SANGAM RAMMANGAL GUPTA, THANE V. ITO WD 3(3), THANE

ITA 2590/MUM/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93254 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2015
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 17-04-2014
• Court: TRIBUNAL
• Department Lawyers: NEELIMA V NADKARNI
• Keywords: Gift; Income from undisclosed sources; Opportunity of being heard; Deemed to accrue or arise in india
• Section: 143(3); 133(6); 68; 56

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER I.T.A. NO.2590/M/2014 (AY:2009 - 2010 ) SANGAM RAMMANGAL GUPTA, 9, KEDAR BUNGALOW, SHIVAJI NAGAR, WAGLE ESTATE, THANE - 604. / VS. INCOME TAX OFFICER, WARD 3(3), THANE. ./ PAN : ABZPG2690D ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI MEHUL SHAH / RESPONDENT BY : MS. NEELIMA V. NADKARNI, DR / DATE OF HEARING : 24.06.2015 / DATE OF PRONOUNCEMENT : 22 .07.2015 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 17.4.2014 IS AGAINST THE ORDER OF THE CIT (A) - 1, THANE DATED 11.02.2014 FOR THE ASSESSMENT YEAR 2009 - 2010. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE, AND IN LAW, LD CIT (A) ERRED IN UPHOLDING ACTION OF THE ASSESSING OFFICER IN TREATING LOANS RECEIVED FROM ANJANI KUMAR JAISWAL AMOUNTING TO RS. 6,00,000/ - AND BINDU DEVI JAISWAL AMOUNTING TO RS. 4,00,000/ - AGGREGATING TO RS. 10,00,000/ - AS INCOME FROM UNDISCLOSED SOURCES DESPITE HAVING EVIDENCES AS TO IDENTITY, GENUINITY AND CREDIT WORTHINESS OF THE LOAN CREDITORS. 2. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW, LD CIT (A) ERRED IN NOT APPRECIATING THAT THE AGGREGATE SUM OF RS. 10,00,000/ - WAS OTHERWISE ALSO NOT TAXABLE IN TERMS OF SECTION 56(VI) OF THE INCOME TAX ACT, 1 961 AS THE SAME WAS RECEIVED FROM IN - LAWS OF YOUR APPELLANT. 2. BRIEFLY STATED , RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE, WHO IS AN INDIVIDUAL, FILED THE RETURN OF INCOME DECLARING THE TOTAL INCOME OF RS. 1,93,590/ - . ASSESSMENT WAS COMPLETED U/ S 143(3) OF THE ACT AND THE ASSESSED INCOME WAS DETERMINED AT RS. 11,93,590/ - , WHICH INCLUDES THE ADDITION OF RS. 10 LAKHS MADE ON ACCOUNT OF DEEMED INCOME ENVISAGED U/S 68 OF THE ACT. DURING THE ASSESSMENT, AO NOTICED THAT THE ASSESSEE RECEIVED LOANS OF RS. 4 LAKHS AND RS. 6 LAKHS FROM SMT. BINDU DEVI JAUSAWAL AND SHRI ANJANI KUMAR JAISAWAL (HUF) RESPECTIVELY. AO INVOKED 2 THE PROVISIONS OF SECTION 133(6) OF THE ACT IN RESPECT OF THESE TWO CREDITORS. NOT SATISFIED WITH THE EXPLANATION AND REPLY OF THE AS SESSEE, AO SUSPECTED THE CREDITWORTHINESS OF THE CREDITORS AND PROCEEDED TO MAKE ADDITION OF RS. 10 LAKHS U/S 68 OF THE ACT AND THE DISCUSSION GIVEN IN PARAS 8 AND 9 OF THE ASSESSMENT ORDER RE RELEVANT IN THIS REGARD. ON APPEAL, CIT (A) CONFIRMED THE SAM E. BEFORE THE CIT (A), ASSESSEE RAISED THE ALTERNATE GROUND FOR GRANTING RELIEF AS THE SAID TRANSACTIONS ARE WITHIN THE SCOPE OF THE PROVISIONS OF SECTION 56(VI) OF THE ACT. AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE, CIT (A) DISMISSED THE ALTERNAT E GROUND AS PER THE DISCUSSION GIVEN IN PARA 9 OF THE IMPUGNED ORDER. CIT (A) HELD THAT THE SAID CLAUSE (VI) OF SECTION 56 OF THE ACT IS APPLICABLE TO THE GIFTS AND NOT TO THE IMPUGNED RECEIPTS OF RS. 10 LAKHS FROM TWO IN - LAWS, WHO FALL WITHIN THE MEANIN G OF THE RELATIVE AS DEFINED UNDER THE STATUTE. THE SAID PARA 9 OF THE CIT (A)S ORDER IS VERY CRYPTIC AS THE SAME DOES NOT CONTAIN THE DETAILS OF BASIC FACTS RELATING TO THE ISSUES THAT WHY HE HAS COME TO THE CONCLUSION THAT THE PRESENT TRANSACTIONS AR E NOT COVERED BY THE SAID CLAUSE (VI) OF SECTION 56 OF THE ACT. AGGRIEVED WITH THE SAID DECISION OF THE CIT (A), ASSESSEE FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL BY RAISING THE ABOVE MENTIONED GROUNDS. 3. DURING THE PROCEEDINGS BEFORE US, AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE MENTIONED THAT CONSIDERING THE AVOIDABLE DISCOMFORT / TROUBLES TO THE AGING IN - LAWS OF THE ASSESSEE , WHO STAYS IN GORAKHPUR, GROUND NO.1 IS NOT PRESSED. AFTER HEARING BOTH THE PARTIES, THE SAID GROUND NO.1 IS DISMISSED AS NOT PRESSED. 4. IN CONNECTION WITH GROUND NO.2, LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT PARA 9 OF THE CIT (A)S ORDER DEALS WITH THE APPLICABILITY OF THE PROVISIONS OF SECTION 56(VI) OF THE TO THE SAID SUMS . HE ALSO DEMONSTRATED THAT THE ORDER OF THE CIT (A) CANNOT BE CONSIDERED AS A SPEAKING ORDER. HE ADVOCATED FOR REMANDING THIS ISSUE TO THE FILE OF THE CIT (A) / AO. 5. ON THE OTHER HAND, LD DR MERELY RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES DUT IFULLY. 6. AFTER HEARING BOTH THE PARTIES AND ON PERUSAL OF THE ORDER OF THE CIT (A) IN GENERAL AND PARA 9 IN PARTICULAR, I FIND THE SAME IS RELEVANT TO THE ISSUE IN THE GROUND NO.2 STANDS ADJUDICATED BY THE FAA WITHOUT GOING INTO THE ISSUE DEEPLY. THE SA ME IS EVIDENT FROM THE PARA 9 OF THE CIT (A)S ORDER . THEREFORE, CONSIDERING THE IMPORTANCE OF THE SAID PARA 9 OF THE CIT (A)S ORDER, THE SAME IS EXTRACTED AS UNDER: 3 9. THE APPELLANTS ALTERNATE CONTENTION REGARDING THE AMOUNT RECEIVED BY HIM FROM HIS IN - LAWS BEING COVERED BY PROVISIONS OF SECTION 56(VI) CANNOT BE ACCEPTED AS THIS SECTION IS APPLICABLE IN RESPECT OF GIFT WHEREAS THE STAND OF THE APPELLANT THROUGHOUT HAS BEEN THAT THE AMOUNT OF RS. 10 LAKHS RECEIVED BY HIM FROM THESE CREDITORS WAS LOAN . THEREFORE, THIS CONTENTION OF THE APPELLANT CANNOT BE ACCEPTED AND IS THEREFORE, REJECTED. 7. FROM THE ABOVE, IT IS EVIDENT THAT THE CIT (A) HAS CONCLUDED THAT THE PROVISIONS OF SECTION 56(VI) OF THE ACT ARE APPLICABLE IN RESPECT OF THE GIFTS AND NO T TO THE LOAN TRANSACTIONS. IN THIS CONTEXT, CONSIDERING THE NECESSITY, THE SAID CLAUSE (VI) OF SECTION 56 OF THE ACT IS REPRODUCED AS FOLLOWS: - SEC.56 (VI): - WHERE ANY SUM OF MONEY, THE AGGREGATE VALUE OF WHICH EXCEEDS FIFTY THOUSAND RUPEES, IS RECEIV ED WITHOUT CONSIDERATION, BY AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY, IN ANY PREVIOUS YEAR FROM ANY PERSON OR PERSONS ON OR AFTER THE 1 ST DAY OF APRIL, 2006 [BUT BEFORE THE 1 ST DAY OF OCTOBER, 2009], THE WHOLE OF THE AGGREGATE VALUE OF SUCH SUM.......... 8. THE ABOVE CLAUSE (VI) DOES NOT COVERS ANY SUM OF MONEY RECEIVED BY THE ASSESSEES WITHOUT CONSIDERATION. SUCH SUMS, SUBJECT TO OTHER CONDITIONS, SHOULD BE SUBJECTED TO TAX UNDER THE HEAD INCOME FROM OTHER SOURCES. THUS, THE LAW DO NOT INDICATE THA T THE SAID PROVISIONS APPLY ONLY TO THE GIFTS. NO CASE LAW IS BROUGHT TO MY NOTICE IN SUPPORT OF THE CIT (A)S ASSUMPTION. IF THE TRANSACTIONS ARE BETWEEN THE RELATIVES AS DEFINED IN CLAUSE (E) TO EXPLANATION OF THE SAID SECTION 56 OF THE ACT, THE TRAN SACTIONS ARE OUTSIDE THE SCOPE OF SECTION 56 OF THE ACT. RELATIONSHIPS HAVE TO BE DEFINED ON THE GIVEN FACTS OF THE PRESENT CASE. THEREFORE, I AM OF THE OPINION THAT THIS ISSUE SHOULD BE REMANDED TO THE FILE OF THE AO FOR EXAMINATION OF THE FACTS AND DEC IDE THE ISSUE AFRESH AFTER AFFORDING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND IN ACCORDANCE WITH THE LAW INCLUDING THE PRECEDENTS, IF ANY . ACCORDINGLY, GROUND NO.2 IS ALLOWED FOR STATISTICAL PURPOSES. 9. IN THE RESULT, APPEAL OF THE ASS ESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN T HE OPEN COURT ON 22 ND JULY, 2015. SD/ - (D. KARUNAKARA RAO) ACCOUNTANT MEMBER MUMBAI ; 22 .7 .2015 . . ./ OKK , SR. PS 4 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI