Bijal Priteshkumar Shah, Surat V. The Income tax Officer-Ward-3(3), Surat

ITA 1653/AHD/2009

• Counselvise Citation: 165320514 RSA 2009
• Duration Of Justice: 4 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 18-09-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 20-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL
• Keywords: Gift; Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH BEFORE: SRI G.C. GUPTA, VICE PRESIDENT AND SHRI T.R. MEENA, ACCOUNTANT MEM BER LATE BIJAL PRITESHKUMAR SHAH, LEGAL HEIR SMT BIJAL PRITESH SHAH 803, SHIVANJALI TOWER, HOTEL CENTRE COURT LANE, ATHWALINES, SURAT. PAN: ACQPS9790K (APPELLANT) VS INCOME TAX OFFICER, WARD-3(3), SURAT (RESPONDENT) REVENUE BY: SRI P.L. KUREEL, SR.D.R. ASSESSEE BY: SRI MEHUL SHAH, A.R. DATE OF HEARING : 18-09-2013 DATE OF PRONOUNCEMENT : 13-11-20 13 / ORDER PER : T.R. MEENA, ACCOUNTANT MEMBER:- THIS IS THE ASSESSEES APPEAL EMANATING FROM THE O RDER OF LD. CIT(A)- II SURAT DATED 27-02-2009 FOR A.Y. 2005-06. 2. THE SOLE GROUND IS AGAINST CONFIRMING THE ADDITI ON OF RS. 70 LACS ON ACCOUNT OF ALLEGED UN-EXPLAINED GIFTS U/S. 68 OF TH E I.T. ACT. ITA NO.1653/AHD/2009 ASSESSMENT YEAR 2005-06 I.T.A NO.1653/AHD/2009 A.Y. 2005-06 PAGE NO BIJAL PRITESHKUMAR SHAH VS. ITO 2 3. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF RETAI L TRADING OF SAREES AND DRESS MATERIALS AND OFFERED INCOME FOR TAXATION U/S 44AF. MOREOVER ASSESSEE IS A PARTNER IN M/S MONARCH GEMS AND DERIV ING SHARE OF PROFIT FROM THE SAID FIRM. DURING THE COURSE OF ASSESSMENT PRO CEEDING, THE AO OBSERVED THAT ASSESSEE HAD RECEIVED GIFT OF RS. 70 LACS IN T HE MONTH OF JULY AND AUGUST, 2004. THE AO GAVE REASONABLE OPPORTUNITY O F BEING HEARD ON THIS ISSUE AND ASSESSEE ALSO RESPONDED. AFTER CONSIDERI NG THE ASSESSEES REPLY, THE AO OBSERVED THAT 45 LACS RECEIVED AS GIFT FROM SMT. DIVYABEN A. PATEL FOR WHICH COPY OF GIFT DEED FOR 25 LACS DATED 23-08 -2004 AND FOR RS. 20 LACS 13-08-2004 WERE FILED. THE ASSESSEE FURNISHED A CO PY OF PAY ORDER OF MANDVI CO-OPERATIVE BANK LTD OF RS. 20 LACS. THE A O OBSERVED THAT THERE WAS NO CREDITWORTHINESS OF SMT. DIVYABEN A. PATEL A ND FULL DETAIL OF COPY OF ACCOUNT OF DONOR AND ANY EVIDENCE ABOUT RELATION WI TH THE ASSESSEE WERE NOT SUBMITTED BEFORE HIM. THE ASSESSEE ACCEPTED GIFT O F RS. 12 LACS FROM SMT. LALTIBEN B SHAH FOR WHICH COPY OF GIFT DEED NOTARIZ ED ON 30-08-2004 WAS FILED BEFORE THE AO ALONG WITH THE COPY OF RETURN O F INCOME WHICH WAS SHOWING RETURNED INCOME OF RS. 98,470/-. THE ASSE SSEE DID NOT FURNISH FULL COPY OF BANK ACCOUNT OF DONOR EXCEPT IN THE MONTH O F AUGUST, 2004 WHICH SHOWED THAT DONOR HAD DEPOSITED 12 LACS CASH IN BAN K ACCOUNT BESIDE THIS DONOR WAS HAVING MEAGRE RETURN INCOME AND OPENING C APITAL BALANCE WAS RS. 5.5 LACS. FURTHER GIFT OF RS. 5 LACS WAS ACCEP TED FROM SMT. FALGUNI R. SHAH FOR WHICH COPY OF GIFT DEED WAS NOTARIZED DATE D 21-07-2004 WAS FILED. THE ASSESSEE DID NOT PROVE THE CREDITWORTHINESS OF THE DONOR, COPY OF FULL BANK ACCOUNT OF DONOR AND NO EVIDENCE REGARDING REL ATION WITH ASSESSEE WAS FILED BY THE ASSESSEE. ANOTHER GIFT OF RS. 8 LACS WAS ACCEPTED FROM SRI CHANDRABAVADAN I PAREKH FOR WHICH COPY OF GIFT DEED NOTARIZED DATED 29-06- I.T.A NO.1653/AHD/2009 A.Y. 2005-06 PAGE NO BIJAL PRITESHKUMAR SHAH VS. ITO 3 2004 WAS FURNISHED ALONG WITH COPY OF PROFIT AND LO SS ACCOUNT. THE ASSESSEE COULD NOT PROVE THE CREDITWORTHINESS OF DONOR, FULL COPY OF BANK ACCOUNT AND ANY EVIDENCE FOR RELATION. THUS THE AO MADE ADDITI ON OF RS. 70 LACS U/S. 68 OF I.T. ACT. 4. BEING AGGRIEVED BY THE ORDER OF AO ASSESSEE CARR IED THE MATTER BEFORE LD. CIT(A) WHO HAS ISSUED 131 NOTICES TO ALL THE DO NORS. OUT OF FOUR DONORS ONLY TWO SMT. LALITBEN A SHAH THROUGH HER SON ASHOK R SHAH AND SRI CHANDRAVADAN I PAREKH APPEARED AND THEIR STATEMENTS WERE RECORDED ON OATH U/S. 131 OF THE IT ACT. THE COPIES OF THEIR STATEM ENTS WERE FORWARDED TO THE AR OF ASSESSEE FOR HIS COMMENTS. THE SON OF SMT. L ALITBEN A. SHAH AND SHRI CHANDRAVADAN I PAREKH CONFIRMED GIFTS IN THEIR STATEMENTS. LD. CIT(A) CONSIDERED THE VARIOUS CASE LAWS CITED BEFORE HIM P ARTICULARLY PADAM SINGH CHOUHAN, DHARMA VIR TULI, NARENDRA KUMAR SHEKHRI MA JOJ KUMAR SHEKHRI (SUPRA) WHICH WERE FOUND DISTINGUISHABLE ON THE FAC T OF THE CASE. LD. CIT(A) RELIED UPON HONBLE SUPREME COURT DECISION IN CASE OF CIT VS. MOHANAKALA (2007) 291 ITR 278 WHEREIN IT WAS HELD T HAT TRANSACTION FOR PAYMENT WERE HELD TO BE NOT REAL ONE MAY BE MONEY C AME BY WAY OF THE BANK CHEQUE AND PAID THROUGH THE PROCESS OF BANK TR ANSACTION BUT THAT ITSELF IS OF NO CONSEQUENCE. HE FURTHER OBSERVED THAT TWO DONORS HAD ABSOLUTELY NO CONNECTION WITH THE ASSESSEE AND THEY MADE GIFT TO THE ASSESSEE ONLY BECAUSE THE NEEDED MONEY TO BUY HOUSE AND THEY WANT ED TO HELP HIM. THIS IS NOT ONLY QUITE UNUSUAL BUT ALSO QUITE UN-NATURAL . IT IS SEEN RATHER THAT A COMPLETE STRANGER WOULD WANT TO GIFT LACS OF RUPEES TO A PERSON ONLY BECAUSE THAT PERSON WANTED THE AMOUNT FOR PURCHASING HOUSE. THE TAXING AUTHORITY WAS ENTITLED TO LOOK INTO THE SURROUNDING CIRCUMSTA NCES WHICH THEY DID AND I.T.A NO.1653/AHD/2009 A.Y. 2005-06 PAGE NO BIJAL PRITESHKUMAR SHAH VS. ITO 4 CAME TO THE CONCLUSION THAT THE GIFT COULD NOT BE S AID TO BE GENUINE. THE LD. CIT(A) EXAMINED THE CASE UNDER THE FOLLOWING HEADS: - (I). WHETHER SMT. LALITABEN V SHAH HAD CREDITWORTHI NESS TO GIVE A GIFT OF RS. 12 LACS. (II). WHETHER SMT. LALITABEN HAD ANY NATURAL LOVE A ND AFFECTION FOR THE ASSESSEE TO GIVE GIFT OF RS. 12 LACS. (III). WHETHER SMT. LALITABEN V SHAH HAD GENUINELY GIVEN THE GIFT OF RS. 12 LACS OR SHE WAS WHICH IS A FACILITATOR IN A MAKE-BE LIEVE ARRANGEMENT. (IV) WHETHER SRI CHANDRAVADAN I PAREKH HAD CREDITWO RTHINESS TO GIVE A GIFT OF RS. 8 LACS (V) WHETHER SRI CHANDRAVADAN I PAREKH HAD ANY NAT URAL LOVE AND AFFECTION FOR THE ASSESSEE TO GIVE THE GIFT OF RS. 8 LACS 5. LD. CIT(A) CONFIRMED THE TOTAL GIFTS OF RS. 70 L ACS AS BOGUS. 6. NOW THE ASSESSEE IS BEFORE US. LEARNED COUNSEL OF THE ASSESSEE ARGUED THAT TWO DONORS APPEARED BEFORE THE LD. CIT( A) BUT NO CROSS- EXAMINATION WAS GIVEN BY THE LD. CIT(A). TWO DONORS ARE NRIS FILED CONFIRMATIONS OF PASSPORT OF DIVYAVADAN A PATEL. THEREFORE HE REQUESTED TO DELETE THE ADDITION. AT THE OUTSET LD. DR ARGUED T HAT GIFT RECEIVED FROM THE BANKING CHANNEL ARE NOT ALWAYS GENUINE. LD. CIT(A) GIVE REASONABLE OPPORTUNITY TO THE ASSESSEE AND WHATEVER EVIDENCE F ILED BY THE ASSESSEE, HE TOOK BEST DECISION AS PER LAW. IN REJOINDER LD. AR DRAWN OUR ATTENTION TO THE PAGE NO. 14 WHICH IS COPY OF THE BANK ACCOUNT O F BANK OF INDIA OF ASSESSEE TO SHOW THAT THE GIFTS WERE RECEIVED THROU GH BANKING CHANNEL. THESE DOCUMENTS WERE ALSO FILED BEFORE LD. CIT(A). FINALLY LD. AR I.T.A NO.1653/AHD/2009 A.Y. 2005-06 PAGE NO BIJAL PRITESHKUMAR SHAH VS. ITO 5 REQUESTED TO SET ASIDE THE ISSUE TO THE LD. CIT(A) TO ALLOW THE CROSS- EXAMINATION OF THE DONOR. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. LD. CIT(A) FORWARDED THE COPY OF THE STATE MENTS TO THE AR FOR HIS COMMENT. IT APPEARS THAT ASSESSEE DID NOT SEEK CRO SS-EXAMINATION OF THE DONOR BEFORE LD. CIT(A) AND THE LD. CIT(A) HAS TAKE N DECISION ON THE BASIS OF THE STATEMENT RECORDED DURING THE APPELLATE PROC EEDINGS AND FACTS OF EACH DONOR. THEREFORE, IN THE INTEREST OF JUSTICE THE A SSESSEE SHOULD BE ALLOWED CROSS-EXAMINATION OF THE DONOR. ACCORDINGLY WE SET ASIDE THE ORDER OF LD. CIT(A) AS PER ABOVE FINDINGS AND PROVIDE A REASONAB LE OPPORTUNITY OF BEING HEARD TO THE APPELLANT. 8. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE SD/- SD/- (G.C.GUPTA) ( T.R. MEENA) VICE PRESIDENT ACCOUNTNAT MEMBER AHMEDABAD : DATED 13/11/2013 AK / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,