TaxTMI 
TaxTMI 
2008 (12) TMI 292
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....nd on the facts of the case in deleting the addition of Rs. 11 lakhs made under section 68 on account of unexplained deposits in the name of M/s. Maheshwari Electronics (Prop. M/s. Radhey Lal Maheshwari) without properly appreciating the facts of the case. 4. That while deleting the addition of Rs. 11 lakhs learned Commissioner of Income-tax (Appeals)-II, Agra has totally ignored the facts that the depositor Sh. Radhey Lal failed to justify cash deposits in his cash book, consequently, the assessee failed to justify the genuineness of the transaction and creditworthiness of the depositors. 5. That the learned Commissioner of Income-tax (Appeals)-II, Agra has erred in law and on facts of the case in deleting the addition of Rs. 6,65,000 made under section 69 on account of unexplained gifts allegedly taken by the assessee from his brother Sh. Ved Prakash Kapoor without properly appreciating the facts of the case. 6. That while deleting the addition of Rs. 6,65,000 learned Commissioner of Income-tax (Appeals)-II, Agra has totally ignored the facts that the alleged donor Sh. Ved Prakash Kapoor has never given any gift to anybody even to his wife or to any of his children. 7. That w....
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....ain any books of account in respect of this business. The same business was carried in the immediately preceding year also where profit rate of 12 per cent on sales of Rs. 24,97,790 had been accepted. There was thus no justification in deviating from the settled position by the Assessing Officer. If ld. CIT(Appeals) corrected the error, he cannot be held wrong. 6. We have heard the parties and perused the material on record. Under the peculiar facts, the decision taken by the ld. CIT(A) does not call for any interference. The construction of the project under consideration was not complete during the year. In the immediately preceding year a profit rate of 12 per cent on sales made during construction period itself had been accepted. No justifiable reasons have been advanced by revenue to deviate from the accepted position. It was not proper for the Assessing Officer to have disallowed 50 per cent of expenses incurred on the project under construction. If the assessee did not maintain books of account and vouchers, the cost of construction can be established only when it is finally complete by taking expert opinion so that the rest of the real income from the project can be brough....
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....nbsp; 5-2-2001 1,22,872 Raj Kumar Muna. Moh. Nawab. Kasganj, Etah 26-1-2001 14,200 6-2-2001 50,000 7-2-2001 10,000 ---------- Total 5,77,072 -------------------------------------------------- However, at the time of recording of statement, Sh. Radhey Lal Maheshwari could not furnish any satisfactory ....
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....which also came for consideration of authorities below reveal that the two payments of Rs. 5,00,000 and Rs. 6,00,000 to the appellant have been cleared against the sale proceeds of the property deposited in that account. Thus the payment so made to the respondent is found to have a direct nexus with the sale proceeds of the property so sold. The cash deposits in that account are not found to have any relation with the payment to the respondent. The finding so reached by ld. CIT(A) for genuineness of transaction is not shown perverse on facts. The onus that lay upon the assessee has duly been discharged. Finding no basis to interfere with the well reasoned decision of ld. CIT(A) and there being no merit in the grounds raised in appeal, the same had been rejected and so announced on the Bench itself at the time of hearing of appeal on 12-6-2007. Ordered accordingly. 14. Ground Nos. 5 and 6 in appeal by revenue relate to the deletion of an addition of Rs. 6,65,000 made under section 68 of the Act on account of alleged gift from Sh. Ved Prakash Kapoor. The assessee claims to have received two gifts of Rs. 2,00,000 and Rs. 4,65,000 from his brother Shri Ved Prakash Kapoor. Confirmation....
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.... the gift in the name of Sh. Ved Prakash Kapoor was rightly added and deserves to be confirmed." 17. The ld. CIT(A) found that the gift has been received by the assessee from his real brother as is a genuine gift. The gift amount has been received by cheque who is assessed to tax and has a creditworthiness to make the gift. Admittedly, the gift has been made out of rent and security received by him for property owned by him. The ld. CIT(A) also found that there is a direct nexus with the payment of gift amount with these two receipts of rent and security. The donor has annual income of Rs. 6.65 lakhs. Considering entire facts, the ld. CIT(A) was satisfied that the identity, capacity and genuineness of the gifts stands established. He, therefore, deleted the addition of Rs. 6,65,000. 18. We have heard the parties with reference to material on record. Under the peculiar facts of this case, the findings of fact have been reached by ld. CIT(A) on proper appreciation of facts, the materials available on record and surrounding circumstances. The essentials of a valid gift have been satisfied. The donor is the real brother of the respondent and gift has been made out of natural love and....
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.... Rs. 10,00,000 as gift received has been made as income under section 68 of the Act. 23. Before ld. CIT(A), the assessee sated that- "The gift for Rs. 10,00,000 was received from Sanjiv Kumar Dagar. Shri Dagar has given the gift through two demand drafts No. 00017 and 000168 dated 7-4-2000 for Rs. 5,00,000 cash drawn on Corporation Bank, New Delhi for which he has submitted an affidavit in which he has explained that he had received Rs. 10,00,000 on sale of computers and printers which was deposited in his said account. Later on, he has gifted the same amount to the assessee, his real brother. He is a regular taxpayer and assessed to tax by the Income-tax Officer, Ward 27(3), Delhi under PAN - AELPD5474 L. Necessary evidence in respect of filing of return, computation of income, copy of bank a/c with explanation in respect of deposits therein are enclosed herewith in support of the above case. The confirmatory letter of the gift given to assessee is also enclosed." 24. The ld. CIT(A) sought remand report of the Assessing Officer, who vide his letter dated 27-7-2004 stated as under:- "Regarding gilt of Rs.l0 lakhs shown in the name of Shri Romit Kapoor.-The assessee has shown r....
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.... source of gift Shri Dagar has stated that the drafts for giving the gift were purchased by debiting his bank account No. 1899 in Corporation Bank of India, Sarita Vihar, New Delhi. When asked about the source of deposit in bank account, Shri Dagar has stated that in March, 2000, I had sold 27 set of computers, printers, UPS, Monitor, CPU etc. to M/s. GK Consultants Ltd., Greater Kailash, Delhi. The company had paid sale consideration to him through cheques. But he could not tell the exact amount of sale consideration or the details of bank on which cheques were drawn by M/s. GKCL. Regarding computers etc. he has stated that computers were purchased by him from M/s. Shiva Sales, Narayana, Delhi for establishing a computer Institute at Nasirpur, Durga Park, New Delhi. But Shri Dagar could not give any reply regarding value of goods purchased at that time nor could he tell the investment made in other activities for establishing computer institute. He could also not tell anything about the payment made in respect of purchases of computers etc. and stated to give such details later on. Finally, a question was asked from Shri Dagar to specify whether he had given any gift to his wife....
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.... and another Rs. 10 lakhs on 7-4-2000 soon after depositing these two amounts cheques have been issued amounts were withdrawn/transferred immediately. The balance on 7-4-2000 became Rs. 3,000 only. On making enquiries from bank it is found that amount of Rs. 10 lakhs on 2-4-2000 was received by Sh. Dagar from M/s. Ashutosh Construction - current account number 263, Corporation Bank, Sarita Vihar, Delhi and Rs. 10 lakhs on 7-4-2000 from M/s. GKCL. Sh. Subodh Gupta who is director of M/s. GKCL current account number 143, Corporation Bank, Sarita Vihar, Delhi is associated with both the companies and accounts. Besides, in the statement of Sh. Dagar the following features are self-contradictory and so merit consideration:- 1. When Shri Dagar was having such a huge business of Share trading etc. he must be having some bank a/c at Delhi, and what was the necessity of opening a/c No. 1899 by him on 30-3-2000. It is also strange that after 7-4-2000 there are no transactions through the a/c No. 1899. 2. Shri Dagar is not relative of Shri Sarv Prakash Kapoor. As per his statement he is only a friend of brother in law of Shri Sarv Prakash Kapoor. There was no occasion such as marriage etc.....
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.... 1899 in Corporation Bank, Sarita Vihar, Delhi was opened only to chanelize the unaccounted money of S.P. Kapoor with the help of Sh. Dagar, M/s. GKCL and M/s. Motley Securities and also that the purchase and sale of computers by Sh. Dagar is doubtful and is not at all proved considering the facts gathered and discussed above. So the very basis of gift stands shattered rather it is proved that it was a case of routing the money with the help of M/s. GKCL, M/s. Motely Securities and Sh. Dagar. The assessee had given his undisclosed cash to Sh. Subodh Gupta who is a well known entry provider who had routed the money through the above concerns. Consequently the creditworthiness of Shri Dagar to give gift of Rs. 10 lakhs and genuineness of gift being shown in his name are not proved, so gift was rightly held unexplained and was rightly added to the income of Shri Sarv Prakash Kapoor. The above conclusion is also supported by the recent decision of Punjab & Haryana High Court in the case of CIT v. Jawahar Lal Oswal [2004] 190 CTR (Punj. & Har.) 56 the facts of which are identical to the instant case to a large extent." 25. In rejoinder before him, the assessee submitted as under: "As....
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....ash, Delhi to whom he has sold 20 sets of computers, printers etc. in March 2000. The computers which Shri Dagar has sold, were purchased from M/s. Shiva Sales, Lohamandi, Narayana, New Delhi. The Assessing Officer has made the enquiry by issuing the notice to M/s. Shiva Sales, Lohamandi, Narayana, New Delhi and asked them to confirm whether they have sold the computers to Shri Sanjeev Kumar Dagar. Shri Rajesh Chaturvedi, Proprietor M/s. Shiva Sales, Lohamandi, Narayana, New Delhi has sent the affidavit to the Assessing Officer wherein he has denied in respect of above transaction, only on the denial of Shri Rajesh Chaturvedi in respect of sales of computers, the Assessing Officer has made the opinion that Shri Dagar has not sold the computers to M/s. G.K. Consultant Ltd. nor he has purchased the same as denied by M/s. Shiva Sales. In this connection appellant most respectfully begs to submit that in Delhi most of the persons are selling their goods unaccounted. Assessee has purchased the computers from M/s. Shiva Sales which might had not been shown the above sale in their a/c, may be doing business outside the books. The assessee or donor has no control over the a/c of 3rd party....
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.... has earned income during the year on account of sale and purchase of shares and also sale of computers for Rs. 10 lakhs which M/s. G.K. Consultant Ltd. has accepted. In this way, the capacity of the donor is also proved. Now there is no doubt remained in the transaction, the doubt which the Assessing Officer has raised is without any basis, genuine gift has been taken by the assessee's son. The donor is regular taxpayer. He has filed his balance sheet before Assessing Officer. The disallowances made by the Assessing Officer is not called for, action of the Assessing Officer is illegal, arbitrary and unjustified. Addition made on this account is liable to be deleted." 26. The ld. CIT(A) vide para 5.5 of his order found that a gift of Rs. 10 lakhs has been shown in the name of the assessee's minor son Master Rohit Kapoor. Practically, the entire amount of gift Rs. 9,80,000 has come to assessee in the form of loan from Rohit Kapoor. He found himself in agreement with the findings reached by Assessing Officer in remand proceedings that the gift was not genuine. The alleged donor is not even remotely related to the assessee. Even there was no direct friendship between Shri Dagar and t....
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....a Prasad More [1971] 82 ITR 540, 545 and Sumati Dayal v. CIT [1995] 214 ITR 801 that the human probabilities and conduct have to be considered in taxation matters and found these cases applicable to the appellant's case inasmuch as that the apparent is not real and the amount shown from this person as gift did not represent genuine transaction. He, therefore, held that the Assessing Officer was justified in not accepting the gifts of Rs. 10,00,000 shown in the name of Sanjeev Dagar as genuine and adding the same to the income of the assessee as undisclosed income under section 68 of the Income- tax Act, 1961. 28. Assessee's counsel Shri Sharma in support of grounds raised in appeal contends that is no factual or legal justification in treating a genuine gift being capital receipt by the minor son as income under section 68 of the Act. The initial onus that lay upon the assessee to establish nature and source of credit has been discharged. The donor had been produced so that his identity and capacity was duly explained. The loan of Rs. 9,80,000 received in the accounts of the appellant was also explained to the satisfaction of the Assessing Authority. The addition of gift was not w....
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....in the opinion of the Assessing Officer, not satisfactory. In such a case there is, prima facie, evidence against the assessee, viz., the receipt of money, and if he fails to rebut, the said evidence being unrebutted, can be used against him by holding that it was a receipt of an income nature." 31. The ld. CIT (Appeals) thus found that the explanation tendered by the appellant is not satisfactory. The opinion was so formed objectively having reference to the entire material on record. As the explanation itself had been rejected that by itself was an evidence against the appellant. After the explanation had been rejected, the transaction of alleged gift having not found as genuine and the amount of gift having reached the appellant's account, in the facts and circumstances of the case, the ld. CIT (Appeals) is found justified in upholding that the unexplained cash credit was income of the appellant under section 68 of the Act. We, therefore, reject the grounds in appeal by the assessee. 32. In the result, both the appeals stand dismissed. Per Diva Singh, Judicial Member.-The draft order placed before me was forwarded to my brother on 27-7-2007 for discussion. However, no discuss....
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.... Sd. 20-8-2007 (A.M.) Ld. J.M." 4. Since the same was placed before me on 21-8-2007 the files were returned with the following observations:- "Placed before me on 21-8-2007 the date may be corrected Sd. 21-8-2007 (J.M) Ld. A.M." 5. The date accordingly was corrected with the following observations:- "No alterations in notings are desired. The file has routed through P.S. on 21-8-2007. May kindly note. &n....
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....ould show the amount of participation/co-operation made by the assessee despite which the Assessing Officer continued to grant number of adjournments to the assessee to enable him to substantiate its claims. A right vested in a person is corresponded with duty on the part of the person who claims the right. 9. Despite the casual and careless approach of the assessee, it would show that each and every adjournments of the assessee was treated fairly and judiciously by the Assessing Officer However, the assessee in the facts of the peculiar case it is seen has abused the fair treatment afforded to him by the Assessing Officer with gross contempt as despite the request for time it is seen that there was no bona fide intention on the part of the assessee to comply with requests for information and the process of law in fact was abused by him. "Return of income was filed on 29-10-2001 declaring total income of Rs. 9,65,913 and the same was processed under section 143(1) on 22-3-2002 resulting in refund of Rs. 1,228 which was issued on 10-5-2002. The case was selected for scrutiny. Accordingly, notice under section 143(2) of the Income-tax Act, 1961 dated 27-8-2002 fixing the case for 1....
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....; 22-1-2004. 22-1-2004 Part reply dated 22-1-2004 filed. 6-2-2004 Part reply filed dated 6-2-2004. ....
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.... dates under section 143(2) which stood mentioned at page 1 of the Assessment Order. In this background he records that the following information was required to be furnished by the assessee:- "During the course of assessment proceedings the assessee was asked vide notice under section 142(1) dated 24-12-2003 to furnish the following information:- (i) Confirmed copy of a/c of parties with complete mailing address to whom sales/purchases have been made exceeding Rs. 50,000. (ii) Details of opening and closing stock and basis of valuation of work-in-progress of raw material consumed and work completed. The assessee was required to produce the stock register. (iii) Bills in respect of material purchased and in respect of expenses made during the relevant previous year. (iv) Name and mailing address of parties from whom material purchased exceeding Rs. 20,000. (v) A sum of Rs. 24,222 has been paid to ADA as development fee. Complete details of property, sanctioned plan by ADA with man and mention up to what stage the construction was completed during the relevant previous year. (vi) Confirmed copy of a/c in the case of sundry creditors. (vii) Produce books of a/c with supporti....
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....es is about 12 per cent. The Assessing Officer without appreciating the facts that the assessee has invested the amount of Rs. 13,85,522 towards the construction of the building, has disallowed 50 per cent out of the above amount and added the same towards the income. The action of the Assessing Officer is incorrect, illegal and against the principle of accountancy. In fact the assessee has made the investment towards the construction of building at Rs. 13,85,522 out of which sold the building to the extent of Rs. 4,60,000 as against the Assessing Officer has made the addition at Rs. 6,92,760. The Assessing Officer has not pointed out any discrepancy towards the construction made by the assessee. The Assessing Officer has considered that the assessee has made the expenditure to the extent of Rs. 13,85,522 of which 50 per cent has been disallowed by him. The reasons recorded by the Assessing Officer are baseless and also incorrect. The assessee is not maintaining any books of account in respect of above business. Last year too, the same business was done and sales to the extent of Rs. 24,97,790 were declared against which the net profit was shown at Rs. 2,95,926 which is also 12 pe....
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....y evidence by way of primary records were either shown or produced before him despite this fact the Assessing Officer has proceeded to disallow only 50 per cent. It was his assertion that no details despite sufficient opportunity were placed before the Assessing Officer and the Assessing Officer has also not disallowed the expenditure completely and has in fact passed a very reasonable order himself giving relief and benefit of doubt to the assessee by allowing 50 per cent of the expenditure claimed which the assessee could never prove. In these facts it was stated that the reliance placed by the assessee only on the impugned order as such was misplaced as the action of the CIT(A) in relying upon the P&L account whose very basic primary and supporting documents could not be produced has been challenged by the revenue. On facts it was stated that the claim of the correctness of the expenses incurred could never be substantiated. No reason has been given by the CIT(A) to address as to why the same be ignored or how the Assessing Officer in the peculiar facts has erred to make a disallowance. It was further submitted that no discussion has taken place in the impugned order the disallo....
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....ars of land and amount invested therein also were never substantiated. It was submitted that despite these detailed queries on record, no information was given consciously by the assessee. No opening and closing stock details were made available and how total cost of construction and expenses were claimed at Rs. 13,85,522 was also never substantiated. Thus it was argued that evidently and admittedly there was no supporting vouchers of the material purchased. In these circumstances, looking at the extent of queries made by the Assessing Officer and the opportunities granted which remained unreplied it was submitted by the learned D.R. that before the CIT(A) it was consciously for first time mentioned that books of account in respect of the above business were not there. The said submission in these peculiar facts it was argued was not bona fide at this belated stage. Moreover, on this aspect it was his submission no specific finding has been given by the CIT(A) who has instead taken the entire issue in an entirely different direction. It was the submission of the ld. D.R. Shri Ambesh that the revenue is aggrieved with the manner in which the issue was considered by the CIT(A) who ha....
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....of the Conventions of the ITAT and settled judicial decorum to be followed in proposing and finalizing an order have been made vainly. Being over conscious that a dissent should never ever be made or be seen to be made for the sake of it I would again refer to the written communications made on this issue:- "Qua Ground Nos. 1 & 2 of revenue while confirming the relief reference has been made to the position immediately preceding assessment year; (1) However facts to this extent are not borne out from the orders of the tax authorities; (2) No evidence in support of the said fact is found in the Paper Book filed by the assessee; (3) Nor reference to this extent is found in the log book; However if any such request was made by yourself on the Bench as per usual practice then also evidence to this extent is not on record. Accordingly you may reconsider the view taken in the absence of necessary evidence." 20. Referring to the exchange of written notes amongst the Members it is admittedly the position that strictly speaking specific arguments on these lines were never addressed before the Bench and the assessment order for the immediately preceding assessment year referred to was also....
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.... of claim of expenditure put forth has not been addressed appropriately and fairly by the assessee before the Assessing Officer. In fact as it is seen the opportunities availed of have been casually and carelessly treated and the assessee has maintained a studied silence on the issue. It is seen that the issue being of a recurring nature cannot be left unaddressed and also cannot be treated by resorting to ad hocism. Apart from the number of opportunities granted by the Assessing Officer which have not been utilised by the assessee in a bona fide manner the assessee has also not given the information/particulars of the material which is necessarily available with him i.e., the approved sanction plan by Agra Development Authority which was specifically called forth by the Assessing Officer. Similarly, the increase in investment claimed etc., by the assessee has not been demonstrated. The fact that the assessee has claimed loans and gifts advanced to him and his minor son are all facts on record and have to be appreciated and taken into consideration, so as to understand the bona fide of the assessee standing before the Tribunal. The macro-position so brought forth by the assessee's ....
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....nt of non-maintenance of accounts for construction has not been adjudicated upon by the CIT(A). The profit rate casually accepted again without referring specifically to past records etc., by the CIT(A) also would depend on the fact that the receipts are being correctly recorded. If the books of account remain absent on what basis can the total receipts be considered to be sacrosanct that the claim of expenditure put forth by the assessee judiciously examined by the Assessing Officer can be said to become irrelevant based on facts which have never been examined by the Assessing Officer in the manner the CIT(A) would want to interpret them. Especially since the CIT(A) also on facts has not made any attempt to call forth for the facts in regard to the same and thereafter give his independent finding thereon with the reasoning that on account of the facts so examined by him the addition made on an estimate by way of a disallowance in the expenses claimed made by the Assessing Officer in regard to which the books of account were never produced by the assessee the addition so made is not warranted for the XYZ reasons. This critical finding based on reasoning which itself is rested on fa....
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....their ground is the deletion of the addition of Rs. 11 lakhs. 23. The relevant facts with regard to this addition of Rs. 11 lakhs are found discussed in pages 2 and 3 of the Assessment Order. In the appeal filed by the assessee against the said addition of Rs. 11 lakhs along with another addition of Rs. 3 lakhs made by the Assessing Officer both were deleted by the CIT(A). However, the revenue has not agitated against the deletion of Rs. 3 lakhs and has confined its grievance by way of its grounds only to the deletion of the addition of Rs. 11 lakhs made by the Assessing Officer. 24. The issue has been discussed by the Assessing Officer is reproduced as under:- "The assessee has claimed interest of Rs. 1,30,017 against the rental income on a/c of interest paid on loan for construction of building. The assessee has claimed deduction of interest of Rs. 1,30,017 against the total income on account of interest paid on loan for construction of building. As per details of loans and deposits from parties as on 31-3-2001, Rs. 11,00,000 and Rs. 3,00,000 have been received from M/s. Maheshwari Electronics and Shri Ashok Kumar Maheshwari respectively apart from loans from other parties dur....
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....le deed dated 8-12-2000 E. No. 693043 Rs. 4,69,400 ------------ 12,69,400 The photocopies of the acknowledgement slip for filing of return, computation of income, bank accounts along with copy of sale deed showing the sale of property are enclosed herewith in support of the loan given by M/s. Maheshwari Electronics: 26. The CIT(A) appreciated the case in the following manner as reproduced in para 4.2 and acting upon the same, he remanded the issue back to the Assessing Officer who submitted his report vide letter dated 13-12-2004 wherein he accepted the loan of Rs. 3 lakhs in the name of Ashok Maheswari and gave the finding that on the basis of information under section 133(6) the identity, source and genuineness of the transaction stood proved. However, in regard to the loan from Shri Radhey Lal Maheswari allegedly of Rs. 11 lakhs he confirmed the view taken in the Assessment Order. For ready reference para 4.2 of the impugned order is reproduced hereunder:- "4.2 Sin....
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....bsp; ---------- Total 5,77,072 -------------------------------------------------- However at the time of recording of statement, Sh. Radhey Lal Maheshwari could not furnish any satisfactory reply regarding the identity of depositors and genuineness of deposits. Therefore, summons/notices under section 133(6) were sent to the addresses of depositors as stated by Sh. Maheshwari. But any information has not been received from respective parties. Then summons dated 9-11-2004 and 1-12-2004 under section 131 were also sent to Sh. Maheshwari requiring him to justify the above credits in his cash book but Sh. Maheshwari has not attended. In view of these facts and circumstances of the case, it is clear that the source of above deposits in the books of Sh. Maheshwari is not explained, so source of deposit of Rs. 30,000 on 3-2-2001, Rs. 10,000 & ....
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....ts in the cash book of the depositor, in my view have no relevance. Firstly, the depositor has explained these cash deposits in his books. Secondly, if at all there is any doubt about such deposits, action, if any, can be taken in the hands of the depositor and no adverse inference can be drawn in the assessee's case. Lastly and more importantly, as rightly contended by the AR, the loan has been given out of the sale proceeds of plot and not from the aforesaid cash deposits on which the Assessing Officer has made the observations. Considering these facts and the position of law, it is held that the assessee has satisfactorily explained the loan of Rs. 11 lakhs also. No addition is, therefore, required to be made under section 68 of the Act. In the result, this ground of appeal is allowed." 29. Aggrieved by this, the revenue is in appeal before the Tribunal qua the deletion of the addition of Rs. 11 lakhs. 30. The contention of the learned DR was that even in the remand proceedings the assessee has not been able to explain the capacity of the concerned person in regard to the cash deposits to the tune of Rs. 11 lakhs and this fact has been reproduced by the CIT(A) in pages 5 and 6....
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.... argued nor any new argument was advanced to show that the facts have been wrongly appreciated by the Assessing Officer in the Remand Report. This fact it was argued is recorded by the CIT(A) himself in the impugned order. 31. Accordingly, on the basis of the above submissions, it was argued by the ld. DR that the impugned order is perverse on facts for the reasons that there was no material or basis before the CIT(A) to hold that the depositor has explained these cash deposits in his books as nothing new was said by the depositor after the Remand Report. This fact it was argued is supported from the fact that the CIT(A) has also not cared to discuss either the cash deposits appearing in the bank account which have been taken note of by the Assessing Officer nor has he himself cared to examine the actual dates on which as per the books the amounts were received by the depositor from the alleged sale of plot and the actual dates on which they were advanced to the assessee. The facts brought out in the remand proceedings on record by the Assessing Officer it was argued have not been specifically addressed in the impugned order as such how the CIT(A) came to the conclusion that the d....
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....deration of the entire facts, arguments as canvassed before us and as are brought out in the orders of the Tax Authorities, I find myself in all humbleness unable to concur with the reasons arrived at in the proposed order in para 13 and after due deliberation in the face of absence of a discussion amongst the Members, I am of the view that in these peculiar facts and circumstances it would be appropriate to restore the issue back to the file of the CIT(A) so that the necessary facts and evidences on record may be considered and discussed qua the availability of funds from the alleged receipts of sale of plot on specific dates on which the payments were made and received by the assessee. A perusal of the Paper Book at pages 48 and 49 which contain a very faded and illegible photocopy of the creditor's bank pass book has been filed before the Bench. It is seen that neither the CIT(A) has cared to discuss nor the assessee has cared to make any arguments on facts to show the availability of fund supposedly from the alleged sale of plot on specific date. A perusal of page 47 would show that certain deposits were made of Rs. 5 lakhs and Rs. 6 lakhs namely 2-4-2001 and 7-2-2001 it would ....
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....the claim of the assessee since the claim of the assessee as per the material available on record was not demonstrated by the assessee it was for the assessee to substantiate its claim. At the cost of repetition as discussed no arguments in the rejoinder were made by the assessee before the CIT(A) and no discussion how the CIT(A) came to the conclusion that the loan was out of the sales proceeds of the plot and not from the cash deposits has taken place. No attempt to discuss in regard to the availability of funds on specific date as observed has been addressed by the assessee before the Tribunal also. The photocopy of the bank account relied upon in Paper Book is not legible and has not been addressed entry-wise or date-wise by the ld. AR also in regard to availability of specific amounts on specific dates as such in these peculiar facts and circumstances of the case, I consider it appropriate to restore the ground Nos. 3 and 4 raised by the revenue back to the file of the CIT(A) with the direction to adjudicate afresh upon the same in the light of the discussion made above and arrive at a finding thereafter in accordance with law by way of a speaking order. Needless to say the as....
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.... 9,80,000 as loan from master Romit Kapoor. Confirmation of gifts has been furnished. The assessee was asked to prove the genuineness of gifts and creditworthiness of the persons from whom gifts have been received with supporting evidences, vide questionnaire with notice under section 142(1) dated 24-12-2003. He was also asked to explain the purpose of loan taken and its utilisation. The assessee was also asked to produce the donors Sh. Ved Prakash Kapoor and Sh. Sanjiv Kumar Dagar with supporting evidences vide order sheet entry dated 24-2-2004 but the assessee has not produced the donors nor complete copy of bank a/c to prove the creditworthiness of the donors has been furnished. The assessee has submitted vide reply letter dated 1-3-2004 that "Shri Dagar has applied for bank statement which has not been received so far. Copy of bank a/c in the case of Shri Ved Prakash Kapoor A/c No. CA3212 for the period 1-4-2001 to 31-5-2001 has been furnished whereas gifts received shown on 28-2-2001 and 21-12-2000 and the copy of bank a/c No. 9032 does not clearly reflect the balance of Rs. 2,00,000 as on 22-12-2000 in the bank account. Since the assessee has not furnished the supporting d....
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....s on 21-12-2000 out of his bank a/c No. 9032 in Allahabad Bank, Moti Katra, Agra and Rs. 4.65 lakhs on 28-2-2001 out of a/c in SBI, Moti Katra, Agra. As regard source of Rs. 2 lakhs out of accumulated balance and Rs. 4,15,162 received as rent from SBI, Moti Katra, Agra. However, in reply to the question whether he had given any gift to his wife or children or had he received any gift from anybody in last 10 years, Shri Ved Prakash Kapoor has stated that he has never given any gift to anybody except the above gift of Rs. 6.65 lakhs. It is strange and un-understandable that a man who had never given any gift to any of his children, wife will suddenly give gift of Rs. 6.5 lakhs without any occasion or without any other reasonable reason to a person who is already more wealthy and well to do than the donor. In view of it, the genuineness of gift is doubtful. So the gift in the name of Sh. Ved Prakash Kapoor was rightly added and deserves to be confirmed." 46. This report was confronted to the assessee as per para 5.3 of the impugned order. The learned AR filed his Rejoinder dated 29-12-2004 in respect of gift from Shri Sanjay Kumar Dagar. However in regard to the gift from Shri Ved Pr....
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....d by the learned DR that as in the earlier grounds herein also finding of facts has been recorded by the CIT(A) in order to grant relief despite the fact that the Remand Report rejecting the claim of the assessee was not controverted by the assessee before the CIT(A). It was argued that herein also submissions made before the CIT(A) in the rejoinder were again reiterated before him as such nothing new was stated or argued to rebut the Remand Report. It was his submission that merely statements have been given that the gift was given out of the rent receipt by the donor and the security received by him from the tenants. The actual availability of funds at the relevant point of time it was argued has not been substantiated as such not examined as per the requirement of law by the CIT(A). It was further submitted that no evidence in this regard has been placed on record by the assessee before the CIT(A) nor before the Bench. Consequently no discussion on actual facts has also taken place in the impugned order. It was his submission that herein also the finding of fact recorded is perverse on facts. It was also submitted by ld. AR that merely because the gift has been received by chequ....
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....itted has given very categoric finding that the donor Shri Ved Prakash Kapoor has never given any gift to his children or wife and instead has given gift of Rs. 6.65 lakhs i.e., entire annual income without any occasion or reasonable cause to his brother who is admittedly more wealthy than the donor himself, this finding has not been controverted either by the assessee or by the CIT(A). Accordingly, it was submitted that in the facts of the case the addition in fact should have been upheld as genuineness and availability of funds at the relevant point of time allegedly from the stated sources was never established. 50. The learned AR, on the other hand relied upon the impugned order. 51. Having heard the submissions and perused the material available on record, I find myself unable to agree with the findings arrived at in the proposed order in para 18. Merely because the donor is the real brother of the assessee and has been an income-tax assessee himself the requirements under the law are not fulfilled. The only evidence in favour of the assessee's claim is that it was through banking channels. The said issue has been laid at rest by the Hon'ble Delhi High Court in the case of S....
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.... brother of the donee in regard to gift through banking channel, ignoring the other facts brought out in the Assessment Order so as to address the issue of genuineness of the transaction and creditworthiness at the relevant point of time of the donor of making the gifts. The CIT(A) has not cared to consider the overall position of the peculiar facts as recorded where the assessee does not try to place its books of account on record attempts to justify the availability of funds for investment through gifts allegedly made to his minor son by Shri Dagar which has not been accepted by the department further has attempted to justify the availability of funds by way of gift from his brother in regard to which the full facts and circumstances in regard to the availability of fund at the relevant point of time with the donor has not been discussed at all. Apart from that he has also tried to justify the availability of funds through loans to the tune of Rs. 11 lakhs odd all these facts and circumstances as per record need to be considered. The finding in the impugned order de hors the relevant facts is legally not correct. The undue importance to the facts that the gift is through banking ....
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....er at the relevant point of time he actually had the stated amounts available with him from the stated sources in the relevant bank accounts has not been demonstrated on behalf of the donor as such evidence to that extent was never considered by the CIT(A) in order to come to a finding thereon which is missing. The other fact on record that no gifts by the donor admittedly have been made to his wife or children and have been allegedly made of his entire alleged annual income to a brother who is better of financially also stands unrebutted. As such, the burden placed upon the assessee has not been discharged. Accordingly for the reasons given hereinabove, the finding available at in the impugned order is held to have been based on no facts, as such, factually and legally incorrect. The finding upheld in the proposed order as such with all humbleness accordingly cannot be subscribed to. The impugned order as such is set aside and the issue is restored back to the file of the CIT(A) with the direction to decide the same in accordance with law in the light of the above discussion by way of a speaking order after giving the assessee an opportunity of being heard. 53. Accordingly, groun....
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....ed during the relevant previous year. (vi) Confirmed copy of a/c in the case of sundry creditors. (vii) Produce books of a/c with supporting evidences. (viii) Investment in land and plots has gone up substantially from Rs. 16,47,312 to Rs. 91,96,931. Source of investment with supporting evidences. He was also required to give details of particulars of land and amount invested therein and further asked year-wise details of what extent the construction was completed." 4. The assessee filed certain replies in pursuance to the above queries. In respect of the construction done by M/s. Prakashwanti Palace, no names from whom the materials were purchased were given to the Assessing Officer. No opening stock and closing stock details were given. No vouchers for salary and conveyance expenses were available with the assessee. No regular books of account were maintained. The Assessing Officer disallowed 50 per cent of the total cost of construction and expenses debited to profit & loss account on an estimated basis resulting in a disallowance of Rs. 6,92,760. This disallowance was challenged before the learned CIT(A) and before the learned CIT(A), the assessee explained with reference t....
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....ts which was furnished and he was asked to prove the genuineness and creditworthiness of the donors with supporting evidence. The assessee was asked to produce Shri Ved Prakash Kapoor and Shri Sanjay Kumar Dagar. As the same were not produced before the Assessing Officer and the documentary evidence proving the creditworthiness of the donor was not given, an addition of Rs. 16,65,000 was made. In the appellate proceedings before the learned CIT(A), the assessee came up with some more details. The learned CIT(A) called for a remand report from the Assessing Officer in respect of these gifts. The learned CIT(A) after going through the remand report and the details filed before him was of the view that the gift of Rs. 6,65,000 from Shri Ved Prakash Kapoor who is the real brother was accepted. According to him, the gift was genuine, gift was received by cheque and the donor is assessed to tax and he has sufficient creditworthiness to explain the nature and source of the gift and Shri Ved Prakash Kapoor had sufficient rent and security deposit receipts which had sourced the gift and there is also close relationship between the donor and the donee and the identity and genuineness of the ....
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.... cash book, consequently the assessee failed to justify the genuineness of the transactions and creditworthiness of the depositors. 5. That the learned Commissioner of Income-tax (Appeals)-II, Agra has erred in law and on facts of the case in deleting the addition of Rs. 6,65,000 made under section 68 on account of unexplained gifts allegedly taken by the assessee from his brother Sh. Ved Prakash Kapoor without properly appreciating the facts of the case. 6. That while deleting the addition of Rs. 6,65,000 learned Commissioner of Income-tax (Appeals)-II, Agra has totally ignored the facts that the alleged donor Sh. Ved Prakash Kapoor has never given any gift to anybody even to his wife or to any of his children. 7. That while, deleting the addition of Rs. 6,65,000 learned Commissioner of Income-tax (Appeals)-II, Agra has totally ignored the facts that the alleged gift was claimed to be given without any occasion or without any other reasonable reason to a person who is already more wealthy and well to do than the donor." 10. It may be seen that the revenue has agitated mainly in respect of the three issues. 11. When the matter travelled to the Tribunal, the learned Accountant ....
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....construction period has been accepted by the revenue. It is these reasons which prompted the learned AM to uphold the order of the learned CIT(A) deleting the disallowance. At this stage, I may mention that it was not appropriate for the learned Judicial Member having regard to the facts and circumstances of the case to again set aside the matter to the learned CIT(A) without any valid reason. In fact, the learned CIT(A) it may be mentioned had called for a remand report from the Assessing Officer vide his letter dated 13-12-2004 and the Assessing Officer has not made any comments meaning thereby even the Assessing Officer cannot have any grievance in respect of this matter. In the light of above, I concur with the learned AM on this issue. 14. As regards the second issue, the learned DR supported the findings of the learned JM. According to him, the assessee has not discharged the onus that lay upon him to prove the cash credit under section 68 of the Act. The addition, according to him, deserves to be restored. The learned counsel for the assessee, on the other hand, strongly supported the order of the learned AM in the light of the discussions that are made in the order of the ....