Mrs. Shakti Mitter, New Delhi V. ACIT, New Delhi

ITA 1318/DEL/2011

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7122 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 16-08-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 15-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B RAMANJANEYULA
• Assessee Lawyers: SATYAM SETHI
• Keywords: Gift; Search and seizure
• Section: 56; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH G NEW DELHI BEFORE : SHRI I.C. SUDHIR , JUDICIAL MEMBER & SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 1318/DEL./2011 ASSTT. YEAR : 2008 - 09 MRS. SHAKTI MITTER, VS. ACIT, CENTRAL CIRLE 7, C - 29, MAYFAIR GARDENS, NEW DELHI HAUZ KHAS ENCLAVE, NEW DELHI. (PAN: AQZPM 2098 K) (APPELLANT) (RESPONDENT) APPELLANT BY : SH. SATYAM SETHI, ADVOCATE RESPONDENT BY : SH. B. RAMANJANEYULA, SR. DR DATE OF HEARING : 16.08.2016 DATE OF PRONOUNCEMENT : 23 .09.2016 ORDER PER L.P. SAHU, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A) - I, NEW DELHI DATED 28.01.2011 FOR THE ASSESSMENT YEAR 2008 - 09 ON THE FOLLOWING GROUNDS : 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE COMMISSIONER OF INCOME TAX (APPEALS) - I, NEW DELHI [BRIEFLY 'THE CIT(A)'] HAS ERRED IN CONFIRMING THE ADDITION OF RS. 1,12,220 / - BEING THE GIFT OF FOREIGN CURRENCY RECEIVED FROM NON RESIDENT SISTER. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW , THE CIT(A) HAVING ACCEPTED THAT AMOUNT OF EURO 2000 WAS RECEIVED BY THE APPELLANT FROM HER NONRESIDENT SISTER ERRED IN UPHOLDING THE ADDITION ITA NO. 1318/DEL./2011 2 FOR THE REASON THAT CREDITWORTHINESS OF THE DONOR WAS NOT PROVED. IT WAS NOT APPRECIATED THAT THE AMOUNT OF THE GIFT WAS NOMINAL. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE C I T(A) HAS ERRED IN NOT APPRECIATING THAT THE PROVISION TO SECTION 56 OF THE ACT MANDATES THAT GIFT FROM BLOOD RELATIONS DO NOT REPRESENT INCOME FROM OTHER SOURCES. 2. THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH AND SEIZURE OPERATION U/S. 132 OF THE INCOME - TAX ACT (IN SHORT THE ACT ) WAS CARRIED OUT IN THE CA SE OF ASSESSEE ON 21.09.2007. DURING THE COURSE OF SEARCH OPERATION AT THE RESIDENCE OF THE ASSESSEE, SOME FOREIGN CURRENCY AMOUNTING TO POUNDS 3840, EURO 1900 AND US DOLLARS 1035 WAS FOUND. THE ASSESSEE WAS ASKED TO FURNISH THE SOURCE OF CURRENCY FOUND. I N RESPONSE, THE HUSBAND OF THE ASSESSEE SH. ARUN MITTER , SUBMITTED THE REPLY SHOWING THE FOREIGN CURRENCY IN THE HANDS OF THE ALL HIS FAMILY MEMBERS INCLUDING THE ASSESSEE AS GIFT. THE ASSESSEE HAS SHOWN A SUM OF EURO 2000 AS GIFT RECEIVED FROM SMT. ANJAL I TALWAR, THE SISTER - IN - LAW OF THE ASSESSEE RESIDING AT MUSCAT (OMAN). HOWEVER, NO DOCUMENT WAS FILED BY THE ASSESSEE IN SUPPORT OF HER ABOVE SUBMISSION EXCEPT THE AFFIDAVIT DATED 14.11.2009 SIGNED BY SMT. ANJALI TALWAR. THE ASSESSING OFFICER NOTED THAT IN THE CA S E OF GIFT, THREE CONDITIONS, I.E., IDENTITY AND CREDITWORTHINESS OF THE DONOR AND GENUINENESS OF THE TRANSACTION HAVE TO BE SATISFIED . IN RESPONSE TO THE QUERY OF THE ASSESSING OFFICER, ONLY THE AFFIDAVIT OF THE DONOR WAS FILED WHICH PROVES THE IDE NTITY OF THE DONOR, AS NOTED BY THE ASSESSING OFFICER. THE ITA NO. 1318/DEL./2011 3 AO FOR WANT OF SATISFYING THE OTHER CONDITIONS, NOTED ABOVE, ADDED THE ENTIRE FOREIGN CURRENCY IN THE HANDS OF SH. ARUN MITTER AND ALSO ADDED EURO 2000 EQUIVALENT TO RS.1,12,220/ - (ONE EURO = RS.5 6.11 AS ON 12.09.2007) IN THE HANDS OF THE ASSESSEE ON PROTECTIVE BASIS. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WHO UPHELD THE ORDER OF THE ASSESSING OFFICER VIDE IMPUGNED ORDER. 3. THE LD. AR SUBMITTED TH AT THE ASSESSING OFFICER HAS MADE THE ADDITION MERELY ON THE BASIS OF SUSPICION. THE GIFT WAS NOT MADE BY A STRANGER. THE APPELLANT RECEIVED THE GIFT OUT OF NATURAL LOVE AND AFFECTION BETWEEN CLOSE FAMILY RELATIONS. MOREOVER, THE GIFT WAS NOT FOR UNREASONA BLE AMOUNT. IT IS CUSTOMARY IN INDIAN SOCIETY TO GIVE GIFTS TO THE RELATIVES AND IN THE PRESENT CASE, THE GIFT WAS GIVEN TO BLOOD RELATION AND SUCH GIFTS ARE RECOGNIZED EVEN BY THE PROVISIONS OF THE ACT INASMUCH AS SECTION 56 OF THE ACT RECOGNIZES SUCH GIF TS. THEREFORE, THERE WAS NO REASON TO DISBELIEVE THE GIFT ON THE ALLEGED GROUND OF CREDITWORTHINESS OF THE DONOR AND GENUINENESS OF THE TRANSACTION. THE DONOR IS NRI AND LIVING WITH HER HUSBAND FROM LAST 10 YEARS AT MUSCAT (OMAN). THEREFORE, THEIR CREDITWO RTHINESS CANNOT BE DOUBT ED FOR GIVING A GIFT OF SUCH A MEAGER AMOUNT. THE AFFIDAVIT OF MRS. ANJALI TALWAR DATE D 14.11.2009 DULY CERTIFIED BY CONSULAR OFFICER, EMBASSY OF INDIA , WAS FILED WITH THE AO. ITA NO. 1318/DEL./2011 4 BESIDES, A LETTER OF DONOR WAS ALSO ADDRESSED TO THE ASS ESSING OFFICER, CONFIRMING THE GIFT OF EURO 2000 TO THE APPELLANT. IT IS SUBMITTED THAT IN FOREIGN CURRENCY EURO 2000 IS NOT A SUBSTANTIAL AMOUNT FOR A PERSON WHO IS NR I LIVING IN GULF COUNTRY FOR LAST 10 YEARS AND IS KEPT IN CASH AND NO SPECIFIC DRAWING F ROM THE BANK IS REQUIRED TO BE SHOWN FOR NRI LIVING ABROAD FOR SUCH A LONG DURATION. THE LD. AR RELIED ON THE JUDGMENT OF HON BLE JURISDICTIONAL HIGH COURT IN CIT VS. SURESH KUMAR KAKKAR, 324 ITR 231 AND THE DECISION OF COORDINATE BENCH OF DELHI TRIBUNAL I N SURAJBHAN BAJAJ VS. ITO, 102 TTJ 665. 4. ON THE OTHER HAND, THE LD. DR TRIED TO JUSTIFY THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE AUTHORITIES BELOW HAVE MADE GOOD ORDERS WHICH DO NOT REQUIRE ANY INTERFERENCE, AS THE CREDITWORTHINESS OF DONOR AND GENUINENESS OF THE TRANSACTION HAS NOT BEEN PROVED BY ASSESSEE. 5. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIALS AVAILABLE ON RECORD, WE FIND THAT THE GIFT AMOUNT OF EURO 2000 IS A MEAGER AMOUNT FOR THE PERSON WHO IS NRI AND RESIDIN G ABROAD FOR LAST 10 YEARS. THEREFORE, THEIR CREDITWORTHINESS CANNOT BE DOUBTED IN THE PECULIAR FACTS OF THE PRESENT CASE. THE DONOR HAS SUBMITTED AN AFFIDAVIT WHICH HAS BEEN DULY CERTIFIED BY CONSULAR OFFICER, EMBASSY OF INDIA AND A LETTER ADDRESSED TO TH E ASSESSING ITA NO. 1318/DEL./2011 5 OFFICER AFFIRMING THE GIFT OF EURO 2000 TO THE ASSESSEE WAS ALSO PLACED BEFORE THE AO. COPY OF PASSPORT WAS ALSO PLACED BY THE ASSESSEE. IT IS ALSO NOT IN DISPUTE THAT THE DONOR VISITED INDIA IN JUNE/JULY, 2007 . IN INDIAN SOCIETY, IT IS NOT STR ANGE THAT AN NRI WHEN VISITS TO ITS COUNTRY, USUALLY GIVE SOME GIFTS TO ITS NEAR AND DEAR, AS IN THE INSTANT CASE. IN PRESENCE OF ALL THESE FACTS AND IN THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND NO JUSTIFICATION TO SUPPORT THE ORDER OF T HE LD. CIT(A) AND THE CONTENTIONS OF THE ASSESSEE ARE FOUND TO HAVE CONSIDERABLE MERIT. ACCORDINGLY, THE APPEAL OF THE ASSESSEE DESERVES TO BE ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23.09.2016 . SD/ - SD/ - ( I.C. SUDHIR ) (L.P. SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 23.09.2016 *AKS/ - COPY OF ORDER FORWARDED TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT. REGISTRAR INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES, NEW DELHI