Shri Suresh Prasad, Burdwan V. JCIT, Range-2, Asansol, Burdwan

ITA 1843/KOL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1145 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 1 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 24-05-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 26-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH KUMAR
• Assessee Lawyers: T P ROY
• Keywords: Gift; Non compliance; Retraction
• Section: 143(3); 131

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI N.V.VASUDEVAN, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO. 1843 / KOL / 2014 ASSESSMENT YEAR :2009-10 SHRI SURESH PRASAD 86, KRISHNA HOUSE, WEST APCAR GARDEN, ASANSOL, DIST. BURDWAN,PIN-713304 [ PAN NO.AEVPP 9312 F ] V/S . JCIT, RANGE-2, ASANSOL, PARMAR BUILDING, WEST APCAR GARDEN, ASANSOL- 713304, DIST. BURDWAN /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI T.P. ROY, ADVOCATE /BY RESPONDENT SHRI SAURABH KUMAR, ADDL. CIT-DR /DATE OF HEARING 12-09-2017 /DATE OF PRONOUNCEMENT 31-10-2017 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-ASANSOL DATED 28.07.2014. ASSESSMENT WAS FRAMED BY JCIT, RANGE-2, ASANSOL U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) VIDE HIS ORDER DATED 22.12.2011 FOR ASSESSMENT YEAR 2009-10. GROUNDS RAI SED BY ASSESSEE PER ITS APPEAL AS UNDER:- 1. FOR THAT THE LD COMMISSIONER OF APPEALS, ASANSO L HAS NOT BEEN JUSTIFIED IN CONFIRMING THE ADDITION OF GIFT OF RS. 25,00,000 INSTEAD OF THE FACT THAT THE GIFT WERE GENUINE AND IDENTIFIABLE AN D THE CREDIT WORTHINESS OF THE GIFT DONORS WERE WELL ESTABLISHED. 2. FOR THAT THE LD COMMISSIONER OF APPEALS, ASANSOL HAS NOT BEEN JUSTIFIED IN ACCEPTING THE LETTER DATED 15/12/2011 OF THE ASSESSEE INSTEAD OF THE FACT THAT THE SAME HAVE EVIDENTLY BE EN MADE UNDER COMPLETE MISCONCEPTION OF LAW AND PSYCHOLOGICAL COE RCION. ITA NO.1843/KOL/2014 A.Y. 2009-10 SH SURESH PRASAD VS. JCIT, RG-2, ASL. PAGE 2 3. FOR THAT THE LD COMMISSIONER OF APPEALS, ASANSOL HAS NOT BEEN JUSTIFIED IN NOT ACCEPTING THE RETRACTION OF THE AS SESSEE VIDE LETTER DATED 17/12/2013. 4. FOR THAT THE LD COMMISSIONER OF APPEALS, ASANSOL HAS NOT BEEN JUSTIFIED IN COMPLETELY DISREGARDING THE CONTENTS O F AFFIDAVIT DATED 24/06/2014. 5. FOR THAT THE LD COMMISSIONER OF APPEALS, ASANSOL HAS NOT BEEN JUSTIFIED IN NOT ACCEPTING THE PLEA OF THE ASSESSEE OF MISCONCEPTION OF LAW AND PSYCHOLOGICAL COERCION. 6. FOR THAT THE LD COMMISSIONER OF APPEALS, ASANSOL HAS NOT BEEN JUSTIFIED IN IMPOSING PENALTY U/S 234 B OF THEE IT ACT 1961. THE APPELLANT BEING AGGRIEVED ON THE ABOVE GROUNDS SEEK TO APPEAL BEFORE THE HNOURABLE INCOME TAX APPELLATE TRIBUNAL, KOLKATA THE APPELLANT CRAVES LEAVE TO ADD AMEND ALTER SUCH FURTHER GROUNDS AS MAY DEEM FIT ANY TIME DURING THE COURSE OF HEARING. SHRI T.P. ROY, LD. ADVOCATE APPEARED ON BEHALF OF A SSESSEE AND SHRI SAURABH KUMAR, LD. DEPARTMENTAL REPRESENTATIVE REPR ESENTED ON BEHALF OF REVENUE. 2. INTER-CONNECTED ISSUE RAISED BY ASSESSEE IS THAT LD. CIT(A) ERRED IN CONFIRMING THE ORDER OF ASSESSING OFFICER BY SUSTAI NING THE DISALLOWANCE OF 25 LAKH ON ACCOUNT OF BOGUS GIFTS. 3. BRIEFLY STATED FACTS ARE THAT ASSESSEE IS AN IND IVIDUAL AND ENGAGED IN BUSINESS OF SCRAP DEALING, MANUFACTURING AND SALE O F IRON INGOT. THE ASSESSEE IN ITS BALANCE DATED 31.0.2009 HAS SHOWN CAPITAL IN TRODUCTION OF 23 LAKH WHICH HE CLAIMED TO HAVE RECEIVED GIFTS OF 25 LAKH FROM THE PERSONS AS DETAILED BELOW:- SL NO. NAME RELATION WITH ASSESSEE PAN & IT JURISDICTION AMOUNT OF GIFT RECEIVED 1 SRI KRISHNA PRASAD FATHER AAENPP2541N WD-2(3)/ASL 5,00,000 2 SMT. RUKMINA DEBI MOTHER ADGPD2244J WD-2(4)/ASL 5 ,00,000 3 SRI DINESH PRASAD OWN BROTHER AHTPP5212D WD-2(3)/ ASL 5,00,000 4 SMT. SARITA PRASAD W/O DINIESH PRASAD SISTER-IN-LAW ALYPP5293R WD-2(3)/ASL 3,00,000 5 SMT. RANI PRASAD W/O SRI SURESH PRASAD SISTER-IN-LAW ALYPP5265D WD-2(3)/ASL 3,00,000 6 SMT. URMILA PRASAD W/O SRI SURESH PRASAD WIFE ARXPP3306N WD-2(3)/ASL 3,00,000 7 SRI RMESH PRASAD S/O MADOJI PRASAD MATERNAL UNCLES SON AJIPP5141Q WD-2(3)/ASL 50,000 ITA NO.1843/KOL/2014 A.Y. 2009-10 SH SURESH PRASAD VS. JCIT, RG-2, ASL. PAGE 3 8 SMT. USHA PRASAD W/O SRI RAMESH PRASAD MATERNAL UNCLES WIFE ALYPP5264C WD-2(3)/ASL 50,000 25,00,000 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO ISS UED NOTICE U/S 131 OF THE ACT TO THE DONORS OF THE GIFTS TO VERIFY AND ES TABLISH THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF SUCH GIFTS. HOW EVER, NONE OF THE DONOR ATTENDED THE OFFICE OF THE AO. ON QUESTION BY THE A O ABOUT THE NON- COMPLIANCE OF NOTICE ISSUED U/S. 131 OF THE ACT, AS SESSEE SUBMITTED THAT ALL THE GIFTS ARE GENUINE AND PRODUCED SUPPORTING DOCUM ENTS IN SUPPORT OF ITS CLAIM AS UNDER:- 1) CONFIRMATION OF GIFT 6) COPY OF IT RETURN 2) MODE OF PAYMENT 7) STATEMENT OF ACCOUNTS 3) DATE OF PAYMENT 8) BANK STATEMENT 4) IDENTIFY PROOF 9) CASH FLOW STATEMENT 5) SOURCE OF MONEY AVAILABLE IN THE HANDS OF DONOR. HOWEVER, ASSESSEE VIDE LETTER DATED 15.12.2011 AGRE ED TO OFFER THE AMOUNT OF GIFTS RECEIVED BY HIM TO TAX DUE TO NON-APPEARANCE OF HIS RELATIVES (DONORS OF GIFT) IN RESPONSE TO THE NOTICES ISSUED U/S. 131 OF THE ACT TO THEM. THE RELEVANT CONTENTS OF THE LETTER DATED 15.12.2011 WRITTEN BY ASSESSEE READS AS UNDER:- THAT FURTHER YOUR HAVE ISSUED SUMMONS U/S.131 OF TH E IT ACT, IN RESPECT OF PERSONAL ATTENDANCE OF ALL MY FAMILY MEM BERS (DONOR) TO ATTEND IN YOUR OFFICE TO GIVE EVIDENCE IN RESPECT OF SUCH GIF T. THAT THE PERSONAL ATTENDANCE OF MY AGE OLD MOTHER A ND FATHER, WIFE AND BROTHERS WIVES AND ALSO OTHER MEMBERS IS A VERY EM BARRASSING FOR ME AS IT WAS BEYOND THE SECRECY AND DIGNITY OF OUR FAMILY. THAT ALTHOUGH ALL HE GIFTS ARE GENUINE IN THE EYE O F LAW BUT YOUR GOODSELF IS NOT READY TO ACCEPT SUCH GIFTS WITHOUT ATTENDANCE OF DO NORS REGARDING TRANSACTIONS AND GENUINENESS OF SAME. THAT IN VIEW OF SAME I AM NOT GOING AGAINST YOUR VI EW AND I WANT TO FINISH THE LITIGATION TO AVOID PERSONAL ATTENDANCE OF MY FAMIL Y MEMBERS BY OFFERING TAX ON SUCH GIFTS BY ADDING THE SUCH GIFTED AMOUNT TO M Y TOTAL INCOME FOR THE YEAR UNDER ASSESSMENT AS I HAVE NO OTHER ALTERNATIVE BUT TO MAKE OFFER FOR TAXATION ON SUCH GIFTS. THAT AT PRESENT I AM NOT IN POSITION TO PAY TAX AT A TIME AS MY BANK ACCOUNT HAS BEEN DECLARED AS NPA ACCOUNT BUT I AM READY TO PAY THE SAME BY INSTALLMENTS IF YOUR GOODSELF PERMIT SUCH INSTALLME NTS THAT I CAN BEAR THE BURDEN OF TAX LIABILITY IN LONG RUN. ITA NO.1843/KOL/2014 A.Y. 2009-10 SH SURESH PRASAD VS. JCIT, RG-2, ASL. PAGE 4 THAT I HOPE YOUR GOODSELF WILL CONSIDER MY OFFER TA XATION ON SUCH GIFTS AS ALSO GRANT THE PAYMENTS OF TAXES IN INSTALLMENTS AND FOR THIS ACT OF YOUR KINDNESS I SHALL REMAIN GRATEFUL TO YOU. IN VIEW OF THE ACCEPTANCE BY THE ASSESSEE TO TREAT THE AMOUNT OF GIFTS AS INCOME, THE AO ADDED THE AMOUNT OF GIFTS FOR 25 LAKHS AS INCOME FROM OTHER SOURCE VIDE HIS ORDER DATED 22.12.2011 UNDER SECTIO N 143(3) OF THE ACT. 4. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE L D. CIT(A). THE ASSESSEE RETRACTED FROM THE ACCEPTANCE GIVEN VIDE L ETTER DATED 15.12.2011 BY WAY OF FILING AN AFFIDAVIT DATED 24.06.2014 DULY NO TARIZED ON THE GROUND THAT THE ACCEPTANCE LETTER WAS SIGNED BY HIM UNDER COERC ION. THE ASSESSEE FURTHER SUBMITTED THAT THE ORDER OF AO IS SILENT ABOUT THE DOCUMENTARY EVIDENCE SUBMITTED DURING THE ASSESSMENT PROCEEDINGS WHICH A RE JUSTIFYING THAT THE GIFTS WERE GENUINE. HOWEVER, LD. CIT(A) DISREGARDED THE CONTENTION OF AO AND CONFIRMED THE ORDER OF AO BY OBSERVING AS UNDER:- 12. THE CASE BOILS DOWN TO WHETHER THERE WAS THREAT OR COERCION AND IF SO WHETHER THE RETRACTION WAS MADE WITHIN REASONABLE T IME. HERE NOTICE UNDER SECTION 131 WAS ISSUED TO DONORS BY ASSESSING OFFICER AND ASSESSEE COMES UP WITH AN OFFER TO OWN UP THE SAME AS HIS IN COME. RECORDS DOES NOT BEAR ANY EVIDENCE THAT THERE WAS THREAT OR COERCION OR EVEN INDUCEMENT. THERE IS NO MISCONCEPTION AS ASSESSEE WAS AWARE OF THE CONSEQUENCE OF ACCEPTANCE OF GIFT AS IS INCOME IN VIEW OF CONTENTS OF PENULTIMATE PARAGRAPH OF HIS LETTER DATED 15.12.2011 TO ASSESSING OFFICER WHICH CONCERNS TAX PAYMENT AS A RESULT OF THE ADMISSION. THE ASSESSEE WAS ALSO NOT ABLE TO ESTABLISH THAT THERE WAS THREAT ON COERCION RESULTI NG IN IMPROPER PROCUREMENT OF ADMISSION. THE JUDICIAL DECISION GIVEN IN PARAGR APH 11 ARE MAINLY OF SUPREME COURT AND HIGH COURT AND HENCE I RELY ON TH E SAME AS AGAINST DECISIONS QUOTED BY ASSESSEE. 13. SINCE THERE IS NO EVIDENCE OF THREAT OR COERCIO N, I HOLD THAT THE RETRACTION ME NOW HAS NO VALIDITY. ACCORDINGLY I DISMISS THE G ROUNDS 1 TO 9. BEING AGGRIEVED BY THIS ORDER OF LD. CIT(A) ASSESSE E CAME IN SECOND APPEAL BEFORE US. 5. BEFORE US LD. AR FOR THE ASSESSEE FILED PAPER BO OK WHICH IS RUNNING PAGES FROM 1 TO 90 AND ASSURED THAT ALL THE DONORS ARE READY TO APPEAR BEFORE THE AO IN RESPONSE TO THE NOTICE ISSUED U/S 131 OF THE ACT. HE FURTHER SUBMITTED THAT THE ADDITION WAS SUSTAINED BY AUTHOR ITIES BELOW ONLY ON THE GROUND THAT THE DONORS OF THE GIFTS FAILED TO COMPL Y THE NOTICE ISSUED U/S. 131 ITA NO.1843/KOL/2014 A.Y. 2009-10 SH SURESH PRASAD VS. JCIT, RG-2, ASL. PAGE 5 OF THE ACT. ACCORDINGLY, LD. AR REQUESTED THE BENCH TO PROVIDE ONE MORE OPPORTUNITY SO THAT ASSESSEE CAN PRODUCE ALL THE DO NORS BEFORE AO IN TERMS OF PROVISION OF SECTION 131 OF THE ACT. ON THE OTHER HAND, LD. DR RAISED NO OBJECTION IF TH E MATTER IS RESTORED BACK TO THE FILE OF AO FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW. 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE G IFTS OF 25 LAKH WAS RECEIVED BY ASSESSEE FROM HIS RELATIVE DONORS DURING THE YEA R WHICH WAS SHOWN AS CAPITAL INTRODUCTION IN ITS BALANCE-SHEET AS ON 31. 03.2009. THE ASSESSEE ALSO PRODUCED NECESSARY DOCUMENTARY EVIDENCES IN SUPPORT OF THE IMPUGNED GIFTS WHICH ARE PLACED ON PAGES 53 TO 90 OF THE PAPER BOO K. BUT THE AMOUNT OF GIFTS WAS TREATED AS INCOME OF ASSESSEE ONLY ON THE GROUN D THAT THE DONORS FAILED TO APPEAR BEFORE AO IN RESPONSE TO THE NOTICE ISSUE D TO THEM U/S 131 OF THE ACT AS WELL AS THE ASSESSEE ACCEPTED TO OFFER THE S AME TO TAX. THE VIEW TAKEN BY THE AO WAS SUBSEQUENTLY CONFIRMED BY LD. CIT(A). NOW THE LIMITED ISSUE BEFORE US ARISES SO AS TO WHE THER THE IMPUGNED AMOUNT OF GIFTS REPRESENTS THE UNDISCLOSED INCOME OF ASSES SEE. WE FIND THAT THE ADDITION WAS MADE BY THE AUTHORITIES BELOW ON ACCOU NT OF TWO REASONS AS DETAILED UNDER : 1. DUE TO NON COMPLIANCE OF NOTICE U/S 131 OF THE A CT BY THE GIFT DONORS. 2. ASSESSEE VIDE LETTER DATED 15.12.2011 AGREED TO OFFER THE AMOUNT OF GIFTS RECEIVED BY HIM TO TAX DUE TO NON-APPEARANCE OF HIS RELATIVES (DONORS OF GIFT) IN RESPONSE TO THE NOTICES ISSUED U/S 131 OF THE ACT TO THEM. NOW, THE LD. AR FOR THE ASSESSEE BEFORE US PLEADED THAT ONE MORE OPPORTUNITY MAY BE GIVEN TO PRODUCE THE DONORS OF G IFTS BEFORE AO IN COMPLIANCE WITH THE NOTICE ISSUED U/S. 131 OF THE A CT. THE LD. AR ALSO AGITATED THAT THE ACCEPTANCE WAS GIVEN BY THE ASSESSEE FOR A DMISSION GIFTS AS INCOME UNDER COERCION. ITA NO.1843/KOL/2014 A.Y. 2009-10 SH SURESH PRASAD VS. JCIT, RG-2, ASL. PAGE 6 IN VIEW OF THE ABOVE DISCUSSION, AND KEEPING IN MIN D THE ENTIRE FACTS OF THE CASE, WE DEEM IT FIT AND PROPER TO REMIT THE MATTER TO THE FILE OF AO FOR FRESH ADJUDICATION IN ACCORDANCE WITH THE LAW AND IN THE LIGHT OF ABOVE DISCUSSION. WHILE DOING SO, THE AO SHALL GIVE A DUE AND FAIR OP PORTUNITY OF HEARING TO THE ASSESSEE AND SHALL DECIDE THE MATTER BY WAY OF A SP EAKING ORDER IN ACCORDANCE WITH LAW. IT IS NEEDLESS TO MENTION THAT THE ASSESSEE SHALL COOPERATE IN THE ASSESSMENT PROCEEDINGS BEFORE THE AO. HENCE, THIS GROUND OF ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PUR POSE. 7. IN THE RESULT, FOR STATISTICAL PURPOSE, THE APPEAL OF ASSESSEE IS TREATED AS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 31/ 10/2017 SD/- SD/- ($ &) ( &) (N.V.VASUDEVAN) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP, SR.P.S (- 31 / 10 /201 7 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-SHRI SURESH PRASAD, 86, KRISHNA HOUSE WE ST APCAR GARDEN, ASANSOL 713304, DIST. BU RDWAN, 2. /RESPONDENT-JCIT, RANGE-2, PARMAR BUILDING WEST APC AR GARDEN, ASANSOL- 713304, DIST. B URDWAN 3. 3 4 / CONCERNED CIT KOLKATA 4. 4- / CIT (A) KOLKATA 5. 7 $$3, 3, / DR, ITAT, KOLKATA 6. < / GUARD FILE. BY ORDER/ , /TRUE COPY/ SR. PRIVATE SECRETARY, HEAD OF OFFICE/DDO 3,