Delhi High Court
Ex. Cap. Vikas Gupta vs The Commissioner Of Income Tax ... on 31 August, 2010
Author: A.K.Sikri
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ITA No. 911 of 2009
% Decision Delivered On : 31st August, 2010.
Ex. CAP. VIKAS GUPTA . . . Appellant
through : Ms. Aishwarya Bhati, Advocate
VERSUS
THE COMMISSIONER OF INCOME TAX (APPEALS) XXX
. . .Respondent
through: Ms. Rashmi Chopra, Advocate
CORAM :-
HON'BLE MR. JUSTICE A.K. SIKRI
HON'BLE MS. JUSTICE REVA KHETRAPAL
1. Whether Reporters of Local newspapers may be allowed
to see the Judgment?
2. To be referred to the Reporter or not?
3. Whether the Judgment should be reported in the Digest?
A.K. SIKRI, J. (Oral)
1. Admit.
2. The following substantial question of law arises for consideration:
"Whether the order of the learned Tribunal as
well as Authorities below suffers from a
fundamental error and illegality in adding
`2,26,592 as unexplained cash credits to the
assessment of the appellant, when the amount
was paid by cheque from the account of Shri
Rajiv Garg and Mrs. Yojana Garg to HUDCO and
later on the same proceeds on the said amount
was refunded to Mrs. & Mr. Garg through
cheques?"
3. Filing of paper book is dispensed with. With the consent of the
parties, we have taken up the matter today itself and heard
finally. Both the counsel are heard at length.
4. The appellant is an Ex. Service Man, who had applied for and was
allotted a flat in May 1999 by U.P. Awas Vikas Parishad,
Vasundhra, Ghaziabad under Armed Forces category. At that
time, he was in active service. The payment of that flat was to be
made to the U.P. Awas Vikas Parishad in instalments and the
appellant had been making those payments from time to time. It
so happened that on 09.07.1999, the appellant was posted with
the regiment, which was deployed in the Kargil Operation. He
remained there till the date of his release from the Army. Since
he was sent away on duty, he had instructed his real sister Mrs.
Yojana Garg and brother-in-law (sister's husband) Rajiv Garg to
make the payments of monthly installments to the U.P. Awas
Vikas Parishad in his absence. Both Mrs. Yojana Garg and Mr.
Rajiv Garg, under instructions from the appellant, made payments
to the extent of `2,26,592 from their joint account. The appellant
filed his return of income for the Assessment Year 2003-04 in
which he showed the purchase of the said flat. During the
proceedings, the Assessing Officer found that the aforesaid
payments have been made by Mrs. Yojana Garg and Mr. Rajiv
Garg on behalf of the appellant. The Assessing Officer, however,
came to the conclusion that the aforesaid two persons could not
show their creditworthiness and therefore, made additions of
`2,26,592 as unexplained cash credit. Certain other additions
were also made, which included unexplained income of `37,550
and capital gain to the extent of ` 35,000.
5. Some of these additions were deleted by the Income Tax
Appellate Tribunal ('the Tribunal' in short). However, three
additions, viz., unexplained cash, credit of `2,26,592, unexplained
income of `37,550 and capital gain of `35,000 have been
sustained by the Tribunal.
6. This appeal is preferred challenging the order of the Tribunal.
Insofar as capital gain is concerned, addition to this extent is not
pressed in the appeal. We are, thus, concerned with the
remaining two additions mentioned above.
7. Regarding addition of `2,26,592 as unexplained cash credit, the
case of the appellant before the Authorities below was that Mr.
Rajiv Garg and Mrs. Yojana Garg had been given gifts by various
persons for making payments against the allotment of the said
flats. In this behalf, it was stated that the following persons in
relation of Mr. Rajiv Garg had given the gifts:
(i) Father `1,00,000 as gift.
(ii) Father-in-law `25,000 as gift.
(iii) Sister `17,000 as loan.
(iv) Wife `36,000 as joint A/c holder.
(v) Cousin Brother `18,000 as loan.
8. It was supported not only by the affidavits of Mr. Rajiv Garg and
Mrs. Yojana Garg, but also by the affidavits of the aforesaid five
persons. Further, material evidence was also filed which included
Bank Statements of Mrs. Yojana Garg and Mr. Rajiv Garg as wells
as Bank Statements of Bhan Prakash Garg (Father), Mr. R.N.
Gupta (Father-in-law) and Mr. Manoj Gangal (cousin brother). All
these documents are also placed on record.
9. From the order of the Tribunal, we find that these material aspects
in support of the version of the assessee that there was proper
explanation in respect of the aforesaid amounts has not been
given any consideration. It is clear from the amounts of gifts that
these are small amounts given by the aforesaid persons. The
highest amount which is gifted by his father is `1,00,000. The
Bank Statements submitted by Bhan Prakash Garg shows the
withdrawal of `1,00,000 (`50,000 each) on the same date from his
bank account.
10. We are, thus, of the opinion that findings of the Tribunal are
totally perverse as the cogent and supportive evidence is not
looked into or considered. The aforesaid evidence clinches the
issue in favour of the assessee, who had duly explained the cash
received in the accounts of Mrs. Yojana Garg and Mr. Rajiv Garg
from where the payments were made. We, thus, decide the
question in the affirmative, i.e., in favour of the assessee and
against the Revenue and delete the addition of `2,26,592 made in
the income of the assessee.
11. Insofar as addition of `37,550 as unexplained income is
concerned, we find from the order of the Tribunal that the addition
only to this extent was made, which could not be explained by the
assessee. This was the position even before the Tribunal as well.
Therefore, there is no reason to interfere with this finding of fact.
This addition is sustained.
12. The Assessing Officer had also initiated penalty proceedings.
Since most of the additions made by the Assessing Officer stand
deleted, we are hopeful that those penalty proceedings shall now
be dropped.
13. This appeal is allowed partly in the aforesaid terms.
(A.K. SIKRI)
JUDGE
(REVA KHETRAPAL)
JUDGE
AUGUST 31, 2010
pmc
