Shri. Azizbhai Umarbhai Kachhi, Nagpur V. Joint Commissioner of Income Tax,Range-3, Nagpur

ITA 107/NAG/2011

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1615 (ITAT-NAGPUR)
• Duration Of Justice: 4 year(s) 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 03-06-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Assessee Lawyers: R P CHARDEKAR
• Keywords: Gift

Judgement Text

1 ITA NO. 107/NAG/2011 IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. (S.M.C.) I.T.A. NO.107/NAG/2011 ASSESSMENT YEAR : 2005 - 06. SHRI AZIZBHAI UMARBHAI KACHHI, JOINT COMMISSIONER OF NAGPUR. VS. INCOME - TAX, RANGE - 3, PAN AABPO 4262F NAGPUR. APPELLANT. RESPONDENT. APPELLANT BY : SHRI R.P. CHARDEKAR. RESPONDENT BY : SHRI NARENDRA KANE. DATE OF HEARING : 09 - 11 - 2015. DATE OF PRONOUNCEMENT : 16 TH NOV., 2015. O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(AP PEALS) - II, NAGPUR DATED 03 - 03 - 2011 AND PERTAINS TO ASSESSMENT YEAR 2005 - 06. THE ISSUE RAISED IS THAT THE LEARNED CIT(APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS.8.5 LAKHS BEING GIFTS RECEIVED BY THE ASSESSEE. 2. IN THIS CASE THE AO NOTED THAT THE ASSESSEE HAS RECEIVED GIFT S OF RS.19,50,000/ - FROM VARIOUS PARTI E S. THE AO ISSUED LETTERS AND SUMMONS TO THE DONORS BUT THE LETTERS CAME BACK UNSERVED. HOWEVER, THE AO EXAMINED ONE DONOR, NAMELY, SHRI ASIF ABUBAKAR MEMON WHO HAD GIVEN THE GIFT OF RS. 1 LAKH. THE AO NOTED THAT COPY OF THE STATEMENT OF BANK ACCOUNT OF THE SAID PERSON WAS OBTAINED AND IT WAS SEEN THAT ON 5 TH APRIL, 2004, RS.1,00,200/ - HAD BEEN DEPOSITED BY CASH. THE SAME WAS ISSUED VIDE D .D. ON 05 - 04 - 2004 OF SAME AMOUNT. THE GIFT DEED WAS MADE ON 29 - 03 - 2004 ON A STAMP PAPER OF RS.20/ - DATED 06 - 04 - 2004. HENCE THE AO HELD THAT FROM THE STATEMENT OF THE DONOR IT 2 ITA NO. 107/NAG/2011 CAN BE CONSTRUED THAT DONOR DOES NOT HAVE CAPACITY TO GIFT ANY AMOUNT TO ANYBODY AS HE IS BARELY ABLE TO MEET HIS ENDS. THE AO FURTHER NOTED THAT IN RESPONSE TO SUMMONS TO ANOTHER DONOR SHRI MUNAF SIDDIQUE SUPEDIWALA, HE SUBMITTED THAT HE HAD NOT DONE ANY TRANSACTION WITH AZIZBHAI UMARBHAI KACHHI DURING THE PERIOD 01 - 04 - 2004 TO 31 - 03 - 2005. THEREAFTER THE AO PROCEEDED TO HOLD THAT RS.11,50,000/ - RECEIVED AS GIFTS FROM VARIOUS DONORS WERE UNEXPLAINED AND THE AO ADDED THE SAME TO ASSESSEES INCOME. THERE IS NO OTHER DISCUSSION ON FACTS BY THE AO. 3. UPON ASSESSEES APPEAL, LEARNED CIT(APP EALS) NOTED THIS ASPECT OF THE AOS ACTION AND THE VARIOUS SUBMISSIONS OF THE ASSESSEE. LEARNED CIT(APPEALS) ALSO OBTAINED REMAND REPORT FROM THE AO. THEREAFTER LEARNED CIT(APPEALS) HELD THAT THE DONORS WHO DID NOT FILE RETURNS OF INCOME CANNOT BE HELD TO BE HAVING CREDITWORTHINESS. FOR THIS, LEARNED CIT(APPEALS) REFERRED TO THE FOLLOWING: A) SHAKEELA ABDUL SALAM : RS.1,00,000/ - B) FAROOK AHMED FAKIR MOHAMMED : RS. 1,00,000/ - C) ZIUAL HASSAN M. HASSAN. : RS.1,00,0 00/ - SO THE CIT(APPEALS) CONFIRMED RS.3.00,000/ - AS ABOVE. LEARNED CIT(APPEALS) FURTHER ADDED RS.2,00,000/ - FROM PERSONS FROM WHOM THE AO HAD FOUND TO BE NOT CREDITWORTH Y IN THE ASSESSMENT ORDER. THEREAFTER LEARNED CIT(APPEALS) REFERRED TO THE AOS FINDING IN THE REMAND REPORT WHEREIN RS.3,50,000/ - FROM KESHARJHE RASUL KHAN AND SHEIKH HASSAN SHEIKH HUSSAIN WERE CONSIDERED NOT GENUINE AS THE SAID DONORS HAVE NO CAPACITY TO PAY THE SAID AMOUNT. ACCORDINGLY, LEARNED CIT(APPEALS) CONFIRMED THE ADDITION TO THE EXTENT OF RS.8,50,000/ - . 4. AGAINST THE ABOVE ORDER, ASSSESSEE HAS FILED APPEAL BEFORE THE TRIBUNAL. 5. I FIND THAT OUT OF THE TOTAL GIFT OF RS.9,50,000/ - THE AO HAS ADDED RS.11,25,000/ - AS UNEXPLAINED INCOME OF THE ASSESSEE. FOR DELETION OF GIFT OF RS.8, 25,000/ - THE AO HAS REFERRED TO HIS EXAMINATION OF ONLY TWO PERSONS WHO 3 ITA NO. 107/NAG/2011 HAD GIVEN GIFT OF RS. 1,00,000/ - EACH. HENCE NO BASIS HAS BEEN MENTIONED AS TO WHY THE AO ACCEPTED THE GIFTS WORTH RS. 8 .25 LAKHS. 6. LEARNED CIT(APPELS) HAS HELD THAT THOSE PERSONS WH O HAVE NOT FILED RETURN OF INCOME CANNOT BE EXPECTED TO BE HAVING CREDITWORTHINESS. IN THIS REGARD LEARNED CIT(APPEALS) HAS REFERRED THE NAMES OF THREE PERSONS AS REFERRED TO HEREIN ABOVE. IN THIS REGARD LEARNED COUNSEL OF THE ASSESSEE HAS PRODUCED BEFOR E ME COPY OF RETURN OF INCOME OF SHAKEELA ABDUL SALAM. HE SUBMITTED THAT AS THE SAID RETURN WAS NOT READILY AVAILABLE DURING THE ASSESSMENT AND APPELLATE PROCEEDINGS THE SAME WAS NOT PRODUCED. LEARNED COUNSEL FURTHER SUBMITTED THAT THE ADDITION FOR ZIASU L HASSAN M. HASSAN CAN ALSO NOT BE MADE AS THE SAID PERSON HAS EXPIRED ON 21 ST DECEMBER, 2007 AND HENCE HE WAS NOT PRODUCED. 7. WITH REGARD TO THE ABOVE, I HAVE NOTED THAT ONLY CONTENTION OF THE LEARNED COUNSEL OF THE ASSESSEE WITH REGARD TO THE ABOVE ADD ITIONS WHICH HAVE SO FAR NOT BEEN SUBSTANTIATED IS THAT THE ADDITION SHOULD HAVE BEEN MADE IN THE HANDS OF THE DONOR AND NOT THE DONEE. 8. UPON CAREFUL CONSIDERATION I FIND THAT THIS PLEA OF THE LEARNED COUNSEL OF THE ASSESSEE IS NOT JUSTIFIED. FROM THE PL ETHORA OF JUDGMENTS FROM THE HONBLE APEX COURT AS WELL AS FROM THE HONBLE HIGH COURTS WHERE ON SIMILAR FACTS, ADDITIONS HAVE BEEN MADE IN THE HANDS OF THE DONE E AS THE DONE E IS SUPPOSED TO EXPLAIN THE SOURCE OF GIFTS AND THE GENUINENESS THEREOF. IN THE ABOVE CASE OUT OF RS.7,50,000/ - ADDITION SUSTAINED BY THE LEARNED CIT(APPEALS) RS.1,00,000/ - ON ACCOUNT OF SHAKEELA ABDUL SALEM DESERVES TO BE DELETED AS THE NECESSARY INCOME - TAX RETURN IS ON RECORD. FOR OTHER GIFTS, DUE TO THE FACT THAT THE DONORS WERE FOUND BY THE AUTHORITIES BELOW TO BE NOT HAVING ENOUGH CREDITWORTHINESS TO GRANT SUCH LOANS, I AFFIRM THE ORDERS OF AUTHORITIES BELOW. ACCORDINGLY THE ADDITION TO THE EXTENT OF RS.6,50,000/ - AS UNEXPLAINED GIFTS IS AFFIRMED. 4 ITA NO. 107/NAG/2011 9. IN THE RESULT, THE APPEAL BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 16 TH DAY OF NOV., 2015. SD/ - ( SHAMIM YAHYA) ACCOUNTANT MEMBER. NAGPUR, DATED: 16 TH NOV., 2015. COPY FORWARDED TO : 1. SHRI AZIZBHAI UMARBHAI KACHHI, BEHIND CANARA BANK, NEAR TANGA STAND, SARAFA OLI, ITWARI, NAGPUR . 2. J.C.I.T., RANGE - 3, NAGPUR. 3. C.I.T. - II, NAGPUR. 4. C.I.T. NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, NAGPUR WAKODE