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 Attachment on Cash Credit of Assessee under GST Act: Delhi HC directs Bank to Comply Instructions to Vacate
 Income Tax Addition Made Towards Unsubstantiated Share Capital Is Eligible For Section 80-IC Deduction: Delhi High Court

Shri Jignesh V. Chauhan, Room No.28, Ground Floor, Bhim Shroff Chawl, 139/A Bhuleshwar Road, Near Kalbadevi Road, Mumbai 400 002 Vs. ITO 14(2)(4), 3rd Floor, Room No.305, Earnest House, Near Hoechest House, Nariman Point, Mumbai - 400021
December, 08th 2015
                        MUMBAI BENCH "J", MUMBAI


                                  ITA No.357/M/2013
                               Assessment Year: 2009-10

         Shri Jignesh V. Chauhan,             ITO 14(2)(4),
         Room No.28, Ground Floor,            3rd Floor, Room No.305,
         Bhim Shroff Chawl,                   Earnest House,
         139/A Bhuleshwar Road,               Near Hoechest House,
         Near Kalbadevi Road,                 Nariman Point,
         Mumbai ­ 400 002                     Mumbai - 400021
         PAN: AGSPC5171E
               (Appellant)                        (Respondent)

       Present for:
       Assessee by                 : Shri K. Gopal, A.R.
       Revenue by                  : Shri Akhilendra P. Yadav, D.R.

       Date of Hearing             : 06.08.2015
       Date of Pronouncement       : 04.12.2015


Per Sanjay Garg, Judicial Member:

       The present appeal has been preferred by the assessee against the order
dated 03.10.2012 of the Commissioner of Income Tax (Appeals) [hereinafter
referred to as the CIT(A)] relevant to assessment year 2009-10.

2.     The assessee in this case has agitated the confirmation of addition of
Rs.15,21,000/- as undisclosed income under section 69A of the Income Tax
       The brief facts of the case are that the Assessing Officer (hereinafter
referred to as the AO) had received information that the assessee had deposited
cash of Rs.15,21,000/- in his saving bank account. On being asked to explain
the source of the above amounts, the assessee submitted to the AO that he had
received gifts out of natural love and affection from relatives i.e. from
                                         2                              ITA No.357/M/2013
                                                                    Shri Jignesh V. Chauhan

father, wife and three brothers amounting to Rs.12,86,000/- and the remaining
amount     of   Rs.2,35,000/-     was    deposited     out   of    his    own         on
capital/savings/income of the year. The AO observed that all the alleged gifts
were in cash and the donors had not sufficient capacity to give gifts to the
assessee. He therefore rejected the explanation given by the assessee and
added the above amount of Rs.15,21,000/- as unexplained income of the
assessee under section 69A of the Act.

      The Ld. CIT(A) confirmed the additions so made by the AO. The
assessee has, thus, come in appeal before us.

3.    We have heard the rival contentions and have also gone through the
records. It is an admitted fact on the file that all the gifts have been received by
the assessee from his close relatives i.e. father, wife and three brothers. The
gifts are of small amount ranging from Rs.1.95 lakhs to 2.92 lakhs. The
assessee has produced on file the copy of income returns of the donors to show
that the donors were earning income and it cannot be said that they had no
capacity to give gifts of the above stated amounts. The donors have confirmed
that they have gifted the above stated amounts to the assessee. The AO has not
called upon the donors to ask for their source of income. He has merely
presumed that the donors have not sufficient capacity to give the gifts to the
assessee. However, this fact also cannot be ignored that the gifts are of the
small amount ranging from Rs.1.95 lakhs to 2.92 lakhs.            The donors are
assessable to income tax. They have filed the confirmations regarding giving
the gifts to the assessee. The amount of Rs.2.35 thousand which the assessee
has shown as out of his own capital/savings and income for the year under
consideration is also nominal. Under such circumstances, we do not find any
justification on the part of lower authorities in disbelieving the explanation
submitted by the assessee without examining and enquiring or calling upon the
                                              3                             ITA No.357/M/2013
                                                                        Shri Jignesh V. Chauhan

donors. The additions therefore made in this of the assessee are not sustainable
in the eyes of law and the same are accordingly ordered to be deleted.

4.       In the result, the appeal of the assessee is hereby allowed.

                  Order pronounced in the open court on 04.12.2015.

        Sd/-                                                     Sd/-
    (G.S. Pannu)                                            (Sanjay Garg)
ACCOUNTANT MEMBER                                       JUDICIAL MEMBER

Mumbai, Dated: 04.12.2015.
* Kishore, Sr. P.S.

Copy to: The Appellant
        The Respondent
        The CIT, Concerned, Mumbai
        The CIT (A) Concerned, Mumbai
        The DR Concerned Bench
//True Copy//                             [

                                                  By Order

                                 Dy/Asstt. Registrar, ITAT, Mumbai.
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