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TMI Blog2015 (12) TMI 508X X X X Extracts X X X X X X X X Extracts X X X X ..... ported the stand and action of the Assessing Officer and submitted that the CIT(A) has grossly erred in deleting the addition made by the Assessing Officer on account of unexplained deposits in the bank account of the assessee. Ld. Counsel for the respondent/assessee strongly supported the impugned order and contended that if the amount or proceeds are found to be taxable in the hands of assessee's father Shri Suresh Nanda and also taxed therein, then the question of taxing the receipts twice in the hands of assessee does not arise and the CIT(A) correctly granted relief to the respondent. 4. On careful consideration of above rival submissions of both the sides, we observe that the CIT(A) granted relief with following observations and conclusion:- "5.4 I have carefully considered the submissions of the appellant and the facts of the case. It is not disputed that the aforesaid amount of Rs. 50,00,000/- was received by the appellant from his father Sh. Suresh Nanda. These amounts were received by way of account payee cheques drawn on three dates, i.e. 10.5.2000, 11.5.2000 and 19.1.2001, from the NRE account of Sh Suresh Nanda with Deutsche Bank, New Delhi. On 29.4.2000, there is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Assessing Officer in the case of Sh. Suresh Nanda in the above appeals. The Assessing Officer is directed to consider the taxability of proceeds of NRNR deposit and interest on RBI Bonds in the case of Sh. Suresh Nanda and bring it to taxation according to law. The amount can not be taxed in the hands of the appellant Sh. Sanjeev Nanda. The ground of the appellant is allowed and the addition is deleted. Appellant gets relief of Rs. 50,00,000/-." 5. On logical analysis of above conclusion of the first appellate authority, at the outset, we note that as per section 68 of the Income Tax Act, 1961, if source of receipts was not established, then it could have been taxed under the said provision. Per contra, there is no provision in the Act to tax an amount or proceed of receipt the source of which has been explained or stands established. In the present case, the source of impugned receipts by the assessee are proceeds of NRNR deposit and interest on RBI Bonds received by father of the assessee Shri Suresh Nanda and if these proceeds have been found to be taxable in the hands of Shri Suresh Nanda, then the question of taxing the same u/s 68 of the Act would not arise. Ld. DR c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Bank, Singapore, belonging to Sh. Suresh Nanda which has been credited to the capital account of Sh Suresh Nanda, father of the appellant. With this remittance, and after certain other debit and credit transactions, the credit balance on 1.6.2003 in the aforesaid bank account was Rs. 18,34,598.75p. The source of payment of Rs. 12,00,000/- on 10.06.2003 to the appellant Sh. Sanjeev Nanda is out of this balance in the account of Sh Suresh Nanda. Thus, the source of money is clear and undisputed. There is no provision under the Income Tax Act, 1961 to tax an amount the source of which has been explained or stands established. If the source was not established, it could have been taxed u/s 68 of the Act. However, as the source is established in the case, section 68 is not attracted. The only provision under which the amount received can be brought to taxation is section 56. Under this section, any sum of money received without consideration is chargeable to tax under clause (v) or clause (vi) and clause (vii) to section 56(2). However, receipt of money from relatives is exempted under these provisions, and these provisions are applicable only from A/Y 2005-06. Section 56(1) can also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed order of the ld. CIT(A) and we uphold the same as the alleged amount cannot be treated as unexplained receipt of the assessee and cannot be taxed in the hands of respondent u/s 68 of the Act. Accordingly, sole ground of revenue for assessment year 2004-05 being devoid of merits is dismissed. I.T.A. No. 601/D/2013 for A.Y. 2006-07 10. The revenue has raised sole ground in this appeal which reads as under:- "On the facts and in the circumstances of the case, ld. CIT(A) has erred in law, fact and in circumstances of the case in deleting the addition of Rs. 23,57,038/- made by Assessing Officer on a/c of unexplained investment by the assessee." 11. Apropos aforesaid ground, we have heard arguments of both the parties and carefully perused the relevant material placed on record. Learned Departmental Representative supported the stand and action of the Assessing Officer and contended that the CIT(A) granted relief to the assessee without any basis, hence, the impugned order may be set aside by restoring that of the Assessing Officer. Ld. Counsel of the assessee has drawn our attention towards para 5.4 of the impugned order and strongly supported the first appellate order wherei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment order in the case of the appellant's father Sh Suresh Nanda, and also taxed in his hands, it cannot be again brought to taxation in the hands of the appellant. The amount could have been taxed u/s 56 as residual income or gift. Under this section, any sum of money received without consideration is chargeable to tax under clause (v) or clause (vi) and clause (vii) to section 56(2). However, receipt of money from relatives is exempted under these provisions, and these provisions are applicable only from A/Y 2005-06. Section 56(1) can also be invoked provided the amount is not taxed in some other hand. In the present case, the source of the amounts received stands established. As mentioned above, the source of payments is from the Singapore account of Sh. Suresh Nanda, father of the appellant, with Deutsche Bank. If these amounts are found to be taxable, and also taxed, in the hands of the Sh. Suresh Nanda, the question of taxing the same amounts in the hands of the appellant would not arise. The same amount cannot be taxed in the hands of the appellant Sh. Sanjeev Nanda. No doubt, contrary to the stand of the revenue, the Hon'ble ITAT has held Sh. Suresh Nanda to be a non-resi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Shri Suresh Nanda and also taxed in his hand, then it cannot be again brought to tax in the hands of present assessee merely because he issued cheques on behalf of his father as co-signatory from the funds belonging to his father. Ld. CIT(A) was right in holding that if the source of expenditure or investment is not established, then the amount can be brought to tax u/s 69C of the Act as unexplained expenditure but as the source is established, then no addition can be made in the hands of the assessee. The CIT(A) was very cautious about application of other taxing provisions as he also considered the applicability of section 56 of the Act and held that the amount could have been taxed u/s 56 of the Act as residual income or gift, however, the receipt of money from relatives is exempt under these provisions which are only applicable from Assessment Year 2005-06 onwards. 14. We are also in agreement with the conclusion of the ld. CIT(A) that even if taxability of this amount is not finally sustained in the hands of Shri Suresh Nanda, it cannot be taxed in the hands of present assessee i.e. Shri Sanjeev Nanda either as unexplained investment as its source is clearly established ..... X X X X Extracts X X X X X X X X Extracts X X X X
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