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2015 (12) TMI 508 - ITAT DELHI

2015 (12) TMI 508 - ITAT DELHI - TMI - Unexplained deposits in bank a/c of assessee - CIT(A) deleted the addition - Held 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 proceed .....

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No.599/Del/2013, I.T.A.No.600/Del/2013 & I.T.A.No.601/Del/2013 - Dated:- 4-12-2015 - SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER For the Petitioner : Shri Ajay Wadhwa Adv. For the Respondent : Smt. Sunita Kejriwal ORDER PER CHANDRAMOHAN GARG, J.M. These appeals by the revenue have been filed against the orders of the CIT(A)-I, New Delhi all dated 9.11.2012 passed in first appeals no. 74, 75 & 76/11-12 for assessment year 200-1-02, 2004-05 and 2006-07 respec .....

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ecord before us. Learned Departmental Representative supported 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 th .....

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ant 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 credit of ₹ 1,04,44,617/- in the Deutsche Bank account being proceeds of NRNR deposit with SBI encashed by Sh. Suresh Nanda. The source of payment of ₹ 25,00,000/- on 10.5.2000 and ₹ 15,00,000/- on 11.5.2000 to the appellant .....

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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 prov .....

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he appellant are proceeds of NRNR deposits and interest on RBI Bonds received by Sh. Suresh Nanda, father of the appellant. If these proceeds are found to be taxable, and also taxed, in the hands of the Sh. Suresh Nanda, the question of taxing the receipt in the hands of the appellant would not arise. No doubt, contrary to the stand of the revenue, the Hon ble ITAT has held Sh. Suresh Nanda to be a non-resident vide its order dated 24.7.2012 in ITA Nos.1428, 1429 and 1430/Del/2012. However, inco .....

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nt Sh. Sanjeev Nanda. The ground of the appellant is allowed and the addition is deleted. Appellant gets relief of ₹ 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 .....

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id reason to interfere with the order of the CIT(A) and we uphold the same. Accordingly, sole ground of the revenue for assessment year 2001-02 being devoid of merits is dismissed. I.T.A.No. 600/Del/2013 for A.Y. 2004-05 6. 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 deleting the addition of ₹ 12,00,000/- made by Assessing Officer on a/c of unexplained deposit in bank a/c of assessee. 7. .....

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ect premise. Learned counsel of the assessee supported the impugned first appellate order and submitted that the assessee received alleged amount from his father by way of account payee cheque drawn on 10.6.2003 from NRE account of Shri Suresh Nanda with Deutsche Bank, New Delhi and the source of alleged amount in question has been properly explained by the assessee, hence the CIT(A) was correct in allowing the issue in favour of the assessee. 8. On careful consideration of above rival contentio .....

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on 10.6.2003, from the NRE account of Sh Suresh Nanda with Deutsche Bank, New Delhi. On 9.4.2003, there is a credit of ₹ 23,65,000/- in the Deutsche Bank account, New Delhi, being inward remittance from abroad received by Sh. Suresh Nanda. The remittance is from Deutsche 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 cr .....

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ver, 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 be invoked provi .....

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father of the appellant, with Deutsche Bank. If these proceeds are found to be taxable, and also taxed, in the hands of the Sh. Suresh Nanda, the question of taxing the same receipt 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-resident vide its order dated 24.7.2012 in ITA Nos. 1428, 1429 and 1430/Del/2012. Even .....

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s not being the case, the question of taxability of this amount in the hands of the appellants does not arise. The ground raised by the appellant is allowed and the addition is deleted. Appellant gets relief of ₹ 12,00,000/-. 9. The aforesaid conclusion is similar to the order of assessment year 2001-02 (supra) and we clearly note that the assessee properly explained source of amount in question that the same was received from his non-resident father Shri Suresh Nanda from the deposits in .....

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t 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 ₹ 23,57,038/- made by Assessing Officer on a/c .....

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ra 5.4 of the impugned order and strongly supported the first appellate order wherein the relief has been granted with following conclusion and observations:- 5.4 I have carefully considered the observations of the Assessing Officer, submissions of the appellant and the facts of the case. It is seen that for A/Y 2006-07 in the case of Sh Suresh Nanda, father of the appellant, an addition of ₹ 7,44,07,498/- was made in respect of payments to various parties with regard to various consultanc .....

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Officer that the remittances are from Deutsche Bank, Singapore, belonging to Sh. Suresh Nanda, father of the appellant, to which the appellant is a co-signatory and signs on the cheques in the absence of his father. The Assessing Officer disbelieved the submissions of the appellant assuming that the appellant held bank accounts abroad. The only reason for the Assessing Officer to conclude so was presence of an Amex card issued in the UK. Significantly, no evidence of any separate bank account be .....

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case of the appellant and his father Sh Suresh Nanda. It has been submitted that these amounts were paid out of the Singapore account of Sh Suresh Nanda and also taxed in his hands. There is no evidence that there is some other source for the payment of these amounts. Thus, the source of investment is clear and undisputed. If the source is not established, the amount can be brought to taxation u/s 69C as unexplained expenditure. But as the source of payment is clear from the assessment order in .....

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/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 .....

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ished; or as gift, being from a relative and no law existing during the period to tax it as such. The amount could have been taxed in the hands of Sh Sanjeev Nanda, the appellant, if it could be treated as a business receipt or salary or perquisite in his hands. This not being the case, the question of taxability of this amount in the hands of the appellants does not arise. The ground raised by the appellant is allowed and the addition is deleted. Appellant gets relief of ₹ 23,57,038/-. 12 .....

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es include payments made between 20.4.2005 to 16.7.2005 to Craig Roberts Associates Inc. against various invoices towards consultation charges and professional services pertaining to Sonali Farms total of which comes to USD 54599. These facts have not been disputed or controverted by the Assessing Officer. 13. It is also amply clear that the remittances are from Deutsche Bank Singapore belonging to the father of the assessee Shri Suresh Nanda to which respondent is a co-signatory and authorized .....

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ment is clear and undisputed that the amounts paid to M/s Craig Roberts were from bank account 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 .....

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