KHURSHEED BANO ANSARI, MUMBAI V. ACIT 21(3), MUMBAI

ITA 3011/MUM/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59684 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 29-11-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 16-04-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A K NAYAK
• Assessee Lawyers: REEPAL G TRALSHAWALA
• Keywords: Gift
• Section: 56(2); 12AA; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G, MUMBAI BEFORE SHRI P.M. JAGTAP, A.M. AND SHRI V. DURGA RAO , J.M. ITA NO. 3011/MUM/2010 ASSESSMENT YEAR: 2006-07 SMT. KHURSHEED BANO ANSARI, APPELLANT KWALITY CONFECTIONERS AND BAKERS (I) PVT. LTD. 122, AZMI COMPOUND, KHERANI ROAD, SAKINAKA, MUMBAI 400 072. (PAN AADPA 4871 E) VS. ASSTT. COMMISSIONER OF INCOME-TAX-21(3), RESP ONDENT C-11, PRATYAKSHAKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI 400 051. APPELLANT BY : MR. REEPAL G. TRALSHAWALA RESPONDENT BY : MR. A.K. NAYAK DATE OF HEARING : 29/11/2011 DATE OF PRONOUNCEMENT: 13/01/2012 ORDER PER V. DURGA RAO, J.M.: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGA INST THE ORDER OF CIT(A)-32, MUMBAI, PASSED ON 11/01/2010 FOR THE ASSESSMENT YEAR 2006-07. 2. THE ASSESSEE HAS RAISED GROUNDS 1.A), B & C), TH E SUM AND SUBSTANCE OF WHICH ARE AGAINST THE ACTION OF THE CI T(A) IN CONFIRMING THE ADDITION OF RS. 7,50,000/- MADE BY THE AO U/S 5 6(2)(V) OF THE ACT. 3. THE FACTS LEADING TO RAISE THIS GROUND ARE THAT THE AO FOUND THAT THE ASSESSEE RECEIVED GIFTS FROM SIX PERSONS. THE A O NOTED THAT OUT OF THESE GIFTS, THE AMOUNTS RECEIVED BY THE ASSESSEE F ROM DR. NAUSHAD HUSSAIN RS. 3,50,000/-, HIS WIFE RESHMA HUSSAIN RS. 3,00,000/- AND ITA NO. 3011/M/2010 KHURSHEED BANO ANSARI 2 DR. SHAKEEL AHMED RS. 1,00,000/-, ARE RELATED TO HE R, I.E. WITHIN THE AMBIT OF SECTION 56(2)(V). AS PER THIS SECTION WHER E ANY SUM OF MONEY EXCEEDING 25,000/- RUPEES IS RECEIVED WITHOUT CONSI DERATION BY AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY FROM ANY PER SON ON OR AFTER THE 1 ST DAY OF SEPTEMBER, 2004 [BUT BEFORE THE 1 ST DAY OF APRIL, 2006], HAS TO BE BROUGHT TO TAX. THEREFORE, THE AO TREATED THE SAID AMOUNTS AS INCOME FROM OTHER SOURCES OF THE ASSESSEE AS T HEY DO NOT FALL UNDER THE DEFINITION OF RELATIVE AND THERE WAS NO O CCASION VIZ. MARRIAGE OF THE INDIVIDUAL, WILL, INHERITANCE, CONT EMPLATION OF DEATH OF PAYER ETC., AS THE SUMS GIVEN AS ALLEGED GIFTS WERE NOT GIVEN IN SUCH MANNER BY PERSONS WHO MAY AROUSE INNATE LOVE AND AF FECTION FOR THE ASSESSEE. THE AO NOTED THAT THE THREE DONORS COULD NOT HAVE SPONTANEOUS LOVE AND AFFECTION FOR A PARTICULAR PER IOD VIZ. BETWEEN 20 TH 23 RD SEPT05. AND GAVE THE ABOVE SUMS TO THE ASSESSEE. HE FURTHER NOTED THAT THE FACT ALSO REMAINS THAT THE S UMS HAD COME TO THE ASSESSEE DURING THE YEAR IN WHICH THE ASSESSEE WANTED TO MAKE THE INVESTMENTS. FURTHER THE ALLEGED GIFTS WERE RE GISTERED IN FORM OF GIFT DEEDS WITH THE GOVT. OF MAHARASHTRA IN MID APR IL, 2007 WHILE THE ACTUAL TRANSACTIONS OF SUM OF MONEY BETWEEN THE PAR TIES TOOK PLACE DURING 20 TH -23 RD SEPT05, WHICH APPEARS AS AN AFTER THOUGHT BY BOTH THE PARTIES. THE AO, THEREFORE, HELD THAT THE ALLEG ED GIFTS DO NOT APPEAR VALID AND IT REPRESENTS A MAKE BELIEVE ARRAN GEMENT TO BUILD UP CAPITAL ON PART OF THE ASSESSEE WHICH HAVE BEEN CON VENIENTLY MADE IN THE YEAR SHE WANTS TO MAKE INVESTMENTS. ACCORDINGLY , THE AO TREATED THE SAID SUM OF RS. 7,50,000/- RECEIVED FROM THE SA ID PERSONS AS INCOME FROM OTHER SOURCES OF THE ASSESSEE AS PER SECTION 56(2)(V) OF THE ACT. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). THE CIT(A) CONFIRMED THE ACTION OF THE AO. STILL AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4. THE LEARNED COUNSEL FOR THE ASESSSEE SUBMITTED T HAT DR. NAUSHAD HUSSAIN AND HIS WIFE DR. RESHMA HUSSAIN GAV E THE GIFT TO THE ASSESSEE ON THE EXPLICIT INSTRUCTION OF THEIR M OTHER, HAFIZA ITA NO. 3011/M/2010 KHURSHEED BANO ANSARI 3 BEGUM, WHO HAPPENS TO BE THE AUNT OF THE ASSESSEE. SIMILARLY, DR. SHAKEEL AHMED GAVE THE MONEY TO THE ASSESSEE ON THE EXPLICIT INSTRUCTION OF HIS FATHER, MR. LIYAKAT HAMEED, WHO HAPPENS TO BE THE BROTHER OF THE ASSESSEE. 5. THE LEARNED DR, ON THE OTHER HAND, STRONGLY RELI ED UPON THE ORDERS OF THE REVENUE AUTHORITIES. 6. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND PERUSED THE RECORD AS WELL AS GONE THROUGH THE ORDE RS OF THE AUTHORITIES BELOW. THE ISSUE INVOLVED IN THIS APPEA L IS WHETHER THE AMOUNTS RECEIVED BY THE ASSESSEE AS GIFTS FROM HER RELATIVES ARE COVERED U/S 56(2)(V) OR NOT. THE PROVISIONS OF SECT ION 56(2)(V) READ AS UNDER: 56(2) ( V ): WHERE ANY SUM OF MONEY EXCEEDING TWENTY-FIVE THO USAND RUPEES IS RECEIVED WITHOUT CONSIDERATION BY AN INDI VIDUAL OR A HINDU UNDIVIDED FAMILY FROM ANY PERSON ON OR AFTER THE 1S T DAY OF SEPTEMBER, 2004 71 [BUT BEFORE THE 1ST DAY OF APRIL, 2006], THE WHOLE OF SUCH SUM : PROVIDED THAT THIS CLAUSE SHALL NOT APPLY TO ANY SUM OF MON EY RECEIVED ( A ) FROM ANY RELATIVE; OR ( B ) ON THE OCCASION OF THE MARRIAGE OF THE INDIVIDUAL ; OR ( C ) UNDER A WILL OR BY WAY OF INHERITANCE; OR ( D ) IN CONTEMPLATION OF DEATH OF THE PAYER; OR 72 [( E ) FROM ANY LOCAL AUTHORITY AS DEFINED IN THE EXPLANATION TO CLAUSE ( 20 ) OF SECTION 10 ; OR ( F ) FROM ANY FUND OR FOUNDATION OR UNIVERSITY OR OTHE R EDUCATIONAL INSTITUTION OR HOSPITAL OR OTHER MEDICAL INSTITUTIO N OR ANY TRUST OR INSTITUTION REFERRED TO IN CLAUSE ( 23C ) OF SECTION 10 ; OR ( G ) FROM ANY TRUST OR INSTITUTION REGISTERED UNDER SE CTION 12AA .] EXPLANATION. FOR THE PURPOSES OF THIS CLAUSE, RELATIVE MEANS ( I ) SPOUSE OF THE INDIVIDUAL; ( II ) BROTHER OR SISTER OF THE INDIVIDUAL; ( III ) BROTHER OR SISTER OF THE SPOUSE OF THE INDIVIDUAL ; ( IV ) BROTHER OR SISTER OF EITHER OF THE PARENTS OF THE INDIVIDUAL; ( V ) ANY LINEAL ASCENDANT OR DESCENDANT OF THE INDIVID UAL; ITA NO. 3011/M/2010 KHURSHEED BANO ANSARI 4 ( VI ) ANY LINEAL ASCENDANT OR DESCENDANT OF THE SPOUSE OF THE INDIVIDUAL; ( VII ) SPOUSE OF THE PERSON REFERRED TO IN CLAUSES ( II ) TO ( VI );] 7. ON PERUSAL OF THE SAID SECTION, WE FIND THAT TH E SAID PARTIES ARE NOT COVERED UNDER THIS SECTION. AS REGARDS THE ARG UMENT ADVANCED BY THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE GIFTS WER E RECEIVED ON THE EXPLICIT INSTRUCTION OF THEIR MOTHER, HAFIZA BEGUM, AUNT OF THE ASSESSEE AND SIMILARLY, DR. SHAKEEL AHMED GAVE THE MONEY TO THE ASSESSEE ON THE EXPLICIT INSTRUCTION OF HIS FATHER, MR. LIYAKAT HAM EED, BROTHER OF THE ASSESSEE, NO MATERIAL/EVIDENCE BROUGHT ON RECORD TO ESTABLISH THAT THE SAID PERSONS WERE DIRECTED TO GIVE THE GIFT ON BEHALF OF THEM. WHILE CONFIRMING THE ADDITION, THE CATEGORICAL FINDING OF THE CIT(A) IS THAT IT IS VERY APPARENT FROM THE ASSESSMENT ORDER THAT THE AO HIMSELF ACCEPTED THE GIFTS TO BE GENUINE. THIS PRECISELY IS THE REASON WHY AN ADDITION OF ONLY RS. 7,50,000/- HAS BEEN MADE THOUG H THE AMOUNT OF GIFT RECEIVED FROM THE SIX DONORS IS RS. 18,85,000/ -. THE AO IS BOUND WITH THE PROVISIONS OF SECTION 56(2)(V) WHICH CLEAR LY PRESCRIBED THAT THE SUM EXCEEDING RS. 25,000/- RECEIVED WITHOUT CONSIDE RATION FROM ANY PERSON HAS TO BE BROUGHT TO TAX. THE CIT(A) FURTHER HELD AS UNDER:- IT IS ALSO A FACT THAT IF THE SAME MONEY HAD BEEN TRANSFERRED BY THE COUSINS TO THEIR RESPECTIVE PARENTS ACCOUNT AN D THEN THE MONEY GIVEN TO THE APPELLANT FROM SUCH SPECIFIED RE LATIVES, IT WOULD HAVE PASSED OFF THE TEST OF DEFINITION OF RE LATIVE PRESCRIBED BELOW THE EXPLANATION 56(2) OF THE ACT. BUT THE PROVISIONS OF THE SAID SECTION ARE NOT ELASTIC ENOU GH TO ACCEPT THE TRANSACTION IN QUESTION AS GIFT FROM SPECIFIED RELA TIVES. IF THE LAW HAD INTENDED TO INCLUDE THE COUSINS AS RELATIVES FO R THIS PURPOSE, IT WOULD HAVE FOUND A SPECIFIC MENTION IN THE SAID EXPLANATION. IN THE ABSENCE OF SUCH INCLUSION, THE PERSUASION OR IN STRUCTION OF THE PARENTS OF ADULT COUSINS CANNOT PARTAKE THE CHARACT ER OF GIFT FROM THE SPECIFIED RELATIVES. UNDER THESE CIRCUMSTANCES, THOUGH THE GIFT MAY BE WELL INTENTIONED AND VERY GENUINE AND F ROM IDENTIFIED SOURCES IT CANNOT BE TREATED AS SUM TO BE EXCLUDED FROM THE OPERATION OF SECTION 56(1) OF ACT. 8. IN VIEW OF THE SPECIFIC FINDINGS GIVEN BY THE C IT(A) WHILE UPHOLDING THE ADDITION MADE BY THE AO, WE FIND NO INFIRMITY I N THE ORDER OF THE CIT(A) ITA NO. 3011/M/2010 KHURSHEED BANO ANSARI 5 AND THE SAME IS HEREBY CONFIRMED. THUS, THE GROUNDS RAISED BY THE ASSESSEE ARE DISMISSED. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. PRONOUNCED IN THE OPEN COURT ON THIS 13 TH DAY OF JANUARY, 2012. (P.M. JAGTAP) (V. DURGA RAO) ACCOUNTANT MEMBER JUDI CIAL MEMBER MUMBAI, DATED: 13 TH JANUARY, 2012 KV COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) CONCERNED. 4) THE CIT CONCERNED. 5) THE DEPARTMENTAL REPRESENTATIVE, G BENCH, I.T .A.T., MUMBAI. BY ORDER //TRUE COPY// ASST. REGISTRAR, I.T.A.T., MUMBAI.