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Income Tax Appellate Tribunal, “ D ” BENCH, AHMEDABAD
Before: SHRI PRADIP KUMAR KEDIA & SHRI MAHAVIR PRASAD
आदेश / O R D E R
PER PRADIP KUMAR KEDIA - AM: The captioned appeal filed at the instance of the assessee is against the order of the Commissioner of Income Tax(Appeals)-10, Ahmedabad [CIT(A) in short] dated 16/02/2015 in the matter of assessment order
ITA No.1142/Ahd/2015 Shri Pannalal Baijnath Jaiswal vs. ITO Asst.Year – 2011-12 - 2 - under s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") dated 24/03/2013 relevant to Assessment Year (AY) 2011-12.
The grounds of appeal raised by the Assessee read as under:- 1. Ld.CIT(A) erred in law and on facts in confirming action of AO in computing profit of Rs.67,00,000/- on sale of immovable property as short term capital gain as against long term capital gain of Rs.21,76,721/- correctly declared by the appellant. Ld.CIT(A) ought to have accepted long term capital gain computed from holding of actual possession of the property by the appellant. It be so held now. 2. Ld.CIT(A) erred in law and on facts in confirming computation of short term capital gain without appreciating documentary evidence submitted that appellant on payment of major portion of his share of purchase price earned rental income on receiving effective possession from 29.03.2007. Ld.CIT(A) ought to have treated gain on sale of property as long term capital gain since the property was held for more than 36 months.
Ld.CIT(A) erred in law and on facts in not appreciating that the rental income declared in AY 2008/09 pertained to property under consideration only since the appellant never possessed any other property at the relevant time. Ld.CIT(A) ought to have held that the appellant correctly computed long term capital gain on sale of property. It be so held now.
Ld.CIT(A) gravely erred in law and on facts in holding the possession letter from the builder filed after comments of AO on additional evidence as inadmissible not appreciating that the same was filed on direction of the appellate authority. Ld.CIT(A) ought to have held that the appellant was in actual possession of the property after cross verification with the builder the fact as evidenced in purchase deed also. It be so held now.
ITA No.1142/Ahd/2015 Shri Pannalal Baijnath Jaiswal vs. ITO Asst.Year – 2011-12 - 3 - 5. Ld.CIT(A) erred in law and on facts in confirming addition made by AO of Rs.19,05,489/- received from deceased brother of the appellant as unexplained cash credit u/s.68 of the Act. Ld. CIT(A) erred in not appreciating that the impugned amount received according to wish & direction of deceased man further corroborated by affidavits of legal heirs remained fully explained. Ld. CIT(A) ought to have deleted addition made by AO. It be so held now. 6. Ld.CIT(A) erred in law and on facts in confirming addition of cash credit holding failure of appellant to explain receipt of impugned amount from the deceased despite accepting veracity of the affidavits of the legal heirs. Ld.CIT(A) ought to have deleted addition made by AO without cross verification with legal heirs wish of the deceased to give impugned amount to his own brother. It be so held now. 7. Levy of interest u/s.234A/234B & 234C of the Act is not justified. 8. Initiation of penalty proceedings u/s.271(1)(c) of the Act is not justified.
Ground Nos.1 to 4 of the appeal concern computing the taxable income of Rs.67 lakhs on sale of immovable property as Short Term Capital Gain (STCG) instead of Long Term Capital Gain (LTCG) of Rs.21,76,721/- offered by the assessee.
Ground Nos. 5 & 6 concern addition made by the Assessing Officer (AO) under s.68 of the Act for alleged unexplained credits of Rs.19,05,489/-.
Briefly stated, the return of income of the assessee was picked up for scrutiny for the relevant AY 2011-12. In the course of scrutiny
ITA No.1142/Ahd/2015 Shri Pannalal Baijnath Jaiswal vs. ITO Asst.Year – 2011-12 - 4 - proceedings, the AO observed that the assessee has sold an immovable property at ‘Shital Varsha’ - Ahmedabad which was co-owned by Assessee along with wife Smt. Kalawatiben Pannalal Jaiswal. It was observed by the AO that the aforesaid property was jointly purchased by the assessee earlier vide purchase agreement dated 15/07/2008 for a consideration of Rs.1,60,00,000/-. The assessee was stated to be holding 50% share in the co-ownership property. Thus, cost of acquisition attributable to the assessee stands at Rs.80 lakhs. The said property was statedly sold by the assessee on 01/04/2010 and the share of the assessee in the sale consideration stands at Rs.1,47,00,000/-. The AO thereafter observed that the assessee held the property for less than three years and therefore the gain emanating on sale of property is taxable as Short Term Capital Gains (STCGs). It was found by the AO that assessee has, instead, claimed indexation benefit on the said property and computed Long Term Capital Gains (LTCGs) therefrom to reap concessional tax benefits. It was inter alia noted by the AO that the purchase deed was registered in favour of the assessee along with the joint owner on 15/07/2008 only. It was also observed that corresponding sale agreement was executed on 01/04/2010. The AO accordingly observed that the assessee was in possession of the property for a period of less than 36 months. The AO also underscored the fact that as mentioned in the purchase-deed, the ‘building use permission’ of the said property was approved on 27/10/2008 vide application dated 16/10/2008. Therefore,
ITA No.1142/Ahd/2015 Shri Pannalal Baijnath Jaiswal vs. ITO Asst.Year – 2011-12 - 5 - as a corollary, the possession could not be availed at earlier date. The assessee in reply submitted before the AO that the possession of the property was taken 29/03/2007 prior to registration of agreement i.e. on 15/07/2008. The assessee thus sought to justify its action of treating the gains under Long Term Capital Gain category. The AO however came to a conclusion that the claim towards LTCGs at Rs.21,76,721/- towards sale of property is not supportable by evidences on record. The AO accordingly held that gains arising on sale of property is susceptible to tax as applicable to Short Term Capital Gains.
As regards second issue, the AO observed that assessee has shown receipt of cash of Rs.19,05,489/- from estate of late brother Shri Rajaram Baijnath Jaiswal. The AO noted the contention of the assessee that it has received aforesaid amount in cash from the estate of Shri Rajaramji on his death pursuant to his wishes. A copy of capital account of Shri Rajaramji as on 31/03/2011 duly signed by son of the deceased (Amarchand R.Jaiswal) was furnished to support receipt. The AO further observed that the assessee claimed that the aforesaid amount in cash was given to him by deceased brother out of his assets as per WILL along with cash given to son amounting to Rs.4,88,068/-. The AO rebutted the aforesaid claim of receipt in ‘cash’ in terms of a WILL inter alia on the ground that during the year aggregate cash receipt of Rs.2,11,000/- only was available in the hands of deceased. The AO found that receipt of
ITA No.1142/Ahd/2015 Shri Pannalal Baijnath Jaiswal vs. ITO Asst.Year – 2011-12 - 6 - staggering amount of cash of Rs.19,05,489/- claimed to have been received from the estate of deceased brother is not corroborated by any evidence viz. copy of WILL, resources towards availability of cash etc. The AO accordingly observed that the assessee has failed to discharge its onus towards the genuineness of cash received purportedly from brother’s account. While coming to such conclusion, the AO further observed that the deceased was an income-tax assessee and was also holding a bank account and therefore it will be unreasonable to them that a person of such means would keep such huge amount as cash in hand. The AO accordingly added Rs.19,05,489/- as unexplained cash credit with the aid of section 68 of the Act.
Aggrieved, the assessee challenged the action of the AO before the CIT(A). Before the CIT(A), the assessee furnished additional evidence in the shape of allotment letter dated 19/02/2007 issued by the builders/developers whereby the allotment of the property was stated to be confirmed. The assessee accordingly claimed that it came to possess rights in property which were later on accentuated into full ownership on execution of registered-deed and meeting obligations attached thereto. The assessee also relied upon ‘possession letter’ of the property purchased dated 05/03/2007 to prop up its claim of acquisition of rights of capital nature in the impugned property.
ITA No.1142/Ahd/2015 Shri Pannalal Baijnath Jaiswal vs. ITO Asst.Year – 2011-12 - 7 - 8. The CIT(A), however, did not see any merit in the appeal of the assessee. The CIT(A) after taking into account remand report from the AO and written submissions made on behalf of the assessee observed that the possession letter was filed after the comments of the AO without any application for admission as additional evidence and hence discarded the same. The CIT(A) also found contradiction in the version of the assessee and observed that while the assessee claims the possession date to be 05/03/2007 as per the letter from the builder, it has all along claimed that possession was given on 29/03/2007. The unexplained discrepancy also cast aspersions on the date of possession. The possession letter also does not bear any date. The original copy of the possession letter was not produced. In essence, the CIT(A) questioned the genuineness of the possession letter.
As regards rental income stated to be derived on the property before its sale, the CIT(A) found that details of the property for which rent was offered is not identifiable from the return of income for AY 2008-09. The CIT(A) also noted that evidence in the form of rent agreement or receipt of rent in the bank account is also not available. The rent is also shown to be received in cash and therefore not verifiable. In short, there was no way to relate the rent receipt, if any, with the property. The CIT(A) therefore came to the conclusion that assessee did not have the possession of the property on 29/03/2007 as claimed. The
ITA No.1142/Ahd/2015 Shri Pannalal Baijnath Jaiswal vs. ITO Asst.Year – 2011-12 - 8 - CIT(A) accordingly endorsed the action of the AO in treating the capital gain arising from the property as STCGs instead of LTCGs.
As regards second ground agitated, the CIT(A) noted that the assessee filed affidavit of the son and wife of the deceased brother as ‘additional evidence’ of the receipt of cash on death of brother. However, the CIT(A) noted that the assessee has failed to file any evidence such as WILL etc. of deceased brother. The CIT(A) after considering various submissions of the assessee found that cash of Rs.19,05,489/- allegedly received from the estate of deceased brother to justify corresponding investments, is not supportable by any credible documentary evidences. The CIT(A) accordingly upheld the addition of Rs.19,05,489/- towards unexplained cash credit in the hands of the assessee.
Further aggrieved, the assessee is in appeal before the Tribunal. 11.
The Ld.Senior Counsel for the assessee, Shri S.N.Soparkar reiterated the facts placed before the lower authorities and submitted that both the lower authorities have misdirected themselves in law in treating the capital gains arising of sale of immovable property as STCGs. The Ld.Counsel adverted to the purchase agreement dated 15/07/2008 (jointly purchased along with wife) for acquisition at an aggregate consideration
ITA No.1142/Ahd/2015 Shri Pannalal Baijnath Jaiswal vs. ITO Asst.Year – 2011-12 - 9 - of Rs.1,60,00,000/- from a builder/developer. The Ld.Counsel adverted to the details of various payment made in tranches as appearing in the purchase agreement and stridently contended that as much as Rs.58 lakhs out of Rs.80 lakhs payable by the assessee towards his share was paid on or before 05/03/2007. The Ld.Counsel thereafter adverted our attention to an allotment letter dated 19/02/2007 and submitted that the property/flat was allotted to the assessee for a total consideration of Rs.1.60 crores which was ultimately translated into purchase agreement. The Ld.Counsel thereafter referred to a possession letter dated NIL (appearing at page No.131 of the paper-book) and submitted that as per the possession letter issued by the builder/developer, the assessee was in possession of the property in question w.e.f. 05/03/2007 notwithstanding execution of formal purchase-deed in July-2008. The Ld.Counsel thus submitted that when all these facts of allotment letter, possession letter, purchase agreement and the details of payment substantially made (before possession as claimed) are seen in tandem, it is quite clear that the assessee held the property in its command from 5th March-2007 which was ultimately sold after 36 months from its possession vide sale- deed dated 01/04/2010. The Ld.Counsel therefore stridently contended that clearly the assessee came to hold the asset before its sale for more than 36 months and therefore the claim of the assessee towards LTCG cannot be disproved on such facts. The Ld.Counsel thereafter adverted our attention to the computation of the income of the assessee for AY
ITA No.1142/Ahd/2015 Shri Pannalal Baijnath Jaiswal vs. ITO Asst.Year – 2011-12 - 10 - 2008-09, wherein rent income of Rs.1,50,000/ - claimed to be derived from the aforesaid property was declared to support its claim of possession of the property during the Financial Year (FY) relevant to AY 2008-09. The Ld.Counsel accordingly submitted that the rights towards the property was accrued in favour of assessee by virtue of the allotment letter and possession letter and therefore the property before its sale is to be reckoned as Long Term Capital Asset and the gain on sale thereof ought to have been treated as LTCGs as characterized by the assessee. The Ld.Counsel also placed reliance upon the decision of the Coordinate Bench of Tribunal in Dy.CIT vs. Shri Dilip Ramanlal Parikh In ITA No.914/Ahd/2016 order dated 16/10/2017 for the proposition that subsequent purchase-deed relates back to the date of allotment for the purposes of determination of period of holding.
As regards the second issue, Shri Soparkar once again broadly reiterated the facts placed before the lower authorities and submitted that the affidavits of the legal heir of the deceased brother goes to support the claim of the assessee towards receipt of Rs.19.05 lakhs received from the estate of late brother in cash. On query from the Bench, the Ld.Counsel submitted that no written WILL was codified. The wishes of the deceased brother expressed orally were fulfilled by the legal heirs. To support its claim of receipt of aforesaid amount of Rs.19.05 lakhs the Ld.Counsel referred to a capital account of the deceased as on
ITA No.1142/Ahd/2015 Shri Pannalal Baijnath Jaiswal vs. ITO Asst.Year – 2011-12 - 11 - 31/03/2011. The Ld.Counsel submitted in conclusion that the CIT(A) has not appreciated the facts in perspective and committed error in confirming the action of the CIT(A). He accordingly urged that the order of the lower authorities requires to be set aside and the addition so made requires to be deleted.
The Ld.DR for the revenue, on the other hand, relied upon the orders of the authorities below and vociferously opposed the plea the assessee. As regards first issue, the Ld.DR emphasized that the possession letter is undated and also, notably, a photocopy only the original of which was not produced. The Ld.DR next contended that it is far fetched to assume that builder would give an irreversible vacant and peaceful possession to a buyer without receipt of actual consideration and without execution of formal deed for sale and hence assume risks associated with third party possession. The Ld.DR contended that the assessee has not adduced the impugned allotment letter to claim rights in property at the assessment stage. The Ld.DR thereafter submitted that allotment letter does not confer any valuable right in favour of assessee. It merely acknowledges the receipt of part payment towards allotment of the property in question. The Ld.DR next contended that the photocopy of the possession letter without producing the original letter was rightly found defective by the CIT(A) in more than one aspect. It was contended that the chain of events as narrated in the order of the CIT(A) clearly
ITA No.1142/Ahd/2015 Shri Pannalal Baijnath Jaiswal vs. ITO Asst.Year – 2011-12 - 12 - show that the property sold was held as capital asset for less than 36 months and therefore rightly denied benefits associated to LTCG towards indexation of costs and concessional tax treatment.
In a sharp rebuttal with regard to second issue, the Ld.DR once again relied upon the order of the CIT(A) and submitted that it is beyond anybody’s understanding as to why such huge amount would be given to the assessee in form of cash. The theory of oral WILL is created only to support unexplained investments. The source of cash in the hands of the deceased brother is also not verifiable. The affidavit filed by the legal heirs without any written testimony (WILL) is only an afterthought to cover up the introduction of unaccounted money of assessee by way of cash. The Ld.DR accordingly contended that it is ostensible that the assessee has failed to discharge its onus miserably.
We have carefully considered the rival submissions. The first issue concerns as to whether the gains arising on sale of immovable property in question is to be considered as Short Term Capital Gain (STCG) or Long Term Capital Gain (LTCG) in the facts of the case.
16.1 The scheme of taxation provides for concessional tax treatment on gains arising from sale of Long Terms Capital Assets (LTCA). The prescribed period holding of capital asset in question is 36 months
ITA No.1142/Ahd/2015 Shri Pannalal Baijnath Jaiswal vs. ITO Asst.Year – 2011-12 - 13 - immediately preceeding its transfer to enjoy the concessional treatment attributable to LTCA. In the backdrop of this, the assessee claims that the property in question was held for more than 36 months prior to its transfer and thus eligible for favourable tax treatment.
16.2. In this regard, we first take note of the foremost plea of the assessee that the ‘rights’ in the property under sale stands acquired by virtue of allotment letter dated 19/02/2007 towards its acquisition. It is the case of the assessee that the allotment letter has vested the rights and interest in the property in favour of assessee in February-2007 itself. It is further case of the assessee that the ‘possession’ of the property was also acquired on part payment of his share as per possession letter on 05/03/2007. It is thus the case of the assessee that notwithstanding the execution of the purchase-deed for acquisition of impugned property at later point of time on 15/07/2008, the assessee was holding the command over the property by way of allotment and possession in the month of Feb-March 2007 itself. It is thus the case of assessee that even when the period of holding is reckoned from the date of possession on 29/03/2007, the assessee can be found to holding the property for a period of more than 36 months prior to its sale on 01/04/2010. The assessee accordingly has claimed that profits and gains arising on sale of property which was held as capital asset for more than 36 months prior to its sale is susceptible to concessional tax treatment
ITA No.1142/Ahd/2015 Shri Pannalal Baijnath Jaiswal vs. ITO Asst.Year – 2011-12 - 14 - being ‘Long Term Capital Gains’ as offered by the assessee. It is contention on behalf of the assessee that the Revenue Authorities have wrongly concluded that the immovable property was held for less than 36 months in the given facts of the case and have committed grave error in treating the gains as STCG instead of LTCG.
16.3. The Revenue, on the other hand, contends that the immovable property in question was held for less than 36 months when reckoned from the date of purchase agreement. It is the case of the Revenue that the allotment letter did not grant any rights in favour of the assessee. It is the further case of the Revenue that it is not possible for the seller to give possession in the given set of facts. It is the contention of the revenue that the possession letter was not produced either at the assessment stage or at the appellate stage. A photocopy of possession letter was annexed to certain replies before the CIT(A) at a later stage merely as an after thought. It is further emphasized on behalf of the Revenue that the joint owners have combinedly given only Rs.58 lakhs to the corresponding seller before the aforesaid date of possession towards acquisition against agreed consideration of Rs.1,60,00,000/-. Under these circumstances, where considerable portion of the total purchase amount was outstanding and a purchase-deed was also not executed, one cannot fathom purported claim of possession. The possession letter also strangely claims a vacant and peaceful possession without receipt of
ITA No.1142/Ahd/2015 Shri Pannalal Baijnath Jaiswal vs. ITO Asst.Year – 2011-12 - 15 - consideration which is beyond understanding. Besides, it is also contended that ‘building use permission’ of the property was approved at quite subsequent stage on 27/10/2008 pursuant to application dated 16/10/2008. In these circumstances, the possession claimed to have been given in March-2007 prior to use permission is beyond comprehension.
16.4. To appreciate the perspective of the assessee towards claim of holding the impugned asset for more than 36 months, we have perused the allotment letter dated 19/02/2007 (as appearing at page No.10 of the paper-book) filed after the completion of the assessment before the CIT(A) as an ‘additional evidence’. A mere glance of the allotment letter gives unflinching impression that no right can be said to have been created in favour of the assessee by virtue of the aforesaid letter. The allotment letter merely stipulates that the seller has received a sum of Rs.15 lakhs as against the total proposed consideration of Rs.160 lakhs. By virtue of clause no. 2, 3 & 4 of the allotment letter, certain obligations have only been placed on the assessee unilaterally. Clause No.5 simply refers to the execution of a formal agreement in the due course. A bare perusal of the allotment letter would therefore show that no right to sue the builder/developer (seller) is created in favour of the assessee per se to assert any right as a consequence of such letter. Therefore, such allotment letter, in our considered view, does not create any right or interest in favour of the assessee to be recognized as capital asset as
ITA No.1142/Ahd/2015 Shri Pannalal Baijnath Jaiswal vs. ITO Asst.Year – 2011-12 - 16 - claimed. Therefore period of holding of property in question cannot be traced back to the date of allotment letter. The period of holding thus cannot be reckoned from the date of so-called allotment letter.
16.5. We shall now turn to the parallel claim of the assessee towards having taken possession of the impugned property by virtue of possession letter dated NIL whereby possession of the property in question is sought to be given to the joint owners w.e.f. 05/03/2007. The possession letter is claimed to have created right and interest of capital nature with effect from the date of possession in favour of the assessee. The possession letter is thus pivotal for such assertions. In this regard, it is noticed that this possession letter was strangely neither given at the assessment stage nor filed by way of additional evidence before the CIT(A). The possession letter was annexed at the first appellate stage along with certain replies at a belated stage. The propriety of such letter is stated to be a suspect by revenue. It is seen on a bare perusal of the aforesaid undated possession letter that a ‘vacant and peaceful’ possession of the property in question is purportedly given to assessee wef 05/03/2007. Significantly, as on that date, the assessee jointly with his wife had paid barely Rs.58 lakhs as against committed amount of Rs.160 lakhs. It is highly unpalatable that a builder would relinquish its control and prematurely give ‘vacant’ and ‘peaceful’ possession of a property to joint-buyers on receipt of such a comparatively small amount
ITA No.1142/Ahd/2015 Shri Pannalal Baijnath Jaiswal vs. ITO Asst.Year – 2011-12 - 17 - vis-a-vis the total obligation, more so in the absence of any formal agreement entered into with the buyers (assessee) at that stage. Besides, we also take note of the vital fact that the aforesaid possession letter is non-descript without any reference to the fate of terms of balance amount to be paid by the assessee and other joint-owner in case of any default. Ostensibly, the impugned possession letter is seeking to grant absolute authority in favour of the assessee without any fetters and recourse for cancellation or repossession under any circumstances. This is quite inexplicable. It is hard to understand that a building/developer would part with possession of property to its customers in haste at such a premature stage without any cover for realization of the balance consideration agreed upon. It is only to state the obvious that the possession of a property under construction cannot be given in such a nonchalant manner which would in fact impede a developer to complete its obligation of construction of the property stated to be in possession of its customer. The ‘vacant’ possession as claimed cannot be visualized for completion of construction. We also do not see any perceptible occasion for a purchaser (assessee) to get hold of the possession when the property is under ongoing construction phase and even Building Use permission has neither been applied for or no approved by the competent authority. It is uncharacteristic of a developer to create a crucial right of possession in favour of assessee towards ongoing under construction property and give preferential and dissimilar treatment to the assessee in an unduly manner
ITA No.1142/Ahd/2015 Shri Pannalal Baijnath Jaiswal vs. ITO Asst.Year – 2011-12 - 18 - qua other customers. When these intriguing circumstances are read in conjunction with the Building Use permission actually granted on 27/10/2008 by the local authority after the completion of the construction, the purport of such symbolic possession letter can be understood at once. The possession letter of such type clearly indicates a foul play to mislead the revenue in believing the claim of the assessee towards period of holding of more than 36 months. The grant of vacant possession of under construction property belies logic and defies common sense.
16.6. As noted earlier, there are long list of circumstances to believe that the claim of purported possession is unreal. Firstly, a vital document in the form of a possession letter remains undated and also not produced for enquiry before the AO. Noticeably, the possession letter was also not produced as additional evidence before CIT(A) earlier. Secondly, the circumstances viz. truncated payment of one third of total agreed consideration; thirdly, property under construction without any completion certificate; fourthly, no formal agreement in place at the time of purported possession; fifthly, no right with builder to seek retrieval of the so-called possession in the event of any default from the assessee. These circumstances unequivocally establishes without any traces of doubt that a symbolic possession letter was introduced as a pretense with a motive to justify longer period of holding of the asset with the object
ITA No.1142/Ahd/2015 Shri Pannalal Baijnath Jaiswal vs. ITO Asst.Year – 2011-12 - 19 - of lessening the tax burden and to avoid appropriate incidence of taxation. The claim of assessee has no semblance of bonafides. The so- called possession letter, in our view, is only cosmetic and inconsequential for determination of period of holding of impugned property sold.
16.7. We therefore hold that the CIT(A) was right in disregarding the effect of such discredited possession letter. Thus, the period of holding, in our view, cannot be reckoned either from the date of allotment letter or the date of purported possession as claimed In the similar vain, we do not find any merit in the plea of the assessee for affirmation of possession having regard to rental income shown to be generated on such property. The property was under construction and thus not habitable. Rent was claimed to be received in cash from an unidentifiable user. The entire action of the assessee defies legitimacy of any sort and is clearly devoid of any strength whatsoever. Thus, the period of holding of the asset/property cannot be reckoned from the date of allotment letter or possession letter as claimed. In this view of the matter, we decline to interfere with the conclusion of the CIT(A) that the asset under sale was short term capital asset and consequently profit is liable to be taxed as Short Term Capital Gains only.
Ground Nos.1 to 4 of assessee’s appeal concerning first issue are dismissed.
ITA No.1142/Ahd/2015 Shri Pannalal Baijnath Jaiswal vs. ITO Asst.Year – 2011-12 - 20 -
We shall now turn to dwell upon the other issue raised by the assessee towards addition of Rs.19,05,489/- assessed as an unexplained cash credit in the hands of the assessee.
18.1. While it is the case of the Revenue that receipt of cash amounting to Rs.19,05,489/- from the estate of deceased brother (Shri Rajaram Baijnath Jaiswal) remains unexplained in terms of section 68 of the Act, the assessee, on the other hand, has taken a stand (on his death on 8/12/2010) that the aforesaid amount was received from the estate of the late brother as per his oral wishes which is duly supported by affidavit of the legal heir (wife and son) of the deceased brother.
18.2. We find the claim of the assessee to be quite perplexing having regard to the circumstances existing. A Perusal of the capital account of the deceased brother as on 31/03/2011 (page No.130 of the paper-book) shows that the late brother was having very limited resources at his disposal. The aforesaid amount of Rs.19.05 lakhs accounts for nearly 50% of the estate of the deceased who is survived by his wife and a son. No immovable property is apparently held by the deceased brother for shelter and use of wife and son. Similarly, a break-up of Rs.19.05 lakhs appearing below the capital account goes to show that Rs.9.90 lakhs only is attributable to cash component. The balance amount out of
ITA No.1142/Ahd/2015 Shri Pannalal Baijnath Jaiswal vs. ITO Asst.Year – 2011-12 - 21 - Rs.19.05 lakhs in question represents non-cash entries. We do not find any documentary evidence of reliable nature to justify the claim of the assessee that the amount was devolved on the assessee due to the wishes of late brother. No written WILL executed by late brother, if any, was brought on record. The amount was claimed to be transferred owing to oral wishes as deposed by surviving legal heirs. Such explanation on behalf of the assessee are grossly opposed to human probabilities and does not inspire any confidence. It is only elementary that a WILL has to be formally reduced in writing in the presence of witnesses to give effect to purported dictates of deceased which is not done in the present case. Secondly, an odd amount of such magnitude vis-a-vis total estate only mystifies an ordinary human conduct. Thirdly, the cash introduced does not match with the bifurcation of the amount devolved. Fourthly, the alternative to WILL in the form of affidavit of purported legal heir is not sufficient in such circumstances to replace the effect of a written WILL. The reasons are not far to seek. A living person has an absolute power of disposal of his properties and estate and may bequeath his self- generated property/assets in favour of any person of his choice. The legal heirs namely wife and son herein can only be reckoned to be frontrunners and strong contenders in the estate of the property. The asset will however not automatically devolve in favour of any party in the absence of any written WILL or other documentation as claimed.
ITA No.1142/Ahd/2015 Shri Pannalal Baijnath Jaiswal vs. ITO Asst.Year – 2011-12 - 22 - The affidavit of legal heirs towards purported oral wishes of the deceased is thus not conclusive.
18.3. The whole narrative of receipt of disproportionate cash of such large amount out of the estate of late brother is highly improbable and a sad spectacle of a make believe story devoid of any credence. The cross- examination of legal heirs or otherwise is inconsequential for understanding the legal effect of a void in the absence of WILL or other tangible document. Incidentally, it is also not known as to when the so- called cash was given to the assessee and by whom and before its transfer, it was lying in whose custody.
18.4. The facts towards credits are not clear at all. The circumstances do not stand to reasons and indicates otherwise to take the transaction out of ambit of section 68 of the Act. The hawkish narrative given by the assessee was rightly denounced by the revenue authorities.
18.5. The case-laws relied upon on behalf of the assessee are rendered in its own set of facts which are materially different. Therefore, we do not consider it necessary to deal with the same out of context.
18.6. In the absence of any documentary evidences and in view of totally improbable and unsubstantiated circumstances, we are unable to
ITA No.1142/Ahd/2015 Shri Pannalal Baijnath Jaiswal vs. ITO Asst.Year – 2011-12 - 23 - affirmatively appreciate the stand of the assessee on this score. Therefore, we decline to interfere with the orders of the authorities below.
Consequently, Assessee’s this ground is also dismissed.
In the result, assessee’s appeal is dismissed. This Order pronounced in Open Court on 01/ 12 /2017
Sd/- Sd/- (महावीर �साद) (�द�प कुमार के�डया) �या�यक सद�य लेखा सद�य ( MAHAVIR PRASAD ) ( PRADIP KUMAR KEDIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER
Ahmedabad; Dated 01/ 12 /2017
ट�.सी.नायर, व.�न.स./T.C. NAIR, Sr. PS आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त(अपील) / The CIT(A)-10, Ahmedabad �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 5. 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, स�या�पत ��त //True Copy//
उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील�य अ�धकरण, अहमदाबाद / ITAT, Ahmedabad