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Income Tax Appellate Tribunal, “SMC-B” BENCH : BANGALORE
Before: SHRI ARUN KUMAR GARODIA
O R D E R
Per Shri A.K. Garodia, Accountant Member
This appeal is filed by the assessee which is directed against the order of ld. CIT(A)-12, Bangalore dated 14.12.2017 for Assessment Year 2009-10.
The grounds raised
by the assessee are as under. “1. The order of the authorities below in so far as it is against the Appellant is opposed to law, weight of evidence, probabilities, facts and circumstances of the Appellant's case.
2. The appellant denies himself liable to be assessed on a total income of Rs. 24,32,560/-determined by the learned assessing officer and confirmed by the learned Commissioner of Income-tax [Appeals], as against the declared income of Rs. 1,68,460/ - by the appellant, on the facts and circumstances of the case of the appellant.
3. The learned Commissioner of Income-tax [Appeals] is not justified in confirming the addition made by the learned assessing officer under section 68 of the Act as unexplained cash credits amounting to Rs. 22,64,100/-, on the facts and circumstances of the case.
4. The learned Commissioner of Income-tax [Appeals] failed to appreciate that the appellant had received the gifts from his close relatives and the same having been confirmed by the donors vide notarised affidavits and consequently the appellant had discharged the primary onus casted upon him and thus, the learned commissioner of Income-tax [Appeals] ought to have deleted the addition made by the learned assessing officer under section 68 of the Act, on the facts and circumstances of the case.
The learned Commissioner of Income-tax [Appeals] failed to appreciate that the primary onus casted upon by the appellant having been discharged and the details of the donors were available with the learned assessing officer and learned assessing officer ought to have conducted further enquiry about the genuineness of the gifts given by the Donors and failing which the addition under section 68 of the Act is arbitrary and based on suspicion and surmises and ought to have been deleted, on the facts and circumstances of the case.
6. The learned Commissioner of Income-tax [Appeals] ought to have appreciated that the appellant having produced the affidavits from the donors which is a valid piece of evidence and same could not be discarded as per the ratio laid down by the Hon'ble Apex Court in the case of M/s. Mehta Parikh Et Co., Vs. CIT, 30 ITR 181, and consequently deleted the addition made by the learned assessing officer, on the facts and circumstances of the case.
The learned Commissioner of Income-tax [Appeals] and the learned assessing officer were not justified in law in rejecting the claim of the appellant unreasonably without proper appreciation of the proofs established as no proof and without conducting further enquire from the donors, on the facts and circumstances of the case.
8. The authorities below failed to appreciate the fact that the appellant discharged the onus by providing the details which the appellant had in his possession and further the authorities failed to appreciate that the onus on the appellant is only to prove the source and not the source of source and origin of origin, on the facts and circumstances of the case.
9. The Appellant denies himself liable to be charged to interest under section 234 A & 234 B of the Income-Tax Act, 1961, on the facts and circumstances of the case.
10. The Appellant craves leave of this Hon'ble Tribunal, to add, alter, modify, delete or substitute any of the grounds urged above.
11. In the view of the above and other grounds that may be urged at the time of the hearing of the appeal, the Appellant prays that the appeal may be allowed in the interest of justice and equity.”
Brief facts are that the AO noted in the assessment order that a proposal u/s. 144 was sent to the assessee proposing to add, the cash deposits of Rs. 22,64,100/- made by him in the savings bank account held with the ICICI Bank, Rajajinagar Branch, Bangalore to the income returned by the assessee. The AO has further noted that in response to this, the assessee’s AR Sri Umesh Babu, CA appeared on 22.12.2011 and stated that the sources for the cash deposits are the gifts received from various relatives during the previous year relevant to the Assessment Year 2009-10 and in this connection, the assessee’s AR has filed letters dated 22.12.2011 and 27.12.2011 along with the copies of gift deeds. Thereafter the AO has observed on page no. 2 of the assessment order that the letters and gift deeds filed by the assessee’s AR have been examined and he has further noted that the gifts were made by assessee’s father-in-law, sister-in-laws, wife, mother and brothers and all these gifts have been made by cash only. The AO has further stated that there is difference in the statement of gifts submitted vide letter dated 26.08.2011 and the gift deeds submitted. The AO came to the conclusion that the assessee has fabricated all the gift deeds to explain the cash deposits of Rs. 22,64,100/- made by him in the savings bank account held with the ICICI Bank, Rajajinagar Branch, Bangalore and on this basis, he made the addition u/s. 68 of IT Act of this amount of Rs. 22,64,100/-. Being aggrieved, the assessee carried the matter before the CIT (A) who has decided the issue against the assessee after noting that there is difference in amount of gift received from father-in-law as per the letter dated 26.08.2011 and gift deed. She has noted on page no. 6 of the order that as per letter dated 26.08.2011, it is stated that the amount of gift from father-in-law was Rs. 4 Lakhs but as per gift deed, it is said to be Rs. 6 Lakhs. Similarly regarding the gifts from Smt. G.V. Reena, sister-in-law of the assessee, it is noted that the amount of gift from this person as per letter dated 26.08.2011 is Rs. 1.5 Lakhs whereas the same as per gift deed is Rs. 2 Lakhs. In respect of third person, Smt. N.S. Sowbhagya, mother of the assessee, it is noted that the amount of gift as per letter dated 26.08.2011 is Rs. 2.5 Lakhs but the same as per gift deed is Rs. 1.5 Lakhs. She has also observed that there was no occasion for gift stated in the said deeds on the same dates and confirmed the assessment order. Now the assessee is in further appeal before the Tribunal.
In course of hearing before the Tribunal, it was submitted by ld. AR of assessee that the second reasoning given by CIT (A) that there is no occasion for gift stated in the gift deeds is not relevant because this is by now a settled position of law that for gift, it is not necessary that there must be some occasion of gift. Regarding the difference in amount of gift from three persons as per letter dated 26.08.2011 and as per gift deed, it is submitted that there is typing mistake in the letter dated 26.08.2011 and therefore, the amount mentioned in gift deed should be considered and if the same is considered then total amount of gift from ten relatives comes to Rs. 19.50 Lakhs and the cash deposit in bank account is of Rs. 22,64,100/- and the balance cash deposit is out of assessee’s own savings and therefore, no addition is justified. The ld. DR of revenue submitted that it is noted by CIT (A) on pages nos. 4 and 5 of her order that various opportunities were provided by CIT (A) starting from 16.02.2016 to 14.12.2017 but the assessee has always sought for more time and did not appear and explain his case before CIT (A). The CIT(A) was forced to decide the issue on the basis of material available on record and therefore, if the assessee has something more to say, the matter may be restored back to the file of CIT(A) for fresh decision after hearing the ld. AR of assessee.
5. I have considered the rival submissions. I find that this is true that it is noted by CIT (A) on pages 4 and 5 of her order that she has fixed the appeal for hearing on 9 dates during 16.02.2016 to 14.12.2017 and she has stated in the remarks column in the table that on two dates i.e. on 12.12.2016 and 20.02.2017, there was no reply and for all the remaining 7 dates, the assessee has sent letters seeking adjournment. The last said date of hearing was fixed on 14.12.2017 and for this, the assessee made request for granting time till last week of December, 2017 but this adjournment application was rejected and the impugned order was passed by CIT (A) on 14.12.2017 on the basis of material available on record. Before the Tribunal also, the assessee is not providing any fresh material and the assessee is relying upon the same gift deeds which was available before the AO and CIT (A) both and therefore, I feel that there is no need to restore the matter back to the file of CIT (A) for fresh decision after providing one more opportunity to assessee. Hence I proceed to decide the appeal on the basis of material available on record. I find that the relevant gift deeds are available on pages 36 to 55 of paper book.
The first gift deed is regarding receipt by the assessee of gift from Shri G. Virupakshiah son of Gubbanna aged about 67 years. He is stated to be assessee’s father-in-law. As per the same, he has given a gift of Rs. 6 Lakhs in cash to the assessee. Regarding the source of fund in his hands, it has been stated that he is Ex-Serviceman, Agriculturist and he is in receipt of pension and agricultural income and it is seen that in respect of gift deed of Rs. 6 Lakhs from father-in-law of assessee, the source of fund in the hands of donor is also explained and there is no specific objection raised by AO/CIT (A) about this aspect of the matter. The only objection is that this amount of gift received from this person is stated to be Rs. 4 Lakhs as per letter dated 26.08.2011 whereas the amount mentioned in the gift deed is Rs. 6 Lakhs. Regarding this difference in amount of gift, it was explained that there is typing mistake in the letter dated 26.08.2011 and therefore, the amount mentioned in gift deed dated 10.12.2008 should be accepted. I find force in the submission of ld. AR of assessee because such differences can be only because of typing mistakes and no person will state a wrong amount in the letter or Gift deed intentionally. Hence, I hold that for deposit of cash in bank account up to Rs. 6 Lakhs, source of deposit in cash should be accepted as out of gift received from father-in-law of assessee.
7. The second gift deed available on pages 38 and 39 of paper book is of Rs. 1.5 Lakhs from Smt. G.V. Roopa, sister-in-law of the assessee and as per this gift deed, it is stated that she had given gift of Rs. 1.50 Lakhs to assessee in cash and regarding sources of fund in her hands, it is stated in the gift deed that she is a self employed and earning income from consultancy. No objection has been raised by the AO/CIT (A) regarding this aspect and for this gift, there is no difference in the amount of gift as per letter dated 26.08.2011 and gift
deed. Hence I find that this gift deed should also be accepted and to the extent of further Rs. 1.50 Lakhs also, it should be accepted that deposit in assessee’s bank account is explained being out of this gift received from Smt. G.V. Roopa.
The third gift deed available on pages 40 and 41 of paper book is of Smt. G.V. Reena. As per this gift deed, it is stated that she has given gift of Rs. 2 Lakhs by cash to assessee and regarding sources of fund in her hands, it is stated that she is a self employed and earning income from consultancy and this gift is given by her out of her past savings and her earning from consultancy and no specific objection has been raised regarding sources of fund in her hands and only objection is about mismatch in amount of gift mentioned in letter dated 26.08.2011 and the gift deed. I have already held that the amount mentioned in gift deed should be accepted because the amount of gift mentioned in letter dated 26.08.2011 is said to be typing mistake. Hence to the extent of Rs. 2 Lakhs of cash deposit in the account of assessee, it should be accepted that such deposit is out of gift received from Smt. G.V. Reena.
The next gift deed is available on pages 42 and 43 of paper book of Smt. G.V. Rekha as per which, she is wife of assessee and she has given gift of Rs. 2 Lakhs and regarding sources of fund in her hands, it is stated that she is a self employed and earning income from consultancy. There is no difference in amount of gift as per gift deed and said letter dated 26.08.2011. Hence I hold that this gift deed should also be accepted to the extent of Rs. 2 Lakhs and it has to be accepted that assessee’s deposit in assessee’s bank account is explained.
The next gift deed available on pages 44 and 45 of paper book of Smt. N.S. Sowbhagya, mother of the assessee. As per the gift deed, she has stated that she has given gift of Rs. 1.50 Lakhs and regarding sources of fund, it has been stated that she is maintaining a paying guest accommodation and maintaining household expenses from the said income and the income is below taxable limit and the gift was made by her to her son out of past savings. The age of this donor is said to be about 60 years. No specific objection is raised in the orders of authorities below about the source of funds in her hands and the only observation is this that as per letter dated 26.08.2011, the amount of gift from this person is said to be Rs. 2.50 Lakhs but the same as per gift deed is Rs. 1.5 Lakhs. On the same basis that there is typing mistake in the letter dated 26.08.2011, I hold that to the extent of amount mentioned in the gift deed of Rs. 1.5 Lakhs, it should be accepted that deposit in assessee’s bank account is explained out of this gift.
The next gift deed available on pages 46 and 47 of paper book is of Shri R. Mahesh, brother of the assessee. As per this gift deed, Rs. 2 Lakhs was given to assessee in cash and about the sources of fund in his hands, it has been stated that he is a businessman and the gift was given by him out of past savings and the amount mentioned in letter dated 26.08.2011 is also matching with the amount mentioned in the gift deed. No specific objection has been raised by authorities below regarding the sources of fund and hence, I hold that this gift deed should be accepted and the deposit in the bank account to this extent of Rs. 2 Lakhs should be accepted as properly explained out of this gift.
The next gift deed available on pages 48 and 49 of paper book is of Shri R. Manjunath, brother of the assessee who has given a gift of Rs. 1 Lakh to assessee and it has been explained that he is a regular income tax assessee and his PAN is ABKPM0028K. It is stated that he is a businessman and the gift is given by him out of past savings and the amount of gift as per letter dated 26.08.2011 and as per gift deed is also matching and hence, this gift deed is also accepted. I hold that this gift deed should be accepted and the deposit in the bank account to this extent of Rs. 1 Lakh should be accepted as properly explained out of this gift.
The next gift deed available on pages 50 and 51 of paper book is of Smt. Lakshmi Manjunath, sister-in-law of assessee. As per this gift deed, she has given gift of Rs. 1 Lakh and regarding sources of fund, she has stated that she is a Financial Analyst in Oracle Financial Services and drawing salary from her
employment and assessed to tax and her PAN being AJTPM1021D and it is also stated that the gift was given by her out of past savings and the amount of gift as per letter dated 26.08.2011 and as per gift deed is also matching. I hold that this gift deed should also be accepted and the deposit in the bank account to this extent of Rs. 1 Lakh should be accepted as properly explained out of this gift.
The next gift deed available on pages 52 and 53 of paper book is of Shri Paramesh, cousin brother of the assessee. As per the said gift deed, he has given gift of Rs. 1 Lakh to assessee and regarding the sources of fund in his hands, it has been stated that he is a businessman and the gift given by him is out of past savings and the amount is also matching. No specific objection has been raised by authorities below regarding sources of fund in his hands. I hold that this gift deed should also be accepted and the deposit in the bank account to this extent of Rs. 1 Lakh should be accepted as properly explained out of this gift.
The last gift deed available on pages 54 and 55 of paper book is of Shri Jagadeesh, cousin brother of the assessee. As per the said gift deed, it is stated that he has given gift of Rs. 1.50 Lakhs to the assessee in cash. As per letter dated 26.08.2011, it has been stated that gift received from this person is Rs. 1,00,000/- but the amount mentioned in the said letter has to be ignored because this is stated to be a typing mistake. Regarding the sources of fund in his hands, he has explained that the same person is a conductor and the gift was given by him out of past savings and since no specific objection has been raised by the authorities below regarding sources of fund, this gift is also accepted to the extent of amount mentioned in gift deed. I hold that this gift deed should also be accepted and the deposit in the bank account to this extent of Rs. 1.50 Lakhs should be accepted as properly explained out of this gift.
In this manner, it is seen that amount of gift received to the extent of Rs. 19.50 Lakhs has to be accepted and the deposit of cash in assessee’s bank account
to this extent has to be accepted as out of gift received against total cash deposit in bank account of Rs. 22,64,100/-. The balance amount of cash deposit of Rs. 3,14,100/- is explained as out of assessee’s own past savings. In the present year, the assessee has declared an income of Rs. 1,68,460/- in the return of income for the present year. Therefore I feel that the claim of having savings of Rs. 3,14,100/- is not excessive or unreasonable and therefore, this is also accepted and hence, I hold that no addition is justified on account of cash deposit in bank of Rs. 22,64,100/- and the same is deleted.
In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court on the date mentioned on the caption page.