2015 (2) TMI 154 - AT - Income Tax

Unexplained / unproved gifts - CIT(A) deleted addition - Held that - Finding considerable force in the conclusion drawn by the Ld. CIT(A) that assessee has sufficiently discharged the onus that lay on her in terms of provision of Section 68 and it cannot be said that the receipts in her hands are in any way unexplained. The unilateral view entertained by the AO was more based on unfounded presumptions without converting them into evidences and the evidences filed by the assessee have remained unaddressed and unrebutted. Accordingly, the Ld. CIT(A) has rightly deleted the addition of ₹ 5,00,000/-, which does not need any interference on our part, hence, we uphold the same. - Decided in favour of assessee. Unexplained unsecured loans - CIT(A) deleted addition - Held that - We find considerable force in the conclusion drawn by the Ld. CIT(A) that in view of the principles laid down by the Hon ble Supreme Court in the case of CIT vs. Orissa Corp. Pvt. Ltd. 1986 (3) TMI 3 - SUPREME Court and Hon ble Gauhati High Court in the case of Nemi Chand Kothari vs. CIT 2003 (9) TMI 62 - GAUHATI High Court the assessee is not required to prove the source of source from which the creditor had advanced to the assessee. Therefore, we find Ld. CIT(A) was not agreed with the finding of the AO and accordingly rightly deleted the addition of ₹ 11,80,000/-, which does not need any interference on our part, hence, we uphold the same. - Decided in favour of assessee. Disallowance of travelling and conveyance expenses - CIT(A) deleted addition - Held that - AS Under the head of Travelling expenses no discrepancy has been noticed by the AO. Therefore, the addition made of ₹ 7,000/- is correctly deleted - Decided in favour of assessee.

Issues:
1. Addition of unexplained/unproved gifts
2. Addition of unexplained unsecured loans
3. Addition of travelling and conveyance expenses

Issue 1: Addition of unexplained/unproved gifts

The Revenue appealed against the Ld. CIT(A)'s order deleting the addition of Rs. 5,00,000 made on account of unexplained/unproved gifts. The Ld. CIT(A) considered the documents provided by the assessee, including gift deeds, income and wealth tax returns of donors, PAN cards, and bank account details. The A.O. disbelieved the gifts due to the absence of donors during assessment proceedings. The Ld. CIT(A) emphasized the assessee's duty to prove the genuineness of credit entries but noted the A.O.'s failure to enforce witness attendance. Citing legal precedents, the Ld. CIT(A) concluded that the assessee had discharged the onus under Section 68. The ITAT concurred with the Ld. CIT(A)'s decision, upholding the deletion of the Rs. 5,00,000 addition.

Issue 2: Addition of unexplained unsecured loans

The Revenue challenged the deletion of the Rs. 11,80,000 addition made on account of unexplained unsecured loans by the Ld. CIT(A). The Ld. CIT(A) reviewed the evidence and noted that both creditors were assessed taxpayers. Referring to legal precedents, the Ld. CIT(A) held that the assessee was not required to prove the source of the source of funds advanced by creditors. Relying on Supreme Court and High Court decisions, the Ld. CIT(A) deleted the addition. The ITAT agreed with the Ld. CIT(A)'s analysis, upholding the deletion of the Rs. 11,80,000 addition.

Issue 3: Addition of travelling and conveyance expenses

The Revenue contested the deletion of the Rs. 7,000 addition on account of travelling and conveyance expenses by the Ld. CIT(A). The Ld. CIT(A) found no discrepancies in the travelling expenses and thus deleted the addition. The ITAT concurred with the Ld. CIT(A)'s reasoning, upholding the deletion of the Rs. 7,000 addition. Consequently, the ITAT dismissed the Revenue's appeal, affirming the Ld. CIT(A)'s order in its entirety.

This comprehensive analysis covers the key issues addressed in the legal judgment, detailing the arguments, evidence, legal principles, and final decisions made by the authorities involved.

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