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Income Tax Appellate Tribunal, JAIPUR BENCHE ‘B’ JAIPUR
Before: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 514/JP/2018
आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE ‘B’ JAIPUR Jh fot; iky jko] U;kf;d lnL; ,oa Jh foØe flag ;kno] ys[kk lnL; ds le{k BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 514/JP/2018 fu/kZkj.k o"kZ@Assessment Year :2013-14 cuke Vinod Kumar Dhanja ITO, Vs. 49/2, Outside Delhi Gate, Near Ward-1(3) Jhulelal Temple, Ajmer-305001 Ajmer LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: ANUPD2219F vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Sanjeev Jain (CA) jktLo dh vksj ls@ Revenue by : Shri K. C. Meena (Addl. CIT) lquokbZ dh rkjh[k@ Date of Hearing : 28/03/2019 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 02/04/2019 vkns'k@ ORDER
PER: VIKRAM SINGH YADAV, A.M. This is an appeal filed by the assessee against the order of ld. CIT(A), Ajmer dated 15.01.2018 for AY 2013-14 wherein the assessee has challenged the confirmation of addition of Rs. 4,52,000/- as income from undisclosed sources.
This appeal was earlier dismissed in limine by the Co-ordinate Bench vide its order dated 25.09.2018. Subsequently, the Co- ordinate Bench vide its order dated 20.03.2019 has recalled the said appeal and now, the appeal has come up before this Bench.
Briefly stated the facts of the case are that the assessee has declared income from salary, brokerage/ commission on property etc
ITA No. 514-JP-2018 Vinod Kumar Dhanja, Ajmer vs. ITO, Ajmer
in his return of income. The assessee is also engaged in share transaction business during the year under consideration. During the course of assessment proceedings, the assessee furnished a copy of his bank account, cash book, salary certificate and ledger of transactions of share trading business. On perusal of cash book furnished by the assessee, the Assessing Officer observed that the assessee has received gifts totaling to Rs. 8,52,000/- from his family members, namely, his father, mother and brother. The assessee was issued a show cause notice and in response, the assessee filed a declaration of gift received from his father and also enclosed copy of bank statement of his father for the period 01.01.2011 to 05.07.2011. The Assessing Officer observed from the perusal of the bank statement of his father that there is a cash withdrawal of Rs. 4,00,000/- on 12.03.2011. However, the gift which has been shown to have been received from his father has been received on 15.02.2013. Therefore, there is long gap between both transactions. Further, given that the assessee has not produced any gift deed from his mother and brother and any other supporting documentation, the Assessing Officer observed that the genuineness of the gift transaction and creditworthiness of the donors are not proved. Therefore, he brought to tax the sum of Rs. 8,52,000/- as income from undisclosed sources.
On appeal, the ld. CIT(A) observed that the father of the assessee has withdrawn cash of Rs. 4,00,000/- on 12.03.2011. The AO has not brought on record any evidence to show that the cash withdrawn from bank on 12.03.2011 was utilized for any other purpose. Accordingly, source of the gift of Rs. 4 lac received from
ITA No. 514-JP-2018 Vinod Kumar Dhanja, Ajmer vs. ITO, Ajmer
father was considered as duly explained. The addition of Rs. 4,000,00/- is deleted. Regarding remaining amount of Rs. 4,52,000, the ld. observed that source of the cash claimed to have been received in form of cash gift remains unexplained and the brother and mother do not have capacity to advance any gift to the assessee. Accordingly, he confirmed the remaining addition of Rs. 4,52,000/- in the hands of the assessee.
Against the said finding of the ld. CIT(A), the assessee is in appeal before us. During the course of hearing, the ld AR has raised various contentions which are contained in the written submissions which are reproduced as under:-
“1. The assessee received following gifts from his close relatives during the year under consideration which have been treated as income from undisclosed sources.
Sh. Noratmal Dhanja Father Rs. 100,000/-
Smt. Geeta Dhanja Mother Rs. 201,000/-
Sh. Mukesh Dhanja Brother Rs. 151,000/-
In the case of Sh. Noratmal, Father of the assessee, retired employee of Municipal Corporation, Ajmer copy of Bank A/c and declaration of gift was provided to the Assessing officer. Sh. Norat Mal was also having cash in hand available with him, including Rs. 400,000/- withdrawn from his bank account on 12/03/2011. Being an elderly person, he preferred to keep cash in hand with him instead of having it deposited in bank account, which does not give him comfort. 3
ITA No. 514-JP-2018 Vinod Kumar Dhanja, Ajmer vs. ITO, Ajmer
As the assessee was having small income by way of salary with private employer, his father gifted an amount of Rs. 500,000/- to the assessee during the A.Y. 2013-14. The said amount was gifted out of available cash in hand with his father. Assessee also produced copy of declaration of gift executed by his father before the Ld. A.O. Hence the entire amount of Rs. 500,000/- gift by father of the assessee stands explained. However Ld. CIT (Appeals) only accepted a sum of Rs. 400,000/-, being withdrawn by his father from his Bank A/c and remaining balance of Rs. 100,000/- was not allowed by him. It was submitted that the remaining amount of Rs. 100,000/-gifted by father of the assessee was resultant of cash available with him which were kept by him as emergency funds, being an old age person. Sh. Norat Mal, being a pensioner, was having regular source of income. It is very reasonable for him to have a possession of Rs. 100000/- in cash besides Rs. 400000/- which was withdrawn by him from his Bank Account. However as the assessee, being his son was in need of funds for the purpose, as explained in detail hereinafter, he thought if fit to hand over the amount to the assessee as gift. For this purpose he also submitted a duly stamped declaration of gift. Hence there is no justification for the addition of Rs. 100000/-, being amount gifted by his father to the assessee, treating it as undisclosed income of the assessee.
In the case of Smt Geeta Dhanja, mother of the assessee, declaration of gift could not be provided before the assessing officer. However declaration of gift by Smt. Geeta Dhanja, mother of the assessee was duly provided before the Ld. CIT (Appeals). Smt. Geeta Dhanja, was having cash in hand available with her as her 4
ITA No. 514-JP-2018 Vinod Kumar Dhanja, Ajmer vs. ITO, Ajmer
"Stree Dhan", accumulated by her from petty household savings and customary gifts received by her over the period. Out of that money, she gifted a sum of Rs. 201000/- to the assessee, being her son. Hence there is no justification for the addition of Rs. 201000/-, being amount gifted by his mother to the assessee, treating it as undisclosed income of the assessee.
In the case of Sh. Mukesh Dhanja, elder brother of the assessee, declaration of gift could not be provided before the assessing officer. Declaration of Gift by Sh. Mukesh Dhanja, Brother of the assessee, was duly provided before the Ld. CIT (Appeals). Sh. Mukesh Dhanja, was having income source, being salary income from Private Service @ Rs. 15000/-P.M. He was having cash in hand available with him as out of that money, he gifted a sum of Rs. 151000/- to the assessee, being his younger brother. Hence there is no justification for the addition of Rs. 151000/-, being amount gifted by the brother to the assessee, treating it as undisclosed income of the assessee.
It was submitted that the identity and creditworthiness of all the above mentioned persons, being close relatives of the assessee stands proved. Further they have confirmed the fact of having gifted the amount in question to the assessee. Hence the addition made by the A.O. treating the amount of gift as income from undisclosed source of the assessee is unjustified.
It was further submitted that the assessee is not a business man or a person having good financial standing. He was working with a private employer on a monthly salary of Rs. 10000/- only. For such a person, the presumption of having undisclosed 5
ITA No. 514-JP-2018 Vinod Kumar Dhanja, Ajmer vs. ITO, Ajmer
income to the tune of Rs. 852000/-, is something which is not to be believed. There is no evidence or source of income/ corresponding investment exist to justify such a large amount of undisclosed income being earned by the assessee. In fact the assessee was thinking for some time to start his own business of share broking which he was having some experience. However, as capital investment was prerequisite to start own business, he discussed the matter in his family and the family members decided to support him financially. The fact remains that gifts thus received by the assessee from his close relatives, could not be utilized by him. Due to certain untoward circumstances, assessee had to drop his idea to set up his own business. However as he has already received gifts from his relatives, he duly recorded it in his cash book. It was submitted that the fact of the gifts being received by him from his relatives is proved beyond doubt, hence the addition of Rs. 452000/- as undisclosed income of the assessee made by the A.O. is totally unjustified and needs to be deleted.”
The ld. DR is heard who has relied on the findings of the lower authorities. It was submitted by the ld DR that even during the remand proceedings, the assessee has not been able to discharge the onus regarding genuineness and creditworthiness of the donors. Accordingly, following the decision of Hon’ble Rajasthan High Court in case of Shri Chainsukh Rathi 270 ITR 368, the addition so made by the Assessing Officer has rightly been sustained by the ld. CIT(A) and the said order should be sustained
ITA No. 514-JP-2018 Vinod Kumar Dhanja, Ajmer vs. ITO, Ajmer
Heard both the parties and persued the material available on record. Firstly, the identity of the donors, being the family members of the assessee, is not in dispute and secondly, they have confirmed the gift transaction by way of gift deed in case of father of the assessee and by way of confirmation in respect of mother and brother of the assessee. It is a trite law that even where the donors are identified, the onus lies with the assessee to demonstrate the creditworthiness of such donees where so asked by the Assessing officer. The father of the assessee is a retired government employee drawing pension and has shown cash withdrawals of Rs 4 lacs from his bank account and cash savings of Rs 1 lacs. Therefore, the creditworthiness of father of the assessee to advance Rs 5 lacs is satisfied in the instant case as the creditworthiness is the ability of a person to gift an amount and doesn’t necessarily mean that one has to link it to actual withdrawals from the bank at a given point in time. Given that the father of the assessee is a retired pensioner who has regular deposits in his bank account and out of that, where he has gifted Rs 5 lacs to his son, the creditworthiness stand duly explained. The mother of the assessee is a house wife and has no independent source of income except household savings over the years out of which she has given an amount of Rs 2 lacs to the assessee. To our mind, given the amount of Rs 2 lacs involved and the Indian family set up where it is not unusual for housewife to save money out of household expenditure and given the facts of the present case, the explanation of the assessee is found reasonable where he has claimed receipt of gift of Rs 2 lacs from his mother out of her past household savings which she has confirmed as well. The brother of the assessee has been claimed to be earning salary income of Rs 15000 pm, however it is not clear since when he is being working and what is
ITA No. 514-JP-2018 Vinod Kumar Dhanja, Ajmer vs. ITO, Ajmer
the position of his savings/bank withdrawals. The explanation of the assessee regarding creditworthiness of his brother to advance Rs 1.5 lacs which is equivalent to ten times his monthly salary therefore doesn’t seem reasonable to us and cannot be accepted. In the result, the additions of Rs 1.5 lacs is confirmed and rest all additions are hereby directed to be deleted.
In the result, appeal of the assessee is partly allowed.
Pronounced in the Open Court on 02/04/2019.
Sd/- Sd/- ¼fot; iky jko½ ¼foØe flag ;kno½ (Vijay Pal Rao) (Vikram Singh Yadav) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 02/04/2019 *Ganesh Kr. आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- Shri Vindo Kumar Dhanja, Ajmer 2. izR;FkhZ@ The Respondent- ITO, Ward 1(3), Ajmer 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. 6. xkMZ QkbZy@ Guard File {ITA No. 514/JP/2018} vkns'kkuqlkj@ By order, सहायक पंजीकार@Aेेज. त्महपेजतंत