Pramod Goyal (Huf), Delhi vs Assessee

This appeal by the assessee is directed against the order passed by

the CIT(A) on 31.12.2013 upholding an addition of Rs.5 lac made by

the AO u/s 68 of the Income-tax Act, 1961 (hereinafter also called 'the

Act') in relation to the Assessment Year 2004-05. ITA No.727/Del/2014 2

2. Briefly stated, the facts of the case are that the Investigation

Wing, Delhi, conducted a large-scale investigation to unearth a huge

racket involving accommodation entry providers. Such entry providers

were found to be giving accommodation entries in the form of bogus

gifts/loans/share application money/capital gains, etc., by cheques/DDs

in lieu of cash received from intending beneficiaries. The list of

beneficiaries who had taken accommodation entries from such

persons/firms also included the name of the assessee. From such

information received by the AO from the Investigation Wing, it

transpired that the assessee received alleged gift of Rs.5 lac from one

Shri Ganesh Goyal (sic. Girish Kumar Goyal). The AO initiated the

proceedings u/s 148. During the course of such assessment

proceedings, the assessee was called upon to submit copy of income-tax

return along with the balance sheets and details of transactions with the

alleged donor with the documentary evidence in support thereof. The

AO also requested the assessee to produce the donor. Despite the

repeated requests made by the AO for production of the donor, the

assessee failed to produce such person. It was, however, maintained

that the gift was genuinely received from the donor. The assessee ITA No.727/Del/2014 3

requested the AO to issue notice to the donor directly. Once again, the

AO required the assessee to produce the donor, which the assessee

failed to comply with. In the absence of production of the alleged

donor, the AO made an addition of Rs.5 lac u/s 68 of the Act, which

came to be upheld in the first appeal.

3. I have heard the rival submissions and perused the relevant

material available on record. It is observed that the dispute is only about

the gift of Rs.5 lac shown to have been received by the assessee from

one Shri Ganesh Goyal for which the AO required the assessee to

produce him which the assessee failed to do so. From the opening part

of the assessment order, it is clear that the Investigation Wing unearthed

a racket of accommodation entry providers and the list of beneficiaries

also included the name of the assessee with similar amount of gift at

Rs.5 lac. However, the fact that the assessee's name appeared in the list

of beneficiaries cannot, per se, lead to an irrebuttable presumption of

the assessee having received bogus gifts. At the same time, there is also

an obligation on the part of the assessee to establish the genuineness of

the gift, if he wants to escape the latches of section 68 of the Act. It is

observed that despite the assessee's request to the AO for summoning ITA No.727/Del/2014 4

the donor directly because of the inability of the assessee to produce

such person, the AO did not do so. When this fact is considered in the

light of the fact that the name of the assessee did appear in the list of the

beneficiaries of the accommodation entries, I am of the considered

opinion that the ends of justice would meet adequately if the impugned

order is set aside and the matter is restored to the file of the AO. I order

accordingly and direct the AO to investigate this issue further and, if

need be, issue summons to the alleged donor.

4. In the result, the appeal is allowed for statistical purposes.

The decision was pronounced in the open court on 19th June,

2015.

Sd/-

(R.S. SYAL) ACCOUNTANT MEMBER Dated: 19th June, 2015.

dk

Copy forwarded to

1. Appellant

2. Respondent

3. CIT

4. CIT(A)

5. DR Dy. Registrar, ITAT, New Delhi