REJECTED. 23. BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED AS UNDER: IT IS VERY IMPORTANT TO NOTE THAT THE APPELLANT HA S FURNISHED THE DETAILS WITH RESPECT TO ALL THE DONORS. THE LE ARNED. AO HAS ISSUED NOTICES U/S. 133(6) ONLY TO 4 PARTIES. THE AO HAS NOT ISSUED ANY NOTICE TO (5) MAHAVEER PRASAD MEHTA (6) RAJESH CHOPRA (7) AJAY THAKKAR. THE AO IS NOT JUST IFIED IN MAKING ADDITION WITH RESPECT TO THESE PARTIES WHEN THE APPELLANT HAS DISCHARGED THE OWN COST ON HIM. THE APPELLANT HAS FURNISHED ALL THE DETAILS TO PROV E THE IDENTITY CAPACITY AND CREDITWORTHINESS OF THE DONO RS. HENCE THE ADDITIONS MADE BY THE AO AND CONFIRMED BY THE L EARNED CIT(A) IS NOT AT ALL JUSTIFIED AND SAME MAY BE DELE TED CASE LAWS: NARESH KUMAR SHAH 11 (I) NEK KUMAR VS ACT (2005) 274 ITR 575 (RAJ) (II) CIT VS R.S. SIBAL (2004) 269 ITR 429 (DEL) (III) CIT VS RAM DEV KUMAR CHITLANGIA (217 CTR 462 (RAJ) (IV) CIT VS PADAM SINGH CHOUHAN (215 CTR (RAJ) 303 (V) MURLIDHAR LAHORIMAL VS CIT 280 ITR 512 (GUJ) WITHOUT PREJUDICE TO THE ABOVE THE AO HAS ISSUED N OTICE U/S. 133(6) ONLY TO THE FOUR DONORS OUT OF THE SEVE N DONORS. THE AO IS THEREFORE NOT AT ALL JUSTIFIED IN ADDITIO N THE GIFTS FROM THOSE DONORS TO WHOM NOTICES WERE NOT ISSUED. THUS THE APPELLANT PRAYS THAT THE ADDITION OF RS. 8 00 0 00/- IS NOT AT ALL JUSTIFIED AND THE SAME MAY BE DELETED. 24. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDER OF THE LOWER AUTHORITIES. 25. WE HEARD BOTH THE PARTIES. WE FIND THAT THE AC KNOWLEDGEMENTS OF RETURN OF INCOME FILED BY SHRI BASANT RAJ SANGHV I AND SEEMA JAIN SHOW THEIR RETURNED INCOME AT RS. 1 08 590/- AND RS . 88 924/- I.E. THE AMOUNT OF GIFT IS MORE THAN THEIR ANNUAL INCOME AND THESE PERSONS ARE NOT EVEN RELATED TO THE ASSESSEE. IT I S FURTHER NOTICED THAT THE GIFTS RECEIVED FROM THE DONORS ARE WITHOUT ANY SPECIFIC OCCASION. 26. THE OCCASION FOR THE GIFTS HAS BEEN MENTIONED A S FOR WEDDING ANNIVERSARY BUT THE GIFTS HAS BEEN SPREAD OVER FOR A LONG PERIOD FROM THE DATE OF WEDDING ANNIVERSARY WHICH IS NOT ACCEPT ABLE. 27. IN THE CASE OF ROSHAN DI HATTI VS CIT 107 ITR 9 38 THE SUPREME COURT HELD AS FOLLOWS: THE LAW IS WELL SETTLED THAT THE ONUS OF PROVING T HE SOURCE OF A SUM OF MONEY FOUND TO HAVE BEEN RECEIVED BY AN ASSESSEE IS ON HIM. IF HE DISPUTES THE LIABILITY F OR TAX IT IS FOR HIM TO SHOW EITHER THAT THE RECEIPT WAS NOT INC OME OR THAT IF IT WAS IT WAS EXEMPT FROM TAXATION UNDER THE PR OVISIONS OF THE ACT. IN THE ABSENCE OF SUCH PROOF THE REVENUE IS ENTITLED TO TREAT IT AS TAXABLE INCOME. TO PUT IT DIFFERENT LY WHERE THE NATURE AND SOURCE OF A RECEIPT WHETHER IT BE OF MO NEY OR OF OTHER PROPERTY CANNOT BE SATISFACTORILY EXPLAINED BY THE NARESH KUMAR SHAH 12 ASSESSEE IT IS OPEN TO THE REVENUE TO HOLD THAT IT IS THE INCOME OF THE ASSESSEE AND NO FURTHER BURDEN LIES O N THE REVENUE TO SHOW THAT INCOME IS FROM ANY PARTICULAR SOURCE. FOLLOWING THE RATIO OF THE ABOVE DECISION WE CONFI RM THE ORDER OF THE LEARNED CIT(A) AND DISMISS THE ASSESSEES APPEA L. 28. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON THIS 12 TH DAY OF JANUARY 2011 SD/- SD/- (SUDHAKAR REDDY) (ASHA VIJAYARAGHAVA N) ACCOUNTANT MEMBER J UDICIAL MEMBER MUMBAI DATED 12 TH JANUARY 2011. RJ COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-CONCERNED 4. THE CIT(A)-CENTRAL - I CONCERNED 5. THE DR I BENCH TRUE COPY BY ORDER ASST. REGISTRAR I.T.A.T MUMBAI NARESH KUMAR SHAH 13 DATE INITIALS 1 DRAFT DICTATED ON: 10.1.2011 SR. PS/PS 2. DRAFT PLACED BEFORE AUTHOR: 11.1.2011 ______ SR. PS/PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER: _________ ______ JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER: _________ ______ JM/AM 5. APPROVED DRAFT COMES TO THE SR. PS/PS: _________ ______ SR. PS/PS 6. KEPT FOR PRONOUNCEMENT ON: _________ ______ SR. PS/PS 7. FILE SENT TO THE BENCH CLERK: _________ ______ S R. PS/PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK: _________ ______ 9. DATE OF DISPATCH OF ORDER: _________ ______ 10 DATE ON WHICH FILE GOES TO THE AR