TMI Blog2011 (8) TMI 1184X X X X Extracts X X X X X X X X Extracts X X X X ..... s instructions from assessee not to press this issue and accordingly, the same is not pressed. As the issue is not pressed, we dismiss the same as not pressed. 3. The next common issue in these three appeals of the assessee on merits is against the order of CIT(A) confirming additions made by Assessing Officer on account of gift received from followings in respective assessment years: Name Assessment Year Amount (Rs.) Sri Deepak Kumar Changia 2003-04 3,00,000 Shri Jagdish Prasad 3,00,000 Shri Anil Gupta 2,00,000 Shri Deepak Kumar Gupta 2004-05 5,00,000 Shri Rajesh Maheswari 2005-06 5,00,000 Shri Brijesh Kumar 2002-2003 5,00,000 4. Brief facts relating to above issue are that Assessing Officer received information from Investigation Wing of the Department, New Delhi that assessee has been a b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the summons issued u/s. 131. Initially in his statement recorded on oath on 14.8.2008 he confirmed giving of gift of ₹ 2,00,000/- to the assessee but later on 18.8.2008 on his own he retracted his statement and submitted that he received cash of ₹ 2,00,000/- from the assessee of Shri Abhishek Mohata and deposited in his bank account and then issued him a cheque of ₹ 2,00,000, as a gift. He submitted that this was basically an adjustment entry for which he received ₹ 5,000/- as commission @ 2.5%. From this statement of Shri Anil Gupta it is clear that the gift of ₹ 2,00,000/- claimed to be received by the assessee from him is not genuine. Similar are the addition in respect of Assessment Year 2004-05 in ITA No.123/K/2011 wherein the gift received from Deepak Kumar Gupta amounting to ₹ 5,00,000/-was added exactly on similar circumstances and confirmed by CIT(A) by holding as under: As described above in this case also it is found that the person who is shown to have given gift to the assessee is not even distantly related to the assessee. He even does not know where does the donor reside. Thus, this gift is highly improbable. Over and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 14.8.2008 vide question and answer no. 5 that he had given ₹ 2,00,000/- as gift to Shri Abhishek Mohta in the relevant FY 2002-03 relevant to Assessment Year 2003-04. Subsequently, Shri Anil Gupta filed a letter dated 18.8.2008 reverted back by stating that this money was received from Shri Abhishek Mohta and deposited in his account and basically this is an entry from which he had earned 2.5% as commission. Shri Deepak Kr. Changia and Shri Jagdish Prasad could not be produced by the assessee even though he was requested by Assessing Officer. In view of the above facts, the first question arises whether the Assessing Officer has ever tried to verify the income tax records of these three donors and in case, the Assessing Officer has not verified the income-tax and wealth-tax record despite having I.T. and W.T particulars and acknowledgment of returns before him, it cannot be said that Shri Deepak Kr. Changia and Shri Jagdish Prasad have no creditworthiness as the assessee is able to prove from bank statements and affirming by affidavits the creditworthiness of these donors. In respect to Shri Anil Gupta, who first admitted on oath that he had given ₹ 2,00,000/- to Shr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t on the ground that it did not certify that the transactions in question were effected through recognized Stock Exchanges. He therefore sent notices to the National Stock Exchange of India Limited calling for the details of the transactions entered into by the assessee through M/s Richmond Securities Pvt. Ltd. and M/s Aiembic Securities Pvt. Ltd. NSE replied that M/s Alembic Securities Pvt. Ltd. was a declared defaulter with effect from 16.06.1999. When this was brought to the notice of the assessee, the assessee submitted that she should be allowed to cross examine the broker and also stated that the broker had also filed an affidavit confirming the transactions with the assessee. The assessee s stand was rejected by the Assessing Officer in the course of the earlier reassessment proceedings on the ground that since the affidavit from the broker was obtained by the assessee herself; there was no need to allow cross examination. As regards M/s Richmond Securities Pvt. Ltd., NSE was given the relevant details of the contract note / broker bills, etc. with a request to verify the same with their records and in response thereto NSE stated that the trade numbers mentioned in the contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Tribunal in the case of Mukesh R Marolia (supra) in which case or of the brokers involved was M/s Richmomd Securities Pvt. Ltd. After reproducing the relevant paragraphs in which the Tribunal had held in Mukesh R Marolia s case that off market transaction were not illegal and such transactions could not be traced through NSE and after noting the rival contentions the Tribunal held in the case of Mr. Sandeep R Shorewala, HUF (supra) that the case of Mukesh A Marolia was factually of the same matrix except for the aspect relating to the affidavit given by Shri Mukesh Choksi and in this view of the matter it was held by the Tribunal that there was no basis for the addition. 24. In the present proceedings the only additional feature is that Shri Mukesh Choksi had given a statement on 27.11.2008 before the Assessing Officer and also confirmed it by an affidavit dated 04/05.12.2008. This aspect has been taken care of by the CIT(A) by relying on the judgment of the Calcutta High Court in the case of CIT vs. Eastern Commercial Enterprises (supra) in which the High Court observed that a man indulging in double speaking cannot be said to be a truthful man at any stage and no Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opies of account. It was also explained that the assessee received these gifts by account payee cheque. We find that only premise of the revenue for treating these gifts as unexplained is that the credit worthiness of cash deposits by these donors in their account before giving loan to assessee is not proved. The assessee submitted every detail in respect to these donors and revenue issued notices u/s. 131 of the Act, which remained unserved. We find that the assessee has discharged the initial onus which lays on him in terms of section 68 by proving the identity of donors by giving their complete addresses, Permanent Account Nos., copies of Balance Sheet and P L Accounts. It has also proved the capacity of the donors by showing that the amounts were received by assessee by way of account payee cheques drawn from bank accounts of donors and the assessee was not expected to prove the genuineness of cash deposited in bank accounts of those donors. We are of the view that revenue, apart from issuing notices under section 131 of the Act, despite the fact that it was having complete addresses submitted by donors itself, did not pursue the matter further. The Revenue did not examine th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come, and by filing affidavit. It is seen from the record that the AO has neither called for the party concerned during the assessment proceedings nor has issued summons u/s 131 of the IT Act. Further, I am of the view that when the appellant has affirmed the whole facts of the case by a detailed speaking affidavit, the genuineness of the transactions should not be doubted unless on examination it is found untrue. Further, the AO in the remand report has mentioned that relevant records are not traceable and the cash credits introduced in the aforesaid two names are not subject to verification and cannot be treated as satisfactorily explained. The appellant has already submitted the copies acknowledgements of returns filed by the cash creditors and thus discharged his onus and if AO is not able to verify it because Return Receipt Register is not traceable, it is not appellant s fault and, the appellant should not be penalized by making huge additions. Having considered the facts of the case carefully, submissions of the AR, observations of the AO in the assessment order as well as in the remand report and also considering the decisions, referred to above, the addition made by the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X
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