TaxTMI 
TaxTMI 
2009 (1) TMI 944
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....a has erred in law and 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)-ll, Agra has totally ignored the facts thai 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/- leaned 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....
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.... it. The assessee did not maintain 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% 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% 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% 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....
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....ies. Then summons dated 09.11.2004 and 01.12.2004 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 03.02.2001, Rs. 10,000/- & Rs. 50,000/- on 05.02.2001 and Rs. 4,50,000/- on 06.02.2001 in his bank account is also not explained. Therefore, it is concluded that the source of loan particularly loan of Rs. 6,00,000/- given by Sh. Radhey Lal Maheshwari on 07.02.2001 to Sh. Sarv Prakash Kapoor is also not explained. In the result, the source of loan given by Sh. Radhey Lal Maheshwari to Sh. Sarv Prakash Kapoor is not explained and is doubtful. Therefore, this amount was rightly added and deserves to be sustained. 10. The Ld. CIT(A) being satisfied that the depositor had appeared and admitted of making deposit with the assessee out of sale proceeds of his property, held that the genuineness of credit stands established. The cash deposits in the bank account of creditor had no relevance with the making ....
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.... the Act. 15. Before the ld. CIT(A), the assessee made following submissions: Rs.6,65,000.00 from Shri Ved Prakash Kapoor Shri Ved Prakash Kapoor has made the gift for Rs. 6,65,000 to assessee. The donor Ved Prakash Kapoor is real brother of the Assessee who has made the gift for Rs. 6,65,000.00 in the following manner: Rs.2,00,000.00 through cheque on 21.12.2000 which^was drawn at Allahabad Bank, same bank a/c No. 9732/433/168 Rs.4,65,000.00 through cheque on 28.2.2001 drawn at S.B.I, a/c No. 01190044590. He is a regular tax payer and assessed to tax by Income Tax Officer, Ward 1(4) under PAN AGMPK 2769G. Necessary evidence in respect of filing of return, computation of income, copy of bank a/c. The confirmatory letter of the gift given to assessee is also enclosed. 16. The ld. CIT(A) sought remand report on these submissions and required the AO to examine the donor. Accordingly, the Assessing Officer furnished his report as under: Shri Ved Prakash was produced on 30.08.2004. He is real brother of assessee. He derives rental income from letting out his premises to SBI, Moti Katara and shops to other tenants. Income is Rs. 1 lac from shops and Rs. 5 lacs from SBI, Mot....
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....ave direct nexus with the own income of the donor. The assessee had duly established the source, the solvency of the donor and his love and affection by his brother, who made him the gift under consideration. On the facts and circumstances of the case and in the absence of any cogent material having been brought on record by revenue to enable us to interfere with the findings reached by ld. CIT(A), it cannot be held that the cash credit was a receipt of an income nature. We, therefore, uphold the decision reached by ld. CIT(A) and finding no merit in grounds raised in appeal by revenue, the same stand rejected. 19. Grounds No. 8 & 9, being general, need no comments. 20. In the result, the appeal of the Revenue stands dismissed. 21. In assessee's appeal in ITA No. 93/Agr./2005, the grounds raised read as under: 1. That the authorities below have been arbitrary and unjust while sustaining the addition for Rs. 10,00,000/- treating the gift received from Shri Sanjiv Kumar Dagar by the assessee's son as not genuine. Gift taken is genuine one. Addition sustained by the CIT (Appeals) treating the gifts as not genuine is not called for. Addition sustained on this score is liab....
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....t Kapoor the minor son of the assessee. In order to ascertain the genuineness of gift, the assessee was required to produce Shri Sanjeev Dagar. Shri Dagar (aged about 35 years) is presently residing at 3137, 1st Floor, Seventh main, ESI Hospital Road, HAL, Stage-II, Indra Nagar, Bangalore. He was produced on 10.9.2004 and his statement on oath was recorded. In his statement he has deposed that during the period 91-96 he was doing export business of Maganese Ore in Goa. As per his statement, his turnover during 95-96 was around Rs. 3 crores and income has been stated in the tune of Rs. 2 lacs to 3 lacs per year. He has stated to be assessed to tax since 1994-PAN No. AELPD 5474 L. Income for the year 2000-01 till the year 03-04 has been stated to be between Rs. 1,50,000 to Rs. 2.25 lacs. From the year 1996 to 2001 he was doing the business of share transactions from his residence. From the year 2002, he changed his business and started in trading of raw silk in Bangalore in the name of M/s. Sidharth Silk. He has stated that his Firm's turnover in the year 2003-04 was about Rs. 55 lacs but the firm is not registered. Shri Dagar could also not tell anything regarding details of per....
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....olas was received from his father in law and thereafter no gift has been received. He has further stated that except the above gift of Rs. 10 lacs he has never given any gift to anybody. On 14.9.2004 Shri Dagar sent copy of purchase bills dt. 1/3/4.04.2000 of M/s. Shiva Sales, Naraina, Delhi. Then, notice under Section 133(6) dated 17.9.2004 along with copy of bills was sent to M/s. Shiva Sales. The prop. Of Shiva Sales Shri Rajesh Chaturvedi filed an affidavit deposing as under 1. That I was the prop. Of M/s. Shiva Sales, Y-254/1, 1st Floor, Loha Mandi, Naraina, New Delhi - 110028 2. That the firm was closed on 5.6.2002 3. That I do not know Mr. Sanjeev Dagar c/o Sanjeev Dagar & Co., 56A, Street No. 2A, Durga Park, Nasipur, New Delhi - 110045 and I had not sold an computers to him and I have not received any payment from him. 4. That the bills shown to me are forged which has been issued misusing the name of my firm by somebody. 5. That the signature on bills are not mine nor the bills had been issued from my firm. -Sd' Verification Verified at Delhi on this 30th day of Sept. 2004 that the contents of this affidavit are correct and true to the knowledge and beli....
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.... sold the computers on 7.04.2000 without utilizing them at all. 4. Shri Dagar is not much acquainted with computer operations so it is also strange that for establishing a computer institute he had purchased computers worth Rs. 20 lacs at the first stage. 5. Though in his statement Shri Dagar has stated that he had never given any gift to anybody in last 10 years except the gift of Rs. 10 lacs given to Shri Romit Kapoor, from the information gathered from the Bank it is found that he had perhaps given two more amount of Rs. 5 lacs each to the family members (namely Ms. Ruchi Kapoor & Neelam Kapoor) of Shri Sarv Prakash Kapoor on 5.4.2000. 6. Summons sent at Bangalore, returned unserved so the address given by Sh. Dagar appears to false and incorrect. Beside though Shri Dagar has stated his income around Rs. 1,50,000/- per year but from the perusal of acknowledgment of return for A.Y. 2001-02 total income has been shown at Rs. 58,910/-. It means that his statement of having income of about Rs. 1.5 lacs per year is false and that his savings must be nil considering his investments. Regarding purchase and sale of computers and receipt of sale consideration from M/s. GKCL, it is ....
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.... parent and house. At that time nobody had supported nor helped him but only Shri Sarv Prakash Kapoor,who is brother in law of his close friend had supported and helped him like brother. At that time, Shri Sanjeev Kumar Dagar thought and decided that in future if Sarv Prakash Kapoor requires any type of help, he (Shri Dagar) will provide the help to his utmost efforts to Shri Kapoor. The Donor was of the view that he has to give the return of his love, affection and support extended by Shri Sarv Prakash Kapoor. On account of these sentiments and relations with Shri Sarv Prakash Kapoor, the Donor when came to know that Sarv Prakash Kapoor was facing little financial crisis on account of blockage of money in a construction project which he had started in Agra. The Dagar feels his pious duty to help and support and gives the return of past support extended by the Sarv Prakash Kapoor. At this time Shri Dagar, Donor was in good financial position on account of sale and purchase of shares and had surplus money in his possession resulting has offered Rs. 10.00 lacs as a gift to his minor son which is nothing but a small support and contribution by the Donor. The A.O. has not accepted the ....
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.....00 lacs which agar has made the gift was out of withdrawal by cheque from his bank a/c wherein the amount of Rs. 10.00 lacs was deposited on account of sale of computers to M/s. G.K. Consultant Ltd. which was credited in the bank a/c, the same amount has been transferred to the appellant's son as a gift. The amount received from M/s. G.K. Consultant Ltd. has been duly accepted by the firm that they have purchased the computers and issued the cheque for Rs. 10.00 lacs. The Donor Shri Sajeev agar has appeared before the A.O. and has accepted in his statement giving on oath before the A.O. that he has made the gift to Master Romit Kapoor, minor son of Shri Sarv Prakash Kapoor. The identity and genuineness of the transaction is fully proved. 3. The capacity of the donor is also established being he has earned the profit on account of sale and purchase of shares as he has admitted and stated before the A.O. on oath. In this way the assessee has proved the capacity of Donor and also genuineness of the transaction being the transaction was made through cheque. Both bank a/c were before the A.O., the amount so transferred by cheque was received by the donor as a sale of computers ....
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....e fact is that M/s. G.K. consultants, the party who had issued cheque to the donor for alleged purchase of computers from him has made huge deposits in cash in its bank account. The person operating the bank account of G.K. consultants and Shiva Sales were the same used for providing bogus entries to various persons. The ld. CIT (A) has also found that from the donor's bank account only three cheques have been issued and that too for gifts to the appellant's family members which was unbelievable under the circumstance that the donor did not have significant income. The capacity of the donor was not such as to enable him to make such large gifts of Rs. 20.00 lacs to the appellant's family members who were strangers to him. 27. Shri Dagar's plea that he had earned profit of Rs. 28 lacs in assessment year 2001-02 from the sale of shares was not believed as he paid no tax on that amount due to indexation of cost of such shares nor any evidence in support of such claim was furnished before the assessing officer when he recorded his statement in remand proceedings. The gifts are also not proved to have been made out of such sale of shares. He also found inconsistency in ....
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.... the source of making gift has been found to have a direct nexus with the Hawala operator Shri Subodh Gupta. The bank account of the person who operated the account of M/s. G.K. Consultants from whom he alleged to have made purchases of computers and M/s. Shiva Sales to whom alleged sale is claimed to have been made, were found operated by the same person used for giving accommodation entry only. There is thus proper application of mind by ld. CIT (Appeals) in forming his opinion that the transaction of gift is not genuine. The Ld. CIT (Appeals) also recorded the finding that the ratio of judgment rendered by apex court in the case of Sumati Dayal v. CIT applied squarely in the case of the appellant. The apex court in,a recent judgment rendered in the case of CIT v. P. Mohankala has referred to the decision in the case of Sumati Dayal vs. CIT supra, in the following words: In all cases in which a receipt is sought to be taxed as income, the burden lies on the Department to prove that it is within the taxing provision and if a receipt is in the nature of income, the burden of proving that it is not taxable because it falls within exemption provided by the Act lies upon the assesse....
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....ce then also evidence to this extent is not on record. Accordingly you may reconsider the view taken in the absence of necessary evidence. Qua ground No. 4 to 7 in the Revenue's appeal I find myself not in agreement with the view taken. Accordingly you may like to reconsider the same or return the files alongwith the proposed order for proceeding as per law to the undersigned Sd/- 17.08.2007(2.30 P.M.) (J.M.) Ld. A.M. 3. However, despite the written communication also as per conventions no discussion took place and the proposed order instead was returned closing the discussion etc. expressing the following view: The Ld. J.M. may take appropriate decision on her own. Sd/- 20.08.2007 (A.M.) Ld. J.M. 4. Since the same was placed before me on 21.08.2007 the files were returned with the following observations: Placed before me on 21st August, 2007 the date may be corrected Sd/- 21.08.2007 (JM). 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 21.08.07. May kindly note. Sd/- 21.08.2007 (A.M.) L. J.M. 6. Accordingly, in the aforementioned circum....
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.... treated fairly and judiciously by the A.O. However, the assessee in the facts of the peculiar case it is seen has abused the fair treatment afforded to him by the A.O. with gross contempt as despite the request for time it is seen that there was no bonafide 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 10.05.2002. The case was selected for scrutiny. Accordingly, notice Under Section 143(2) of the IT. Act, 1961 dated 27.08.2002 fixing the case for 10.09.2002 was issued. None attended on this date. Again a notice Under Section 143(2) was issued on 18.10.2002 fixing the case for 29.10.2002 but this also remained un-complied with. Subsequently, another notice under Section 143(2) was issued on 13.10.2003 fixing the case for 20.10.2003 but it also remained unattended. The position of further notices issued Under Section 143(2)/142(1) is as under: Notice Under Section Date of notice Fixed for Remarks 143(2) ....
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.... 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 upto 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 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 to what extent the construction was completed. 12. The A.O. thereafter referring to the replies filed by the assessee in regard to the claim of the construction expenditure put forth by the assessee of Rs. 13,85,522/- made a disallowance of 50% of the expenditure claimed in the P&L Account in view of the fact that the assessee could not substantiate it's claim. The disallowance was made since no material in support of the expenditure claimed despit....
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....een disallowed by him. The reasons recorded by the AO are baseless and also incorrect. The assessee is not maintaining any books of accounts in respect of above business. Last year too, the same business was done and sales to the extent of Rs. 24,97,790.00 were declared against which the net profit was shown at Rs.2,95,926.00 which is also 12%. Last year assessee has invested Rs. 40,06,681.00 towards the construction. The AO without appreciating the facts has disallowed 50% of the investment made by the assessee towards the construction. The action of the AO is incorrect, illegal, no addition is liable to be made. The addition made therein is liable to be deleted. 14. Considering these facts, the CIT(A) came to the following conclusion: (3.3) I have carefully considered the facts of the case and the submissions of the A.R. In my opinion, the appellant deserves to succeed. I find force in the AR's contention that the AO was not justified in disallowing 50% of the expenses debited in the Profit & Loss Account. In construction business if books of account are not maintained then normally the profit is estimated by applying a suitable rate on the total sales/receipts. In this ....
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....ts has erred to make a disallowance. It was further submitted that no discussion has taken place in the impugned order the disallowance made by the A.O. is either excessive or unreasonable. It was emphasised that the A.O. has specifically put the assessee to notice that the details of opening and closing stock and basis of valuation of work in progress of raw material consumed and work completed were never placed before him. It was submitted that despite this the stock register also was never produced nor bills in respect of any of the material allegedly purchased in respect of expenses incurred during the year under consideration as per sub-paras 2 and 3 of the notice under Section 142(1) dated 24.12.2003 were placed before the A.O. 17. Reading from the Assessment Order it was emphasised by the Ld. D.R. that the A.O. had required the assessee to give information about the name and mailing address of the parties from whom the material exceeding Rs. 20,000/- was purchased. The A.O. also required the assessee to at least explain in regard to a sum of Rs. 24,222/- which had been paid to Agra Development Authority as development fee. As such, the assessee could at least give the detai....
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....s ignored the glaring deficiencies discussed at length by the A.O. on the basis of material placed before him has taken an entirely different line to grant relief to the assessee without addressing how relevant facts on record of the A.O. can be ignored and how oral submissions of the assessee can be accepted. It was argued on facts that the 50% disallowance made by the A.O. is more than reasonable and no further relief is justified. The action of the CIT (A) who has instead proceeded to consider the issue on the basis of a profit rate it was argued ignoring the fact that the A.O. has not made any addition on profit. It was his submission that the issue has been derailed by the CIT (A) who has instead taken it into an entirely different direction ignoring the copious material available on record, hence the Revenue is aggrieved by the impugned order as facts brought out in detail in the Assessment Order have been completely ignored by the CIT(A). 18. Learned A.R., on the other hand, proceeded to rely only upon the impugned order. 19. Having considered the facts available on record in the light of the arguments advanced before the Bench, I find myself unable to concur with the reas....
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.... was neither substantiated before the CIT(A) nor before the Bench. The fact is not disputed despite the exchange of notes and is an admitted position as no denial thereon is on record. These facts were specifically put in writing to my brother colleague which have been reproduced in 1st para of order sheet dated 17.08.2007 of the dissent order and as stated have not been disputed at all. Accordingly, since these facts are not borne out from the record by way of any evidence or finding by the CIT(A) nor any evidence in support of the same has been placed in the Paper Book before the Bench and reference to this extent is also not found in the Log Book and no direction in the course of hearing was also given to the learned A.R. to file the same as also has been addressed by the written communication since no specific arguments thereon apart from relying upon the arguments before the CIT(A) were addressed, I find myself unable to agree with the conclusion arrived at in para 6 of the proposed draft order wherein a finding has been given that in the immediately preceding year a profit rate of 12% on sales made during the construction period itself had been accepted to negate the claim of....
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....al evidence in terms of the principles laid down by the Apex Court in the case of Sumati Dayal, the genuineness of the transaction the principles laid in the context of the same in the case of Durga Prasad More, cannot be ignored thus a view ignoring the relevant findings in the Assessment Order in the face of the facts set out on record cannot be taken. The assessee as per material available on record has been required to justify by way of primary documents the basis of the claim of expenses put forth in the P&L account. The same admittedly were never placed on record. In the circumstances, the A.O. disallowed 50% of the same. Though the assessee did come up in appeal against the said disallowance and canvassed the arguments of profit rate and has de horse the facts and records argued with impunity that the A.O. has not pointed any discrepancy towards construction. He has naively ignored the fact that as per his own subsequent assertion in the very same para no. 3.1 of the impugned order he has also simultaneously and carelessly argued before the CIT (A) that he is not maintaining any books of account in respect of this business. Thus, the argument, grievance and umbrage expressed....
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....roceeded without making a reference to relevant material and has instead rushed in haste to arrive at a finding without due care and attention to the facts of the case. The issue is of a recurring nature and this is a typical situation wherein on account of the specific care and attention of the A.O. ad-hocism ought not to be resorted to. While granting relief in regard to claim of expenditure never substantiated by the assessee the CIT (A) has instead proceeded in an entirely different direction. Ignoring in haste carelessly losing track of the basic facts and the fact that the scope of the enquiry made by the A.O. was distinct and different as compared to the scope of enquiry which was made without first considering the specific facts independently by the CIT (A) in regard to the basis of relief i.e. the profit rate. It is seen that on the profit rate admittedly no enquiry by the CIT(A) has been carried out by him and as such no independent finding based on facts and reasoning is set out. The scope of enquiries in the peculiar facts and circumstances remain completely distinct and divergent. No arguments have been advanced on behalf of the assessee to show that the disallowance i....
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....plete postal address, rate of interest and relationship from whom loan taken and amount of interest and to produce source of repayment of loan and necessary supporting documentary evidences i.e. Bills etc. to prove the creditworthiness and genuineness of loan transactions. The assessee has also shown a sum of Rs. 9,80,000/- as loan received from minor Master Romit Kapoor. 25. Aggrieved by these actions the assessee went in appeal before the CIT (A). The arguments advanced on behalf of the assessee before the CIT (A) are found reproduced in para 4.1 of the impugned order. However, since the issue of addition of Rs. 3.00 Lakhs has not been challenged by the Revenue, it is not considered necessary to reproduce that portion. The reproduction as such is confined to the arguments advanced before the CIT (A) relevant to the addition of Rs. 11.00 Lakhs made by the A.O. which is under challenge by the Revenue: (4.1) During the appellate proceedings, the following submissions were made by the AR: Shri Ashok Kumar Mahesh wari Rs. 03,00,000/- ... ... .... .... .... ... ... ... ... ... ...... ...... ... ... .... .... .... ... ... ... ... ... .... .... .... ... ... ... ... ... ...... ... ......
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....d Rs. 6 lacs on 07.02.2001 out of his bank account number 132 in Jammu Kashmir Bank Ltd., Hing ki Mandi, Agra. As regards source of loan he has stated that he had received an amount of Rs. 29 lacs in November and December, 2000 on account of sale of his land at Nalband Xing, Agra to M/s Parmar Builders and out of money available from that, loan was given. However, on examination of cash book of Sh. Radhey Lal Maheshwari it was found that there are following cash deposits in his cash book: Name Date Amount Rs. Sh. Firoz Khan, Takia Wazir Shah, 21.01.2001 1,80,000/- Hing ki Mandi, Agra 04.02.2001 2,00,000/- 05.02.2001 1,22,872/- Raj Kumar Muna, Moh. Nawab, Kasganj, Etah 26.01.2001 14,200/- 06.02.2001 50,000/- 07.02.2001 10,000/- 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 09.11.2004 and 01.12.2004 Under Section 131were also sent t....
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....o satisfactorily explained the source of giving the same. The AO has not been able to controvert the appellant's claim that the loan was given out of Rs. 29 lacs received on the sale of plot. The AO's observations about the cash deposits 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 AO 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 lacs 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 D.R. was that e....
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....or the alleged sale of plot of the creditor on the contrary the assessee reiterated the submissions made earlier as such no new fact after the Remand Report was argued nor any new argument was advanced to show that the facts have been wrongly appreciated by the A.O. 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. D.R. 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 A.O. 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 A.O. it ....
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....ok filed on behalf of the assessee so as to contend that there is a direct nexus with the loan advanced. 34. On a careful consideration, of the entire facts, arguments as canvassed before us and as are brought out in the order 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. ....
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....e peculiar facts and circumstances of the case it was not for the A.O. to controvert 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. A.R. 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 No. 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 fin....
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.... gifts received by master Romit Kapoor the assessee has shown a sum of Rs. 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 ....
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....en gifts of Rs. 2 lacs on 21.12.2000 out of his bank a/c No. 9032 in Allahabad Bank, Moti Katra, Agra and Rs. 4.65 lacs on 28.2.01 out of a/c in SBI, Moti Katra, Agra. As regard source Rs. 2 lacs 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 Kapur has stated that he has never given any gift to anybody except the above gift of Rs. 6.65 lacs. 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 lacs 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 A.R. filed his Rejoinder dated 29.12.2004 in respect of gift from Shri Sanjay Kumar Dagar. However in regard to the gift fr....
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....arlier grounds herein also finding 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. A.R. that merely because the gift has been received by cheque and donor is assessed to tax is ....
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....hri 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 A.R., 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 Sajjan Das and Sons, 264 ITR 435 (Delhi) as su....
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.... 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 accounts 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 hasp 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. 11.00 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 channel by an identifiable assessee and circumstances of the case can not be up....
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....lable 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. The going the assessee on opportunity of been head. 53. Accordingly, ground no. 5, 6 & 7 of the Revenue are allowed for statistical purposes an....
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.... 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 AO. 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 AO disallowed 50% 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 to the similar transactions in the last year and the learned CIT (A) found the rate of profit at 12% declared....
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....not produced before the AO 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 AO 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 donor is proved, the addition of Rs. 6,65,000/- was deleted. The other gift was not accepted by the learned CIT (A). 7. There are other small disallowances which the learned CIT (A) had substantially deleted. Both the assessee and the Revenue came up in....
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....eleting 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 traveled to the Tribunal, the learned Accountant Member who proceeded to draft the order for the Bench has dismissed both the appeals by the assessee and the Revenue. When the draft order was placed before the learned Judicial Member, she took certain serious exceptions as to the manner o....
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....al 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 AO vide his letter dated 13.12.2004 and the AO has not made any comments meaning thereby even the AO 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 learned CIT (A). The learned Counsel pointed out that cash credits have been sufficiently explained with all supporting documents and there is no reason to make an addition Under Section 68 of the Act. 15. I have carefully gone through the records and completely agree with the order of the lea....