Shri Sunil Kumar Roy, Siliguri V. DCIT, C ircle- 2, Siliguri, Siliguri

ITA 1879/KOL/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78423 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 9 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2004-2005
• Appeal Filed On: 07-10-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M L SUNDAR
• Assessee Lawyers: RAVI TULSIYAN
• Keywords: Gift

Judgement Text

I.T.A. NO. 1879/KOL. /2010 ASSESSMENT YEAR: 2004-2005 PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA C BENCH, KOLKATA BEFORE SHRI SHAMIM YAHYA (ACCOUNTANT MEMBER), AND SHRI GEORGE MATHAN (JUDICIAL MEMBER) I.T.A. NO. 1879/KOL./ 2010 ASSESSMENT YEAR : 2004-2005 SRI SUNIL KUMAR ROY,............................. ......APPELLANT ROY BHAWAN, S.S. MARKET, SILIGURI [PAN :ACLPR 2167 F] -VS.- DEPUTY COMMISSIONER OF INCOME TAX,............... ........RESPONDENT CIRCLE-2, SILIGURI APPEARANCES BY: SHRI RAVI TULSIYAN, A.R., FOR THE ASSESSEE SHRI M.L. SUNDAR, JCIT, SR. D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : JULY 14, 2014 DATE OF PRONOUNCING THE ORDER : JULY 17, 2014 O R D E R PER GEORGE MATHAN: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS), SILIGURI IN A PPEAL NO. 216/CIT(A)/SIG/06-07 DATED 28.07.2010 FOR THE ASSES SMENT YEAR 2004- 05. 2. SHRI RAVI TULSIYAN, C.A., REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI M.L. SUNDAR, LD. JCIT SR. D.R., REPRESENTED ON BEHALF OF THE REVENUE. 3. IN THE ASSESSEES APPEAL, THE ASSESSEE HAS RAISE D THE FOLLOWING GROUNDS:- I.T.A. NO. 1879/KOL. /2010 ASSESSMENT YEAR: 2004-2005 PAGE 2 OF 6 (1) THE ORDERS PASSED BY THE LOWER AUTHORITIES ARE ARBITRARY, WITHOUT PROPER REASONS, INVALID AND BAD IN LAW. (2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, BOTH THE LD. CIT(A) AS WELL AS THE AO ERRED IN HAVING CONFIR MED AND ADDED A SUM OF RS.10,00,000/- RECEIVED BY WAY OF GI FT FROM NINE DIFFERENT PERSONS WHOSE IDENTITY, GENUINENESS AND CREDITWORTHINESS WERE PROVED BY ADDUCING NECESSARY EVIDENCE AND AFFIDAVITS TO THE EFFECT. (3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) ERRED IN HAVING DIRECTED THE AO TO COMPUTE C APITAL GAIN WITH REFERENCE TO THE VALUE ADOPTED BY THE STAMP VA LUATION AUTHORITY, ALTHOUGH THE APPELLANT HAD INVESTED THE FULL VALUE OF SALE CONSIDERATION IN THE EXEMPTED ASSET US. 54EC O F THE I.T. ACT, 1961. (4) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LOWER AUTHORITIES ERRED IN ESTIMATING THE MONTHLY EXPENSE S OF THE ASSESSEE AND ADDING A SUM OF RS.43,000/- ON ACCOUNT OF LOW DRAWINGS. 4. AT THE TIME OF HEARING, IT WAS SUBMITTED BY THE LD. A.R. THAT THE ASSESSEE DID NOT WISH TO PRESS GROUND NO. 3. CONSEQ UENTLY, GROUND NO.3 OF THE ASSESSEES APPEAL STANDS DISMISSED BEING NOT PRESSED. 5. IN REGARD TO GROUND NO. 2, IT WAS SUBMITTED BY T HE LD. A.R. THAT THE ISSUE WAS AGAINST THE ACTION OF THE LD. CIT(APPEALS ) IN CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER ON AN AMOUNT OF RS.10,00,000/- RECEIVED BY THE ASSESSEE AS GIFTS. IT WAS THE SUBMI SSION THAT THE ASSESSEE HAD RECEIVED THE AMOUNT OF RS.10,00,000/- FROM 10 P ERSONS. IT WAS THE SUBMISSION THAT ONE OF THE PERSONS WAS THE ASSESSEE S SON AND THE OTHERS WERE FRIENDS AND RELATIVES. IT WAS THE SUBMISSION T HAT THE GIFT FROM THE SON WAS ACCEPTED WHEREAS THE GIFTS FROM OTHER FRIEN DS AND RELATIVES WERE NOT ACCEPTED. IT WAS THE SUBMISSION THAT THE ASSESS ING OFFICER HAD ASKED THE ASSESSEE TO PRODUCE THE DONORS AND ALL THE DONO RS HAD APPEARED BEFORE THE ASSESSING OFFICER AND THEIR STATEMENTS H AD BEEN RECORDED. ALL THE DONORS HAD CONFIRMED THE GIFTS TO THE ASSESSEE. IT WAS THE SUBMISSION THAT THE ASSESSING OFFICER ON THE GROUND THAT THE A SSESSEE HAD SUBSTANTIAL I.T.A. NO. 1879/KOL. /2010 ASSESSMENT YEAR: 2004-2005 PAGE 3 OF 6 CAPITAL AND THE DONORS WERE NOT HAVING SUBSTANTIAL CAPITAL HAD DISBELIEVED THE GIFT. 6. IT WAS THE SUBMISSION THAT ON APPEAL BEFORE THE LD. CIT(APPEALS), THE LD. CIT(APPEALS) HAD DIRECTED THE ASSESSING OFF ICER TO RE-EXAMINE THE DONORS AND NOTICES HAD BEEN SENT BY THE ASSESSING O FFICER TO THE DONORS. FOUR OF THE DONORS HAD APPEARED BEFORE THE ASSESSIN G OFFICER AGAIN AND HAD REITERATED THEIR EARLIER STAND. IT WAS THE SUBM ISSION THAT ALL THE GIFTS WERE RECEIVED BY CHEQUES. CONSEQUENTLY THE GENUINEN ESS OF THE TRANSACTIONS WAS PROVED. IT WAS THE FURTHER SUBMISS ION THAT THE DONORS HAD THEMSELVES CONFIRMED THE TRANSACTIONS BEFORE TH E ASSESSING OFFICER AND AGAIN IN THE REMAND PROCEEDINGS WHEN THE APPEAL WAS PENDING BEFORE THE LD. CIT(APPEALS). THESE TOO REITERATED THE GENU INENESS OF THE TRANSACTIONS. THE DONORS WERE ALL INCOME-TAX ASSESS EES AND THEY HAVE FILED THEIR INCOME-TAX RETURNS AND THEY HAVE ALSO P RODUCED SUCH INCOME- TAX RETURNS ALONG WITH THEIR COMPUTATION OF TOTAL I NCOME AND STATEMENT OF AFFAIRS BEFORE THE ASSESSING OFFICER WHICH PROVE TH E IDENTITY AND CREDITWORTHINESS OF THE DONORS. IT WAS THE FURTHER SUBMISSION THAT EVEN IN THE REMAND PROCEEDINGS FOUR OF THE DONORS HAD THEMS ELVES APPEARED BEFORE THE ASSESSING OFFICER IN RESPONSE TO THE NOT ICES ISSUED BY THE ASSESSING OFFICER, WHICH CLEARLY SHOWED THAT THE TR ANSACTIONS WERE GENUINE AND THE GIFTS HAD BEEN RECEIVED BY THE ASSE SSEE THROUGH CHEQUES ONLY. THIS WAS PROVED IN THE REMAND PROCEEDINGS. IT WAS THE SUBMISSION THAT THE LD. CIT(APPEALS) BY HOLDING THAT THE CIRCU MSTANCES WERE UNUSUAL AND UNNATURAL, HAD CONFIRMED THE ACTION OF THE ASSE SSING OFFICER. IT WAS THE SUBMISSION THAT THE ADDITION AS CONFIRMED BY TH E LD. CIT(APPEALS) BE DELETED. 7. IN REGARD TO THE GROUND NO. 4, WHICH IS AGAINST THE ACTION OF THE LD. CIT(APPEALS) IN CONFIRMING THE ESTIMATED MONTHLY EX PENSES AS ADDED BY THE ASSESSING OFFICER AT RS.43,000/-. IT WAS THE SU BMISSION THAT THE ASSESSEE HAD ADEQUATE DRAWINGS FOR HOUSEHOLD EXPENS ES AND ASSESSEES I.T.A. NO. 1879/KOL. /2010 ASSESSMENT YEAR: 2004-2005 PAGE 4 OF 6 WIFE HAD ALSO DRAWINGS. IT WAS THE SUBMISSION THAT THE ASSESSING OFFICER HAS NOT FOUND ANY SPECIFIC EXPENDITURE WHICH EXCEED ED THE DRAWINGS AS HAS BEEN CLAIMED BY THE ASSESSEE. THERE IS NO PROVI SION FOR MAKING AN ADDITION. 8. IN REPLY, LD. D.R. SUBMITTED THAT THE ASSESSEE H AD NOT PROVED THE REASONS FOR THE GIFTS. IT WAS THE FURTHER SUBMISSIO N THAT HUMAN PROBABILITIES FOR AN ASSESSEE WHO HAS HIGH NET WORT H INDIVIDUALLY TO RECEIVE SUCH GIFTS FROM PERSONS OF LESSER NET WORTH WAS AGAINST HUMAN PROBABILITIES. IT WAS THE FURTHER SUBMISSION THAT I N THE STATEMENT RECORDED FROM THE VARIOUS DONORS, EVEN THOUGH THEY HAD STATED TO HAVE GIVEN THE GIFTS AND THAT THE ASSESSEE IS A FAMILY F RIEND THEY DID NOT EVEN KNOW THE NAME OF THE WIFE OF THE ASSESSEE. LD. D.R. VEHEMENTLY SUPPORTED THE ORDER OF THE LD. CIT(APPEALS). IN RESPECT OF TH E ADDITION MADE UNDER THE HEAD DRAWINGS, LD. D.R. VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND LD. CIT(APPEALS). 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AT THE OUTSET, A PERUSAL OF THE ASSESSMENT ORDER CLEARLY SHOWS THAT THE ASSE SSING OFFICER HAD CALLED FOR THE DONORS AND THEY HAD ALL APPEARED BEF ORE THE ASSESSING OFFICER AND THEY HAD CONFIRMED THE TRANSACTIONS WIT H THE ASSESSEE MORE SO GIVING OF THE GIFTS. THE ASSESSING OFFICER HAS M ENTIONED THAT THE DONORS HAVE GIFTED IN CASH. HOWEVER, A PERUSAL OF THE ORDE R OF LD. CIT(APPEALS) SHOWS THAT HE HAD DIRECTED THE ASSESSING OFFICER TO RE-VERIFY THE DONORS. FOUR OF THE DONORS APPEARED BEFORE THE ASSESSING OF FICER IN THE REMAND PROCEEDINGS AND CONFIRMED THAT THEY HAD GIVEN THE G IFTS AND SOME OF THE GIFTS WERE BY CHEQUE. FURTHER A PERUSAL OF THE ASSE SSMENT ORDER AS ALSO THAT OF THE LD. CIT(APPEALS) SHOWS THAT THE DONORS ARE ALL INCOME-TAX ASSESSEES AND THEY HAVE ALL FILED THEIR RETURNS AND HAVE ACCEPTED GIVING GIFTS TO THE ASSESSEE. ADMITTEDLY THE ASSESSEE HAS PROVED THE IDENTITY OF THE DONORS AS HAS BEEN ACCEPTED BY THE ASSESSING OF FICER IN HIS ASSESSMENT ORDER. THE ASSESSING OFFICER IS ONLY DOU BTING THE I.T.A. NO. 1879/KOL. /2010 ASSESSMENT YEAR: 2004-2005 PAGE 5 OF 6 CREDITWORTHINESS OF THE DONORS AND THE GENUINENESS OF THE GIFTS. THE DONORS THEMSELVES HAVING CONFIRMED THAT THEY HAVE G IVEN THE GIFTS AND HAVING SHOWN THAT THEY ARE INCOME-TAX ASSESSEES AND HAVING FILED THEIR RETURNS OF INCOME CLEARLY SHOW THEIR CREDITWORTHY. THE FACT THAT THEY HAVE CONFIRMED THE TRANSACTIONS OF GIVING GIFTS TO THE ASSESSEE PROVES GENUINE. FOUR OF THE DONORS HAVE BEEN EXAMINED BEHI ND THE BACK OF THE ASSESSEE AND THEY HAVE ALSO CONFIRMED TO HAVE GIVEN THE GIFTS. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE ADDITION AS MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(APPE ALS) REPRESENTING THE GIFTS RECEIVED BY THE ASSESSEE IS LIABLE TO BE DELE TED AND WE DO SO. 10. IN REGARD TO GROUND NO. 4, WHICH IS AGAINST THE ADDITION AS CONFIRMED BY THE LD. CIT(APPEALS) ON ACCOUNT OF LOW DRAWINGS MADE BY THE ASSESSEE, IT IS NOTICED THAT THE ASSESSEE IS 71 YEARS OLD PERSON. HE IS STAYING WITH HIS SON. NO EXPENDITURE HAS BEEN FOUND IN THE HANDS OF THE ASSESSEE, WHICH HAS REMAINED UNEXPLAINED. THIS BEIN G SO, NO AD HOC DISALLOWANCE UNDER THE HEAD DRAWINGS CAN BE MADE IN THE HANDS OF THE ASSESSEE. IN THESE CIRCUMSTANCES, THE ADDITION AS M ADE BY THE ASSESSING OFFICER AND AS REDUCED BY THE LD. CIT(APPEALS) ON A CCOUNT OF DRAWINGS STANDS DELETED. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH JULY, 2014. SD/- SD/- SHAMIM YAHYA GEORGE MATHAN (ACCOUNTANT MEMBER) (JU DICIAL MEMBER) KOLKATA, THE 17 TH DAY OF JULY, 2014 I.T.A. NO. 1879/KOL. /2010 ASSESSMENT YEAR: 2004-2005 PAGE 6 OF 6 COPIES TO : (1) SRI SUNIL KUMAR ROY, ROY BHAWAN, S.S. MARKET, SILIGURI (2) DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2, SILIGURI (3) COMMISSIONER OF INCOME-TAX (APPEALS) (4) COMMISSIONER OF INCOME TAX (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.