SHRI BHARATJI K. RAJPUT,PATAN vs. THE INCOME TAX OFFICER, WARD-1, PATAN

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ITA 789/AHD/2017Status: DisposedITAT Ahmedabad24 April 2019AY 2008-099 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal allowed the assessee's claim for gifts received from his mother, wife, and father, finding that the department failed to bring any contrary evidence. The Tribunal accepted the statements and affidavits provided by the relatives.

What were the facts?

The assessee had made substantial cash deposits in savings bank accounts. The Assessing Officer (AO) added the peak cash balance of Rs. 9,87,700/- to the assessee's income, treating it as unexplained. The assessee claimed these deposits were from gifts received from relatives.

What were the issues?

Whether the gifts received from relatives were adequately explained and whether the addition of peak cash balance was justified without considering the source of funds.

Which sections of the Income-tax Act were involved?

Section 68,Section 234A,Section 234B,Section 234C,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD “SMC” BENCH

Before: SHRI PRADIP KUMAR KEDIA & SHRI MAHAVIR PRASAD

For Appellant: Shri Jimit Shah, A.R

PER MAHAVIR PRASAD, JUDICIAL MEMBER 1. This appeal filed by the Assessee is directed against the order of the Ld. CIT(A), Gandhinagar, Ahmedabad dated 27.02.2017 pertaining to A.Y. 2008- 09 and following grounds have been taken: 1. The Id.AO as well as the Id. CIT (A) has erred in law and in considering the facts of the case and has disallowed the gift received from the relatives of the

ITA No. 789/Ahd/2017 2 . A.Y. 2008-09 appellant. The ld. CIT (A) has disallowed the gift of Rs.1,25,000/- from his mother, Rs.75,000/- from his wife and Rs.4,5 0,000/- from his father. 2. The ld. CIT (A) has erred in law and has erred in considering the documents placed on record and has made the addition without considering the statements recorded by the Id.AO during the course of remand report proceedings. 3. The ld. CIT (A) as well as the Id. AO has erred in law and in facts of the case and has made the entire addition on the basis of the presumption basis. Thus the addition made by the Id.AO and upheld by the Id. CIT (A) needs to be deleted. 4. The learned CIT(A) has erred in law and on facts of the case in confirming action of the Id. AO in levying interest u/s 234A/B/C of the Act. 5. The learned CIT(A) has erred in law and on facts of the case in confirming action of the Id. AO in initiating penalty u/s 271(l)(c) of the Act.

2.

During the assessment proceeding the assessee filed his return of income on 14/10/2015 declaring total income at Rs. 78,812/- and agriculture income at Rs. 2,02,150/-. The following issue arose for discussion during the course of assessment proceedings.

3.

The assessee has made the cash deposits of Rs. 10,72,800/- in saving bank account No. 247010100063151 with the Axis bank account. During the assessment proceedings it is come to the noticed that the assessee is also having saving bank account No. 07821000007295 with HDFC bank wherein the assessee has made the cash deposit at Rs. 5,04,500/- during the F.Y. 2007-08. The assessee was asked to furnish the source of aggregate cash deposits at Rs. 15,77,300/- (1072800+504500) in his savings bank accounts with substantial evidences.

ITA No. 789/Ahd/2017 3 . A.Y. 2008-09 4. In response to the notice the assessee has furnished the books of account alongwith the bank statement and Cash book. The assessee has also furnished the copy of form No. 12 (agriculture land record).

5.

On verification of the land record it is noticed that in land at survey no. 167/1 admeasuring 10345 sq. meter land, in land record column of crop grown name written as "useless farm" (Padtar land)'. As regards the survey no. 10/ paiki 2 admeasuring 4995 sq. meter land it has been written as "no information available" in, land record. It is noticed that the assessee has shown opening cash on hand at Rs. 4,25,255/-, agriculture income at Rs. 2,02,000/- and unsecured loan at Rs. 2,03,500/-. The assessee has not furnished any supporting evidence as regards to opening cash on hand at Rs. 4,25,255/-. Further, the assessee has also not furnished any supporting sale bills of agriculture sale products with regards to the agriculture income. Since the assessee has failed to furnish the source of cash deposits at Rs. 15,77,300/- (1072800+504500) in saving bank accounts the assessee vide this office letter bearing No. ITO/Wd-1 /Patan/142(1 )/RBK/Show cause/2015-16 dated 15/09/2015 asked to show cause as to why the cash deposit of Rs. 15,77,300/- should not be treated as deposited from the unaccounted source of income and added to your total income.

6.

In response to the show cause notice the assessee vide his letter dated 19/10/2015 stated that whatever cash deposited by him in the Axis Ban account and HDFC bank accounted is deposited by withdrawing from the said bank accounts and redeposit. Therefore, instead of making addition of entire cash deposit take the peak of my cash and make the addition accordingly.

ITA No. 789/Ahd/2017 4 . A.Y. 2008-09 7. The reply of the assessee has considered carefully and found there is some force in the contention of the assessee's reply. Therefore, the calculation of peak cash amount is worked as under: Date Op. balance Withdrawal Deposit Balance

04.04.2007 2000 2000

04.04.2007 2000 500 2500

18.04.2007 2500 2400 100

19.04.2007 100 20000 20100

19.04.2007 20100 20000 40100

20.04.2007 40100 400 40500

03.05.2007 40500 10000 50500

04.05.2007 50500 2000 52500

21.05.2007 52500 1500 54000

29.05.2007 54000 2500 51500

05.06.2007 51500 200 51300

06.06.2007 51300 1 00000 -48300

j. 07.06.2007 -48300 9900 -58200

i 09,06.2007 -58200 50000 -108200

12.06.2007 -108200 25000 -133200

15.06.2007 -133200 8500 -141700

22.06.2007 -141700 8200 -133500

25.06.2007 -133500 700 -132800

25.06.2007 -132800 20000 -112800

29.06.2007 -112800 2000 -110800

10.07.2007 -110800 500 -100300

1 1 .07.2007 -110300 2000 -108300

ITA No. 789/Ahd/2017 5 . A.Y. 2008-09

12.07.2007 -108300 4000 -104300

13.07.2007 -104300 100 -104200

24.07.2007 -104200 500 103700

25.07.2007 -103700 10000 -113700

28.07.2007 -113700 2000 -111700

01.08.2007 -111700 1700 -113400

01.08.2007 -113400 23000 -136400

01.08.2007 -136400 17000 -153400

02.08.2007 -153400 3000 -156400

02.08.2007 -156400 2500 -158900

07.08.2007 -158900 45000 -203900

08.08.2007 -203900 10000 -213900

1 3.08.2007 -213900 4500 -218400

1 6.08.2007 -218400 2000 -220400

17.08.2007 -220400 15000 6000 -229400

21.08.2007 -229400 80000 -149400

21.08.2007 -149400 4000 -145400

22.08.2007 -145400 . 18000 -163400

29.08.2007 -163400 50000 -213400

03.09.2007 -213400 2500 -210900

06.09.2007 -210900 7500 -203400

12.09.2007 -203400 2000 -201400

21.09.2007 -201400 1 50000 -51400

24.09.2007 -51400 2500 -48900

24.09.2007 -48900 20000 -28900

ITA No. 789/Ahd/2017 6 . A.Y. 2008-09 25.09.2007 -28900 20000 -8900

25.09.2007 -8900 20000 . 11100

26.09.2007 11100 12000 23100

03.10.2007 23100 6500 16600

04.10.2007 16600 28000 -11400

05.10.2007 -11400 49500 -60900

06.10.2007 -60900 49900 -110800

15.10.2007 -110800 1000 -111800

22.10.2007 -111800 49500 -161300

24.10.2007 -161300 49900 -211200

25.10.2007 -211200 49500 -260700

26.10.2007 -260700 48500 -309200

29.10.2007 -309200 4000 -313200

02.11.2007 -313200 2500 -315700

05.11.2007 -315700 35000 -350700

06.11.2007 -350700 45000 -395700

07.11.2007 -395700 4500 1 5000 -407200

21.11.2007 -407200 ——— 1 0000 -417200

22.1 1.2007 -417200 12000 -529200

03.12.2007 -529200 15000 -514200

06.12.2007 -514200 15000 -499200

10.12.2007 -499200 6000 -493200

24.12.2007 -493200 18000 -475200

31.12.2007 -475200 1000 -474200

08.01 .2008 -474200 20000 -454200

08.01.2008 -454200 20000 -434200

ITA No. 789/Ahd/2017 7 . A.Y. 2008-09

10.01.2008 -434200 200000 -634200

11 .01 .2008 -634200 75000 -709200

16.01.2008 -709200 10000 -719200

16.01.2008 -719200 5000 -724200

23.01.2008 -724200 83000 -807200

24.01.2008 -807200 70000 -877200

25.01.2008 -8777200 100000 -977200

08.02.2008 -977200 7000 -984200

13.02.2008 -984200 3500 Peak Balance - 987700

1 6.02.2008 -987700 11000 -976700

18.02.2008 -976700 1500 -978200

03.03.2008 -978200 6000 -972200

. 05.03.2008 -972200 70000 -832200

05.03.2008 -832200 20000 -812200

05.03.2008 -812200 180000 -632200

260.32008 -632200 3000 -635200

8.

The reply of the assessee dated 19.10.2015 considered and peak cash of HDFC bank and Axis bank account wherein the assessee has made the cash deposit is worked out as above and peak cash at Rs.9,87,700/- is added to the total income of the assessee.

9.

Against the addition of Rs. 9,87,700/-, assessee preferred first statutory appeal before the ld. CIT(A) who partly allowed the appeal of the assessee.

10.

Now assessee has come before us.

ITA No. 789/Ahd/2017 8 . A.Y. 2008-09

11.

We have gone through the relevant record and impugned order. So far an amount of Rs. 1,25,000/- is concerned, this amount was taken by theassessee from his Mother Kantaben Rajput. She appeared before the Assessing Officer during remand proceeding and stated on oath that she is engaged in dairy farming. She earns income from dairy farming activities. She does not have any permanent account number and neither does has any bank account and she is mother of the assessee and further stated that her income is approximately Rs. 1,00,000/- per annum and from his past savings. She had deposit of Rs. 1,25,000/- as well as also submitted an affidavit to this effect. And department could not brought anything against the statement of the mother of the assessee. Thus, statement of Kantaben Rajput cannot be discarded, it can be easily believed that a house wife must have been an amount of Rs. 1,25,000/- as in Indian family system there is tendency that house wife generally keep some money with them from their past saving for emergency purpose. Therefore, in India house wife is also called Laxmi (Goddess of Wealth). Therefore, we allow the claim of the assessee.

12.

The assessee has claimed to have Rs. 75,000/- from his wife and Rs. 4,50,000/- from his father, the A.O. has recorded statements of both the persons were recorded and parties admitted that they have given gift to the appellant out of animal husbandry business and they have also field affidavit before the ld. A.O. And his father is having agricultural land 2.54 hectare. And before the A.O. during remand proceedings, one person proprietary of Vardhman Traders, Patan also appeared before the ld. A.O. to whom appellant has sold agriculture produce and copies of bills etc. were submitted with the A.O. and ld. A.O. could not brought anything on record which prove that these details are incorrect. It is fact that family members are having income from dairy farming

ITA No. 789/Ahd/2017 9 . A.Y. 2008-09 and agriculture activities and their statements have been recorded by the A.O. Thus, claim of the assessee cannot be rejected. Thus, this ground of appeal of the assessee is allowed.

13.

In the result, appeal filed by the assessee is allowed.

Order pronounced in Open Court on 24 - 04- 2019

Sd/- Sd/- (PRADIP KUMAR KEDIA) (MAHAVIR PRASAD) ACCOUNTANT MEMBER True Copy JUDICIAL MEMBER Ahmedabad: Dated 24 /04/2019 Rajesh Copy of the Order forwarded to:- 1. The Appellant. 2. The Respondent. 3. The CIT (Appeals) – 4. The CIT concerned. 5. The DR., ITAT, Ahmedabad. 6. Guard File. By ORDER

Deputy/Asstt.Registrar ITAT,Ahmedabad

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