Smt. Mala Chitlangia, Kolkata V. I.T.O., Ward - 29(4), Kolkata

ITA 2/KOL/2009

• Counselvise Citation: 223514 RSA 2009
• Duration Of Justice: 2 year(s) 9 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2011
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 14-07-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 01-01-2009
• Court: TRIBUNAL
• Department Lawyers: NIHAR DUTTA GUPTA
• Assessee Lawyers: R SALARPURIA
• Keywords: Gift
• Section: 56

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BEN CH A, KOLKATA () BEFORE , ,, , , SHRI MAHAVIR SINGH, JUDICIAL MEMBER. /AND . .. . ! ! ! !. .. . , '# SHRI C.D.RAO, ACCOUNTANT MEMBER $ $ $ $ / ITA NO . 2/KOL/2009 %& '(/ ASSESSMENT YEAR : 2005-06 (*+ / APPELLANT ) SMT.MALA CHITLANGIA, KOLKATA (PAN : ACMPC 1816 E) - % - - VERSUS - . (-.*+/ RESPONDENT ) I.T.O., WD-29(4), KOLKATA *+ / 0 '/ FOR THE APPELLANT: SHRI R.SALARPURIA -.*+ / 0 '/ FOR THE RESPONDENT: SHRI NIHAR DUTTA GUPTA 1%2 / !# /DATE OF HEARING : 28.10.2011. 3' / !# /DATE OF PRONOUNCEMENT : 31.10.2011. '4 / ORDER ( (( ( . .. . ! ! ! !. .. . ) )) ), , , , '# PER SHRI C.D.RAO, AM THIS APPEAL IS FILED BY ASSESSEE AGAINST THE ORDER DATED 31.10.2008 OF THE LD. CIT(A)-XVI, KOLKATA. 2. THE ONLY ISSUE RAISED BY ASSESSEE IS RELATING T O ADDITION OF RS.20 LAKHS. 3. THE BRIEF FACTS OF THIS ISSUE ARE THAT WHILE DO ING THE SCRUTINY ASSESSMENT ASSESSING OFFICER MADE AN ADDITION OF RS.20 LAKHS B Y OBSERVING THAT IN THIS CASE THE GIFT WAS MADE BY A HUF TO THE ASSESSEE AND HENCE IT DOES NOT FALL IN ANY OF THE CATEGORIES MENTIONED IN THE PROVISION OF SECTION 56 (2)(V) OF THE IT ACT. HE TREATED THE SAID GIFT AS LIABLE TO BE TREATED AS INCOME OF ASSE SSEE. 3.1. ON APPEAL LD. CIT(A) HAS CONFIRMED THE ACTION OF AO BY OBSERVING AS UNDER :- 2 5. I HAVE CONSIDERED THE ISSUE. THE GIFT DEED IN Q UESTION MENTIONS THE P.A.NO. OF THE DONOR AS AAEHK2460E WHICH IS THE P.A.NO. OF THE HUF IN QUESTION. FURTHER, THE GIFT WAS MADE DIRECTLY FROM THE HUF ACCOUNT AND NOT FROM SHRI AGARWALS INDIVIDUAL ACCOUNT. THE EXPLANATION THAT THE GIFT WAS GIVEN BY SHRI AGARWAL OUT OF WITHDRAWAL FROM HIS HUF FUNDS IS NOT BORNE OUT BY THE FACTS OF THE MATTER. IT WAS CLEARLY WITHOUT DOUBT THE HUF WHICH HAD GIVEN THE GIFT. THE LIST GI VEN IN THE PROVISO TO SECTION 56(2)(V) IS VERY SPECIFIC AND DOES NOT INCLUDE ANY HUF. A PLAIN READING OF THE SUB- SECTION WILL MAKE CLEAR THAT THE FACT THAT SOME MEM BERS OF AN HUF MAY BE RELATIVES AS DEFINED IN THE SUB-SECTION WILL NOT ALTER THE SI TUATION. IT IS THUS EVIDENT THAT THE SAID HUF DOES NOT FALL WITHIN THE EXEMPTED CATEGORY OF R ELATIVES OF SECTION 56(2)(V) AND THE AO WAS CORRECT IN INCLUDING THE GIFT AMOUNT AS INCOME FROM OTHER SOURCES AS PER THE PROVISIONS OF THE SUB-SECTION. I, THEREFORE, CO NFIRM THE ACTION OF THE AO IN THE MATTER. 3.2. AGGRIEVED BY THIS ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4. AT THE TIME OF HEARING THE LD. COUNSEL APPEARING ON BEHALF OF ASSESSEE BY RELYING ON TWO TRIBUNAL JUDGEMENTS ONE IN THE CASE OF ITA NO.1542/KOL/2009 IN THE CASE OF ITO VS NIDHI GOENKA AND THE OTHER ONE IN IT A NO.583/RAJ/2007 AND 601/RAJ/2008 OF RAJKOT BENCHES CONTENDED THAT THE A CTION OF THE REVENUE IN ASSESSEES CASE IS NOT JUSTIFIABLE. THEREFORE, HE REQUESTED TO SET ASIDE THE ORDERS OF THE REVENUE AUTHORITIES AND DELETE ADDITION OF RS.20 LAKHS. 5. ON THE OTHER HAND, THE LD.DR APPEARING ON BEHALF OF THE REVENUE RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES AND REITERATED TH E OBSERVATIONS MADE BY ASSESSING OFFICER AS WELL AS LD. CIT(A). THEREFORE HE REQUEST ED TO UPHELD THE ORDERS OF THE REVENUE AUTHORITIES. 6. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREF UL PERUSAL OF MATERIALS AVAILABLE ON RECORD IT IS OBSERVED THAT THE KOLKAT A BENCHES IN ITA NO.1542/KOL/2009 IN THE CASE OF ITO VS NIDHI GOENKA WHEREIN THE REVE NUES APPEAL HAS BEEN DISMISSED BY OBSERVING AS UNDER :- 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL PLACED BEFORE US. WE HAVE ALSO CAREFULLY PERUSED THE ORDERS OF T HE LOWER AUTHORITIES. WE FIND THAT WHILE DELETING THE ADDITION THE LD. CIT(A) HAS HELD AS UNDER : THE APPELLANT RECEIVED GIFT OF RS.10 LAKH ON 16.09 .05 FROM M/S. MURARILAL AGARWAL & SONS(HUF). AS PER PROVISIONS OF SEC. 56(2)(VI) GI FT RECEIVED FROM PERSONS SPECIFIED FOR PROVISION ARE NOT ALLOWABLE. THE A.O HELD THAT THE HUF IS NOT A RELATIVE AS PER THE PROVISION. ACCORDINGLY THE GIFT AMOUNT IS ASSESSED AS INCOME FROM OTHER SOURCE. IT IS SEEN THAT THE HUF IS A CREATURE OF LAW. THE HUF HAS NO PHYSICAL EXISTENCE. THE HUF IS MAINTAINED BY KARTA OF HUF. THE GIFT AMOUNT IS G IVEN BY THE KARTA OF MR. MURARILAL AGARWAL WHO IS FATHER IN LAW OF THE APPEL LANT. THE GIFT IS MADE OUT THE HUF 3 FUNDS. THE KARTA OF THE HUF IS A RELATIVE OF THE AP PELLANT AS PER EXPLANATION PROVIDED UNDER SEC. 56(2)(VI). THE PROVISIONS READ AS UNDER: 56(2)(VI). WHERE ANY SUM OF MONEY, THE AGGREGATE VA LUE OF WHICH EXCEEDS FIFTY THOUSAND RUPEES, IS RECEIVED WITHOUT CONSIDERATION, BY AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY, IN ANY PREVIOUS YEAR FROM A NY PERSON OR PERSONS ON OR AFTER THE 1ST DAY OF APRIL, 2006, THE WHOLE OF T HE AGGREGATE VALUE OF SUCH SUM: PROVIDED THAT THIS CLAUSE SHALL NOT APPLY TO ANY SU M OF MONEY RECEIVE- (A) FROM ANY RELATIVE, OR - EXPLANTION.0 FOR THE PURPOSE OF THIS CLAUSE, RELAT IVE MEANS- (VI) ANY LINEAL ASCENDANT OR DESCENDANT OF THE SPOU SE OF THE INDIVIDUAL; IN THE CASE OF THE APPEIIANT FATHER IN LAW IS COVER ED BY THE EXPLANATION QUOTED. HENCE THE GIFT RECEIVED BY THE APPELLANT FROM HER F ATHER IN LAW MR. MURARILAL AGARWAL KARTA OF HUF IS COVERED BY THE PROVISIONS O F SECTION 56(2)(VI) READ WITH EXPLANATION. THE A.O IS NOT CORRECT IN ASSESSING TH E GIFT AMOUNT OF RS. 10 LAKH. THE A.O IS DIRECTED TO DELETE THE ADDITION. SINCE THE LD. DR AT THE TIME OF HEARING BEFORE US C OULD NOT CONTROVERT THE ABOVE FINDING OF THE LD. CIT(A) BY PRODUCING ANY COGENT M ATERIAL OR EVIDENCE, WE FIND NO INFIRMITY IN HIS ORDER AND THE SAME IS HEREBY UPHEL D. THIS GROUND OF APPEAL OF THE REVENUE IS, THEREFORE, DISMISSED. 6.1. AGAIN THE RAJKOT BENCHES IN ITA NO.583/RAJ/20 7 AND 601/RAJ/2008 IN THE CASE OF ITO VS SHRI VINITKUMAR RAGHAVJIBHAI BHALODI A WHEREIN THE REVENUES APPEAL HAS BEEN DISMISSED BY OBSERVING AS UNDER :- 11.2. FURTHER, FROM A PLAIN READING OF SECTION 56( 2)(VI) ALONG WITH THE EXPLANATION TO THAT SECTION AND ON UNDERSTANDING THE INTENTION OF THE LEGISLATURE FROM THE SECTION, WE FIND THAT A GIFT RECEIVED FROM RELATIVE, IRRES PECTIVE OF WHETHER IT IS FROM AN INDIVIDUAL RELATIVE OR FROM A GROUP OF RELATIVES IS EXEMPT FROM TAX UNDER THE PROVISIONS OF SECTION 56(2)(VI) OF THE ACT AS A GRO UP OF RELATIVES ALSO FALLS WITHIN THE EXPLANATION TO SECTION 56(2)(VI) OF THE ACT. IT IS NOT EXPRESSLY DEFINED IN THE EXPLANATION THAT THE WORD RELATIVE REPRESENTS A S INGLE PERSON. AND IT IS NOT ALWAYS NECESSARY THAT SINGULAR REMAINS SINGULAR. SOMETIMES A SINGULAR CAN MEAN MORE THAN ONE, AS IN THE CASE BEFORE US. IN THE CASE BEFORE U S THE ASSESSEE RECEIVED GIFT FROM HIS HUF. THE WORD HINDU UNDIVIDED FAMILY, THOUGH SOUN DS SINGULAR UNIT IN ITS FORM AND ASSESSED AS SUCH FOR INCOME-TAX PURPOSES, FINAL LY AT THE END A HINDU UNDIVIDED FAMILY IS MADE UP OF A GROUP OF RELATIVES. THUS, IN OUR OPINION, A SINGULAR WORDS/WORDS COULD BE READ AS PLURAL ALSO, ACCORDING TO THE CIRCUMSTANCES/SITUATION. TO QUOTE AN EXAMPLE, THE PHRASE A LOT. HERE, THE PHRASE A LOT REMAINS AS SUCH, I.E. PLURAL, IN ALL CIRCUMSTANCES AND SITUATIONS, W HERE IN THE CASE OF ONE OF THE FRIENDS OR ONE OF THE RELATIVES, THE PHRASE REMA INS SINGULAR ONLY AS THE PHRASE STATES SO THAT ONE AMONGST THE RELATIVES AND AT NO STRETCH OF IMAGINATION IT COULD MEAN AS PLURAL WHEREAS IN THE PHRASE A LOT THE WORDS A AND LOT ARE INSEPARABLE AND IF SPLIT APART BOTH GIVE DISTINCTIVE NUMBERS, I.E. A SINGULAR AND LOT PLURAL AND WHEREAS WHEN READ TOGETHER, IT CAN ONLY READ AS PLU RAL IN NUMBER UNLIKE IN THE CASE OF ONE OF THE RELATIVES WHERE ONE IS ALWAYS SINGUL AR IN NUMBER WHEREAS RELATIVES 4 IS ALWAYS PLURAL IN NUMBER, BUT WHEN READ TOGETHER IT COULD READ AS SINGULAR IN NUMBER. APPLYING THIS DESCRIPTION WITH THE CASE ON HAND, WE HAVE ALREADY FOUND THAT THOUGH FOR TAXATION PURPOSE, AN HUF IS CONSIDERED A S A SINGLE UNIT, RATHER, AN HUF IS A GROUP OF RELATIVES AS IT IS FORMED BY THE RELA TIVES. THEREFORE, IN OUR CONSIDERED VIEW, THE RELATIVE EXPLAINED IN EXPLANATION TO SE CTION 56(2)(VI) OF THE ACT INCLUDES RELATIVES AND AS THE ASSESSEE RECEIVED GIFT FROM HIS HUF, WHICH IS A GROUP OF RELATIVES, THE GIFT RECEIVED BY THE ASSESSEE FROM THE HUF SHOULD BE INTERPRETED TO MEAN THAT THE GIFT WAS RECEIVED FROM THE RELATIVES THEREFORE THE SAME IS NOT TAXABLE UNDER SECTION 56(2)(VI) OF THE ACT, WE HOLD ACCORDI NGLY. 6.2. SINCE THE LD. DR FOR THE REVENUE COULD NOT CON TROVERT THE ABOVE FINDINGS OF THE HONBLE TRIBUNAL BY BRINGING ANY CONTRARY DECISION OR COGENT MATERIAL WE ARE OF THE VIEW THAT ADDITION MADE BY THE REVENUE AUTHORITIES IS NOT JUSTIFIED IN THE FACTS AND CIRCUMSTANCES OF THE CASE IN VIEW OF THE ABOVE TRIB UNALS DECISIONS. THEREFORE WE SET ASIDE THE ORDERS OF THE REVENUE AUTHORITIES ON THIS ISSUE AND DIRECT AO TO DELETE THE ADDITION OF RS.20 LAKHS. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 31.10.2011. SD/- SD/- , , , , MAHAVIR SINGH, JUDICIAL MEMBER . .. . ! ! ! !. .. . , , , , '# '# '# '# , C.D.RAO, ACCOUNTANT MEMBER. ( (( (!# !# !# !#) )) ) DATE: 31.10.2011. '4 / -5 6'5'7- COPY OF THE ORDER FORWARDED TO: 1. SMT.MALA CHITLANGIA, C/O SALARPURIA JAJODIA & CO., 7, C.R.AVENUE, KOLKATA- 700072. 2 THE I.T.O., WARD-29(4), KOLKATA. 3. THE CIT, 4. THE CIT(A)-XVI, KOLKATA. 5. DR, KOLKATA BENCHES, KOLKATA .5 -/ TRUE COPY, '4%1/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES R.G.(.P.S.) 5