SHRI SHIVPRASAD BINDESHSHWARI DUBEY,NAGPUR vs. I.T.O. WARD -2(1), NAGPUR

1 ITA No. 434/Nag/2016. IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. (S.M.C.) I.T.A. No. 434/Nag/2016. Assessment Year : 2011-12. Shri Shivprasad Bindeshwari Dubey, The Income-tax Officer, Nagpur. Vs. Ward-2(1), Nagpur. PAN ALJPD6191P. Appellant. Respondent. Appellant by : Shri K.P. Dewani. Respondent by : Shri A.R. Ninawe. Date of Hearing : 08-12-2016 Date of Pronouncement : 12th January, 2017. O R D E R. This appeal by the assessee is directed against order of Learned CIT(Appeals)-II, Nagpur dated 23/3/2016 and pertains to assessment year 2011- 12. The grounds of appeal read as under :

2 ITA No. 434/Nag/2016. to Rs.3,50,000/- had been obtained by the assessee from one Shri Rammilan Divedi who is husband of assessee’s sister. The AO required the assessee to establish the creditworthiness of Shri Rammilan Divedi. Various evidences were furnished by the assessee before the AO. The AO, however, was not satisfied with the same and added an amount of Rs.3,50,000/- to the income of he assessee. Similarly in respect of an amount of Rs.5,50,000/- it was explained by the assessee that the same was received from the assessee’s wife who had sold some jewellery during the year under consideration. The AO, however, was not satisfied by the said explanation and added the same to the income of the assessee.

Further the assessee had explained that an amount of Rs.17,50,000/- had been received from one Ganpathi Traders on 31-01-2011. However, inspite of several opportunities being given requiring submission of further details of the said Ganpathi Traders, there was no compliance at the end of the assessee. Consequently, the AO added the amount of Rs.17,50,000/- to the income of the assessee.

Apropos addition of Rs. 3, 50, 000/-. “4.5 I have considered the facts of the case ane! submissions of the appellant. it is evident from the various evidences brought on record that Shri Rammilan Divedi is a man of meagre means and could not have given a gift of such magnitude to the appellant. Shri. Rammilan Divedi is a retired person who obtained total retirement benefits of about Rs. 5 lakhs and presently draws monthly pension of Rs. 6000/- only. His bank balance as per the details furnished by the Le!. AO is very meagre and in the range of few thousands only. His entire monthly pension is being regularly withdrawn for household expenses which shows that he has no other funds or sources of income. In such sets of circumstances, it is inconceivable that such a person would give a gift amounting to Rs. 3,50,000/- to the appellant. No evidence of ownership of agricultural land has been established. The gift that has been received by the appellant is shown to be in cash. On the date of gift or immediately before the same, there are no withdrawal from the bank account of Shri. Rammilan Divedi. Even in respect of the claim of agricultural income of Rs. 40,000/- no evidence whatsoever has been furnished.

3 ITA No. 434/Nag/2016. 4.6 Considering the above set of facts it is evident that Shri Rammilan Divedi is not a man of meagre means and his creditworthiness has not been established at all. Moreover as stated above, the given transaction is not through banking channels and is claimed to have been made in cash. In view of above facts the addition of Rs. 3,50,000/- u/s. 69 is hereby confirmed.”

Apropos addition of Rs. 5,50,000/-.

“4.9 I have considered the facts of the case and submissions of the appellant. I have also perused the bills issued by M/s. Jain Jewellers in compliance to the letter of the Ld. AO. While the said M/s. Jain Jewellers has confirmed the said transaction, however there are various issues in respect of the confirmation which still remains unresolved. The said purchase of jewellery from M/s Jain Jewellers is claimed to be in cash. Such a transaction is highly improbable as no businessman will carry out the purchase transaction on stock in tr-ade inJcash. Further perusal of the bill itself shows that there is no description whatsoever of the nature of jewellery sold by the appellant. It is merely stated 19 tolas and rate per tola is mentioned at Rs. 280001- resulting in total bills of Rs. 5,32,0001-. It is merely mentioned as sale of gold with items 1. Haar, 2. Mangalsutra and 3. Nagchudi. There is no description of nature of the above items and no individual weight or purity of gold is mentioned in the bill. Moreover the bill has been issued on the standard cash memo of Mls Jain Jewellers which is normally used only in respect of sales. Thus the appellant has failed to give proper evidences to support the sale of jewellery made by it to Mls Jain Jeweller.

4 ITA No. 434/Nag/2016. 4.15 Also there is no merit in the contention of the appellant that the Ld. AO ought to "have verified the present address of the party by issuing the commission to the Nashik Income Tax office. Such a contention of the appellant is misplaced for various reasons. Firstly the onus is on the appellant to establish the identity and creditworthiness of lender. The appellant cannot give vague reasons of "strained" relationship to shift the onus on the department. The reason remains unsubstatiated and is a self serving assertion at the end of the appellant. Secondly the appellant has submitted one copy of bank statements which is claimed to be of Ganapathi Traders. Though the appellant has stated that he has got it from the bank, the same is highly improbable as bankers do not provide bank statement of their customers to unknown random individuals. In view of the same no reliability or credibility can be attached to the bank statement submitted by the appellant. The Department cannot start carrying out enquiries on the basis of documents submitted which themselves lack credibility. Thirdly there is no merit in the contention of the appellant that it has strained relation with the said lender. The appellant claims to have borrowed the huge amount of Rs. 17,50,000/- from the said person. As clarified by the appellant, the said amount still remains unpaid. Also the appellant has not been paying any interest on the said borrowings to Shri Sunil Kolhe. In such facts, it is reasonable to accept that the said Shri Sunil Kolhe would be continuously after the appellant to recover his amount with or without interest. In such circumstances the appellant has stated that it has strained relation with the said party and hence cannot give any detail related to him. Such an explanation of the appellant is not acceptable and the appellant cannot shift his primary onus on the Department.

“I. Gift of Rs.3,50,000/- from Shri Rammilan Dwivedi.

A) Assessee has submitted gift deed for sum of Rs.3,50.000/- before A.O. and genuineness of the gift deed is not in dispute. B) The donor is aged about 65 years and had received pensioner benefit from Ministry of Defence, Govt. of India. The evidence of which was placed before lower authorities. The bank pass book of donor was placed on record which indicated that there were cash withdrawal of more than Rs.4,00,000/- in the immediate past. The donor is agriculturist and holding agricultural lands was also placed on record. The donor has during remand proceedings confirmed the amount of 5 ITA No. 434/Nag/2016. gift given to assessee which sufficiently demonstrate the availability of capital to give gift. The legal evidence placed on record by donor has not been faulted. 6 ITA No. 434/Nag/2016. Reliance on i) 245 ITR 160 (M.P.) CIT vs. Metachem Industries.

III. Credit of Rs.17,50,000/- from M/s Ganpathi Traders.

A) The amount received in bnk account of assessee is through transfer from bank account of M/s Ganpathi Traders of Nashik. The bank account of such party placed on record corroborates the credit in bank account of assessee. The deposit in bank account can no longer remained unexplained in order to invoke the provision of section 69 to make addition at the hands of assessee. B) The bank statement of creditor discharges the onus lay on assessee to explain th deposit by bank account. The addition made by A.O. is unjustified. C) The perusal of bank statement of M/s Ganpathi Traders demonstrates that money is flown from its bank account to the bank account of assessee. The genuineness and bona fide of transaction thus stands substantiated and corroborates by legal evidence on record. D) The assessee has pleaded before lower authorities that because of strained relation assessee is unable to obain confirmation. As it is bank transfer A.O. may invoke powes and machinery to verify the submission of assessee.

IV Provisions of sec. 69 are not mandatory. Reliance on:

i) 237 ITR 570 CIT vs. Smt. P.K. Noorjahan. ”

7 ITA No. 434/Nag/2016. 6. Per Contra Learned Departmental Representative relied upon the orders of the authorities below.

Accordingly in the interest of justice I remit this issue to the file of the Assessing Officer. The Assessing Officer is directed to consider the issue afresh after giving the assessee adequate opportunity of being heard