STEVEN CHARLES DAVID, Pune V. ITO, Pune

ITA 1735/PUN/2012

• Counselvise Citation: 173524514 RSA 2012
• Duration Of Justice: 1 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-12-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 09-12-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 27-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L PATHADE
• Keywords: Gift; Principle of natural justice; Revised return

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NOS.1734 & 1735/PN/2012 (A.YS.2002-03 & 2003-04) STEVEN CHARLES DAVID B 303, SHAAN GANGA, NEXT TO GREEN PARK, SALISBURY PARK, PUNE 411037 PAN: AFQPD5066A APPELLANT VS. ITO, WARD 2(1), PUNE RESPONDENT APPELLANT BY : SHRI PRAMO D SHINGTE RESPONDENT BY : SHRI P.L. PATHADE DATE OF HEARING : 09.12.2013 DATE OF ORDER : 27.12.2013 ORDER PER SHAILENDRA KUMAR YADAV, J.M: BOTH THESE APPEALS PERTAIN TO THE SAME ASSESSEE FO R A.Y. 2002- 03 AND 2003-04. SO THESE WERE HEARD TOGETHER AND A RE BEING DISPOSED OFF BY THIS COMMON ORDER FOR THE SAKE OF C ONVENIENCE. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN THE AP PEALS FOR A.Y. 2002-03. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LOWER AUTHORITIES HAVE ERRED IN ADDING A SUM RS.4,73,885/- AS DEPOSIT UNDER THE GUISE OF GIFTS BY SUMMARILY DISREGARDING ALL THE EVIDENCES SUBMITTED BY THE APPELLANT IN THIS REGARD. THE SAID ACTION BEING AR BITRARY IN NATURE AND THEREFORE, NEEDS TO BE QUASHED AND ADDIT ION NEEDS TO BE DELETED IN ITS ENTIRETY. 2 2. THE APPELLANT CRAVES FOR TO LEAVE, ADD, ALTER, MODI FY, DELETE, AND ALTER ABOVE GROUND OF APPEAL BEFORE OR AT THE T IME HEARING, IN THE INTEREST OF NATURAL JUSTICE. 2. THE ASSESSEE IS AN INDIVIDUAL AND THE MAIN SOURC ES OF INCOME IS BY WAY OF SALARY AS A PASTOR OF ST.ANDREWS CHURCH, PUNE WHICH WAS ADMINISTERED BY HINDUSTANI CONVENT CHURCH, PUNE. TH E ASSESSEE ALSO DERIVES INCOME FROM HOUSE PROPERTY AND INTERES T INCOME UNDER THE HEAD 'INCOME FROM OTHER SOURCES'. DURING THE AS SESSMENT PROCEEDINGS, THE ASSESSING OFFICER FOUND THAT ENQUI RIES REGARDING THE ASSESSEE'S INVESTMENT IN IMMOVABLE PROPERTIES, BANK DEPOSITS AND ITS SOURCE OF INCOME WAS CARRIED OUT WHICH REVEALED THAT THE ASSESSEE HAD MADE CERTAIN DEPOSITS IN THE BANK ACCO UNT FOR WHICH NO PROPER SOURCES OF INVESTMENT WAS DISCLOSED IN TH E RETURN OF INCOME ORIGINALLY FILED. THE ASSESSING OFFICER THUS AFTER HAVING THE BELIEF THAT INCOME CHARGEABLE HAD ESCAPED ASSESSMEN T, ISSUED NOTICE U/S.148 FOR BOTH THE A.YRS I.E. 2002-03 AND 2003-04 ON 31.3.2008. THE ASSESSEE IN RESPONSE TO THE NOTICE FILED A LETT ER ON 03.04.2008 INTER ALIA STATING THAT THE REVISED RETURNS FOR BOT H THE ASSESSMENT YEARS HAD BEEN FILED ON 19.03.2008 AND REQUESTED TO TREAT THE SAME AS FILED IN RESPONSE TO THE AFORESAID NOTICE. THE R EVISED RETURN OF INCOME FILED BY THE ASSESSEE WAS BEYOND THE TIME AL LOWED U/S. 139(5), HENCE TREATED AS NON-EST. THE ASSESSING OF FICER THEREFORE, COMPARED THE INFORMATION RECEIVED FROM THE INVESTIG ATION WING WITH RESPECT TO THE DEPOSITS MADE IN THE BANK ACCOUNT WH ICH TOTALLED TO RS.6,95,895/- AND RS.7,02,065/- FOR A.Y. 2002-03 AN D 2003-04, RESPECTIVELY. HOWEVER, IN COMPARISON TO THE INCOME DECLARED IN THE RETURN U/S.148 THERE WAS A DIFFERENCE OF RS.4,73,88 5/- AND RS.4,37,065/- FOR THE A.YRS. 2002-03 AND 2003-04 RE SPECTIVELY. THE EXPLANATION FURNISHED BY ASSESSEE IN RESPECT OF SOU RCE OF BANK DEPOSITS UNDER THE GUISE OF GIFT WAS NOT ACCEPTED B Y THE ASSESSING OFFICER AS GENUINE AND THE SAME WAS ADDED AS UNDISC LOSED INCOME OF ASSESSEE FOR ASSESSMENT YEAR UNDER CONSIDERATION WH ICH WAS CONFIRMED BY CIT(A). 3 3. THE STAND OF THE ASSESSEE BEFORE US HAS BEEN THA T FOR A.Y. 2002-03 OUT OF RS.4,73,888/- WERE ATTRIBUTABLE TO T HE GIFTS RECEIVED FROM AN AUNTY MRS. SARLA F. DANIEL WHO WAS RESIDING IN USA AND RS.1,00,000/- WAS RECEIVED FROM HIS FATHER-IN-LAW. THE ASSESSEE FOR A.Y. 2003-04 STATED THAT THE ENTIRE AMOUNT OF RS.4, 37,065/- WAS ATTRIBUTABLE TO THE GIFT RECEIVED FROM HIS AUNTY MR S. SARLA E. DANIEL RESIDING IN USA. THE ASSESSEE HAD ALSO ENCLOSED A L ETTER ALONG WITH THE RETURN OF INCOME FOR BOTH THE ASSESSMENT YEARS EXPLAINING THE CIRCUMSTANCES UNDER WHICH THE GIFTS WERE RECEIVED. THE ASSESSING OFFICER THEREAFTER, SOUGHT THE EXPLANATION OF THE A SSESSEE WITH RESPECT TO THE IDENTITY AND CAPACITY OF THE DONOR A ND ALSO TO THE GENUINENESS OF THE TRANSACTIONS ALONG WITH PROPER P ROOF AND EVIDENCE. THE ASSESSEE FURNISHED A XEROX COPY OF T HE DECLARATION DATED 03.04.2002 BY MRS. SARLA E DANIEL, CONFIRMING FOR GIFT OF 4000 US DOLLARS AND COPY OF CHEVY CHASE BANK DATED 20.04 .2002. THE ASSESSING OFFICER DID NOT BELIEVE THE VERSION AND M ADE ADDITION WHICH IS NOT JUSTIFIED BECAUSE ASSESSEE HAS RECEIVE D THE SAID AMOUNT THROUGH BANK TRANSACTIONS FROM ONE MRS. SARLA E DA NIEL WHO HAS CONFIRMED THE ABOVE SAID GIFT WHICH SHOULD NOT BE B RUSHED ASIDE IN THIS MANNER. ACCORDINGLY, THIS ADDITION IS NOT JUST IFIED. SAME IS DIRECTED TO BE DELETED. REGARDING THE GIFT OF RS.1 ,00,000/- RECEIVED FROM THE ASSESSEES FATHER-IN-LAW, THE STAND OF THE ASSESSEE THAT HE WAS WORKING IN AIR INDIA, MUMBAI ALL HIS LIFE AND T HAT HIS WIFE WAS THE ONLY DAUGHTER, SO ADDITION IS NOT JUSTIFIED BEC AUSE THE ASSESSING OFFICER WAS NOT JUSTIFIED TO HOLD THAT FATHER-IN-LA W SHOULD HAVE GIVEN THE GIFT TO HIS ONLY DAUGHTER I.E. WIFE OF THE ASSE SSEE AND NOT TO THE ASSESSEE. IN CASE ASSESSEE AND HIS WIFE HAVE GOOD RELATIONS, FATHER- IN-LAW CAN GIVE GIFT OUT OF NATURAL LOVE AND AFFECT ION TO THE ASSESSEE WHICH IS NOT UNUSUAL IN THE SOCIAL CIRCUMSTANCES OF INDIA. SO, ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING ADDIT ION WHICH IS DIRECTED TO BE DELETED. AS DISCUSSED ABOVE, SIMILA R FIRST ISSUE AROSE IN A.Y. 2003-04. FACTS BEING SIMILAR, SO FOLLOWING THE SAME REASONING, THE ASSESSING OFFICER IS DIRECTED TO DEL ETE THE ADDITION OF 4 RS.4,37,065/- MADE BY ASSESSING OFFICER IN RESPECT OF GIFT FROM SAID MRS. SARLA F. DANIEL. 3. IN THE RESULT, BOTH THE APPEALS OF ASSESSEE ARE ALLOWED. PRONOUNCED IN THE OPEN COURT ON THE DAY OF 27 TH DECEMBER 2013. SD/- SD/- (R.K. PANDA) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 27 TH DECEMBER, 2013 GCVSR COPY TO:- 1. DEPARTMENT 2. ASSESSEE 3. THE CIT(A), KOLHAPUR 4. THE CIT, KOLHAPUR 5. THE DR, A BENCH, I.T.A.T., PUNE. 6. GUARD FILE BY ORDER //TRUE COPY// SENIOR PRIVATE SECRETARY, I.T.A.T., PUNE