Appeal Details
Counselvise Citation
[2012] 140 COUNSELVISE.COM (IT) 61593 (ITAT-DELHI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 9 month(s) 25 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
04-04-2012
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
F
Next Hearing Date
08-02-2012
Assessment Year
2005-2006
Appeal Filed On
09-06-2010
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH `F : NEW DELHI) BEFORE SHRI U.B.S. BEDI, JUDICIAL MEMBER AND SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER ITA NO.2869/DEL./2010 (ASSESSMENT YEAR : 2005-06) SHRI RUCHIR GUPTA, VS. ITO, WARD 26(1), A-9, VISHAL ENCLAVE, NEW DELHI. RAJOURI GARDEN, NEW DELHI. (PAN/GIR NO.ABZPG3509Q) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI NEERAJ KHIWANI, ADV. REVENUE BY : SHRI RENUKA JAIN GUPTA, SR.DR ORDER PER U.B.S. BEDI, J.M. THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER PASSED BY THE CIT(A)- XXIV, NEW DELHI, DATED 17.03.2010 RELEVANT TO ASSES SMENT YEAR 2005-06 WHEREBY BESIDES CHALLENGING THE CONFIRMATION OF ACTION OF T HE ASSESSING OFFICER IN REOPENING AN ASSESSMENT, ASSESSEE HAS ALSO CHALLENGED CONFIRMATI ON OF ADDITION OF RS.2,50,250/-, RECEIVED AS GIFT. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS ONE OF THE PARTNERS IN THE FIRM I.E. M/S RAJASTHAN STEEL ENTERPRISES AND DERIVES IN COME THERE FROM. THE ASSESSING OFFICER ON THE BASIS OF INFORMATION IN RESPECT GIFT OF RS.2,50,000/- SHOWN TO HAVE BEEN RECEIVED BY THE ASSESSEE, INITIATED PROCEEDINGS U/S 147 OF THE I.T. ACT, 1961. THE GIFT HAD I.T.A. NO.2869/DEL./2010 (A.Y. : 2005-06) 2 BEEN TAXED AS INCOME BY THE ASSESSING OFFICER AS TH E ASSESSEE FAILED TO EXPLAIN IT PLAUSIBLY. 3. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, ASSESSEE TOOK UP THE MATTER IN APPEAL AND BESIDES CHALLENGING VALIDITY OF PROCEEDI NGS U/S 147 OF THE ACT, ASSESSEE HAS ALSO CHALLENGED TREATMENT OF GIFT AS INCOME AND ADD ITION MADE THEREON. 4. DURING THE COURSE OF APPELLATE PROCEEDINGS, ASSE SSEE FILED WRITTEN SUBMISSIONS AND VIDE NOTE SHEET ENTRY DATED 23.02.2010, LD.AR O F ASSESSEE WAS ASKED TO PRODUCE THE DONOR ON 16.03.2010. HE WAS ALSO ASKED TO SHOW THE RELATIONSHIP WITH THE DONOR TO EXPLAIN CREDITWORTHINESS OF THE DONOR. FURTHER, HE WAS REQUIRED TO SHOW CAUSE AS TO WHY THE FINDING OF THE HIGHER JUDICIAL AUTHORITIES IN T HE CASES OF SUMATI DAYAL, 214 I.T.R. 801(SC) P. MOHANKALA, 291 I.T.R. 278, ANIL KUMAR, 2 92 I.T.R. 552, ASHOK MOHINDER & SONS, 173 TAXMAN 178 AND TIRATH RAM GUPTA, 304 I.T. R. 145 MAY NOT BE APPLIED TO THE ASSESSEES CASE. FURTHER, LD.COUNSEL FOR THE ASSES SEE WAS SOUGHT TO SUBMIT WHETHER THE ASSESSEE HAD EVER GIVEN ANY GIFT TILL DATE TO ANYON E. ALL THIS REMAINED UN-COMPLIED WITH. NEITHER ANYBODY ATTENDED FURTHER PROCEEDINGS, NOR W AS ANY WRITTEN SUBMISSIONS/ADJOURNMENT FILED/SOUGHT. SO, CIT(A) P ROCEEDED TO CONCLUDE THE PROCEEDINGS ON THE BASIS OF MERITS OF THE CASE EMAN ATING FROM THE MATERIAL AVAILABLE ON THE RECORD TREATING IT TO BE QUITE JUDICIOUS. 5. AFTER DISCUSSING VARIOUS CASE LAWS, FACTS OF THE CASE AND MATERIAL ON RECORD, CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICE R SO FAR AS INITIATION OF PROCEEDINGS U/S 147 OF THE ACT ARE CONCERNED AS PER PARAS.4.3, 4.4, 4.5, 4.6, 4.7 & 4.8 OF HIS ORDER. 6. STILL AGGRIEVED, THE ASSESSEE HAS COME UP IN FUR THER APPEAL AND WHILE REITERATING THE SUBMISSIONS AS MADE BEFORE LOWER AUTHORITIES, I T WAS PLEADED FOR QUASHING THE I.T.A. NO.2869/DEL./2010 (A.Y. : 2005-06) 3 INITIATION OF PROCEEDINGS U/S 147 OF THE ACT, WHILE RELYING ON HONBLE DELHI HIGH COURTS DECISION IN THE CASE OF CIT VS. SFIL STOCK BROKING LTD. DATED 27.04.2010, WHEREAS LD.DR HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND PLEADED FOR CONFIRMATION OF THE IMPUGNED ORDER AS CIT(A) HAS CONSIDERED EACH AND EVERY ASPECT OF THE MATTER IN DETAIL IN THE LIGHT OF VARIOUS DECISIONS OF DIFFERE NT COURTS. NEITHER ANY ADDITIONAL MATERIAL OR EVIDENCE HAS BEEN PRODUCED NOR ASSESSEE COULD EX PLAIN AS TO WHY HE COULD NOT SUBSTANTIATE HIS GROUNDS RAISED IN THE APPEAL AND W HY HE DID NOT RESPOND AFTER HAVING BEEN GIVEN ADEQUATE OPPORTUNITY BY CIT(A), OTHERWIS E IT IS A FIT CASE OF ESCAPEMENT. SO, INITIATION OF REASSESSMENT WAS JUSTIFIED WHICH HAS CORRECTLY BEEN UPHELD BY THE CIT(A), WHOSE ACTION MAY FURTHER BE CONFIRMED. 7. WE HAVE HEARD BOTH THE SIDES, CONSIDERED THE MAT ERIAL ON RECORD IN THE LIGHT OF CASE LAWS CITED BY BOTH THE SIDES AND CONSIDERED BY THE CIT(A), THE BASIS AND REASONING AS GIVEN BY THE CIT(A), WITH RESPECT TO ISSUE IN RE LATION TO PROCEEDINGS U/S 147 OF THE ACT, ARE FOUND TO BE CONVINCING. SINCE NO CONTRARY MATERIAL OR EVIDENCE IS PRODUCED OR ANY JUSTIFIABLE REASON HAS BEEN GIVEN BY LD.AR OF T HE ASSESSEE TO PERSUADE US TO TAKE A DIFFERENT VIEW OTHER THAN TAKEN BY THE CIT(A), WHIC H OTHERWISE IS FOUND TO BE JUST AND PROPER. SO FAR AS ASSESSEES RELIANCE ON DELHI HIG H COURT DECISION IN THE CASE OF SFIL STOCK BROKING LTD. (SUPRA) IS CONCERNED, IN THAT CA SE REASON RECORDED CLEARLY INDICATE THAT ASSESSING OFFICER HAS BEEN DIRECTED BY THE ADDL.CIT -VIII, NEW DELHI THROUGH A LETTER DATED 26.8.2003 TO INITIATE PROCEEDINGS U/S 148 OF THE ACT IN RESPECT OF THE CASES PERTAINING TO THAT WARD AND HONBLE HIGH COURT WHIL E SPECIFICALLY NOTING THAT REASONS WERE BASED ON DIRECTION WHICH IS NOT AT ALL DISCERN ABLE AS TO WHETHER THE ASSESSING OFFICER HAS APPLIED HIS MIND TO THE INFORMATION AND INDEPENDENTLY ARRIVED AT A BELIEF ON I.T.A. NO.2869/DEL./2010 (A.Y. : 2005-06) 4 THE BASIS OF THE MATERIAL WHICH HE HAD BEFORE HIM, INCOME HAS ESCAPED ASSESSMENT. BUT, IN THE INSTANT CASE, FACTS ARE DIFFERENT. THERE IS INDEPENDENT RECORDING OF REASONS ABOUT ESCAPEMENT RECORDED BY THE ASSESSING OFFICER HIMSEL F. SO, RATIO OF THE DECISION CANNOT BE APPLIED. AS SUCH, WHILE CONSIDERING ALL THE POI NTS RAISED IN SUPPORT OF THE APPEAL OF THE ASSESSEE AND COUNTER SUBMISSIONS ADVANCED BY TH E LD.DR., ON THE POINT OF INITIATION OF PROCEEDINGS U/S 147 OF THE ACT, WE UPHOLD THE AC TION OF THE CIT(A) IN THIS REGARD AND DISMISS THE APPEAL OF THE ASSESSEE BEING DE VOID OF ANY MERIT. 8. AS REGARDS THE ISSUE ON MERITS WITH REGARD TO AM OUNT OF RS.2,50,250/- IS CONCERNED, THE ASSESSING OFFICER MADE THE ADDITION FOR LACK OF EVIDENCE TO ESTABLISH IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE T RANSACTION AND IN APPEAL, THE CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER AFTER DISCUSSING VARIOUS ASPECTS OF THE CASE IN THE LIGHT OF CASE LAWS CITED AND IN FURTHER APPE AL, LD.AR OF THE ASSESSEE HAS REITERATED THE SUBMISSIONS AS MADE BEFORE LOWER AUTHORITIES TO PLEAD FOR DELETION OF THE IMPUGNED ADDITION, WHEREAS LD.DR. HAS RELIED UPON THE ORDER OF CIT(A) TO PLEAD FOR CONFIRMATION OF THE IMPUGNED ORDER AS PROPER REASONING AND BASIS BEEN GIVEN BY THE CIT(A) TO UPHOLD THE ACTION OF THE ASSESSING OFFICER. 9. AFTER HEARING BOTH THE SIDES AND CONSIDERING THE MATERIAL ON RECORD, WE FIND THAT THE LD. CIT(A) WHILE DISCUSSING AND CONSIDERING TH IS ISSUE, HAS CONCLUDED TO DISMISS THIS GROUND OF APPEAL AS PER PARAS 6.7 & 6.8 OF HIS ORDE R AS UNDER: 6.7 I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APPELLANT AND PERUSED MATERIAL ON RECORD. THE QUESTION IS ONE OF APPLICA BILITY OF THE PRINCIPLES TO THE FACTS IN A GIVEN CASE. IT HAS BEEN A WELL-SETTLED VIEW THAT THE RATIO OF ANY DECISION MUST BE UNDERSTOOD IN THE BACKGROUND OF THAT CASE. WHAT IS OF ESSENCE IN A DECISION IS ITS RATIO AND NOT EVERY OBSERVATION FOU ND THEREIN NOR WHAT LEGALLY FOLLOWS FROM THE VARIOUS OBSERVATIONS MADE IN IT. IT IS NOT A PROFITABLE TASK TO I.T.A. NO.2869/DEL./2010 (A.Y. : 2005-06) 5 EXTRACT A SUITABLE SENTENCE HERE AND THERE FROM A J UDGMENT AND TO BUILD UPON IT (VIDE AMBICA QUARRY WORKS VS. STATE OF GUJARAT, AIR 1987 (SC) 1073). IN VIEW OF THE FACTUAL AND CIRCUMSTANTIAL EVIDENCE GATHERED BY THE ASSESSING OFFICER AS A RESULT OF INVESTIGATION AS DISCUSSED AT LENGTH IN T HE ASSESSMENT ORDER, THE ASSESSING OFFICER CAME TO THE CONCLUSION THAT THE A PPELLANT HAS NOT RECEIVED THE GENUINE GIFT. THIS SHOULD NOT BE VIEWED WITH BLINK ING EYES BY THE JUDICIAL AS WELL AS QUASI JUDICIAL AUTHORITIES AS CONSISTENTLY HELD BY THE COURTS. IN THIS CONTEXT, THE ATTENTION IS DRAWN TO THE OBSERVATION THE OBJECT O F THE COURT IS TO METE OUT JUSTICE AND TO CONVICT THE GUILTY AND PROTECT THE INNOCENT, THE TRIAL SHOULD BE A SEARCH FOR THE TRUTH AND NOT ABOUT OVER TECHNICALITIES MADE B Y THE HONBLE SUPREME COURT WITH REFERENCE TO THE APPEAL FILED AGAINST THE DECI SION OF LOWER COURT IN JESSICA LAL MURDER CASE ACQUITTING THE CULPRITS TO STATE. THE OVERALL CIRCUMSTANCES OF THE INSTANT CASE DISCUSSED HEREIN BEFORE ESTABLISHES TH AT THE GIFT OF RS.2.50 LAKHS IS NON-GENUINE. FURTHER, IF EVIDENCES BEYOND REASONAB LE DOUBT ARE NOT AVAILABLE, THE TOTALITY OF CIRCUMSTANCES HAS TO BE LOOKED INTO TO EVOLVE A PROCESS WHICH WOULD ADAPT TO SITUATION IN PURSUIT OF THE TRUTH AND JUST ICE. IN SUPPORT OF THE VIEW THAT WHERE DIRECT EVIDENCES ARE NOT AVAILABLE, THE CIRCU MSTANTIAL EVIDENCES COULD BE TREATED AS SUFFICIENT FOR DECIDING A CASE. HERE, T HE DIRECT EVIDENCES ESTABLISH THAT THE GIFT IS NON-GENUINE. FURTHER RELIANCE WAS MADE ON THE DECISIONS OF THE SUPREME COURT RELATING TO THE DOCTRINE LIFTING OF CORPORATE VEIL LAID DOWN THEREIN STATED THAT IN ORDER TO UNEARTH THE GENUINE NESS, ONE SHOULD GO BEYOND THE FAADE OF GENUINENESS BY LOOKING INTO THE OVERALL P ICTURE AND HUMAN PROBABILITIES. 6.8 IN THE NUTSHELL, UNDER THE PREVAILING CIRCUMSTA NCES, NEITHER THE DONOR IS FOUND IN EXISTENCE AT THE ADDRESS, AS THAT ADDRESS IS BOGUS NOR THE CREDIBILITY OF THAT PERSON HAVING ESTABLISHED SOURCE OF INCOME, KN OWN CAPACITY OF MAKING A GIFT; AND FURTHER IN THE LIGHT OF DECISION OF HONBLE SUP REME COURT IN THE CASE OF P. MOHAN KALA AND OBSERVATIONS TO DECIDE THE ISSUE IN LIGHT OF DECISION IN THE CASE OF SUMATI DAYAL, IT EMERGES THAT THE ASSESSEE HAS GROS SLY FAILED TO PROVE THAT THE GIFT HAS BEEN MADE FOR NATURAL LOVE AND AFFECTION. THE ADDITION MADE BY THE ASSESSING OFFICER IS THEREBY SUSTAINED. THEREFORE, THESE GROUNDS ARE HEREBY DISMISSED. 10. SINCE NO CONTRARY MATERIAL OR EVIDENCE HAS BEEN PRODUCED NOR ANY CONVINCING REASON HAS BEEN GIVEN TO PERSUADE US TO TAKE A DIFF ERENT VIEW THAN TAKEN BY CIT(A) AND MOREOVER REASONING AND BASIS AS GIVEN BY THE CIT(A) IN DISMISSING THIS GROUND OF APPEAL OF THE ASSESSEE HAS BEEN FOUND TO BE JUST AND PROPE R. THEREFORE, CONCURRING WITH THE FINDING OF CIT(A) IN THIS REGARD, WE UPHOLD HIS ORD ER AND DISMISS THIS GROUND OF APPEAL OF THE ASSESSEE. I.T.A. NO.2869/DEL./2010 (A.Y. : 2005-06) 6 11. AS A RESULT, THE APPEAL OF THE ASSESSEE GETS DI SMISSED. ORDER PRONOUNCED IN OPEN COURT ON 04.04.2012. SD/- SD/- (S.V. MEHROTRA) ACCOUNTANT MEMBER (U.B.S. BEDI ) JUDICIAL MEMBER DATED : APRIL 04, 2012. SKB COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A)-XXIV, NEW DELHI. 5. CIT(ITAT) DEPUTY REGISTRAR, ITAT
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