Sri.Dhananjayan Unnithan, Trivandrum V. DCIT, Trivandrum

ITA 243/COCH/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69117 (ITAT-COCHIN)
• Duration Of Justice: 7 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2013
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 05-12-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 03-05-2013
• Court: TRIBUNAL
• Department Lawyers: LATHA V KUMAR
• Assessee Lawyers: IYPE MATHEW
• Keywords: Gift; Opportunity of being heard; Reasonable cause
• Section: 56

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A. NO. 243/COCH/2013 ASSESSMENT YEAR : 2007-08 DHANANJAYAN UNNITHAN, TC9/2196, NARAYANA BHAVAN, KURUPS LANE, SASTHAMANGALAM, TRIVANDRUM. [PAN:AAAPU 8014C] VS. THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE- 1(2), TRIVANDRUM. (ASSESSEE -APPELLANT) (REVENUE-R ESPONDENT) ASSESSEE BY SHRI IYPE MATHEW, CA REVENUE BY SMT. LATHA V. KUMAR, JR. DR DATE OF HEARING 05/12/2013 DATE OF PRONOUNCEMENT 20/12/2013 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: BOTH THE APPEALS FILED BY THE ASSESSEE ARE DIRECTE D AGAINST THE ORDERS PASSED BY LD CIT(A), TRIVANDRUM AND THEY RELATE TO THE ASSESS MENT YEARS 2007-08 AND 2008-09. BOTH THE APPEALS ARE BARRED BY LIMITATION BY 33 DAY S. THE ASSESSEE HAS FILED A PETITION REQUESTING THE BENCH TO CONDONE THE DELAY AND ADMIT THE APPEALS. IN THE PETITION, IT IS STATED THAT THE FILING OF APPEALS GOT DELAYED DUE T O PRE-OCCUPATION OF HIS AUDITOR WITH BANK BRANCH AUDITS. WE HEARD THE PARTIES ON THIS P RELIMINARY ISSUE. HAVING REGARD TO THE SUBMISSIONS MADE BY THE ASSESSEE IN THE PETITIO N, WE ARE OF THE VIEW THAT THERE IS REASONABLE CAUSE IN FILING THE APPEALS BELATEDLY. ACCORDINGLY, WE CONDONE THE DELAY AND ADMIT THE APPEALS FOR HEARING. 2. THE ISSUE URGED IN BOTH THE APPEALS ARE IDENTICA L IN NATURE, VIZ., RELATING TO THE ADDITION OF GIFTS RECEIVED FROM A NRI NAMED SHRI B. SASIDHARAN PILLAI. IT WAS SEEN THAT THE ASSESSEE HAD RECEIVED GIFT OF RS.3.00 LAKHS AND RS.3.35 LAKHS RESPECTIVELY IN THE I.T.A. NO.243/COCH/2013 2 YEARS RELEVANT TO THE ASSESSMENT YEARS 2007-08 AND 2008-09 FROM THE ABOVE SAID PERSON, WHO IS SAID TO BE THE BROTHER OF THE ASSESS EES FATHER-IN LAW. THE ASSESSEE SEEMS TO HAVE FILED CONFIRMATION LETTERS OBTAINED F ROM SHRI B SASIDHARAN PILLAI TO SUPPORT THE GIFT RECEIPTS. SINCE THE DONOR DID NOT FALL WITHIN THE CATEGORY OF RELATIVES DEFINED IN SEC. 56 (2)(VI) OF THE ACT, THE AO ASSES SED THE GIFT RECEIPTS AS THE INCOME OF THE ASSESSEE. HOWEVER, DURING THE COURSE OF APPEL LATE PROCEEDINGS, THE ASSESSEE SUBMITTED ANOTHER LETTER OBTAINED FROM SHRI B. SASI DHARAN PILLAI, WHEREIN IT WAS STATED THAT THE GIFT WAS GIVEN TO THE WIFE OF THE ASSESSEE NAMED SMT. LATHA DHANANJAYAN AND NOT TO THE ASSESSEE. HOWEVER, THE AO IN THE REMAND PROCEEDINGS AS WELL AS THE LD CIT(A) CONSIDERED THE SECOND LETTER AS AN AFTERTHOU GHT AND ACCORDINGLY, THE LD CIT(A) CONFIRMED THE ADDITIONS CITED ABOVE IN BOTH THE YEA RS. AGGRIEVED, THE ASSESSEE HAS FILED THESE APPEALS BEFORE US. 3. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULL Y PERUSED THE RECORD. ACCORDING TO LD A.R, IT IS CUSTOMARY PRACTICE THAT THE IN-LAW S OF ANY MALE PERSON NORMALLY GIVE GIFTS TO THEIR DAUGHTERS ONLY. HOWEVER, AS A CUSTO MARY PRACTICE THE GIFT CHEQUES, THOUGH MEANT TO THE DAUGHTER, WOULD BE GIVEN TO THE SON-IN-LAW ONLY. ACCORDING TO LD A.R, THE INTENTION OF THE DONOR IS AN IMPORTANT CRI TERION TO BE CONSIDERED TO DECIDE ABOUT THE IDENTITY OF THE DONEE. ACCORDING TO LD A .R, THOUGH THE AMOUNTS WERE DEPOSITED INTO THE BANK ACCOUNTS OF THE ASSESSEE, Y ET THE DONEE OF THE GIFT RECEIPTS IS THE ASSESSEES WIFE, WHICH FACT HAS BEEN CONFIRMED BY THE DONOR, SHRI SASIDHARAN PILLAI IN THE SUBSEQUENT LETTER FILED BEFORE THE LD CIT(A) . HOWEVER, ACCORDING TO LD D.R, THE ASSESSEE IS SIMPLY SHIFTING HIS STAND TO AVOID THE ASSESSMENT OF GIFT RECEIPTS AS HIS INCOME. 4. WE NOTICE THAT THERE IS NO DISPUTE ABOUT THE GEN UINENESS OF IMPUGNED GIFT RECEIPTS AND HENCE THE SAME HAS BEEN ACCEPTED BY TH E AO. HOWEVER, SINCE THE DONOR, VIZ, BROTHER OF THE ASSESSEES FATHER-IN-LAW, DID N OT FALL IN THE CATEGORY OF RELATIVES AS DEFINED IN SEC. 56(2)(VI) OF THE ACT, THE AO HAS AS SESSED THE GIFT AMOUNTS AS THE INCOME OF THE ASSESSEE IN BOTH THE YEARS. WE NOTIC E THAT THE DONOR SHRI B SASIDHARAN PILLAI HAS INITIALLY CONFIRMED THE PAYMENT OF GIFT IN HIS LETTER DATED 20.12.2010. I.T.A. NO.243/COCH/2013 3 SUBSEQUENTLY, THE DONOR HAS GIVEN ANOTHER LETTER CL ARIFYING THAT THERE WAS A MISTAKE IN THE EARLIER LETTER GIVEN BY HIM AND THEN CONFIRMED THAT THE GIFT WAS GIVEN TO THE ASSESSEES WIFE SMT. LATHA DHANANJAYAN. 5. WE NOTICE THAT BOTH THE TAX AUTHORITIES HAVE REJECTED THE SECOND LETTER GIVEN BY THE DONOR BY TREATING THE SAME AS AN AFTERTHOUGHT, WITHOUT MAKING ANY FURTHER ENQUIRY. WE FIND MERIT IN THE CONTENTION OF THE LD A.R THAT THE INTENTION OF THE DONOR IS REQUIRED TO BE CONSIDERED TO DECIDE ABOUT THE IDENTITY OF TH E DONE. ACCORDING TO LD A.R, IT IS CUSTOMARY PRACTICE THAT THE IN-LAWS OF ANY MALE PER SON NORMALLY GIVE GIFTS TO THEIR DAUGHTERS ONLY AND ACCORDING TO LD A.R, THE PREVAIL ING CUSTOMARY PRACTICE IS AN IMPORTANT FACTOR THAT REQUIRES CONSIDERATION, IN RE SPECT OF THE GIFT PAYMENTS. WE NOTICE THAT THESE FACTORS HAVE NOT BEEN CONSIDERED BY THE TAX AUTHORITIES, AS THEY HAVE REJECTED THE SECOND LETTER GIVEN BY THE DONOR AS AN AFTERTHOUGHT. THERE SHOULD NOT BE ANY DISPUTE THAT NO ONE ELSE, OTHER THAN THE DONOR, CAN CLARIFY ABOUT THE IDENTITY OF THE DONEE. HENCE, IN OUR VIEW, THE SECOND LETTER GIVEN BY THE DONOR REQUIRES OBJECTIVE CONSIDERATION BY DULY TAKING INTO ACCOUNT THE PREVA ILING CUSTOMARY PRACTICE. ADMITTEDLY, THE SECOND LETTER OF THE DONOR HAS NOT BEEN EXAMINE D IN AN OBJECTIVE MANNER. ACCORDINGLY, WE ARE OF THE VIEW THAT THE ISSUE BEFO RE US IN BOTH THE YEARS REQUIRE FRESH CONSIDERATION AT THE END OF THE ASSESSING OFFICER. 6. ACCORDINGLY, WE SET ASIDE THE ORDERS OF LD C IT(A) ON THIS ISSUE IN BOTH THE YEARS AND RESTORE THE SAME TO THE FILE OF THE ASSESSING O FFICER WITH THE DIRECTION TO EXAMINE THE IMPUGNED ISSUES IN BOTH THE YEARS AFRESH BY DUL Y CONSIDERING THE MATERIALS AVAILABLE ON RECORD AND ALSO THAT MAY BE FILED BEFORE HIM AND TAKE APPROPRIATE DECISION IN ACCORDANCE WITH THE LAW, AFTER AFFORDING NECESSARY OPPORTUNITY OF BEING HEARD. I.T.A. NO.243/COCH/2013 4 7. IN THE RESULT, THE APPEALS FILED BY THE ASSE SSEE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED ACCORDINGLY ON 20-12-2 013. SD/- SD/- (N.R.S. GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 20TH DECEMBER, 2013 GJ COPY TO: 1.DHANANJAYAN UNNITHAN, TC9/2196, NARAYANA BHAVAN, KURUPS LANE, SASTHAMANGALAM, TRIVANDRUM. 2.THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-1(2 ), TRIVANDRUM. 3.THE COMMISSIONER OF INCOME-TAX(APPEALS), TRIVANDR UM. 4.THE COMMISSIONER OF INCOME-TAX, TRIVANDRUM. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR ) I.T.A.T, COCHIN I.T.A. NO.243/COCH/2013 5