SHRI LAXMANBHAI G. PATEL, Surat V. THE INCOME TAX OFFICER, Surat

ITA 1155/AHD/2009

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9137 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-09-2009
• Assessment Year: 2005-2006
• Appeal Filed On: 15-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEETA SHAH SENIOR
• Keywords: Unexplained cash credit; Gift; Assessment record; Set aside
• Section: 133(6); 131; 68; 2

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'B' (BEFORE S/SHRI P K BANSAL AND MAHAVIR SINGH) ITA NO.1155/AHD/2009 (ASSESSMENT YEAR:- 2005-06) SHRI LAXMANBHAI G PATEL, 16, RIVER PALACE, NANPURA, SURAT PAN NO. ABTPP 6998 C V/S THE INCOME-TAX OFFICER, WARD-5(2), [APPELLANT] [RESPONDENT] APPELLANT BY :- SHRI MANISH J SHAH, ADVOCATE RESPONDENT BY:- SMT. NEETA SHAH, SENIOR DR O R D E R PER P K BANSAL (ACCOUNTANT MEMBER): THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT( A) DATED 3 RD NOVEMBER, 2008, BY TAKING THE FOLLOWING EFFECTIVE G ROUNDS: 1 THE CIT(A) ERRED IN NOT TAKING INTO CONSIDERATION T HE OVERALL FACTS AND EVIDENCES OF THE CASE BEFORE CONFIRMING THE ADD ITION OF RS.2,00,000/- ON THE PRETEXT OF THE GIFT BEING BOGU S. 2 THE CIT(A) ERRED IN HOLDING THAT THE ENTIRE TRANSAC TION WAS A SHAM TRANSACTION AND ADDING THE AMOUNT OF GIFT AS UNEXPL AINED CASH CREDITS. 2 THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E RECEIVED GIFTS OF RS.1 LAC EACH FROM S/SHRI JAMANBH AI SAKARIA AND CHHAGANBHAI SAKARIA. THESE TWO DONORS WERE NOT PRODUCED FOR EXAMINATION AND THE ASSESSEE ONLY FILED DECLARA TION OF GIFTS, 2 BALANCE SHEET OF THE DONORS AND RELEVANT PORTION OF THEIR BANK ACCOUNTS AND STATED THAT THE TWO DONORS WHO WERE RE SIDENTS OF KATARGAM LEFT SURAT AFTER THE FLOODS IN 2006 AND TH EIR ASSESSMENT RECORDS COULD BE CALLED FOR BY THE AO FOR ANY FURTH ER INVESTIGATION. THE AO REQUISITIONED THE ASSESSMENT RECORDS OF THE TWO DONORS AND FOUND THAT NO SUCH GIFT WAS MENTIONE D IN THEIR CAPITAL ACCOUNT. TO FURTHER ASCERTAIN THE DECLARATI ON OF GIFTS MADE BY THE TWO DONORS, THE AO ISSUED NOTICE U/S 133(6) OF THE ACT TO THE ADINATH CO-OPERATIVE BANK, SURAT FOR FURNISHING BANK STATEMENTS OF THE PERSONS FROM WHOSE ACCOUNTS, PAY ORDERS NO.107517 AND 107519 (THROUGH WHICH THE GIFTS WERE CLAIMED TO HAVE BEEN MADE) WERE ISSUED. THE BANK INFORMED THAT FOUR PAY ORDERS EACH FOR RS.1 LAC WERE ISSUED FROM THE ACCOU NTS OF PANKAJ CHANDULAL GANDHI WHICH WAS CLOSED ON 18-04-2005 AND FROM THE ACCOUNT OF LALIT SHANTILAL SHAH WHICH WAS CLOSED ON 19-01-2005. THE AO ALSO OBSERVED THAT AS PER THE WRITTEN SUBMIS SION FILED ON 10-10-2007, THE ASSESSEE STATED THAT THE DONORS LEF T THE CITY AFTER FLOODS OF 2006 AND IT WAS NOT POSSIBLE FOR HIM TO P RODUCE THEM FOR VERIFICATION. HOWEVER, AS PER WRITTEN SUBMISSIO N DATED 10-11- 2007, HE STATED THAT THEY HAVE SHIFTED TO PARAS SOC IETY IN KATARGAM AND THE TWO STATEMENTS WERE CONTRADICTED F OR NOT PRODUCING THE DONORS FOR VERIFICATION. THE AO TREAT ED THE ENTIRE AMOUNT AS UNEXPLAINED CASH CREDITS U/S 68 OF THE AC T. WHEN THE MATTER WENT IN APPEAL BEFORE THE CIT(A), THE CIT(A) CONFIRMED THE ADDITION HOLDING THAT THE TRANSACTION IS A SHAM TRANSACTION. 3 WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y CONSIDERED THE SAME. IN OUR OPINION, THE ASSESSEE H AS TO PROVE THE 3 IDENTITY OF THE DONORS, CREDITWORTHINESS AND GENUIN ENESS OF THE TRANSACTIONS. IN THIS CASE WE NOTED THAT THE ASSESS EE COULD NOT PRODUCE THE NECESSARY EVIDENCE TO PROVE THE GENUINE NESS OF THE TRANSACTIONS. WE ALSO NOTED THAT THE ASSESSEE HAS R EQUESTED THE AO TO ISSUE SUMMONS U/S 131 AND SOUGHT INFORMATION U/S 133(6) FROM THE CONCERNED INCOME-TAX OFFICE WHETHER THE DO NORS ARE BEING ASSESSED. THE AO, NO DOUBT, HAS SOUGHT INFORM ATION FROM THE CONCERNED AO. THE GIFTS GIVEN BY THE DONORS HAV E NOT DULY BEEN SHOWN IN THEIR INCOME-TAX RETURNS OR IN THEIR CAPITAL ACCOUNTS. THE AO OBSERVED THAT THE DONORS HAVE NOT SHOWN THE GIFTS IN THEIR INCOME-TAX RETURNS, ALTHOUGH THE AO HAS SOUGHT INFORMATION FROM WARD-8(1) AND 8(2) OF THE INCOME-T AX OFFICE. ONCE THE AO CAME TO THE CONCLUSION THAT THIS INFORM ATION WAS NOT AVAILABLE IN THE CAPITAL ACCOUNT OF THE DONORS, IN OUR OPINION, THE AO WAS DUTY BOUND TO PROVIDE THIS INFORMATION T O THE ASSESSEE AND ASK FOR THE EXPLANATION OF THE ASSESSE E. THIS HAS NOT BEEN DONE BY THE AO BUT HAS TAKEN A DECISION AT THE BACK OF THE ASSESSEE. THE RULE OF EVIDENCE DOES NOT EXPECT FROM THE AO THAT HE CAN RELY ON ANY EVIDENCE COLLECTED AT THE BACK O F THE ASSESSEE. WE, THEREFORE, IN THE INTEREST OF JUSTICE AND FAIR PLAY TO BOTH THE PARTIES, SET ASIDE THE ORDER OF THE CIT(A) AND REST ORE THIS ISSUE TO THE FILE OF THE AO WITH THE DIRECTION THAT THE AO S HALL LOOK INTO THE FACTS OF THE CASE AFRESH AND GIVEN PROPER AND R EASONABLE OPPORTUNITY TO THE ASSESSEE INCLUDING THE EVIDENCES COLLECTED BY THE AO SO THAT THE ASSESSEE CAN COUNTER THOSE EVIDE NCES AND PASS AN ORDER IN ACCORDANCE WITH LAW. 4 4 IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT TODAY ON 17-09-2 009 SD/- SD/- (MAHAVIR SINGH) JUDICIAL MEMBER (P K BANSAL) ACCOUNTANT MEMBER DATE : 17-09-2009 COPY OF THE ORDER FORWARDED TO : 1. SHRI LAXMANBHAI G PATEL, 16, RIVER PALACE, NANPU RA, SURAT 2. THE ITO, WARD-5(2), SURAT 3. CIT CONCERNED 4. CIT(A)-III, SURAT 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT, AHMEDABA