Himanshu Garg, 14/22, First Floor, Shakti Nagar, New Delhi. Vs. ITO, Ward 20(1), New Delhi.
May, 01st 2015
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCHES : C : NEW DELHI
BEFORE SHRI R.S. SYAL, AM AND SHRI C.M. GARG, JM
Assessment Year : 2006-07
Himanshu Garg, Vs. ITO,
14/22, First Floor, Ward 20(1),
Shakti Nagar, New Delhi.
Assessee By : None
Department By : Shri T. Vasanthan, Sr. DR
Date of Hearing : 29.04.2015
Date of Pronouncement : 30.04.2015
PER R.S. SYAL, AM:
This appeal by the assessee is directed against the order passed by
the CIT(A) on 31.8.2010 in relation to the assessment year 2006-07.
2. We have heard the ld. DR. There is no appearance from the side of
the assessee. One adjournment application was filed, which stands
rejected. As such, we are proceeding to dispose of this appeal ex parte
qua the assessee.
3. First ground of the appeal is against the confirmation of addition of
Rs.50,000/- made u/s 68 of the Income-tax Act, 1961 (hereinafter also
called `the Act') .
4. Succinctly, the assessee claimed to have received a gift of
Rs.50,000/- from one Shri Raj Kumar, which was declared in the books
of account. In the absence of any confirmation from the donor, the AO
treated it as income of the assessee u/s 56(2)(v) of the Act. The assessee
filed application under Rule 46A of the Income-tax Rules, 1962 before
the ld. CIT(A) submitting confirmation of the donor who had passed
away on 24.1.2007. Relationship between the assessee and the donor
was also disclosed, who happened to be brother of the assessee's mother.
In view of this relation, the ld. CIT(A) held that the provisions of
Section 56(2)(v) were not applicable. However, considering the bank
statement of the donor, which, before the credit of Rs.55,000/- prior to
transfer of Rs.50,000/- to the assessee, had a small balance of Rs.429/-
he, confirmed the addition by treating it as unexplained cash credit.
5. It is obvious that the gift was received by the assessee from the
brother of his mother. Merely because the balance in the account of the
donor was less before the transaction, cannot be a reason to treat the gift
as bogus. The Assessing Officer refused to accept the capacity etc. of
the donor without examining him. Since the donor is no more alive,
there cannot be any further investigation in this regard. Considering the
smallness of the amount and the relationship between the donor and the
donee and the further fact that the donor is no more alive, we accept the
genuineness of the gift received by the assessee. Accordingly, this
addition is deleted. This ground is allowed.
6. The second ground is against the confirmation of addition of
Rs.2,04,843/- made by the AO u/s 68 of the Act. The facts apropos this
ground are that the AO noticed cash deposits in the assessee's capital
account maintained with M/s Ganesh Traders totaling to Rs.3,55,000/-.
The AO got convinced to the extent of Rs.1,46,187/-. He, therefore,
made addition for the remaining amount of Rs.2,04,843/-. The
assessee's explanation about the amount received from certain relatives
and other parties, did not persuade the AO. During the course of first
appellate proceedings, the assessee filed confirmations of all the 15
depositors with their Permanent Account Nos. and also copies of their
income-tax returns. The assessee submitted that some of those
documents could not be filed before the AO for want of time. The ld.
CIT(A) called for the remand report. The AO refused to accept the bona
fide of the source of the amount by holding that such confirmations were
expected to be filed before him and not the CIT(A). The ld. first
appellate authority upheld the addition by observing that there was only
remote likelihood of such amounts having been received.
7. Having heard the ld. DR and perused the relevant material on
record, we find from the impugned order that the assessee furnished
confirmations from all the depositors having advanced small amounts
ranging between Rs.17,000/- to Rs.19,500/-. Not only that, the assessee
also filed cash flow statement by which the amount received from these
persons was returned during the year itself. We find that the AO has
simply referred to the cash deposits in the capital account of the assessee
without narrating the amounts withdrawn. Once a particular amount is
received from a person which is credited to the capital account and,
thereafter, amount is returned to such person by showing as withdrawal
in the capital account, it is not permissible to accept the withdrawal
aspect and reject the receipt from such relatives without any further
investigation. Here is a case in which no investigation has been carried
out by the AO to ascertain the veracity of these squared up creditors.
Considering the totality of facts and circumstances of the instant case,
we are satisfied that the assessee sufficiently discharged the onus cast
upon him to prove the genuineness of these credits. This ground is
8. In the result, the appeal is allowed.
The order pronounced in the open court on 30.04.2015.
[C.M. GARG] [R.S. SYAL]
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated, 30th April, 2015.
Copy forwarded to:
4. CIT (A)
5. DR, ITAT
AR, ITAT, NEW DELHI.