JOSHI VASANTKUMAR J. vs. I.T. OFFICER

O/TAXAP/420/2003 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 420 of 2003

FOR APPROVAL AND SIGNATURE:

HONOURABLE MR.JUSTICE KS JHAVERI

and HONOURABLE MR.JUSTICE K.J.THAKER

================================================================ 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ================================================================ JOSHI VASANTKUMAR J.....Appellant(s) Versus I.T. OFFICER....Opponent(s) ================================================================ Appearance: MR KR DIXIT, ADVOCATE for the Appellant(s) No. 1 MRS MAUNA M BHATT, ADVOCATE for the Opponent(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER Page 1 of 5

O/TAXAP/420/2003 JUDGMENT

Date : 14/11/2014

ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. Being aggrieved and dissatisfied with the impugned judgment and order passed by the Income Tax Appellate Tribunal, Ahmedabad Bench (hereinafter referred to as ‘the Tribunal’) dated 28.03.2003 in ITA No. 610/Ahd/2000 for the Assessment Year 1996-97, the revenue has preferred the present Tax Appeal for consideration of the following substantial question of law which was framed while admitting the matters: “Whether the Tribunal was justified in adding Rs. 40,000/- especially when the identity and the capacity of the depositor and the genuineness of the transaction had been proved by the appellant – assessee?” 2. The assessment u/s 143(3) was completed on the total income of the assessee and while completing the assessment, the Assesing Officer made addition of Rs. 40000/- on account of cash credit under section 69 of the Act. It was found that the all the four persons were family members On appeal by the assessee, the CIT (Appeals) sustained the additions. On appeal before the Tribunal by the revenue, by impugned judgment and orders, Tribunal dismissed the appeal and upheld the order of CIT(A). Being aggrieved and dissatisfied with the impugned order passed by the Tribunal, the revenue has preferred the present Tax Appeal for consideration of the aforesaid substantial question of law. Page 2 of 5

O/TAXAP/420/2003 JUDGMENT 3. Mr. Dixit, learned Counsel appearing on behalf of the appellant– assessee has submitted that the decision of the Tribunal is erroneous. He submitted that the Tribunal ought to have not confirmed the addition of Rs. 40000/- as the said cash credit was made in the names of four persons comprising of father and his unmarried daughters. He submitted that in fact in Hindu Society gift in cash or in kind are given to young kids on festivals or other special occasions. He has relied upon a decision of the Gauhati High Court in the case of Roopchand Manojkumar vs. CIT reported in 235 ITR 461 (Gau). 4. Mr. Bhatt, learned Senior Counsel appearing for the revenue supported the impugned order and submitted that the same having been passed in accordance with law does not call for any interference by this Court. He submitted that the observations made by the Tribunal are justified as the deposit of cash credit could not be proved by the assessee. 5. We have heard Mr. Bhatt, learned Senior Counsel appearing on behalf of the Department and Mr. Dixit, learned advocate for the assessee. The Tribunal in the impugned order has observed that the explanation given by the assessee was not substantiated inasmuch as the only material relied upon are letters of confirmation from the creditors and mere letters of confirmation are not enough and that there should be material to inspire confidence in the financial capacity of the creditors and the genuineness of the transaction. 5. A similar question came up before the Gauhati High Page 3 of 5

O/TAXAP/420/2003 JUDGMENT Court in the case of Roopchand Manoj Kumar (supra), and the Gauhati High Court while deciding the said issue has held as under: “10. Considering the facts and circumstances of the case, in our view, the assessee satisfactorily discharged the primary onus which lay on him to prove the nature and source of the credits. There cannot be any inference under the law that the confirmatory letters given by the assessee are bogus. Learned counsel for the Revenue has relied on a decision of the Calcutta High Court in the case of CIT v. Precision Finance Pvt. Ltd. [1994] 208 ITR 465. The facts of the case were altogether different as in that case the Assessing Officer had conducted enquiries through the inspector ; but in the instant case, no enquiries were made by the Revenue.” [Emphasis Supplied] 5.1 In view of the aforesaid, we are of the opinion that considering the peculiar facts and circumstances of the present case, in view of the confirmation letters produced by the assessee with regard to the identity of the persons coupled with the fact that the Assessing Officer himself has observed that there is no taxable income of the assessee, the question raised in the present appeal is required to be answered in favour of the assessee. 6. Accordingly, the question raised in the present Tax Appeal is answered in favour of the assessee and against the department. Consequently, the impugned judgment and orders passed by the Tribunal is confirmed. Appeals are dismissed. (K.S.JHAVERI, J.) Page 4 of 5

O/TAXAP/420/2003 JUDGMENT (K.J.THAKER, J) divya Page 5 of 5