The ITO, Ward 1 (1), RAJKOT-GUJARAT V. Smt Ritaben S Bosamia, Jetpur

ITA 13/RJT/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56684 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 26-08-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 07-01-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Keywords: Gift; Question of law

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.13/RJT/2009 (ASSESSMENT YEAR 2004-05) ITO, WD.1(1) VS SMT. RITABEN S BOSAMIA RAJKOT FULWADI, STATION ROAD JETPUR PAN : ABCPB1847P (APPELLANT) (RESPONDENT) I.T.A. NO.14/RJT/2009 (ASSESSMENT YEAR 2004-05) ITO, WD.1(1) VS SHRI SAURABH S BOSAMIA RAJKOT FULWADI, STATION ROAD JETPUR PAN : ACDPB3363J (APPELLANT) (RESPONDENT) I.T.A. NO.15/RJT/2009 (ASSESSMENT YEAR 2004-05) ITO, WD.1(1) VS SHRI RAMESHCHANDRA D BOS AMIA RAJKOT FULWADI, STATION ROAD JETPUR PAN : ABCPB1848C (APPELLANT) (RESPONDENT) I.T.A. NO.16/RJT/2009 (ASSESSMENT YEAR 2004-05) ITO, WD.1(1) VS SHRI SHREYAS R BOSAMIA RAJKOT FULWADI, STATION ROAD JETPUR PAN : ACDPB3362K (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MK SINGH RESPONDENT BY: NONE DATE OF HEARING : 26-08-2011 DATE OF PRONOUNCEMENT : 30-08-2011 ITA NO.13, 14, 15 & 16/RJT/2009 2 O R D E R PER N.R.S. GANESAN, JM ALL THE FOUR APPEALS OF THE REVENUE ARE DIRECTED A GAINST THE INDEPENDENT ORDERS OF CIT(A)-I, RAJKOT IN RESPECT OF FOUR DIFFE RENT ASSESSEES, ALL FOR ASSESSMENT YEAR 2004-05. 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IN ALL T HE FOUR APPEALS IS WITH REGARD TO ADDITION OF FOREIGN GIFTS. THEREFORE, AL L THE FOUR APPEALS WERE HEARD TOGETHER AND ARE DISPOSED OFF BY THIS COMMON ORDER. 3. NOTICE OF HEARING WAS ISSUED TO ALL THE FOUR ASS ESSEES IN APPEAL. HOWEVER, NO ONE APPEARED FOR THE ASSESSEE WHEN THE APPEALS WERE TAKEN UP FOR HEARING. THEREFORE, WE HEARD THE LD.DR AND PROCEED ED TO DISPOSE OFF THE APPEAL ON MERIT. 4. SHRI M.K. SINGH, THE LD.DR SUBMITTED THAT ALL TH E FOUR ASSESSEES RECEIVED GIFTS FROM NON RESIDENT INDIANS. HOWEVER, THE ASSE SSEES COULD NOT IDENTIFY THE DONORS. EVEN THE BASIC DETAILS OF ALL THE DONORS W ERE NOT KNOWN TO THE ASSESSEES. THEREFORE, THE ASSESSING OFFICER FOUND THAT THE GIFTS WERE NOT GENUINE. HOWEVER, THE CIT(A) DELETED THE ADDITION WITHOUT ANY REASONS. THE LD.REPRESENTATIVE FURTHER POINTED OUT THAT THE CIT( A) HAS NOT EXAMINED THE ISSUE IN THE LIGHT OF THE JUDGMENT OF THE APEX COURT IN T HE CASE OF CIT VS P MOHANA KALA(2007) 291 ITR 278 (SC). REFERRING TO THE DECI SION OF THE TRIBUNAL IN THE ITA NO.13, 14, 15 & 16/RJT/2009 3 CASE OF JAYANTILAL G KUNDALIYA & ORS IN ITA NO.438/ RJT/2005 & ORS ORDER DATED 24-06-2011 THE LD.DR SUBMITTED THAT ON IDENTICAL CI RCUMSTANCES THIS TRIBUNAL REMANDED BACK THE MATTER TO THE FILE OF THE ASSESSI NG OFFICER FOR RECONSIDERATION IN THE LIGHT OF THE JUDGMENT OF THE APEX COURT IN T HE CASE OF CIT VS P MOHANA KALA (SUPRA). 5. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD.DR AND HAVE ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. AS RIGHTLY SUBMI TTED BY THE LD.DR, THE ASSESSEE COULD NOT EVEN FURNISH THE BASIC DETAILS WITH REGAR D TO THE DONOR. IT IS FOR THE ASSESSEES TO ESTABLISH THE IDENTITY OF THE DONORS, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS. THIS TRIBUNAL HAD AN OCCASION TO EXAMINE AN IDENTICAL SITUATION IN THE CASE OF JAYANTILAL G KUN DALIYA & ORS IN ITA NO.438/RJT/2005 & ORS ORDER DATED 24-06-2011 AND FO UND THAT THE RECEIPT OF FOREIGN GIFT NEEDS TO BE EXAMINED IN THE LIGHT OF T HE JUDGMENT OF THE APEX COURT IN THE CASE OF CIT VS P MOHANA KALA (SUPRA). SINCE TH E LOWER AUTHORITIES HAV NOT DONE THAT EXERCISE, IN OUR OPINION, THE MATTER NEED S TO BE RECONSIDERED IN THE LIGHT OF THE JUDGMENT OF THE APEX COURT IN THE CASE OF CIT VS P MOHANAN KALA (SUPRA). IN FACT THIS TRIBUNAL IN THE CASE OF JAYA NTILAL G KUNDALIYA & ORS IN ITA NO.438/RJT/2005 & ORS ORDER DATED 24-06-2011 HAS OB SERVED AS FOLLOWS, ON IDENTICAL CIRCUMSTANCES: 17. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EI THER SIDE AND HAVE ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, CASH CREDIT WAS FOUND IN THE FORM OF NRI GIFT. THE ASSESSEE CLAIMED THAT THE DONOR IS A FRIEND. ADMITTEDLY, TH E DONOR IS NOT A RELATIVE OF THE ASSESSEE. NORMALLY THERE SHOULD BE AN OCCASION FOR GIVING GIFT BY A PERSON, WHO IS NOT BLOOD RELATIVE. IN CASE OF BLOOD ITA NO.13, 14, 15 & 16/RJT/2009 4 RELATIVE ONE MAY SAY THAT NO OCCASION IS REQUIRED F OR GIVING GIFT. MOTHER, FATHER, BROTHER, SISTER MAY GIFT AT ANY TIM E TO THEIR CHILDREN / GRAND CHILDREN, BROTHER, SISTER RESPECTIVELY. BUT THAT IS NOT THE CASE IN RESPECT OF OTHER PERSONS. NORMALLY, THE THIRD P ARTIES WOULD GIFT ON AN OCCASION. SUCH A GIFT IS ALSO NEEDS TO BE RECIP ROCATED APPROPRIATELY. ALL THESE FACTS WOULD DEPENDENT UPON THE FACTS OF EACH CASE. ONE CANNOT LAY DOWN ANY RULE / PRESCRIPT ION FOR GIVING / RECEIVING GIFTS. IT IS TO BE ESTABLISHED SATISFACT ORILY DEPENDING UPON THE FACTS OF EACH CASE. 18. WE FIND THAT THE APEX COURT IN THE CASE OF P MO HANA KALA (SUPRA) HAD AN OCCASION TO CONSIDER AN IDENTICAL SE T OF FACTS. IN THE CASE BEFORE THE APEX COURT, THE ASSESSEE RECEIVED F OREIGN GIFT FROM A DONOR. THE PAYMENT WAS MADE THROUGH BANKING CHAN NEL AND IT WAS CREDITED IN THE BANK ACCOUNT. THE DONOR IN THE CASE BEFORE APEX COURT CLAIMED THAT HE WAS PAYING TAX IN ENGLAN D AND HAD SUFFICIENT FUNDS FOR GIVING GIFT. THE APEX COURT F OUND THAT THE STATEMENT MADE BY THE DONOR IS A SELF-SERVING STATE MENT AND THERE IS NO MATERIAL EVIDENCE AS REGARDS TO HIS FINANCIAL STATUS. ULTIMATELY, THE APEX COURT FOUND THAT THE TRANSACTI ONS THOUGH APPARENT WERE HELD TO BE NOT REAL ONES. MAY BE THE MONEY CAME BY WAY OF BANK CHEQUE AND WAS PAID THROUGH THE PROC ESS OF BANKING TRANSACTION BUT THAT ITSELF IS OF NO CONSEQ UENCE. IN FACT, THE APEX COURT OBSERVED ON PAGE 289 OF THE ITR, AS FOLL OWS: RELYING ON THE DECISIONS OF THIS COURT IN BEJOY G OPAL MUKHERJI V. PRATUL CHANDRA GHOSE, AIR 1953 SC 153 A ND ORIENT DISTRIBUTORS V. BANK OF INDIA LTD. AIR 1979 SC 867, SHRI IYER, LEARNED SENIOR COUNSEL CONTENDED THAT THE ISSUE REL ATING TO THE PROPRIETY OF THE LEGAL CONCLUSION THAT COULD BE DRA WN ON THE BASIS OF PROVED FACTS GIVES RISE TO A QUESTION OF LAW AND, T HEREFORE, THE HIGH COURT IS JUSTIFIED IN INTERFERING IN THE MATTER SIN CE THE AUTHORITIES BELOW FAILED TO DRAW A PROPER AND LOGICAL INFERENCE FROM THE PROVED FACTS. WE ARE UNABLE TO PERSUADE OURSELVES TO ACCE PT THE SUBMISSIONS. THE FINDINGS OF FACT ARRIVED AT BY TH E AUTHORITIES BELOW ARE BASED ON PROPER APPRECIATION OF THE FACTS AND THE MATERIAL AVAILABLE ON RECORD AND SURROUNDING CIRCUM STANCES. THE DOUBTFUL NATURE OF THE TRANSACTION AND THE MANNER I N WHICH THE SUMS WERE FOUND CREDITED IN THE BOOKS OF ACCOUNTS M AINTAINED BY THE ASSESSEE HAVE BEEN DULY TAKEN INTO CONSIDERATIO N BY THE AUTHORITIES BELOW. THE TRANSACTIONS THOUGH APPAREN T WERE HELD TO BE NOT REAL ONES. MAY BE THE MONEY CAME BY WAY OF BANK CHEQUES AND PAID THROUGH THE PROCESS OF BANKING TRANSACTION BUT THAT ITSELF IS OF NO CONSEQUENCE. ITA NO.13, 14, 15 & 16/RJT/2009 5 IN VIEW OF THE ABOVE MERELY BECAUSE THE TRANSACTION WAS MADE THROUGH BANKING CHANNEL THAT ALONE WILL NOT PROVE T HE GENUINENESS OF THE TRANSACTION. SOMETHING MORE IS REQUIRED TO BE PROVED IN RESPECT OF FOREIGN GIFT. BOTH THE AUTHORITIES BELO W HAD NO OCCASION TO CONSIDER THIS JUDGMENT OF THE APEX COURT IN THE CASE OF P MOHANA KALA (SUPRA). THE ASSESSEE HAD ALSO NO OCCA SION TO EXPLAIN THE CONSEQUENCE OF THE JUDGMENT OF THE APEX COURT IN THE CASE OF P MOHANA KALA (SUPRA). THEREFORE, IN OUR O PINION, THE MATTER NEEDS TO BE RECONSIDERED BY THE ASSESSING OF FICER IN THE LIGHT OF THE JUDGMENT OF THE APEX COURT IN THE CASE OF P MOHANA KALA (SUPRA) AFTER GIVING ADEQUATE OPPORTUNITY TO THE AS SESSEE. 19. WE HAVE ALSO GONE THROUGH THE DECISION OF THE M UMBAI BENCH OF THE TRIBUNAL IN THE CASE OF MRS. ASHA HAMP ANNAVAR ITA NO.5319/MUM/07 ORDER DATED 30 TH JANUARY, 2008. IN THE CASE BEFORE THE MUMBAI BENCH OF THE TRIBUNAL, THE DONOR WAS FOUND TO BE NOT A STRANGER TO THE ASSESSEE. THE MUMBAI BENC H AFTER EXAMINING THE FACTS OF THE CASE FOUND THAT THE GENU INENESS OF THE TRANSACTION WAS ESTABLISHED BY THE ASSESSEE. ON FU RTHER APPEAL BY THE REVENUE BEFORE THE BOMBAY HIGH COURT, THE BOMBA Y HIGH COURT FOUND THAT THERE IS ABSOLUTELY NO QUESTION OF LAW ARISE FOR CONSIDERATION. SIMILARLY, THE APEX COURT REJECTED THE SPECIAL LEAVE PETITION OF THE REVENUE ON THE GROUND THAT THE HIGH COURT FOUND THAT THE GIFT WAS GENUINE AND NO MATERIAL WAS AVAILABLE ON RECORD TO SHOW THAT THE CONFIRMATION WAS NOT CORRECT. THEREF ORE, IT IS CLEAR THAT EACH CASE HAS TO BE EXAMINED ON ITS OWN FACTS AND WE HAVE TO FIND OUT THE GENUINENESS OF THE TRANSACTION. THE D ECISION OF THE MUMBAI BENCH OF THE TRIBUNAL UPHOLDING THE GENUINEN ESS OF THE TRANSACTION WAS CONFIRMED BY THE BOMBAY HIGH COURT ON THE GROUND THAT THERE IS NO QUESTION OF LAW. NO LAW WA S LAID DOWN BY THE APEX COURT WHILE REJECTING THE SLP. HOWEVER, I N THE CASE OF P MOHANA KALA (SUPRA), THE HONBLE APEX COURT EXAMINE D THE ISSUE IN DEPTH AND CATEGORICALLY HELD THAT MERELY BECAUSE THE TRANSACTION WAS MADE THROUGH BANKING CHANNEL THAT ALONE WILL NO T ESTABLISH THE GENUINENESS OF THE TRANSACTION. MOREOVER, BOTH THE AUTHORITIES BELOW, HAVE NOT EXAMINED THE ISSUE OF FOREIGN GIFT IN THE LIGHT OF THE JUDGMENT OF THE APEX COURT IN THE CASE OF P MOHANA KALA (SUPRA). THEREFORE, IN OUR OPINION, THE FACTS OF THE CASE NE ED TO BE EXAMINED IN THE LIGHT OF THE JUDGMENT OF THE HONBL E APEX COURT IN THE CASE OF P MOHANA KALA (SUPRA). ACCORDINGLY WE SET ASIDE THE ORDERS OF LOWER AUTHORITIES AND REMAND BACK THE MAT TER TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL EXAMINE THE ISSUE AFRESH AND THEREAFTER DECIDE THE SAME IN ACCO RDANCE WITH LAW AFTER CONSIDERING THE JUDGMENT OF THE HONBLE APEX COURT IN THE CASE OF P MOHANA KALA (SUPRA). NEEDLESS TO POINT O UT THAT THE ITA NO.13, 14, 15 & 16/RJT/2009 6 ASSESSING OFFICER SHALL GIVE SUFFICIENT OPPORTUNITY TO THE ASSESSEE BEFORE DECIDING THIS ISSUE. 6. IN VIEW OF THE ABOVE FINDING OF THE TRIBUNAL ON IDENTICAL CIRCUMSTANCES, IN OUR OPINION, THE MATTER NEEDS TO BE RE-EXAMINED. A CCORDINGLY THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE ISSUE OF FO REIGN GIFTS IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING O FFICER SHALL RE-EXAMINE THE ISSUE OF FOREIGN GIFTS AND DECIDE THE MATTER AFRESH IN AC CORDANCE WITH LAW AFTER PROVIDING OPPORTUNITY TO THE ASSESSEE. 7. IN THE RESULT, ALL THE FOUR APPEALS OF THE REVEN UE ARE ALLOWED, FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 30-08-2011. SD/- SD/- (A.L. GEHLOT) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER RAJKOT, DT : 30 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