2013 (5) TMI 499 - AT - Income Tax

Rectification of Mistakes - miscellaneous applications filed against tribunal order - unaccounted cash credits confirmed by ITAT as identity of creditors or their creditworthiness not proved - as per assessee Tribunal committed factual mistake in not considering the confirmation, PAN & also did not consider the oral submission that the initial burden is discharged - Tribunal also failed to appreciate the ratio laid by the cases relied upon by the AR - Held that - None of the judgements cited by the A.R. is rendering any help to the assessee in the present case & the Tribunal had considered all the facts and have given sufficient reasoning for its decision. It is also seen that wherever, the tribunal had not followed the decision cited before it, the facts were duly discussed and those judgements were distinguished on the basis of facts. As decided in Shia Dawoodi Bohra Jamat (2010 (4) TMI 859 - Gujarat High Court) it was held that mere citing of judgement of Hon ble Apex Court or of any other High Court is not sufficient without specifying how they were applicable to the facts of the case. Hence, the decision of the Tribunal in the impugned order for distinguishing any judgement cited before it on the basis of difference in facts, stands approved by Hon ble Gujarat High court as per this decision and hence, there is no merit in this contention that the decision cited before the Tribunal should be followed on the basis of ratio laid down in the decision without examining and comparing the facts of the cited case and the case in hand before the tribunal. Also regarding gift tribunal has decided this issue after considering all the facts and the decision and concluded that the assessee could not show that there is any relationship of the assessee with the donor and there is any occasion for the gift because as per the theory of preponderance of probabilities, gift could not be established as genuine because no person will gift 50% of his capital to a person with whom he has no relationship, blood relation or friendship. See Abhai Devilal Rathod Vs DCIT (2010 (6) TMI 497 - ITAT, AHMEDABAD) wherein held that in respect of gift, the assessee is required to discharge this onus of submitting complete details of gift before the A.O. such as identity of the donor, creditworthiness,genuineness of transaction, Occasion, relationship of the donor and donee & evidence of natural love and affection and merely because money is claimed to have been transferred through banking channel, it cannot be inferred that genuineness of the gift has been established. Against assessee.

Issues Involved:

1. Alleged mistakes in the Tribunal's order regarding unsecured loans under Section 68 of the Income Tax Act.
2. Alleged mistakes in the Tribunal's order regarding the genuineness of gifts received by the assessee.

Issue-wise Detailed Analysis:

1. Alleged Mistakes in the Tribunal's Order Regarding Unsecured Loans:

The assessee filed a miscellaneous application pointing out errors in the Tribunal's order concerning unsecured loans. The Tribunal had noted that many creditors did not have PANs, and the assessee failed to provide sufficient documentation to establish the identity and creditworthiness of the creditors, as required under Section 68 of the Income Tax Act. The Tribunal reversed the CIT(A)'s partial deletion of the addition, stating that merely furnishing PANs does not satisfy the requirements of Section 68.

The assessee argued that the Tribunal failed to consider the confirmations and PANs provided for many creditors and did not appreciate the initial burden discharged by the assessee. The Tribunal was accused of not considering the Gujarat High Court decision in CIT vs. Rohini Builders, which held that providing PANs and confirmations was sufficient to establish the identity of creditors.

The Tribunal, however, found no apparent mistake in its order. It noted that the assessee had not provided additional documents such as assessment orders, income tax returns, or balance sheets to support the identity and creditworthiness of the creditors. The Tribunal distinguished the Rohini Builders case on the basis of factual differences, emphasizing that the assessee in that case had provided comprehensive documentation, which was not done in the present case.

2. Alleged Mistakes in the Tribunal's Order Regarding the Genuineness of Gifts:

The assessee also challenged the Tribunal's decision regarding the genuineness of gifts received. The Tribunal had rejected the assessee's claim, stating that there was no relationship between the donor and donee, no occasion for the gift, and the donor had not appeared before the AO. The Tribunal applied the theory of preponderance of probabilities, concluding that no person would gift 50% of their capital to someone without any relationship or occasion.

The assessee argued that the Tribunal failed to consider the ratio laid down in the Gujarat High Court decisions in Murlidhar Lahorimal vs. CIT and CIT vs. Asha Hampannavar, which supported the genuineness of gifts under similar circumstances. The Tribunal was also accused of not considering whether the donor had taken back the money directly or indirectly.

The Tribunal found no apparent mistake in its order. It reiterated that the assessee had not established the genuineness of the gift, as required by the theory of preponderance of probabilities. The Tribunal's decision was consistent with its previous ruling in Abhai Devilal Rathod vs. DCIT, which required the assessee to provide comprehensive details of the gift, including the identity and creditworthiness of the donor, the genuineness of the transaction, the occasion, and the relationship between the donor and donee.

Conclusion:

The Tribunal dismissed both miscellaneous applications, finding no apparent mistakes in its original order. The Tribunal emphasized the necessity of providing comprehensive documentation to establish the identity and creditworthiness of creditors under Section 68 and the genuineness of gifts, as per established legal principles and precedents. The Tribunal's decisions were based on a thorough consideration of the facts and applicable legal standards, and the reasoning was adequately explained in the order.

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