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Facts
The assessee's appeal stems from additions made by the Assessing Officer (AO) and confirmed by the CIT(A) concerning unexplained deposits in the assessee's bank account, claimed to be gifts. The assessee failed to provide adequate evidence regarding the identity, creditworthiness, and genuineness of these transactions.
Held
The Tribunal held that the assessee failed to establish the identity, creditworthiness, and genuineness of the alleged gifts. The deposits were treated as undisclosed income and added to the assessee's total income, upholding the orders of the lower authorities.
Key Issues
Whether the amounts received by the assessee were genuine gifts or undisclosed income, and whether the assessee discharged their onus to prove the genuineness of such receipts.
Sections Cited
68, 132, 127, 153A, 142(1)
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Income Tax Appellate Tribunal, CHANDIGARH BENCH, ‘A’, CHANDIGARH
Before: SHRI RAJPAL YADAV & SHRI KRINWANT SAHAY
�नधा�रती क� ओर से/Assessee by : None राज�व क� ओर से/ Revenue by : Shri Rohit Sharma, CIT DR (Virtual) सुनवाई क� तार�ख/Date of Hearing : 06.02.2025 उदघोषणा क� तार�ख/Date of Pronouncement : 25.02.2025 आदेश/Order Per Krinwant Sahay, AM : Appeal in this case has been filed by the assessee against the order dated 5.7.2019 passed by the ld. Commissioner of Income Tax (Appeals)-2, Jalandhar [hereinafter referred to as ‘CIT(A)’].
2. The Assessee has raised following grounds of appeal:
1282 -Chd-2019 Anubhav Aggarwal, Ludhiana
1. That on the facts and in the circumstances of the case and in law, Ld. AO and Ld. CIT (Appeals) erred in making incorrect addition of Rs. 57,43,057/-being gifts received from Brother-in-Law residing out of India being received through proper banking channel.
2. Non applicability of Section 68 of Income Tax Act, 1961 as assessee has provided Bank Statements and Foreign Inward Remittance Certificates for all the gifts received.
The contention of Ld. AO and Ld. CIT (Appeals) is wrong that the assessee has routed unaccounted funds generated by the flagship company M/s ARK Imports Private Limited and routed these funds from different bank accounts in the name of Anubhav Aggarwal and other group companies i.e. M/s Genex Polyfab Limited, M/s Genex Fincap Private Limited.
4. That on the facts and in the circumstances of the case and in law, Ld. AO and Ld. CIT (Appeals) erred in making incorrect addition of Rs. 54,90,000/-being cheques received from sister, sister's husband and M/s Jasmin Impex which were returned later on. 3. It emerges out from the record that and other cases of this group are on Board since 29th March 2017. From the Note Sheet entry, it is seen that Shri Tej Mohan Singh, Shri Jasleen Khera and others have appeared from time to time and thereafter all the Counsels have withdrawn their power of attorney and pleaded no instructions. On 26.9.2024, Shri Tej Mohan Singh, Advocate and Shri Sanjay Sood, CA also withdrew their power 1282 -Chd-2019 Anubhav Aggarwal, Ludhiana
3 of attorney. It is pertinent to note that as and when a counsel withdrew his power of attorney, it is a duty cast upon him to serve a notice through registered post upon the Assessee informing that he is withdrawing his power of attorney so that Assessee can make alternative arrangement thereafter. The Tribunal is not required to serve a fresh notice. But in the interest of justice and for abundant caution, Tribunal issued fresh notice for hearing to the Assessee for 20.11.2024. But none appeared on behalf of the Assessee. It is 50th occasion that this group has been listed for hearing. The notice was issued through the A.O. and the A.O. has informed that notice has been sent on the last e.mail available with the Department. It is further observed that DCIT, Central Circle, Ludhiana vide his letter dated 7.1.2025 informed the Tribunal that officials from the Range visited the premises of the Assessee which was found locked.
During proceedings before us, the ld. DR informed the Bench that he has been intimated by the Assessing Officer that the Assessee is absconding. We have been apprised that there are large number of cases pending against the head of the group with different investigating agencies. Looking to all 1282 -Chd-2019 Anubhav Aggarwal, Ludhiana
4 these cumulative setting of circumstances would suggest that the Assessee is not very much interested in persecuting this appeal. Even otherwise, it is trite (‘S. Velu Palandar Vs. DCIT’, 83 ITR 686 (Mad.)] and incumbent on the authority to decide an appeal on merit in accordance with the principles of natural justice.
Now coming on merits of the case, the brief facts, as enumerated in the assessment order are as under:
The assessee belongs to Genex Group of cases, Ludhiana where a search and seizure operation u/s 132 of the Income Tax Act was conducted on 23.05.2013. During the search operation, various documents were found and seized from the various business and residential premises of the group. Accordingly, the case was centralized u/s 127 of Income Tax Act, 1961 vide order F.No.CIT- I/LDH/TECH/127/2013-14/606 dated 11.06.2013 and a notice u/s 153 A of the IT. Act requiring the assessee to file his return of income was issued on 24.03.2014.
1282 -Chd-2019 Anubhav Aggarwal, Ludhiana
5 1.2 In response thereto, no return of income was filed by the assessee on the ground that he is not having taxable income. The case was taken up for scrutiny and statutory notice u/s 142(1) along with questionnaire was issued on 13.05.2015 and the same was duly served on the assessee. Subsequently, notice u/s 142(1) issued and complied with. In response to these notices, Sh. Gaurav Gupta, C.A. and Sh. Gaurav Sharma, C.A., authorized representatives of the assessee attended the proceedings with whom the case was also discussed.
The assessee is an individual and is claimed to have no source of income. Hence, no return of income was filed by him.
2.1 On examination of assessee's bank account no. 7589 with United Bank of India, Clock Tower, Ludhiana, it is noticed that this bank account is credited with the amount of Rs. 54,90,000/- on different dates from 7.1.2008 to 21.3.2008.
1282 -Chd-2019 Anubhav Aggarwal, Ludhiana
6 2.2 In the course of assessment proceedings, the assessee was asked to explain the source of deposit of above amounts in the said bank account. However, no explanation was furnished despite allowing of repeated opportunities. Thus, the source of deposit of Rs. 54,90,000/- in the bank account remained unexplained and is therefore, added to the income: returned. Accordingly, an addition of Rs. 54,90,000/- is made to the income returned.
2.3 Further, on examination of assessee's bank account No. 7589 with United Bank of India, Clock Tower, Ludhiana, it is noticed that this bank account is credited with an amount of Rs. 57,43,057/- on different dates.
Period Particulars Amount (In Rs.) 2007-08 Mr. Roman Umaraov 57,43,057/- 2008-09 Mr. Roman Umaraov 66,36,11,825/- 2009-10 Mr. Roman Umaraov 1,62,65,892/- 2010-11 Mr. Roman Umaraov 20,27,66,730/- 2011-12 Mr. Roman Umaraov 52,218/- 2012-13 Ms Swetlana Umaraov 15,17,00,000/- 2013-14 Ms Swetlana Umaraov 78,21,00,000/- Total 1,22,22,39,722/- 1282 -Chd-2019 Anubhav Aggarwal, Ludhiana
7 2.4 In the course of assessment proceedings, the assessee was asked to explain the source of aforesaid deposits of on different dates throughout the year under consideration in the said bank account. The assessee as per his letter dated 07.03.2014 explained that these are gifts received during the year under consideration from his brotherrin-law Mr. Raman Umarova and in support its contention enclosed the copies of the remittance advices.
2.5 Since the amount received as gifts during the different periods was substantial say more than 122 Crores and are being received continuously on different dates nearly through out the year(s) and that too without any occasion, the genuineness of receipt of such gifts was required to be examined. Therefore, in order to verify the genuineness of the receipt of gifts as claimed, the assessee was asked to establish the identity, creditworthiness and genuineness of the transactions justifying the receipt of above amounts as gifts as claimed. He was 1282 -Chd-2019 Anubhav Aggarwal, Ludhiana
8 also specifically asked to establish the relationship with the donee supported with documentary evidence. However, the assessee instead of establishing the genuineness of the receipt of above amounts as a gift and the relationship with the donee, filed his objections on 01.03.2016 which are described in para 2.5 of the assessment order.
2.6 The explanation of the assessee has been considered and found no merit in it. It is a settled law that no person can make a gift even to his near relative without consideration. It is a matter of record that the above gifts has been received not on a particular occasion but in a continuous process. Moreover, it is not evident as to whether the gifts as claimed was ever made and the doner had the resources to make such gifts of a substantial amount. Since the assessee has failed to establish the identity, creditworthiness and genuineness of the gifts claimed to have been received from his brother-in- law during the year under consideration and as such it is held that the amount of deposits introduced by 1282 -Chd-2019 Anubhav Aggarwal, Ludhiana
9 the assessee in his bank account in the guise of receipt of gifts represents his undisclosed income earned from undisclosed sources which is liable for taxation. Therefore, the amount of Rs. 57,43,057/- received in the guise of gifts is held to be assessee's own income earned from undisclosed sources and is therefore added to the income returned. Accordingly, an addition of Rs. 57,43,057/- is made to the income returned.
We have gone through the assessment order passed by the Assessing Officer and the appellate order passed by the ld. CIT(A). We find that the Assessing Officer has passed a speaking order based on various incriminating documents found and seized from various business and residential premise of the group. Against the order of the Assessing Officer, the Assessee filed an appeal before the ld. CIT(A) on different grounds. The ld. CIT(A), in our view, has passed a speaking order on merit on each and every issue / ground raised by the Assessee in the appeal. The Assessee dissatisfied with the order of the ld. CIT(A) has filed this appeal before the Tribunal but despite giving fifty opportunities to the Assessee, 1282 -Chd-2019 Anubhav Aggarwal, Ludhiana
10 the Assessee has not complied with and further that all the Counsels and C.A. who had filed their Power of Attorney have also withdrawn in the absence of any instruction from the Assessee.
The ld. DR relied on the order of the CIT(A) and prayed that the appeal of the Assessee deserves to be dismissed.
In our view, both the Assessing Officer and the ld. CIT(A) have passed the assessment order and the appellate order keeping in view the aspect of natural justice. They have considered all the necessary documents, statements and submissions filed by the Assessee. The relevant part of the finding of the ld CIT(A) is reproduced as under:-
“5.2 I have gone through the assessment order passed by the AO, submissions filed by the appellant and find that an addition of Rs. 54,90,000 has been made by the AO on account of unexplained deposits. During the course of assessment proceedings, it was found by the AO that there are certain credits in the bank account No. 7589 of the appellant with United Bank of India, Ludhiana which could not be explained. In the absence of any explanation being given by the appellant, the total amount of deposits/credits 1282 -Chd-2019 Anubhav Aggarwal, Ludhiana
11 amounting to Rs. 54,90,000 was held to be unexplained income for the year under consideration.
5.3 In the course of present proceedings, the appellant has merely stated that these credits in the bank account are on account of receipts from M/s Jasmin Impex, Smt. Sumedha Goel and Shri Amit Goel. The appellant has filed a copy of their bank accounts to support his contentions.
5.4 Having considered the material available on record, I find that appellant has not been able to produce any confirmation from M/s Jasmin Impex, Smt. Sumedha Goel and Shri Amit Goel regarding the amount received from these persons. The appellant has also failed to furnish any detail of the purpose for which these amounts were received and proof of identity, sources of income in their hands etc. Thus, I hold that appellant has not been able to furnish any evidence to prove the identity, creditworthiness of these creditors and genuineness of these transactions. Hence, none of the requirements as provided u/s 68 of the IT Act has been satisfied by the appellant. Accordingly, I confirm the addition of Rs. 54,90,000 made by the AO on this account.”
Since the order passed by the ld. CIT(A) is a speaking order on each issue, therefore, in our considered opinion, 1282 -Chd-2019 Anubhav Aggarwal, Ludhiana
12 there is no need to interfere in the findings given by the ld. CIT(A). Thus, findings given by the ld. CIT(A) on different issues in his Appeal Order are hereby sustained. Accordingly, appeal filed by the Assessee on different grounds are hereby dismissed 10 In the result, appeal of the assessee is dismissed.
Order pronounced on 25.02.2025.