Musani M.Salim A.Gani, Surat V. The Income tax Officer,Ward-5(3), Surat

ITA 1417/AHD/2011

• Counselvise Citation: 141720514 RSA 2011
• Duration Of Justice: 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 19-09-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 19-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S A BOHRA
• Assessee Lawyers: R N VEPARI
• Keywords: Gift; Corroborative evidences
• Section: 143(3)

Judgement Text

-1- IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'SMC' BEFORE SHRI MUKUL KUMAR SHRAWAT JUDICIAL MEMBER ITA NO.1417/AHD/2011 (ASSESSMENT YEAR:-2004-05) MUSANI M SALIM A GANI PROP. OF S M TEXTILES, 693, ABHISHEK MARKET, RING ROAD, SURAT V/S THE INCOME-TAX OFFICER, WARD-5(3), SURAT PAN: ADBPM 3589 J [APPELLANT] [RESPONDENT] APPELLANT BY :- SHRI R N VEPARI, AR RESPONDENT BY:- SHRI S A BOHRA, SR. DR DATE OF HEARING:- 19-09-2011 DATE OF PRONOUNCEMENT:- 20-09-2011 O R D E R THIS IS AN APPEAL AT THE BEHEST OF THE ASSESSEE WH ICH HAS EMANATED FROM THE ORDER DATED 18-01-2011 OF THE LEA RNED COMMISSIONER OF INCOME-TAX (APPEALS)-III, SURAT [TH E CIT(A)] FOR ASSESSMENT YEAR (AY) 2004-05. THE ONLY GROUND IS IN RESPECT OF A GIFT OF RS.2,00,000/- MADE BY LATE SHRI ADAMBHAI BO DILA. 2 THE FACTS OF THE CASE HAVE REVEALED THAT IN THE P AST THIS ISSUE HAD COME UP BEFORE THE ITAT AND VIDE SMC ORDER DATE D 27-02-2008 IN ITA NO.4589/AHD/2007 FOR AY 2004-05, THE MATTER WAS RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER [AO FOR SHORT] WITH THE DIRECTION TO EXAMINE THE DONOR WHICH WOULD BE PRODU CED BY THE ASSESSEE. CONSEQUENCE THEREUPON, THE AO PROCEEDED U /S 143(3) OF THE INCOME-TAX ACT, 1961 [THE ACT FOR SHORT] AND VIDE ORDER DATED 24-11-2009 HE HAS HELD THAT THOUGH THE TRIBUNAL HAD DIRECTED TO PRODUCE THE DONOR BUT STILL THE ASSESSEE HAD FAILED TO PRODUCE THE 2 ITA NO.1417/AHD/2011 DONOR, HENCE, AGAIN TAXED THE AMOUNT OF RS.2,00,000 /- AS BOGUS GIFT IN THE HANDS OF THE ASSESSEE. 3 EVEN THE LEARNED CIT(A) HAS AFFIRMED THE ACTION O F THE AO PRIMARILY ON THE GROUND THAT THE DIRECTION WAS GIVE N BY THE TRIBUNAL ON THE REQUEST OF THE ASSESSEE TO PRODUCE THE DONOR AND FOR THAT REASON THE MATTER WAS SET ASIDE BACK TO THE FILE OF THE AO. ACCORDING TO THE LEARNED CIT(A), SINCE THE ASSESSEE HAD NOT BEEN ABLE TO CARRY OUT THE DIRECTION OF THE TRIBUNAL, TH EREFORE, THE AO WAS JUSTIFIED IN CONFIRMING THE GIFT. 4 FROM THE SIDE OF THE ASSESSEE, THE LEARNED AR MR. R N VEPARI, APPEARED AND INFORMED THAT THE DONOR WAS FATHER-IN- LAW OF THE ASSESSEE. THE DONOR WAS AGED ABOUT 86 YEARS AND BEC AUSE OF HIS ADVANCE AGE, HE WAS UNABLE TO TRAVEL UPTO SURAT TO PRESENT HIMSELF BEFORE THE AO. THE LEARNED AR HAS ALSO PLACED TWO C ERTIFICATES FROM A DOCTOR DATED 03-08-2009 AND 09-11-2009 TO DEMONST RATE THAT THE DONOR WAS BED RIDDEN DURING THE PERIOD WHEN THE AO HAD ISSUED NOTICES FOR HIS APPEARANCE. HOWEVER, THE LEARNED AR HAS INFORMED THAT THE GIFT TRANSACTION WAS DULY SUPPORTED BY A G IFT DEED AND AN AMOUNT OF RS.1,00,000/- WAS THROUGH A CHEQUE DATED 25-04-2003 AND AN ANOTHER AMOUNT OF RS.1,00,000/- WAS ALSO VID E CHEQUE DATED 29-12-2003, BOTH DRAWN ON CENTRAL BANK OF INDIA, RI NG ROAD, SURAT. THE LEARNED AR HAS ALSO STATED THAT AN AFFIDAVIT WA S MADE BY THE DONOR ANALYZING THE FACT THAT HE HIMSELF WAS UNABLE TO TRAVEL UPTO SURAT. HE HAS PLEADED THAT AN AFFIDAVIT ON OATH IS AS GOOD AS A STATEMENT ON OATH RECORDED BY THE AO. HE HAS ALSO P LEADED THAT ONCE THE DONATED AMOUNT WAS THROUGH ACCOUNT PAYEE C HEQUE AND THE TRANSACTION WAS NOT DOUBTED, THEREFORE, MERELY DUE TO NON- APPEARANCE, THE GIFTED AMOUNT SHOULD NOT BE TAXED I N THE HANDS OF THE ASSESSEE. HE HAS ALSO STATED THAT AS THE BAD LU CK WOULD HAVE IT, THE DONOR HAD EXPIRED ON 12-05-2010. 3 ITA NO.1417/AHD/2011 5 FROM THE SIDE OF THE REVENUE, THE LEARNED DR MR. S A BOHRA, APPEARED AND REITERATED THAT THE ASSESSEE HAS NOT C OMPLIED WITH THE DIRECTION OF THE TRIBUNAL, THEREFORE, THE LOWER AUT HORITIES HAD NO OPTION BUT TO MAKE THE ADDITION. HE HAS ALSO ARGUED THAT MERELY BY ISSUANCE OF CHEQUE DID NOT AFFIRM THE NATURE OF TRA NSACTION, HENCE, THE CLAIM OF GIFT WAS RIGHTLY REJECTED BY THE AO. 6 HAVING HEARD BOTH THE SIDES, I AM OF THE VIEW THA T ONE HAS TO EXAMINE THE TOTALITY OF THE CIRCUMSTANCES WHILE ADJ UDICATING THE LEGAL ISSUE. THE CORROBORATIVE EVIDENCES SHOULD NOT BE IGNORED. THOUGH IT IS TRUE THAT AT THE TIME OF APPEAL BEFORE THE RESPECTIVE COORDINATE BENCH, IT WAS PLEADED TO PRODUCE THE DON OR AND BY ACCEPTING THAT REQUEST, THE MATTER WAS RESTORED BAC K TO THE FILE OF THE AO, BUT THE CHANGED CIRCUMSTANCES I.E. ILL HEAL TH OF THE DONOR, WAS NOT IN THE HANDS OF THE ASSESSEE. UNDISPUTEDLY, TWO CHEQUES OF RS.1,00,000/- BEARING NOS.215713 AND 215714 DRAWN O N CENTRAL BANK OF INDIA, RING ROAD, SURAT WERE ISSUED IN FAVO UR OF THE DONORS SON-IN-LAW I.E. THE ASSESSEE. THEREFORE, IT IS NOT IN DISPUTE THAT THE DONOR AND THE DONEE WERE RELATED TO EACH OTHER. IT IS ALSO NOT CONTROVERTED THAT THE DONOR WAS SUBJECTED TO TAX FO R AY 2004-05 AND THE IMPUGNED AMOUNT OF RS.2,00,000/- WAS DULY DEBIT ED TO HIS CAPITAL ACCOUNT. AS IS EVIDENT FROM THE ACCOUNTS OF THE DONOR PLACED ON RECORD, THERE WAS AN OPENING BALANCE OF RS.4,10, 736/- OUT OF WHICH RS.2,00,000/- WAS GIFTED TO SON-IN-LAW AND AN ANOTHER AMOUNT OF RS.2,00,000/- WAS GIFTED BY THE DONOR TO HIS DAU GHTER. THE LEARNED AR HAS PLEADED BEFORE ME THAT NO ACTION WHA TSOEVER WAS TAKEN BY THE REVENUE AUTHORITIES IN THE CASE OF THE OTHER GIFT WHICH WAS MADE IN FAVOUR OF THE DAUGHTER. THOUGH THE AO H AS EXAMINED THIS EVIDENCE BUT STRESSED UPON THE PERSONAL PRESEN CE OF THE DONOR. HOWEVER, IT WAS STATED THAT THE DONOR WAS VERY OLD AND ATTAINED AGE OF 83 YEARS BED RIDDEN, HENCE, HIS PERSONAL ATTENDA NCE MAY BE EXCUSED BUT THE AO WAS GUIDED BY THE DIRECTION OF T HE TRIBUNAL AND TAXED THE AMOUNT SIMPLY DUE TO NON-ATTENDANCE OF TH E DONOR. IN MY 4 ITA NO.1417/AHD/2011 OPINION, IT WAS NOT THE INTENTION OF THE TRIBUNAL T O DIRECT THE AO TO IGNORE ALL OTHER CORROBORATIVE EVIDENCES SUCH AS GI FT DEED AND THE DONORS CAPACITY TO DONATE THE AMOUNT THAT TOO THRO UGH A BANKING TRANSACTION AND ONLY TO INSIST UPON THE PERSONAL PR ESENCE OF 83 YEARS OLD PERSON. ACCORDING TO ME, HAD THE POSITION WAS REVERSE THAT THE DONOR WAS PRESENT AND MADE A STATEMENT OF THE G IFT BUT HE HAD NO OTHER CORROBORATIVE EVIDENCE, WHETHER THE AO WOU LD ACCEPT THE SAID GIFT. OBVIOUSLY, THE CORROBORATIVE EVIDENCES A RE TO BE TAKEN INTO CONSIDERATION AND DEFINITELY PLAY DECIDING ROLE ESP ECIALLY IN SUCH TYPE OF CASES WHEN THE GENUINENESS OF THE GIFT IS U NDER SCRUTINY. SINCE THE DONOR AND DONEE WERE RELATED TO EACH OTHE R, THE GIFT TRANSACTION WAS DULY SUPPORTED BY THE GIFT DEED AND AFFIDAVIT, THE DONOR WAS A TAX PAYER, AND IN THE CAPACITY TO MAKE THE GIFT, AND THE GENUINENESS OF THE GIFT TRANSACTION WAS OTHERWISE N OT DOUBTED, THEREFORE, I HOLD THAT THE IMPUGNED AMOUNT OF GIFT DESERVES TO BE ACCEPTED. I HEREBY DIRECT TO DELETE THE ADDITION. T HIS GROUND IS ALLOWED. 7 IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE COURT TODAY ON 20-09-2011 SD/- (MUKUL KUMAR SHRAWAT) JUDICIAL MEMBER DATE : 20-09-2011 COPY OF THE ORDER FORWARDED TO: 1. MUSANI M SALIM A GANI PROP. OF S M TEXTILES, 693 , ABHISHEK MARKET, RING ROAD, SURAT 2. THE INCOME-TAX OFFICER, WARD-5(3), SURAT 3. CIT CONCERNED 4. CIT(A)-III, SURAT 5. DR, ITAT, AHMEDABAD BENCH-SMC, AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT, AHMEDABAD