ACIT CEN CIR 17 & 28, MUMBAI V. MAHESH A. DOSHI, MUMBAI

ITA 1063/MUM/2010

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2870 (ITAT-MUMBAI)
• Duration Of Justice: 6 year(s) 7 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 24-06-2016
• Assessment Year: 2002-2003
• Appeal Filed On: 10-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AGAINST DATED PASSED
• Keywords: Gift
• Section: 142(1); 153A; 68; 15

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI . . , , !' #$, % , & BEFORE SHRI R.C.SHARMA, AM AND SHRI AMARJIT SINGH, JM / I.T.A. NO.1063/MUM/2010 ( %' ( / ASSESSMENT YEAR: 2002-03) ASTT. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 17 & 28 ROOM NO.401, 4 TH FLOOR, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI 400020 ' / VS. SHRI MAHESH M. DOSHI 01, NATRAJ, 34, V.P.ROAD, VILE PARLE (WEST) MUMBAI - 400056 ./ ./ PAN/GIR NO. : AABPD9701C ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING: 01.07.2016 !' /DATE OF PRONOUNCEMENT: 05.10.2016 #$ / O R D E R PER AMARJIT SINGH, JM: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 27.11.2009 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) 39, MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] R ELEVANT TO THE A.Y.2002-03. ASSESSEE BY: SHRI S.C.TIWARI DEPARTMENT BY: SHRI MALLIK ARJUN UTTIRE ITA NO.1063/MUM/10 A.Y.2002-03 2 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- A. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING ADDITION O F RS.50,00,000/- MADE BY THE ASSESSING OFFICER U/S.68 OF THE I.T.ACT, 1961. B. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDIT ION ON THE GROUND THAT THE ASSESSEE HAD SUFFICIENT BALANCE IN HIS CAPITAL ACCOUNT AND BANK ACCOUNT, WHEN IN FACT ALL THE AMOUNTS RECEIVED IN BANK ACCOUNT WERE FROM THE DONE ES ACCOUNT I.E. EURO GROUP AND INCOME RETURNED BY THE DONOR WAS ONLY RS.6,43,665/- FOR A.Y.2002-03. C. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN ACCEPTING THE GENU INENESS OF THE GIFT WHEN THE DONOR DOES NOT HAVE SUFFICIENT RESOURCES TO MAKE THE GIFT. 2. THE APPELLANT CRAVES TO LEAVE TO ADD, TO AMEND A ND / 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)-39, MUMBAI MAY BE SE T ASIDE AND THAT OF THE ASSESSING OFFICER RESTORED. 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILE D HIS RETURN OF INCOME ON 29.12.2006 DECLARING TOTAL INCOME TO THE TUNE OF RS.2,65,850/-. THE RETURN OF WAS PROCESSED U/S.143( 1) OF THE INCOME TAX ACT, 1961( IN SHORT THE ACT). A SEARCH AND S EIZURE ACTION U/S.132 OF THE ACT WAS CONDUCTED ON 03.08.2006 BY T HE DDIT UNIT III(1), MUMBAI ON EURO GROUP OF COMPANIES. THE ASS ESSEE BEING AN ASSOCIATE PERSON OF THIS GROUP, HIS RESIDENTIAL PRE MISES WAS ALSO SEARCHED. A NOTICE U/S.153A OF THE ACT WAS ISSUED ON 30.11.2006. IN ITA NO.1063/MUM/10 A.Y.2002-03 3 RESPONSES TO THE SAID NOTICE, THE ASSESSEE FILED HI S RETURN OF INCOME ON 29.12.2006 DECLARING TOTAL INCOME TO THE TUNE OF RS .2,65,850/-. THE RETURN OF INCOME WAS ACCOMPANIED WITH COMPUTATION O F TOTAL INCOME, BALANCE SHEET AND CAPITAL ACCOUNT ETC. NOTICES U/S . 143(2) / 142(1) OF THE ACT WERE ALSO ISSUED AND SERVED UPON THE ASSESS EE. THE ASSESSEE RECEIVED THE DONATION TO THE TUNE OF RS.50,00,000/- . THE CREDITWORTHINESS OF THE DONOR AND THE GENUINENESS O F THE GIFT WERE NOT PROPERLY PROVED. THEREFORE, THE GIFT TO THE TUNE O F RS.50,00,000/- WAS ADDED TO THE INCOME OF THE ASSESSEE. THEREFORE, TH E ASSESSEE PREFERRED AN APPEAL BEFORE THE LEARNED CIT(A) WHO ALLOWED THE CLAIM OF THE ASSESSEE. THEREFORE, THE REVENUE HAS FILED THE PRE SENT APPEAL BEFORE US. ISSUE NO. A, B & C:- 4. THESE ISSUES ARE INTERCONNECTED THEREFORE ARE BE ING TAKEN UP TOGETHER FOR ADJUDICATION. THE REVENUE HAS RAISED T HE ISSUE OF DELETION OF RS.50,00,000/- ADDED BY THE ASSESSING OFFICER U/ S. 68 OF THE ACT. THE ASSESSEE HAS ALREADY SHOWN GIFT OF RS.50,00,000 /- IN HIS RETURN OF INCOME WHICH HAS BEEN PROCESSED U/S. 143(1) OF THE ACT AND COPY OF WHICH HAS BEEN ATTACHED AT PAGE 8 OF THE PAPER BOOK . THEREAFTER AN ACTION U/S.132 OF THE ACT WAS CONDUCTED ON 03.08.20 06 BY THE DDIT UNIT-II(1), MUMBAI ON EURO GROUP OF COMPANIES. THE ASSESSEE BEING AN ASSOCIATE PERSON ON THIS GROUP, HIS RESIDENTIAL PREMISES WAS ALSO SEARCHED. IN THE BOOKS OF ACCOUNTS DONOR SHRI VIMA L RATHI HAS ALSO ITA NO.1063/MUM/10 A.Y.2002-03 4 SHOWN THE GIFT TO THE ASSESSEE TO THE TUNE OF RS.50 ,00,000/-. THE ASSESSMENT WAS REOPENED U/S.147 OF THE ACT. IN THE INSTANT CASE THE IDENTIFICATION OF THE DONOR IS NOT IN DISPUTE WHO H AS CAPITAL OF WORTH RS.97,53,788/-. DONOR HAS EXECUTED THE GIFT DEED IN FAVOUR OF THE DONEE AND ALSO FILED AN AFFIDAVIT IN THIS SUPPORT. THE DONOR AS WELL AS DONEE HAS REFLECTED THE TRANSACTION IN THEIR BOOKS OF ACCOUNTS. THE GIFT HAS BEEN MADE THROUGH CHEQUE WHICH HAS BEEN RE FLECTED IN THE BANK ACCOUNT AND THE DONEE HAS ALSO RECEIVED THE CH EQUE AND THE TRANSACTION HAS BEEN REFLECTED IN HIS BANK ACCOUNT ALSO. IN THIS SAID CIRCUMSTANCES THE GENUINENESS OF THE DONOR IS NOT I N DISPUTE AND THE CREDITWORTHINESS OF THE DONOR IS ALSO IN DISPUTE BE ING HE WAS HAVING SUFFICIENT AMOUNT IN HIS ACCOUNT. THE ACCOUNT OF T HE DONOR IS HEREBY MENTIONED BELOW WHICH REFLECT THE SUFFICIENT AMOUNT OF DONATION:- DATE CH. NO. PARTICULARS DEBITS CREDITS BALANCE 2001 23.06.2001 26.06.2001 26.06.2001 26.06.2001 26.06.2001 74478 331616 336368 BROUGHT FORWARD BAL. TO CLFD/01/9800008 FOR DRSM:00120 VIMAL KUMAR RATHI BY CLFD/01/9800008 DRSM M L M INVESTMENT CO. BY INST. NO. 331616 ON THE COSMOS CO-OPERATIVE BANK 970592 LALJIBHAI K SHAH 970598 NENSHI L SHAH BY INST. NO. 498993 ON THE COSMOS CO-OPERATIVE BANK 5,00,000.00 5,00,000.00 5,00,000.00 20,25,479.00 10,34,110.00 5,10,462.12 10,462.12 5,10,462.12 20,35,941.12 30,70,051.12 ITA NO.1063/MUM/10 A.Y.2002-03 5 26.06.2001 27.06.2001 28.06.2001 28.06.2001 28.06.2001 28.06.2001 498993 44820 74479 361614 361082 970013 NEELAM METALS BY INST. NO. 44820 ON MUMBAI DISTRICT CENTRAL C 3244 LAXMI PLY & VANEER TO CLFD 01/980008 FOR DRSN : 00121 VIMAL KUMAR RATHI M M DOSHI BY CLFD/01/98008 DRSN N BY INST. NO.363614 ON CITI BANK N.A. CENTURY ENKA BY INST. NO.361082 ON CITI BANK N.A. CENTURY ENKA 51,28,000.00 50,00,000.00 10,34,110.00 10,34,110.00 50,00,000.00 250.00 50.00 41,04,161.12 51,38,271.12 10,271.12 49,89,728.88D 10,271.12 10,521.12 10,571.12 5. THE ABOVE SAID STATEMENTS SPEAKS ABOUT THE SUFFI CIENT FUNDS LIES WITH THE DONOR TO THE VARIOUS TRANSACTIONS CARRIED OUT BY HIM AND THEREFORE, IN VIEW OF THESE SOURCES THE DONOR HAS M ADE THE GIFT TO THE DONEE. MOREOVER, THE SEARCH CARRIED OUT IN VIEW OF THE PROVISION U/S.132 OF THE ACT AT THE RESIDENTIAL AS WELL AS BU SINESS PREMISES OF DONOR AND DONEE. NO NEW MATERIAL OF ANY KIND WAS F OUND WHICH MAY LEADS TO THIS FACT THAT THE TRANSACTION IS BOGUS AN D IS NOT LIABLE TO BE TREATED AS GENUINE. THE INCOME OF THE DONEE NOWHER E ROUTED THROUGH THE ACCOUNT OF DONOR. NO DOUBT NO MATERIAL OF ANY KIND WAS FOUND WITH THE AUTHORITY TO WHICH IT CAN BE ASSUME THAT T HE GIFT IS NOT IN ACCORDANCE WITH LAW. MOREOVER IN THIS REGARD WE AL SO FIND SUPPORT OF LAW SETTLED IN CIT VS. MS. ASHA HAMPANNAVAR SLP (CI VIL NO.16370 OF 2009) SLP REJECTED IN (2009) IN (2009) 319 ITR ( ST)5 WHEREIN THE ITA NO.1063/MUM/10 A.Y.2002-03 6 HONBLE SUPREME COURT HAS CONFIRMED THE ORDER OF BO MBAY HIGH COURT IN ITA NO.1108 OF 2008, WHEREIN IT WAS HELD T HE GENUINENESS OF THE TRANSACTION OF THE GIFT WAS PROVED AND THE CAP ACITY OF DONOR HAS BEEN ESTABLISHED THEREFORE THERE IS NO OCCASION TO ARRIVE AT THIS CONCLUSION THAT THE GIFT WAS NOT THE GENUINE GIFT CONTRARY TO THE ANY MATERIAL ON THE FILE. 6. HOWEVER AT THE TIME OF ARGUMENT THE LEARNED REPR ESENTATIVE OF THE ASSESSEE HAS ALSO RAISED THE POINTS TO THE EFFE CT THAT ASSESSEE HAS DISCLOSED THE GIFT IN HIS RETURN OF INCOME WHICH HA S BEEN FINALIZED IN VIEW OF THE PROVISION CONTAINED IN SECTION 143(1) O F THE ACT. THEREFORE THERE IS NO CONCEALMENT OF ANY KIND ON TH E PART OF THE ASSESSEE HENCE THE MATTER CANNOT BE TAKEN UP AGAIN IN VIEW OF THE PROVISION CONTAINED IN SECTION 153A OF THE ACT. HO WEVER, ASSESSEE HAS ALSO RELIED UPON THE PLETHORA OF CASE IN WHICH IT HAS BEEN DECIDED THAT WHEN THE ASSESSEE HAS DISCLOSED EACH AND EVERY FACTS IN HIS EARLIER RETURN AND NO NEW MATERIAL OF ANY KIND WAS FOUND IN THE SEARCH, THEREFORE, THE ASSESSMENT U/S.143(3) R.W.SECTION 15 3A OF THE ACT IS NOT LIABLE TO BE SUSTAINABLE IN THE EYES OF LAW AND REL IED UPON LAW SETTLED IN CASE CIT V/S CONTINENTAL WAREHOUSE CORPORATION 2 015(120) DTR 0089. HOWEVER ON THE OTHER HAND THE LEARNED REPRESE NTATIVE OF THE ASSESSEE HAS REFUTED THE SAID CONTENTION. NO DOUBT THE ASSESSEE DID NOT FILE THE APPEAL AND CROSS OBJECTION BUT IN VIEW OF THE RULE 27 OF THE ACT, HE CAN RAISE THE QUESTION AT THE TIME DURING T HE APPEAL OF THE FILED ITA NO.1063/MUM/10 A.Y.2002-03 7 BY THE REVENUE ALSO. IN VIEW OF THE LAW SETTLED IN CIT VS. MAHALAXMI TEXTILE MILLS LTD. (1967) 66 ITR 710 (SC) AND CIT V S. BANDARU SUBBARAO (1996) 85 TAXMAN 631, 633 (AP) THE LEGAL Q UESTION CAN BE RAISED AT ANYTIME. SINCE NO NEW MATERIAL WAS FOUND IN RELATION WITH THE ASSESSEE THEN NO DOUBT THE CASE OF THE ASSESSEE IS NOT REQUIRED TO BE OPENED IN VIEW OF SECTION 153A OF THE ACT. THERE FORE, WE ARE OF THE VIEW THAT THIS ISSUE IS SQUARELY COVERED BY THE ABOVE SAID LAW I.E CIT V/S CONTINENTAL WAREHOUSE CORPORATION 2015(120) DTR 0089. IN VIEW OF THE ABOVE SAID OBSERVATIONS, WE ARE OF THE VIEW THAT PRESENT CASE IS NOT THE CASE TO TAKE UP THE MATTER IN VIEW OF PROVISION UNDER SECTION 153A OF THE ACT. WE THEREFORE SET ASIDE THE ASSESSMENT ORDER UNDER SECTION 153A OF THE ACT. ACCORDINGLY THIS ISS UE IS DECIDED IN FAVOUR OF ASSESSEE AGAINST THE REVENUE. ISSUE NO.2 &3 7. ISSUE NO.2 AND 3 IS FORMAL IN NATURE WHICH DOES NOT REQUIRE ANY ADJUDICATION AT ALL. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS HEREBY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH OCTOBER , 2016. SD/- SD/- (R.C.SHARMA) (AMARJIT SINGH) # / ACCOUNTANT MEMBER %& # /JUDICIAL MEMBER ' ( MUMBAI; )# DATED 5 TH OCTOBER, 2016 MP MP MP MP ITA NO.1063/MUM/10 A.Y.2002-03 8 * +%'#, -,(' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. * ( ) / THE CIT(A)- 4. * / CIT 5. -./ &&01 , 01' , ' ( / DR, ITAT, MUMBAI 6. /34 5 / GUARD FILE. ' / BY ORDER, - & //TRUE COPY// ./$ ! /(DY./ASSTT. REGISTRAR) , ' ( / ITAT, MUMBAI