Sh Jagjit Singh, New Delhi V. ITO, New Delhi

ITA 1453/DEL/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61750 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 04-06-2012
• Assessment Year: 2002-2003
• Appeal Filed On: 05-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR
• Assessee Lawyers: DHARAM TANEJA
• Keywords: Gift; Question of law

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : D NEW DELHI DELHI BENCH : D NEW DELHI DELHI BENCH : D NEW DELHI DELHI BENCH : D NEW DELHI BEFORE SHRI U.B.S. BEDI, JUDICIAL MEMBER AND SHRI K.G. BANSAL, ACCOUNTANT MEMBER I.T.A NO. 1453/DEL/10 ASSTT. YEAR 2002-03 JAGJIT SINGH, CD-158, VISHAKHA ENCLAVE, PITAMPURA NEW DELHI AATPSO649G VS. ITO WARD 25(1), NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI DHARAM TANEJA, CA RESPONDENT BY: MS. Y. KAKKAR, DR DATE OF HEARING : 04-06-2012 DATE OF PRONOUNCEMENT : 29-06-2012 ORDER PER K.G. BANSAL, AM: THE ASSESSEE HAS TAKEN UP 7 GROUNDS IN THE APPEAL C HALLENGING THE NOTICE U/S 148, ADDITION OF THE AMOUNT OF ` 1,68,12 0/- TO THE TOTAL INCOME AND CHARGING OF INTEREST U/S 234A AND 234B. HOWEVER , THE LD. COUNSEL HAS ONLY ARGUED GROUNDS REGARDING THE ADDITION OF ` 1,6 8,120/- TAKEN UP IN GROUND NO. 6.1, 6.2 AND 6.3. 2. THE FACTS ARE THAT THE ASSESSEE RECEIVED THE AF ORESAID GIFT FROM SHRI LOKESH BAJAJ OF A SUM OF US$ 3600 (` 1,68,120/-). I N SUPPORT OF THE GIFT, HIS DRIVING LICENCE, CERTIFICATE OF FOREIGN REMITTANCE AND THE DECLARATION OF THE ITA NO. 1453/DEL/10 2 DONOR WERE FILED. IT WAS FOUND THAT SIMILAR GIFTS W ERE RECEIVED BY SHRI AJMER SINGH AND SHRI HARVINDER SINGH ALSO. IT WAS SUBMITTED THAT SHRI LOKESH BAJAJ IS OLD FRIEND AND IS WELL SETTLED IN FLORIDA, USA. WHENEVER HE COMES TO INDIA HE STAYS WITH THE ASSESSEE AND SIMIL ARLY WHENEVER ANY FAMILY MEMBERS OF THE ASSESSEE VISITS THE USA, HE S TAYS WITH THE DONOR. THE GIFTS HAVE BEEN GIVEN OUT OF LOVE AND AFFECTION . THE INSTANT TRANSACTION HAS BEEN CARRIED THROUGH THE BANKING CH ANNEL. CONFIRMATION OF THE DONOR HAS BEEN FILED. THEREFORE IT WAS ARGUE D THAT THE GIFT IS GENUINE. THE AO DID NOT ACCEPT THE EXPLANATION BY M ENTIONING THAT THE CONFIRMATION HAS NOT BEEN FILED, IDENTITY AND CREDI TWORTHINESS HAVE NOT BEEN PROVED. THE LD. CIT(A) CONFIRMED THE DECISION BY MENTIONING THAT IT IS FOR THE ASSESSEE TO PROVE IDENTITY OF THE DONOR, HIS CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION. A FRIEND RESIDING A T A DISTANT PLACE USUALLY COMMUNICATES WITH REGARD TO HIS INTENTION TO MAKE T HE GIFT. NO REGULAR COMMUNICATION EXISTS BETWEEN THE DONOR AND THE DONE E. THEY ARE NOT RELATED. FURTHER, THE FACTS DO NOT PROVE THAT THE D ONOR IS A CREDITWORTHY PERSON. 3. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE REFE RRED TO PAGE NUMBERS 2,3,4,11 & 14. THESE PAGES CONTAIN THE IDEN TITY OF THE DONOR , CERTIFICATE OF FOREIGN INWARD REMITTANCE ISSUED BY BANK OF PUNJAB LIMITED, DECLARATION OF GIFT MADE BY THE DONOR AND VERIFIED BY THE NOTARY PUBLIC, FLORIDA, THE DECISION OF HONBLE DELHI HIGH COURT I N THE CASE OF UJJAGAR SINGH IN ITA 621/2009 DATED 4.9.2009 AND MRS. KUSUM GUPTA IN ITA NO. 831/2010 DATED 16.7.2010. IT IS SUBMITTED THAT THE IDENTITY OF THE DONOR ITA NO. 1453/DEL/10 3 STANDS PROVED IN VIEW OF IDENTIFICATION CARD ISSUED BY TRANSPORT AUTHORITIES AT FLORIDA AND THE NOTARISED DECLARATION OF THE DON OR. THE DECLARATION STATES THAT GIFT HAS BEEN GIVEN OUT OF PERSONAL SOU RCE OF INCOME. THE AMOUNT INVOLVED IS RATHER SMALL, I.E. US $ 3600. IN THESE CIRCUMSTANCES, THE CAPACITY ALSO STANDS PROVED. THE GIFT IS STATED TO BE ON ACCOUNT OF CLOSE RELATIONSHIP WITH THE ASSESSEE. IT HAS BEEN R ECEIVED THROUGH BANKING CHANNEL. THEREFORE THE GENUINENESS OF THE G IFT IS ALSO PROVED. 3.1 IN THE CASE OF UJJAGAR SINGH OBEROI, THE HONBL E HIGH COURT MENTIONED THAT THE DONEE PROVIDED THE PARTICULARS O F THE DONORS, WHO ARE RESIDENTS OF USA OR UK, THE GIFTS FROM 7 DONORS AGG REGATE TO ` 16,38,539/-, WHICH IS A NEGLIGIBLE AMOUNT IN TERMS OF US DOLLARS OR POUND STERLINGS. THE DONORS HAVE NOT ONLY CONFIRMED THE GIFTS BY FILING EVIDENCE IN ORDER TO PROVE THEIR CREDITWORTHINESS, THEY HAD EVEN SUBMITT ED THEIR INCOME TAX RETURNS. THESE ARE PURE FINDINGS OF THE FACT AND NO SUBSTANTIAL QUESTION OF LAW ARISEN FROM THEM. THUS THE APPEAL OF THE REVENU E WAS DISMISSED. 3.2 IN THE CASE OF MRS. KUSUM GUPTA THE HONBLE COU RT MENTIONED THAT GIFTS WERE MADE BY REGISTERED DEEDS AND STATEMENT O F THE DONORS WAS ALSO RECORDED. THE TRIBUNAL RECORDED A FINDING THAT IDENTITY AND CREDITWORTHINESS WAS PROVED BEYOND DOUBT. THE GIFTS WERE MADE BY WAY OF ACCOUNT PAYEE CHEQUES. IN THESE CIRCUMSTANCES IT CANNOT BE SAID THAT THE GIFTS ARE NOT GENUINE. 4. IN REPLY, THE LD. SR. DR SUBMITTED THAT THE DECL ARATION HAS BEEN NOTARISED IN FLORIDA. THE SAME SHOULD HAVE BEEN GOT CERTIFIED BY THE ITA NO. 1453/DEL/10 4 DESIGNATED OFFICER IN THE INDIAN CONSULATE. THEREFO RE, THE DECLARATION CANNOT BE ADMITTED AS EVIDENCE. IN ANY CASE THIS IS A SELF SERVING DOCUMENT. THE ASSESSEE HAS NOT PROVED ANY EVIDENCE REGARDING CREDITWORTHINESS. NO OCCASION HAS ALSO BEEN MENTION ED FOR MAKING GIFT. THE DONOR HAS ALSO MADE A GIFT OF US $ 1200 TO THE RELATIVE OF THE ASSESSEE SHRI HAR CHARAN SINGH. THEREFORE, IT IS A CASE OF LAUNDERING MONEY. THE ASSESSEE HAS FILED NO EVIDENCE TO PROVE THE CREDITWORTHINESS OF THE DONOR AND GENUINENESS OF THE TRANSACTION, AP ART FROM ESTABLISHING HIS IDENTITY. THE FORMER TWO INGREDIENTS HAVE NOT B EEN PROVED. THEREFORE, THE GIFT IS NOT GENUINE AND THE CREDIT IN THE ACCOU NT REMAINS UNPROVED U/S 68. 5. IN ORDER TO SUPPORT HER CONTENTION, RELIANCE WAS PLACED A NUMBER OF DECISIONS WHICH ARE DISCUSSED HERE UNDER :-- A) IN THE CASE OF VIMAL CHANDRA GOLECHA V. ITO 134 ITR 119 (RAJ), RELIED UPON BY THE LD. SR. DR, IT HAS BEEN HELD THA T ATTESTATION BY THE DESIGNATED OFFICER IN THE CONSULATE OFFICE I S AN ALTERNATIVE MEANS FOR CERTIFYING A DOCUMENT TO ITS NOTARISATION BY THE NOTARY PUBLIC. THUS, IT CAN BE EITHER NOTARI SED OR ATTESTED IN THE CONSULATE OFFICE. THIS CASE GOES AG AINST THE REVENUE. B) IN THE CASE OF ITO VS. MUKESH BHAN BHAI (2009) 3 18 ITR (AT) 394 (MUM), IT HAS BEEN HELD THAT IN RESPECT OF A GI FT FROM A ITA NO. 1453/DEL/10 5 NON RESIDENT DONOR, IT IS FOR THE ASSESSEE TO ESTAB LISH GENUINENESS OF THE GIFT AND CREDITWORTHINESS OF THE DONOR. C) IN THE CASE OF CIT VS. ANIL KUMAR (2007) 292 IT R 552 (DEL), IT HAS BEEN HELD THAT SINCE THE AMOUNT IS CLAIMED TO B E GIFT RECEIVED BY THE ASSESSEE, THE ONUS OF PROVING THE I DENTITY AND CAPACITY OF THE DONOR LIES ON HIM. IT MAY BE MENTIO NED THAT THE GIFTS WERE RECEIVED FROM NON-RESIDENT PERSONS T HROUGH NRE ACCOUNTS. D) SHE ALSO RELIED ON THE DECISIONS REPORTED IN 333 ITR 287, 304 ITR 45, AND 3 ITR (TRIB) 8, BUT THESE CASES DO NOT DEAL WITH CREDITS U/S 68, THUS THE CITATION FURNISHED BY THE LD. SR. DR ARE FOUND TO BE INCORRECT. NONETHELESS , FROM THE CASES CITED BY HER, IT IS CLEAR THAT IN ORDER TO HOLD THE GIFT TO BE GENUINE, A FINDING HAS TO BE RECORDED THAT IDENTITY AND CREDIT WORTHINESS OF THE DONOR HAVE BEEN ESTABLISHED AND THE TRANSACT ION IS GENUINE. 6. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUB MISSIONS MADE BEFORE US. FROM THE FACTS NARRATED ABOVE, IT IS CLE AR THAT THE IDENTITY OF THE DONOR HAS BEEN PROVED BY FILING IDENTIFICATION CARD FROM FLORIDA AUTHORITIES AND THE NOTARISED DECLARATION. THE DONOR HAS MENTIO NED THAT HE IS ENGAGED IN SERVICE. THE AMOUNT OF US$ 3600 IS NOT S UCH A BIG AMOUNT THAT A SERVING PERSON IN USA CANNOT GIVE IT AS A GI FT. THEREFORE, IN OUR HUMBLE VIEW, THE CREDITWORTHINESS OF THE DONOR HAS BEEN PROVED. IT IS ALSO ITA NO. 1453/DEL/10 6 MENTIONED IN THE DECLARATION THAT THE DONOR AND DON EE HAVE CLOSE RELATIONSHIP AND, THUS, IT CANNOT BE SAID THAT IT IS A GIFT TO A TOTAL STRANGER SO THAT IT DEFIES HUMAN PROBABILITIES OF CONDUCT. T HE GIFT HAS BEEN MADE THROUGH BANKING CHANNEL, THUS, ITS GENUINENESS HAS ALSO BEEN PROVED. IN THIS CONNECTION WE FIND THAT THE DECISION IN THE CA SE OF UJAGAR SINGH OBEROI IS BY AND LARGE APPLICABLE TO THE FACTS OF T HIS CASE. THE FACTS OF THE CASE OF MRS. KUSUM GUPTA ARE SOMEWHAT DIFFERENT AS THE GIFTS WERE MADE BY REGISTERED DEED AND THE DONORS WERE INCOME TAX A SSESEES. ON OVERALL VIEW, WE FIND THAT ALL THE THREE INGREDIENTS OF SEC TION 68/69 HAVE BEEN PROVED ON A PRIMA FACIE BASIS. THEREAFTER THE AO HA S NOT BROUGHT ANY EVIDENCE OF RECORD TO DISPLACE THE CASE OF THE ASSE SSEE. CONSEQUENTLY IT IS HELD THAT THE GIFT IS GENUINE. 7. IN THE RESULT, THE APPEAL IS ALLOWED. SD/- SD/- [U.B.S. BEDI] [K.G. BANSAL] JUDICIAL MEMBER ACCOUNTANT MEMBER VEENA COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT