Income Tax Appellate Tribunal - Kolkata
Indrachand Agarwal, Siliguri vs Department Of Income Tax on 18 April, 2013
आयकर अपीलीय अधीकरण, Ûयायपीठ - "C" कोलकाता,
IN THE INCOME TAX APPELLATE TRIBUNAL "C" BENCH: KOLKATA
(सम¢)Before ौी के. के. गूƯा, लेखा सदःय एवं/and ौी महावीर िसंह, Ûयायीक सदःय)
[Before Shri K. K. Gupta, AM & Shri Mahavir Singh, JM]
आयकर अपील संÉया / I.T.A No. 1027/Kol/2010
िनधॉरण वषॅ/Assessment Year: 2006-07
Indra Chand Agarwal Vs. Addl. Commissioner of Income-tax
(PAN: ACCPA8179Q) Range-1, Siliguri.
(अपीलाथȸ/Appellant) (ू×यथȸ/Respondent)
&
आयकर अपील संÉया / I.T.A No. 1380/Kol/2010
िनधॉरण वषॅ/Assessment Year: 2006-07
Deputy Commissioner of Income-tax, Vs. Indra Chand Agarwal
Circle-I, Siliguri.
(अपीलाथȸ/Appellant) (ू×यथȸ/Respondent)
Date of hearing: 18.04.2013
Date of pronouncement: 14.05.2013
For the Assessee : Shri S. K. Tulsiyan, Advocate
For the Revenue : Shri L. K. S. Dehiya, CIT(DR) &
Shri K. N. Jana, Sr. DR
आदे श/ORDER
Per Shri Mahavir Singh, JM:
Both these cross appeals by assessee and revenue are arising out of order of CIT(A), Siliguri in Appeal No. 86/CIT(A)/Slg/08-09 dated 16.03.2010. Assessment was framed by Addl.CIT, Range-1, Siliguri u/s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as "the Act") for Assessment Year 2006-07 vide his order dated 30.12.2008.
2. First we take up ITA No. 1027/K/2010. The only issue in this appeal of assessee is against the order of CIT(A) confirming the action of AO in treating the unsecured loan of Rs.13.25 lakh from Shri Subhash Chandra Gautam and Rs. 1 lakh from Shri Sushil Kr. Sad as unexplained as the assessee failed to produce loan creditors. For this, assessee has raised following grounds:
"1.1. That the Ld. Assessing Officer and the CIT(A) erred in holding that the loan of Rs.13,25,000/- from Shri Subhash Chandra Gautam was not proved on account of non- productíon of the loan creditor.2 ITA No.1027/K/2010 & 1380/K/2010
Shri Indra Chand Agarwal, AY: 2006-07 1.2. That the Ld. CIT(A) failed to appreciate the factual matrix of the case as appearing at page 5, para 3 to his order while holding that the loan credit from Shri Subhash Chandra Gautam remained unexplained.
1.3. That the Ld. CT(A) further erred in holding that the appellant failed to prove identity and credit-worthiness of the credítor and establish the genuineness of loan. 2.1. That the Ld. Assessing Officer and the CIT(A) erred in holding that the loan of Rs.1,00,000/- from Shri Sushil Kr. Sad was not proved on account of non-production of the loan creditor.
2.2. That the Ld. CIT(A) failed to appreciate the factual matrix of the case as appearing at page 5, para 4 to his order while holding that the loan credit from Shri Sushil Kumar Sad remained unexplained.
2.3. That the Ld. CIT(A) erred in holding that the appellant failed to prove identity and credit-worthiness of the creditor and establish the genuineness of loan.."
3. Brief facts leading to the above issue are that the AO during the course of assessment proceedings noticed that the assessee received unsecured loan from Shri Subhash Chandra Gautam of Rs.13.25 lakh and from Shri S. K. Sad of Rs.1 lakh. The assessee filed copies of Balance Sheet, bank statement, confirmation and I. T. returns to support these two cash creditors. The AO after examination of bank statement found that the creditor Shri S. K. Sad has deposited a sum of Rs. 1 lakh immediately before the date of payment of this loan to assessee. The AO required the assessee to produce the cash creditor to prove his identity and creditworthiness. Further, on examination of Balance Sheet of Shri Subhash Chandra Gautam, the AO observed that he took loan from two person viz., Smt. Pushpa Devi Sharma and Shri Mukesh Kr. Gautam and in turn gave loan to assessee. As the assessee failed to produce these two cash creditors before the AO, he treated these cash creditors as unexplained and added in the hands of the assessee. Aggrieved, assessee preferred appeal before CIT(A), who confirmed the action of AO by giving following finding:
"I have carefully considered the submission of the Ld AR and also perused the assessment order. It is fact that the Assessee could not produce the creditors before the AO and also failed to furnish any reason for such non-production. At the appellate stage also no explanation could be given. Mere filing of particulars of the cash-creditor is not enough. There is no record to establish that the assessee had furnished the bank statement if Shri Goutam before the AO. No explanation regarding the availability of huge fund with him for the loan was given before the AO. At this stage, the same cannot be admitted as evidence. The source of the cash deposited in the bank account of Shri Sad was not explained before the AO.
From all respect. it is held that the assessee had failed to discharge the legal obligation. The Courts held that if the assessee offers an explanation about the cash credit, the AO can ask the assessee to prove his explanation and if the assessee fails to tender evidence or burkes an enquiry, then the Assessing Officer is justified in rejecting the explanation and holding that the income is from undisclosed source. The AO is not required to specify, or prove what that source is, which from the nature of the case must be known on1y to the assessee, as held in Seth Kalekhan Md Hanif vs CIT (1963) 50 ITR l (SC).3 ITA No.1027/K/2010 & 1380/K/2010
Shri Indra Chand Agarwal, AY: 2006-07 It is necessary for the assessee to prove prima-facie the transactions genuine with identity of the creditor, his capacity and the transaction. Only after these three things proved prirna-facie, only then the burden shifts on the department. Merely establishing the identity of the creditor is not enough [ref. Shankar Industries vs CIT (1978) 114 ITR 689 (Cal); Prakash Textile Agency vs CIT (1980) 121 ITR 890 (Cal). In the case of CIT vs Baishnav Charan Mahanti (1995) 212 ITR 199 (Ori), it was held that only when three conditions fulfilled by the assessee then the burden shifts to the department. But in this case, the assessee failed to prove the identity of the creditors and their creditworthiness. Therefore, the burden never shifted to the department. It is also held that mere filing the Income tax file numbers of the creditors is not enough. Their identity and creditworthiness should be proved and there should be genuine transactions as held in CIT vs Korley Trading Co Ltd (1998) 232 ITR 820 (Cal).
Thus. I am the opinion that AO has rightly concluded that the assessee failed to establish the genuineness of the loans. The observation made by the ITAT Kolkata in the cases of Smt Kalpana Ghosh vs ITO (supra) applies to this case. In that case, the identity of the donors were established and gift amount was given by Bank cheque but the source of the bank deposit remain unexplained. The assessee failed to produce any evidence regarding amount deposited in cash in their bank accounts to the effect that these were their business receipts despite opportunity was provided and the ITAT found that the creditworthíness the donors have rightly been disbelieved by the AO. The Hon'ble ITAT held that whether the donors were capable to make gift, is more important. In view of the above discussion, the addition made by the Ld AO is confirmed."
Aggrieved, now assessee is in appeal before us.
4. We have heard rival submissions and gone through facts and circumstances of the case. We find that the assessee has produced complete assessment particulars, balance sheets, bank statement and also confirmations. It is a fact that assessee could not produce the cash creditors before the AO. In such circumstances, whether the cash creditors can be treated as unexplained in the absence of production before the AO. In such circumstances, the Ld. counsel for the assessee relied on various case laws and one pertinent case law of Hon'ble Calcutta High Court in the case of CIT Vs. M/s. Dataware Private Limited, ITAT No.263 of 2011, GA No.2856 of 2011 dated 21.09.2011, wherein Hon'ble High Court has observed as under:
"In our opinion, in such circumstances, the Assessing officer of the assessee cannot take the burden of assessing the profit and loss account of the creditor when admittedly the creditor himself is an income tax assessee. After getting the PAN number and getting the information that the creditor is assessed under the Act, the Assessing officer should enquire from the Assessing Officer of the creditor as to the genuineness of the transaction and whether such transaction has been accepted by the Assessing officer of the creditor but instead of adopting such course, the Assessing officer himself could not enter into the return of the creditor and brand the same as unworthy of credence.
So long it is not established that the return submitted by the creditor has been rejected by its Assessing Officer, the Assessing officer of the assessee is bound to accept the same as genuine when the identity of the creditor and the genuineness of transaction through account payee cheque has been established.
We find that both the Commissioner of Income Tax (Appeal) and the Tribunal below followed the well-accepted principle which are required to be followed in considering the 4 ITA No.1027/K/2010 & 1380/K/2010 Shri Indra Chand Agarwal, AY: 2006-07 effect of Section 68 of the Act and we thus find no reason to interfere with the concurrent findings of fact recorded by both the authorities.
The appeal is thus devoid of any substance and is summarily dismissed."
7. We find that in the present case also the assessee has discharged its onus by filing confirmations from the donors, copies of acknowledgment of returns of the relevant assessment year, copies of PAN card, copies of bank statements and also contra confirmation. Once this is the position and none of the authorities below have gone into the details and not doubted the genuineness of the transaction or the creditworthiness of these creditors, in our view, now nothing before us remains after the decision of Hon'ble Calcutta High Court in the case of M/s. Dataware Private Limited (supra). Respectfully following the said decision in the case of M/s. Dataware Private Limited (supra), we are of the view that in the absence of any enquiry from the AO of the creditors, the AO cannot make the addition in the hands of the assessee by treating the loans received by assessee as unexplained. We delete the same and allow the appeal of assessee.
5. Now, coming to ITA No. 1480/Kol/2010. The first issue in this appeal of revenue is against the order of CIT(A) deleting the addition of Rs.1.56 lakhs added by AO as undisclosed receipts. For this, revenue has raised following ground nos.1 and 5:
"1. That on the fact and in the circumstances of the case, Ld. CIT(A) has erred in deleting the addition of Rs.1,56,000/- on account of receipts from ICICI Bank without considering the fact that the assessee has not disclosed the contractual receipts of Rs.1,56,000/- in his return of income, whereas, he had claimed the credit of the TDS on the said contractual receipts.
5. That on the fact and in the circumstances of the case the Ld. CIT(A) has wrongly deleted the above said addition without considering the fact that the TDS certificates u/s. 194I were issued by the SBI in the name of the assessee."
6. We have heard rival submissions and gone through facts and circumstances of the case. Briefly stated facts of the case are that during the assessment proceedings AO noticed that the assessee received a sum of Rs.1,56,200/- from ICICI Bank on account of contract receipt and ICICI Bank has deducted TDS on the same and assessee also claimed the same but these receipts are not disclosed. As the assessee could not furnish any explanation with regard to these contract receipts, he added the same as income of the assessee from contract business. Aggrieved, assessee preferred appeal before CIT(A), who deleted the addition after considering the submissions and documents filed before him. Aggrieved, revenue is now in appeal before us.
5 ITA No.1027/K/2010 & 1380/K/2010Shri Indra Chand Agarwal, AY: 2006-07
7. We find that the assessee is a co-owner in the building SKY STAR (SS). These co- owners entered into several lease agreements with various companies for letting out the property on rent and service charges. These rent and service charges were paid by the companies proportionately to the co-owners. Taxes on the same were also deducted at source and TDS certificates were issued in the name of respective co-owners. The assessee before us explained that the sum of Rs.1,56,200/- being a contractual receipt i.e. service charges received from ICICI Bank vide lease agreement with ICICI Bank dated 20.02.2003, 16.10.2003 and 21.02.2003. The assessee filed complete reconciliation and details of rent and service charges received from ICICI Bank. This sum of Rs.1,56,200/- is included in the business income of the Assessee and also TDS was claimed. In such circumstances, we feel that the CIT(A) has rightly deleted the addition and we confirm the same. This issue of revenue's appeal is dismissed.
8. The next issue in this appeal of revenue is against the order of CIT(A) in deleting the addition made by AO on account bogus gift of immovable property. For this, revenue has raised following ground nos. 2, 3, 4 and 6:
"2. That on the fact and in circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs. 14,70,34,400/- on account of bogus gift of immovable property (multi storied building) without considering the fact that the creditworthiness of the alleged gift donors is very much poor in comparison to the assessee.
3. That on the fact and in the circumstances of the case the Ld. CIT(A) is not justified in deleting the addition of Rs. 14,70,34,400/- on account of bogus gift of immovable property multi storied buìlding ) without considering the fact that the Municipality mutation of the building was in the name of the assessee and others, there was no partitíon of the property among the co-owners.
4. That on the fact and in the circumstances of the case the Ld. CIT(A) is not justified ìn deleting the addition wìthout considering the fact that the share of each co-owners was not marked or identified.
6. That on the fact and in the circumstances of the case the Ld. CIT(A) has wrongly concluded that the addition made u/s 69B based on the value adopted by the Stamp Valuation Authority and A.O. had applied the provisions of section 50C of the IT Act without considering the fact that there was no valid gift in this gift in this case and it was a case of relinquishment of right with adequate consideration and the amount of consideration was determined at market value on the basis of the valuation of the properties as determined by the register."
9. Briefly stated facts are that the assessee is co-owner of the building (SS). This (SS) building i.e. 7 storied with floor area of 129802 sft. constructed on 1 bigha 11 cottahs of land was purchased in 1984 and construction was completed in 1985-86, which was paid by 8 co- owners including the assessee. This building was leased out vide several lease agreements with various companies for letting out the property on rent and service charges. The rent and service charges were paid by these companies proportionately to the co-owners. Taxes on the same 6 ITA No.1027/K/2010 & 1380/K/2010 Shri Indra Chand Agarwal, AY: 2006-07 were deducted at source and TDS certificates on the same were also issued in the name of 8 co- owners, who are as under:
"i) Shri Indra Chand Agarwal
ii) Smt. Benarashi Devi Agarwal
iii) Shri Kishore Kr. Agarwala
iv) Smt. Sulochana Devi Agarwala
v) Shri Anil Kr. Agarwala
vi) Shri Anand Kr. Agarwala
vii) Shri Prakash Chand Agarwala
viii) Shri Narayan Prasad Agarwala"
Out of the above co-owners, mother Smt. Benarashi Devi Agarwala and three brothers of the assessee namely, Shri Kishore Kr. Agarwala, Shri Narayan Prasad Agarwala and Shri Prakash Chand Agarwala made gift of their undivided share in this house property (SS) unto assessee out of natural love and affection vide separate gift deeds duly registered on 08.08.2005. The assessee disclosed these gifts received in the capital account filed along with the return of income by increasing the capital. During the course of assessment proceedings, the AO required the assessee to explain how it was possible that four co-owners decided to relinquish their rights in the above said property to the assessee by making gifts, more so, when the property was undivided and the share of each co-owner is not determined. He also alleged that assessee's Balance Sheet as on 31.03.2006 reveals capital of more than Rs. 1 cr., whereas donor's Balance Sheets reveals a minimal capital. The assessee explained before the AO that the donors were close blood relations being mother and brothers, who by swearing affidavits confirming the gifts having been made to the assessee out of natural love and affection. These gifts were duly registered by separate deed of gifts registered on 08.08.2005. The assessee and four donors are assessed to tax and gifts were duly incorporated in the respective accounts. It was also explained by the assessee before the AO that the donors have gifted their rights over 1/8th share of each of the co-owners i.e. undivided share of house property. The assessee also explained that circle rates or stamp duty rates has nothing to do with the valuation of gift of immovable property because in any eventuality, the property is gifted and not sold by them on a consideration. As such, valuation does not change the substance of gift.
10. Finally AO was of the view that "While the deeds were registered, the market value of the properties have been determined by the Registrar at Rs 3,67,58,600/- in respect of each undivided l/8th share of the immovable property, Sky Star Building and Rs. 17,71,000/- in respect of each of the two flats. Now the question is why all the four persons made the said gifts to one and only Sri Indra Chand Agarwal. All of them are having family of their own. They 7 ITA No.1027/K/2010 & 1380/K/2010 Shri Indra Chand Agarwal, AY: 2006-07 have small children to look after. None of these donors have any resìdential properties. All the donors spent huge amount of money for purchase of land and construction of the multi storeyed building thereon. They were receiving good amount of rent amounting to Rs.10,00,000/- approximately per year from the said property. All on a sudden why they took decision to make gift of their such valuable property to the assessee. Neither the assessee nor the donors could have answered these questions.
The property in question was mutated in the name of Indra Chand Agarwal and others. The names of the donors are not recorded in the register of Municipality. There was no partition deed amongst the co-owners and the portion of each co-owner was not marked and identified. All of them are jointly owner of the property. Accordingly none of the co-owners have any title separately in the said property. Unless their shares are determinate and identified, how they can make the gift, possession of which portion passes away to the donee. So, the transactions made by the donors cannot be treated as a valid gift.
It was held by the Hon'ble Supreme Court in the case of Thamma Venkat Subbamma Thamma Rattamma, AIR 1987 SC 1775, "There is a long catena of decisions holding that a gift by a coparcener of his undivided interest in the coparceners property is void. It is not necessary to refer all these decisions. Instead, we may refer to the following statement of law in Maynes Hindu Law, Eleventh Edition, Art. 382;
'It is now equally well settled in all the provinces that a gift or device by a coparcener in a Mitakshara family of his undivided interest is wholly invalid. A coparcener cannot make a gift of his undivided interest in the family property, movable or immovable, either to a stranger or to a relative except for purposes warranted by special texts',"
The same view was also taken by the Hon'ble M.P High Court in the case of Balchand Malaiya (HUF) vs. C.I.T, 227 ITR 651.
From the observations as quoted above, it is clear that a gift by a coparcener of his undivided interest in the coparcener property is void. The reason as to why a coparcener is not entitled to alienate his undivided interest in the coparceners property by way of gift is that an individual member of the joint Hindu family has no definite share in the coparcener property.
The assessee's case fully identical to the citation referred to above. Undivided 1/8th share in the property in the names of the donors have not been specified and determinate. Accordingly, the donors cannot make the alleged gifts, when they have the title and definite share in their own name. hence, the alleged gifts are treated as void.
8 ITA No.1027/K/2010 & 1380/K/2010Shri Indra Chand Agarwal, AY: 2006-07 On the contrary, since the transactions have taken place between the assessee and his four relatives, this can be treated as relinquishment of their rights in the undivided property. This is nothing but a transfer with adequate consideration. Since the market value of the properties have been determined by the Registrar at Rs 3,67,58,600/-, it is inferred that the assessee has paid the said sum of Rs 3,67,58,600/- each to all the four persons to acquire their right in the undivided property. This is nothing but undisclosed investments in the hands of the assessee which is covered by Section 69B of the I.T. Act. Accordingly, the total undisclosed investments made by the assessee comes to Rs 14,70,34,400/- ( Rs 3,67,58,600/-X4) which is added to the total income of the assessee u/s 69B of the I.T. Act."
Aggrieved, assessee preferred appeal before CIT(A).
11. CIT(A) deleted the addition made by AO by observing as under:
"I have carefully considered the submission of the Ld AR and also perused the assessment order. On going through various documents submitted by the AR, it appears that the land on which the building who has been constructed was purchased by virtue of separate deeds by the 8 co-owners. The income earned by them has also been shown separately in their Income-tax Return. Though the 1/8th share of each co-owner has been defined but the floor area of the building has not been marked or defined. On the other hand, the Ld AO has equated the term coparcener with co-owner of a property. The ratio laid down in two decisions cited by the Ld AO relates to the gift of HUF property, not to any joint ownership property. Therefore, thìs decision cannot be applied in case of the assessee.
Even if, it is considered that the gift made by the four co-owners was not valid and it was a void gift, that cannot affect the taxability in the hands of the assessee. The Ld AO did not make any attempt to bring any material on record or to establish that any consideration was paid by the assessee for acquiring the property of those four co- owners. If, it is a relinquishment of right in favour of the assessee in case of those four co-owners, same has to be considered in their cases to compute the capital gain for such transfer.
For application of the provisions of Sec.69B of the Act, the AO has held that there was no valid gift in this case and it was a case of relinquishment of right with adequate consideration and to determine the amount of consideration, the Ld AO has applied the provisions of Sec.50C of the Act. The Ld AO relied on the value of the property adopted by the Stamp Valuation Authority for the purpose of Registration as investment made by the assessee. The valuation adopted by SVA is applicable for the purpose of Capìtal Gain, as prescribed u/s.50C of the Act which has very limited purpose. This legal fiction has been created for computation of Capital Gain only in case of the seller of any asset. The same cannot be extended ìn ease of the purchaser to estimate the undisclosed investment. The decisions in cases of CIT vs Mother India Refrigeration Industries P Ltd ( l985) 48 CTR (SC) 176 and CIT vs Amarchand N. Shroff (l 963) 48 ITR 59 (SC) are applicable ìn this case.
Secondly. there is no evidence on record to establish that there was any underhand dealing in case of this transfer. No enquiry was conducted by the Ld AO in the instant case. Therefore, the action of the AO amounts only to act on surmise. While making assessment. there is no scope of any suspicion and surmise.9 ITA No.1027/K/2010 & 1380/K/2010
Shri Indra Chand Agarwal, AY: 2006-07 Thirdly, in a number of cases different Courts held that the provisions of Sec.50C are applicable only in the case of a seller and the rate determined by the Stamp Valuation authority cannot be applied as the investment made by the purchasers (Ref. ITO vs Optec Disc Manufacturing (2008) l I DTR (Chd) (Trib) 264; ITO vs Satya Narayan Agarwal (2007) 112 TTJ (Jd) 717. In view of the aforesaid legal positìon and fact of the case, ìt is held that the decision cited by the ld AO cannot be applied in this case. The ITAT, Kolkata in the case of DCIT vs Dr. R K Agarwal in [ITAT (SS) A No. 30/Kol/2009] has taken similar view. Therefore, the additìon made u/s.69B based on the value adopted by the SVA cannot be sustained. The addition of the AO, is deleted."
Aggrieved, now revenue is in appeal before us.
12. We have heard rival submissions and gone through facts and circumstances of the case. We find that the admitted facts are that the (SS) Building was owned by 8 co-owners and that also undivided share having floor area of 1,29,802 sft. i.e. 6+1 storied, acquired in 1984 to 1986. The cost, of construction as well as purchase of land, was paid by 8 co-owners including assessee. It is also a fact that various companies entered into several lease agreements with assessee including co-owners of building for letting out the property on rent and service charges. It is also a fact that rent and service charges were paid by these companies proportionately to the co-owners. Taxes were deducted i.e. TDS and TDS certificates were issued in the names of 8 co-owners separately. This rental income and service charges are assessed to income tax from last about 15/20 years and there is no dispute about it. During the year under consideration, out of 8 co-owners, the 4 co-owners namely, mother of the assessee Smt. Benarashi Devi Agarwal and three brothers namely Shri Kishore Kr. Agarwala, Shri Narayan Prasad Agarwala and Shri Prakash Chand Agarwala made gift of their undivided share in the above house property, the (SS) Building, out of natural love and affection to the assessee vide separate gift deeds duly registered with Sub-registrar on 08.08.2005. This (SS) Building was purchased and constructed in 1984 to 1986 and there is no dispute about sources. About the ownership of these 8 co-owners there is no dispute that they are having 1/8th share each in the above building. These 4 co-owners, blood relations with the assessee, have gifted their undivided share i.e. 1/8th share each to the assessee. It means the requirement of gift i.e. (i) it is between relations within the meaning of definition of relatives, (ii) all donors are assessed to income tax and gifts are by way of gift deed registered with Sub-registrar on 08.08.2005 i.e. separate gift deeds of 1/8th undivided share of each of 4 co-owners, (iii) gift is disclosed by donors in their return of income by reducing the capital account and by donee by including in his capital account. The gift is made on account of their love and affection. The source of gift in the hands of donor is explained. It means that all the ingredients of gift has been explained and met with. The only issue raised by AO and by CIT, DR that the undivided share cannot be gifted. For this, he referred to the decision of Hon'ble Supreme Court in the case of Thamma 10 ITA No.1027/K/2010 & 1380/K/2010 Shri Indra Chand Agarwal, AY: 2006-07 Venkat Subbamma Thamma Rattamma, AIR 1987 SC 1775, wherein it is stated that the undivided interest in the coparceners property i.e. HUF property cannot be transferred by way of gift. Further, the Ld. CIT, DR as well as the AO referred to the decision of Hon'ble M. P. High Court in the case of Balchand Malaiya (HUF) Vs. CIT 227 ITR 651 (as referred in AO's order). We find that even in the case before Hon'ble M. P. High Court, the issue was alienation of undivided interest in the coparcener property by way of gift because in the Joint Hindu Family property the individual has no definite share. From the above two citations referred by Ld. CIT, DR, it is clear that both cases pertain to the coparceners property and that also interest in the property not undivided share. It can happen that the coparceners property the undivided interest cannot be determinate but in the case of undivided property of co-owners i.e. of individuals, has a definite share as in the present case that each of the co-owners is having 1/8th share and that share is being assessed to income tax separately. In the case of coparceners, only one assessment of HUF is carried out and not of coparceners because coparceners are not having definite undivided interest in that movable or immovable property. In such circumstances, we are of the view that the CIT(A) has rightly deleted the addition made by AO u/s. 69 of the Act qua this gift. Further, Ld. CIT(DR) heavily relied on the decision of Hon'ble Supreme Court in the case of Sumati Dayal Vs. CIT (1985) 214 ITR 801 (SC) and also CIT Vs. Durgaprasad More (1971) 82 ITR 540 (SC), wherein Hon'ble Supreme Court has considered the issue that apparent must be considered real until it is shown that there are reason to disbelieve that the apparent is not the real and that the taxing authorities are entitled to look into the surrounding circumstances to find out the reality and the matter has to be considered by applying the test of human probabilities. There is no dispute about the proposition laid down by the Hon'ble Supreme Court in the above two case laws but in the present case what is apparent is real because the assessee's brothers and mother have gifted their 1/8th undivided share in the above building Sky Star. The apparent is not the real, the burden of proof is on the department. We are of the view that the burden of showing that the apparent state of affairs was not the real one, very heavy burden lies on the department. In the facts and circumstances of the instant case, apart from circumstances which by themselves could be said to be neutral, there was no material to doubt the nature of the transaction and to hold that the same was income of the assessee. Every gift made or in regard to which no quid pro quo has been made in the absence of the same automatically the income from transaction cannot be made as income of the assessee u/s. 69 of the Act. Without tangible material to suspect that the gift made by the relatives or without recording any finding or evidence the conclusion reached by the CIT(A) needs to be upheld. Even otherwise, the explanations offered by the assessee has 11 ITA No.1027/K/2010 & 1380/K/2010 Shri Indra Chand Agarwal, AY: 2006-07 not been rejected by revenue and in such circumstances, this issue of revenue's appeal is dismissed.
13. In the result, appeal of assessee is allowed and that of revenue is dismissed.
14. Order pronounced in the open court on 14.05.2013 Sd/- Sd/-
के . के . गूƯा, लेखा सदःय महावीर िसंह, Ûयायीक सदःय
(K. K. Gupta) (Mahavir Singh)
Accountant Member Judicial Member
तारȣख)
तारȣख) Dated:
(तारȣख 14th May, 2013
वǐरƵ िनǔज सिचव Jd.(Sr.P.S.)
12 ITA No.1027/K/2010 & 1380/K/2010
Shri Indra Chand Agarwal, AY: 2006-07
आदे श कȧ ूितिलǒप अमेǒषतः- Copy of the order forwarded to:
1. अपीलाथȸ/APPELLANT - Shri Indra Chand Agarwal, Sevoke Road, Siliguri 2 ू×यथȸ/ Respondent - Addl. CIT, Range-1, Siliguri/DCIT, Circle-1, Siliguri
3. आयकर किमशनर (अपील)/ The CIT(A), Siliguri
4. आयकर किमशनर/ CIT Siliguri
5. ǒवभािगय ूितनीधी / DR, Kolkata Benches, Kolkata स×याǒपत ूित/True Copy, आदे शानुसार/ By order, सहायक पंजीकार/Asstt. Registrar.