The ACIT, Circle-6, Ahmedabad V. Shri Jatin R.Shah, Ahmedabad

ITA 2230/AHD/2007

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0295 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2009
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 03-09-2009
• Assessment Year: 2004-2005
• Appeal Filed On: 25-05-2007
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: M J SHAH
• Keywords: Gift; Income from undisclosed sources; Set aside
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A AHMEDABAD BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER, AND SHRI D. C. AGRAWAL, ACCOUNTANT MEMBER ITA NO.2230/AHD/2007 & CROSS OBJECTION NO.206/AHD/2007 (ARISING OUT ITA NO.2230/AHD/2007 ASSESSMENT YEAR:2004-05 DATE OF HEARING:3.9.09 DRAFTED:14.10.09 ACIT, CIRCLE-6, AHMEDABAD SHRI JATIN R SHAH, C/O. HIGH TECH ENTINEERS, 4507, PHASE IV, GIDC ESTATE, AHMEDABAD PAN NO.ADFPS9485B V/S . V/S . SHRI JATIN R SHAH, C/O. HIGH TECH ENTINEERS, 4507, PHASE IV, GIDC VATVA, AHMEDABAD ACIT, CIRCLE-6, AHMEDABAD (APPELLANT) .. (RESPONDENT) ASSESSEE BY :- SHRI M.J. SHAH, AR REVENUE BY:- SHRI MAHESH KUMAR, SR, DR O R D E R PER MAHAVIR SINGH, JUDICIAL MEMBER:- THIS APPEAL BY THE REVENUE AND CROSS OBJECTION (CO) BY THE ASSESSEE ARE ARISING OUT OF THE ORDER OF COMMISSIONER OF INCOME-TAX (APP EALS)-XII, AHMEDABAD IN APPEAL NO. CIT(A)-XII/CIR.6/95/06-07 DATED 8-02-2007. THE ASSESSMENT WAS FRAMED BY THE ACIT, CIRCLE-, AHMEDABAD U/S.143(3) OF THE INCOME-T AX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 30-1 0-006 FOR THE ASSESSMENT YEAR 2004-05. ITA NO.2230/AHD/2007 & C.O. 206/AHD/2007 A.Y.2004-05 ACIT CIR-6 ABD V. SH. JATIN R SHAH PAGE 2 2. THE ONLY COMMON ISSUE IN THIS APPEAL OF THE REVE NUE AND CO OF THE ASSESSEE IS AS REGARDS TO THE ORDER OF CIT(A) IN DE LETING THE ADDITION MADE BY THE ASSESSING OFFICER U/S. 68 OF THE ACT AMOUNTING TO R S.13,79,582/- AS INCOME FROM UNDISCLOSED SOURCE BY TREATING THE GIFTS RECEIVED A S NON-GENUINE AND IN THE CO, THE ASSESSEE HAS RAISED THE SIMILAR ISSUE THAT AN AMOUN T OF $ 10,000/- HAS BEEN ADDED TWICE IN THE NAME OF SANGITA N PATEL AND ALSO IN TH E NAME OF SHRI NATVARLAL K PATEL, WHEREAS THE AMOUNT IS THE SAME. FOR THIS, THE REVEN UE HAS RAISED THE FOLLOWING EFFECTIVE GROUND NO.1 :- 1. THE LD. COMMISSIONER OF INCOME TAX (A)-XII, AHM EDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION MADE OF RS.13 ,79,582/- AS INCOME FROM UNDISCLOSED SOURCES UNDER SECTION 68 OF THE INCOME TAX ACT, 1961, BY TREATING THE GIFTS RECEIVED AS NON GENUINE. AND IN THE CO, THE ASSESSEE HAS RAISED THE FOLLOWIN G TWO GROUNDS :- 1. THE C.I.T.(APPEALS) ERRED IN NOT CONSIDERED THE SUBMISSIONS OF THE ASSESSEE THAT AN AMOUNT OF $ 10000 HAS BEEN ADDED T WICE AS IF THE ASSESSEE HAD RECEIVED AN AMOUNT OF $ 10000 FROM TWO SEPARATE INDIVIDUALS. THIS HAPPENED BECAUSE OF THE REASON THAT THE AMOUNT OF $ 10000 WAS RECEIVED BY THE ASSESSEE BY A CHEQUES GIVEN IN JOINT NAME OF SA NGITA N PATEL AND HER FATHER SHRI NATVARLAL K PATEL. 2. THE C.I.T. (APPEALS) OUGHT TO HAVE TAKEN THE EVI DENCE PRODUCED BEFORE HIM INTO CONSIDERATION AND OUGHT TO HAVE DECIDED THAT $ 10000 WAS RECEIVED ONLY ONCE AND NOT TWICE OVER AS HAS BEEN HELD BY THE ASS ESSING OFFICER. 3. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THR OUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE HAVE ALSO PERUSED THE CASE RECORDS INCLUDING THE ASSESSMENT ORDER, THE ORDER OF CIT(A) AS WELL AS AS SESSEES PAPER BOOK CONSISTING OF PAGES 1-23. THE BRIEF FACTS LEADING TO THE ABOV E COMMON ISSUE ARE THAT THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT P ROCEEDINGS NOTICED THAT THE ASSESSEE HAS RECEIVED GIFTS FROM VARIOUS PERSONS RE SIDING IN INDIA AND ABROAD WHICH NARRATED THE DETAILS IN HIS ASSESSMENT ORDER, WHICH READS AS UNDER:- SR. NAME OF THE DONEE AMOUNT OF GIFT VALUE IN RUPEES DATE OF GIFT DT. OF CREDIT IN BANK A/C. AS PER LEDGER EVIDENCES GIVEN ITA NO.2230/AHD/2007 & C.O. 206/AHD/2007 A.Y.2004-05 ACIT CIR-6 ABD V. SH. JATIN R SHAH PAGE 3 1 SEJAL PATEL 2500 US $ 1,16,235 06/06/03 24/06/03 COPY OF PAY ORDER 2 BHARATKUMAR SOKALCHAND 225 US $ 1,461 16/05/03 24/06/03 COPY OF PAY ORDER 3. VARSHA B PATEL 2000 US $ 91,851 25/07/03 05/08/03 COPY OF PAY ORDER 4 SANGITA N PATEL 10000 US $ 4,57,400 07/07/03 06/08/03 COPY OF PAY ORDER 5 NATVARLAL K PATEL 10000 US $ 4,57,400 07/07/03 UNSIGNED CERTIFICATE OF GIFT 6 BALDEVBHAI C PATEL RS.50000 50,000 09/06/03 09/06/03 GIFT CERTIFICATE 7 RAJEN MODY RS.25000 25,000 25/12/03 CASH UNSIGNED CERTIFICATE OF GIFT. 8 NIMISH 2300 UK POUND 1,71,235 05/05/03 NO DETAILS AVAILABLE TOTAL GIFT IN RS. 13,79,582 THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO FILE THE DETAILS AND PROVE THE SAID GIFTS AS GENUINE. THE ASSESSEE BEFORE THE AO GAVE A COMMON GENERAL REPLY IN WHICH IT WAS STATED THAT THE GENUINENESS THE CAPACI TY AND CREDITWORTHINESS OF THOSE PERSONS HAVE BEEN PROVED BY FURNISHING EVIDENCES IN THE SHAPE OF EMAIL IDS AND ALSO FURNISHED COPIES OF CHEQUES BY WHICH THEY HAVE BEEN GIVEN THESE GIFTS. THE AO WAS NOT CONVINCED AND MADE ADDITION BY TREATING THE ALLEGED GIFTS AS INCOME FROM OTHER SOURCES U/S.68 OF THE ACT. AGGRIEVED, TH E ASSESSEE PREFERRED APPEAL BEFORE CIT(A) AND THE CIT(A) DELETED THE ADDITION B Y STATING AS UNDER:- IT HAS BEEN CLARIFIED BY THE LD. COUNSEL THAT DONO RS MENTIONED BY THE AO, IN HIS ORDER, AT SR. 1 TO 5 ARE FAMILY FRIENDS, WHO ST AY AT THE PLACE OF APPELLANT WHENEVER THEY COME TO INDIA. DONOR AT SR. 6 HAS BEE N EXPLAINED TO BE HIS BUSINESS PARTNER AND DONOR AT SR. 7 IS THE BROTHER- IN-LAW OF THE APPELLANT,(NRI). DONOR AT SR. 8, SHRI NIMISH IS THE REAL BROTHER OF THE APPELLANT, (NRI). IT IS SEEN FROM THE GIFT CERTIFIC ATES THAT ALL THE DETAILS REGARDING IDENTITY OF THE DONORS, THEIR E-MAIL IDS, FULL ADDRESSES, REASONS FOR GIFTS, AMOUNT OF GIFTS IN DOLLARS, ETC. HAVE BEEN F URNISHED BEFORE THE A.O. COPIES OF RELEVANT PAY ORDERS AND CHEQUES HAVE ALSO BEEN FIELD BEFORE THE A.O ALL THESE FACTS PROVE THAT THE GIFTS RECEIVED B Y THE APPELLANT ARE FROM HIS FRIENDS, NEAR AND DEAR ONES AND FROM RELATIVES. SIN CE THE GIFT CERTIFICATES CONTAINING ALL FACTS HAVE BEEN FILED BEFORE THE A.O ., THE A.O IS NOT JUSTIFIED TO TREAT THE AMOUNT OF THESE GIFTS AS INCOME OF THE AP PELLANT FROM UNDISCLOSED ITA NO.2230/AHD/2007 & C.O. 206/AHD/2007 A.Y.2004-05 ACIT CIR-6 ABD V. SH. JATIN R SHAH PAGE 4 SOURCES. THE A.O IS ALSO NOT JUSTIFIED IN NOT ACCEP TING THE GIFT CERTIFICATES, WHICH ARE DETAILED ONES, ONLY BECAUSE THEY HAVE BEEN SENT BY THE E-MAIL AND ARE NOT SIGNED BY THE DONORS. IN VIEW OF THE FACTS AND CIRCUMSTANCES AS STATED ABOVE, I AM OF THE OPINION THAT THE A.O WAS NOT JUSTIFIED IN TREATING THE GIFT PF RS/13.79,582/- RECEIVED BY THE APPELLANT DURING THE YEAR UNDER CONSIDERATION, AS INCOME OF THE APPELLANT FROM UNDISCLOSED SOURCES. THEREFORE, THE ADDITION MADE B Y THE A.O ON THIS COUNT IS DELETED. AGGRIEVED, THE REVENUE CAME IN APPEAL BEFORE US AND THE ASSESSEE CAME BEFORE US IN CO. WE FIND THAT THE CIT(A) HAS PASSED APPELLATE ORDER JUST ON THE BASIS OF PRELIMINARY EVIDENCES LIKE E-MAIL IDS AND HE IS NOT DISCUSSED T HE INDIVIDUAL DONEE, THEIR CAPACITY AND GENUINENESS OF TRANSACTION AND IDENTITY. IN VIEW O F THESE, WE ARE OF THE CONSIDERED VIEW THAT THIS ISSUE NEEDS RE-VERIFICATION IN ENTERITY AT THE LEVEL OF THE ASSESSING OFFICER. TO THIS, LD. COUNSEL FOR THE ASSESSEE AS WELL AS LD. DEPARTMENTA L REPRESENTATIVE FAIRLY AGREED FOR SETTING ASIDE THIS COMMON ISSUE TO THE FILE OF THE AO AS REGARDS TO CO OF THE ASSESSEE IS AN AMOUNT OF $ 10000 HAVE BEEN ADDED TWICE IN THE NAME OF SANGITA N PATEL AS WELL AS IN HER FATHERS NAME SHRI NATVARLAL K PATEL. HE FURTHER ST ATED THAT THESE TWO ARE NOT DIFFERENT GIFTS WHEREAS THE ONLY GIFT MADE BY SHRI NATVARLAL K PATE L. THIS ALSO NEEDS RE-VERIFICATION AT THE LEVEL OF THE ASSESSING OFFICER AND ACCORDINGLY THIS APPEAL OF THE REVENUE AND THAT OF CO OF THE ASSESSEE ARE SET ASIDE TO THE FILE OF THE ASSES SING OFFICER AS INDICATED ABOVE. 4. IN THE RESULT, REVENUES APPEAL AND THAT OF ASSESSE ES CO ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 16/10/2009 SD/- SD/- (D.C.AGRAWAL) (MAHAVIR SING H) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, DATED :16/10/2009 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)- XII, AHMEDABAD 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD