Income Tax Appellate Tribunal - Mumbai
Bholaram Malviya, Mumbai vs Ito 16(1)(1), Mumbai on 5 February, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCHES "SMC", MUMBAI
Before Shri Shamim Yahya, Accountant Member
ITA No.2933/MUM/2017
Assessment Year : 2012-13
Bholaram Malviya, ITO 16(1)(1)
Embassy 15X Flat No.605, Mumbai
Near Xulfa Dairy, Shastri Nagar, Vs.
Lokhandwala, Andheri (West)
Mumbai 400 053
PAN AAMPM7312D
(Appellant) Respondent)
Appellant By : Shri Neeraj Mangla
Respondent By : Ms N Hemalatha
Date of Hearing :09.11.2017 Date of Pronouncement : 05.02.2018
ORDER
This is an appeal by the assessee directed against order of learned CIT(A)-4, Mumbai, dated 15.03.2016 and pertains to assessment year 2012-13.
2. The issue raised is that CIT(A) erred in upholding the addition of Rs. 36,25,000/- being unidentified deposit in the bank account claimed to be gifts from the relatives.
3. The assessee has also raised additional grounds which read as under:
"1. That the additions of Rs 36,25,000/- made vide order passed u/s. 143(3) of the Income Tax Act, 1961, on 28.01.2015 by the Assessing Officer, is perverse to the facts of the case because of making additions only on the basis of an AIR report alleging that cash amounting to Rs 51,00,000/- was deposited in the bank account of the appellant whereas cash aggregating to Rs 41,50,000/- only was deposited in the bank accounts."2
ITA No2933/Mum/2017 Bholaram Malviya
4. I have heard both the counsel and perused the records.
5. As regards the addition ground, I find the same pleads that there are double entries in the bank account which has led to the increase in unidentified bank deposits by Rs. 9, 50, 000/-
6. I find that there is no basis for such averment. What's the basis of assessee submission that one entry has been made twice in the bank account has not been explained. Furthermore, I find that assessee had tried to explain the unidentified bank deposit as gifts from relatives. Now after the same has not been accepted by the authorities below, assessee has come up with an explanation that there are double entries of deposits in bank account without any basis. Accordingly, I do not find any substance in the submission of the assessee. Hence, the additional ground stands dismissed.
7. As regards the merits of the case the Assessing Officer has mentioned in Para 4 of the assessment order that the assessee has deposited cash of Rs.51 lacs in HDFC Bank and Saraswat Co-op. Bank. Therefore, the AR of the assessee was asked on 13.10.2014 to explain the source of such cash deposits and reconcile it with return of income. In reply dated 26.12.2014, the AR of the assessee has submitted that out of Rs.51 lacs deposit, an amount of Rs.36,25,000/- is from relatives who had given cash gift. During the year, the assessee has purchased 2 Flats No.713 & 714 in Raheja Crest-ll, Andheri(W), Mumbai. The explanation of the assessee has not been found satisfactory by the Assessing Officer on the ground that assessee is not able to prove the creditworthiness and identity of such donor. Most of the relative do not file any return of income. These cash deposits have been made suddenly in the month of May & November, whereas, the last payment made 3 ITA No2933/Mum/2017 Bholaram Malviya for the purchase of Flat is on 22.10.2011. Thus, the Assessing Officer has held that an amount of Rs.36,25,000/- is the assessee's own unexplained income which has been utilized for purchase of Flats. Thus, she has made the addition of Rs.36,25,000/- as unexplained income of the assessee.
8. On assessee's appeal, learned CIT(A) confirmed the addition by observing as under:
"3.2. I have considered the findings of the Assessing Officer and rival submission of the appellant, carefully. I find that Appellant has failed to prove beyond doubt the genuineness of Gift claimed to be received from 11 persons. Merely by filing confirmation letter that too in a cyclostyle manner cannot be presumed to be a proper explanation of cash deposits of Rs.36,25,000/-. It earn be seen from so-called Gift Deed that it has not been prepared on any stamp paper, but it has been typed on a plain paper and it cart be seen from these Gift Deed that it has been prepared later on only with a view to justify the cash deposit. It can be seen from the sign "X" that signature has been obtained. Similarly, addresses have been mentioned in a identical handwriting. Further, it is very important to note that cash has been deposited on 07.04,2011, 21.04.2011, 29.04.2011, 02.05.2011, 09.05.011 and so many other dates whereas gift deed has been prepared or got signed on 31.03.2012, 06.03.2015. Further, falsity of the claim can be pointed out by referring the fact that in Balance Sheet, there is no mentioned of any such Gift of Rs.36,25,000/-. For ready reference, copy of Balance Sheet is reproduced here as under:-
Bholaram Malviya Balance Sheet as on March 31, 2012, Asst. Year 2012-13 LIABILITIES Amount (Rs) ASSETS Amount (Rs.) Amount (Rs.) Bhotaram Malviya Fixed Assets (As pet 23,574,664.75 Capital A/c. Schedule 3) (As per Schedule 1) 5,633,60789 Life Insurance 2,541924.00 (As pel Schedule 4} Loans (Schedule 2) Cash in Hand 5,254.00 20,569,65799 Bank Balance with FDR with Saraswat Bank HDFC Bank SB A/c 74,409.00 Saraswat Co-op Bank Ltd. 7,014.03 81,423.13 A/c No.9077 --------------4
ITA No2933/Mum/2017 Bholaram Malviya TOTAL Rs. 26,203,265.88 TOTAL Rs. 26,203,265.88 Further, it is important to point out that in capital Account, the assessee has shown entry as under :-
Bholaram Malviya Schedule to Balance Sheet & Profit & Loss Account as on March 31, 2012, Asst. Year 2012-13 As per Schedule 1 Amount Rs Bholaram Malviya Capital Account Opening Balance 3,099,957.38 Add: Income as per Income & Expenditure Account 1,260,159.23 Add: Interest on Saraswat Co-op Bank SB A/c. 1,759.00 Add: Interest on HDFC Bank SB A/c. 23,292.31 Add: Rental income from Mira Road Property 42,000.00 Add: Long Term Capital Gain on sale of flat 3,600,001.00 Add: Gifts received from relatives 25,000.00 8,052,168.92 3.3. Thus, the above narrated facts reveal that in reality there was no Gift and when Appellant found himself unable to explain the cash deposit in two banks, then only he had come with "cooked up story" that Cash Gifts were received from relatives. The Appellant has never established the creditworthiness of such donor. Further genuineness has also not been established, ft can be seen from the Gift Deed that an amount of Rs.6,25,000/- has been shown from Smt. Sheetal Malviya, who is wife, but, her source of income has not been disclosed. Therefore, genuineness of claim of Gift is not established. Therefore, in the facts & circumstances of the case, I also reach to the conclusion that the Appellant has introduced his own unaccounted money while depositing in two bank, hence, an amount of Rs 36,25,000/-added by Assessing Officer is sustained."
Against above order assessee is in appeal before the ITAT.
9. I have heard both the counsel and perused the records. I find that when unidentified entries of deposits have been found in the asseessee's bank account assessee has come up with an explanation that the same are gift from 11 relatives. Authorities below have given a clear finding that these are self serving documents 5 ITA No2933/Mum/2017 Bholaram Malviya and an afterthought. It is found that except for confirmation there is no cogent evidence of the gifts. Proper document supporting the creditworthiness of the so- called relatives are not available on record. Furthermore facts and circumstances clearly indicate that assessee has purchased a flat and to make the necessary payments has made unidentified cash deposits in the bank account. When the revenue had detected the same through AIR information the assessee came up with the explanation of the deposits being gifts from 11 relatives. It is clearly an afterthought, no such detail/explanation is/claim was made in the original return of income and it is filed by the assessee. Furthermore the creditworthiness of these relatives have not at all been established. In these circumstances it is settled law that revenue authorities are not supposed to put upon blinkers but they are also to look into the surrounding circumstances. Accordingly, I do not find any infirmity in the order's of authorities below. The case law referred by the learned counsel of the assessee has been rendered in a different context in the case of share premium by corporate entity and the same does not support the assessee. Accordingly, I uphold the order of the authorities below.
10. In the result, this appeal by the assessee stands dismissed Order pronounced in the open court on this day of 5th February, 2018.
Sd/-
(Shamim Yahya) ACCOUNTANT MEMBER Mumbai, Dated :5th February, 2018.
SA 6 ITA No2933/Mum/2017 Bholaram Malviya Copy of the Order forwarded to :
1. The Appellant.
2. The Respondent.
3. The CIT(A),
4. The CIT
5. The DR, 'SMC' Bench BY ORDER //True Copy// (Assistant Registrar) Income Tax Appellate Tribunal, Mumbai