Smt. Kamlesh Kumari, Rewari V. ITO, Rewari

ITA 1202/DEL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 82130 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 15-10-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 04-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift
• Section: 56(2); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D : NEW DELHI BEFORE SHRI T.S. KAPOOR, ACCOUNTANT MEMBER AND SHRI A.T . VARKEY , JUDICIAL MEMBER ITA NO . 1202 /DEL/ 2013 ASSESSMENT YEAR : 2009 - 10 KAMLESH KUMARI, VS. ITO, W/O SH. SAJJAN SINGH, WARD - 1, 7680/12 - D, MAHAVIR NAGAR, REWARI. KALKA ROAD, REWARI. AAWPK5093M (APPELLANT) (RESPONDENT) APPELLANT BY: SH. GAUTAM JAIN, CA RESPONDENT BY: SH. VIVEK NANGIA, SR. DR ORDER PER A.T. VARKEY, J.M. THIS APPEAL ARISES FROM AN ORDER OF LD. CIT(A), ROHTAK DATED 18 TH DECEMBER, 2012 FOR A.Y. 2009 - 10. 2. THE SOLITARY ISSUE INVOLVED IN THE INSTANT APPEAL RELATES TO ADDITION OF RS. 5 LAKHS BEING GIFT RECEIVED BY THE ASSESSEE. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO, NOTED THAT ASSE SSEE HAS RECEIVED A GIFT FROM SH. MUKESH KUMAR, SON - IN - LAW OF THE ASSESSEE. HE ACCORDINGLY RECORDED THE STATEMENT OF SH. MUKESH KUMAR (DONOR) ON 19 TH OCTOBER, 2011 AND THEREAFTER HELD THAT SINCE AS PER CUSTOMS AND TRADITIONS OF THE SOCIETY IN THE AREA, TH E GIFT BY SON - IN - LAW TO HIS MOTHER - IN - LAW IS QUITE UN - REALISTIC, AND THEREFORE HELD THAT THE SAID SUM IS ASSESSEES UNEXPLAINED MONEY. 4. THE LD CIT(A), ALSO SUSTAINED THE ADDITION ON THE GROUND THAT SH. MUKESH KUMAR IN TURN RECEIVED A GIFT FROM HIS UNCLE, SH. VED PRAKASH. AND SINCE THE DATE AND OCCASION OF THE GIFT WERE NOT MAINTAINED IN THE ITA NO. 1202 /D/ 2013 KAMLESH KUMARI 2 DECLARATION OF THE GIFT, THEREFORE, ACCORDING TO THE LD. CIT(A), THE SAID DECLARATION BY SH. VED PRAKASH WAS TO ONLY ACCOMMODATE THE ASSESSEE BY WAY OF ALLEGED GIFT T O SH. MUKESH KUMAR. 5. BEFORE US, THE LD. AR SH. GAUTAM JAIN ASSAILED THE IMPUGNED O RDER OF THE LD. CIT(A) AND CONTENDED THAT ADDITION IS BASED ON MERE SUSPICION AND FURTHER SUBMITTED THAT SON - IN - LAW IS A RELATIVE AS PER THE EXPLANATION TO SECTION 56(2) OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT), AND AS SUCH THE BASIS OF ADDITION MADE BY THE AO IS NOT LEGAL. HE FURTHER SUBMITTED THAT THOUGH THE AO DID NOT DISPUTE THE CREDIT WORTHINESS OF THE DONOR AFTER EXAMINATION OF THE DONOR, THE CIT(A), ON C ONJECTURES AND SURMISES HAS ERRONEOUSLY HELD THAT THE CLAIM TO BE NON - GENUINE. AS PER THE LD. AR, THE LD. CIT(A) HAVING FOUND THAT SH. VED PRAKASH (UNCLE) HAD SOURCE TO MAKE A GIFT, WAS NOT JUSTIFIED TO DISBELIEVE THE CLAIM. HE RELIED UPON THE FOLLOWING JUDGMENT: A) 264 ITR 254 PAGE 261 - 266 (GAU) NEMICHAND KOTHARI VS. CIT, B) 220 CTR 622 (RAJ.) ARAVALI TRADING CO. VS. ITO, C) 256 ITR 360 (GUJ.) DCIT VS. ROHINI BUILDERS 6. ON THE OTHER HAND, THE LD. DR SUPPORTED THE CONCLUSION OF THE LD. CIT(A) AND CONTENDED THAT N EITHER SH. VED PRAKASH IS AN INCOME TAX ASSESSEE AND NOR THE GIFT MADE BY MUKESH KUMAR WAS THROUGH BANKING CHANNEL, SO LD. CIT(A) RIGHTLY CONCLUDED THAT THE TRANSACTION WAS NOT GENUINE. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND GONE THROUGH THE RECORDS AN D CASE LAWS CITED BEFORE US. WE FIND THAT THE LD. CIT(A) HAS SUSTAINED THE ADDITION BY DOUBTING THE GENUINENESS OF THE TRANSACTIONS ON THE GROUND THAT THERE WERE DEFECTS IN THE DEED OF GIFT , AND THE SAID GIFTS WERE BY PERSONS WHO WERE NOT INCOME TAX ASSES SEES ; AND WERE NOT THROUGH BANKING CHANNELS. HOWEVER, IT IS APPOSITE TO NOTE THAT THE ASSESSING OFFICER HAD MADE THE ADDITIONS ON THE LIMITED GROU ND THAT THE GIFT BY SH. MUKESH KUMAR (SON - IN - LAW) TO ASSESSEE (MOTHER - IN - LAW) IS NOT REALISTIC AS PER THE CUS TOMS. IT IS THUS, EVIDENT THAT THE AO, AFTER EXAMINING THE SAID ITA NO. 1202 /D/ 2013 KAMLESH KUMARI 3 DONOR AND EVIDENCE LED BY THE DONOR TO PROVE THE GENUINENESS OF THE TRANSACTION, WAS FULLY SATISFIED WITH THE CLAIMS OTHER THAN TO THE EXTEND STATED ABOVE, I.E. GIFT BY SON - IN - LAW TO MOTHER - I N - LAW (ASSESSEE) IS UNREALISTIC AND AGAINST THE CUSTOMS. HOWEVER, THE LD. CIT(A) HAS OVER - LOOKED THE ABOVE FACT OF CONFIRMATION OF GIFT BY THE DONOR IN PERSON DURING EXAMINATION BEFORE THE AO. AND AS THE LD. CIT(A) ALSO ERRED IN OVER - LOOKING THE SUBMISSI ON MADE BEFORE HIM, THAT THE GIFT WAS TAKEN FOR THE CONSTRUCTION OF HOUSE IN WHICH DAUGHTER AND SON - IN - LAW (DONOR) ARE RESIDING. HE ALSO ERRED IN REJECTING THE CLAIM AFTER HAVING FOUND AND HELD THAT THE DONOR SH. MUKESH KUMAR GOT AN AMOUNT OF RS. 5 LAKHS FROM HIS UNCLE WHO HAD SOLD AN AGRICULTURAL LAND FOR RS. 39 LAKHS AND HAD WITHDRAWN THE SAID SUM OF RS. 5 LAKHS FROM THE BANK ACCOUNT. THUS, WE FIND THAT THE GIFT OF RS. 5 LAKH HAS A PROPER SOURCE AS STATED ABOVE, WHICH HAS BEEN CONFIRMED BY THE DONOR PER SONALLY BEFORE THE AO ALONG WITH GIFT DEED. THUS, THE INGREDIENTS OF SEC. 68 OF THE ACT STANDS SATISFIED IN THE FACTS OF THE INSTANT CASE. IT IS FURTHER OBSERVED THAT THERE IS NO STATUTORY EXPRESS OR IMPLIED PRECONDITION THAT GIFT NECESSARILY HAS TO BE M ADE THROUGH BANKING CHANNEL OR BY AN INCOME TAX ASSESSES. ALL THAT HAS TO BE EXAMINED IS WHETHER THE EXPLANATION OFFERED BY THE ASSESSEE, AS TO THE NATURE AND SOURCE OF THE GIFT IS SATISFACTORY, WHICH STANDS SATISFIED IN THIS CASE. THE RAJASTHAN HIGH COU RT I N THE CASE OF 220 CTR 622 ARAVA LI TRADING COMPANY HAS HELD AS UNDER: HELD THAT NEITHER THE PROVISIONS OF SECTION 68 NOR ON GENERAL PRINCIPLE IT CAN BE SAID THAT ONCE THE EXISTENCE OF PERSON IN WHOSE NAME CREDITS ARE FOUND IN THE BOOKS OF THE ASSESSEE IS PROVED AND SUCH PERSON OWN SUCH CREDIT WITH THE ASSESSEE, STILL THE ASSESSEE IS TO FURTHER PROVE THE SOURCE FROM WHICH CREDITORS COULD HAVE ACQUIRED MONEY TO BE DEPOSITED WITH HIM. THE FACT THAT DEPOSITORS EXPLANATION ABOUT THE SOURCE WHERE FROM THEY ACQUIRED THE MONEY IS NOT ACCEPTABLE TO THE ASSESSING OFFICER, IT CANNOT BE PRESUMED THAT THE DEPOSIT MADE BY SUCH CREDITOR IS THE MONEY OF THE ASSESSEE HIMSELF. THERE IS NO WARRANT FOR SUCH PRESUMPTION. ITA NO. 1202 /D/ 2013 KAMLESH KUMARI 4 8. IN CIT VS. PAD AM SINGH CHAUHAN 215 CTR 303 RA JASTHAN HIGH COURT HAS HELD AS FOLLOWS: THE LD. CIT(A) HAS REVERSED THIS FINDING BY HOLDING, THAT THE ASSESSEE HAD CLEARLY SHOWN FROM THE ASSESSMENT PROCEEDINGS, THAT THE GIFTS WERE MADE OUT OF LOVE AND AFFECTION TOWARDS THE ASSESSEE, AND IT IS A MATTER OF GODS GRACE TO MAKE LOVE AND AFFECTION BETWEEN DONORS AND DONE, AND THAT TO HAVE LOVE AND AFFECTION BETWEEN TWO PERSONS, BLOOD RELATION IS NOT REQUIRED, AND LOOKING TO THE STATUS OF THE DONORS, THE AMOUNT GIFTED WAS VERY MEAGER. THEN, IT WAS FOUND BY T HE LD. CIT(A), THAT THE ASSESSEE HAS ALSO FURNISHED THE COPIES OF THE GIFT DEEDS, AND AFFIDAVITS OF THE DONORS. IN THE OPINION OF THE LD. CIT(A), IT IS NOT A CASE, WHERE THE ASSESSEE HAD FIRST GIVEN SUCH AMOUNTS TO THE DONORS, AND THE DONOR RETURNED BACK TO THE ASSESSEE BY WAY OF GIFT. THE CIT(A) HAD GONE THROUGH THE BANK ACCOUNTS OF THE DONORS, COPIES THEREOF ARE ON RECORD, AND FOUND, THAT THERE WAS SUFFICIENT CASH BALANCE ON THE DATE OF GIFT TO THE APPELLANT, IN RESPECT OF BOTH THE DONORS, AND THUS, THE ADDITION WAS DELETED, AND THE LD. TRIBUNAL HAS AFFIRMED THIS FINDING, BY RELYING UPON CERTAIN JUDGMENTS. IN OUR VIEW, THERE IS NO LEGAL BASIS TO ASSUME, THAT TO RECOGNIZE THE GIFT TO BE GENUINE, THERE SHOULD BE ANY BLOOD RELATIONSHIP, OR ANY CLOSE RELATI ONSHIP, BETWEEN THE DONOR AND THE DONE. INSTANCES ARE NOT RARE, WHEN EVEN STRANGERS MAKE GIFTS, OUT OF VERY MANY CONSIDERATIONS, INCLUDING ARISING OUT OF LOVE, AFFECTION AND SENTIMENTS. IN OUR VIEW, WHEN THE ASSESSEE HAS PRODUCED THE COPIES OF THE GIFT D EEDS AND THE AFFIDAVITS OF THE DONORS, IN THE ABSENCE OF ANYTHING TO SHOW, THAT THE ACT OF THE ASSESSEE IN CLAIMING GIFT, WAS AN ACT BY WAY OF MONEY LAUNDERING, SIMPLY BECAUSE HE HAPPENS TO RECEIVE GIFTS, IT CANNOT BE SAID THAT, THAT IS REQUIRED TO BE ADDE D IN HIS INCOME. 9. HAVING NOTED THE ABOVE DECISION WE CONCLUDE THAT THE EVIDENCE FURNISHED BY THE ASSESSEE CANNOT BE BRUSHED ASIDE BY SIMPLY HOLDING IT AS UN - REALISTIC ; OR BY SAYING THAT THE TRAIL OF TRANSACTION CASTS A BIG SHADOW ON GENUINENESS OF THE C LAIM. WHEN THE DOCUMENTARY/ORAL EVIDENCE IS PRODUCED BY THE ASSESSEE , WHICH HAS NOT BEEN FOUND TO BE FALSE, THE SAME CANNOT BE TREATED AS NON - GENUINE. IT WAS INCUMBENT UPON THE CIT(A), TO FIND OUT IF THE CLAIM IS UNTRUE OR FALSE BY DISPROVING THE EVIDENC E ON RECORD. HAVING NOT DONE SO, A GOOD PROOF CANNOT BE TERMED AS NON - ITA NO. 1202 /D/ 2013 KAMLESH KUMARI 5 PROOF OR AN IN GENUINE PROOF. BOTH THE AO AND THE CIT(A) HAS MADE THE ADDITION BASED ON SURMISES OR CONJECTURES. AND THEREFORE, THE ADDITION IS NOT SUSTAINABLE AND SO WE DELETE IT. 10. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14.11.2014. - SD/ - - SD/ - ( T.S. KAPOOR ) (A.T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 14.11.2014 *KAVITA /AK KEOT COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, NE W DELHI TRUE COPY BY ORDER ASSISTANT REGISTRAR