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Income Tax Appellate Tribunal, DELHI BENCHES “E”: DELHI
Before: SHRI BHAVNESH SAINI & SHRI B.R.R. KUMAR
This appeal by Assessee has been directed against the Order of the Ld. CIT(A)-15, Delhi, Dated 19.10.2015, for the A.Y. 2011-2012.
We have heard the Learned Representative of both the parties and perused the material available on record.
2 ITA.No.139/Del./2016 Mr. Krishna Kumar, New Delhi. 3. The Ld. D.R. also produced the assessment record and placed on record copies therefrom which are perused.
Briefly the facts of the case are that return of income declaring an income of Rs.2,93,490/- was e-filed on 12.03.2012. Notice under section 148 of the I.T.Act 1961, dated 26.03.2013 was issued on the basis of information obtained from DIT (Inv). During the course of investigation proceedings in respect of suspicious Financial transaction by Shri Satish Kumar, assesses had categorically admitted on oath that Rs.49.50 lakhs was received from his deceased mother which could not be proved with evidence and hence remained unexplained and undisclosed and therefore, notice under section 148 of the Act was issued. During the course of reassessment proceedings, perusal of statement of affairs filed by the assessee had revealed that the assessee had made investment in plot amounting to Rs.51 lakhs. Regarding source of the same it was stated that the said amount was paid out of cash deposits of Rs.49,50,000/- in saving bank account no xxx8109 made
3 ITA.No.139/Del./2016 Mr. Krishna Kumar, New Delhi. during F.Y 2010-11. Regarding source of the same, the assessee had stated that he had received the cash as gift from his deceased mother. However, no evidence thereof could be furnished to establish the genuineness of the transaction and creditworthiness of the donor. In absence of the same, the investment remains unexplained and the same was added as income under section 69 of the I.T. Act 1961.
The above addition was challenged before the Ld. CIT(A). Written submissions of the assessee is reproduced in the appellate order in which it was explained that assessee’s mother Smt. Shanti Devi was around 85 years old sick lady. She is house wife and she was not having any bank accounts dealing mainly in cash. Regarding creditworthiness of donor it was submitted that assessee’s mother has sold its 200 Sq. yards out of Total Area 400 Sq. yards She had sold 100 Sq. yards each on 27.07.2010 and 21.08.2010 of Rs.13,75,000/- and Rs.14,60,000/- by cash. Copy of the Sale Agreement and GPA were filed. The assessee’s real brother Mr. Sukhbir
4 ITA.No.139/Del./2016 Mr. Krishna Kumar, New Delhi. Singh also sold his plot on February, 2010 and give cash to his mother after withdrawing the amount of Rs.13,00,000/-. Smt. Shanti Devi has given cash to the assessee for purchasing property. Copy of Agreement to sell and copy of bank pass book were filed. It was, therefore, submitted that mother of assessee was having creditworthiness and amount was given to the assessee out of sale of the property and her savings. Copy of the death certificate was also filed. The submissions of the assessee were forwarded to the A.O. for his comments in which the A.O. reiterated the same facts as noted in the assessment order and also noted that Counsel for Assessee took adjournment initially and filed copy of ITR and computation of income and thereafter, none attended the proceedings. The Counsel for Assessee attended later on and filed balance sheet along with copy of the agreement. The A.O. requested the additional evidences should not be admitted and assessee may be asked to produce further documents on record. The assessee in the rejoinder reiterated the same facts stated before A.O. The Ld. CIT(A), however, confirmed
5 ITA.No.139/Del./2016 Mr. Krishna Kumar, New Delhi. the addition on merit and dismissed the appeal of assessee. His findings in para-6 of the Order is reproduced as under :
“6. I have considered the facts of the case and gone through the submissions of appellant. The perusal of bank statement of the appellant reveals that the cash amounts of Rs.21,00,000/-, 19,50,000/- and Rs.9,00,000/- have been deposited on 22.09.2010 (first two deposits) and 23.09.2010 (third deposit) respectively. While explaining the source of these cash deposits, appellant has stated that he received the amounts of Rs.13,75,000/- and Rs.14,60,000/- by cash as gifts from his mother who had sold part of land measuring 100 so. yards each on 27.07.2010 and 21.08.2010. It has been further stated that his brother Mr. Sukhbir Singh also sold his plot in February 2010 and gave cash to his mother after withdrawing the amount of Rs.13,00,000/- out of this sale consideration which was in turn given by mother to appellant for the purpose of depositing it in bank account. In this way, the appellant has tried to explain the source of cash
6 ITA.No.139/Del./2016 Mr. Krishna Kumar, New Delhi. deposits of Rs.49,50,000/- in his bank account. However, as per above explanations, appellant could explain the amount of Rs.41,35,000/- (Rs.13,75,000/- + 60,000/- + Rs.13,00,000/-) only. For the balance amount of Rs.8,15,000/-, appellant could not give any explanation either during assessment proceedings or appellate proceedings. Now, the contention of assessee has to be examined in the light of documentary evidence furnished by him. The appellant has partly explained the source of cash deposits from sale consideration of property by his mother. However, the copies of sale documents reveal that the property has been sold by his mother through general power of attorney and considerations of Rs.13,75,000/- and Rs.14,60,000/- have been received in cash. But, these amounts have been given or transferred to the account of appellant, is not established. Appellant could not furnish a single documentary evidence which could prove that the money received by his mother was handed over to him for deposits in his bank account. Surprisingly, there are 7 ITA.No.139/Del./2016 Mr. Krishna Kumar, New Delhi. two 'Wills' dated 27.07.2010 and 21.08.2010 by Smt. Shanti Devi, mother of appellant, by which she has bequeathed her properties (for which sale considerations of Rs.13,75,000/- and Rs.14,60,000/- have been received) to firstly (1) Prem Singh S/o Late Shri Rati Ram, (2) Sunil Kumar S/o Shri Baldev Singh and (3) Suresh Kumar S/o Sube Singh and secondly, Baldev Singh S/o Late Shri Harke Ram. Incidentally, all these persons are purchasers of aforesaid properties which have been sold by appellant's mother. In none of the two Wills, name of appellant is mentioned for receiving any share in the properties of his mother. Preparing the two different Wills on different dates also raises doubt on the genuineness of these Wills and the sale transactions of properties. Similarly, the assessee could not furnish any evidence to establish that the sale considerations received by his brother against the sale of property was transferred or handed over to his mother and, in turn, it has been gifted to the appellant. The appellant also could not submit the copy of any gift deed made by his
8 ITA.No.139/Del./2016 Mr. Krishna Kumar, New Delhi. mother in this regard. Thus, there is no method explained by appellant to co-relate the source of cash deposits in his bank account with the funds of his mother. Even the creditworthiness of creditor i.e. mother of the appellant is not conclusively proved. As already mentioned by AO, no return of income has been filed by appellant's mother to establish her creditworthiness though she was liable to disclose the capital gains on transfer of properties. The details of assets and liabilities as on 31.03.2011 of his mother has also not been provided by appellant. Thus, no evidence has been furnished by appellant which can be verified with any corresponding real time transactions. No other details to prove the creditworthiness of donor, i.e., appellant's mother, has been filed. As held by Hon'ble Delhi High Court in the case CIT vs. Anil Kumar, 167 Taxman 143, in the case of cash gifts recorded in the books of the donee, mere identification of the donor and showing the movement of the amount through banking channels is not sufficient to prove the genuineness of the gift. The 9 ITA.No.139/Del./2016 Mr. Krishna Kumar, New Delhi. onus lies on the donee not only to establish the identity of the donor but also the donor's capacity to make such a gift and also the genuineness of transactions. Similarly, Hon'ble Punjab and Haryana High Court in the case Tirath Ram Gupta vs. CIT, 304 ITR 145, has opined that to see the genuineness of a gift, the test of human probability is the most appropriate. A gift cannot be accepted as such to be genuine merely because the amount has come by way of a cheque or draft through banking channels, unless the identity of the donor, his creditworthiness, relationship with donee and the occasion are proved. Unless the recipient proves the genuineness thereof, the same can very well be treated to be an accommodation entry of the assessee's own money, which is not disclosed for the purpose of taxation. In the case of appellant also, neither the creditworthiness of the donor nor the genuineness of transactions is proved. The appellant has neither mentioned any occasion for receiving the gifts from his mother nor any other instance of his mother giving any 10 ITA.No.139/Del./2016 Mr. Krishna Kumar, New Delhi. gift to any other member of family. All these facts clearly establish that there is no truth in the claim of appellant and he has just concocted the story of receiving gifts from his mother to explain the cash deposits in his bank account. In view of this, I uphold the addition of Rs.49,50,000/- made by the AO and dismiss the grounds taken by appellant on this account”.
4. The assessee on Ground No.1, challenged the assessment order to be invalid and bad in law because copy of the reasons for reopening of the assessment under section 148 have not been provided to assessee. Learned Counsel for the Assessee submitted that since reasons have not been supplied to assessee, therefore, assessment may be quashed. He has relied upon following decisions :
(i) Union of India & Others vs. Rai Singh Deb Singh Bist & Another [1973] 88 ITR 200 (SC).
11 ITA.No.139/Del./2016 Mr. Krishna Kumar, New Delhi. (ii) Order of ITAT, Chandigarh Bench in the case of Vardhman Holdings Ltd., vs. AC, Ludhiana 158 ITD 843.
(iii) Judgment of Hon’ble Supreme Court in the case of Pr. CIT vs. V. Ramaiah [2019] 262 Taxman 16.
(iv) Judgment of Hon’ble Karnataka High Courtin the case of Pr. CIT vs. V. Ramaiah 409 ITR 580 (Karnataka).
On the other hand, Ld. D.R. produced the record and also filed copy of the letter submitted by assessee before A.O. along with other material submitted before Ld. CIT(A). The Ld. D.R. submitted that copy of the reasons under section 148 were supplied to assessee. The assessee never objected before A.O. and Ld. CIT(A) that no reasons have been supplied to the assessee. Letters of the assessee on record also did not say anything if no reasons have been supplied to the assessee. The Ld. D.R. submitted that after receipt
12 ITA.No.139/Del./2016 Mr. Krishna Kumar, New Delhi. of notice under section 148 of the I.T. Act, assessee did not file return of income in response to notice under section 148 of the I.T. Act. The Ld. D.R. submitted that this point was not raised before the authorities below which clearly suggests that it is an afterthought and same cannot be considered.
We have considered the rival submissions and do not find any justification to interfere on this ground. Copies of the letters of the assessee filed before A.O. have been produced on record in which the assessee never stated before A.O. or later on Ld. CIT(A) that reasons under section 148 have not been supplied to the assessee. Further, the assessee is unable to prove if assessee filed any return of income in response to notice under section 148 of the I.T. Act. Therefore, there is no question for A.O. to supply reasons to the assessee unless return is filed. Further, this issue was never raised before the authorities below and no material have been produced in support of this ground so agitated for the first time before the Tribunal. Even no material have 13 ITA.No.139/Del./2016 Mr. Krishna Kumar, New Delhi. been produced on record to rebut the contention of Ld. D.R. for supply of reasons. The record produced by the Ld. D.R. shows that on the first date of the order sheet, reasons have been recorded. Thereafter, Counsel for Assessee appeared time to time and filed the details. The assessee never agitated before A.O. that no copy of the reasons have been supplied to the assessee. In view of the above and in the absence of any material from the side of the assessee, no interference is called for in the matter. The decisions relied upon by Counsel for Assessee would not support the case of the assessee because of the above facts. Ground No.1 of the appeal of the Assessee is dismissed.
On Ground No.2, assessee challenged the addition of Rs.49,50,000/- on account of amount received as gift from his mother.
Learned Counsel for the Assessee merely relied upon the submissions made before the authorities below.
14 ITA.No.139/Del./2016 Mr. Krishna Kumar, New Delhi. 9. On the other hand, Ld. D.R. relied upon the Orders of the authorities below and submitted that no documentary evidences have been produced on record to prove that genuine gift have been received by the assessee from his mother.
We have considered the rival submissions and do not find any merit in this ground of appeal of the assessee. The assessee explained that he has made cash deposits in the bank account. It was further pleaded that cash amount was received from his mother on different dates which have no co-relation with the dates of the deposits of cash in his bank account. The assessee did not file any gift deed regarding gift received from his mother. No evidence of genuineness of the gift received from the mother of assessee has been filed. No evidence of balance amount of Rs.8,15,000/- have been filed on record. No evidence have been produced before us to prove ingredients of Section 68 of the I.T. Act in the matter. It is a case of alleged cash gift received by assessee from his mother which is not satisfactorily
15 ITA.No.139/Del./2016 Mr. Krishna Kumar, New Delhi. explained and substantiated on the basis of the documentary evidences on record. The entire story appears to be fabricated by the assessee without any reasons or explanation. It may also be noted here that assessee did not produce any evidence before A.O. and it is for the first time assessee has taken a plea of gift before Ld. CIT(A). The Ld. CIT(A) considered the issue on the basis of the copies of the agreement of sale and GPA and did not accept the explanation of assessee because of the discrepancies noted thereon in his findings which have not been clarified by the Assessee’s Counsel. The assessee failed to prove any co-relation of the source of the cash deposit in his bank account with the alleged funds of his mother. Mother of the assessee has not filed any return of income or to disclose any capital gains on transfer of property. Therefore, assessee miserably failed to prove any genuine gift in the matter and creditworthiness of his mother. No reasons or occasion of gift have been filed on record. Since no sufficient evidence has been filed before the authorities
16 ITA.No.139/Del./2016 Mr. Krishna Kumar, New Delhi. below to prove genuineness of the gift in the matter, therefore, it is clear that gift in the matter is not genuine gift and is arranged affair of the assessee and an afterthought. The Hon’ble Delhi High court in the case of CIT vs. Anil Kumar 292 ITR 552 (Del.) held as under :
“In the case of gifts mere identification of the donor and showing the movement of the gift amount through banking channels is not sufficient to prove the genuineness of the gift. Since the claim of gift is made by the assessee, the onus lies on him not only to establish the identity of the person making the gift but also his capacity to make such a gift. In assessment proceedings for the assessment year 1995-96 the Assessing Officer observed that the assessee had received two gifts of Rs.10 lakhs each from N. R. E. accounts of two donors, namely V and D. The Assessing Officer found that the assessee could not discharge his onus of proving the credit-worthiness of the donors and held that the amount of Rs.20 lakhs
17 ITA.No.139/Del./2016 Mr. Krishna Kumar, New Delhi. which had been declared by the assessee as gift, was in fact his income and added to his total income under section 68. The addition was deleted by the Commissioner (Appeals) and this was upheld by the Tribunal. On appeal to the High Court: Held that there was nothing on record to show as to what was the financial capacity of the donors, what was the credit- worthiness of the donors, what kind of relationship the donors had with the assessee, what were the sources of funds gifted to the assessee and whether they had the capacity of giving large amounts of gift to the assessee. Further, the assessee was asked to appear in person before the Assessing Officer, but never appeared. The addition of Rs.20 lakhs was justified”.
10.1. The Hon’ble Supreme Court in the case of CIT vs. P. Mohankala 291 ITR 278 held as under :
“The assessee received foreign gifts from one common donor. The payments were made to them by instruments issued by foreign banks and credited to the respective account of the assessees by negotiation
18 ITA.No.139/Del./2016 Mr. Krishna Kumar, New Delhi. through a bank in India. Most of the cheques sent from aboard were drawn on the Citibank, N. A. Singapore. The evidence indicated that the donor was to receive suitable compensation from the assessees. On this material the Assessing Officer held that the gifts though apparent were not real and accordingly treated all those amounts which were credited in the account books of the assessees as their income applying section 68 of the Income-tax Act, 1961. The assessees did not contend that even if their explanation was not satisfactory the amounts were not of the nature of income. The Commissioner (Appeals) confirmed the assessment. On further appeal, there was a difference of opinion between the two Members of the Appellate Tribunal and the matter was referred to the Vice President who concurred with the findings and conclusion of the Assessing Officer and the Commissioner (Appeals). On appeal the High Court re- appreciated the evidence and substituted its own findings and came to the conclusion that the reasons
19 ITA.No.139/Del./2016 Mr. Krishna Kumar, New Delhi. assigned by the Tribunal were in the realm of surmises, conjecture and suspicion. On appeal to the Supreme Court: Held, reversing the decision of High Court, that findings of the Assessing Officer, the Commissioner (Appeals) and the Tribunal were based on the material on record and not on any conjectures and surmises. That the money came by way of bank cheques and was paid through the process of banking transaction was not by itself of any consequence. The High Court misdirected itself and erred in disturbing the concurrent findings of fact.”
10.2. The Hon’ble Punjab & Haryana High Court in the case of Yash Pal Goel vs. CIT 310 ITR 75 held as under :
“Held, dismissing the appeal that the financial position of M. suggested that he neither had the capacity to make the gift nor the source from where the gift was made. No reason whatsoever had been assigned for gifting such a huge amount by M to the assessee. M never visited the home of the assessee and hence there is no love and affection. It was nothing but a subterfuge
20 ITA.No.139/Del./2016 Mr. Krishna Kumar, New Delhi. to avoid income-tax. The transactions were not genuine ones”.
Considering the above discussion, it is clear that assessee failed to prove creditworthiness of the donor and genuineness of the gift in the matter. No sufficient evidence or material is filed on record to prove genuineness of the gift in the matter. The Hon’ble Supreme Court in the cases of Durga Prasad More 82 ITR 540 (SC) and Sumati Dayal 214 ITR 81 (SC) held that “Courts or Tribunals have to judge the evidence before them by applying the test of human probabilities.” If the said test is applied in this matter, it is clearly established that the assessee has failed to prove genuine gift in the matter. We, accordingly, do not find any merit in the appeal of assessee and the same is accordingly dismissed. Ground No.2 of the appeal of assessee dismissed.
In the result, appeal of Assessee dismissed.
21 ITA.No.139/Del./2016 Mr. Krishna Kumar, New Delhi. Order pronounced in the open Court.