K.Priya, CHENNAI V. ITO, Coimbatore

ITA 2028/CHNY/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73660 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 05-02-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 19-11-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: T N BETGIRI JT
• Assessee Lawyers: R VIJAYARAGHAVAN
• Keywords: Gift; Source of fund
• Section: 143(3); 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI . . . , . . !' , # '$ % [BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT AND SHRI S. S. GODARA, JUDICIAL MEMBER] ./ I.T.A.NO.2028/MDS/2013 / ASSESSMENT YEAR : 2009-10 SMT. K. PRIYA NO.66, AVARAMPALAYAM ROAD K.R. PURAM COIMBATORE 641 006 VS. THE INCOME TAX OFFICER WARD II(2) COIMBATORE [PAN AJXPP 4653 Q] ( &' / APPELLANT) ( ()&' /RESPONDENT) / APPELLANT BY : SHRI R. VIJAYARAGHAVAN, ADVOCATE /RESPONDENT BY : SHRI T.N.BETGIRI, JT.CIT / DATE OF HEARING : 05-02-2014 / DATE OF PRONOUNCEMENT : 10-02-2014 '* / O R D E R PER S.S.GODARA, JUDICIAL MEMBER THIS APPEAL FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 2009-10, IS DIRECTED AGAINST THE ORDER OF THE COMMI SSIONER OF INCOME- TAX(APPEALS)-I COIMBATORE, DATED 18.10.2013, PASSED IN APPEAL NO. I.T.A.NO.2028/13 :- 2 -: 349/2011-12, IN PROCEEDINGS UNDER SECTION 143(3) O F THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT). 2. IT IS TO BE SEEN FROM THE GROUNDS RAISED IN THE APP EAL THAT THE ASSESSEES SOLE AND SUBSTANTIVE GRIEVANCE IS A GAINST THE ORDER OF THE CIT(A) CONFIRMING GIFT DISALLOWANCE OF ` 3,04,35,137/- AS AGAINST THAT MADE BY THE ASSESSING OFFICER AMOUNTING TO ` 3,05,93,652/- U/S 68 OF THE ACT. THE ASSESSEE ARGUES THAT IN ORDER TO PROVE THE GIFTS IN QUESTION DURING HER MARRIAGE AND RECEPTION, SHE HAD DULY DEMONSTRATED BEFORE THE LOWER AUTHORITIES TO HAVE R ECEIVED THE SAME FROM RELATIVES, FRIENDS, STAFF AND STUDENTS ETC. A CCORDINGLY, SHE FILES A PAPER BOOK COMPRISING OF PARTICULARS OF GIFT DONORS AS WELL CASE LAW OF DELHI BENCH OF THE TRIBUNAL IN THE CASE OF J. SET HI VS DCIT [2008] 21 SOT 75(DELHI) AND PRAYS FOR ACCEPTANCE OF THE APPE AL. 3. THE REVENUE HAS CHOSEN TO STRONGLY SUPPORT THE ORDE R OF THE CIT(A) IN PARTLY CONFIRMING THE DISALLOWANCE OF IMP UGNED GIFTS. 4. THE ASSESSEE IS AN INDIVIDUAL. SHE IS STATED TO BE MANAGING ADMINISTRATION OF NUMEROUS EDUCATION INSTITUTIONS R UN BY HER FATHER, SHRI TSR KHANNAIYANN IN AND AROUND COIMBATORE. ON 19.3.2010, THE ASSESSEE HAD FILED HER RETURN DISCLOSING INCOME OF ` 7,83,049/-. I.T.A.NO.2028/13 :- 3 -: 5. IN THE COURSE OF SCRUTINY, THE ASSESSING OFFICER NOTICED THE ASSESSEE TO HAVE CREDITED SUMS TOTALLING TO ` 3,20,93,652/- IN FINANCIAL YEAR RELEVANT TO THE IMPUGNED ASSESSMENT YEAR. THE ASSESSEE PLEADED TO HAVE RECEIVED THE SAME DURING HER MARRIA GE ON 10.9.2008 AND OTHER RELATED FUNCTIONS LIKE RECEPTION ETC. FRO M HER FRIENDS, RELATIVES, STAFF AS WELL AS STUDENTS OF THE EDUCATI ONAL INSTITUTIONS. IN SUPPORT, SHE CHOSE TO PRODUCE THREE MOI BOOKS CON TAINING DETAILS OF THE DONORS. THE FIRST ONE OF THEM COMPRISED OF 82 NAMES INCLUDING SOME IDENTIFIABLE RELATIVES TO HAVE GIFTED ` 65,00,008/- IN MARRIAGE CEREMONY. THE SECOND BOOK COMPRISED OF 314 NAMES [ SOME OF THEM IDENTIFIABLE RELATIVES] WHO HAD GIFTED HER A SUM OF ` 1,87,93,592/- DURING RECEPTION AFTER MARRIAGE. THE THIRD AND LAS T BOOK SOUGHT TO PROVE A SUM OF ` 68,00,052/- TO HAVE RECEIVED ON THE OCCASION OF MARRIAGE RECEPTION FROM STAFF MEMBERS AND STUDENTS OF THE EDUCATIONAL INSTITUTIONS. 6. ON THIS, THE ASSESSING OFFICER SOUGHT FOR DONORS D ETAILS, CONFIRMATIONS, THEIR SOURCES OF INCOME, INCOME TAX PARTICULARS AND PERSONAL DRAWINGS IN CASE OF GIFTS INVOLVING SUMS OF ` 1 LAKH OR ABOVE COUPLED WITH SUBSIDIARY BOOK COMPRISING OF GIFTS RE CEIVED FROM STAFF MEMBERS AND STUDENTS. I.T.A.NO.2028/13 :- 4 -: 7. IN RESPONSE, THE ASSESSEE PRODUCED SUBSIDIARY BOOK S PERTAINING TO THE GIFTS FROM STAFF MEMBERS AND STUD ENTS. HOWEVER, SHE COULD NOT PRODUCE THE DONORS NAMES, ADDRESSES AND CONFIRMATIONS ETC FOR PAUCITY OF TIME. FACED WITH THIS SITUATION , THE ASSESSING OFFICER PROCEEDED TO FINALIZE THE REGULAR ASSESSMENT ON T HE BASIS OF DETAILS ALREADY AVAILABLE ON RECORD. IN COURSE THEREOF, HE FOUND THAT THERE WERE REPETITIONS OF DONORS NAMES IN THE BOOKS PROD UCED BY THE ASSESSEE. WE FIND FROM THE ASSESSMENT ORDER DATED 30.12.2011 THAT THERE IS AN ARRAY OF DONORS WHOSE NAMES ARE REPEATE D IN BOOK NO.1 AS WELL AS 2 PRODUCED BY THE ASSESSEE. SIMILARLY, TH E ASSESSING OFFICER CAME ACROSS ADDITION IN THE FIGURES OF DENOMINATION S OF THE GIFTED AMOUNTS AND ALSO THAT LIST OF THE DONORS/STUDENTS TURNED OUT TO BE ALPHABETICALLY MAINTAINED WHICH WAS IMPOSSIBLE IN T HE CASE OF SOCIAL FUNCTIONS LIKE MARRIAGE, RECEPTION ETC. IN THIS MA NNER, HE CAST DOUBTS ON THE GENUINENESS OF THE RELEVANT EXPLANATION OFFE RED BY THE ASSESSEE. IT EMANATES FROM THE ASSESSMENT ORDER T HAT AFTER ANALYZING THE ASSESSEES CASH BOOK THE ASSESSING OFFICER FOU ND THE ASSESSEE TO HAVE RECEIVED A SUM OF ` 50 LAKHS DURING BETHROTHAL CEREMONY WHICH WAS GIFTED ON THE SAME DAY TO HER MOTHER SMT. TRK S ARASWATHI BY WAY OF DEBIT IN THE CASH BOOK. THE ASSESSING OFFIC ER DID NOT TREAT THIS PLEA AS AN AUTHENTIC ONE AFTER OBSERVING THAT NO PR UDENT HUMAN BEING I.T.A.NO.2028/13 :- 5 -: WOULD KEEP SUCH CASH AMOUNT AT HOME AND ALSO THAT IN NORMAL COURSE, ONLY THE PARENTS GIFT THEIR CHILDREN WITH S UCH AMOUNTS AND NOT VICE VERSA. THUS, HE TURNED DOWN ASSESSEES EXPLA NATION SUPPORTING THE AFORESAID GIFT AMOUNTS. AT THE SAME TIME, THE ASSESSING OFFICER TOOK INTO CONSIDERATION THE ASSESSEES SOCIO-ECONO MIC STATUS AND TREATED A PART OF THE TOTAL GIFTS LUMP SUM TO THE E XTENT OF ` 15 LAKHS AS EXPLAINED AND THE BALANCE AMOUNT OF ` 3,05,93,652/- STOOD ADDED U/S 68 OF THE ACT AS INCOME FROM OTHER SOURCES. 8. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL. APART FR OM MERITS, SHE RAISED FIRST AND FOREMOST PLEA OF NOT H AVING BEEN GRANTED ADEQUATE OPPORTUNITY TO PROVE THE GIFTS IN THE COUR SE OF REGULAR ASSESSMENT. THE CIT(A) OBSERVES THAT FROM 14.12.20 11 TILL FINALIZATION OF REGULAR ASSESSMENT ON 30.12.2011, THE ASSESS EE HAD BEEN AFFORDED A TIME PERIOD OF ONLY 17 DAYS TO PROVE THE GIFTS. THEREAFTER, HE ASKED THE ASSESSEE TO PLACE ON RECORD LIST OF D ONORS WITH ADDRESSES, CONFIRMATIONS AND NECESSARY EVIDENCE. A FTER THE ASSESSEE HAD FILED THE SAME, THE CIT(A) SOUGHT REMAND REPORT FROM THE ASSESSING OFFICER WHICH WAS SUBMITTED ON 9.1.2013. IN COURSE THEREOF, THE ASSESSEE HAD FILED ADDRESSES OF 101 DONORS, OU T OF WHICH 80 WERE STATED TO BE FRIENDS AND RELATIVES. REST OF THE 21 DONORS WERE STATED I.T.A.NO.2028/13 :- 6 -: TO BE EMPLOYEES OF HINDUSTAN GROUP OF EDUCATIONAL INSTITUTIONS. HOWEVER, ONLY 11 OF THEM TURNED UP FOR CROSS EXAMIN ATION. IT IS EVIDENT THAT AMONGST THESE 11 PERSONS, SOME WERE CO LLEGE PRINCIPALS WHO HAD INDEPENDENTLY CONFIRMED GIFTS OF ` 500010,000/-. ON BEING ASKED BY THE ASSESSING OFFICER ABOUT THE LIST OF ST UDENTS WHO HAD MADE GIFTS, THEY FAILED TO PRODUCE ANY. SOME OF TH E DONORS PRODUCED BY THE ASSESSEE IN THE COURSE OF REMAND PROCEEDING S TURNED OUT TO BE AGRICULTURISTS WHO CLAIMED TO HAVE MADE GIFTS TO T HE ASSESSEE. HOWEVER, THEY COULD NOT PROVE THEIR SOURCE OF INCOM E. ONE OF SUCH CASE WAS OF ASSESSEES MATERNAL GRANDMOTHER SMT.MUT HAYAMMAL WHO STATED TO HAVE GIFTED ` 8 LAKHS WHEREAS HER SOURCE OF INCOME WAS ONLY PROVED TO THE EXTENT OF ` 20,000-25,000/- PER ANNUM. IN ADDITION TO THIS, NO AGRICULTURAL LAND OWNERSHIP DOCUMENTS HAD BEEN PRODUCED IN REMAND PROCEEDINGS. THIS PROMPTED THE ASSESSING OF FICER TO OBSERVE IN THE REMAND REPORT THAT THE ASSESSEE HAD FAILED TO PROVE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE GIFT PLEA R AISED IN THE LOWER APPELLATE PROCEEDINGS. 9. ON RECEIVING THE REMAND REPORT, THE CIT(A) CONFRONT ED THE ASSESSEE WITH THE SAME. SHE SOUGHT FURTHER OPPORTU NITY TO PRODUCE MORE EVIDENCE TO PROVE ALL THE THREE INGREDIENTS O F A VALID GIFT. THE I.T.A.NO.2028/13 :- 7 -: CIT(A) AGAIN SOUGHT A REMAND REPORT FROM THE ASSESS ING OFFICER. THE SAME WAS FILED ON 15.5.2013. THE LOWER APPELLATE O RDER READS THAT THIS TIME, THE ASSESSING OFFICER HAD SUMMONED 102 A LLEGED DONORS ON ASSESSEES ASKING. OUT OF THEM, 25 LETTERS WERE RE TURNED BACK BY THE POSTAL AUTHORITIES. THEREAFTER, THE ASSESSING OFFI CER COULD EXAMINE 22 OF THE ALLEGED DONORS AND SUBMITTED A REPORT THAT G IFT AMOUNTS OF ONLY ` 1,08,512/- COULD BE VERIFIED. HE OBSERVED THAT S OME OF THE DONORS HAD REFUSED TO HAVE GIFTED ANY AMOUNT TO THE ASSES SEE. AND IN SOME CASES, SIGNATURES OF THE ALLEGED DONORS DID NOT TAL LY. WHEN THE CIT(A) AGAIN CONFRONTED THE ASSESSEE WITH THE SECOND REMA ND REPORT (SUPRA), THE ASSESSEE PLEADED HER SOCIO-ECONOMIC BACKGROUND I.E SHE BELONGS TO GOUNDER COMMUNITY HAVING CUSTOM OF GIVING CASH GIFTS IN MARRIAGES ETC. AND THE WOMEN KEEP THE CASH WITH THEMSELVES. THE AFORESAID EXPLANATION COULD NOT FIND FAVOUR FROM TH E CIT(A). IN THE ORDER UNDER CHALLENGE, HE HAS ACCEPTED THE ASSESSE ES ARGUMENTS ONLY TO THE EXTENT OF VERIFIED GIFTS OF ` 1,58,515/- (SUPRA) AND CONFIRMED THE ADDITION TO THE EXTENT OF ` 3,04,35,137/-. THIS LEAVES THE ASSESSEE AGGRIEVED. 10. WE HAVE HEARD BOTH PARTIES AND GONE THROUGH THE CAS E FILE. NEEDLESS TO SAY, IT EMERGES THAT IN THE COURSE OF M ARRIAGE AND OTHER I.T.A.NO.2028/13 :- 8 -: RELATED CEREMONIES, THE ASSESSEE CLAIMED TO HAVE R ECEIVED THE GIFTS OF ` 3,20,93,652/- FROM FRIENDS, RELATIVES, STAFF MEMBER S AND STUDENTS. AS STATED IN THE PRECEDING PARAGRAPHS, SHE HAS NOT BEEN ABLE TO SUBSTANTIATE THE AFORESAID GIFTS BY WAY OF PROVING IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE SO CALLED D ONORS. WE NOTICE THAT ON ASSESSEES ASKING, THE CIT(A) SOUGHT REMAN D REPORTS FROM THE ASSESSING OFFICER TWICE. STILL, SHE HAD MISERABLY FAILED TO SUBSTANTIATE HER CASE BY WAY OF PRODUCING COGENT EVIDENCE. BEFO RE US AS WELL, SHE CLAIMS THAT THE PAPER BOOK IN QUESTION CONFIRMS GIF T AMOUNTS FROM RELATIVES, STAFF AND STUDENTS OF ` 1,69,13,064/-. HOWEVER, IN VIEW OF THE FACT THAT THE SAME COULD NOT BE VERIFIED BY THE ASSESSING OFFICER ONCE IN THE COURSE OF REGULAR ASSESSMENT AND TWIC E IN REMAND PROCEEDINGS (SUPRA), WE DO NOT TAKE NOTICE OF THESE UNVERIFIABLE CONFIRMATIONS. WE MAKE IT CLEAR THAT THE ASSESSEE HAS NOT FILED ANY EVIDENCE SO AS TO PROVE THAT THE FINDINGS OF THE AU THORITIES BELOW ARE AGAINST THE RECORD. SO FAR AS CASE LAW QUOTED BY THE ASSESSEE IS CONCERNED, IN THAT CASE, THE CONCERNED ASSESSEE HA D DULY PROVED BY WAY OF OVERWHELMING DOCUMENTARY EVIDENCE ABOUT THE FACTUM OF GIFTS RECEIVED BY PROVING ALL BASIC INGREDIENTS OF A VALI D GIFT WHICH IS NOT THE CASE IN HAND. IN THESE CIRCUMSTANCES, WE FIND NO R EASON TO INTERFERE WITH THE ORDER OF THE CIT(A) WHO HAS ALREADY ALLOWE D THE ASSESSEE I.T.A.NO.2028/13 :- 9 -: BENEFIT OF GIFTS TO THE EXTENT SHE WAS ABLE TO PROV E IN THE REMAND PROCEEDINGS (SUPRA). THUS, THE CIT(A)S FINDINGS STAND CONFIRMED. 11. THE ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED ON MONDAY, THE 10 TH OF FEBRUARY, 2014, AT CHENNAI. SD/- SD/- (DR. O.K. NARAYANAN) VICE-PRESIDENT (S. S. GODARA) JUDICIAL MEMBER DATED: 10 TH FEBRUARY, 2014 RD COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR