The ITO, Bhopal V. Shri Vinan Chawla, Bhopal

ITA 267/IND/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1505 (ITAT-INDORE)
• Duration Of Justice: 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-10-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 12-10-2009
• Assessment Year: 2005-2006
• Appeal Filed On: 21-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APARNA KARAN
• Keywords: Gift; Source of fund; Avoidance of tax

Judgement Text

PAGE 1 OF 5 IN THE INCOME TAX APPELATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JM AND SHRI V.K. GUPTA, AM ITA NO.267/IND/2009 AY: 2005-06 ITO-1(2), BHOPAL ..APPELLANT V/S. PINAN CHAWLA PROP. M/S. S.S.D. AGENCIES, MF-29, C-BLOCK, MANSAROVAR COMPLEX, HOSHANGABAD ROAD, BHOPAL (PAN AAIPC 3573 G) ..RESPONDENT DEPARTMENT BY : SMT. APARNA KARAN, SR. DR ASSESSEE BY : NONE ORDER PER JOGINDER SINGH, JM THIS APPEAL IS BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A)-I, BHOPAL, DATED 25.3.2009 FOR THE AY 2005-06 ON THE GROUND THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. FIRST APPELLATE AUTHORITY ERRED IN DELETING THE ADDITION OF RS.10,34,500/- MADE ON ACCOUNT OF UNDIS CLOSED INCOME FROM OTHER SOURCES. 2. DURING HEARING OF THIS APPEAL, WE HAVE HEARD SMT . APARNA KARAN, LD. SR. DR AND NONE WAS PRESENT FOR THE ASSESSEE. THE LD. D R FILED A LETTER DATED PAGE 2 OF 5 26.8.2009 CLAIMING THAT THE SERVICE OF THE NOTICE D ATED 21.7.2009 WAS DULY EFFECTED ON THE ASSESSEE. IN SPITE OF SERVICE OF NO TICE, THE ASSESSEE DID NOT TURN UP, THEREFORE, WE HAVE NO OPTION BUT TO PROCEE D EXPARTE AGAINST THE ASSESSEE ON THE BASIS OF RECORD/MATERIAL AVAILABLE ON THE FILE. THE CRUX OF ARGUMENTS ON BEHALF OF THE REVENUE IS IN SUPPORT TO THE ASSESSMENT ORDER BY CONTENDING THAT OPPORTUNITY WAS PROVIDED TO THE ASS ESSEE TO EXPLAIN THE SOURCE OF RS.8 LAKHS, RECEIVED FROM SHRI YOGESH SOO D AND RS.2,34,500/- FROM SMT. PEWAND BAI. IT WAS FAIRLY ADMITTED THAT SHRI Y OGESH SOOD IS THE COUSIN OF THE ASSESSEE AND SMT. PEWAND BAI WAS GRANDMOTHER, W HO EXPIRED ON 13.12.2005. THE ADDITION WAS STRONGLY DEFENDED. IT WAS FURTHER PLEADED THAT THE LD. FIRST APPELLATE AUTHORITY HAS NOT EXAMINED THE FINANCIAL CAPACITY OF THE DONOR, THEREFORE, THE DELETION OF ADDITION WAS ARGU ED TO BE UNJUSTIFIED. 3. WE HAVE CONSIDERED THE SUBMISSIONS PUTFORTH BY T HE LD. SR. DR AND PERUSED THE MATERIAL AVAILABLE ON THE FILE. BEFORE COMING TO ANY CONCLUSION, WE ARE REPRODUCING HEREWITH THE RELEVANT PARA FROM THE ASSESSMENT ORDER: THE ASSESSEE WAS SPECIFICALLY REQUIRED TO EXPLAIN/P ROVE THE SOURCES OF ADDITION TO THE CAPITAL ACCOUNT OF RS.10,34,000/-. IT WAS INFORMED BY THE ASSESSEE THA T HE HAD RECEIVED GIFT OF RS.8 LACS FROM SHRI YOGESH SOO D BY CHEQUE NO. 290740 & 248731 DATED 26-8-04 OF RS.4 LA C EACH AND THAT HE HAD RECEIVED YET ANOTHER GIFT OF RS.2,34,500/- FROM SMT. PEWAND BAI THROUGH A CHEQUE . AS TO THE GIFT MADE BY SMT. PEWAND BAI, IT IS STATED V IDE ASSESSEES LETTER DATED 15-11-07 THAT SHE HAD GIVEN THE GIFT THROUGH CHEQUE DRAWN ON HER S.B. ACCOUNT WITH JAMMU & KASHMIR BANK LTD., T.T. NAGAR, BHOPAL AND THAT SHE COULD NOT BE PRODUCED, AS SHE EXPIRED ON 13-12-05. ON GOI NG THROUGH THE REPLY, IT WAS FELT THAT SOME MORE CLARI FICATIONS PAGE 3 OF 5 AS TO THE RECEIPT OF GIFTS OF RS.10,34,500/- (RS.8 LACS FROM SHRI YOGESH SOOD AND RS.2,34,500/- FROM SMT. PEWAND BAI) ARE TO BE CALLED FOR. ACCORDINGLY, ANOTHER LET TER WAS ISSUED ON 25-06-07 REQUIRING THE ASSESSEE TO FURNIS H ON 28-6-07 COPY OF BANK ACCOUNTS OF SHRY YOGESH SOOD A ND SMT. PEWAND BAI THROUGH WHICH THE TRANSACTIONS OF T HE SO- CALLED GIFT TOOK PLACE. HOWEVER, ON 03-09-07, SHRI NARESH RAJANI, CA ATTENDED AND FILED COPY OF BANK ACCOUNTS OF SHRI YOGESH SOOD AND SMT. PEWAND BAI WITH MAIN BRANCH OF JAMMU AND KASHMIR BANK LTD., BHOPAL. IT WAS FURTHER STATED THAT SH. YOGESH SOOD IS COUSIN OF THE ASSESS EE AND THAT SMT. PEWAND BAI WAS GRAND-MOTHER WHO EXPIRED O N 13-12-05. HOWEVER, NO EXPLANATION WAS OFFERED AS TO THE SOURCES OF THE GIFT OR THE SOURCES OF INCOME OF THE PERSONS; THOUGH THE SAME WAS SPECIFICALLY REQUIRED VIDE THIS OFFICE LETTER DATED 25-6-07. 4. IF THE AFORESAID PARA IS ANALYSED, THERE IS NO D ISPUTE TO THE FACT THAT THE IMPUGNED GIFTS WERE RECEIVED THROUGH CHEQUE NO. 290 740 AND 248731 DATED 26.8.2004. THE DONOR ARE COUSIN AND GRANDMOTHER OF THE ASSESSEE AND SMT. PEWAND BAI GAVE THE GIFT FROM HER SAVING BANK ACCOU NT MAINTAINED WITH JAMMU & KASHMIR BANK, BHOPAL. HOWEVER, AS SHE EXPIR ED ON 13.12.2005, SHE COULD NOT BE PRODUCED BEFORE THE ASSESSING OFFICER. THE AMOUNTS WERE SUSPECTED BY THE ASSESSING OFFICER. ADMITTEDLY, THE COPY OF BANK A/C OF SHRI YOGESH SOOD AND SMT. PEWAND BAI WERE FURNISHED BY T HE ASSESSEE. THE WHOLE ADDITION WAS MADE BY THE ASSESSING OFFICER BY CONTENDING THAT REGARDING THE SOURCE, NO EXPLANATION WAS FURNISHED. WE ARE NOT AGREEING WITH SUCH FINDING FIRSTLY BECAUSE THE GIFTS WERE MADE TH ROUGH DRAFT/BANKING CHANNEL AND SECONDLY THE SAME WAS SUBSTANTIATED BY FILING OF BANK STATEMENTS OF BOTH THE DONORS. ADMITTEDLY, EVERY TR ANSACTION BY CHEQUE MAY NOT BE SACROSCENT AS WAS HELD BY THE HONBLE GAUHAT I HIGH COURT IN THE CASE PAGE 4 OF 5 OF NEMICHAND KOTHARI (264 ITR 254) (GAUHATI) BUT ON CE THE ASSESSEE PROVES THE IDENTITY OF CREDITORS, GENUINENESS OF TRANSACTI ON THEN THE BURDEN STAND DISCHARGED AND SHIFTS TO THE REVENUE TO SHOW THAT A MOUNTS IN QUESTION ACTUALLY BELONG TO THE ASSESSEE. UNDER THE AFOREMEN TIONED FACTS, IT CAN BE SAID THAT THE CASE IN NEMICHAND KOTHARI RATHER SUPP ORTS THE CASE OF THE ASSESSEE. THE WHOLE ADDITION SEEMS TO BE BASED ON S USPICION. WE ARE OF THE VIEW THAT SUSPICION CANNOT TAKE THE SHAPE OF EVIDEN CE, HOWEVER, STRONG IT MAY BE. DURING HEARING OF THE APPEAL, THE LD. DR IN VITED OUR ATTENTION TO THE DECISION FROM THE HONBLE APEX COURT IN THE CASE OF MCDOWELL & CO. LTD. VS. CIT (154 ITR 148) (SC). HOWEVER, WE ARE OF THE VIEW THAT THE LD. ASSESSING OFFICER HAS NOT INDICATED AS TO HOW THE ASSESSEE AR RANGED TO AVOID THE TAX, IF ANY BECAUSE THE AFORESAID DECISION IS APPLICABLE ON LY WHEN THE AVOIDANCE OF TAX IS ESTABLISHED. BOTH THE DONORS ARE CLOSE RELAT IVES OF THE ASSESSEE. ONE OF THE DONOR I.E. GRANDMOTHER, WAS 94 YEARS OF AGE AND PREFERRED TO MAKE A GIFT TO HER GRANDSON BY SELLING THE JEWELLERY AND THE SA LE PROCEEDS OF THE SAME WERE GIVEN AS A GIFT. IT IS NOT THE CASE THAT THE I MPUGNED AMOUNTS WERE DEPOSITED BY THE DONEE IN THE RESPECTIVE AMOUNTS OF THE DONOR AND THE SAME MONEY WAS TAKEN BACK IN THE FORM OF GIFTS. NO SUCH EVIDENCE WAS BROUGHT ON RECORD, CONSEQUENTLY, THE RATIO LAID DOWN IN THE CA SE OF PADAMSINGH CHOUHAN (2008) (215 CTR (RAJ)303) RATHER SUPPORTS THE CASE OF THE ASSESSEE. ADMITTEDLY, THE ASSESSEE EVEN PROVED THE SOURCE OF SOURCE AND ALSO THE RELATIONSHIP WITH THE DONORS. THE SURVIVING DONOR A PPEARED BEFORE THE PAGE 5 OF 5 ASSESSING OFFICER AND SPECIFICALLY ACCEPTED THAT TH E IMPUGNED GIFT WAS MADE BY HIM. THOUGH THIS VERSION OF THE DONOR WAS NOT AC CEPTED BY HIM BUT AT THE SAME TIME, HE COULD NOT BRING ANY EVIDENCE IN DISPR OVING SUCH CLAIM. IN VIEW OF THIS FACT, WE HAVE NOT FOUND ANY INFIRMITY IN TH E IMPUGNED ORDER, THEREFORE, UPHELD. IN THE RESULT, THIS APPEAL OF THE REVENUE IS HAVIN G NO MERIT, THEREFORE, DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 .10.2009 . SD/- SD/- (V.K. GUPTA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 13 .10.2009 !VYAS! COPY TO: APPELLANT/RESPONDENT/CIT/CIT(A)/DR