Shri Shripal Pratapbhai Shah, Surat V. The Income tax Officer,Ward-5(4), Surat

ITA 2957/AHD/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 5594 (ITAT-AHMEDABAD)
• Duration Of Justice: 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 16-07-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 30-10-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B D BAROT
• Keywords: Unexplained cash credit; Gift; Set aside
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH AHMEDABAD BENCH AHMEDABAD BENCH AHMEDABAD BENCH SMC SMC SMC SMC BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI N NN N. .. .S. SAINI S. SAINI S. SAINI S. SAINI, , , , ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE OF HEARING :22-7-10 DRAFTED ON:22-7-10 ITA NO. 2957 /AHD/ 2009 ASSESSMENT YEAR :2005-06 SHRI SHRIPAL PRATAPBHAI SHAH, 602 RATNA REKHA APT., OPP. GANDHISMRUTI, NANPURA, SURAT. VS. INCOME TAX OFFICER, WARD 5(4), AAYAKAR BHAVAN, MAJURA GATE, SURAT. PAN/GIR NO. : ANPPS 2991 A (A PPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI HARDIK VORA. RESPONDENT BY: SHRI B.D. BAROT, D .R. O R D E R O R D E R O R D E R O R D E R PER N.S.SAINI , ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-II I, SURAT DATED 17-8-2009. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS :- GROUND NO.1 READS AS UNDER :- 1. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF ASSESSING OFFICER IN MAKING ADDITION OFRS.3,55,151/- ON ACCOU NT OF GIFT RECEIVED AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT. 2. IT IS THEREFORE, PRAYED THAT THE ABOVE ADDITIO N MADE BY THE ASSESSING OFFICER AND CONFIRMED BY COMMISSIONER OF INCOME-TAX (APPEALS) MAY PLEASE BE DELETED. 3. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE O N RECORD. IN THE INSTANT CASE THE LEARNED ASSESSING OFFICER HAS OBSE RVED THAT THE ASSESSEE HAS RECEIVED OF GIFT OF `.3,00,000 FROM HI S FATHER AND - 2 - `.55,151/- FROM HIS MOTHER. THE LEARNED ASSESSING O FFICER TREATED THE SAME AS INCOME OF THE ASSESSEE UNDER SECTION 68 OF THE ACT 4. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) CONFIRMED THE ACTION OF THE LEARNED ASSES SING OFFICER. 5. BEFORE US THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE POINTED OUT THAT GIFT OF `.3 LAKH FROM THE FATHER WAS ACTUALLY MISTAKENLY PRESENTED AS GIFT BY THE ASSESS EE AND THE SAME WAS INVESTMENT BY THE FATHER IN THE ACQUISITION OF FLAT. THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE EXPLAINED THAT THE ASSESSEE AND HIS FATHER JOINTLY PURCHASED A FLAT FO R `.6,21,000/- AND THE FATHER BEING EQUAL OWNER OF THE PROPERTY CONTRI BUTED HIS SHARE OF MONEY OF ABOUT `.3 LAKHS. THIS INVESTMENT IN TH E FLAT BY THE FATHER WAS MISTAKENLY TREATED AS GIFT BY THE ASSESS EE IN HIS ACCOUNT AND ACCORDINGLY THE LEARNED ASSESSING OFFIC ER MADE THE ADDITION UNDER SECTION 68 OF THE ACT. HE CONTENDED THAT THE LOWER AUTHORITIES WERE NOT ABLE TO APPRECIATE THE COMPLET E FACTS OF THE CASE IN PROPER PERSPECTIVE. HE POINTED OUT THAT NO BENEFIT OF THE AMOUNT IN QUESTION OF `.3 LAKHS WAS EVER RECEIVED B Y THE ASSESSEE AS THE PROPERTY TO THAT EXTENT IS OWNED BY THE FATH ER OF THE ASSESSEE AND NOT THE ASSESSEE AND THEREFORE, THE SA ME AMOUNT CANNOT BE ADDED TO THE INCOME OF THE ASSESSEE. 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE O THER HAND OBJECTED AGAINST THE ABOVE PLEA OF THE ASSESSEE. HE SUBMITTED THAT ADDITION UNDER SECTION 68 WAS MADE ON THE BASIS OF A DECLARATION MADE BY THE ASSESSEE IN THE RETURN OF INCOME AND ON THE BASIS OF GIFT DECLARATION FILED DURING THE COURSE OF THE ASS ESSMENT. THE PLEA NOW TAKEN BY THE ASSESSEE BEING A NEW PLEA THE SAME SHOULD NOT BE ADMITTED BY THE TRIBUNAL. 7. I FIND THAT THE CONTENTION OF THE ASSESSEE THAT THE FLAT WAS ACQUIRED ON 3-3-2006 FOR `.6,21,000 IN THE JOINT NA ME OF THE - 3 - ASSESSEE AND HIS FATHER COULD NOT BE CONTROVERTED B Y THE REVENUE. A COPY OF THE RELEVANT REGISTERED SALE DEED WAS PLA CED AT PAGE NOS. 7 TO 31 OF THE PAPER BOOK. IN MY CONSIDERED OP INION, IF THE FLAT IS ACTUALLY OWNED BY THE ASSESSEE AND HIS FATHER BO TH AND THE MONEY WHICH WAS PAID BY THE FATHER WAS TOWARDS ACQU ISITION OF HIS SHARE OF OWNERSHIP OF THE FLAT THEN IT CANNOT BE HE LD THAT THE ASSESSEE HAS RECEIVED ANY BENEFIT OF `.3 LAKHS IN Q UESTION AND THEREFORE, THE SAME CANNOT BE HELD AS GIFT BY THE F ATHER OF THE ASSESSEE AND CONSEQUENTLY THE SAME CANNOT BE ADDED UNDER SECTION 68 IN THE HANDS OF THE ASSESSEE. IN MY CONS IDERED OPINION THE ISSUE IS TO BE DECIDED BY CONSIDERING ALL THE R ELEVANT FACTS OF THE CASE AND NOT BY MERELY THE TREATMENT GIVEN BY T HE ASSESSEE OR PRESENTATION MADE BY THE ASSESSEE OR BY THE NOMENCL ATURE GIVEN TO A DOCUMENT BY THE ASSESSEE OR HIS FATHER. IT IS TRUE NATURE OR CHARACTER OF THE TRANSACTION THAT SHOULD DETERMINE THE CONSEQUENCE OF THE TRANSACTION. IN THE ABOVE CIRCU MSTANCES, IN MY CONSIDERED OPINION IT SHALL BE IN THE INTEREST OF T HE JUSTICE TO RESTORE THIS ISSUE BACK TO THE FILE OF THE LEARNED ASSESSIN G OFFICER FOR PROPER VERIFICATION OF THE SALE DEED AND TO DETERMI NE THE ACTUAL NATURE OF TRANSACTION OF THE AMOUNT OF `.3 LAKHS IN QUESTION. IF IT IS FOUND ON VERIFICATION THAT THE AMOUNT OF `.3 LAKHS WAS CONSIDERATION PAID BY THE FATHER OF THE ASSESSEE FO R ACQUIRING PART OWNERSHIP OVER THE FLAT THEN THE SAME CANNOT BE HEL D AS GIFT BY THE FATHER TO THE ASSESSEE AND CONSEQUENTLY THE SAME CA NNOT BE ADDED UNDER SECTION 68 TO THE INCOME OF THE ASSESSE E. THE LEARNED ASSESSING OFFICER SHALL RE-ADJUDICATE THE I SSUE AFRESH AS PER LAW AFTER PROPER VERIFICATION OF ALL THE RELEVA NT FACTS AND AFTER ALLOWING REASONABLE OPPORTUNITY OF HEARING TO THE A SSESSEE. THUS, THIS GROUND OF APPEAL IS SET ASIDE TO THE FILE OF T HE LEARNED ASSESSING OFFICER FOR RE-ADJUDICATION OF THE SAME. 8. IN RESPECT OF GIFT OF `.55,151/- CLAIMED BY THE ASSESSEE TO HAVE RECEIVED FROM HIS MOTHER SMT. MADHUBEN P.SHAH, IT IS OBSERVED THAT THE LEARNED ASSESSING OFFICER ADDED T HE SAME TO THE - 4 - INCOME OF THE ASSESSEE ON THE GROUND THAT THE SAID SMT. MADHUBEN P. SHAH WAS NOT AN INCOME TAX ASSESSEE, SHE WAS A H OUSE WIFE AND THE GIFT WAS GIVEN IN CASH. THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE CONTENDED BEFORE US THAT THE MOTHER OF THE ASSESSEE WAS AN OLD LADY AND TO SAY THAT SHE COULD NOT HAVE ANY SAVINGS IN HER LIFE TIME WILL BE AGAINST THE REAL L IFE FACT. HE SUBMITTED THAT THE LEARNED ASSESSING OFFICER WAS NO T JUSTIFIED IN ARBITRARILY DISBELIEVING THE GIFT FROM MOTHER TO TH E SON WITHOUT BRINGING ANY COGENT MATERIAL ON RECORD AFTER EXAMIN ING THE MOTHER OF THE ASSESSEE. THE LEARNED DEPARTMENTAL REPRESENT ATIVE SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 9. I FIND THAT IT IS NOT IN DISPUTE THAT THE GIFT C LAIMED BY THE ASSESSEE WAS DULY SUPPORTED BY THE DOCUMENTARY DECL ARATION GIVEN BY THE DONOR I.E. SMT. MADHUBEN P. SHAH, MOTH ER OF THE ASSESSEE. THE IDENTITY OF THE DONOR WAS ALSO NOT IN DOUBT. IN THE INSTANT CASE THE LEARNED ASSESSING OFFICER ENTERTAI NED A DOUBT ABOUT THE CREDIT WORTHINESS OF THE DONOR ON THE GRO UND THAT SHE WAS A HOUSE WIFE AND SHE WAS NOT ASSESSED TO TAX AN D THE GIFT WAS GIVEN IN CASH. IN MY CONSIDERED OPINION MERELY BEC AUSE A GIFT WAS TRANSACTED IN CASH THE SAME CANNOT BE DISBELIEVED. FURTHER TO SAY THAT A HOUSE WIFE WILL HAVE NO SAVING OF ANY AMOUNT IS ALSO AN UN- ACCEPTABLE PROPOSITION AND TO SAY THAT SHE HAD NO C APACITY TO MAKE GIFT OF ANY AMOUNT TO HER SON IS AGAINST THE R EAL FACT. A HOUSE WIFE OF MORE THAN 51 YEARS OF AGE NEED NOT TO BE AN INCOME TAX ASSESSEE FOR HAVE A SAVING OF ABOUT `.55,000/- ONL Y. IN THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, AND KEEPING IN VIEW THE FACT THE DONOR WAS ABOUT 52 YEARS OF AGE IN MY CONSIDERE D OPINION THE ORDERS OF THE LOWER AUTHORITIES THAT SHE WOULD HAVE NO PAST SAVINGS TO MAKE GIFT TO HER SON CANNOT BE UPHELD. I ALSO FI ND THAT NO MATERIAL COULD BE BROUGHT ON RECORD BY THE REVENUE AFTER EXAMINING THE DONOR TO SHOW THAT THE GIFT OF ` 55,1 51/- WAS NOT GENUINE. IN THE ABOVE FACTS AND CIRCUMSTANCES IN MY CONSIDERED OPINION THE ADDITION WAS MADE MERELY ON THE BASIS O F SURMISES AND - 5 - CONJECTURES AND IGNORING THE REAL LIFE FACT. I THER EFORE, DELETE THE ADDITION OF `.55,151/- AND ALLOW THIS PART OF THE G ROUND OF THE ASSESSEE. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED IN THE MANNER INDICATED ABOVE. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 23RD JULY, 2010. SD/- ( N.S. SAINI ) ACCOUNTANT MEMBER AHMEDABAD; ON THIS 23RD DAY OF JULY, 2010 PATKI COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)- 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD DATE INITIALS 1. DRAFT DICTATED ON ------------- ----------- -------- 2. DRAFT PLACED BEFORE AUTHORITY ------------- - ------------------ 3. DRAFT PROPOSED & PLACED ------------- -------- ----------- JM BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER ----------- ----- ------------------- JM 5. APPROVED DRAFT COMES TO P.S ---------------- -- ------------------ 6. KEPT FOR PRONOUNCEMENT ON ---------------- --- ----------------- 7. FILE SENT TO THE BENCH CLERK ---------------- -------------------- 8. DATE ON WHICH FILE GOES TO THE ---------------- -------------------- 9. DATE OF DISPATCH OF ORDER ---------------- --- ------------------