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TMI Blog2013 (9) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... ntained for the previous years - both the Accountant Member and the 3rd Member have expressly recorded in their orders that they have not gone into the merits of the additions. The 3rd Member also observed that he has refrained himself from getting into the merits of the additions although learned counsels, who appeared, presented certain case laws, which were relevant for deciding the issue on merits. The Accountant Member and the 3rd Member, after having decided the question of law, should have considered the question of genuineness of gifts, which was pressed by the counsel appearing for the assessee. The assessee has lost the right of second appeal on the question of genuineness of gifts, on its merits - Tribunal erred in law in dismissing the appeal only on the ground that since the 3rd Member had agreed with the Accountant Member, the appeal deserves to be dismissed. The question of genuineness of gifts in view of the opinion of the 3rd Member was not considered on merits and was thus still open and on which the Tribunal did not give any decision - matter remanded back. - Decided in favour of assessee. - Income Tax Appeal (Defective) No. 36 of 2013, Income Tax Appeal No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dismissing the Application of the Assessee, U/s 254 (2), by holding that the assessee has raised a highly debatable issue, whereas, it is a pure question of fact, as to whether the ground of appeal stood decided on merits or not and hence the ITAT, committed perversity in recording such findings as the same are contrary to the material and evidence available on record." 4. Brief facts giving rise to these two appeals are that an assessment was made by the Income Tax Officer, Range-3, Mathura under Section 143 (3) of the Act, by making additions to the returned income under Section 68, disallowing the gift received by the assessee of Rs. 2 lacs from Shri Jay Singh Yadav, and another gift of Rs. 2 lacs from Shri Gajanand Goyal. The gift received from Shri Jay Singh Yadav was disallowed on the ground that Shri Jay Singh Yadav had never given any donation to her. The assessee had herself deposited the amount in the account of Shri Jay Singh Yadav and had thereafter withdrawn to deposit it in her account showing it as donation. She has no relations with Shri Jay Singh Yadav, who has a small salary and huge liability of his family. In the year 2000 he had got his daughter married. His ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (the gifts) were received in her individual bank account, and do not relate to the books of account of her proprietorship concern. The Judicial Member held that Section 68 is attracted only when any credit entry is found in the books of account of the assessee. The bank passbook, in which these amounts were credited, is not a book of account. Relying upon Bhai Chand H. Gandhi vs. CIT 141 ITR 67, 69 (Bom.); Sunder Lai Jain vs. CIT 117 ITR 316, 318 (All.); Ms. Mayawati vs. Dy. CIT 113 TTJ 178 (Del 'A'); Anand Ram Raitani vs. CIT 223 ITR 544, 549 (Gau); Smt. Shanti Devi vs. CIT 171 ITR 532, 534 (P H); and Jawahar Lal Oswal vs. ACIT, 71 ITD 324 (Chd.) he held that since the assessee had succeeded on the legal aspect, there was no need to decide the appeal on the merits of these gifts. Consequently, the appeal was partly allowed. 7. The Accountant Member in his dissenting opinion held that in the present case the bank account under reference being a regular and disclosed one, the same in any case forms part of the assessee's accounts so that it becomes immaterial in so far as application of Section 68 is concerned. The credit amount does not continue to be deposited in the bank accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is on the assessee. Further, this onus, the relevant provisions of Chapter VI of the Act (viz. s.68, 69, 69A, 69B, and 69C) being para materia, employing the same language, is the same for all the said provisions. This aspect of the matter, i.e., of the extent and the nature of the burden of proof cast per the different deeming provisions of the said Chapter, where applicable, being the same, stands, apart from being born out by the express language of the Act, endorsed by the Tribunal (Agra Bench) per its decision in the case of Sachin Aggarwal v. ITO (in ITA No.17/Agr/2008 dated 02/1/2009. As such, it would be of no consequence in law, in the facts and circumstances of the case if the AO applied the provisions of s. 68 instead of s. 69 of the Act it being trite that the omission to refer to a section, or even applying a wrong section, would be of no moment as long as the authority concerned has the necessary power to perform the action under reference (refer: L. Hazarimal Kuthalia vs. ITO (1960) 41 ITR 12 (SC): Laxmi Industries Cold Storage Pvt. Ltd vs. ITO, 79 ITR 248 (All). Also, it is a settled principle of law that in a given case the transaction under reference may fall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt proceedings. The audit under Section 44AB of the Act is to be of the assessee's accounts for the relevant year and not only those relating to the business/profession, the turnover in which exceeds the threshold limit, or only of its business or profession. The Assessing Officer held that it was clear from the record that the bank account under reference forms part of the assessee's business accounts as is evident from the absence of any ground in its respect, both before the Tribunal as well as before CIT (A). According to him all these shows that the assessee is maintaining books of account. 10. The Vice President, ITAT acting as 3rd Member observed that the Accountant Member went on to discern the assessee's books and found that the credit amount does not continue to be deposited in the bank account, but stood immediately withdrawn so that the amount flows into the assessee's business where regular accounts are maintained. He opined that there was no factual basis whatsoever for allowance of its appeal on this basis and justified the addition even under Section 69 of the Act. He relied upon CIT VS. Jauharimal Goel 147 Taxman 448 (All) wherein it was clarified that the deposi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the tax authorities. So, the quarrel whether it is Section 68 or Section 69 should not make a difference having regard to the subsisting obligation of the assessee to explain all the credits and sources of the investments found by the Revenue. In my view the learned Judicial Member was unnecessarily in haste to get into the case laws without properly appreciating the facts of the case. It always happens whenever a judgment is appreciated without appreciating the facts that led to that particular decision. I am observing this because it was not the case of the assessee either before the AO or before the CIT (A) and the record that is produced by the assessee before the authorities and before the Tribunal is sufficient to indicate the fact relating to the maintenance of the books of account by the assessee, as discussed by the learned Accountant Member. Therefore, in my view, deleting the addition only on the legal grounds, without appreciating the facts on record does not bring proper result. To this extent I do not approve the view of the learned Judicial Member. I entirely agree with the discussions of the learned Accountant Member in this regard. 12. In the light of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... book is not a book of accounts. In the opinion of the 3rd Member, who had considered the escalating facts, the difference of opinion was recorded only on the question as to whether the bank account under reference being a regular and disclosed one, the same formed part of the assessee's account so that this became immediately in so far as application under Section 68 is concerned. In para 4 of the order the Accountant Member clearly opined that since the order passed by the Judicial Member did not adjudicate the issue on merits, he is also refraining from doing so as it could be of no consequence. 15. Shri Abhinav Mehrotra submits that in the aforesaid circumstances the opinion of 3rd Member, to which the matter was referred for resolution under Section 255 (4) on the question of law, could not be the basis to dismiss the appeal. The Bench of Income Tax Appellate Tribunal, after having received the order of the 3rd Member, who had resolved the issue with regard to question of law referred to it, should have adverted back to the merits of the matter and considered as to whether the gifts were genuine. Having resolved the legal question and the quarrel whether under Sections 68 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ell as the genuineness of the transaction on its merits and that in the ultimate result gifts were not found to be genuine. It was recorded that Shri Jay Singh Yadav did not have any means and that the amount was deposited by the assessee in his account and was withdrawn showing it to be gift. Shri Jay Singh Yadav appeared but could not establish that he had any relation or capacity to give the gift of an amount of Rs. 2 lacs. On the other gift of Rs. 2 lacs the findings that the donor did not appear despite several opportunities and that a wrong address was given for service on him under Section 131 of the Act by the assessee was also considered and formed. Shri Shambhu Chopra submits that the gifts were arranged through Chartered Accountant, who could not establish the identity of Shri Gajanand Goyal and his relationship and capacity to give gift to the assessee. These two transactions recorded in the bank pass book, which were ultimately reflected in the accounts of Shri Ganesh Traders, which had maintained the accounts as wholesale cloth merchant was considered. The personal accounts of the assessee were compiled in the final accounts of the business in the firm and were reflec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee maintained for the previous years. 20. We have examined the question of law, which was raised and argued before the Tribunal and was referred for opinion of the 3rd Member, which was considered by the Judicial and Accountant Member of the Tribunal as well as 3rd Member, as to whether the Commissioner of Income Tax (Appeals) was wrong in confirming/disallowing the gifts received by the assessee of Rs. 4 lacs from following; (a) Shri Jay Singh Yadav of Rs. 2 lacs, (b) Shri Gajanand Goyal Rs. 2 lacs as cash credit and to assessee as income under Section 68 of the Act by learned Income Tax Officer. Both the Accountant Member and the 3rd Member, to whom the matter was referred, considered the question of law and returned the question in favour of the revenue. The counsel appearing for the assessee has not questioned the correctness of their decision, which is the majority decision of the Tribunal on the issue. 21. We however find substance in the argument of Shri Avinash Mehrotra that after deciding the question referred to as above, both the Accountant Member and the 3rd Member have expressly recorded in their orders that they have not gone into the merits of the additions. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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