O.T.Alexander, Cochin V. DCIT, Cochin

ITA 172/COCH/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69032 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2013
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 22-07-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 03-07-2012
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Assessee Lawyers: C K KARUNAKARAN
• Keywords: Gift
• Section: 56

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A. 172/COCH/2012 ASSESSMENT YEAR : 2008-09 SHRI O.T.ALEXANDER, NATIONAL SEA FOODS COMPANY, 14/454, SRAMBIKKAL ROAD, CHULLIKAL, KOCHI-682 005. [PAN: ACQPA 4609K] VS. THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-3(1), KOCHI. (ASSESSEE -APPELLANT) (REVENUE-R ESPONDENT) ASSESSEE BY SHRI C.K. KARUNAKARAN, ADV. REVENUE BY SMT. S. VIJAYAPRABHA, JR. DR DATE OF HEARING 22/07/2013 DATE OF PRONOUNCEMENT 11/10/2013 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 18-05-2012 PASSED BY LD. CIT(A)-II, KOCHI, CONFIRMING THE ASSE SSMENT OF GIFT AMOUNT OF RS. 18.00 LAKHS RECEIVED BY THE ASSESSEE FROM HIS SISTER IN T HE ASSESSMENT YEAR 2008-09. 2. THE FACTS RELATING TO THE ISSUE ARE STATED IN BR IEF. THE ASSESSEE IS A COMMISSION AGENT IN SEAFOOD. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT HE HAS RECEIVED A SUM OF RS. 18.00 LAK HS FROM HIS SISTER NAMED SMT. ANNIE JACOB. DURING THE YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION, THE GIFT RECEIVED FROM A RELATIVE AS DEFINED IN EXPLANATION T O SEC. 56(1)(VI) OF THE ACT IS NOT CONSIDERED AS INCOME AS PER PROVISO BELOW TO THE AB OVE SAID SECTION. ACCORDINGLY, THE ASSESSEE CLAIMED THE SAME AS EXEMPT. THE ASSESSEE ALSO FILED A LETTER OBTAINED FROM HIS SISTER. IN THE SAID CONFIRMATION LETTER, SMT. ANNIE JACOB HAD STATED THAT THE SOURCES FOR MAKING THIS GIFT ARE FUNDS AVAILED FROM HER DAU GHTER WHO IS IN SHARJAH. ON MAKING FURTHER ENQUIRY, THE ASSESSING OFFICER NOTICED THAT AMT. ANNIE JACOB HAS RECEIVED FUNDS FROM ANOTHER PERSON NAMED SHRI BIJU GEORGE, OREGANO RESTAURANT. PO BOX NO. 52139, I.T.A. NO. 172/COCH/2012 2 DUBAI AND NOT FROM HER DAUGHTER AS CLAIMED IN THE C ONFIRMATION LETTER HOWEVER, THE ASSESSEE CLAIMED THAT SHRI BIJU GEORGE IS THE SON-I N-LAW OF SMT. ANNIE JACOB AND THE FUNDS HAVE BEEN TRANSFERRED FROM A JOINT BANK ACCOU NT STANDING IN THE NAME OF SHRI BIJU GEORGE AND HIS SPOUSE, I.E., DAUGHTER OF SMT. ANNIE JACOB. SINCE SMT. ANNIE JACOB DID NOT HAVE ANY INDEPENDENT SOURCES FOR MAKING THE ABOVE SAID GIFT, THE ASSESSING OFFICER TOOK THE VIEW THAT THE ASSESSEE HAS RECEIVE D THE GIFT ONLY FROM SHRI BIJU GEORGE AND THE SAME HAS BEEN ROUTED THROUGH SHRI ANNI JACO B, ONLY TO AVOID INCOME TAX. ACCORDINGLY, THE AO TOOK THE VIEW THAT GIFT RECEIVE D BY THE ASSESSEE FROM SHRI BIJU GEORGE IS TAXABLE U/S 56 OF THE ACT AND THE SAME IS NOT COVERED BY EXEMPTION GIVEN IN PROVISO TO SEC. 56(2)(VI) OF THE ACT. ACCORDINGLY, THE ASSESSING OFFICER ASSESSED THE GIFT AMOUNT OF RS. 18.00 LAKHS AS THE INCOME OF THE ASSE SSEE. THE LD. CIT(A) ALSO CONFIRMED THE SAID ASSESSMENT. HENCE THE ASSESSEE HAS FILED THIS APPEAL BEFORE US. 3. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULL Y PERUSED THE RECORD. APPARENTLY, THE ASSESSEE HAS RECEIVED GIFT FROM HIS SISTER, NAMED SMT. ANNIE JACOB. WITH REGARD TO THE SOURCES FOR MAKING GIFT, SHE HAS RECEIVED FUNDS FROM HER SON-IN-LAW, NAMED SHRI BIJU GEORGE. IT SHOWS THAT SMT. ANNIE J ACOB DID NOT HAVE ANY INDEPENDENT SOURCE OF INCOME. UNDER THESE SET OF FACTS, WE NOTI CE THAT THE TAX AUTHORITIES HAVE DRAWN INFERENCE THAT THE GIFT HAS BEEN GIVEN TO THE ASSESSEE ONLY BY SHRI BIJU GEORGE AND NOT BY SMT. ANNIE JACOB. THERE IS NO DISPUTE W ITH REGARD TO THE FACT THAT THE GIFT, IF CONSIDERED AS RECEIVED FROM SHRI BIJU GEORGE, IS TAXABLE IN THE HANDS OF THE ASSESSEE U/S 56 OF THE ACT. 4. HOWEVER, WE NOTICE THAT THE TAX AUTHORITIES HAVE DRAWN INFERENCE STATED ABOVE, WITHOUT CONDUCTING NECESSARY ENQUIRIES IN THIS REGA RD WITH SHRI BIJU GEORGE. IT IS A SETTLED PROPOSITION THAT THE STRICT RULE OF EVIDENC E SHALL NOT BE APPLICABLE TO INCOME TAX PROCEEDINGS AND THE TAX AUTHORITIES ARE ENTITLED TO LIFT THE VEIL AND DRAW INFERENCES ON THE BASIS OF SURROUNDING CIRCUMSTANCES. HOWEVER, IN OUR VIEW, SUCH AN INFERENCE SHOULD BE DRAWN ONLY AFTER CARRYING OUT THE NECESSA RY ENQUIRIES SURROUNDING THE TRANSACTIONS. IN THE INSTANT CASE, THERE MAY BE A POSSIBILITY THAT SHRI BIJU GEORGE MIGHT HAVE INTENDED TO GIVE MONEY TO HIS MOTHER-IN- LAW, SMT. ANNIE GEORGE ONLY AND I.T.A. NO. 172/COCH/2012 3 SMT. ANNIE JACOB, IN TURN AND ON HER OWN WILL, MIGH T HAVE GIFTED THE AMOUNT TO THE ASSESSEE EITHER WITH OR WITHOUT THE KNOWLEDGE OF SH RI BIJU GEORGE. 5. IN OUR VIEW, IT IS NECESSARY TO ASCERTAIN T HE PURPOSE FOR WHICH THE FUNDS WERE GIVEN BY SHRI BIJU GEORGE TO SMT. ANNIE JACOB. THE ASSESSEE HAS ALSO NOT STATED ANYTHING ABOUT THE NATURE OF SUCH RECEIPT BY SHRI A NNIE JACOB, I.E., WHETHER SHRI BIJU GEORGE HAS GIVEN IT AS LOAN OR GIFT. IN OUR VIEW, ALL THESE FACTS SHOULD HAVE BEEN EXAMINED AND ASCERTAINED FIRST BY THE ASSESSING OFF ICER BEFORE DRAWING INFERENCES AGAINST THE ASSESSEE. HENCE, THE FACTUAL POSITION WITH REGARD TO THIS TRANSACTION, IN OUR VIEW, NEEDS TO BE ASCERTAINED. WE HAVE ALSO NOTICE THAT THE ASSESSEE HAS ALSO FAILED TO FURNISH ANY DOCUMENT TO SHOW THE PURPOSE FOR WHICH SHRI BIJU GEORGE HAS GIVEN THE MONEY TO SMT. ANNIE JACOB. IT IS IN THE COMMON KNO WLEDGE OF EVERYBODY THAT, UNDER NORMAL CIRCUMSTANCES, A PERSON SHALL NOT GIVE MONEY TO ANY OTHER PERSON WITHOUT ANY SPECIFIC PURPOSE AND ALSO WITHOUT ANY SPECIFIC CIRC UMSTANCE. 6. IN VIEW OF THE FOREGOING DISCUSSIONS, IN OUR VIEW, THIS ISSUE REQUIRES FRESH EXAMINATION AT THE END OF THE ASSESSING OFFICER. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD. CIT(A) ON THIS ISSUE AND RESTORE THE SAME T O THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO EXAMINE THE ISSUE AFRESH AND TA KE APPROPRIATE DECISION IN ACCORDANCE WITH LAW, AFTER AFFORDING NECESSARY OPPO RTUNITY OF BEING HEARD TO THE ASSESSEE. WE ALSO DIRECT THE ASSESSEE TO FURNISH THE DOCUMENTS/EXPLANATIONS THAT MAY BE CALLED FOR BY THE AO. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED ACCORDINGLY ON 11-10-20 13. SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 11TH OCTOBER, 2013 GJ I.T.A. NO. 172/COCH/2012 4 COPY TO: 1. SHRI O.T.ALEXANDER, NATIONAL SEA FOODS COMPANY, 14/454, SRAMBIKKAL ROAD, CHULLIKAL, KOCHI-682 005. 2.THE THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE -3(1), KOCHI. 3 THE COMMISSIONER OF INCOME-TAX(APPEALS)-II, KOCHI . 4.THE COMMISSIONER OF INCOME-TAX, KOCHI. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T, COCHIN