Income Tax Appellate Tribunal - Chandigarh
Smt. Rinky Gupta, Mohali vs Ito, W-6(2), Mohali on 5 April, 2019
IN THE INCOME TAX APPELLATE TRIBUNAL
CHANDIGARH BENCHES, 'SMC', CHANDIGARH
BEFORE SHRI N.K. SAINI, VICE PRESIDENT
ITA No.1329/Chd/2018
Assessment Year: 2010-11
Smt. Rinky Gupta Vs. The I TO
H.No. 15, Phase -6 Ward-6(2)
Mohali Mohali
PAN No. AL APG0418K
(Appellant) (Respondent)
Assessee By : Sh. Parikshi t Aggarwal,CA
Revenue By : Sh. Manjit Singh,CI T DR
Date of hearing : 19/03/2019
Date of Pr onouncement : 05/04/2019
ORDER
This is an appeal by the Assessee against the order dt. 21/08/2018 of Ld. CIT(A)-2, Chandigarh.
2. In the present appeal Assessee has raised the following grounds:
1. That on the facts, circumstances and legal position of the case, the Worthy CIT(A) in Appeal No. 10121/2/17-18 dated 21.08.2018 has erred in passing that order in contravention of the provisions of S. 250(6) of the Income Tax Act, 1961.
2. That on law, facts and circumstances of the case, the Worthy CIT(A) has erred in partially confirming the action of Ld. AO in making addition of Rs.
3,00,000/- on account alleged unexplained source of funds for investment in purchase of property even when such funds were received as gifts and were from declared sources.
3. That on law, facts and circumstances of the case, the Worthy CIT(A) has erred in confirming the action of Ld. AO in making addition of Rs. 1,50,000/- on account alleged unexplained source of funds for investment in purchase of property even when such investment was made from declared sources of income i.e. Past Savings and Istridhan.
4. That the appellant craves leave for any addition, deletion or amendment in the grounds of appeal on or before the disposal of the same.
3. Grievance of the assessee relates to the sustenance of addition of Rs. 3,00,000/- claimed to be received as gifts and Rs. 1,50,000/- out of the past savings and Istridhan.
4. Facts of the case in brief are that the assessee filed the return of income on 31/03/2011 declaring an income of Rs. 2,04,300/-.
25. The Assessing Officer on the basis of information that the assessee had made investment of Rs. 9,00,000/- in purchase of immovable property initiated the proceedings under section 147 r.w.s 148 of the Income Tax Act, 1961 (hereinafter referred to as 'Act') on 31/03/2017. In response the assessee submitted that the return has already been filed and the same may be treated as filed in response to the notice under section 148 of the Act.
6. During the course of assessment proceedings the Assessing Officer noticed that the assessee had made investments of Rs. 9,45,000/- for purchase of House No. 439/B-2, Shiv Colony, Bitna Road, Pinjore, Tehsil Kalka. He asked the assessee to explain about the source of cash for the purchase of house. In response the assessee submitted that assessee had deposited cash of Rs. 6,00,000/- after receiving cash gifts of Rs. 2,00,000/- each from her Husband, Father, and Father in law and that the remaining investment was made from her past savings. The affidavit of Shri. Shyam Sunder Gupta(Husband of assessee), Sh. Radhey Shyam (Father of the assessee) and Shri Gaya Parsad Gupta (Father in law of the assessee) were furnished wherein it was mentioned that they had given cash of Rs. 2,00,000/- each to the assessee. The Assessing Officer also asked the credit worthiness of all the relatives who had given the cash gifts of Rs. 2,00,000/- each to the assessee. According to the Assessing Officer, no documentary evidence to prove the source of cash gifts was given. As regards to the remaining investments of Rs. 3,50,000/- it was stated that the same was out of the past savings and Istridhan. It was also explained that the assessee was doing stitching work at home and had kept her Istridhan at home which was shown in her returned income for the previous years. The Assessing Officer however accepted only Rs. 2,00,000/- from the past savings & Istridhan and considered the remaining amount of Rs. 7,50,000/- as an investment out of undisclosed sources. Accordingly addition of Rs. 7,50,000/- was made.
7. Being aggrieved the assessee carried the matter to the Ld. CIT(A) and submitted as under :
The assessee had filed return vide Acknowledgement No. 000349 on 02/07/2010 declaring Income of Rs. 2,03,880/- from stitching & Tailoring. The assessee received three Cash Gifts of Rs. 2 Lac each from Father i.e. Sh. Radhey Shyam, Father in law i.e. Sh. Gaya Parsad Gupta and Husband i.e. Sh. Sham Sunder Gupta. Affidavits from donors were furnished to Ld. AO during the course of Assessment Proceedings along with the copies of Return of Income of Sh. Sham Sundar Gupta. Identity and Address Proofs of Donors were also given to Ld. AO. Bank Statement of Sh. Sham Sundar Gupta was also furnished to Ld. AO. Despite these documents, the Ld. AO did not consider the above said documents as Proof of gifts received by the assessee. Source of Cash Gifts were duly explained to the Ld. AO. He considered Rs. 7.50 Lac Investment in Purchase of Property as from undisclosed sources best known to the Assessee. The assessee has been 3 filing Income Tax Return since long Back before the year under consideration, copies of old Income Tax Returns were also submitted to Ld. AO during the course of Assessment Proceedings but Ld. AO also disregarded the same. Addition made is without any basis and devoid of Principles of Natural Justice.
The Ld. AO arbitrary disallowed Credit of Past savings and Istridhan . Amounting to Rs. 1.50 lacs despite the fact that Assessee was having cash in hand. The above facts can be related to the following case law: In the LTAT Chandigarh Bench, Nirmal Rani v. Dy. Commissioner of Income Tax, Ambala City. & ITAT Ahmedabad Bench 'C Deem Roll Tech Ltd. v Deputy Commissioner of Income Tax."
8. The Ld. CIT(A) after considering the submissions of the assessee observed that the Husband of the assessee Sh. Shyam Sunder Gupta is a regular income tax assessee declaring income of Rs. 3,00,000/- per annum and after considering the house hold expenses, possibility of some savings could not be ruled out. He also observed that since no source as in terms of withdrawals from bank account etc. had been proved the claim of gifts of Rs. 2,00,000/- could not be believed in totality. However by considering the annual income of Rs. 3,00,000/- the Ld. CIT(A) accepted the source of Rs. 1,50,000/- as explained and remaining amount of Rs. 50,000/- was treated as unexplained. As regards to the gifts of Rs. 2,00,000/- each from Father and Father in law, the Ld. CIT(A) observed that no document had been provided to explain the credit worthiness of those parties and that the bank account did not have sufficient deposits or withdrawals therefore the claim of the assessee could not have been accepted in totality. According to the Ld. CIT(A) there was possibility of some contribution from Father and Father in law at the time of purchase of the property, he considered Rs. 75,000/- from each of them totaling to Rs. 1,50,000/- as explained and the balance amount of Rs. 2,50,000/- was treated as unexplained. As regards to the contribution of the assessee amounting to Rs. 3,50,000/-, ld. CIT(A)was of the view that the Assessing Officer was fair in treating the amount of Rs. 2,00,000/- as explained and the remaining amount of Rs. 1,50,000/- as unexplained. He accordingly allowed the relief of Rs. 3,00,000/- and sustained the addition of Rs. 4,50,000/-.
9. Now the assessee is in appeal.
10. The Ld. Counsel for the assessee reiterated the submissions made before the authorities below and further submitted that the Husband of the assessee was regularly filing the income tax return declaring the income of Rs. 3,00,000/- so he was in a position to make the gifts of Rs. 2,00,000/- to the assessee. It was further submitted that the Father in law of the assessee furnished the affidavit 4 stating therein that he had given gifts of Rs. 2,00,000/- to his Daughter in law from his past savings, reference was made to page no. 14 to 17 of the asessee's paper book. He also referred to page no. 17 of the assessee's compilation which is the copy of the bank account issued by Punjab National Bank wherein it has been mentioned that the said person Shri Gaya Parsad Gupta (Father in law of the assessee) was having effective available balance of Rs. 4,46,405.59. It was further submitted that the Father of the assessee Sh. Radhey Shyam Gupta had also given an affidavit for giving the cash gifts of Rs. 2,00,000/- to the assessee out of his past savings. It was contended that Father and Father in law of the assessee helped the assessee for the purchase of house and gave cash gifts from out of their past savings. It was also stated that the assessee was regularly showing her income from stitching work which had not been doubted, therefore there was no reason to disbelieve her past savings amounting to Rs. 3,50,000/-.
11. In his rival submissions the Ld. CIT(A) strongly supported the orders of the authorities below.
12. I have considered the submissions of both the parties and perused the material available on the record. In the present case it is an admitted fact that the Husband of the assessee was assessed to tax and had shown income of Rs. 3,00,000/- per annum therefore the cash gifts of Rs. 2,00,000/- cannot be doubted. In that view of the matter the addition of Rs. 50,000/- sustained by the Ld. CIT(A) out of the cash gifts of Rs. 2,00,000/- received from the Husband by the assessee is deleted.
13. As regards to the addition of Rs. 1,50,000/- out of the contribution by the assessee from her past savings and Istridhan amounting to Rs. 3,50,000/- is concerned, it is noticed that the Assessing Officer has not doubted this contention of the assessee that she was earning income from stitching work and was filing her return of income regularly. Therefore the addition made by the Assessing Officer and sustained by the Ld. CIT(A) for Rs. 2,00,000/- was also not justified. Accordingly the same is deleted.
14. As regards to the balance amount of Rs. 2,50,000/- is concerned it is noticed that the Ld. CIT(A) accepted past savings of the Father as well as Father in law of the assessee at Rs. 75,000/- each. In my opinion the said amount appears to be on lower side. Therefore to meet the ends of justice it will be fair 5 and reasonable to consider the past savings of the Father as well as Father in law of the assessee for making gifts, at Rs. 1,00,000/- each instead of Rs. 75,000/- each considered by the Ld. CIT(A) therefore the addition is sustained to the extent of Rs. 2,00,000/- instead of Rs. 2,50,000/- considered by the Ld. CIT(A) out of the gifts received from the Father and Father in law. In view of the above discussion the assessee will get a total relief of Rs. 2,50,000/- i.e; (Rs. 50,000/- + Rs. 1,50,000/- + Rs. 50,000/-).
16. In the result appeal of the assessee is partly allowed.
(Order pronounced in the open Court on 05/04/2019 ) Sd/-
(N.K. SAINI) VICE PRESIDENT Place: Chandigarh Dated : 05/04/2019 AG Copy to: The Appellant, The Respondent, The CIT, The CIT(A), The DR