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2016 (8) TMI 263
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....ble as debtors, loans and advances. These are not the Revenue expenditure and as such they cannot be adjusted against revenue receipts. 3. The Ld. CIT(A) erred in deleting additions made on account of ground rent which was retained by the assessee and had been utilized for the expenses of the firm. 4. Whether the Ld.CIT(A) was justified in deleting the addition made on charging on interest on late payment. 5. Whether the Ld. CIT(A) was justified in deleting addition made on account of cancellation charges out earnest money. 6. Whether the Ld. CIT(A) was justified in deleting addition for which the assessee had not been able to produce details and evidence. 7. Whether the Ld. CIT(A) was correct in law and on facts of the case while deleting the additions made on account of gifts by the AO merely on identification of the donor and movement of gifts through the banking channels that too when the donor was not related to the assessee." 3. The brief facts of the case are that the assessee is an individual. A search operation was carried on 16.03.2007. Pursuant to which return u/s 153A was filed on 08.10.2008 submitting the total income of Rs. 2287516/-. Against this th....
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....wing the decision of the coordinate bench in the case of the assessee we delete the disallowance of Rs. 6344/- on account of ground rent. In the result ground No. 3 of the appeal is dismissed. 9. Ground No. 4 of the appeal is against deletion of addition on account of interest on late payments of Rs. 125000/-. The ld AR submitted that an identical issue has been dealt with Hon'ble ITAT in case of assessee himself in ITA No. 2964/Del/2011 for AY 2002-03. Ld DR could not controvert this fact and also could not submit that how the facts are different in this year compared to the decision of coordinate bench in the case of the assessee and others on the same issue. 10. We have carefully considered the ground No. 4 of this appeal as well as ground No. 5 of that appeal and we are convinced that there is no change in the facts and circumstances of the case. The coordinate bench has set aside the issue to the file of AO as per para No. 20 to 22 of that appeal. Therefore, following the decision of the coordinate bench we set aside this issue also for this year back to the file of AO on similar directions. In the result the ground No. 4 of the appeal is dismissed. 11. The ground No.....
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....nt are withdrawn within two/three days leaving a meager balance in the account. Since there is no justification for the gifts made by a person who is not related to the assessee or any member of family, it can safely be concluded that the impugned gift represents the unaccounted money of the assessee routed through Sh. Mangla to benefit the assessee. The assertion of the assessee that the gift was given out of natural love & affection does not arise in this case for Sh. Mangla is no way related to the assessee and none of his family members is aware about Sh. Mangla in any way. By the questionnaire dated 08.09.2009, the assessee was asked to Show Cause as to why the impugned gifts amounting to Rs. 20(00,000/- from Sh. Mangla should not be added as unexplained income of the assessee based on the findings made in the course of assessment proceedings in the cases of M/s. K.K. Aggarwal & Sons(HUF) and M/s. Manish Aggarwal & Sons (HUF) in F.Y. 2008-09 wherein it was concluded by the AO that Sh. Mangla did not have the creditworthiness to make such gifts. Replying to the Show Cause, the assessee filed some documents purported to be copies of returns of Sh. Jagdish Mangla for the A.....
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....e any natural love and affection between the donors and the donees, (d.) There is no record of the assessee's having given any gifts whatsoever, to the donors in return for their largesse, (e.) All this gifts have been made without there being any occasion or function in the assessee's family that could justify the receipt of these gifts. The bank account of most of these donors were examined, and it was found that these bank accounts appeared like the bank accounts of entry operators, in that, large amount of money were credited, to these bank accounts, only to be withdrawn the next date or immediately thereafter in the form of cheques to various parties among which were -the gifts to the assessee. Summons were also issued to most of the donors so that they could confirm the gifts made to the assessee however, none of the donors appeared in response to the said summons. Therefore, there were reasons to believe that most of the gifts were merely accommodation entries. In view of the observations recorded by my predecessor in the assessment of Manish Aggarwal & Sons (HUF) and in view of the fact that the documents since filed by the assessee have been seen to be ....
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.... During the course of search summons were issued to the donor but could not be served as he passed away on 24.06.2002. On examination of his bank statement the ld Assessing Officer noted that the donor is an accommodation entry provider. It was further noted by him that the amounts deposited in that account are withdrawn within 2 to 3 days leaving meager balance in his bank account. The donor is not at all related to the assessee and therefore ld AO doubted the genuineness of the gift as well as the creditworthiness of the donor. Further, as the donor was not acquainted or not known to the assessee, AO was also susceptible that gift was given out of natural love and affection does not arise in this case. The ld CIT (A) has deleted the addition holding that in appeal No. 334/09-10 in case of Kamal Kishore Agarwal for AY 2001-02 wherein a gift of Rs. 21 lacs from Mr. Jagdish Mangala was deleted. The order of the ld CIT(A) in appeal No. 334/09-10 dated 28.02.2011 is also produced by the ld AR. However, on going through para No. 4 and 4.1 of the above order he deleted this addition because of his decision in ground No. 3 in appeal No. 97/08-09 in the case of Sh. Kamal Kishore Agarwal a....
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....mal course of human conduct. In background the above decision of Hon'ble Delhi High Court in it apparent that during the year Sh. Jagdish Mangala has given a gift of Rs. 51 lacs at least collectively to the assessee, Mr. KK Agarwal and Mr. KK Agarwal HUF. Further the ld Assessing Officer has alleged that Shri Mangala is an accommodation entry provider and his bank account also shows that amount deposited is immediately withdrawn within 2 to 3 days leaving a meager balance in the bank account. the assessee before the Assessing Officer as well as before ld CIT(A) could not state even what business Mr. Jagdish Mangala is carrying on which justifies his creditworthiness of making a gift of Rs. 51 lacs during the single assessment year as stated above. Further, regarding the genuineness of the transaction has also not been proved by the assessee. Before the ld Assessing Officer assessee could not satisfactorily explained the doubts raised by the Assessing Officer about the genuineness of the transaction. As the assessee could not prove the creditworthiness of the Sh. Jagdish Mangala and genuineness of the transaction before the ld Assessing Officer and further the ld CIT(A) has deleted ....
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....xed in India and, therefore, production of assessment order was not relevant. He also observed that onus of proof was discharged by the assessee by disclosing identity, capacity, source and confirmation from the donor. 8. Possibly, some of the information/confirmation may not have been possible for the appellant-assessee to procure but the close relationship, not necessarily the blood relationship, between the parties could have been asserted and fortified. Genuineness of the transaction has to be examined by not only taking into consideration the paper/documents, which were executed but the surrounding circumstances are also relevant. These aspects are of significance and importance, when the genuineness of a transaction is in issue. A gift is a voluntary act, by a person who out of love and affection transfers of money, movable or immovable asset to another person. Element of personal and close relationship between the two is the motivating factor as the donor parts with and transfers what belongs to him to someone, whom he/she loves and cares. This mandates and requires a close association between the donor and the donee, except where gifts are made for charity and philanthro....