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Income Tax Appellate Tribunal, DELHI BENCH ‘C’ : NEW DELHI
Before: SHRI R.K.PANDA & SHRI KULDIP SINGH
PER KULDIP SINGH, JUDICIAL MEMBER :
The Appellant, Gaurav Garg (hereinafter referred to as ‘the Assessee’) by filing the present appeal sought to set aside the impugned order dated 16.10.2014 passed by the Commissioner of Income-tax (Appeals)- Ghaziabad qua the assessment year 2012-13 on the grounds inter alia that :
“1. That the Learned Commissioner of Income Tax (Appeals) had erred in law as well as on facts of the case in sustaining the Addition of Rs. 30,00,000/- as unexplained Income 69-A of I. Tax Act which ought not to have been sustained by the Learned Commissioner of Income Tax (Appeals).”
Briefly stated that facts necessary for adjudication of the controversy at hand are : On 05.01.2012, assessee was found in possession of Rs. 30,00,000/- by I/C SST Squad, which was requisitioned by the revenue authorities and consequent proceedings u/s 153A were initiated. The assessee is into the job work pertaining to Jewellery and the business qualifies under section 44AD of the Act.
Assessee raised the defence that he was going to pay an advance of Rs. 50,00,000/- for the purchase of property from one Dr. SAntosh Kumar Gupta residing at Modi Nagar, over which demand draft no. 168577 dated 05.01.2012 of Rs. 20,00,000/- were drawn on Syndicate Bank and amount of Rs. 30,00,000/- in cash was received as the gift from Sh. Ravindra Kumar Garg, his father. Declining the contention raised by the assessee AO proceeded to hold that since Ravindra Kumar Garg was having income of Rs. 5,00,000/- per annum, he had no capacity to gift huge amount of Rs. 30,00,000/- to the assessee and thereby made addition of Rs. 30,00,000/- u/s 69A of the Act.
Assessee carried the matter before the Ld. CIT(A) by filing the appeal who has confirmed the addition by partly allowing the appeal.
Feeling aggrieved the assessee has come up before the Tribunal by way of filing the present appeal.
We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case.
Undisputedly assessee was found in possession of cash amount of Rs. 30,00,000/- on 05.01.2012. It is not in dispute that initially assessee claimed that the amount in question i.e. Rs. 30,00,000/- is a sale proceeds of his Jewellery shops. It is also not in dispute that subsequently assessee retracted from his initial statement rather claimed to have taken the amount in question of Rs. 30,00,000/- as a gift from his father Rabindra Garg. It is also not in dispute that Rabindra Garg was having annual income of Rs. 5,00,000/-. It is also not in dispute that the capital account of Rabindra Garg shows that on gifting the huge amount of Rs. 30,00,000/- to the assessee, his capital balance became deficit. It is also not in dispute that Sh. Rabindra Garg has not produced book of accounts and other details called for by the AO by way of issuance of notice u/s 131 of the IT Act. It is also not in dispute that Ld. CIT(A) has deleted the addition of Rs. 11,87,129/- made by AO u/s 68 of the Act on account of unexplained cash credit.
From the aforesaid undisputed facts, order passed by the revenue authorities below and argument addressed by the Ld. Authorised Representatives of the parties to the appeal the sole question arises from determination in this case is “as to whether the assessee has proved genuineness and creditworthiness of Rabindra Garg, his father alleged to be donor of amount of Rs. 30,00,000/-”.
Assessee relied upon a gift deed dated 05.01.2012 executed by his farther Rabindra Kumar for gifting an amount of Rs. 30,00,000/- which is available at page 23 to 25 of the paper book. Assessee also relied upon income tax return of Rabindra Garg for AY 2012-13 showing gross total income of Rs. 4,88,612/- available at page 44 to
Assessee also relied upon balance sheet of Deepali Jewellers available at page 20 of the paper book and cash book available at page 47 to 63 of the paper book. Assessee also relied upon sale tax return of Deepali Jewellers available at page 64 to 66 of the paper book.
All the aforesaid documents have been duly examined by AO as well as Ld. CIT(A) during proceedings before them. First of all it is proved on record that assessee is approbating and reprobating as per his convenience to conceal the true and correct facts. Initially the assessee has taken the shelter u/s 44AD of the Act that he is not maintaining any book of accounts but subsequently taken the U-turn by producing audited account books of Deepali Jewellers. Initially assessee claimed that the amount in question has been gifted by his father Rabindra Kumar to him but subsequently in his tatement u/s 132A he has raised new plea that the amount in question is out of sale proceeds of his Jewellery shops. So in these circumstances, it is difficult to believe the version put forth by the assessee.
AO in order to examine the fact if the amount in question was out of sale proceeds of the assessee extracted the capital account as on 31.03.2013 as under :-
Capital Balance 19,34,377.74 Add Net Profit 5,41,320.88 24,75,698.62 Less Drawings during the year 1,63,705.45 Gift to Gaurav Garg 30,00,000.00 -6,88,006.83
Aforesaid detail of capital account of assessee shows that in case the version of the assessee is believed that the amount of Rs. 30,00,000/- was gifted to him by his father Rabindra Garg then as on 31.03.2013 there was negative balance of Rs. 6,88,006.83. Moreover the assessee has shown sales in month of December, 2011 and January, 2012 at much higher scale then in the Month of December, 2010 and January, 2011, which is without any plausible explanation but just to prove his lame defence. Further more for the reason best known to assessee his father Rabindra Garg has not preferred to produce the books of accounts and other details as required by the AO by the issuance of notice u/s 131 of the Act.
Further more Rabindra Garg in his statement recorded by AO stated that his annual income from Jewellery shop is Rs. 5,00,000/- per annum. It is also a matter of fact that Rabindra Garg was maintaining 2/3 bank account during the period under consideration but no such amount of Rs. 30,00,000/- has been withdrawn from such bank accounts nor Rabindra Garg has produced his cash book to prove the fact that the amount of Rs. 30,00,000/- was readily available with him on or before 05.01.2012.
12. Assessee also relied upon the fact that the amount in question was to be given in cash to the seller of the land as per agreement to sell available at page 149 to 151 of the paper book. Though this document is not relevant to discuss over here because the assessee has otherwise failed to prove the creditworthiness of Rabindra Garg so as gift an amount of Rs. 30,00,000/- to him nor he has been able to prove if the said amount was out of sale proceeds of his jewellery shop, but to examine the surrounding circumstances it is pointed out that the agreement to sell is not a legible document so as to trace out the exact date of its execution. Even signature of proposed seller are not there on the same. Moreover beneath the last page of agreement to sell attestation date is 02.01.2012. So in any case if the payment was to be made to the proposed sellers it was to be made on 02.01.2012 the date of agreement to sell and not on 05.01.2012. So we are of the considered view that it is again a document prepared to set up a false defence.
The Ld. AR for the assessee to support his argument relied upon decisions rendered by Hon’ble High Court, Hon’ble Supreme Court and Co-ordinate bench of Tribunal cited as CIT vs. Meghjibhai Popatbhai Virani (2013) (ii) Orissa Corporation (1986) 159 ITR 78 (SC) (iii) CIT vs. Smt. P.K.Noorjahan [1999] 237 ITR 570 (iv)
Nemi Chand Kothari v. CIT [2003] 264 ITR 254/[2004] 136 taxman 213.
We are of the considered view that the Ld. CIT(A) has rightly confirmed the addition made by AO and the decision relied upon by the Ld. AR for the assessee are not applicable to the facts and circumstances of the case.
So, finding no illegality or perversity in the impugned order passed by Ld. CIT(A), the present appeal filed by the assessee is hereby dismissed. Order pronounced in open court on this 20th February, 2019.