Shri Labhubhai Dharmshibhai Lakhani, Surat V. The Income tax Officer, Ward-9(2), Surat

ITA 2567/AHD/2006

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 8723 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 29-03-2010
• Assessment Year: 2000-2001
• Appeal Filed On: 29-11-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K KHANDELWAL
• Assessee Lawyers: DIVYAKANT PARIKH
• Keywords: Gift; Non passing of speaking order
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD C BENCH (BEFORE S/SHRI G.D. AGARWAL, VICE-PRESIDENT AND T.K. SHARMA, JUDICIAL MEMBER) ITA.NO.2567, 2568/AHD/2006 ASSTT.YEAR : 2000-2001 AND 2001-2002 LABHUBHAI D. LAKHANI 78, SADHNA SOCIETY VARACHHA ROAD SURAT. VS. ITO, WARD-9(2) SURAT. ITA NO.372/AHD/2007 ASSTT.YEAR : 2001-2002 LAKHANI LILABEN LABHUBHAI 78, SADHNA SOCIETY VARACHHA ROAD SURAT. VS. ITO, WARD-9(2) SURAT. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI DIVYAKANT PARIKH REVENUE BY : SHRI A.K.KHANDELWAL O R D E R PER G.D. AGARWAL, VICE-PRESIDENT: THESE ARE THREE APPEALS BY THE TWO ASSESSES AGAINST RESPECTIVE ORDERS OF THE CIT(A )-V, SURAT DATED 18-9-2006 AND DATED 15-11-2006 FOR THE ABOVEMENTIONED ASSESS MENT YEARS. SINCE ISSUES RAISED IN THESE APPEALS ARE COMMON AND ASSESSES ARE INTERRELATED, FOR THE SAKE OF CONVENIENCE WE DISPOSE OF ALL THESE APPEALS BY THIS CONSOLIDATED ORDER. 2. AS AFORESAID, GROUNDS RAISED IN ALL THESE APPEAL S ARE SIMILARLY WORDED EXCEPT FIGURES OF AMOUNTS IN THE RESPECTIVE APPEALS . THEREFORE, TO AVOID REPETITION, WE REPRODUCE ONLY THE GROUNDS RAISED IN ITA NO.2567/AHD/2006 IN THE CASE OF LABHUBHAI D. LAKHANI WHICH READ AS UNDE R: 1. THAT THE CIT(A) ERRED IN TREATING THE GENUINE A ND EXPLAINED GIFTS OF RS.1,55,000/- AS BOGUS. ITA.NO.2567 AND 2568/AHD/2006 & 372/AHD/2007 -2- 2. THAT THE CIT(A) FAILED TO APPRECIATE THAT THE DO NORS ARE THE LAND OWNERS AND THEY ARE NOT OF RIPE AGE AND HAVE UNDERT AKEN THE AGRICULTURE ACTIVITIES. (THE PROOF OF LAND HOLDING & SALE BILLS OF AGRICULT URE PRODUCE (WHEREVER CALLED FOR) ARE ALREADY ON RECORD. 3. THAT THE CIT(A) ERRED IN RELYING UPON THE FINDIN GS GIVEN IN A.Y.2002-2003. EACH ASSESSMENT YEAR IS A DIFFERENT YEAR. 4. THAT THE CIT(A) ERRED IN ARRIVING AT A CONCLUSIO N WITHOUT APPRECIATING THE FACT FROM THE DETAILS FURNISHED TH AT THE DONORS ARE NOT OF SOUND FINANCIAL CAPACITY. 5. THAT THE GIFTS OF RS.1,55,000/- FROM VARIOUS PER SONS MAY KINDLY BE TREATED GENUINE & ADDITION AS MADE BY THE AO MAY KINDLY BE CANCELLED. 6. THAT THE CIT(A) ERRED IN NOT SETTING ASIDE THE A SSESSMENT ON THE GROUND OF NON PASSING OF SPEAKING ORDER TO JUSTIFY REOPENING AS PER THE SC DECISION IN GKN DRIVE SHAFTS (I) LTD. 7. THE APPELLANT CRAVES LEAVE TO ADD, AMEND ALTER V ARY AND/OR WITHDRAW ANY OR ALL OF THE ABOVE GROUNDS OF APPEAL. 3. IN THIS APPEAL, THE ASSESSEE HAS RAISED SEVERAL GROUNDS. HOWEVER, AT THE OUTSET, GROUND NO.6 AGAINST THE REOPENING OF THE AS SESSMENT HAS BEEN PRESSED FOR HEARING BY THE LEARNED COUNSEL FOR THE ASSESSEE . AT THE TIME OF HEARING BEFORE US, IT IS SUBMITTED BY THE LEARNED COUNSEL F OR THE ASSESSEE THAT THE HONBLE APEX COURT IN THE CASE OF GKN DRIOVESHAFTSW (INDIA) LTD. VS. ITO, 259 ITR 19 (SC) HAS LAID DOWN PROCEDURE TO BE FOLLO WED BY THE ASSESSING OFFICER (AO) WHEN THE ASSESSMENT IS TO BE REOPENE D. IN THE CASE UNDER APPEAL, THE AO HAS NOT FOLLOWED THE PROCEDURE LAID DOWN BY THE HONBLE APEX COURT, THEREFORE, HE HAS SUBMITTED THAT THE MATTER SHOULD GO BACK TO THE FILE OF THE AO FOR PASSING SPEAKING ORDER IN RESPECT OF THE REOPENING OF THE ASSESSMENT. ITA.NO.2567 AND 2568/AHD/2006 & 372/AHD/2007 -3- 4. THE LEARNED DR, ON THE OTHER HAND, RELIED ON THE ORDER OF THE CIT(A) AND SUBMITTED THAT THERE WAS VALID REASON FOR THE R EOPENING OF THE ASSESSMENT AND THE CIT(A) HAS ALSO RECORDED THE FINDING THAT T HE ASSESSMENT WAS VALIDLY REOPENED. 5. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BO TH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. IN THE CASE OF GKN DRIVESHAFTS (I) LTD., (SUPRA), THE HONBLE APEX COURT HAS LAID DOWN THE F OLLOWING PROCEDURE TO BE FOLLOWED BY THE AO WHEN AN ASSESSMENT IS TO BE REOP ENED. WE SEE NO JUSTIFIABLE REASON TO INTERFERE WITH THE ORDER UNDER CHALLENGE. HOWEVER, WE CLARIFY THAT WHEN A NOTICE UNDER SECTIO N 148 OF THE INCOME-TAX ACT IS ISSUED, THE PROPER COURSE OF ACT ION FOR THE NOTICEE IS TO FILE A RETURN AND IF HE SO DESIRES, TO SEEK REA SONS FOR ISSUING NOTICES. THE ASSESSING OFFICER IS BOUND TO FURNISH REASONS WITHIN A REASONABLE TIME. ON RECEIPT OF REASONS, THE NOTICEE IS ENTITLE D TO FILE OBJECTIONS TO ISSUANCE OF NOTICE AND THE ASSESSING OFFICER IS BOU ND TO DISPOSE OF THE SAME BY PASSING A SPEAKING ORDER. IN THE INSTANT CA SE, AS THE REASONS HAVE BEEN DISCLOSED IN THESE PROCEEDINGS, THE ASSES SING OFFICER HAS TO DISPOSE OF THE OBJECTIONS, IF FILED, BY PASSING A S PEAKING ORDER, BEFORE PROCEEDING WITH THE ASSESSMENT IN RESPECT OF THE AB OVESAID FIVE ASSESSMENT YEARS. ADMITTEDLY, IN THE CASE UNDER APPEAL BEFORE US, THE PROCEDURE AS LAID DOWN BY THE HONBLE APEX COURT HAS NOT BEEN FOLLOWED. IN V IEW OF THE ABOVE, WE SET ASIDE THE ORDER OF THE AUTHORITIES BELOW AND RESTOR E THE MATTER BACK TO THE FILE OF THE AO. WE DIRECT HIM TO SUPPLY THE COPY OF THE RE ASONS RECORDED FOR THE REOPENING OF THE ASSESSMENT AND THEREAFTER, IF THE ASSESSEE FILES OBJECTION TO THE ISSUANCE OF THE NOTICE, THE AO WILL PASS A SPEAKING ORDER WITH REGARD TO THE VALIDITY OF THE REOPENING OF THE ASSESSMENT. IF HE COMES TO A CONCLUSION THAT THE ASSESSEE WAS VALIDLY REOPENED, HE WILL PROCEED TO MAKE ASSESSMENT AFRESH. WITH THE ABOVE DIRECTION, THE MATTER IS RESTORED BA CK TO THE FILE OF THE AO. ITA.NO.2567 AND 2568/AHD/2006 & 372/AHD/2007 -4- 6. SINCE WE HAVE ALREADY SET ASIDE THE ORDER OF THE AUTHORITIES BELOW ON THE ISSUE OF REOPENING OF THE ASSESSMENT, GROUND NOS.1 TO 5 OF THE ASSESSEES APPEALS AGAINST VARIOUS ADDITIONS NEED NO SEPARATE ADJUDICATION AT THIS JUNCTURE. 7 . IN THE RESULT, ALL THE APPEALS OF THE ASSESSEES A RE TO BE TREATED AS ALLOWED FOR THE STATISTICAL PURPOSE ONLY. ORDER PRONOUNCED IN OPEN COURT ON 31 ST MARCH, 2010. SD/- SD/- (T.K. SHARMA) JUDICIAL MEMBER (G.D. AGARWAL) VICE-PRESIDENT PLACE : AHMEDABAD DATE : 31-03-2010 VK* COPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER AR, ITAT, AHMEDABAD