Dinesh Mothilal, CHENNAI V. ITO, Coimbatore

CO 80/CHNY/2013

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 1725 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 7 month(s) 10 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 09-12-2015
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 12-10-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 29-04-2013
• Court: TRIBUNAL
• Department Lawyers: LAKSHMI SRIRAM
• Assessee Lawyers: P RADHAKRISHNANJCIT
• Keywords: Unexplained cash credit; Gift

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . , ! , '. ! $ , % & BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI G.PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A.NO.436 /MDS./2013 ( / ASSESSMENT YEAR :2009-10) & C.O. NO.80/MDS./2013 INCOME-TAX OFFICER, WARD-II(3), COIMBATORE. VS. SHRI DINESH MOTILAL, 22,DVANGA HIGH SCHOOL ROAD, R.S.PURAM,COIMBATORE 641 002. PAN AEYPM 8290 G ( '( / APPELLANT ) ( )*'( / RESPONDENT / CROSS OBJECTOR ) / APPELLANT BY : MR. P.RADHAKRISHNAN,JCIT, D.R / RESPONDENT BY : MS.LAKSHMI SRIRAM,ADVOCATE / DATE OF HEARING : 12.10.2015 /DATE OF PRONOUNCEMENT : 09.12.2015 + / O R D E R PER A.MOHAN ALANKAMONY , ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE REVENUE, AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)-I, COIMBA TORE DATED ITA NO.436 /MDS/2013 2 11.12.2012 IN ITA NO.270/11-12 PASSED UNDER SEC.14 3(3) READ WITH SECTION 250 OF THE ACT. THE ASSESSEE HAS ALSO FILE D CROSS OBJECTION AGAINST THE VERY SAME ORDER OF THE CIT(A). 2.1 THE REVENUE HAS RAISED FOUR ELABORATE GROUNDS IN ITS APPEAL; HOWEVER THE CRUX OF THE ISSUES IS THAT THE LEARNED CIT(A) HAD ERRED IN DELETING THE ADDITION ON ACCOUNT OF THE GIFT RECEIV ED BY THE ASSESSEE ` 13,50,000/- U/S.68 OF THE ACT AS UNEXPLAINED CASH C REDIT. 2.2. THE ASSESSEE HAS RAISED FIVE GROUNDS IN HIS CROSS O BJECTION AND THEY ARE IN SUPPORT OF THE ORDER OF THE LD. CIT (A). 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN INDIVIDUAL, RECEIVING REMUNERATION FROM THE PARTNER SHIP FIRM M/S.ASHA & CO., IN THE CAPACITY AS A PARTNER, FILED HIS RET URN OF INCOME FOR THE ASSESSMENT YEAR 2009-10 ON 10.02.2010 ADMITTING INC OME OF ` 1,84,840/-. SUBSEQUENTLY, THE RETURN WAS TAKEN UP FOR SCRUTINY AND THE ASSESSMENT WAS COMPLETED VIDE ORDER DATED 30.12 .2011 WHEREIN THE LD. AO HAD MADE CERTAIN ADDITIONS AMONGST WHICH AN ADDITION ITA NO.436 /MDS/2013 3 U/S.68 OF THE ACT WAS MADE TREATING THE GIFT RECEIV ED BY THE ASSESSEE OF ` 13,50,000/- AS UNEXPLAINED CASH CREDIT. 4.1 DURING THE COURSE OF ASSESSMENT PROCEEDINGS I T WAS OBSERVED BY THE LD. ASSESSING OFFICER THAT THE ASSESSEE HAS ADMITTED REMUNERATION RECEIVED FROM M/S.ASHA & CO. ` 50,175/-, SHORT TERM CAPITAL GAIN OF ` 1,24,273/- AND INCOME FROM OTHER SOURCES ` 24,330/-. IT WAS ALSO REVEALED THAT THE ASSESSEE HAD SOLD A P ROPERTY WHICH WAS RECEIVED AS GIFT AND EARNED LONG TERM CAPITAL GAIN OF RS.41.75 LAKHS AGAINST WHICH THE ASSESSEE HAD CLAIMED EXEMPTION U/ S.54 OF THE ACT. FURTHER ON VERIFYING ON BANK STATEMENT, IT WAS NOTI CED THAT THERE WERE SEVERAL CREDITS AGGREGATING TO ` 20,01,385/-. THE ASSESSEE HAD EXPLAINED THAT HIS MOTHER HAD RECEIVED GIFT FROM HE R BROTHERS DETAILED AS FOLLOWS WHICH WAS PASSED ON TO THE ASSESSEE BY H IS MOTHER:- SL. NO. NAME OF PERSONS FROM WHOM GIFT WAS RECEIVED RELATIONSHIP AMOUNT 1. SRI VASANTH R.TRIKAMJI UNCLE 9,50,000 2. SRI PRAVIN R.TRIKAMJI UNCLE 4,00,000 TOTAL 13,50,000 ITA NO.436 /MDS/2013 4 4.2 THE ASSESSEE HAD FURTHER EXPLAINED BEFORE THE LD. ASSESSING OFFICER THAT BOTH THE ASSESSEES UNCLES HAD SOLD TH EIR ANCESTOR PROPERTY DURING MARCH 2008 FOR ` 11,25,000/- WHICH WAS THE SOURCE FOR THE GIFT GIVEN TO HIS MOTHER. HOWEVER, THE LD. ASS ESSING OFFICER REJECTED THE CONTENTION OF THE ASSESSEE FOR THE FOL LOWING REASONS:- I) THE GIFT WAS MADE TO THE SISTER BY THE BROTHER S IN PIECE MEAL. THEREFORE, THE GENUINENESS OF THE GIFT IS DOUBTFUL. II) THE GIFTS WERE RECEIVED IN CASH AND WERE DEPOSI TED BY THE ASSESSEE IN HIS BANK ACCOUNT. III) THE DONORS ARE NOT ASSESSED TO TAX. IV) THE PERSONS WHO HAVE GIFTED THE CASH OUT OF THE SALE PROCEEDS OF THE ANCESTRAL PROPERTY HAD THEIR OWN FAMILY CONSIST ING OF CHILDREN WHO ARE ALSO ENTITLED TO THE SHARE IN THE ASSETS SO LD. THEREFORE THE THEORY OF GIFT IS NOT BELIEVABLE. V) THE ASSESSEE HAS ONLY DISCHARGED THE IDENTITY OF THE DONORS, HOWEVER NOT ESTABLISHED THE CREDIT WORTHINESS OF TH E DONORS, GENUINENESS OF THE TRANSACTIONS SINCE THERE WAS NO OCCASION FOR THE DONORS TO HAVE MADE THE GIFT. ITA NO.436 /MDS/2013 5 4.3 HOWEVER, ON APPEAL, THE LD. CIT (A) DELETED TH E ADDITION BY OBSERVING AS UNDER:- 5. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, TH E APPELLANT SUBMITTED THAT THE ASSESSEES UNCLES SHRI VASANT R TIKANJI AN D SRI PRAVEEN R TIKANJI HAVE SOLD ANCESTRAL PROPERTY DURING MARCH 2008. BOT H OF THEM RECEIVED RS.11,25,000/- EACH AS PER THE DETAILS FURNISHED. O UT OF THIS AMOUNT, THEY HAVE GIFTED RS.9,50,000/-AND RS.4,00,000/- RESPECTI VELY TO THEIR SISTER SMT.LEELAVATHY MOTILAL. THE DEPOSITS IN THE BANK AC COUNT OF THE ASSESSEE WERE EXPLAINED AS THE PROCEEDS OUT OF THE GIFTS REC EIVED FROM HIS UNCLES. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AR FILED THE SALE DEEDS, CONFIRMATION LETTERS FROM THE DONORS THEREBY ESTABLISHING THE IDENTITY OF THE DONOR, CREDIT WORTHINESS OF THE DON OR AND THE GIFT GIVEN TO THE APPELLANTS MOTHER. REGARDING THE GENUINENESS O F THE TRANSACTION, THE GIFT WAS GIVEN BY MEANS OF CASH TO THE ASSESSEE BY HIS UNCLES. THE ASSESSING OFFICER DISCUSSED ABOUT THE HUMAN PROBABI LITY AS TO WHY THE DONOR IS PROMPTED TO GIVE GIFT TO THE APPELLANT. ON THE FACTS OF THE CASE, THE GIFT IS GIVEN BY BROTHER TO HIS SISTER. THE EVI DENCES FURNISHED BY THE APPELLANT DURING THE COURSE OF ASSESSMENT PROCEEDIN GS, HAVE NOT BEEN EXAMINED OR INVESTIGATED FURTHER TO DOUBT THE GENUI NENESS OF THE TRANSACTION. THE CONFIRMATION LETTERS FILED ALONG W ITH THE BANK ACCOUNTS SHOW THAT THE UNCLES HAVE PAID THE AMOUNTS TO SHRI MOTILAL IN THE MONTH OF BY THE DONORS WHICH IS NOT DISPUTED BY THE ASSESSIN G OFFICER. IN VIEW OF THE ABOVE FACTS, I DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION THE INCOME TAX ACT. ITA NO.436 /MDS/2013 6 5. BEFORE US LD. D.R ARGUED IN SUPPORT OF THE ORDE RS OF THE REVENUE AND ON THE OTHER HAND LD. A.R. RELIED ON TH E ORDER OF THE LD. CIT (A). 6. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PE RUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE FACTS OF T HE CASE, IT IS APPARENT THAT THE ASSESSEE HAD EXPLAINED THE SOURCE OF GIFT WHICH IS JUSTIFIABLE. AS OBSERVED BY THE LD. CIT (A), THE L D. ASSESSING OFFICER HAS REJECTED THE EXPLANATION MADE BY THE ASSESSEE W ITHOUT INVESTIGATING FURTHER ON THE MATTER. THE ASSESSEE H AS ALSO FURNISHED CONFIRMATION LETTERS FROM THE DONORS AND PRODUCED T HE BANK ACCOUNTS TO ESTABLISH THE SOURCE OF GIFT FROM HIS UNCLES. T HE UNCLES OF THE ASSESSEE HAD GIFTED THE AMOUNT TO THEIR SISTER WHIC H WAS PASSED ON TO THE ASSESSEE. CONSIDERING THE RELATIONSHIP OF AL L THE PERSONS INVOLVED IN THE TRANSACTIONS WE DO NOT HAVE ANY HES ITATION TO ACCEPT THE VIEW TAKEN BY THE LD. CIT (A) BECAUSE THE ASSES SEE HAD FURNISHED ALL THE DETAILS OF THE TRANSACTION. THE L D.A.O WITHOUT VERIFYING THE EVIDENCE FURNISHED BY THE ASSESSEE HA D PROCEEDED ON THE BASIS OF ASSUMPTIONS WHICH CANNOT BE APPRECIATE D. HENCE, WE ITA NO.436 /MDS/2013 7 HEREBY CONFIRM THE ORDER OF THE LD. CIT (A). SINCE THE CROSS OBJECTIONS RAISED BY THE ASSESSEE IS IN SUPPORT OF THE ORDER OF THE LD. CIT (A), THE SAME IS ALLOWED IN FAVOUR OF THE ASSES SEE. 7. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D & THE CROSS OBJECTIONS RAISED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 9 TH DECEMBER, 2015 AT CHENNAI. SD/- SD/- ( ! . ' ) (G.PAVAN KUMAR) ( . ) (A.MOHAN ALANKAMONY) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 09 TH DECEMBER, 2015. K S SUNDARAM. #$%% &'%(' /COPY TO: % 1. /APPELLANT 2. /RESPONDENT 3. % )%*+ /CIT(A) 4. % ) /CIT 5. 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