Income Tax Appellate Tribunal - Delhi
Pankaj Mahajan, New Delhi vs Department Of Income Tax on 17 June, 2015
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCHES : F : NEW DELHI
BEFORE SHRI R.S. SYAL, AM AND SHRI A.T. VARKEY, JM
ITA No.4085/Del/2012
Assessment Year : 2008-09
ITO, Vs. Pankaj Mahajan,
Ward-37(1), C/o A.C. Gupta & Associates,
New Delhi. 104-105, M.M. House,
Raja Iron Factory Building,
59, Rani Jhansi Road,
New Delhi - 110 055.
PAN: AAFPM2880F
(Appellant) (Respondent)
Assessee By : Shri Anil Gupta, CA
Department By : Shri Vikram Sahay, Sr. DR
Date of Hearing : 17.06.2015
Date of Pronouncement : 18.06.2015
ORDER
PER R.S. SYAL, AM:
This appeal by the Revenue is directed against the order passed by the CIT(A) on 31.5.2012 in relation to the assessment year 2008-09. ITA No.4085/Del/2012
2. The only issue raised here in the appeal through different grounds is against the deletion of addition of Rs.13,01,000/- made by the Assessing Officer (AO).
3. Briefly stated, the facts of the case are that an AIR information was received about the assessee having deposited cash of Rs.13,01,000/- in Oriental Bank of Commerce (OBC), Connaught Place, New Delhi. On being called upon to explain the source of this cash deposit, the assessee stated that he inherited more than Rs.13 lac from his mother Smt. Saroj Gupta, who died on 14.8.2006. He claimed that Smt. Saroj Gupta was a regular income-tax assessee and used to file her income-tax returns. In support of this contention, he filed a copy of her return for the AY 2006- 07; a copy of Will dated 28.2.2006; and a copy of death certificate. On perusal of the Will of Smt. Saroj Gupta, the AO observed that she claimed through this Will to have possessed Moveable assets including Saving bank account in OBC, FDRs in OBC, National Saving Certificate, Shares of limited companies, Cash as 'Istridhan', Gold and diamond jewellery received at the time of her marriage and further as 2 ITA No.4085/Del/2012 purchased from 'Istridhan.' As per this Will, cash (not quantified) was to be given to the assessee and Gold and diamond jewellery to Smt. Shefali Mahajan, wife of the assessee. The AO observed that there was no mention about the amount of cash available with her. On being called upon to furnish evidence of her filing income-tax returns along with Balance sheets and Statement of affairs as on 31.3.2005, 31.3.2006 and 14.8.2006 (date of death), the assessee did not file any Statement of affairs as on 31.3.2005 and 31.3.2006. Copies of Balance sheet of her Proprietorship concerns, namely, M/s Satyam Investments and M/s Mahajan Investments and Financial Services as on 31.3.2005 were filed, which depicted cash balance of Rs.16,706/- and Rs.7,754/-, respectively. Statement of affairs of Smt. Saroj Gupta as on 14.8.2006 filed by the assessee showed that there was no cash in hand as on that date. The AO noticed from the records of Smt. Saroj Gupta submitted by the assessee that there was no mention of any cash balance, whether as 'Istridhan' or otherwise which could have been reflected in the alance sheets of the proprietorship concerns or in the Statement of affairs. The AO noticed that the availability of such cash in hand and other moveable assets with 3 ITA No.4085/Del/2012 Smt. Saroj Gupta attracted the levy of wealth tax as the value of cash and jewellery as claimed by the assessee exceeded Rs.15 lac. Since no Wealth-tax return was filed and there was nothing to show the availability of cash to the extent of Rs.13.01 lac, the AO made addition for this sum as 'Income from undisclosed sources.' The ld. CIT(A) concurred with the submissions advanced on behalf of the assessee and deleted the addition. The Revenue is aggrieved against such deletion of addition.
4. We have heard the rival submissions and have perused the relevant material available on record. The entire controversy rotates around the source of cash of Rs.13.01 lac deposited by the assessee in his bank account, which was claimd to have been received from the estate of Smt. Saroj Gupta, his mother, who passed away on 14.8.2006. From the discussion made above, it is patent that there is no direct evidence of the availability of cash to this extent in her hands. The assessee has claimed it as `Istridhan', which was not reflected anywhere. Now the question arises as to whether the existence of cash to the above extent as 4 ITA No.4085/Del/2012 `Istridhan' can be accepted as genuine in the extant facts. It can be observed from the assessment order that she was proprietor of two concerns, namely, M/s Satyam Investments and M/s Mahajan Investments and Financial Services. She filed her return for the AY 2005-06 declaring total income of Rs.1,42,710/- with the amount of tax liability at Rs.1,242/-, a copy of which is available on page 5 of the paper book. In this return, she claimed to have earned income from the above referred two proprietorship concerns. A perusal of the Profit & Loss Account of M/s Mahajan Investments and Financial Services, a copy of which is available on page 9 of the paper book, indicates gross revenue from operations at Rs.5,050/-. Her capital balance in this concern as on 31.3.2005 stands at Rs.1,14,243/-. Now, we turn to the Profit & Loss Account of M/s Satyam Investments, in which gross income from operations has been shown at Rs.1.73 lac. Balance sheet of this proprietorship concern indicates capital of Smt. Saroj Gupta at Rs.3.56 lac. Here, it is interesting to mention that she has made withdrawals to the tune of Rs.1.52 lac from this concern. Her computation of income for the AY 2006-07 indicates earning of interest 5 ITA No.4085/Del/2012 from bank on saving bank account, on tax saving bonds, on FDRs and on NSCs. It is further important to note that Smt. Saroj Gupta was having some amounts parked in saving bank accounts, FDRs and National Saving Certificates and hence regularly earning interest income therefrom. We fail to comprehend as to how such a wise person, being fully aware of and actually earning interest income by investing funds, can be expected to keep huge cash of Rs.15.06 lac in her almirah for years together.
5. The assessee tried to prove the availability of cash with her to the tune of Rs.13.01 lac by submitting before the ld. CIT(A) that Shri A.C.Gupta, executor of the will of his mother, opened the locker of Almirah kept at the residence in the presence of three witnesses and cash of Rs.15.06 lac was found on such opening of almirah. It is relevant to note that Shri A.C. Gupta, claimed to be the executor of the will of Smt. Saroj Gupta, is none other than father of the assessee and husband of the deceased. Further, what has been claimed to have been opened by him is not a bank locker, but, simply an almirah in the house. Smt. Saroj 6 ITA No.4085/Del/2012 Gupta died on 14.8.2006 and this almirah at the assessee's own home was claimed to have been opened on 12.2.2007, roughly at a gap of around six months and that too in the presence of three witnesses. It is undisputed that the only beneficiaries of the will of Smt. Saroj Gupta happened to be the assessee and his wife. Admittedly, there is no conflicting claim on the will of Smt. Saroj Gupta. In such a situation, we fail to understand the necessity of any so-called executor of the Will, being father of the assessee and the circumstances leading to the opening the almirah at the residence after a gap of around six months from the death of death and that too in the presence of three witnesses. When there were no conflicting claims on the Will of the deceased and the beneficiaries were only the assessee and his wife, it is not understandable as to what prompted the family of the deceased to allegedly open the almirah after six months and that too in the presence of three witnesses. What was the need of witnesses in the absence of any dispute, is beyond our understanding. We find that this is nothing but camouflage. The entire exercise appears to have been shown to have 7 ITA No.4085/Del/2012 been carried out for giving a colour of genuineness to the availability of cash of Rs.15.06 lac from the almirah of the deceased.
6. There is another interesting aspect of the matter. When the AO pointed out the obligation of Smt. Saroj Gupta of filing wealth-tax return in case she had cash and jewellery etc. exceeding Rs.15 lac, the assessee came out with a fantastic explanation that out of Rs.15.06 lac found at the time of death, only a sum of Rs.13.01 lac was available up to the end of the year, that is, 31.3.2006 and the remaining amount was received during the period 1.4.2006 to 14.8.2006, being the date of her death. This was just a futile attempt to thwart the obligation of filing wealth tax return and bearing the consequences for its non-filing.
7. It is further pertinent to mention that Smt. Saroj Gupta, was proprietor of two concerns and we have noticed negligible cash balance in the balance sheets of these two proprietorship concerns which have been placed on record. If she really had lacs of cash in hand, here business would not have been run on such negligible cash balance. 8 ITA No.4085/Del/2012
8. All the above circumstances prove it beyond any shadow of doubt that there was no cash in hand available as 'Istridhan' on the death of Smt. Saroj Gupta that was bequeathed by the assessee to the tune of Rs.13.01 lac. Except for a bald claim of finding cash of Rs.15.06 lac on the sudden opening of the almirah on the death of Smt. Saroj Gupta, there is no evidence about the source of the availability of cash to such a huge extent in her hands. In our considered opinion, the assessee just concocted a story of inheriting cash from his mother after her death.
9. We are reminded of the judgment of the Hon'ble Supreme Court in the case of CIT vs. Durga Prasad More (1971) 82 ITR 540 (SC). In this case, it has been held that self serving recitals cannot be accepted as true unless the assessee proves it. The Hon'ble Supreme Court has held that the AO is entitled to look into surrounding circumstances for finding out reality. Similar view has been reiterated by the Hon'ble Supreme Court in the case of Sumati Dayal vs. CIT (1995) 214 ITR 801 (SC). In this case, the assessee tendered an explanation that she got the amounts from horse races, which was not accepted by the ITO who came to hold that 9 ITA No.4085/Del/2012 the winning tickets were purchased by the assessee after the event. Upholding the view taken by the AO, the Hon'ble Supreme Court held that for considering whether the apparent is real, the matter should be considered by applying the test of human probabilities. Viewed from that angle, the Hon'ble Summit court upheld the view canvassed by the AO that the explanation of the assessee was not genuine. In our considered opinion, the entirety of facts and circumstances prevailing in the instant case do lead to an irresistible conclusion that there was no cash available with Smt. Saroj Gupta at the time of her death and the assessee was not justified in claiming that a sum of Rs.13.01 lac was bequeathed from his mother. We, therefore, overturn the impugned order on this score and restore the opinion of the AO.
10. In the result, the appeal is allowed.
The order pronounced in the open court on 18.06.2015.
Sd/- Sd/- [A.T. VARKEY] [R.S. SYAL] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated, 18th June, 2015. 10 ITA No.4085/Del/2012 dk Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI. 11