The ITO, Ward-1(1), RAJKOT-GUJARAT V. Shri Harjibhai Jivanbhai Mokariya (HUF), RAJKOT-GUJARAT

ITA 1095/RJT/2009

• Counselvise Citation: 109524914 RSA 2009
• Duration Of Justice: 1 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 28-07-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 19-11-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Assessee Lawyers: DM RINDANI
• Keywords: Gift

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI A.L. GEHLOT (AM) AND SHRI N.R.S. GANESA N (JM) I.T.A. NO.1095/RJT/2009 (ASSESSMENT YEAR 2005-06) ITO, WD.1(1) VS SHRI HARJIBHAI JIVABHAI MOKHARIY A(HUF) RAJKOT SHREE MARUTI HOUSE, SADAR MOTI TANKI CHOWK, RAJKOT PAN : AACHM5759E (APPELLANT) (RESPONDENT) DATE OF HEARING : 28-07-2011 DATE OF PRONOUNCEMENT : 12-08-2011 APPELLANT BY : SHRI MK SINGH RESPONDENT BY: SHRI DM RINDANI O R D E R PER N.R.S. GANESAN, JM THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(A)-I, RAJKOT DATED 20-08-2009 PERTAINING TO ASSESSMENT YEAR 2005 -06. 2. THE FIRST ISSUE ARISES FOR CONSIDERATION IS GIFT RECEIVED BY THE ASSESSEE FROM NON RESIDENT INDIAN. 3. SHRI MK SINGH, THE LD.DR SUBMITTED THAT THE ASSE SSEE HAS RECEIVED RS.10 LAKHS AS GIFT FROM ONE SHRI KANJIBHAI LALJIBHAI MOK ARIA. THE ASSESSEE HAS NO RELATIONSHIP WHATSOEVER WITH THE DONOR. THE ASSESS EE SIMPLY CLAIMED THAT THE DONOR IS A LONG STANDING FRIEND AND OUT OF LOVE AND AFFECTION HE GIFTED THE AMOUNT TO THE ASSESSEE. ACCORDING TO THE LD.DR THERE WAS NO OCCASION FOR THE DONOR TO GIVE GIFT TO THE ASSESSEE. MERELY BECAUSE THE CHEQ UE WAS RECEIVED THROUGH BANKING CHANNEL THE CIT(A) FOUND THAT THE GIFT WAS GENUINE. THE LD.DR FURTHER ITA NO.1095/RJT/2009 2 SUBMITTED THAT ON SIMILAR CIRCUMSTANCES, THIS TRIBU NAL REMANDED BACK THE MATTER IN THE CASE OF SMT. GANGABEN A NAVANI IN ITA NO.606 /RJT/2010 AND IT(SS)A. 05/RJT/2010 DTD 21-07-2011 AND OTHERS TO THE FILE O F THE ASSESSING OFFICER FOR RE- EXAMINATION AFRESH IN THE LIGHT OF THE JUDGMENT OF THE APEX COURT IN THE CASE OF CIT VS P MOHANA KALA (2007) 291 ITR 278 (SC). 4. WE HAVE HEARD SHRI DM RINDANI, THE LD.REPRESENTA TIVE FOR THE ASSESSEE ALSO. HE SUBMITTED THAT HE MAY NOT HAVE ANY OBJECT ION IN REMANDING THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER FOR RE-EX AMINING THE ISSUE AFRESH IN THE LIGHT OF THE JUDGMENT OF THE APEX COURT IN THE CASE OF CIT VS P MOHANA KALA (SUPRA). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE. THE ASSESSEE CLAIMED BEFORE THE ASSESSING OFFICER THAT HE HAS RE CEIVED GIFT FROM ONE SHRI KANJIBHAI LALJIBHAI MOKARIA VIDE TWO CHEQUES, ONE N UMBERED 012218 OF HABIB EXCHANGE COMPANY, DUBAI FOR RS.5 LAKHS AND THE OTHE R NUMBERED 757606 OF M/S AL RAZOUKI INTERNATIONAL EXCHANGE COMPANY ALSO FOR RS.5 LAKHS. THE CIT(A) FOUND THAT THE CHEQUES WERE CLEARED THROUGH BANKING CHANNEL. THEREFORE, HE FOUND THAT THE GIFT RECEIVED BY THE A SSESSEE IS GENUINE. THE FACT REMAINS IS THAT BOTH THE AUTHORITIES BELOW HAVE NOT EXAMINED THE FACTS OF THE CASE IN THE LIGHT OF THE JUDGMENT OF THE APEX COURT IN THE CASE OF CIT VS P MOHANA KALA. THE APEX COURT, AFTER CONSIDERING THE CASE LAWS ON THE SUBJECT FOUND THAT MERELY BECAUSE THE GIFT WAS ROUTED THROU GH BANKING CHANNEL, THAT ALONE MAY NOT BE SUFFICIENT TO SHOW THE GENUINENESS OF THE GIFT. SINCE BOTH THE AUTHORITIES BELOW HAVE NOT EXAMINED THE CASE IN THE LIGHT OF THE JUDGMENT OF THE ITA NO.1095/RJT/2009 3 APEX COURT, IN OUR OPINION, THE MATTER NEEDS TO BE EXAMINED BY THE ASSESSING OFFICER IN THE LIGHT OF THE JUDGMENT OF THE APEX CO URT IN THE CASE OF CIT VS P MOHANA KALA (SUPRA). ACCORDINGLY, THE ORDER OF THE LOWER AUTHORITIES IS SET ASIDE AND THE ISSUE OF GIFT IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER FOR RECONSIDERATION. THE ASSESSING OFFICER SHALL RE-EX AMINE THE ISSUE OF GIFT IN THE LIGHT OF THE JUDGMENT OF THE APEX COURT IN THE CASE CIT VS P MOHANA KALA (SUPRA) AND THEREAFTER DECIDE THE ISSUE AFRESH IN ACCORDANC E WITH LAW AFTER GIVING OPPORTUNITY OF HEARING TO THE ASSESSEE. 6. THE NEXT ISSUE FOR CONSIDERATION IS DISALLOWANCE OF EXPENDITURE. WE HAVE HEARD THE LD.DR AND THE LD.REPRESENTATIVE FOR THE A SSESSEE. THE ASSESSING OFFICER DISALLOWED 20% OF THE EXPENDITURE CLAIMED B Y THE ASSESSEE ON THE GROUND THAT THE ASSESSEE HAS NOT PRODUCED THE BOOKS OF ACC OUNT FOR EXAMINATION. THE CIT(A) FOUND THAT THE ASSESSEE IS NOT CORRECT IN NO T PRODUCING THE REQUIRED INFORMATION FOR PERUSAL OF THE ASSESSING OFFICER. HOWEVER, THE CIT(A) REDUCED THE DISALLOWANCE TO 10% AS AGAINST 20% MADE BY THE ASSE SSING OFFICER. THE CIT(A) HAS NOT GIVEN ANY REASON FOR REDUCING THE SAME TO 1 0%. WHEN THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS NOT PRODUCED TH E BOOKS OF ACCOUNT FOR VERIFICATION HE HAS TO GIVE SOME REASON AS TO WHY T HE DISALLOWANCE OF 20% OF THE EXPENDITURE WOULD BE JUSTIFIED. THE CIT(A) HAS ALS O NOT GIVEN ANY REASON FOR RESTRICTING THE DISALLOWANCE TO 10% OF THE EXPENDIT URE CLAIMED. IN SUCH CIRCUMSTANCES, IN OUR OPINION, THE MATTER NEEDS TO BE RECONSIDERED BY THE ASSESSING OFFICER. ACCORDINGLY THE ISSUE IS RESTOR ED TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RE-EXAMINE TH E MATTER AFRESH AND THEREAFTER ITA NO.1095/RJT/2009 4 GIVE A SPECIFIC FINDING AS TO WHY ANY PORTION OF TH E EXPENDITURE HAS TO BE DISALLOWED. IT IS ALSO OPEN TO THE ASSESSEE TO PRO DUCE BOOKS OF ACCOUNT AND OTHER DETAILS TO PROVE THE EXPENDITURE. THE ASSESS ING OFFICER SHALL THEN DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER GIVIN G OPPORTUNITY OF HEARING TO THE ASSESSEE. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S TREATED AS ALLOWED, FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 12-08-2011. SD/- SD/- (A.L. GEHLOT) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER RAJKOT, DT : 12 TH AUGUST, 2011 PK/- COPY TO: 1. ASSESSEE 2. REVENUE 3. THE CIT(A)-I, RAJKOT 4. THE CIT-I, RAJKOT 5. THE DR, I.T.A.T., RAJKOT (TRUE COPY) BY ORDER ASSTT.REGISTRAR, ITAT, RAJKOT