IN INCOME TAX APPELLATE TRIBUNAL, BENCH D , MUMBAI BEFORE SHRI B.R.BASKARAN, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA No. 7625/Mum/2012 for AY - 2006-07 Smt. Rani Lalchand Kalro ITO 16(1)(1), 42, Rajmal Mansion, Peddar V Mumbai. Road, Mumbai-400026 s. PAN: AGZPK6735F (Appellant) (Respondent) Assessee by : Shri Prakash K. Jotwani (AR) Revenue by : Shri B. S. Bist (DR) Date of hearing : 27.07.2016 Date of Pronouncement : 30.09.2016 ORDER PER PAWAN SINGH, JM: 1. 1. This appeal u/s. 253 of Income-tax Act (Act) is directed by assessee against order of CIT(A)-25, Mumbai dated 05.11.2012 for Assessment Year (AY) 2006-07). 2. Brief facts of case are that assessee filed return of income for relevant AY on 28.07.2006 declaring total income at Rs. 1,24,011/-. case was selected for scrutiny. While framing assessment, Assessing Officer (AO) made disallowance of gift of Rs. 11,00,000/- and further made addition of unexplained cash credit u/s 68 of Rs. 5,49,500/-,in assessment order dated 16.12.2008. Aggrieved by order of AO, assessee filed appeal before CIT(A) but without any success. Thus, this second appeal is filed before us u/s. 253 of Act. 3. We have heard Ld. Authorised Representative (AR) of assessee and Ld. Departmental Representative (DR) for Revenue and perused material available on record. Ld. AR for assessee argued that assessee received gift of Rs. 10,00,000/- from his brother. Assessee furnished copy of 2 ITA No. 7625/M/20142 Smt. Rani Lalchand Kalro NRE Bank A/c in India from which Rs. 10,00,000/- was credited through cheque. assessee also furnished statement of account of donor s bank in Dubai to prove creditworthiness of donor. assessee has also filed copy of confirmation and certificate of donor about running of proprietary concern in Dubai. In respect of Rs. 1,00,000/-,it was argued that assessee received this amount from her son Neeraj kalro.. It was further argued that AO as well as ld. CIT(A) not considered fact in proper manner. Against unexplained cash credit of Rs. 5,49,500/- it was argued by ld. AR of assessee that assessee had withdrawn cash from Bank A/c in United Bank of India for making expenses in marriage of her son. As marriage could not take place, said amount was again deposited back in Bank A/c. Ld. AR of assessee further argued that he has placed on record copy of confirmation gift of Rs. 1,00,000/- from Neeraj Kalro along with statement of account of Neeraj Kalro. assessee has further placed on record copy of certificate issued by Punjab & Sind Bank dated 01.03.2014, with reference to statement of account of Sh.Gopal Chabria showing transaction of Rs. 10,00,000/- to assessee on 01.02.2006, copy of cheque drawn on Punjab & Sind Bank bearing No. 387627 and copy of confirmation of donor. identities of creditors and transaction through banking channels were not disputed by AO. revenue authority has also not disputed that assessee withdrew cash from his bank account. Revenue authorities disputed genuinity of transaction. On other hand ld. DR for Revenue argued that assessee has not filed any proof regarding marriage of her son. It was argued that, if purpose of marriage was not fulfilled then amount should have been deposited in Bank immediately. huge cash transaction was against of possible probabilities and thus, findings of authorities below are in accordance with provisions of law. 4. We have considered rival contentions of parties and gone through order of authorities below including document placed on record. AO while framing assessment observed that assessee has received gift of Rs.10,00,000/-, Rs. 3,00,000/- and Rs. 1,00,000/- from Shri Gopal Chabria, 3 ITA No. 7625/M/20142 Smt. Rani Lalchand Kalro Vasudev Chabria and Neeraj Kalro respectively. assessee was asked to prove creditworthiness, genuineness of gift, bank statement of donor and relationship with donor, loan confirmation of bank and complete statement of account of United Bank of India. assessee filed its reply and contended that assessee received Rs. 1,00,000/- from her son Neeraj Kalro, Rs. 10,00,000/- from Gopal Chabria and Rs. 300,000/- from Sh Vasudev Chabaria. It was further contended that Neeraj Kalro has been filing return from last several years. copy of cash book of Neeraj Kalro was also filed showing that he was having sufficient cash balance to deposit in his account. assessee also filed copy of confirmation letter of gift and statement of bank account about gift from Gopal Chabria, AO not accepted contention of assessee holding that gift received from Neeral Kalro does not appear to be genuine as cash was deposited in account of Neeraj Kalro one day before issuance of cheque of Rs. 1,00,000/- and same was added u/s. 68 as unexplained cash credit. In respect of gift from Gopal Chabria, AO concluded that assessee has not furnished original statement of donor and their creditworthiness and genuineness of transaction is not established and addition was made u/s 68 of Act. explanation of gift from Vasudev Chabaria was accepted. With regard to cash deposit of Rs. 5,49,500/- on various dates in United Bank of India & HDFC Bank, assessee was asked to furnish source of cash transaction. AO concluded that assessee is non-co-operative and did not offer any explanation. source of cash transaction is not proved, thus, entire deposit was treated u/s 68 of Act. During first appellate stage, similar submission and contention were raised before First Appellate Authority (FAA). While considering contention of assessee with regard to gift of Rs. 10,00,000/-, ld. CIT(A) concluded that donor/Gopal Chabria is residing at Dubai from last 24 years and settled there. donor confirmed that gift of Rs. 10,00,000/- was given to his cousin sister Miss. Rani Kalro (assessee) and as per Explanation to section 56(2), cousin sister did not fall in category of relative, therefore, said amount is taxable u/s 56(2)(v) of Act. For gift of Rs. 1,00,000/-, it was hold by ld. CIT(A) that cash was deposited in donor s Bank Account immediately 4 ITA No. 7625/M/20142 Smt. Rani Lalchand Kalro prior to issuance of cheque. And in respect of unexplained cash credit, it was concluded by ld. CIT(A) that there was no evidence about marriage or re- schedule of marriage of her son. There is no evidence that withdrawal was for purpose of marriage. If, entire amount was not utilized, whole of withdrawal should have been deposited immediately. 5. We have noticed that Revenue authorities have not disputed identity of both donor i.e. brother Shri Gopal Chabria and Neeraj Kalro. creditworthiness of Gopal Chabria was also not disputed. gift of Rs. 10,00,000/- was through banking channel. We have further seen that assessee has placed on record certificate of Punjab & Sindh Bank dated 01.03.2014, which contained reference of Cheque No. 387627 dated 01.02.2006, copy of Cheque dated 01.02.2006 drawn on Punjab & Sindh Bank, Kazi Syeed Street, Mumbai, and confirmation of donor dated 27.09.2008, 12.03.2008 & 29.10.2012. All these documents clearly established creditworthiness of donor and genuineness of transaction. So far as, gift of Rs. 1,00,000/- received from Neeraj Kalro (son) is concerned only objection of Revenue is that amount was deposited just prior to issuance of cheque. Mere suspicion of Revenue that amount was deposited just before issuance of cheque cannot be ground for rejection of claim/gift where capacity of donor and identity is not in dispute. Thus, we delete addition of Rs. 1,00,000/-. We have observed that ld CIT(A) while disposing appeal of assessee, instead of examining gift from angel of section 68 of Act, examined same under section 56 of Act. ld CIT(A) concluded that cousin sister did not fall under category of relative as per explanation attached with section 56(2) (v) and therefore impugned gift is liable to be taxed under this section. As per our opinion case of assessee may fall under clause (vi) instead of clause (v) of sub section (2) of secion56. Since ld CIT(A) examined case of assessee under section 56(2) (v) of Act, without confronting assessee hence we deem it appropriate to restore this 5 ITA No. 7625/M/20142 Smt. Rani Lalchand Kalro part of ground to file of ld CIT(A) to consider it afresh after giving opportunity to assessee and pass order in accordance with law. So far as, cash deposit of Rs. 4,85,000/- in United Bank of India & Rs. 64500/- in HDFC Bank are concerned, Revenue authority has not disputed withdrawal of cash from her bank on earlier dates. objection of Revenue is only that cash deposit varies at different occasions and frequent cash deposit itself establishing non-genuine character of explanation offered. However, contention of assessee throughout assessment proceedings and appellate stage was that, amount was withdrawn for expenses to be incurred for marriage of her son. We think that there cannot be any evidence about re-schedule of marriage, though there may be evidence of solemnisation of marriage. Further, objection of Revenue is that if amount was not utilized, whole amount of withdrawal should have been deposited immediately. Neither AO nor CIT (A) worked out difference of amount withdrawn and subsequent deposit. grounds of addition on account of unexplained cash credit when assessee has categorically pleaded that cash was withdrawn for specific utilization and same was deposited is based only on hypothetication of Revenue authorities. Thus, addition on account of cash credit of Rs. 5,49,500 is deleted. In result, ground related to addition of gift of Rs. 10,00,000/-is restored to file of CIT(A) for fresh finding and addition on account of Gift of Rs. 1,00,000/- from son and addition on account of cash credit are deleted. 6. In result, appeal filed by assessee is allowed. Order pronounced in open court on 30th September 2016. Sd/- Sd/- (B.R.BASKARAN) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated 30/09/2016 S.K.PS 6 ITA No. 7625/M/20142 Smt. Rani Lalchand Kalro Copy of Order forwarded to : 1. Appellant 2. Respondent. 3. CIT(A), Mumbai. 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. BY ORDER, //True Copy/ (Asstt.Registrar) ITAT, Mumbai Rani Lalchand Kalro v. ITO 16(1)(1), Mumbai