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Income Tax Appellate Tribunal, “F” BENCH, MUMBAI
Before: HON’BLE SHRI AMARJIT SINGH, JM & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
O R D E R Manoj Kumar Aggarwal (Accountant Member) 1.1 The grievance of the assessee in aforesaid appeals for Assessment Years (AY) 2014-15 & 2015-16 is common. It is admitted position that adjudication of any one appeal shall equally apply to the other appeal also. These appeals were heard on 26/07/2021 along with appeals of other family members of the group since issues were 2 Mrs. Sumita Ramesh Patodia Assessment Years: 2014-15 & 2015-16 common. For the purpose of adjudication, the appeal for AY 2014-15 is taken as the lead year which arises out of the order of learned Commissioner of Income-Tax (Appeals)-47, Mumbai [CIT(A)], dated 31/07/2018 in the matter of assessment framed by Ld. Assessing Officer (AO) u/s 143(3) r.w.s. 153A of the Act on 21/12/2016. The assessee is aggrieved by confirmation of certain additions in the impugned order. 1.2 Having heard rival submissions and upon perusal of relevant material on record, our adjudication would be as given in succeeding paragraphs.
The material facts are that pursuant to search action on Balaji Group on 28/01/2015, the premises of the assessee were also covered under the search. In response to notice u/s 153A, the assessee offered returned income of Rs.6.09 Lacs which was the same as offered u/s 139(1). The assessee was saddled with various additions which are adjudicated as under: - 3. Gifts 3.1 The assessee received gifts of Rs.0.97 Lacs from her mother-in- law Smt. Santaben Vashrambhai Patodiya which was supported by gift deed and land holdings. However, bank statement was not filed. Further, donor had reflected income of Rs.1.78 Lacs only. The donor had gifted amount of Rs.4.94 Lacs to various other family members during the year. Therefore, rejecting assessee’s explanation, these gifts were added to assessee’s income as unexplained cash credit u/s 68. The Ld.CIT(A), after appreciating additional evidences, confirmed the addition by observing that the donor advanced gifts to various other members and there was no concrete income in her return of income. The donor was 3 Mrs. Sumita Ramesh Patodia Assessment Years: 2014-15 & 2015-16 stated to have contributed an amount of Rs.10.47 Lacs towards household expenses which was highly improbable. No agricultural income was offered by her in return of income. Aggrieved, the assessee is in further appeal before us. 3.2 We find that similar issue has been decided by us in assessee’s favor in as follows: - 3.5 Upon perusal of documents on record, we find that the mother of the assessee has declared income of Rs.1.78 Lacs during the year as miscellaneous income. However, upon perusal of her Balance Sheet as on 31/03/2014, as placed on record, it could be seen that she has capital balance of Rs.1287.32 Lacs which has been invested in various forms. This capital balance is arrived at after reducing Gifts of Rs.4.94 Lacs and withdrawals of Rs.10.47 Lacs. The source of gift, in our opinion, could not solely be the current year’s income particularly in view of the fact that the mother of the assessee was on old lady and living in a joint family. There is no adverse material to prove the gifts. Therefore, the conclusion drawn by Ld. CIT(A) could not be sustained and we are inclined to delete the addition of Rs.1 Lacs. Facts being pari-materia the same, we delete the impugned addition and allow this ground of appeal. 3.3 The assessee received another gift of Rs.0.97 Lacs from her brother Shri Hansraj Kohtiya. In the absence of return of income and bank statement, the same was added to the income of the assessee. The same, upon confirmation by Ld. CIT(A) is in further challenge before us. 3.4 We find that the donor is an agriculturist which is supported by particulars of land holding in the affidavit. The gifts are duly substantiated by the affidavit of the donor. The amounts of gifts are less than Rs.1 Lac which was below exemption limit of Rs.2 Lacs. Therefore, there would be no obligation on the donor to file the return of income. The details of agricultural land have been well enumerated in the affidavit. Regarding allegation of immediate cash deposit, the donors being agriculturist 4 Mrs. Sumita Ramesh Patodia Assessment Years: 2014-15 & 2015-16 working in remote village would receive the proceeds of agriculture in cash. The cash deposit need not match with harvesting season since there is no such requirement under law. Therefore, this addition stands deleted. We order so.
4. Rejection of Claim of House Property Loss & Deduction u/s 80C 4.1 This addition stem from the fact that the assessee claimed deduction of interest on borrowed capital for Rs.0.13 Lacs for self- occupied property under the head Income from House Property. In the absence of sufficient evidences, the deduction was denied to the assessee. The same upon, confirmation by Ld. CIT(A) is in further challenge before us. The assessee had also claimed deduction of repayment of principal amount for Rs.0.71 Lac u/s 80C which was also denied in the similar manner. 4.2 Upon perusal of documents, we find that assessee has placed on record a copy of special power of attorney as well as mortgage deed dated 03/03/2008 with respect to property. The assessee is joint owner of the property. On the loan taken from Gopinath Patil Parsik Janata Sahakari Bank Ltd., an amount of Rs.0.32 Lacs has been paid as interest along with repayment of principal amount of Rs.1.71 Lacs. The husband of the assessee, as co-owner, has claimed only proportionate deduction which is evident from his computation of income. Thus, these two claims would be allowable to the assessee. We order so.
5. Low Household Drawings 5.1 Upon perusal of drawings details, it transpired that the family declared aggregate drawings of Rs.1.40 Lacs which include children’s 5 Mrs. Sumita Ramesh Patodia Assessment Years: 2014-15 & 2015-16 education expenses and LIC payments, The assessee did not furnish complete details of expenses on various items, expenses during functions and festivals, travelling etc. It was concluded that the overall drawings were too low to run a family. Accordingly, the yearly drawings were estimated at Rs.4.00 Lacs and the difference of Rs.2.59 Lacs was added to the income of the assessee. 5.2 We find that similar issue has been decided by us in assessee’s favor in as follows: - 4.4 After going through the observations of Ld. CIT(A) and material on record and in view of our observations in preceding para 3.5, we are of the view that the drawings made by the mother as well as gifts given by her are duly supported by her Balance Sheet as on 31/03/2014. It could be seen that she has capital balance of Rs.1287.32 Lacs which has been invested in various forms. This capital balance is arrived at after reducing Gifts of Rs.4.94 Lacs and withdrawals of Rs.10.47 Lacs. The assessee’s drawings in all the earlier years are less than Rs.2 Lacs which is evident from detail of household expenses as placed on record for various years. This being the case, this addition is not sustainable and hence, we delete the same.