M/s Ismail Khan, V. ACIT,

ITA 272/RAN/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0439 (ITAT-RANCHI)
• Duration Of Justice: 1 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 26-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHOUDHARY ORAON
• Keywords: Gift; Corroborative evidences

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL: CIRCUIT BENCH : RANCHI [BEFORE HONBLE S/SHRI N. S. SAINI, AM AND GEORGE M ATHAN, JM] ITA NO.272/RAN/2014 ASSESSMENT YEAR: 2006-07 M/S. ISMAIL KHAN, 12 ASHIRVAD COMPLEX, SAKCHI, JAMSHEDPUR, JHARKHAND PAN:AJCPK1057D V S THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE-2, JAMSHEDPUR (APPELLANT) (RESPONDENT) APPELLANT BY SHRI S. K. PODDAR WITH SHRI M. K. CHOUDHARY, ADVOCATES RESPONDENT BY SHRI CHOUDHARY ORAON, DR DATE OF HEARING: 29-10-2015 DATE OF PRONOUNCEMENT: 29-10-2015 O R D E R PER GEORGE MATHAN, JM: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED CIT(A),JAMSHEDPUR, (JHARKHAND) IN APPEAL NO .347/JSR/2008- 09 DATED 19-06-2014 FOR THE ASSESSMENT YEAR 2006-07 . 2. SHRI S. K. PODDAR AND SHRI M. K. CHOUDHARY, ADVO CATES REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI CHOU DHARY ORAON, LEARNED DR REPRESENTED ON BEHALF OF THE REVENUE. 3. IT WAS SUBMITTED BY THE LEARNED AR THAT IN GROUN D NO.1 AND 2, THE ASSESSEE HAS CHALLENGED THE ACTION OF THE LEARN ED CIT(A) IN CONFIRMING THE ADDITION OF RS.2,50,000/- RECEIVED B Y THE ASSESSEE ITA NO.272/RAN/2014 (AY: 2006-07) 3 FROM HIS UNCLE, WHO WAS RESIDING WITH HIM AND WHO H AD NO DEPENDENT EXCEPT THE ASSESSEE. IT WAS A SUBMISSION THAT THE A SSESSEES UNCLE WAS EMPLOYED IN THE CANTEEN OF TATA STEEL AND HE HA D RETIRED FROM THE SERVICE IN 1982. IT WAS A SUBMISSION THAT AT THAT P OINT OF TIME, HE WAS RECEIVING SALARY OF RS.560/- PER MONTH. IT WAS SUBM ITTED THAT THE SAID UNCLE OF THE ASSESSEE ALSO HAD IMMOVABLE PROPERTY W HICH HE HAD GIFTED TO THE MASJID ALONG WITH SOME CASH. AS THE A SSESSEE WAS THE ONLY RELATIVE, THE UNCLE WAS STAYING WITH HIM AND H E HAD GIFTED THE ASSESSEE RS.2,50,000/- WHICH THE ASSESSEE HAD SHOWN IN HIS CAPITAL ACCOUNT. THE LEARNED AR PLACED BEFORE US A COPY OF THE SERVICE BOOK OF LATE SHRI HAZI HABIB, THE UNCLE OF THE ASSESSEE. IT WAS FURTHER SUBMITTED THAT THE UNCLE OF THE ASSESSEE DIED ON 09 -09-2008. IT WAS A SUBMISSION THAT WHEN THE ASSESSMENT WAS DONE IN DEC EMBER, 2008, THE ASSESSEE COULD NOT PRODUCE THE SAID UNCLE AND T HE ASSESSMENT HAS BEEN COMPLETED EX-PARTE. IT WAS A SUBMISSION THAT A S THE ASSESSEES UNCLE HAD EXPIRED, HE WAS UNABLE TO PRODUCE ANY OTH ER CONFIRMATION OTHER THAN FROM MULLAH, AS ALSO THE DEED OF ADVANCE OF THE SAID MONEY. IT WAS A SUBMISSION THAT THE LEARNED CIT(A) DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AS THE ASSESSEES UNCLE HAD EXPIRED ON 09- 09-2008 THEREBY MAKING THE VERIFICATION IMPOSSIBLE AND ON THE GROUND THAT THE GIFT WAS NOT MADE THROUGH BANKING CHANNEL. IT WAS A SUBMISSION THAT THE ADDITION AS MADE BY THE AO AND CONFIRMED BY THE LEARNED CIT(A) MAY BE DELETED IN THE INTEREST OF JU STICE. IT WAS A FURTHER SUBMISSION THAT IN THE COURSE OF ASSESSMENT , THE AO HAD ESTIMATED THE NET PROFIT OF THE ASSESSEE AT 5%; WHE REAS THE ASSESSEE HAD HIMSELF SHOWN THE NET PROFIT OF 1.66%. IT WAS A SUBMISSION THAT THE LEARNED CIT(A) ON APPEAL HAD REDUCED THE ESTIMA TION OF THE NET PROFIT TO 2.5%. IT WAS A SUBMISSION THAT THE NET PR OFIT RATE MAY BE REDUCED TO 2%. ITA NO.272/RAN/2014 (AY: 2006-07) 3 4. IN REPLY, THE LEARNED DR VEHEMENTLY SUPPORTED TH E ORDER OF THE ORDER OF THE AO AND THE LEARNED CIT(A). IT WAS FURT HER SUBMISSION IN RESPECT OF THE GIFT RECEIVED BY THE ASSESSEE ADEQUA TE PROOF HAS NOT BEEN PRODUCED. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERU SAL OF THE ASSESSMENT ORDER SHOWS THAT THE ASSESSMENT ORDER IS AN EX-PARTE ORDER. BEFORE THE LEARNED CIT(A), THE ASSESSEE HAD PRODUCED THE DEED OF GIFTS. FURTHER, THE FACTUM OF GIFTS HAS ALSO BEE N CONFIRMED BY THE MULLAH. IT WAS ALSO CONFIRMED THAT THE ASSESSEE HAS CONDUCTED THE LAST NAMAJ FOR THE DEPARTED SOUL. ALL THESE CLEARLY SHOW THAT THE PREPONDERANCE OF PROBABILITY THAT THE UNCLE COULD H AVE GIVEN THE ASSESSEE THE GIFT OF RS.2,50,000/-. ADMITTEDLY, THE RE WAS NO WAY OF SPECIFICALLY VERIFYING THE GIFT AS THE DONOR IS NO MORE. IT IS, IN THESE CIRCUMSTANCES, THE PREPONDERANCE OF PROBABILITY WOU LD HAVE TO BE CONSIDERED ALONG WITH THE CORROBORATIVE EVIDENCES I N THE FORM OF THE CONFIRMATION FROM THE RELIGIOUS HEAD. IN THESE CIRC UMSTANCES, WE ARE OF THE VIEW THAT THE ADDITION MADE BY THE AO AND CO NFIRMED BY THE LEARNED CIT(A) IN RESPECT OF THE GIFT OF RS.2,50,00 0/- RECEIVED BY THE ASSESSEE FROM HIS UNCLE LATE SHRI HAZI HABIB IS UNC ALLED FOR AND CONSEQUENTLY BE DELETED. 6. COMING TO THE ISSUE OF ESTIMATION OF NET PROFIT, IT IS NOTICED THAT THE ASSESSEE HIMSELF HAS DISCLOSED NEARLY 1.66% NET PROFIT. THE ASSESSEE IS DEALING IN MOBILE RE-CHARGING, WATCHES AND HOME APPLIANCES. ADMITTEDLY, THE MARGINS IN THIS TRADING MORE SPECIFICALLY A RETAIL DEALER ARE NOT VERY HIGH. IN THE CIRCUMSTANC ES, CONSIDERING THE FACTS OF THE PRESENT CASE, IN THE INTEREST OF JUSTI CE THE ESTIMATION OF THE NET PROFIT IS REDUCED TO 2% AS PRAYED FOR BY TH E ASSESSEE. ITA NO.272/RAN/2014 (AY: 2006-07) 3 7. IN THE RESULT, APPEAL OF THE ASSESSEE STANDS ALL OWED. THE ORDER WAS PRONOUNCED IN THE OPEN COURT AT THE CLOSE OF HEARING ON 29-10-2015. SD/- SD/- (N.S. SAINI) ACCOUNTANT MEMBER (GEORGE MATHAN) JUDICIAL MEMBER DATE : 29 .10 .1 5 LK DEKA/SR.PS COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) - 5. THE DR, ITAT, RANCHI 6. GUARD FILE BY ORDER DATE INITIAL ORIGINAL DICTATION PAD & DRAFTS ARE ENCLOSED IN THE F ILE 1. DRAFT DICTATED ON 29.10.15 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 29.10.15 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 29.10.15 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 29.10.15 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 29.10.15 SR.PS 6. DATE OF PRONOUNCEMENT 2 9 .10.15 SR.PS 7. FILE SENT TO THE BENCH CLERK 29 .10.15 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER