Avadhesh Mangal, Morena V. ITO, Gwalior

ITA 27/AGR/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 6833 (ITAT-AGRA)
• Duration Of Justice: 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 26-04-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 11-02-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Gift; Reason to believe
• Section: 143(2); 147; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA (SMC) BENCH, AGRA BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO.27/AGR./2010 ASSTT. YEAR : 2001-02 SHRI AVADHESH MANGAL, VS. INCOME TAX OFFICER, S/O. SHRI SHANTI LAL MANGAL, WARD 2(2), GWALIOR. SHANTI TRADING COMPANY, SITARAM DHARMASHALA, MORENA (M.P.) (PAN: AGWPM 4330 R). ITA NO.28/AGR./2010 ASSTT. YEAR : 2001-02 SHRI ANOOP KUMAR MANGAL, VS. INCOME TAX OFFICER, S/O. SHRI SHANTI LAL MANGAL, WARD 2(2), GWALIOR. SHANTI TRADING COMPANY, SITARAM DHARMASHALA, MORENA (M.P.) (PAN: AGWPM 4320 P) (APPELLANTS) (RESPONDENT) APPELLANTS BY : SHRI RAJENDRA SHARMA, ADVOCATE RESPONDENT BY : SHRI VINOD KUMAR, JR. D.R. ORDER THE ASSESSEES HAVE FILED THESE TWO APPEALS AGAINST DIFFERENT ORDERS DATED 31.12.2009 PASSED BY THE LD. CIT(A), GWALIOR FOR TH E ASSESSMENT YEAR 2001-02. SINCE COMMON ISSUES ARE INVOLVED IN BOTH THE APPEAL S, THEREFORE, I AM DISPOSING OF THESE APPEALS BY PASSING ONE COMMON ORDER FOR THE S AKE OF CONVENIENCE. THE 2 ASSESSEES HAVE ALSO TAKEN SIMILAR GROUNDS OF APPEAL IN BOTH THE APPEALS. FOR THE SAKE OF CONVENIENCE, THE GROUNDS TAKEN BY THE ASSES SEE IN ITA NO.27/AGR/2010 ARE REPRODUCED AS UNDER :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW A ND FACTS IN DISMISSING THE 1 ST GROUND OF APPEAL TAKEN BEFORE HER AS REPRODUCED BELOW CHALLENGING THE INITIATION OF PROCEEDING U/S 147 AND ISSUANCE OF NOTICE U/S 148. I) NO LIVE LINK AND NEXUS BETWEEN THE CASE OF SAID YOGESH GUPTAS SCAM AND THE ASSESSEE HAS ESTABLISHED AND THERE IS NO MATERIAL WITH THE ASSESSING OFFICER TO HAVE REASON TO BELIEV E THAT ASSESSEES INCOME HAS ESCAPED ASSESSMENT. II) THE NOTICE U/S 148 WAS ISSUED PURELY ON SUSPICI ON, SURMISES AND CONJECTURES MERELY BECAUSE IN THE CAPITAL ACCOU NT OF THE ASSESSEE THERE WAS A CREDIT ENTRY OF ` 80,000/- ON ACCOUNT OF GIFT FROM MOTHER AND FATHER. III) THE ASSESSEE HAD DISCLOSED THE IDENTITY OF THE DONORS IN THE CAPITAL ACCOUNT AND ALL MATERIAL FACT I.E. CAPITAL ACCOUNT, BALANCE SHEET AND COMPUTATION OF INCOME WHICH WERE NECESSARY FOR ASSESSMENT WERE FILED BY THE ASSESSEE ALONG WITH THE RETURN OF INCOME. IV) NOTICE U/S 148 WAS ISSUED FOR THE PURPOSE OF MA KING ENQUIRY INTO THE GIFT TRANSACTION AND REASON WERE BEING EXP LORED AFTER ISSUE OF NOTICE U/S 148 AND THAT NO REASONS WERE IN EXISTENCE AT THE TIME OF ISSUE OF NOTICE U/S 148. V) NO NOTICE U/S 143(2) WAS ISSUED WITHIN THE STIPU LATED TIME AND THE ASSESSING OFFICER SUBSTITUTED THE NOTICE U/S 14 3(2) BY NOTICE U/S 148. 3 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) WAS NOT JUSTIFI ED IN CONFIRMING THE ADDITION OF ` 80,000/- BEING GIFT TAKEN BY THE ASSESSEE FROM HIS FATHER ( ` 50,000/-) AND MOTHER ( ` 30,000/-). 3. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER, MODIFY, SUBSTITUTE OR DELETE ANY GROUND OF APPEAL AT THE TI ME OF OR BEFORE HEARING OF APPEAL. 2. THE AFORESAID APPEALS HAVE BEEN FILED BY THE ASS ESSEES AGAINST THE DISALLOWANCE OF GIFTS IN DISPUTE RECEIVED FROM THEI R FATHER AND MOTHER. FOR THE SAKE OF CONVENIENCE, I AM NARRATING THE FACTS OF ITA NO. 27/AGR/2010 WHICH ARE ALSO APPLICABLE IN ITA NO.28/AGR/2010. 3. THE ASSESSEE FILED HIS RETURN OF INCOME ON 26.06 .2001 DECLARING TOTAL INCOME OF RS.53,150/- FROM BUSINESS AND OTHER SOURCES. AL ONG WITH THE RETURN, THE ASSESSEE HAS ALSO SHOWN A SUM OF ` 80,000/- AS RECEIPT OF GIFTS FROM HIS FATHER AND MOTHER. THE ASSESSING OFFICER FOUND THAT THE ASSES SEE HAS NOT FURNISHED FULL PARTICULARS OF ALLEGED GIFTS WITH THE RETURN AND HE REOPENED THE CASE OF THE ASSESSEE BY ISSUING NOTICE UNDER SECTION 148 OF THE INCOME T AX ACT, 1961 (THE ACT HEREINAFTER) DATED 10.01.2005 CALLING FOR DETAILS O F THE DONORS. IN COMPLIANCE OF THE SAME, THE ASSESSEE FILED HIS WRITTEN SUBMISSION STATING THAT THE RETURN FILED ORIGINALLY MAY BE TREATED IN COMPLIANCE OF NOTICE U NDER SECTION 148 OF THE ACT. THE ASSESSEE HAS ALSO RAISED OBJECTION IN HIS WRITT EN SUBMISSION DATED 28.11.2005 4 AGAINST THE PROCEEDINGS UNDER SECTION 147 OF THE AC T. AFTER CONSIDERING THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE, THE ASSESSING OF FICER REJECTED THE OBJECTION FILED BY THE ASSESSEE ON 28.02.2006 AND DIRECTED THE ASSE SSEE TO CLARIFY ABOUT THE GIFTS RECEIVED BY HIM FROM SHRI SHANTI LAL MANGAL OF ` 50,000/- AND FROM SMT. SHANTI DEVI MANGAL OF ` 30,000/-. IN RESPONSE TO THE SAME, THE ASSESSEE F ILED PHOTOCOPY OF INCOME TAX RETURN OF HIS FATHER IN WHICH HE HAS SHOWN GIFT OF ` 1,00,000/- GIVEN TO HIS SONS. HE HAS ALSO FILED AN AFFIDAVIT OF HIS MOTHER SMT. SHANTI DEVI MANGAL DATED 27.02.2006 IN WHICH SHE HAS CONFIRMED THAT SH E HAS GIVEN A GIFT OF ` 30,000/- TO EACH OF HER TWO SONS NAMELY SHRI AVADESH MANGAL AND SHRI ANOOP MANGAL. SINCE THE CREDITWORTHINESS OF THE DONORS PRIMA FACI E DID NOT PROVE, THE ASSESSING OFFICER DIRECTED TO CROSS-EXAMINE THE PARENTS OF TH E ASSESSEE (DONORS). THE ASSESSEE PRODUCED BOTH THE DONORS BEFORE THE ASSESS ING OFFICER ON 03.03.2006, WHOSE STATEMENT ON SOLEMN AFFIRMATION WAS FILED ON 03.03.2006 AND THEY AFFIRMED THAT THEY HAVE GIVEN THE GIFTS IN DISPUTE TO THEIR SONS. 4. AFTER EXAMINING THE DONORS AS WELL AS THE DOCUME NTARY EVIDENCES ALONG WITH WRITTEN SUBMISSIONS FILED BY THE ASSESSEE, THE ASSE SSING OFFICER WAS OF THE OPINION THAT THE ASSESSEE HAS NOT PROVED THE CREDITWORTHINE SS OF THE DONORS. IN FACT, GIFTS CREDITED BY THE ASSESSEE IN HIS CAPITAL ACCOUNT IS HIS INCOME FROM OTHER SOURCES AND ASSESSABLE UNDER SECTION 68 OF THE ACT. ACCORDINGL Y, HE MADE THE ADDITION OF THE 5 GIFT IN DISPUTE AMOUNTING TO ` 80,000/- IN THE CASE OF THE ASSESSEE BY COMPLETING THE ASSESSMENT UNDER SECTION 143(3)/147 OF THE ACT ON 08.03.2006. 5. EXACTLY SAME ADDITION HAS ALSO BEEN MADE IN THE CASE OF SAHRI ANOOP KUMAR MANGAL IN ITA NO28/AGR/2010 IN SIMILAR FACTS BY THE ASSESSING OFFICER BY COMPLETING THE ASSESSMENT UNDER SECTION 143(3)/147 OF THE ACT ON 08.03.2006. 6. AGGRIEVED BY THE SAME, THE ASSESS FILED APPEAL B EFORE THE LD. FIRST APPELLATE AUTHORITY WHO, VIDE THE IMPUGNED ORDER DATED 31.12. 2009, DISMISSED THE APPEAL FILED BY THE ASSESSEE BY CONFIRMING THE ASSESSMENT MADE BY THE ASSESSING OFFICER. 7. AT THE TIME OF HEARING, THE LD. AUTHORISED REPRE SENTATIVE OF THE ASSESSEE STATED THAT THE ASSESSEE IS AN INDIVIDUAL DERIVED I NCOME FROM RETAIL BUSINESS OF ELECTRICAL ITEMS AND REPAIRING OF ELECTRICAL APPLIA NCES AT MORENA. HE STATED THAT THE ASSESSEE IS FILING RETURN OF INCOME REGULARLY AND T HE DEPARTMENT WAS REGULARLY ACCEPTING THE SAME. BUT FOR THE ASSESSMENT YEAR IN DISPUTE, THE ASSESSEE HAS RECEIVED GIFTS FROM HIS FATHER AND MOTHER AMOUNTING TO ` 50,000/- AND ` 30,000/- RESPECTIVELY. THE ASSESSEE HAS GIVEN THE PROOF OF IDENTITY OF THE DONOR BECAUSE HIS FATHER IS FILING HIS RETURN OF INCOME. HE FURTHER STATED THAT IN THE CAPITAL ACCOUNT FILED WITH THE RETURN, BESIDES INCOME EARNED DURING THE YEAR UNDER CONSIDERATION, 6 THE ASSESSEE HAS CREDITED A SUM OF ` 80,000/- AS RECEIPT OF GIFTS BUT THE ASSESSING OFFICER HAS ISSUED A NOTICE ON THE BASIS OF A CASE OF YOGENDRA GUPTA, PROP. VISHWA VIDHYALAYA PRAKASHAN, MAHADAJI PARK, GWALIOR WHO IS ALLEGED TO BE IN THE SCAM OF GIVING BOGUS GIFTS AND HUGE AMOUNTS ARE BEING INTRO DUCED THROUGH BOGUS BANK ACCOUNTS. ON THIS INFORMATION, THE ASSESSING OFFIC ER HAS REASON TO BELIEVE THAT DUE TO FAILURE ON THE PART OF THE ASSESSEE TO DISCL OSE FULLY AND TRULY ALL THE RELEVANT FACTS REQUIRED FOR ASSESSMENT, THE INCOME OF ` 80,000/- HAS ESCAPED FROM ASSESSMENT FOR THE YEAR IN DISPUTE. 8. THE LD. COUNSEL FOR THE ASSESSEE STATED THAT THE ASSESSEE RAISED OBJECTION AGAINST THE ISSUANCE OF NOTICE UNDER SECTION 148 OF THE ACT BUT THE ASSESSING OFFICER HAS REJECTED THE SAME IN A ROUTINE MANNER W ITHOUT APPRECIATING THE RECORDS OF THE ASSESSEE. HE FURTHER STATED THAT THE ASSESS EE PROVED THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE DONORS BEFORE THE ASSES SING OFFICER BY FILING THE NECESSARY EVIDENCES. HE DREW MY ATTENTION TOWARDS THE ORDER OF THE ASSESSING OFFICER AS WELL AS THE IMPUGNED ORDER PASSED BY THE LD. FIRST APPELLATE AUTHORITY AND STATED THAT BOTH THE DONORS WERE APPEARED BEFOR E HE ASSESSING OFFICER AND HE HAS EXAMINED THE DONORS WHO CONFIRMED HAVING GIVEN THE GIFTS IN DISPUTE TO BOTH THEIR SONS. INSPITE OF THE SAME, THE ASSESSING OFF ICER HAS MADE THE ADDITION IN DISPUTE AND THE SAME HAS WRONGLY BEEN CONFIRMED BY THE LD. FIRST APPELLATE 7 AUTHORITY. HE FURTHER STATED THAT, ON LEGAL ISSUE, THERE ARE VARIOUS DECISIONS IN FAVOUR OF THE ASSESSEE BY THE JURISDICTIONAL BENCH WHICH HE HAS MENTIONED IN HIS PAPER BOOK FILED BEFORE THIS BENCH AND, AS REGARDS TO MERIT OF THE CASE, THERE ARE VARIOUS DECISIONS IN FAVOUR OF THE ASSESSEE ON THE ISSUE IN DISPUTE WHICH HE HAS ATTACHED IN THE PAPER BOOK CONTAINING PAGE NOS.2 TO 47. FINALLY HE STATED THAT KEEPING IN VIEW THE FACTS OF THE PRESENT CASE AS WE LL AS THE DECISIONS ATTACHED WITH THE PAPER BOOK, THE ADDITION IN DISPUTE MAY BE DELE TED. AT THE END, THE LD. COUNSEL FOR THE ASSESSEE ALSO STATED THAT IN CASE THE BENCH IS CONVINCED WITH THE ARGUMENTS ADVANCED BY HIM ON MERIT AND WANTS TO DECIDE THE IS SUE IN DISPUTE IN FAVOR OF THE ASSESSEE ON MERIT, THEN, LEGAL GROUND RAISED BY THE ASSESSEE, HE IS NOT PRESSING THE SAME AND MAY BE DISMISSED AS WITHDRAWN. 9. ON THE CONTRARY, THE LD. DEPARTMENTAL REPRESENTA TIVE RELIED UPON THE ORDER PASSED BY THE REVENUE AUTHORITIES AND STATED THAT T HE ASSESSEE HAS NOT PROVED THE CREDITWORTHINESS OF THE DONORS AND, THEREFORE, THE ADDITION IN DISPUTE HAS RIGHTLY BEEN MADE BY THE REVENUE AUTHORITIES. 10. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS AVAILABLE WITH ME AND I AM OF THE CONSIDERED OPINION THAT IT IS AN ADMITTED FACT THAT THE GIFTS IN DISPUTE HAVING BEEN GIVEN TO THE ASSESSEE BY HIS PARENTS (F ATHER AND MOTHER). IT IS ALSO AN 8 ADMITTED FACT THAT FATHER AND MOTHER OF THE ASSESSE E HAS ALSO APPEARED BEFORE THE ASSESSING OFFICER ON 03.03.2006 AND THE ASSESSING O FFICER HAS RECORDED THEIR STATEMENTS, WHO CONFIRMED, HAVING GIVEN GIFTS TO TH EIR SONS I.E. THE ASSESSEES. IT IS ALSO AN ADMITTED FACT THAT THE FATHER OF THE ASSESS EE IS REGULARLY FILING HIS RETURN OF INCOME WHICH HAS BEEN ACCEPTED BY THE REVENUE AUTHO RITIES. AS REGARDS TO THE CREDITWORTHINESS OF THE MOTHER OF THE ASSESSEE, SHE HAS ALSO AFFIRMED IN THE STATEMENT THAT SHE IS HAVING SAVINGS WITH HER WHICH SHE HAS RECEIVED FROM HER PARENTS ON VARIOUS OCCASIONS. EVEN OTHERWISE, SHE CAN GET MONEY FROM HER HUSBAND ALSO. KEEPING IN VIEW OF THE FACTS AND CIR CUMSTANCE OF THE PRESENT CASE AND THE DECISIONS CITED BY THE LD. COUNSEL FOR THE ASSESSEE, I AM OF THE CONSIDERED OPINION THAT THE ASSESSEE HAS PROVED THE CREDITWORT HINESS OF THE DONORS BY FILING THE NECESSARY EVIDENCES LIKE INCOME TAX RETURN OF T HEIR FATHER AS WELL AS BY PRODUCING THE DONORS BEFORE THE ASSESSING OFFICER W HO HAVE CONFIRMED THAT THEY HAVE GIVEN GIFTS TO THEIR SONS. IN THE INSTANT CAS E, IDENTITY OF BOTH THE DONORS ARE NOT IN DISPUTE. THE FATHER OF THE ASSESSEE IS ASSE SSED TO TAX. THE ONLY OBJECTION OF THE REVENUE AUTHORITIES IS THAT THE ASSESSEE HAS NO T PROVED THE CREDITWORTHINESS OF THE DONORS. THE ONUS HAS FULLY BEEN DISCHARGED BY THE ASSESSEE. IT IS NOT PERMISSIBLE UNDER LAW THAT THE ASSESSEE SHOULD PROV E THE SOURCE OF SOURCE. IN THE PRESENT CASE, SUFFICIENT EVIDENCE HAS BEEN FILED BY THE ASSESSEE TO PROVE THE IDENTITY AND CREDITWORTHINESS OF THE DONORS ALONG WITH GENUI NENESS OF THE TRANSACTION. 9 THEREFORE, THE ADDITION IN DISPUTE HAS FULLY BEEN E XPLAINED AS GIFTS BY THE ASSESSEES, WHICH HE HAS RECEIVED FROM THEIR FATHER AND MOTHER. I AM OF THE CONSIDERED OPINION THAT THE ADDITION IN DISPUTE DESERVES TO BE CANCELLED AND I CANCEL THE SAME BY ACCEPTING THE APPEALS FILED BY THE ASSESSEES. 11. THE LD. COUNSEL FOR THE ASSESSEE MADE A STATEME NT, AT THE TIME OF ARGUMENT, THAT HE IS NOT PRESSING THE LEGAL GROUND RAISED BY THE ASSESSEES. KEEPING IN VIEW OF THE STATEMENT OF THE LD. COUNSEL FOR THE ASSESSEE, THE LEGAL ISSUE RAISED IN GROUND NO.1 IN BOTH THE APPEALS ARE DISMISSED. 12. IN THE RESULT, BOTH THE APPEALS FILED BY THE AS SESSEES ARE PARTLY ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 29.04.2011) SD/- (H.S. SIDHU) JUDICIAL MEMBER DATED: 29 TH APRIL, 2011 PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT BY ORDER 3. CIT CONCERNED 4. CIT (APPEALS) CONCERNED 5. DR, ITAT, AGRA BENCH, AGRA 6. GUARD FILE ASSISTANT REGISTRAR INCOME-TAX APPELLATE TRI BUNAL, AGRA TRUE COPY