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Income Tax Appellate Tribunal, MUMBAI BENCHES “G”, MUMBAI
Before: Shri Amit Shukla, & Shri Ashwani Taneja
आदेश / O R D E R Per Ashwani Taneja (Accountant Member):
This appeal has been filed by the assessee against the order of Ld. Commissioner of Income Tax (Appeals) -27, Mumbai {(in short Ld. CIT(A)} dated 26.11.2010 for the 2 Gaurav Vora assessment year 2005-06, decided against the assessment order passed by the Assessing Officer (in short ‘AO’) u/s 143(3) of the Act. The assessee has raised following grounds of appeal:
“The Honourable Commissioner of Income Tax (Appeals) has erred in not accepting the gifts received from the "close relatives" as defined in the proviso of section 56(2)(vi) of the 1. T. Act, during the previous year relevant to the Asst. year under consideration without considering the fact and merits of the case. The Honourable Commissioner of Income Tax (Appeals) has also erred in not understanding the business related books of accounts submitted during assessment proceedings, looking the personal non-taxable transaction into the same with a finding of the said gifts that have not been reflected in the books of Accounts without considering the fact and merits of the case. The Honourable Commissioner of Income Tax (Appeals) has also erred in not giving opportunity to submit family tree explaining the family tree without considering the fact and merits of the case. The Honourable Commissioner of Income Tax (Appeals) has also erred in taking own view towards conversion of dollars in Rupees other than banks without considering the fact and merits of the case. The Appellant craves leave to submit at the time of hearing such further facts, information, clarification, documents etc. as may be necessary for the purpose of deciding the issues in the appeal. The appellant craves leave to add, to alter, amend or modify the aforesaid grounds of appeal. .”
During the case of hearing none has appeared on behalf of the Assessee. It is seen from the history of this case that Assessee has not been appearing in this case, for some long
3 Gaurav Vora time. It is further seen by us that the notice has been sent to the Assesse by registered post, every time. However, written submissions have been filed in this case by the Assessee. It appears that Assessee wants that his case should be decided on the basis of written submissions filed before the bench. In view of these facts we proceed to hear the appeal on the basis of written submissions filed by the Assessee and submissions made by the Learned Departmental Representative (in short ‘Ld. DR’), on the behalf of the Revenue.
The solitary issue involved in this appeal is with respect to the addition made by the AO amounting to Rs.13,54,000/- being the amount of cash gift received by the assessee in foreign currency, as unexplained cash credit u/s 68 of the Income Tax Act 1961.
During the assessment proceedings, it was found by the AO that Assessee has made cash deposits to the tune of Rs.13,54,000/- in his bank account, during the year under consideration. On inquiry with the Assessee, it was replied that the bank account of the Assessee was being operated by the wife of the assessee and his wife had received gifts, in dollars, from their close relatives, who are residents of Abu Dhabi and the same amount was deposited in the bank account. It was further submitted that gifts were received from the close relatives and therefore, these were exempt in view of provisions of section 56(2)(vi) of the Income Tax Act. It was further submitted by the Assessee that gifts were received from Ms Gul Sadani (aunt) and resident of Abu Dhabi, Mr
4 Gaurav Vora Vishnu Sadani (uncle) and resident of Abu Dhabi and Ms Soma Jham (aunt) and resident of Dubai. The Assessee submitted copies of declaration of gift in the name of assessee and his wife and also copies of their passport and visa. The AO held in the assessment order that the assessee had kept silent about the maintenance of joint saving bank account and only because of AIR report this account came to the knowledge of the department, thus, this indicates that the Assessee was maintaining this account secretly and had not disclosed the same to the department. It was further observed by the AO that said bank account was opened and closed for short period. The AO made detailed discussion in the assessment order for holding claim of the Assessee as sham and bogus and that, in fact no gift has been received by the Assessee, that the Assessee has not followed proper law in converting US dollars into Indian rupees, that no proper response has been given by the assessee and that the Assessee could not prove the genuineness of the gift, creditworthiness of the donor and authenticity of the transactions. Keeping in view all these facts, the AO held the gift transactions as non-genuine and added the same under section 68 of the Act.
The Assessee carried the matter in first appeal before the Ld. CIT(A) and filed further submissions before him. It was, inter alia, submitted by the assessee before the Ld. CIT(A) that interest income of Rs.12,570/- raised during the relevant period from the impugned bank account was included in computation of income of the assessee’s wife since this 5 Gaurav Vora account was primarily operated by her. After considering the submissions of the Assessee, Ld. CIT(A) rejected the same and confirmed the addition made by the AO.
Before us, Ld. DR has argued the matter, relying upon the orders of the lowers authorities and requested for confirming the addition made by the AO. On the other hand, assessee has placed on record his written submissions.
We have gone through the orders of lower authorities and written submissions filed by the assessee. The AO had passed a detailed order while making the impugned addition, holding that the impugned gifts are unsubstantiated. The Ld CIT(A) confirmed the findings of the AO by giving detailed reasoning, these are reproduced here under:
“At the outset, the declaration of gifts filed by the appellant does not explain the relationship of the donor with the appellant. Passport copy was not filed in the case of Ms.Shoba Jham and the passport copy in the case of Mr. Vishnu Sadam does not show his travel to India at the material point of time. Further, I do not find any papers on record to show that the donors are close relatives of the appellant covered in proviso to section 56(2)(vi). The family tree explaining the relationship is not placed on record except stating that the appellant and his wife are nephew/niece to the donors. Thus, the claim of the appellant that the donors are real uncle and aunt of the appellant are not proved anywhere on record. Secondly,
6 Gaurav Vora the appellant has not given any valid explanation as to why the said gifts in foreign exchange were not routed through the normal banking channels, especially when the amounts involved are huge. It is also beyond common sense that the gifts received in cash dollars were kept idle for more than 9 months without depositing them in the bank accounts. The appellant's conduct in not furnishing the details of the said bank account till the issue was raised by the AO would go to show that appellant never had any intention to disclose proper facts for the purpose of assessment. The AO has rightly taken cognizance of the fact that the so called gifts were never credited to the capital account of the appellant. No doubt the appellant has been running proprietary business in the name of MIG travels but it does not preclude the appellant from furnishing relevant particulars of income while filing the return by including all the personal transactions also. Even for a Moment it is accepted that the appellant has received gifts from NRI relatives in foreign exchange, the crucial link as to how the, said dollars were converted into Indian rupees is missing in the given set of facts. The appellant is not legally authorized to convert the foreign exchange in a channel other than a bank/authorized foreign exchange dealer. The very fact that the appellant failed to provide information as to how the so called gifts received in foreign exchange were converted into Indian rupees would go to show that there is no proper explanation as to the cash deposits in the impugned bank
7 Gaurav Vora account of the appellant. As stated already, the issue under consideration is cash deposits in the saving bank account of the appellant and as long as there is no proper explanation as to how the said cash is available to the appellant, the AO is perfectly within his powers to invoke the provisions of section 68 of the Act. In view of the above discussion, I do not find any merit in the submissions made by the appellant. Accordingly, I uphold the addition made by the AO in this regard and therefore the appellant fails on this ground of appeal and the same is dismissed.”
7.1. It is noted that in his written submissions, the assessee has not brought out any new facts or submissions on record, no documentary evidences have been referred in these written submissions, and no proper book has been filed before us to negate the aforesaid findings of Ld CIT(A), and to substantiate the claim made by the assessee. No reasoning has been given in the written submissions to assail the detailed findings given by the Ld. CIT(A) against the genuineness of impugned gifts. It is noted, general and vague submissions have been made in these written submissions, but on the other hand, the AO has made detailed discussion and has given detailed findings and reasoning in the assessment order while making additions, which have been further elaborated by Ld. CIT(A) and he has given categorical findings to establish that the alleged gifts were not genuine. These findings remain uncontroverted, no interference is called for therein, and therefore these are confirmed. Ground raised by the assessee is rejected.
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In the result, the appeal of the assessee is dismissed.
Order pronounced in the open court on 13th October, 2015.