Income Tax Appellate Tribunal - Delhi
Jagtar Singh vs Income-Tax Officer on 4 August, 1998
Equivalent citations: [1999]69ITD47(DELHI)
ORDER
I. S. VERMA, J.M.
1. This is an appeal by the assessee against order of the CIT(A)-II, New Delhi dt. 28th August, 1991, wherein the assessee has disputed additions of Rs. 1,44,510 and Rs. 12,415 being the opening capital and receipts by way of gift respectively.
2. We have heard the assessee's counsel as well the learned Departmental Representative. The assessee's counsel submitted that the AO was not justified in considering the amount of opening capital as the assessee's income by invoking the provisions of s. 69A, because there is no evidence on record that the assessee had become the owner of the capital during the financial year relevant to asst. yr. 1988-89. Explaining the provisions of s. 69A the assessee's counsel submitted that the requirements of the section are that first it has to be proved that the assessee had become the owner of any money, bullion, jewellery, or any other valuable article during a particular financial year which is not recorded in the book; and second is that the assessee offers no explanation about the nature and source of the acquisition of such articles or money, bullion, jewellery, or the explanation offered by him is not found to be satisfactory. Referring to pp. 1 to 5 of the assessee's compilation which are the assessee's statement of affairs as on 31st March, 1983, 31st March, 1984, 31st March, 1985, and 31st March, 1986, as also 31st March, 1987, respectively the assessee's counsel submitted that the opening capital as on 1st April, 1987, was the closing balance as on 31st March, 1987, and the same was sum total of accumulation since financial year 1982-83. From this statement of affairs assessee's counsel submitted that in the presence of the assessee's statement of affairs since 1982-83, it cannot be presumed or assumed by the Revenue that the opening capital as on 1st April, 1987, was acquired by the assessee on 1st April, 1987, i.e., during the financial year 1987-88 and unless and until the Revenue brings out some cogent material to prove that the opening capital was acquired or the assessee became the owner of the opening capital only on or after 1st April, 1987, provisions of s. 69A could not be invoked. He further submitted that the Revenue has nowhere disputed the assessee's income by way of interest on loans and deposits as having come out of brought forward capital and in view of this, the Revenue should not have doubted the genuineness of the opening capital or the loans and advances given by the assessee. He further submitted that another requirement of s. 69A is that the fact of ownership should not have been recorded in the books of account, which is not the case here because the assessee has duly shown the opening capital as well as the loans and advances come out of that in his statement of affairs. Concluding in the last, the assessee's counsel submitted that the Revenue should have either accepted the assessee's statement of affairs since 31st March, 1983 or should not have accepted any one of them and in both the eventualities, addition of opening capital could not be made, because if the Revenue accepts the statement of affairs every year, which it was bound to accept under the law, there was no question of addition of opening capital as the assessee's income and in case the Revenue disbelieved the statement of affairs then, it should have disbelieved the statement of affairs as on 31st March, 1988, also and once it was done the Revenue has no evidence of the assessee's ownership any money, jewellery, bullion, etc. He further submitted that simply because the assessee's income became taxable in asst. yr. 1988-89 and the assessee complying with the law of the land, furnished his due return, it was not justified on the part of the Revenue to doubt the genuineness of the brought-forward capital, i.e., opening capital without bringing any evidence to the contrary. He further submitted that similar statement of affairs subsequent to asst. yr. 1989-90 have been accepted by the Revenue to be genuine. In support of his submissions, the learned counsel relied on the decision of Delhi High Court in the case of CIT vs. Om Prakash Mahajan & Sons (1985) 152 ITR 583 (Del).
3. The learned Departmental Representative, on the other hand, submitted that during the previous year relevant to asst. yr. 1988-89 the assessee had claimed to have advanced loans and deposits to the extent of Rs. 1,56,105 and it was the assessee's onus to prove the source of this investment which he failed to do and consequently the addition, if cannot be sustained under s. 69A, has to be sustained under s. 69 of the IT Act.
4. After considering the rival submissions, facts and circumstances of the case and the assessee's statement of affairs, and the case law relied by the assessee's counsel, we are of the opinion that the submission of the learned Departmental Representative that addition should be sustained under s. 69 has no force because the provisions of s. 69 and 69A are quite different in the material respect, and the Revenue cannot support its case on the plea that in the case the addition cannot be sustained under s. 69A, the same should be sustained under s. 69 of the Income-tax Act. On the other hand, we are inclined to agree with the submission of the assessee's counsel that in view of the assessee's statement of affairs available with the Revenue since 1982-83, the genuineness of the brought-forward capital cannot be doubted. Simply because the assessee's income became taxable in this year and the assessee filed the return complying with the provisions of law cannot be a ground to penalise the assessee by not accepting its brought forward capital and that too without bringing any evidence to the contrary. The Revenue's allegation that the assessee stone-walled the investigations also cannot be appreciated because in case the assessee was not furnishing the details required by the AO, he had ample power under the IT Act to make necessary enquiry at his own level and should not have allowed the assessee to escape the liability of proper tax.
5. In view of above facts and circumstances, we are of the opinion that as far as the addition of opening capital is concerned, the same cannot be sustained. However, as far as the addition of Rs. 12,415 is concerned, since the assessee had not furnished any evidence in support of his claim that amount was received as gift, the Revenue authorities were justified in taxing the same because admittedly the assessee became the owner of this amount during the previous year relevant to assessment year under appeal.
6. In the result, we sustain the addition of Rs. 12,415 whereas the addition of Rs. 1,44,510 is deleted.
7. In the result, the assessee's appeal is partly allowed.