TMI Blog2021 (6) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... d sustained by the CIT(A), an amount of ₹ 49,85,000/- is accepted as explained. The order of the CIT(A) is modified to this extent and the ground raised by the assessee is partly allowed. Additions on account of rental income - HELD THAT:- We find the assessee has shown to have received an amount as rent in respect of gym equipments given on hire to NIIT Ltd. We find, the AO in the order passed u/s 144 of the Act has made an addition after allowing 30% deduction from the rent u/s 24 of the Act. Since the assessee does not have any house property to let out and the rental income was received out of gym equipments given on hire to NIIT Ltd., therefore, the addition made by the AO and sustained by the CIT(A) is not justified. Accordingly, the order of the CIT(A) sustaining the addition is set aside and the ground raised by the assessee on this issue is allowed. Additions on account of professional income - HELD THAT:- As the professional income has not been doubted by the lower authorities. Since the assessee undoubtedly, is a gym trainer and has received rental income from hiring of gym equipments as well as professional income as a trainer, the various expenses claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her made an addition of ₹ 13,344/- and ₹ 30,609/- being interest received on savings bank account maintained with Oriental Bank of Commerce and Punjab National Bank respectively. Similarly, the interest on fixed deposits of ₹ 40,819/- being fixed deposits maintained with PNB was also added by the AO to the total income of the assessee. 5.1 During the course of assessment proceedings, the AO noted that the assessee has received rental income of ₹ 3,30,000/- from M/s NIIT Ltd., during the year. After allowing 30% statutory deduction u/s 24 of the Act, the AO made addition of ₹ 31,000/- to the total income of the assessee under the head: Income from house property. The AO further noted that as per 26AS, the assessee has received professional income of ₹ 4,20,000/- whereas the assessee in his return of income has shown income from Business or profession at ₹ 2,02,468/- out of the total receipt of ₹ 7,50,000/-. Since as per form No.26AS, the total receipt is ₹ 7,50,000/- and the receipt of ₹ 3,30,000/- is rental income, therefore, the AO, in absence of filing of any documentary evidence, made addition of ₹ 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... human probabilities and reality of human life are also to be considered for determining the genuineness of the gifts. According to him, the assessee, in the instant case, could not substantiate all these ingredients. Therefore, he rejected the claim of gift received by the assesseee from the various family members. So far as the various amounts withdrawn from the bank earlier which was explained to be deposited in the bank account subsequently is concerned, the ld.CIT(A) held that the assessee could not substantiate as to why those amounts were earlier withdrawn and kept for such a long period with the assessee without depositing the same. So far as the deduction of ₹ 42,850/- claimed by the assessee u/s 80C of the IT Act is concerned, the ld.CIT(A) also upheld the same on the ground that the assessee could not substantiate with evidence to his satisfaction regarding such claim. The ld.CIT(A) also sustained the addition of ₹ 84,772/- being interest on savings bank account and ₹ 40,819/- being interest on fixed deposits. So far as the addition of ₹ 2,31,000/- on account of rental income received during the year is concerned, the ld.CIT(A) also sustained the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,000/- as rental of equipments on which TDS @ 2% has been deducted u/s 194A(a) and ₹ 4,20,000/- as professional receipt as trainer of gym. Therefore, making addition of the rental income of the equipments and again adding the rental income as income from house property amounts to double taxation of the same. 10. So far as the amount of ₹ 50,40,000/- in the bank account is concerned, the ld. counsel submitted that the above cash was explained to be out of opening cash balance of ₹ 5,55,500/-, gift received from parents, brother and wife amounting to ₹ 9,25,000/- and ₹ 36,39,000/- being the amount withdrawn from the bank which was utilized for re-deposit of the same. The ld. counsel for the assessee drew the attention of the Bench to the submissions made by the assessee during the remand proceedings wherein the cash deposited in the bank account amounting to ₹ 50,40,000/- was explained. He submitted that the assessee, during the impugned assessment year had an opening cash balance of ₹ 5,55,500/-. He submitted that there is no such provision in the Income-tax Act or in the incometax return form to disclose the opening cash balance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the remand report wherein the AO had given the datewise amount of gifts received by the assessee from his father. The AO himself had given a finding that cash of ₹ 2 lakh was withdrawn on 6th May, 2010 and ₹ 1,50,000/- on 17th May, 2010 which was given by the father to the assessee on 7th May, 2010 as gifts. Therefore, gifts from the father to the extent of ₹ 3,50,000/- is from the withdrawal from the bank account. So far as the remaining gift is concerned, the ld. counsel for the assessee submitted that the father of the assessee is an agriculturist and has given the gift out of the cash balance with him. So far as the argument of the AO that the father of the assessee could have given cheque instead of giving cash gifts, the ld. counsel submitted that nowhere in the law it is prohibited that cash gift cannot be given by the father to his son. 11.2 So far as the gift from brother of ₹ 1,50,000/- is concerned, the assessee submitted that the brother of the assessee is an income-tax payee and has declared an amount of ₹ 1,89,500/- as his income for the impugned assessment year. He submitted that in addition to the above income his brother is also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ash was withdrawn earlier, which was subsequently deposited in the bank account after a few days cannot be a ground to reject the claim. Referring to the decision of the Hon ble Karnataka High Court in the case of S.R. Venkata Ratnam vs. CIT, 127 ITR 807, the ld. counsel drew the attention of the Bench to the following observations:- There is some force in the argument of the learned counsel for the petitioner and the argument advanced by the revenue is, therefore, without any force. Once the petitioner-assessee disclosed the source as having come from the withdrawal made on a given date from a given bank, it was not for respondents Nos. 1 and 2 to concern themselves with what the assessee did with that money, i.e., whether he had kept the same in his house or utilised the services of a bank by depositing the same. 13. Referring to the decision of the Hon ble Delhi High Court in the case of CIT vs Kulwant Rai 291 ITR 36 (Del), the ld. counsel drew the attention of the Bench to the following paragraphs:- The orders of Assessing Officer as well as Commissioner of Income Tax are completely silent as to for what purpose the earlier withdrawals would have been spent. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R.K. Dave vs. ITO (019 TTJ 094 ITAT Jodhpur); xi) Shri Aasheesh M. Pittie vs. ITO (ITA No.1409/Hyd/2012 dated 11.01.2013, ITAT Hyderabad); xii) Shri Vikram Deokisan Sarda vs. CIT (ITA No.277/M/2012 dated 05.12.2012, ITAT Mumbai); xiii) Shri Surendra Singh vs. ITO (ITA No.650, 701/JP/2011 dated 31.01.2012, ITAT, Jaipur.). 16. So far as the deduction u/s 80C claimed by the assessee, the ld. counsel submitted that the assessee had filed the necessary details for claiming exemption and, therefore, the lower authorities should not have rejected the claim of the assessee. 17. The ld. DR, on the other hand, heavily relied on the order of the AO and the CIT(A). He submitted that the ld.CIT(A) has given a categorical finding that the assessee has not disclosed any closing cash balance for the assessment year 2010-11, therefore, the opening cash balance of ₹ 5,55,000/- cannot be accepted. Similarly, the gifts received by the assessee from the parents and brother and spouse clearly shows that the assessee is a habitual gift taker and their credit worthiness has not been proved. There was no occasion on the part of the assessee for receiving the gift alth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 50,40,000/- was deposited out of cash withdrawal from the same bank amounting to ₹ 41,15,000/-, ₹ 9,25,000/- received as gifts from father, mother, brother and wife and an amount of ₹ 5,55,000/- was the opening cash balance. We find, the ld.CIT(A), after obtaining two remand reports from the AO and the rejoinder of the assessee to such remand reports, sustained the addition made by the AO. A perusal of the various details furnished by the assessee in the paper book which were also filed before the lower authorities, shows that the assessee, during the year under consideration has explained the deposit of the above amount of ₹ 50,40,000/- as under:- a) Opening cash balance - ₹ 5,55,000/- b) Cash withdrawn by the assessee from the bank and re-deposited during the year - ₹ 41,15,000/- c) Gift received from blood relations and spouse - ₹ 9,25,000/- 20. So far as the opening cash balance of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner-assessee disclosed the source as having come from the withdrawal made on a given date from a given bank, it was not for respondents Nos. 1 and 2 to concern themselves with what the assessee did with that money, i.e., whether he had kept the same in his house or utilised the services of a bank by depositing the same. 22. Similarly, the Hon ble Delhi High Court in the case of CIT vs Kulwant Rai 291 ITR 36 (Del), has observed as under:- The orders of Assessing Officer as well as Commissioner of Income Tax are completely silent as to for what purpose the earlier withdrawals would have been spent. As per the cash book maintained by the assessed, a sum of ₹ 10,000/- was being spent for household expenses every month and the assessed has withdrawn from bank a sum of ₹ 2 lacs on 4th December, 2000 and there was no material with the Department that this money was not available with the assessed. It has been held by the Tribunal that in the instant case the withdrawals shown by the assessed are far in excess of the cash found during the course of search proceedings. No material has been relied upon by the Assessing Officer or Commissioner Income Tax (A) to sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onors who are parents, brother and spouse, respectively. They are not outsiders or unknown persons. No independent inquiry whatsoever was conducted by the AO either u/s 133 (6) or 131(1) of the Act. Since the gifts in the instant case are received from parents, brother and spouse, respectively and the father has withdrawn substantial cash amount from the bank before giving the gift of ₹ 5,75,000/- on various dates to his son and the gifts of ₹ 1,50,000/- from brother, ₹ 1 lakh from mother and ₹ 1 lakh from spouse are not huge amounts, therefore, doubting the genuineness of such gifts received from blood relations is not justified. We accordingly accept the source of ₹ 9,25,000/- deposited in the bank to be out of gifts. Thus, in nutshell, as against the addition of ₹ 50,40,000/- made by the AO and sustained by the CIT(A), an amount of ₹ 49,85,000/- is accepted as explained. The order of the CIT(A) is modified to this extent and the ground raised by the assessee is partly allowed. 26. In the second ground, the assessee has challenged the order of the CIT(A) in sustaining the addition of ₹ 2,31,000/- made by the AO on account of re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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