Smt. Jashuben Thakorebhai Patel, Valsad V. The Income tax Officer,Ward-2, Valsad

ITA 249/AHD/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94742 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 29-09-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 29-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift
• Section: 148

Judgement Text

, B IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ./ ITA NO.249/AHD/2013 / ASSTT. YEAR: 2004-2005 SMT JASHUBEN THAKOREBHAI PATEL NR. SANSKAR ROW HOUSE AMIT PARK TITHAL ROAD VALSAD 396 001. PAN : AGSPP 4546 L VS ITO, WARD - 2 VALSAD. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : WRITTEN SUBMISSIONS (NONE) REVENUE BY : SHRI SOMOGYAN PAL, SR.DR / DATE OF HEARING : 28/09/2015 / DATE OF PRONOUNCEMENT: 04/12/2015 $%/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE OR DER OF THE LD.CIT(A), VALSAD DATED 26.10.2012 FOR THE ASSTT.YE AR 2004-05. 2. THE GROUNDS TAKEN BY THE ASSESSEE ARE NOT IN CON SONANCE WITH THE RULE 8 OF THE INCOME TAX (APPELLATE TRIBUNAL) R ULES, 1963 - THEY ARE DESCRIPTIVE AND ARGUMENTATIVE IN NATURE. IN B RIEF, HER GRIEVANCE REVOLVES AROUND TWO ISSUES VIZ. (I) THE LD.CIT(A) H AS ERRED IN UPHOLDING THE REOPENING OF THE ASSESSMENT, AND (II) THE LD.CI T(A) ERRED IN CONFIRMING THE ADDITION OF RS.1,01,100/-. ITA NO.249/AHD/2013 2 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S FILED A RETURN OF INCOME ON 25.10.2004 DECLARING TOTAL INCOME OF RS.1 ,88,814/-. THE LD.AO HAS REOPENED THE ASSESSMENT BY ISSUANCE OF NO TICE UNDER SECTION 148 OF THE INCOME TAX ACT ON 24.3.2011. ACCORDING TO THE AO THE DIRECTOR OF INCOME TAX, CENTRAL INFORMATION BRANCH, DELHI, TRANSMITTED DATA IN CD CONTAINING THEREIN THE FOREIGN REMITTANC E RECEIVED BY THE ASSESSEE FROM NEW ZEALAND THROUGH ANZ BANK, NEW ZEA LAND DURING THE F.Y.2003-04. THE AO HAS OBSERVED THAT THE ASSESSEE HAS RECEIVED THE FOLLOWING AMOUNTS: YEAR ENDING AMOUNT IN NZD 31.03.2004 143 31.03.2004 1326 31.03.2004 669 31.03.2004 507 31.03.2004 442 31.03.2004 284 31.03.2004 19 TOTAL 3370 4. ON THE BASIS OF THE INFORMATION, HE HARBORED A B ELIEF THAT INCOME OF THE ASSESSEE HAS ESCAPED ASSESSMENT, THEREFORE, HE REOPENED THE ASSESSMENT BY ISSUANCE OF NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT. THE ASSESSEE HAS CONTENDED THAT SHE HAS REQUE STED THE AO TO SUPPLY COPY OF THE REASONS ALONG WITH SUPPORTING MA TERIALS WHICH ENABLED THE AO A HARBOR A BELIEVE THAT THE INCOME O F THE ASSESSEE HAS ESCAPED ASSESSMENT. ACCORDING TO THE AO, SUCH REAS ONS ARE GIVEN TO THE ASSESSEE. THE ASSESSEE HAS CONTENDED THAT SHE HAS NOT RECEIVED ANY REMITTANCE OF 3370 NEW ZEALAND DOLLAR (NZD) AS STATED BY THE AO. SHE HAS FILED A WRITTEN SUBMISSION CONTENDING THERE IN THE DETAILS OF GIFTS RECEIVED BY HER DURING THE YEAR. THE LD.AO HAS MAD E AN ADDITION OF ITA NO.249/AHD/2013 3 RS.1,01,100/- TO THE TOTAL INCOME OF THE ASSESSEE B Y OBSERVING AS UNDER: ON VERIFICATION OF THE RETURN OF INCOME FOR THE YE AR UNDER CONSIDERATION, THE ABOVE REMITTANCES HAVE NOT BEEN FOUND REFLECTED IN IT. THEREFORE, DURING THE COURSE OF ASSESSMENT, THE ASSESSEE WAS ASKED TO EXP LAIN WHERE THE ABOVE REMITTANCES HAVE BEEN RECORDED VIDE THIS OFFICE LET TER DATED 10.10.2011. IN RESPONSE, THE ASSESSEE REPLIED THAT THE ASSESSEE HA S NOT RECEIVED ANY SUCH REMITTANCE DURING THE YEAR. THEREAFTER, A SHOW CAUSE NOTICE WAS ISSUED VIDE LETTER DATED 19.10.2011 ASKING THE ASSE SSEE WHY THE ABOVE REMITTANCE OF NZD OF 3370 SHOULD NOT BE ADDED TO TH E TOTAL INCOME, AS THE ABOVE REMITTANCES HAVE BEEN SHOWN IN THE NAME OF TH E ASSESSEE AS PER THE DETAILS AVAILABLE. IN RESPONSE TO THIS SHOW CAU SE NOTICES ALSO, THE ASSESSEE DENIED TO HAVE RECEIVED ANY SUCH REMITTANC ES. THE REPLY OF THE ASSESSEE IS NOT ACCEPTABLE AS THE ASSESSEE HAS RECE IVED NZD OF 3370 DURING THE YEAR UNDER ASSESSMENT, THROUGH ANZ BANK NEW ZEALAND AND THIS HAS BEEN COMMUNICATED TO THE ASSESSEE ON VARIO US OCCASIONS. SINCE THE ASSESSEE HAS NOT SHOWN THE REMITTANCE OF NZD OF 3370 IN HER BOOKS OF ACCOUNTS, THE SAME IS TREATED AS THE ASSESSEE'S UNA CCOUNTED INCOME FOR THE YEAR UNDER CONSIDERATION. THEREFORE, AN AMOUNT OF RS. 1,01,1007- (THE RATE OF ONE NZD IS TAKEN AT RS. 30 AS ON 31.3.2004) IS ADDED TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF UNACCOUNTED IN COME. PENALTY PROCEEDINGS UNDER EXPLANATION 1 TO SECTION 271(L)(C ) OF THE IT. ACT, 1961 IS INITIATED ON THIS ADDITION. 5. SUBJECT TO THE ABOVE, TOTAL INCOME OF THE ASSESS EE IS COMPUTED AS UNDER: TOTAL INCOME AS PER COMPUTATION RS.1,88,814 ADD: ADDITION/DISALLOWABLES AS PER PARA NO.4 RS.1,01,100 ASSESSED INCOME RS.2,89,914 I.E. RS. 2,89,910 ========= 5. DISSATISFIED WITH THE ADDITION MADE BY THE AO, T HE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A). THE LD.CIT(A ) HAS CONFIRMED THE ADDITION BY OBSERVING AS UNDER: DECISION :- I HAVE CAREFULLY CONSIDERED THE OBSERV ATION OF THE AO IN THE PENALTY ORDER AS WELL AS THE CONTENTIONS RAISED BY THE AR OF THE APPELLANT IN THE WRITTEN SUBMISSION. THE BARE FACT OF THE CASE IS THAT THE APPELLANT PURPORTEDLY RECEIVED CER TAIN REMITTANCES FROM NEW ZEALAND WHICH WAS NOT DISCLOSED IN THE RET URN FILED. THIS INFORMATION WAS RECEIVED BY THE AO THROUGH DDIT(INV .), DELHI AND CONFRONTED WITH THE APPELLANT DURING THE ASSESSMENT PROCEEDING. THE APPELLANT DENIED HAVING RECEIVED THOSE AMOUNTS. FINALLY, THE ITA NO.249/AHD/2013 4 AO RECORDED DATE-WISE REMITTANCES CREDITED IN THE A PPELLANT'S BANK ACCOUNT IN THE ASSESSMENT ORDER AND CONCLUDED THE ASSESSMENT BY ADDING THOSE AMOUNT TO THE INCOME OF THE APPELLANT. BEFORE ME THE APPELLANT TOOK A DIFFERENT VIEW THAT THOSE AMOUNTS WERE THE GIFT RECEIVED FROM HER BROTH ER. THE ID. AR ALSO SUBMITTED COPY OF THE GIFT AGREEMENTS TO SU PPORT THE CAUSE OF THE CASE. I AM NOT INCLINED HERE TO DECIDE THE MERIT OF THE CASE. WHAT IS IMPORTANT HERE WAS WHY THE APPELL ANT FAILED TO TAKE SIMILAR STAND BEFORE THE AO. AS PER RECORD, TH E AO ACCEPTED OTHER GIFTS BUT NOT THE ONE IN DISPUTE. EVEN, AT TH E TIME OF ASSESSMENT THE APPELLANT FAILED TO JUSTIFY THAT THO SE AMOUNTS ARE GIFTS RECEIVED FROM HER BROTHERS. THE MOST IMPORTAN T FACTOR IS THAT THE GIFT DEEDS COPY SUBMITTED NOW SHOULD HAVE BEEN SUBMITTED BEFORE THE AO TO SET THE RECORDS STRAIGHT. IN THE F ITNESS OF THE THING, THE DENIAL OF THE APPELLANT OF HAVING RECEIV ED THOSE AMOUNTS ALTHOUGH, IT WAS CREDITED IN THE BANK ACCOU NT SUFFICIENTLY HOLDS AGAINST THE APPELLANT. THEREFORE, I AM INCLIN ED TO UPHOLD THE ACTION OF THE AO. ACCORDINGLY, THIS GROUND IS DISMI SSED. 6. IN RESPONSE TO THE NOTICE OF HEARING THE ASSESSE E HAS FILED WRITTEN SUBMISSIONS ALONG WITH PAPER BOOKS. 7. WITH THE ASSISTANCE OF THE LD.DR, WE HAVE GONE T HROUGH THE RECORD CAREFULLY. A PERUSAL OF THE RECORD WOULD IN DICATE THAT THE AO HAS ISSUED A QUESTIONNAIRE TO THE ASSESSEE ON 29.6.2011 . THE ASSESSEE WAS REQUIRED TO SUBMIT REPLY BY 19.7.2011. THE ASSESSE E HAS SUBMITTED A REPLY DATED 15.9.2011 WHEREIN SHE HAS SPECIFICALLY REPLIED THE QUESTIONNAIRE ISSUED BY THE AO. SHE HAS DISCLOSED THE PERMANENT ACCOUNT NUMBER OF ALL THE SISTER CONCERNS. SHE HAS DISCLOSED HER BANK ACCOUNTS. SHE HAS DISCLOSED GIFTS RECEIVED BY HER DURING THE YEAR FROM NEW ZEALAND. THE DETAILS OF THESE GIFTS READ AS UN DER: SR. NO. NAME AND ADDRESS OF THE DONOR DATE ON WHICH GIFT CHEQUE/BANKERS DRAFT/T.T. RECEIVED AMOUNT ITA NO.249/AHD/2013 5 1 VINOD SOMABHAI PATEL WESTVITAS SUPREAT, 235, TITIRANGI ROAD, TITIRANGI, AUCKLANT, NEW ZEALAND 13. 11. 2003 BY CHEQUE NO. 0323083 OF BANK OF NEW ZEALAND 27,870 2 JAGDISHBHAI SOMABHAI PATEL 31, TOWNSHIP ROAD, WAITAKERP, AUCKLAND, NEW ZELAND 08. 12.2003 BY CHEQUE NO. 980861 OF BANK OF BARODA, PETHAN BRANCH, PETHAN-396445 40,000 3 JAGDISHBHAI SOMABHAI PATEL 31, TOWNSHIP ROAD, WAITAKERP, AUCKLAND, NEW ZELAND 08. 12.2003 BY CHEQUE NO. 7 16 175 OF BANK OF BARODA, KARADI BRANCH, KARADI-3 96440 1,25,000 4 JAGDISHBHAI SOMABHAI PATEL 31, TOWNSHIP ROAD, WAITAKERP, AUCKLAND, NEW ZELAND 12. 01. 2004 BY CHEQUE NO. 04273 17 OF BANK OF NEW ZEALAND 1,51,716 5 GIRISH SOMABHAI PATEL 841, MT. EDEN ROAD, MT. EDEN, AUCKLAND, NEW ZEALAND 08.0 1.2004 BY CHEQUE NO. 0423283 OF BANK OF NEW ZEALAND 1,19,941 6 GIRISH SOMABHAI PATEL 841, MT. EDEN ROAD, MT. EDEN, AUCKLAND, NEW ZEALAND 12.01. 2004 BY T.T. TO STATE BANK OF INDIA VALSAD BRANCH 1,75,000 8. IF WE PERUSE THE ASSESSMENT ORDER AND THE ORDER OF THE CIT(A) IN THE LIGHT OF THE SUBMISSION MADE BY THE ASSESSEE, T HEN IT WOULD REVEAL THAT THE ASSESSEE HAS BEEN SPECIFICALLY DENYING THE CHARGE THAT SHE HAS RECEIVED REMITTANCE OF 3,370 NYD FROM NEW ZEALAND A S UNEXPLAINED GIFTS. SHE HAS GIVEN DETAILS OF GIFTS RECEIVED BY HER (EXTRACTED SUPRA). THE AO HAS NOT DISBELIEVED THESE GIFTS. HE HAS NOT MADE ADDITION OF ANY AMOUNT OUT OF THE ABOVE GIFTS IN THE TOTAL INCO ME OF THE ASSESSEE. NOW, THE QUESTION IS, WHAT IS THE NATURE OF THIS 33 70 NZD ? THE ASSESSEE HAS BEEN ASKING THE AO TO GIVE HER DETAILS , FROM WHERE IT HAS GENERATED AND HOW IT HAS BEEN CREDITED TO HER ACCOU NTS ? THE AO HAS SIMPLY OBSERVED THAT THE REPLY OF THE ASSESSEE IS N OT ACCEPTABLE. THE LD.CIT(A) SUMMARILY REJECTED THE APPEAL WITHOUT EVE N VISUALIZING THE ITA NO.249/AHD/2013 6 PLEA TAKEN BY THE ASSESSEE. WE FAILED TO UNDERSTAN D HOW THE LD.CIT(A) HARBOURED A BELIEF THAT THE ASSESSEE HAS PLEADED TH AT GIFTS WERE RECEIVED FROM HER BROTHER AND SHE WANTS TO PRODUCE GIFT DEEDS. THE GIFT DEEDS AND DETAILS OF GIFTS WERE DISCLOSED TO THE AO AND ADDITION FOR THAT WAS NOT MADE. THE ADDITION HAS BEEN MADE OF THE AL LEGED REMITTANCE OF 3,370 NYD. NOW IT IS FOR THE DEPARTMENT TO FIRS T DEMONSTRATE THAT THIS AMOUNT HAS EVER BEEN TRAVELLED EITHER TO THE B ANK ACCOUNT OF THE ASSESSEE OR TO THE ASSESSEE WHICH HAS BEEN ENCASHED FROM THE MONEY CHANGERS. NO SUCH STEP HAS BEEN TAKEN BY THE REVE NUE AUTHORITIES. RATHER, THE REVENUE AUTHORITIES EVEN DID NOT PAY AN Y HEED TO THE REQUEST OF THE ASSESSEE TO EXPLAIN THE ISSUE. THEY JUST ASSUMED THAT DATA CONTAINED IN THE CD INDICATED THAT THE ASSESSE E HAS RECEIVED THE AMOUNT, THEREFORE, IT IS A GOSPEL TRUTH. WE SET AS IDE THE ORDER OF THE CIT(A) AND REMIT THIS ISSUE TO THE FILE OF THE CIT( A) FOR RE-ADJUDICATION. THE LD.CIT(A) SHALL CALL FOR EVIDENCE FROM THE AO E XHIBITING THE GENERATION OF NEW ZEALAND DOLLARS AND CREDITING IN THE ACCOUNTS OF THE ASSESSEE OR ANY OTHER EVIDENCE EXHIBITING THE FACT THAT THE ASSESSEE HAS RECEIVED THESE NZD DURING THIS ACCOUNTING YEAR. TH EREAFTER, THE EXPLANATION OF THE ASSESSEE WILL BE SOUGHT. IT IS T HE PRIMARY ONUS OF THE REVENUE TO FIRST BRING DEMONSTRATIVE EVIDENCE OF AN Y ALLEGED UNEXPLAINED GIFTS RECEIVED BY THE ASSESSEE, ONLY TH EREAFTER, THE ASSESSEE WILL BE CALLED UPON TO EXPLAIN THE SOURCE AND THE NATURE OF THE TRANSACTION. THE REVENUE AUTHORITIES HAVE MISERAB LY FAILED TO ESTABLISH THE LINK BETWEEN THE CHARGES VIS--VIS WITH THE ASS ESSEE. 9. THE REOPENING OF THE ASSESSMENT IS ALSO DEPENDED UPON THE QUALITY OF MATERIAL COLLECTED BY THE AO. IF THERE IS NEXUS BETWEEN THE DATA VIS-A-VIS WITH THE ASSESSEE, THEN THAT WOULD A UTHORIZE THE AO TO HARBOR A BELIEF THAT INCOME CHARGEABLE TO TAX HAS E SCAPED ASSESSMENT. THEREFORE, THIS ISSUE IS ALSO LINKED WITH THE ISSUE ON MERIT. WE SET ASIDE BOTH THE ISSUES FOR RE-ADJUDICATION BY THE LD.CIT(A ) AFTER COLLECTING PRIMARY EVIDENCE AND THE REPORT FROM THE AO. ITA NO.249/AHD/2013 7 10. WITH THE ABOVE OBSERVATIONS, THE ORDER OF THE C IT(A) IS SET ASIDE AND THIS APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. 11. IN RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT ON 4 TH DECEMBER, 2015 AT AHMEDABAD. SD/- SD/- (ANIL CHATURVEDI) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER