ANITA GUPTA, MUMBAI V. ACIT CIR 27(1), NAVI MUMBAI

CO 45/MUM/2017

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 3483 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 8 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 30-01-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2006-2007
• Appeal Filed On: 20-02-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR P DANIEL
• Assessee Lawyers: RAJESH KUMAR YADAV
• Keywords: Gift; Assessment record
• Section: 143(3); 56(2); 131; 56

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH A, MUMBAI BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI N.K. PRADHAN, ACCOUNTANT MEMBER ITA NO.4855/M/2015 ASSESSMENT YEAR: 2006-07 THE ACIT, CIR-27(1), ROOM NO.411, 4 TH FLOOR, TOWER NO.6, VASHI STATION COMPLEX, MUMBAI 400 703 VS. SMT. ANITA A. GUPTA, 13, VASANT VIHAR SOC., C.G. ROAD, CHEMBUR, MUMBAI 400 074 PAN: ACKPG0089P (APPELLANT) (RESPONDENT) CO NO.45/M/2017 ASSESSMENT YEAR: 2006-07 SMT. ANITA GUPTA, 13, VASANT VIHAR SOCIETY, C.P. GIDWANI ROAD, CHEMBUR, MUMBAI 400 074 PAN: ACKPG0089P VS. THE ACIT, CIR-27(1), ROOM NO.411, 4 TH FLOOR, TOWER NO.6, VASHI STATION COMPLEX, VASHI, NAVI MUMBAI (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI RAJESH KUMAR YADAV, A.R. REVENUE BY : DR. P. DANIEL, D.R. DATE OF HEARING : 24.01.2018 DATE OF PRONOUNCEMENT : 30.01.2018 O R D E R PER D.T. GARASIA , JUDICIAL MEMBER: THE ABOVE TITLED APPEAL HAS BEEN PREFERRED BY THE REVENUE AND THE CROSS OBJECTION FILED BY THE ASSESSEE AGAINST T HE ORDER DATED ITA NO.4855/M/2015 & CO NO.45/M/2017 SMT. ANITA GUPTA 2 04.06.2015 OF THE COMMISSIONER OF INCOME TAX (APPEA LS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT YEAR 2006-07. 2. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, FRO M THE DETAILS FURNISHED, THE ASSESSING OFFICER (HEREINAFTER REFER RED TO AS THE AO) NOTICED THAT ASSESSEE HAS RECEIVED GIFT OF RS.1 CRO RE BY WAY OF CHEQUE AND RS.23,66,733/- IN FORM OF EQUITY SHARES FROM HER DAUGHTER MRS. RUCHI GUPTA. THE AO NOTICED THAT ASS ESSEE FILED PHOTOCOPIES OF THE NOTARIZED DECLARATIONS REGARDING THE RECEIPT OF GIFT FROM HER DAUGHTER AND THAT ONE SUCH DECLARATION WAS DATED 26.12.13 WHEREIN MRS. RUCHI GUPTA DECLARED THAT SHE HAD GIFT ED RS.1,00,00,000/- TO HER MOTHER DURING F.Y. 2005-06 WITHOUT ANY CONSIDERATION. THE DECLARATION WAS DATED 14.02.200 7 ACCORDING TO WHICH MRS. RUCHI GUPTA HAS GIFTED SHARES WORTH RS.2 3,66,735/- TO HER MOTHER OUT OF NATURAL LOVE AND AFFECTION. THE AO OBSERVED THAT ASSESSEE HAS TAKEN LOAN FROM M/S. ASHIANNA FAMILY T RUST OF RS.31,75,000/- AND OUT OF THIS AN AMOUNT OF RS.11,7 5,000/- WAS OUTSTANDING. THE ASSESSEE IS ONE OF THE TRUSTEES O F THE TRUST AND HER CHILDREN ARE THE BENEFICIARIES. THE AO HELD THAT T RUSTEE CANNOT TAKE LOAN FROM TRUST AND ADDED THE AMOUNT OF RS.11,75,00 0/- TO THE INCOME OF THE ASSESSEE. 3. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. CIT(A) HAS ALLOWED BY OBSERVING AS UNDER: 3.3 I HAVE GONE THROUGH THE CONTENTION OF THE APPE LLANT AS WELL AS THAT OF THE A.O. THE PRIMARY FACTS EMANATING OUT OF THE INS TANT CASE ARE THAT THE ITA NO.4855/M/2015 & CO NO.45/M/2017 SMT. ANITA GUPTA 3 APPELLANT AND HER DAUGHTER WERE PARTNERS IN A PARTN ERSHIP FIRM M/S. INDIA STEEL INTERNATIONAL. THE DAUGHTER OF THE APPELLANT MRS. RUCHI GUPTA IN OR AROUND DECEMBER, 2004 GOT MARRIED AND IS NOW SETTLE D WITH HER IN-LAWS. AT THE TIME OF MARRIAGE, THE SAID MRS.RUCHI GUPTA HAD HER OWN INCOME HAVING HER OWN CAPITAL FROM PARTNERSHIP BUSINESS AND OTHER SOU RCES. BESIDES, HER INVESTMENT IN CAPITAL ACCOUNT IN A PARTNERSHIP FIRM , SHE HAD VARIOUS OTHER INVESTMENTS LIKE INVESTMENT IN SHARES, ETC. SINCE T HE IN-LAWS OF THE SAID MRS.RUCHI GUPTA DID NOT WANT HER PARENTAL CAPITAL T O BE REMAINED WITH HER AFTER MARRIAGE, THE SAID RUCHI GUPTA THOUGHT IT FIT TO TRANSFER HER ENTIRE CAPITAL TO HER MOTHER BY WAY OF GIFT. IT IS IN THIS BACKDROP, THE SAID RUCHI GUPTA HAD TRANSFERRED HER VARIOUS INVESTMENTS TO HER MOTHER, (THE APPELLANT) OUT OF HER NATURAL LOVE AND AFFECTION. IT IS ALSO SEEN FROM RE CORDS THAT HER MOTHER HAD WITHDRAWN MORE MONEY FROM THE PARTNERSHIP FIRM NAME LY M/S. INDIA STEEL INTERNATIONAL WHEREAS MRS. RUCHI GUPTA HAD A CREDIT BALANCE. THUS, SHE WITHDREW HER CAPITAL FROM THE FIRM AND GIFTED THE SAME TO HE R MOTHER WHICH WAS IN TURN BROUGHT BACK BY HER MOTHER AGAINST HER WITHDRAWALS FROM THE FIRM. SIMILARLY, SHE HAD ALSO TRANSFERRED VARIOUS OTHER INVESTMENTS TO H ER MOTHER. THE A.O'S STAND OF APPLICABLY OF PROVISIONS OF SECTION 56 IS UNWARRANT ED AND UNCALLED FOR SINCE THE GIFT WAS RECEIVED FROM HER DAUGHTER WHICH WOULD FALL IN THE CATEGORY OF EXEMPTIONS OF GIFTS RECEIVED FROM RELATIVES UNDER SECTION 56. IT IS ALSO PERTINENT TO NOTE THAT APPELLANT HAS EXPLAINED THE SOURCE OF GIFT RECEIVED AS WELL AS CONSIDERING THE GIFT FROM DAUGHTER TO MOTHER, THE GENUINENESS THEREOF CA NNOT BE DOUBTED, IN THE SPECIFIC CIRCUMSTANCES. CONSIDERING THE AFORESAID B ACK-GROUND, THE ADDITIONS MADE BY A.O ARE INDIVIDUALLY DEALT WITH HEREINAFTER. 3.4 IN THIS CASE MRS. RUCHI GUPTA HAS GIVEN GIFT TO HER MOTHER MRS ANITA GUPTA. THE GIFT IS IN TWO PARTS FIRSTLY THE AMOUNT OF RS 1 CRO RE PAID BY CHEQUE AND GIFT OF SHARES HAVING FACE VALUE OF RS 23,66,733/-. THE UNDISPUTED FACT IS THAT THE GIFT IS FROM DAUGHTER TO HER MOTHER. THE RELATIONSHIP BETWEEN TH E APPELLANT AND HER DAUGHTER IS ACCEPTED. FURTHER, THE GIFT OF RS 1 CRORE IS REC EIVED BY CHEQUE, THE CAPACITY I.E CREDIT WORTHINESS OF THE DONOR, HER IDENTITY IS NOT DISPUTED. AS REGARDS THE NATURE OF TRANSACTION, IT IS OBSERVED THAT THE APPELLANT I S A PARTNER IN PARTNERSHIP FIRM M/S INDIA STEEL INTERNATIONAL FROM NUMBER OF YEARS. SHE HAD OVERDRAWN THE CAPITAL FROM SAID PARTNERSHIP FIRM PRIOR TO A.Y. 2002-2003 OF RS .64,89,483/- AND SAME WAS REFLECTED AS A LIABILITY AND FIXED CAPITAL OF RS. 2 ,50,000/- IS REFLECTED AS ASSETS IN HER BALANCE SHEET. THE APPELLANT OWES A SUM RS. 64,89,4 83/- TO THE FIRM. FURTHER, MRS.RUCHI GUPTA HAD TO RECEIVE AN AMOUNT OF RS. 77, 63,790/- FROM SAID FIRM. THESE TRANSACTIONS WERE DONE THROUGH BANK ACCOUNT IN INDI AN BANK WADALA BRANCH. THE BANK A/C NO 424784153, BELONGS TO THE APPELLANT FRO M WHERE SHE PAID A SUM OF RS. 80 LCAS ON 24/01/2006 TO THE FIRM HAVING BANK A/C 4 24811871 AGAINST HER LIABILITY OF RS. 64,89,483/-. THE EXCESS AMOUNT OF RS. 12,40,000 /- WAS REFUNDED BY PARTNERSHIP FIRM. ON RECEIPT OF SAID AMOUNT THE FIRM REFUNDED A MOUNT OF RS. 77,63,790/- DUE TO MRS.RUCHI GUPTA IN HER BANK A/C. NO.424737770. FROM THE SAID ACCOUNT MRS.RUCHI GUPTA GIFTED A SUM OF RS.66, 15,000/- OUT OF TOTAL GIFT OF RS.1 CRORE AND REMAINING BALANCE FROM HER ICICI BANK. 3.5 THUS, THE TRANSACTION OF GIFT OF RS 1 CRORE IS ROUTED THROUGH THE BANK ACCOUNT AND HAS BEEN EXPLAINED. THUS, ALL THE ELEMENTS OF T HE GIFT ARE IMBIBED IN THE ITA NO.4855/M/2015 & CO NO.45/M/2017 SMT. ANITA GUPTA 4 TRANSACTION AS ENVISAGED IN SECTION 56(2) OF THE AC T. MERELY BECAUSE THE DECLARATION OF THE GIFT HAS BEEN MADE SUBSEQUENTLY CANNOT ALTER THE NATURE OF THE TRANSACTION. THUS, NO ADDITION ON THIS ACCOUNT CAN BE SUSTAINED. 3.6 AS REGARDS THE GIFT OF SHARES OF THE FACE VALUE OF RS23,66,733/- IT IS OBSERVED THAT THE TRANSFER OF THE SHARES HAVE TAKEN PLACE TH ROUGH DEMAT ACCOUNT IMMEDIATELY DURING THE RELEVANT FINANCIAL YEAR AND THE SAME HAS BEEN REFLECTED IN THE DEMAT STATEMENT OF BOTH THE APPELLANT AND THE D ONOR. THEREFORE, THERE CANNOT BE ANY AFTERTHOUGHT IN THIS ARRANGEMENT. AS ALL THE MATERIAL FACTS REMAIN THE SAME, THE ADDITION ON THIS ACCOUNT CANNOT BE SUSTAINED. A CCORDINGLY, THE ADDITION OF RS.1,23,66,733/- (RS.1,00,00,000/- + RS.23, 23,66,7 33) IS HEREBY DELETED. 3.7 .. 3.8 THE ADDITION OF RS.11,75,000/- ON ACCOUNT OF LO AN TAKEN FROM FAMILY TRUST IS NOT SUSTAINABLE ON THE FACTS OF THE CASE. THE APPEL LANT IS ONE OF THE TRUSTEES OF THE AASHIANA &FAMILY TRUST AND HER CHILDREN ARE BENEFIC IARIES. THE TRUST IS ASSESSED UNDER PAN AABTA6326J. THE AO HAS NOT GIVEN ANY REAS ON TO CONCLUDE AS TO HOW THE AMOUNT OF RS 11,75,000/- CONSIDERED AS LOAN FRO M THE TRUST AND THAT THE SAME HAS BEEN USED BY THE APPELLANT FOR HER PERSONAL BEN EFIT. THE TRUST IS REGULARLY ASSESSED TO TAX AND ITS ASSESSMENTS FOR THE ASSESSM ENT YEARS 2006-2007 AND 2007- 2008 HAVE BEEN COMPLETED UNDER SECTION 143(3) OF TH E ACT, THE DETAILS WAS FURNISHED BEFORE THE AO TO PROVE THE GENUINENESS OF TRANSACTIONS ALONG WITH THE BALANCE SHEET AND CAPITAL ACCOUNT. THE LIABILITY OF THE APPELLANT OF RS. 15,46,000/- IS REFLECTED IN BALANCE SHEET AND SAME IS ACCEPTED BY AO ON THE STRENGTH OF CONFIRMATION FILED. THUS, THE ADDITION IS NOT SUSTA INABLE ON THIS ACCOUNT AND THE SAME IS DELETED. ACCORDINGLY, THE ADDITION OF RS. 1 1,75,000/- IS HEREBY DELETED. 4. THE LD. D.R. SUBMITTED THAT DURING THE COURSE OF PROCEEDINGS THE SUMMONS UNDER SECTION 131 WAS ISSUED TO THE ASS ESSEE AND TO HER DAUGHTER AND AO HAS VERIFIED ALL THE ACCOUNTS AND F ROM THESE THREE JOINT ACCOUNTS WHICH WERE FILED BEFORE THE AO WHICH IS PRODUCED IN ASSESSMENT RECORD. THE AO HAS COME TO A CONCLUSION THAT THIS IS CALCULATED DESIGN TO GET BENEFIT OF SECTION 56 CLAI MING OF GIFT BY DAUGHTER TO HER MOTHER. IN THE FIRST BANK ACCOUNT ASSESSEES NAME IS THERE AND DEPOSITS WERE MADE BY TWO OTHER PERSONS. THEREFORE, ALL DECLARATIONS MADE ARE ONLY A SELF SERVING STATEMENT AND THE LD. CIT(A) WITHOUT CONSIDERING THE MANNER IN WHICH THE AMOUNTS WERE OPERATED HAS DELETED THE ADDITION. ITA NO.4855/M/2015 & CO NO.45/M/2017 SMT. ANITA GUPTA 5 5. ON THE OTHER HAND, THE LD. D.R. HAS RELIED UPON THE ORDER OF THE LD. CIT(A). 6. THE LD. A.R. SUBMITTED THAT THE ASSESSEE HAS FIL ED ACKNOWLEDGMENT OF RETURN FILED BY MRS. RUCHI GUPTA ALONG WITH COMPUTATION OF INCOME, BALANCE SHEET, CAPITAL ACCOU NT FOR A.Y. 2005-06 & 2006-07. THE ASSESSEE HAS ALSO FILED THE DETAIL OF SHARE INVESTMENT, NUMBER OF SHARES BY MRS. RUCHI GUPTA. THEREFORE, ASSESSEE HAS APPROVED THE GENUINENESS OF GIFT BY WA Y OF IDENTITY OF DONORS CREDITWORTHINESS. HENCE, THE QUESTION OF G IFT RECEIVED BY THE ASSESSEE AS INCOME DOES NOT ARISE. SUMMONS WERE IS SUED UNDER SECTION 131 AND MRS. RUCHI GUPTA HAS ALSO CONFIRMED THE SAME. THEREFORE, THE LD. CIT(A) HAS VERIFIED ALL THE RECO RDS. THEREFORE, NO ADDITION IS REQUIRED. 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE P ARTIES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT ASSESSEES DAUGHTER MRS. RUCHI GUPTA GOT MARRIED AN D SETTLED WITH HER LAWS. AT THE TIME OF MARRIAGE MRS. RUCHI GUPTA HAD HER OWN SOURCE OF INCOME IN PARTNERSHIP AND OTHER SOURCES. SHE HAD ALSO CAPITAL ACCOUNT AND MADE VARIOUS INVESTMENTS IN SHA RES. THEREFORE, MRS. RUCHI GUPTA AFTER MARRIAGE HAS TRANSFERRED ENT IRE CAPITAL ACCOUNT TO HER MOTHER AND ALL THE PAYMENTS HAVE BEE N MADE BY WAY OF CHEQUE. THE RELATION BETWEEN ASSESSEE AND HER D AUGHTER IS ACCEPTED. THE GIFT OF RS.1,00,00,000/- IS RECEIVED BY CHEQUE. CREDITWORTHINESS OF HER IDENTITY IS NOT DISPUTED. MOREOVER, ITA NO.4855/M/2015 & CO NO.45/M/2017 SMT. ANITA GUPTA 6 TRANSACTION WAS DONE THROUGH BANKING CHANNEL, THERE FORE, CONSIDERING THE SAME, THE LD. CIT(A) HAS DELETED TH E ADDITION AND OUR INTERFERENCE IS NOT REQUIRED. SIMILARLY, THE A DDITION OF RS.11,75,000/- IS ASSESSED TO TAX AND THE ASSESSMEN T FOR 2006-07 & 2007-08 HAS BEEN COMPLETED UNDER SECTION 143(3) OF THE ACT AND DETAILS WERE FURNISHED. THEREFORE, ALL THESE EVIDE NCES WERE VERIFIED BY THE LD. CIT(A) AND THE LD. CIT(A) HAS RIGHTLY DE LETED THE ADDITION. THEREFORE, OUR INTERFERENCE IS NOT REQUI RED. HENCE, THE REVENUES APPEAL IS DISMISSED. 8. AS WE HAVE ALREADY DISMISSED THE DEPARTMENTAL AP PEAL, ISSUE OF REOPENING HAS BECOME ACADEMIC. THEREFORE, WE DO NO T DEAL WITH IT. HENCE, THE CROSS OBJECTION OF THE ASSESSEE IS DISMI SSED. 9. IN THE RESULT, REVENUES APPEAL AS WELL AS ASSES SEES CROSS OBJECTION IS DISMISSED ORDER PRONOUNCED IN THE OPEN COURT ON 30.01.2018. SD/- SD/- (N.K. PRADHAN) (D.T. GARASIA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 30.01.2018. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH ITA NO.4855/M/2015 & CO NO.45/M/2017 SMT. ANITA GUPTA 7 //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.