TMI Blog1994 (12) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee from the said Shri Jain. The Assessing Officer required the assessee to file confirmations of the gifts from Shri Jain and also to tell his address in India as also his relationship/intimacy with Shri Jain. Despite opportunities given to the assessee on 11th Oct., 1991, 24th Oct., 1991, 20th Nov., 1991 and 26th Nov., 1991 he could not furnish the required information and simply stated that Shri Jain had stayed with him in Kathmandu (Nepal) for a month or so and it was out of love and affection resulting from that friendship that Shri Jain had gifted the amount of Rs. 25,000 to him. The Assessing Officer did not accept such contention of the assessee and made an addition of Rs. 25,000 to assessee's total income. 3. In appeal, the assessee appears to have filed a confirmation in the shape of aerograme letter from Shri Jain. After taking into account this additional evidence also the learned CIT(A) agreed with the Assessing Officer that the alleged gift was sham and actually the amount had been arranged by the assessee through some contact or middleman so as to convert his unaccounted money into accounted money by way of alleged foreign gift. In this behalf the CIT(A) re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Kathmandu in Nepal. He could never tell his address in India. The bare assertion of an occasional stay of the alleged donor with the assessee in Nepal turning the intimacy into friendship of the degree which prompted the donor to donate substantial amount to the assessee at no auspicious occasion, got no corroborative support not even from assessee's own affidavit which does not even state as to when and for how many days Shri Jain stayed with the assessee. The assessee cannot even tell his address and other relatives in India which a friend is normally expected to know. The circumstances attending on the alleged transaction as also the conduct and behaviour of the parties were clearly such as went against the genuineness of the transaction. In this behalf the approach adopted by the Tribunal in the case of Smt. Saroj Sirselewala for asst. yr. 1985-86 (ITA No. 45/Jp/91) wherein the GTO had charged gift-tax on the gifted amount and had thus accepted the genuineness of the gift in that case does not help the assessee in the present case. 7. In the totality of the circumstances of this case we accept the concurrent finding of the assessing authorities that the gift was sham and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17 goes to show that in order to settle down their family dispute the assessee, his brother, their mother and other relations had appointed on 13th Feb., 1987 Shri Bhagwan Dass as the sole arbitrator who made the award on 15th Feb., 1987. The parties applied in the Court to make the award as rule of Court which the Court of District. Judge, Sriganganagar did on 10th March, 1989 in Civil Petition No. 101 of 1987. According to the rule of the Court 25 bighas of agricultural land of square No. 192/60 in Chak 19 KND was to remain the property of Shri Dinesh Kumar. Smt. Kesar Devi, the aged mother of the assessee appears not to have felt satisfied with this arrangement. She, therefore, filed Civil Petition No. 76 of 1989 before the District Judge, Sriganganagar who vide his decree dt. 31st July, 1989 passed in terms of compromise between the parties, directed that the aforesaid agricultural land shall be the property of Smt. Kesar Devi. It is thus clear that during the period ending on 31st March, 1989 Smt. Kesar Devi was not in possession of any agricultural land so as to contribute Rs. 10,000 to the household expenses of the assessee. Looking to the social and financial status of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k-in-hand there. The reflection of the stock-in-hand in the accounts of Mrs. Kailash Devi and her assessment, under Amnesty Scheme clearly support the view that it was her income and, therefore, the same was wrongly clubbed in assessee's hands. The addition of Rs. 12,500 is, therefore, deleted. (4) Addition of Rs. 5,000 15. A return of income in the status of Shyam Sunder Gupta Sons (HUF) was filed on 29th Dec., 1989, showing income of Rs. 12,500. On being asked to explain, it was told to the Assessing Officer that income of Rs. 5,000 came from business and of Rs. 7,500 from interest. The Assessing Officer observed that the HUF had never disclosed in the past any income from business. He, therefore, made an addition of Rs. 5,000 in the hands of the assessee. In appeal the learned CIT(A) observed that during asst. yr. 1988-89 certain transactions in cotton bales were carried on in the name of the HUF but at the end of the year there was no stock left with the HUF. Mr. Ranka referred to the account of the HUF at pp. 38-39, the assessment order for 1988-89 at pages 53 and 73 and the appellate order at pages 61 to 64 to show that the HUF existed and carried on business. That ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Balance B/F . . 10,460.40 22-9-1988 Cash - 20,000, . 23-9-1988 Self (Cash) 20,000 - . 27-9-1988 Transfer - 20,000 (Loan from Jai Shankar Beej Bhandar) . 27-9-1988 By cash - 40,000, . 07-10-1988 Withdrawal 70,000 - . 09-12-1988 By Intt. - 53.65, . 26-12-1988 OBC - 5,000.00 (Gift) . 26-12-1988 OBC (Cash) 17 - . 21-01-1989 Cash 5,000 - . It is noted from above that the assessee had been depositing cash and, yet, on the next day withdrawing the same (22nd Sept., 1988 and 27th Sept., 1988). From the cash Rs. 20,000 withdrawn on 23rd Sept., 1988, the assessee had given Rs. 6,000 to M/s Jai Shankar Beej Bhandar, as per the copy of account of the assessee in the books of the said party filed. How the balance cash Rs. 14,000 was utilised is not known. On 27th Sept., 1988, the assessee had taken a loan of Rs. 20,000 from M/s Jai Shankar Beej ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1988 50,000 Withdrawal SB a/c No 3114 on 1st Jan., 1989 48,000 Deposit a/c No. 1690 Syndicate Bank (Assessee's) on 28th March, 1989 60,000 In view of above, it has been explained by the learned counsel that the period during which the cash remained at home with the assessee was not more than three months at any time. In this context, it needs to be mentioned that the assessee has himself stated that the cash Rs. 20,000 withdrawn on 22nd Sept., 1988 was re-deposited on 27th Sept., 1988. This implies that the assessee was in the habit of depositing cash which he did not need or did not utilise. The alternative plea above, submitted by the learned counsel, cannot be accepted as it is contrary to the explanation furnished in regard to source of deposit of Rs. 50,000 in the account of Smt. Kailash Devi on 30th Dec., 1988. As already stated above, the source of this deposit had been explained to be sale realisation of the stocks lying in Kathmandu. It is evident that when the learned Assessing Officer, in his impugned assessment order, did not believe the explanation furnished as the alleged stocks had been sold in April, 1988, and not in Dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 1690 with Syndicate Bank. 8.10. During the assessment proceedings, the assessee had taken the plea that Rs. 60,000 deposited on 28th March, 1989 was out of withdrawal of Rs. 70,000 on 7th Oct., 1988. During the appellate proceedings, the learned counsel of the assessee when asked to explain the source of amount Rs. 14,000 paid in cash to M/s Jai Shankar Beej Bhandar on 15th Nov., 1988 (balance of Rs. 20,000 loan taken on 27th Sept., 1988), the learned counsel for the assessee had explained that this amount was paid out of Rs. 70,000 withdrawn on 7th Oct., 1988 and lying at home. The question now arises that if the alternative explanation furnished by the learned counsel that out of Rs. 70,000, Rs. 50,000 was deposited on 31st Dec., 1988 in the bank account of his wife and Rs. 60,000 deposited in the assessee's bank account on 23rd Aug., 1989 represented Rs. 48,000 withdrawn the balance amount out of Rs. 20,000 lying out of withdrawal of Rs. 70,000 on 7th Oct., 1988, the said explanation of the learned counsel of the assessee is self-defeating. The learned counsel had explained that Rs. 14,000 had been paid to M/s Jai Shankar Beej Bhandar on 15th Nov.,1988. This means that ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where was the need for the assessee to withdraw from his SBBJ bank account Rs. 5,000 on 21st Jan., 1989. The assessee had credit balance in SBBJ account on 9th Dec., 1988, Rs. 51,405, supra. On 26th Dec., 1988, Rs. 5,000 was deposited (alleged gift) and this Rs. 5,000 was withdrawn on 21st Jan., 1989. This in itself shows that the assessee did not possess or have Rs. 70,000 withdrawn on 7th Oct., 1988 with him on 21st Jan., 1989. Therefore, the question of depositing Rs. 50,000 on 31st Dec., 1988 in wife's account and Rs. 60,000 on 28th March, 1989 in his own account out of the amount withdrawn Rs. 70,000 on 7th Oct., 1988 does not arise. 8.12. Thus, the explanation of the assessee that the deposits of Rs. 50,000 on 31st Dec., 1988, in his wife's account No. 3114 with SBBJ was out of the amount Rs. 70,000 withdrawn by him from his bank account on 7th Oct., 1988 and the deposit of Rs. 60,000 in his Syndicate Bank a/c on 28th March, 1989 was out of either Rs. 70,000 withdrawn on 7th Oct., 1988 or comprised of Rs. 48,000 withdrawn on 1st Jan., 1989 from his wife's account and balance Rs. 12,000 out of the balance amount of Rs. 20,000 of 70,000 withdrawn earlier cannot be accepted an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition of Rs. 60,000. 22. In so far as the addition of Rs. 50,000 on account of the cash deposit in the name of Smt. Kailash Devi is concerned, though we find sufficient force in the reasons given by the learned CIT(A) in that respect too, yet we are of the opinion that in view of certain facts including our finding above in respect to addition of Rs. 12,500 made on account of the benami income in the name of Smt. Kailash Devi, it would not be proper to approve of this addition. In this behalf we may observe that the stock-in-hand relating to the business of M/s Pashupati Readymade Emporium in Nepal was treated to be the property of the wife, and, therefore, the sale proceeds thereof could have resulted in making deposit in her account particularly when she is not found to make investments elsewhere and the account in question contains transactions carried on exclusively in her hands. Under such circumstances we do not consider it proper and safe to approve of the addition of Rs. 50,000 in the hands of the assessee. Accordingly we delete the addition of Rs. 50,000. (6) Interest under s. 234B 234C 23. Relief claimed in respect of interest charged under s. 234B and 234C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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