The ITO, Ward-6(2), Ahmedabad V. Shri Hatishbhai Ramanlal Patel, Ahmedabad

ITA 2109/AHD/2009

• Counselvise Citation: 210920514 RSA 2009
• Duration Of Justice: 2 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 10-01-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 02-07-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G S SOURYAWANSHI
• Assessee Lawyers: M J SHAH
• Keywords: Gift; Corroborative evidences
• Section: 194C; 56

Judgement Text

ITA NO.2109/AHD/09 ASSES SMENT YEAR 2005-06. 1 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHM EDABAD (BEFORE SHRI G.C. GUPTA,VICE PRESIDENT AND SHRI A. L.GEHLOT) I.T.A. NO. 2109 /AHD/2009 (ASSESSMENT YEAR: 2005-2006) INCOME TAX OFFICER, WARD 6(2), PRATYAKSHA BHAVAN, OPP. OLD SACHIVALAYA, AMBAWADI,AHMEDABAD. (APPELLANT) VS. SHRI HATISH RAMANLAL PATEL, PROP. OF GHANSHYAM TRADERS, U-140, SOMESHWAR PARK, NR. SUN-N-STEP CLUB, THALTEJ, AHMEDABAD. (RESPONDENT) PAN: ABBPP 4929 M ON BEHALF OF THE REVENUE: MR. G.S. SOURYAWANSHI, SR .D.R. ON BEHALF OF THE ASSESSEE: MR. M. J. SHAH. ( )/ ORDER DATE OF HEARING : 10-1-2012 DATE OF PRONOUNCEMENT : 13-1-2012 PER: SHRI A.L.GEHLOT, A.M. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE OR DER OF LD. CIT (A)-XI, AHMEDABAD IN APPEAL NO. CIT (A)-XI/705/2008-09 DATE D 17-4-2009 FOR THE ASSESSMENT YEAR 2005-06. 2. THE FIRST GROUND RAISED IN THE APPEAL IS IN RESP ECT OF DELETION OF ADDITION OF RS.9,86,000/- U/S. 68 ON ACCOUNT OF UNEXPLAINED GIF T. ITA NO.2109/AHD/09 ASSES SMENT YEAR 2005-06. 2 3. BRIEF FACTS OF THE ISSUE ARE THAT DURING THE ASS ESSMENT PROCEEDINGS IT WAS NOTICED BY THE AO THAT THE ASSESSEE RECEIVED GIFT O F RS.9,86,000/- GIFTED BY ASSESSEES BROTHER. THE A.O. MADE THE ADDITION U/S. 68 OF THE ACT ON THE GROUND THAT THE ASSESSEE HAS SIMPLY STATED THAT THE GIFT W AS RECEIVED FROM HIS BROTHER, HOWEVER, WITHOUT FURNISHING ANY SUPPORTING EVIDENCE TO PROVE THE IDENTITY, CREDITWORTHINESS OF THE DONOR AND GENUINENESS OF TH E TRANSACTION. THE ASSESSEE HAS FAILED TO FURNISH ANY DOCUMENTARY EVIDENCE IN RESPE CT OF HIS CLAIM AND TO PROVE THE GENUINENESS OF THE TRANSACTION. THE CIT (A) AFTER C ONSIDERING THE ASSESSEES SUBMISSION DELETED THE SAID ADDITION ON THE GROUND THAT THE GIFT OF RS.9.86 LACS RECEIVED FROM ASSESSEES BROTHER WHO IS STAYING AT USA. THE SAID GIFT WAS RECEIVED THROUGH BANKING CHANNEL. THE ASSESSEE HAS FILED COP IES OF THE DRAFTS, CHEQUES ISSUED BY THE DONOR AS WELL AS COPY OF HIS PASSPORT AND ACKNOWLEDGEMENT OF RETURN HAVING BEEN FILED BY HIS BROTHER IN USA. 4. THE LD. D.R. SUBMITTED THAT THE ASSESSEE DID NOT FURNISH DETAILS BEFORE THE AO BUT SAME WAS FURNISHED BEFORE THE CIT (A) AND TH E CIT (A) WITHOUT PROVIDING OPPORTUNITY OF HEARING TO AO OR WITHOUT CALLING REM AND REPORT FROM THE AO DELETED THE ADDITION. 5. THE LD. AR ON THE OTHER HAND, RELIED UPON THE OR DER OF CIT (A) AND SUBMITTED THAT ALL THE DETAILS WERE FILED BEFORE TH E AO WHICH WERE FILED BEFORE THE CIT (A). THE LD. AR FURTHER STATED WITH REFERENCE TO A LETTER DT. 29-12-2008 ADDRESSED TO THE ASSESSEE BY THE AO WHEREIN HE ASKE D ABOUT THE FURNISHING OF DOCUMENTARY EVIDENCE IN RESPECT OF THE IDENTITY OF THE DONOR. THE ASSESSEE VIDE HIS LETTER DATED 29-12-2008 IN RESPONSE TO THE AOS LET TER SUBMITTED THE DETAILS. THE LD. AR POINTED OUT RELEVANT PARAGRAPH OF THE SAID L ETTER READS AS UNDER:- ON REVEALING THE SUBMISSIONS MADE VIDE LETTER DATE D 29-12-08 FOR GIFT RECEIVED FROM BROTHER ALSO YOUR APPELLANT HAD PROVIDED THE DETAILS TO ITA NO.2109/AHD/09 ASSES SMENT YEAR 2005-06. 3 PROVE THAT HE IS RELATED AS BROTHER WITH DONOR WITH IN THE PROVISIONS OF SECTION 56(2)(V) OF THE I.T. ACT, 1961 AND HENCE, GIFT AMOU NT OF RS.9.86 LACS CANNOT BE CONSIDERED AS INCOME FROM OTHER SOURCE. ALL THE PROOFS SUBMITTED WITH SAID LETTER DATED 29-12-2008 ARE ALSO SUBMITTED HER EWITH BY WAY OF ANNEXURE C TO THIS LETTER. WE ARE ALSO SUBMITTING HEREWITH PHOTOCOPY OF INCOME TAX RETURN FILED BY THE DONOR IN USA AND ON PERUSAL OF THE SAME IT CAN BE REVEALED THAT THE DONOR HAS FILED RETURN OF INCOME OF 74,864 US$ AND HENCE, HE IS HAVING CREDIT WORTHINESS TO GIVE GIFT OF RS.9.86 LACS. THE PHOTOCOPY OF ACKNOWLEDGEMENT OF RETURN OF INCOME OF DONOR IS ENCLOSED BY WAY OF ANNEXURE D TO THIS LETTER. 6. A COPY OF ABOVE LETTER HAS BEEN PLACED AT PAGE 5 & 6 OF THE ASSESSEES PAPER BOOK. HE FURTHER SUBMITTED THAT ON IDENTICAL SET OF FACTS IN ANOTHER CASE IN THE CASE OF SMT. JAYABEN D. PATEL IN ITA NO.2958/AHD/209VIDE ORDER DATED 2-12-2011, THE ITAT DELETED THE ADDITION MADE BY THE AO U/S. 68 OF THE ACT. 7. AS REGARDS THE CONTENTION OF THE LD. DR., THAT T HE CIT (A) DID NOT PROVIDE OPPORTUNITY OF HEARING TO THE AO THE LD. AR SUBMITT ED THAT THE REVENUE DID NOT TAKE SUCH GROUND OF APPEAL, THEREFORE, THE FACTS RE CORDED BY THE CIT(A) ARE THE CORRECT FACT AND THE SAME ARE REQUIRED TO BE ACCEPT ED. 8. WE HAVE HEARD LEARNED REPRESENTATIVES OF THE PAR TIES AND PERUSED THE RECORDS. ON CONSIDERATION OF FACTS OF THE CASE AND CONTENTION OF THE LD. DR IT HAS BEEN NOTICED THAT THE ONLY GRIEVANCE OF REVENUE IS THAT THE CIT (A) HAS DELETED THE ADDITION WITHOUT PROVIDING OPPORTUNITY OF HEARING T O THE AO AND NOT CALLING FOR THE REMAND REPORT FROM THE A.O. THE SCHEME OF THE ACT R EQUIRES THAT ASSESSMENT ORDER OF THE AO SHOULD BE A SPEAKING ORDER CONTAINING ALL DETAILED FACTS SUPPORTING THE REASONS WHICH ARE MENTIONED OR STATED AGAINST THE A SSESSEE AND CONSIDERED FOR CONCLUSION. MERELY BY SAYING THAT THE ASSESSEE DID NOT FURNISH THE DETAILS IS NOT SUFFICIENT. THE AO HAS TO QUANTIFY SUCH DEFAULTS. IN THE CASE UNDER CONSIDERATION A PERUSAL OF THE RECORD WE FIND THAT THE INQUIRIES OF THE AO ON THE LINE IS WHETHER THE ITA NO.2109/AHD/09 ASSES SMENT YEAR 2005-06. 4 DONOR IS RELATIVE OF THE ASSESSEE OR NOT AS PER PRE SCRIBED PERSONS U/S. 56(2)(V) OF THE ACT. THE AO HIMSELF ASKED THE ASSESSEE VIDE HIS LE TTER DATED 21-11-2008 THAT ASSESSEE SHOULD FURNISH THE DOCUMENTARY EVIDENCE TO IDENTIFY THE DONOR. NON- FURNISHING THE DETAILS AMOUNT OF RS.9.86 LACS AS GI FT REQUIRED TO BE ADDED TO THE TOTAL INCOME OF THE ASSESSEE. THE AO MADE INQUIRIES TO EXAMINE THE CASE IN VIEW OF SECTION 56 (2) (V) OF THE ACT AND ALL OF A SUDDE N IN THE ASSESSMENT ORDER TURNED TO SECTION 68 AND MADE THE ADDITION MERELY BY SAYIN G THAT THE ASSESSEE FAILED TO PRODUCE THE EVIDENCE TO SATISFY THE REQUIREMENT OF SECTION 68 OF THE ACT. THE ASSESSEE VIDE HIS LETTER DATED 15-12-2008 CLEARLY P OINTED OUT TO THE AO THAT ASSESSEE RECEIVED GIFT OF RS.9.86 LACS FROM HIS BRO THER WHICH IS APPEARING IN CAPITAL ACCOUNT. THE DONOR IS REAL BROTHER VIZ. SHRI RAJEND RA R. PATEL, WHO IS STAYING AT USA SINCE SO MANY YEARS. IN SUPPORT OF IDENTIFICAT ION OF THE DONOR THE ASSESSEE FILED ZEROX COPY OF SCHOOL LEAVING CERTIFICATE, BIR TH CERTIFICATE OF DONOR AND GIFT CHEQUE SENT BY ASSESSEES BROTHER TO ASSESSEE FROM USA. THE REVENUE HAS FAILED TO POINT OUT ANY MATERIAL BY SHOW CAUSE NOTICE OR OTHE RWISE THAT THE AO WANTS TO TAKE ACTION IN ACCORDANCE WITH THE PROVISIONS OF SECTION 68 OF THE ACT. THE CIT (A) FOUND THAT THE ASSESSEE HAS FURNISHED SUFFICIENT MA TERIAL TO SATISFY ALL THE CONDITIONS LAID DOWN IN SECTION 68 OF THE ACT BEFORE DELETING THE ADDITION. THE FACTS RECORDED BY THE CIT (A) AFTER EXAMINING AND VERIFYING THE RE LEVANT RECORDS, ARE REQUIRED TO BE TAKEN AS CORRECT FACTS AS NO CONTRARY MATERIAL T O THE FACTS USED BY CIT (A) HAS BEEN POINTED OUT BY REVENUE. RULE 10 OF (INCOME TAX APPELLATE TRIBUNALS) RULES, 1963 PROVIDES WHERE THE FACT WHICH CANNOT BE BORN-O UT BY OR IS CONTRARY AS ALLEGED IT SHALL BE STATED CLEARLY AND CONSCIOUSLY AND SUPP ORTED BY DULY SWORN AFFIDAVIT. IN THE CASE UNDER CONSIDERATION THE FACTS RECORDED BY CIT (A) HAS NOT BEEN CHALLENGED BY REVENUE BY FILING SUCH AFFIDAVIT. IN ADDITION TO ABOVE IT HAS ALSO BEEN NOTICED THAT THE REVENUE DID NOT TAKE SPECIFIC GROUND IN AP PEAL. IN THE LIGHT OF ABOVE DISCUSSION WE ARE INCLINED TO UPHOLD THE ORDER OF C IT (A) AS CIT (A) DELETED THE ITA NO.2109/AHD/09 ASSES SMENT YEAR 2005-06. 5 ADDITION AFTER SATISFACTION BY EVIDENCE AND MATERIA L FILED BY ASSESSEE THAT THE ASSESSEE HAS DISCHARGED ONUS OF SECTION 68 OF THE A CT. THEREFORE, THE ORDER OF CIT (A) IS CONFIRMED. THIS GROUND OF APPEAL OF THE REV ENUE IS DISMISSED. 9. SECOND GROUND OF APPEAL IS IN RESPECT OF DELETIN G OF ADDITION OF RS.1,09,68,236/- ON ACCOUNT OF TRANSPORTATION CHARG ES U/S. 40(A)(IA). THE BRIEF FACTS OF THIS GROUND ARE THAT ASSESSEE HAS PAID FREIGHT C HARGES OF RS.109.68 LACS. THE AO DID NOT SATISFY WITH THE REPLY OF THE ASSESSEE AND DISALLOWED THE CLAIM OF THE ASSESSEE U/AS. 40(A)(IA) ON THE GROUND THAT THE ASS ESSEE HAS SIMPLY STATED THAT EVERY SINGLE PAYMENT WAS BELOW RS.10,000/- HOWEVER, THE A SSESSEE DID NOT FURNISH ANY COPY OF ACCOUNT, BILLS, VOUCHERS ETC. IN SUPPORT OF THE CLAIM. THE CIT (A) AFTER CONSIDERING THE ASSESSEES SUBMISSION DELETED THE S AID ADDITION ACCEPTING THE ASSESSEES CONTENTION THAT THE CASE OF THE ASSESSEE IS NOT COVERED BY SECTION 40 (A) (IA) OF THE ACT. THE AO FAILED TO POINT OUT SUB-CO NTRACTOR IN WHOSE CASE CHARGES ARE PAID MORE THAN 20,000/- IN EACH TRANSACTION OR IN WHOSE CASE CHARGES CONSOLIDATEDLY PAID RS.50,000/- AND ABOVE. 10. THE LD. DR REITERATED THE SUBMISSIONS WHICH WER E MADE WHILE ARGUING GROUND NO.1 OF THE APPEAL. THE LD. AR HAS ALSO REIT ERATED HIS CONTENTION WHICH WERE MADE IN RESPECT OF GROUND NO.1. THE LD. AR AL SO DREW OUR ATTENTION REGARDING FACTS AND SUBMISSIONS OF THE ASSESSEE WHI CH HAS BEEN RE[PRODUCED BY THE CIT (A) IN PARAGRAPH 4 OF HIS ORDER. THE LD. AR POINTED OUT THAT THE AO DID NOT CONSIDER THE SUBMISSION MADE BY THE ASSESSEE VIDE L ETTER DATED 29-12-2008. THE LD. AR SUBMITTED THAT THE ASSESSEE FURNISHED RELEVA NT DETAILS, BOOKS OF ACCOUNT FROM WHICH IT IS EVIDENT THAT THE ASSESSEE DID NOT PAY ANY TRANSPORT CHARGES EXCEEDING RS.20,000/- OR ABOVE QUA SUB-CONTRACTOR A ND HAS NOT PAID ANY TRANSPORT CHARGES IN EXCESS OF RS.50,000/- QUA SUB-CONTRACTOR IN THE YEAR UNDER CONSIDERATION ITA NO.2109/AHD/09 ASSES SMENT YEAR 2005-06. 6 THEREFORE, THE PROVISION OF SECTION 194C IS NOT APP LICABLE. HENCE DISALLOWANCE OF EXPENSES CANNOT BE MADE U/S. 40(A)(IA) OF THE ACT. 11. WE HEARD THE LEARNED REPRESENTATIVES OF THE PAR TIES AND PERUSED THE RECORDS. WE FIND THAT THAT THE ISSUE UNDER CONSIDE RATION IS IN RESPECT OF APPRECIATION OF FACTS .THE AO DISALLOWED THE CLAIM OF THE ASSESSEE U/S. 40 (A) (IA) ON THE GROUND THAT THE ASSESSEE DID NOT DEDUCT TAX AT SOURCE. ON PERUSAL OF THE ORDER OF THE AO WE FAIL TO LOCATE THE SECTION UNDER WHICH THE ASSESSEE HAS FAILED TO DEDUCT TAX AT SOURCE, WHETHER U/S. 194C OR OTHER. W ITHOUT DETERMINING NATURE OF TRANSACTION HOW ONE CAN REACH TO A CONCLUSION THAT THE SECTION 194C OR 194J IS APPLICABLE TO THE FACTS OF THE CASE. THE CIT (A) A FTER CONSIDERING THE ASSESSEES SUBMISSIONS APPRECIATED THE FACTS OF THE CASE AND H ELD THAT THE AO HAS FAILED TO POINT OUT HOW THE SECTION 40 (A)(IA) WAS APPLICABLE WHEN THE ASSESSEE WAS NOT REQUIRED TO MAKE ANY DEDUCTION OF TAX AT SOURCE ON THE TRANSACTIONS WHICH WERE NOT MORE THAN 20,000/- OR 50,000/- AS THE CASE MAY BE. IN THE LIGHT OF DETAILED DISCUSSION MADE WHILE DECIDING THE GROUND NO.1 WE D O NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT (A).THE ORDER OF THE CIT ( A) IS CONFIRMED. 12. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN OPEN COURT ON 13 - 01 - 2012 . SD/- SD/- (G. C. GUPTA) (A. L.GEHLOT) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD. S.A.PATKI. ITA NO.2109/AHD/09 ASSES SMENT YEAR 2005-06. 7 COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS)-XI, AHMEDABAD. 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD. 1.DATE OF DICTATION 10 - 1 -2011 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 11 / 1 / 2011 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S 12 - 1 -2011. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 13 - 1 -2011 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 13 - 1 -2011 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 13 - 1 -2011. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..