SMT. JALPA B. MEHTA, MUMBAI V. ASSTT. C.I.T. CENTRAL CIRCLE 14, MUMBAI

CO 195/MUM/2008

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 8131 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 22 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 04-12-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: J
• Next Hearing Date: 04-12-2012
• Assessment Year: 2001-2002
• Appeal Filed On: 12-11-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B D PATIL
• Assessee Lawyers: FIROZ ANDHYARJUNA
• Keywords: Gift; Search and seizure
• Section: 143(3); 153A; 132

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES J MUMBAI . . , . / BEFORE SHRI B.R. MITTAL, JUDICIAL MEMBER / AND , . . SHRI RAJENDRA, ACCOUNTANT MEMBER ITA NO. 3606/M/2008 ASSESSMENT YEAR 2001-02 ASST. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 14, R.NO. 1102, 11 TH FLOOR, OLD CGO ANNEXE BLDG., MUMBAI-400 020. VS. SMT. JALPA B. MEHTA, 708, GOLDEN CHAMBER, 7 TH FLOOR, ANDHERI (WEST), MUMBAI -58. PAN: AEVPM 0565 P C.O. NO. 195/M/2008 ASSESSMENT YEAR 2001-02 SMT. JALPA B. MEHTA, 708, GOLDEN CHAMBER, 7 TH FLOOR, ANDHERI (WEST), MUMBAI -58. PAN: AEVPM 0565 P VS. ASST. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 14, R.NO. 1102, 11 TH FLOOR, OLD CGO ANNEXE BLDG., MUMBAI-400 020. ( / APPELLANT ) ( / RESPONDENT ) REVENUE BY : SHRI B.D. PATIL ASSESSEE BY : SHRI FIROZ ANDHYARJUNA ! '#$ / DATE OF HEARING : 04-12-2012 %&' ! '#$ / DATE OF PRONOUNCEMENT : 04-12-2012 () / O R D E R PER RAJENDRA, AM CHALLENGING THE ORDER OF THE CIT(A) CENTRAL-III, MU MBAI DT. 19-03-2008, ASSESSEE AS WELL AS THE ASSESSING OFFICER (AO) HAVE RAISED T HE FOLLOWING GROUNDS OF APPEAL/CROSS OBJECTION IN THE APPEALS FILED BY THEM : ITA NO. 3606/M/2008 C.O. NO. 195/M/2008 SMT. JALPA B. MEHTA 2 ITA NO. 3606/M/08 - AY 2001-02 (I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS.35 LACS ON ACCOUNT OF U NEXPLAINED GIFT BY RELYING SOLELY ON THE REMAND REPORT OF THE A.O. AND WITHOUT EXAMINING THA T THE A.O.S REPORT IS NOT BASED ON ANY ENQUIRIES CONDUCTED BY THE A.O. TO FIND OUT THE GEN UINENESS OF THE CERTIFICATE OF SHAH & CO. AND THE CERTIFICATE DOES NOT GIVE THE NATURE OF PRO FESSION/ BUSINESS OF MR. BIPIN R. SHAH. (II) WITHOUT PREJUDICE TO GROUND NO.1 THE LD. CIT( A) ERRED IN NOT TAKING INTO CONSIDERATION THAT THE A.O.S REMAND REPORT DATED 15.11.2007 WAS FORWARDED BY THE ADDL. CIT, CR-3, MUMBAI BY LETTER DATED 16.11.2007 WITH THE COMMENTS THAT WITH REGARD TO GIFTS RECEIVED FROM SHRI BIPIN R. SHAH, IT MAY BE NOTED THAT THE A.O. HAS BASED HIS REPORT SOLELY ON THE BASIS OF CREDITS IN THE ACCOUNT OF SHRI. BIPIN R. SHAH BEING FROM OUTSIDE THE COUNTRY AND THE LOCAL ADDRESS IN THE D-MAT STATEMENT OF SHRI. BIPIN SHAH WAS INCORRECT. (III) WITHOUT PREJUDICE TO GROUND NO.1 THE LD. CIT (A) ERRED IN HOLDING THAT THE GIFT OF RS. 35 LACS IS GENUINE, EVEN THOUGH SHRI. BIPIN R. SHAH WA S NOT FOUND AVAILABLE AT THE MUMBAI ADDRESS AND THE DETAILS SUBMITTED BEFORE THE A.O. B Y UCO BANK, NARIMAN POINT, MUMBAI IN LETTER DATED 7.11. 2007 (REFERRED TO IN REMAND REP ORT ) DO NOT REFLECT THE SOURCE OF THE DEPOSIT AS BEING FROM THE SINGAPORE ACCOUNT OF SHRI. BIPIN R. SHAH. 2. THE APPELLANT CRAVES LEAVE TO ADD, TO AMEND AND / OR TO ALTER ANY OF THE GROUNDS OF APPEAL, IF NEED BE. 3. THE APPELLANT, THEREFORE, PRAYS THAT ON THE GROU NDS STATED ABOVE, THE ORDER OF THE CIT (A), CENTRAL-III, MUMBAI MAY BE SET ASIDE AND THAT OF TH E ASSESSING OFFICER RESTORED. CO. 195/M/08 GROUNDS OF CROSS OBJECTIONS 1 .1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LEARNED CIT(A) ERRED IN COMPLETING THE APPELLATE PROCEEDINGS WITHOUT GIVING PROPER OPPORTUNITY TO THE RESPONDENT IN THE MATTER OF GIFT OF RS. 10,00,000/- FROM MR. SUBH ASH DUDANI. 1.2 THE LEARNED CIT(A) ERRED IN NOT CONSIDERING LET TERS DATED FEBRUARY 27, 2008, MARCH 10,2008 AND MARCH 21, 2008 SUBMITTED IN THE COURSE OF THE APPELLATE PROCEEDINGS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE ADDITION OF RS. 10,00,000/- RECEIVED AS GIFT FROM MR. SUBHASH DUDANI IS IMPROPE R, INVALID AND BAD IN LAW AND HENCE MAY BE DELETED. 3. ALL THE GROUNDS OF APPEAL ARE MUTUALLY EXCLUSIVE AND WITHOUT PREJUDICE TO ONE ANOTHER. 4. THE RESPONDENT CRAVES LEAVE TO ADD, ALTER, AMEND OR MODIFY ANY OR ALL GROUNDS TILL THE APPEAL IS HEARD. ASSESSEE, AN INDIVIDUAL FILED HER RETURN OF INCOME ON 15-11-2006 DECLARING TOTAL INCOME AT RS. 1.47 LAKHS. ASSESSMENT WAS FIN ALISED BY THE ASSESSING OFFICER (AO) ON 28-12-2006 U/S. 143(3) R.W.S. 153A OF THE I NCOME TAX ACT, 1961 (ACT) DETERMINING INCOME AT RS. 46.56 LAKHS. ITA NO. 3606/M/2008 C.O. NO. 195/M/2008 SMT. JALPA B. MEHTA 3 2. A SEARCH SEIZURE ACTION U/S. 132 OF THE ACT WAS CA RRIED OUT IN THE CASE OF SHRI BIMAL NATWARLAL MEHTA (HUSBAND OF THE ASSESSEE) AND HIS ASSOCIATES ON 24-06-2004. DURING THE ASSESSMENT PROCEEDINGS, AO FOUND THAT AS SESSEE HAD RECEIVED THE FOLLOWING GIFTS FOR WHICH GIFT DECLARATION WAS FOUN D AND SEIZED DURING THE SEARCH AND SEIZURE PROCEEDINGS: S.NO. NAME OF THE DONOR INSTRUMENT DETAILS AMOUNT RS. DT. OF RECEIPT OF GIFT 01 BIPIN SHAH CHQ.NO. 033052 UCO BANK, NARIMAN PT. MUMBAI 20,00,000 03/07/2000 02 BIPIN SHAH CHQ.NO. 033055 UCO BANK, NARIMAN PT. MUMBAI 15,00,000 26/01/2001 03 SUBASH DUDHANI CHQ.NO. 623763 INDIAN BANK, MAHIM, MUMBAI 10,00,000 29/01/2001 3. AO DIRECTED THE ASSESSEE TO PRODUCE FURTHER EVIDEN CE IN SUPPORT OF THE CREDITWORTHINESS OF THE DONORS. AFTER CONSIDERING REPLY FILED BY THE ASSESSEE, HE HELD THAT IDENTITY AND GENUINENESS OF THE TRANSACTION WA S ESTABLISHED, THAT CREDITWORTHINESS OF THE DONOR WAS NOT PROVED, THAT ASSESSEE HAD NOT PRODUCED ANY PROOF IN SUPPORT OF THE CONTENTION THAT DONOR WAS HAVING NET WORTH OF M ORE THAN RS. 50 CRORES. HE ADDED AN AMOUNT OF RS. 35 LAKHS SHOWN AS GIFT AS DEEMED I NCOME OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. 3.1 WITH REGARD TO GIFT RECEIVED FROM SHRI SUBASH DUDHA NI, AO FOUND THAT THE MEHTA FAMILY (SHRI BIMAL MEHTA, ASSESSEE AND TWO MI NOR DAUGHTERS) HAD RECEIVED GIFTS AMOUNTING TO RS. 1.11 CRORES FROM SHRI DUDHAN I DURING THE PERIOD JANUARY 2001 TO OCTOBER 2001, THAT HUSBAND OF THE ASSESSEE COULD NOT PROVIDE THE ADDRESS AND CONTACT NUMBER OF SHRI DUDHANI, THAT SHRI DUDHANI W AS NEITHER CLOSE FRIEND NOR THE RELATIVE OF THE ASSESSEE. HE HELD THAT GIFT MADE BY SHRI DUDHANI WAS STRANGE AND UN- NATURAL, THAT GIFTS CLAIMED TO HAVE BEEN RECEIVED W ERE NOT OUT OF NATURAL LOVE AND AFFECTION, THAT GIFT CONFIRMATION LETTERS SEIZED DU RING THE SEARCH OPERATION PROVED IDENTITY AND GENUINENESS OF THE TRANSACTION. HE FI NALLY HELD THAT ASSESSEE HAD NOT PROVED CREDITWORTHINESS OF THE DONOR SHRI DUDHANI. THEREFORE, AN AMOUNT OF RS. 10 LAKHS SHOWN AS GIFT RECEIVED FROM HIM WAS TREATED A S INCOME OF THE ASSESSEE FOR THE AY UNDER CONSIDERATION. 4. ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPE LLATE AUTHORITY (FAA). AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, FAA CALLED FOR A REMAND REPORT FROM THE AO. IN THE REMAND REPORT, AO REPORTED AS UNDER: THE INFORMATION AS ASKED FOR REVEALED THAT THE DEP OSITS IN THE BANK ACCOUNT OF MR. BIPIN R. SHAH HAVE BEEN REMITTED FROM SINGAPORE AND IT APPEARS THAT MR. BIPIN R. SHAH HAS THE CAPACITY TO GIVE THE GIFTS OF RS. 5,00,000/ - FOR THE A.Y. 1999-2000 AND RS. 35,00,000/- FOR THE AY 2001-02 (COPY OF THE DETAILS AS OBTAINED FROM THE BANK IS ALSO ENCLOSED). FROM THE CERTIFICATE, IT APPEARS THAT SHRI BIPIN S HAH HAS THE CAPACITY TO GIVE GIFTS OF RS. 5 LAKHS FOR THE AY 99-00 AND RS. 35 LAKHS FOR T HE AY 2001-02 TO THE ASSESSEE. ITA NO. 3606/M/2008 C.O. NO. 195/M/2008 SMT. JALPA B. MEHTA 4 AFTER CONSIDERING THE REMAND REPORT AND SUBMISSIONS OF THE ASSESSEE, FAA HELD THAT NO ADDITION WAS CALLED FOR ON GROUNDS AS GIFTS BEING NON-GENUINE IN THE CASE OF SHRI BIPIN SHAH. ADDITION AMOUNTING TO RS. 35 LAKH S MADE BY THE AO WAS DELETED BY HIM. WITH REGARD TO GIFT RECEIVED FROM SHRI SUBASH DUDHA NI, FAA HAD CALLED REMAND REPORT FROM THE AO. IN HIS REMAND REPORT, AO OBSER VED AS UNDER: AS THE BANK FAILED TO PRODUCE ANY RECORDS RELATED TO THE CREDIT ENTRIES AND THE VARIOUS CASH TRANSACTIONS AS IS EVIDENT FROM THE BANK STATE MENT INDICATES THAT THE TRANSACTION WITH SMT. JALPA B. MEHTA DOES NOT APPEAR TO BE GENU INE AND ALSO THE CREDITWORTHINESS OF SHRI SUBHASH DUDHANI REMAINED UNVERIFIED. HE CONFRONTED THE ASSESSEE WITH THE ABOVE FINDINGS OF THE AO VIDE HIS OFFICE LETTER DT. 06-02-2008, AND THE ASSESSEE WAS REQUIRE D TO EXPLAIN THE SOURCE OF CREDIT IN THE CURRENT A/C NO. 9034 OF THE UCO BANK. NO DETAI LS WERE FILED BEFORE THE FAA ABOUT THE CREDITWORTHINESS OF THE DONOR. HE FINALL Y HELD THAT IN THE ABSENCE OF ANY EXPLANATION REGARDING THE CREDIT ENTRIES IMMEDIATEL Y BEFORE THE DATE OF GIFTS, THE GIFTS IN QUESTION COULD NOT BE TREATED AS GENUINE. HE CO NFIRMED THE ADDITION MADE BY THE AO AMOUNTING TO RS. 10 LAKHS TO THE INCOME OF THE A SSESSEE. 5. REVENUE HAS FILED APPEAL AGAINST THE DELETION OF T HE ADDITION MADE BY THE AO WHEREAS ASSESSEE PREFERRED AN APPEAL FOR ADDITION S USTAINED BY THE FAA. BEFORE US, DEPARTMENTAL REPRESENTATIVE (DR) SUBMITT ED THAT CREDITWORTHINESS OF DONOR WAS NOT PROVED THAT GIFTS RECEIVED BY THE ASSESSEE WAS HER OWN INCOME. AUTHORISED REPRESENTATIVE (AR) SUPPORTED THE ORDER OF THE FAA. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL PLACED B EFORE US. WE FIND THAT AO HAD SUBMITTED A REMAND REPORT. AS PER THE DIRECTION O F THE FAA IN THE REMAND REPORT HE HAS GIVEN A CATEGORICAL FINDING THAT CREDITWORTH INESS OF THE DONOR WAS ESTABLISHED. WE FIND THAT GENUINENESS OF THE TRANSACTION AND IDE NTITY OF THE DONOR WAS ACCEPTED BY THE AO IN THE ASSESSMENT ORDER ITSELF. IN THESE CI RCUMSTANCES, WE ARE OF THE OPINION THAT THERE IS NO NEED TO INTERFERE WITH THE ORDER O F THE FAA. APPEAL FILED BY THE REVENUE STANDS DISMISSED. C.O. NO. 195/M/2008 6. FACTS OF THE CASE HAVE ALREADY BEEN DISCUSSED IN T HE EARLIER PARAGRAPHS. BEFORE US, AR SUBMITTED THAT GIFT RECEIVED BY THE ASSESSEE WAS GENUINE, THAT CREDITWORTHINESS OF THE DONOR WAS ESTABLISHED. DR RELIED UPON THE O RDER OF THE FAA. AFTER HEARING THE RIVAL SUBMISSIONS, WE FIND THAT ASSESSEE HAS FAILED TO PROVE THE CREDITWORTHINESS OF THE DONOR, ADDRESS OF THE DONOR WAS NOT SUPPLIED BY THE ASSESSEE TO THE AO OR THE FAA. REMAND REPORT SUBMITTED BY THE AO TO THE FAA IS SEL F-EXPLANATORY. FAA HAD ALSO ITA NO. 3606/M/2008 C.O. NO. 195/M/2008 SMT. JALPA B. MEHTA 5 PROVIDED AN OPPORTUNITY TO THE ASSESSEE TO EXPLAIN HER STAND ABOUT THE GIFT IN QUESTION. IN OUR OPINION, ASSESSEE HAD FAILED TO PROVE THE CR EDITWORTHINESS OF THE DONOR. UPHOLDING THE ORDER OF THE FAA, WE DISMISS THE APPE AL (CROSS-OBJECTION) FILED BY THE ASSESSEE. AS A RESULT APPEAL OF THE AO AND CROSS-OBJECTIO N OF THE ASSESSEE STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH DECEMBER, 2012. () ! %&' $ + ,( - 4TH DECEMBER, 2012 & ! . / SD/- SD/- ( . . / B.R. MITTAL ) ( / RAJENDRA ) (0 / JUDICIAL MEMBER $ (0 / ACCOUNTANT MEMBER MUMBAI, ,( DATE: 4 TH DECEMBER, 2012 TNMM COPY TO: 1. APPELLANT 2. RESPONDENT 3. THE CONCERNED CIT (A) 4. THE CONCERNED CIT 5. DR J BENCH, ITAT, MUMBAI 6. GUARD FILE 1' ' //TRUE COPY// () () () () / BY ORDER, 2 22 2 / 3 3 3 3 DY./ASST. REGISTRAR , / ITAT, MUMBAI