ACIT, New Delhi V. Smt. Shashi Puri, New Delhi

ITA 3379/DEL/2011

• Counselvise Citation: 337920114 RSA 2011
• Duration Of Justice: 3 year(s) 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 30-10-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 29-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMESH CHANDRA
• Assessee Lawyers: V K AGGARWAL
• Keywords: Gift; Business income; Income from undisclosed sources; Charitable institution; Source of fund; Additional evidence; Question of law; Difference of opinion; Corroborative evidences; Assessment record
• Section: 44AD; 143(3); 142(1); 153A; 260A; 147; 68; 263; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A.NO. 3378/DEL/2011 (ASSESSMENT YEAR 2007-08) ACIT, CC-13, VS. SMT SHASHI PURI, NEW DELHI A-1/36, PANCHSHEEL ENCLAVE, NEW DELHI. I.T.A.NO. 3379/DEL/2011 (ASSESSMENT YEAR 2007-08) ACIT, CC-13, VS. SMT. SHASHI PURI, NEW DELHI L/H OF LATE SH. VINAY PURI, A-1/36, PANCHSHEEL ENCLAVE, NEW DELHI PAN: AFWPP8805K DEPARTMENT BY: SH. RAMESH CHANDRA, CIT DR, ASSESSEE BY: SH. V.K. AGGARWAL, ADV. DATE OF HEARING : 17.12.2014 DATE OF ORDER : ORDER PER T.S. KAPOOR, AM: THESE ARE TWO APPEALS FILED BY REVENUE AGAINST SEP ARATE ORDERS OF LD. CIT(A) BOTH DATED 06.04.2011. I.T.A. NO. 23273 /DEL/2011 IS FILED BY REVENUE AGAINST SMT. SHASHI PURI WHEREAS I.T.A. NO. 3379/DEL/2011 IS AGAINST SMT. SHASHI PURI AS LEGAL HEIR OF HER DE CEASED HUSBAND SHRI VIKRANT PURI. THE COMMON ISSUE INVOLVED IN THE PRE SENT APPEALS IS THAT ASSESSEE AND HER HUSBAND HAD RECEIVED CERTAIN GIFTS FROM THEIR SON MR. MOHIT PURI WHO HAD SENT THESE GIFTS FROM DUBAI. TH E A.O. MADE ADDITIONS HOLDING THAT GENUINENESS AND CREDITWORTHI NESS OF GIFTS WAS NOT PROVED WHEREAS LD. CIT(A) ALLOWED RELIEF TO THE ASS ESSEE AND DURING ITA NO.3378 , 3379/DEL/2011 2 APPELLATE PROCEEDINGS ALSO, ACCEPTED ADDITIONAL EVI DENCE. THE HUSBAND OF ASSESSEE IN THE MEANWHILE HAD EXPIRED, THEREFORE , BOTH OF ASSESSMENT STAGE AND AT APPELLATE STAGE THE ASSESSEE WAS MADE A PARTY AS LEGAL HEIR OF HER DECEASED HUSBAND. IN VIEW OF THE ABOVE IN BOTH APPEALS ASSESSEE IS A RESPONDENT ONE IN HER INDIVIDUAL CAPACITY AND OTHER AS A LEGAL HEIR. BOTH THESE APPEALS WERE HEARD TOGETHER AND, THEREFORE, A COMMON AND CONSOLIDATED ORDER IS BEING PASSED. THERE ARE TWO COMMON GROUNDS OF APPEAL; GROUND NO.1 RELATES TO MERITS OF THE CASE A ND GROUND NO.2 RELATES TO VIOLATION OF PROVISIONS OF RULE 46A. VIDE INTER IM TRIBUNAL ORDER DATED 28.11.2014 GROUND NO.2 OF APPEAL HAS ALREADY BEEN D ISPOSED OFF WHICH RELATES TO VIOLATION OF RULE 46A. THE SAID GROUND OF APPEAL HAS BEEN DECIDED AGAINST REVENUE AND THE APPEAL ON MERITS WA S FINALLY HEARD ON 17.12.2014. 2. AT THE OUTSET, LD. D.R. SUBMITTED THAT IN THE IN TERIM ORDER PASSED ON 28.11.2014, THE HONBLE TRIBUNAL HAS IGNORED THE SUBMISSIONS FILED BY REVENUE AND IN THIS RESPECT, HE FILED A SINGLE PAGE NOTE ON THE ARGUMENTS MADE ORIGINALLY. IN THE NOTE, LD. D.R. SUBMITTED T HAT AS PER HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF MANISH BUI LDWELL PVT. LT., LD. CIT(A) WAS REQUIRED TO AFFORD TWO OPPORTUNITIES TO THE A.O. I.E. ONE AT THE TIME OF ACCEPTANCE OF ADDITIONAL EVIDENCE BY IN VITING HIS OBJECTIONS FOR ACCEPTING THE ADDITIONAL EVIDENCE AND THE SECON D, AFTER CIT(A) ADMITS THE SAME FOR HIS COMMENTS ON MERITS OF SUCH ADDITIO NAL EVIDENCE. IT WAS FURTHER SUBMITTED THAT CASE LAWS RELIED BY ITAT IN THE CASE OF DDIT VS HUMAN CARE CHARITABLE TRUST, WAS NOT APPLICABLE AS IT WAS GIVEN PRIOR TO THE JUDGEMENT OF HON'BLE JURISDICTIONAL HIGH COURT AND HENCE, WAS TO BE IGNORED. THEREFORE, IN VIEW OF THE ABOVE, LD. D.R. MADE A REQUEST TO TAKE INTO ACCOUNT THESE FACTS WHILE PASSING FINAL ORDER. IT WAS ALSO SUBMITTED THAT PASSING OF SUCH FINAL ORDER WILL NOT AMOUNT TO REVIEW OF EARLIER ORDER. ITA NO.3378 , 3379/DEL/2011 3 3. LD. D.R. ARGUING UPON THE MERITS OF THE CASE RAI SED MANY OBJECTIONS REGARDING GENUINENESS OF THE GIFTS AND C REDITWORTHINESS OF DONOR. THE CRUX OF ARGUMENTS ADVANCED BY LD. D.R. ARE SUMMARIZED AS UNDER: IT WAS SUBMITTED THAT IDENTITY, GENUINENESS AND CREDITWORTHINESS OF DONOR WAS NOT PROVED AND FURTHER SUBMITTED THAT MISCHIEF ON THE PART OF DONOR CAN BE JUDGED FROM THE FACT THAT HE WAS LI VING IN DELHI AND HAD FILED RETURNS IN KOLKATTA. RELIANCE IN THIS RESPEC T WAS PLACED ON THE FOLLOWING CASE LAWS: `I) 264 ITR 434 IN THE CASE OF SAJAN DASS & SONS VS CIT II) 208 ITR 465 IN THE CASE OF CIT VS PRECISION FIN ANCE (P) LTD III) 290 ITR 306 IN THE CASE OF JASPAL SINGH VS CIT IV) 108 ITD 560 IN THE CASE OF ACIT VS RAJEEV TANDO N 3.1 IT WAS FURTHER SUBMITTED THAT THERE WAS NO OCCA SION TO MAKE GIFTS THEREFORE, THE GENUINENESS OF GIFTS WAS NOT PROVED. RELIANCE IN THIS RESPECT WAS PLACED ON THE FOLLOWING CASE LAWS: I) RAJEEV TANDON 294 ITR 488 (DEL.) II) CHAINSUKH RATHI AVS CIT 270 ITR 368 (RAJ.) III) LAL CHAND KALRA 22 CTR 125 (PUNJAB & HARYANA) 4. IT WAS SUBMITTED THAT MERE RECEIPT OF AMOUNT BY CHEQUES WAS NOT SUFFICIENT TO ESTABLISH GENUINENESS OF GIFT. IT WA S SUBMITTED THAT THE GIFTS WERE MADE IN THE FORM OF CHEQUES OF RS.5 LACS EACH AND THE CHEQUE NUMBERS ISSUED BY THE DONOR WERE IN CONTINUITY INST EAD OF ISSUING A CONSOLIDATED CEHQUE AND DONOR HAD ISSUED CHEQUES FO R AN AMOUNT OF RS.5 LACS EACH PROBABLY TO AVOID SCRUTINY OF OFFICIALS B Y AVOIDING ISSUE OF A CONSOLIDATED CHEQUE OF TOTAL AMOUNT. THE BEHAVIOR OF DONOR IN ISSUING CHEQUES OF RS.5 LACS EACH ESTABLISHES THAT SOMETHIN G WAS WRONG. IT WAS SUBMITTED THAT HON'BLE DELHI HIGH COURT IN ITS JUDG EMENT IN THE CASE OF ITA NO.3378 , 3379/DEL/2011 4 INTERNATIONAL TAXATION VS ALCATEL USA INC. THE HON 'BLE COURT HAS QUOTED IN ESTHUSI ASWATHAH VS CIT 66 ITR 478 (S.C.) AND HAS SAID THAT IN INCOME TAX PROCEEDINGS, CONCLUSIVE PROOF WAS NOT REQUIRED AND TRIBUNAL MAY ACT UPON PROBABILITIES OR PRESUMPTIONS AND THEREFORE, IT WAS SUBMITTED THAT ON THE FACE OF IT AMOUNTS SENT BY MR . MOHIT PURI WAS NOT A GIFT AS THE GENUINENESS WAS NOT ESTABLISHED AS THER E WERE MANY INCONSISTENCIES IN THE DOCUMENTS IN SUPPORT OF GIFT S. LD. D.R. TOOK US TO PAGE 1 OF THE PAPER BOOK AND SUBMITTED THAT IT WAS UNDATED AND THERE WAS NO MENTION THAT THE SAME WAS FILED BEFORE THE A.O. AND THE COPY WAS NOT A TRUE COPY. AS REGARDS PAPER BOOK PAGE 2 AND 3 WH ICH WAS A COPY OF MEMORANDUM OF GIFT, LD. D.R. ARGUED THAT IT WAS NOT RELIABLE AS THE SIGNATURES OF DONOR MOHIT PURI WAS AT A VARIANCE WI TH THE SIGNATURES ON THE PASSPORT OF DONOR WHICH WAS PLACED AT PAPER BOO K PAGE 37. IT WAS FURTHER SUBMITTED THAT IT APPEARS THAT DEED WAS SIG NED BY SOME OTHER PERSON OTHER THAN DONOR AS IMPRESSION OF SIGNATURE OF LEFT HAND SIDE WAS NOT MATCHING WITH THE SIGNATURES IN THE COPY AVAILA BLE ON RECORD OF A.O. REFERRING TO PAGE 5 OF THE PAPER BOOK, LD. D.R. SUB MITTED THAT DATE MENTIONED AS 08.12.2009 IS NOT THERE IN THE COPY AV AILABLE IN THE RECORD. SIMILARLY PAGE 14 WAS REFERRED AND IT WAS SUBMITTED THAT THE DOCUMENT DOES NOT SEEM TO BE TRUE COPY OF AS IN THE COPY AVA ILABLE IN THE ASSESSMENT RECORD THERE ARE SIGNATURES WHEREAS SIGN ATURES ARE NOT THERE IN THE COPY AVAILABLE IN THE PAPER BOOK. SIMILARLY, P APER BOOK PAGES 6 TO 23, WERE REFERRED AND IT WAS SUBMITTED THAT SIGNATU RES ON EMPLOYMENT AGREEMENT WERE ALSO VARYING WITH THE SIGNATURES AS FOUND IN THE PASSPORT A COPY OF WHICH WAS PLACED AT PAPER BOOK 37. SIMIL ARLY, IT WAS SUBMITTED THAT PAPER BOOK PAGES 31-36 SHOWING COPY OF CORPORA TE AGREEMENT WITH SMART IMPRESSION NEED TO BE REJECTED AS SIGNATURES OF MOHIT PURI ON THIS DOCUMENT ARE AT VARIANCE WITH SIGNATURES ON THE PAS SPORT. REGARDING PAPER BOOK PAGES 26-28 IT WAS SUBMITTED THAT THESE NEED TO BE IGNORED AS ITA NO.3378 , 3379/DEL/2011 5 THESE RELATE TO MR. VIKRANT PURI AND NOT TO ASSESSE E. FURTHER ARGUING LD. D.R. SUBMITTED THAT IN FACT THE GIFTS WERE RECEIVED BY ASSESSEE WHO HAD ADVANCED AMOUNTS TO MR. VIKRANT PURI ANOTHER SON OF MRS. SHASHI PURI WHO WAS ENGAGED IN THE HAWALA RACKET. LD. D.R. SUB MITTED THAT IN FACT MR. VIKRANT PURI MUST HAVE FIRST TRANSFERRED HIS IL L GOTTEN MONEY ABROAD AND THEN THROUGH CHAIN OF TRANSACTIONS HAD RECEIVED BACK THE SAME FROM DUBAI IN THE FORM OF GIFT BY HIS BROTHER TO MOTHER AND THEN TO HIMSELF AS LOANS. IT WAS SUBMITTED THAT ALL THESE CIRCUMSTANC ES POINT OUT THAT THE GIFTS WERE NOT GENUINE. FURTHER ARGUING LD. D.R. S UBMITTED THAT GIFT DEEDS WERE NEITHER REGISTERED NOR WITNESSED. IT WA S ALSO SUBMITTED THAT CREDITWORTHINESS OF DONOR WAS ALSO NOT PROVED AS HE HAD JUST GONE TO DUBAI AND HAS CLAIMED TO HAVE EARNED A HUGE AMOUNT FOR WHICH THERE WAS NO PROPER EVIDENCE. IT WAS SUBMITTED THAT IN THE C OPY OF EMPLOYMENT AGREEMENT OF MR. MOHIT PURI DONOR, THERE ARE MANY M ISTAKES WHICH HAVE ALREADY BEEN POINTED OUT INCLUDING MISMATCHING OF S IGNATURES OF MOHIT PURI ON THE EMPLOYMENT AGREEMENT AND THEREFORE, THE SAME CANNOT BE RELIED UPON. THEREFORE, CREDITWORTHINESS CANNOT BE ACCEPTED ON THE BASIS OF SUCH DOCUMENTS. THEREFORE, IT WAS SUBMITTED THA T CONSIDERING THE PECULIAR CIRCUMSTANCES OF THE CASE, IT WOULD BE LOG ICAL FOR THE TRIBUNAL TO INFER THAT THE IMPUGNED AMOUNT DOES NOT REPRESENT G ENUINE GIFTS. RELIANCE IN THIS RESPECT WAS PLACED ON THE CASE LAW OF SIMATI DAYAL 214 ITR 801 FOR THE PROPOSITION THAT TO DECIDE A MATTER SURROUNDING CIRCUMSTANCES AND HUMAN PROBABILITIES SHOULD BE KEP T IN MIND. IT WAS SUBMITTED THAT THE CASE LAW RELIED BY LD. CIT(A) OF SURESH KAKKAR, IS NOT APPLICABLE AS IN THAT CASE, HON HIGH COURT HAD DIS MISSED THE APPEAL OF REVENUE HOLDING THAT NO QUESTION OF LAW ARISE AND S UCH DECISIONS CANNOT HAVE PRECEDENTIAL VALUE AS HELD BY HON'BLE SUPREME COURT IN THE CASE OF STATE OF PUNJAB VS SURINDER KUMAR 194 ITR 434. ITA NO.3378 , 3379/DEL/2011 6 4.1 AS REGARDS RELIANCE OF LD. CIT(A) ON THE CASE L AW OF SURESH KUMAR KAKKAR, LD. D.R. ARGUED THAT RELIANCE HAS BEE N WRONGLY PLACED AS THE APPEAL OF REVENUE WAS DISMISSED AS HONBLE COUR T HAD HELD THAT NO SUBSTANTIAL QUESTION OF LAW ARISES AND THEREFORE, I T HAD NO PRECEDENTIAL VALUE AS HELD BY HON'BLE SUPREME COURT IN THE CASE OF STATE OF PUNJAB VS SURINDER KUMAR 194 ITR 434. 5. AS REGARDS THE ISSUE OF VIOLATION OF RUE 46A, LD . D.R. BASICALLY RELIED UPON THE JUDGEMENT OF HON'BLE DELHI HIGH COU RT IN THE CASE OF MANISH BUILDWEELL PVT. LTD. 204 TAXMAN 106 AND ARGU ED THAT AS PER THIS STATEMENT WHICH WAS SQUARELY APPLICABLE ON THE ASSE SSEE, LD. CIT(A) WAS REQUIRED TO GIVE TWO OPPORTUNITIES TO THE A.O. WHIC H WAS NOT GIVEN IN THE PRESENT CASE AND, THEREFORE, THE CASE NEEDS TO BE R EADJUDICATED BY LD. CIT(A) WHO SHOULD READJUDICATE AFTER AFFORDING REAS ONABLE OPPORTUNITY TO THE A.O. IT WAS FURTHER ARGUED THAT ONCE REMAND HA D BEEN MADE, LD. CIT(A) HAD NO CHOICE BUT TO DECIDE THE APPEAL ON RE CEIPT OF REMAND REPORT ONLY BUT IN THE PRESENT CASE, LD. CIT(A) HAD PASSED ORDER WITHOUT WAITING FOR REMAND REPORT. 6. ON THE OTHER HAND, LD. A.R. FILED SYNOPSIS OF HI S SUBMISSIONS AND ARGUED AFTER READING FROM THE SYNOPSIS. LD. A.R. S UBMITTED THAT GROUND NO.2 HAS ALREADY BEEN DECIDED AND IT CANNOT BE REGA RDED AS INTERIM ORDER AS REGARDS GROUND NO.2 AS GROUND NO.2 HAS BEEN DECI DED AND SINCE ONE GROUND OUT OF TWO WAS DECIDED AND THAT IS WHY IT WA S TERMED AS INTERIM ORDER BUT AS FAR AS GROUND NO.2 IS CONCERNED IT HAS FINALLY BEEN DECIDED AND ANY CHANGE ON THIS GROUND WILL AMOUNT TO REVIEW OF ITS OWN JUDGEMENT WHICH IS NOT PERMISSIBLE. LD. A.R. HOWEV ER, REITERATED HIS SUBMISSIONS FOR GROUND NO.2. REGARDING MERITS THE CRUX OF ARGUMENTS OF LD. A.R. AS EXTRACTED FROM HIS WRITTEN SUBMISSIO NS DATED 17.12.2014 WHICH CAN BE SUMMARIZED AS UNDER: ITA NO.3378 , 3379/DEL/2011 7 I) THE GENUINENESS OF GIFT WAS ESTABLISHED BY THE F ACT THAT SHRI MOHIT PURI HAS CONFIRMED THE FACTS OF GIFT IN HIS STATEME NT RECORDED U/S 132(4) OF THE ACT. AS REGARDS IDENTITY OF THE DONOR, IT WAS ESTABLISHED FROM THE ADDRESS ON PASSPORT AND PAN. THE LD. A.R. SUBMITTE D THAT DONOR HAD COME TO INDIA ON VACATION OTHERWISE HE WAS A RESIDE NT OF DUBAI. IT WAS SUBMITTED THAT MEMORANDUM OF GIFT WAS FILED BEFORE A.O. WHICH CLEARLY STATED THAT THE GIFTS WERE RECEIVED THROUGH PROPER BANKING CHANNEL AND THEREFORE, THE GENUINENESS OF GIFT WAS FULLY ESTABL ISHED. AS REGARDS CREDITWORTHINESS, THE SAME WAS PROVED FROM THE COPY OF EMPLOYMENT AGREEMENT WITH FRIENDS GENERAL TRADING DUBAI INDICA TING PAYMENT TO DONOR OF 40,000 DH PER MONTH EQUIVALENT TO RS.4,96, 400/- PER MONTH AND BESIDES ABOVE SALARY, DONOR WAS PAID COMMISSION AMO UNTING TO RS.54,54,545 DH EQUIVALENT TO RS.6,76,90,903/- IN 9 MONTHS FROM APRIL 2006 TO DEC. 2006. THEREFORE, THE TOTAL FUNDS AVAI LABLE WERE RS.7,21,58,503/-. IT WAS SUBMITTED THAT BESIDES A BOVE SOURCES, ASSESSEE HAD RECEIVED 26,89,550 DH EQUIVALENT TO RS.3,33,77, 316/- FROM A REAL ESTATE BROKERAGE, THEREFORE, TOTAL FUNDS AVAILABLE WITH THE DONOR WERE RS.10,55,35,819/-. IN VIEW OF ABOVE FACTS, IT WAS SUBMITTED THAT ASSESSEE CANNOT BE ASKED TO EXPLAIN SOURCE OF THE SOURCE AND RELIANCE WAS PLACED ON THE FOLLOWING JUDGEMENTS: I) CIT VS DIAMOND PRODUCTS LTD. 21 DTR (DEL.) 9 II) MOONGIPA INVESTMENTS LTD. VS ITO 70 DTR (DEL.) (TRIB.)132 III) JAIKISHAN DADLANI VS ITO 4 SOT 138 (MUM.) IV) TOLARAM DAGA VS CIT 59 ITR 632 (ASSAM) 7. AS REGARDS THE ARGUMENTS OF LD. D.R. THAT THERE WAS NO OCCASION TO MAKE GIFT, LD. A.R. SUBMITTED THAT GIFTS WERE MADE OUT OF NATURAL LOVE AND AFFECTION FOR THE PARENTS AND IT WAS JUDICIALLY SETTLED THAT NO OCCASION ITA NO.3378 , 3379/DEL/2011 8 WAS REQUIRED FOR MAKING GIFT OUT OF LOVE AND AFFECT ION. IN THIS RESPECT, RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS: I) CIT VS SURESSH KUMAR KAKAR, 2010-TIOL-294-HON'BL E HIGH COURT-DEL-IT. II) CIT VS MS. MAYAWATI (2011) 338 ITR 563 (DEL.). 8. AS REGARDS THE ARGUMENTS OF LD. D.R. THAT MR. VI KRANT PURI WAS A HAWALA OPERATOR, LD. A.R. SUBMITTED THAT THE OBSERV ATION OF A.O. WAS PURELY BASED ON SURMISES AND CONJECTURES WITHOUT AN Y MATERIAL ON RECORD AND IT WAS FURTHER SUBMITTED THAT MR. VIKRANT PURI WAS NEITHER THE DONOR NOR DONE THEREFORE, NO REFERENCE COULD BE MADE TO H IM. IT WAS SUBMITTED THAT GENUINENESS, IDENTITY AND CREDITWORTHINESS OF DONOR WAS ALREADY ESTABLISHED AND USE OF OWN MONEY BY DONOR IN HER OW N RIGHT CANNOT BE QUESTIONED TO DECIDE GENUINENESS OF GIFT. IT WAS S UBMITTED THAT THE A.O. HAD NOT FOUND ANY FAULT WITH THE DOCUMENTS FILED BY APPELLANT WHICH INCLUDES EMPLOYMENT AGREEMENT WITH FRIENDS GENERAL TRADING, DUBAI AND HE HAD NOT BROUGHT ANY MATERIAL ON RECORD TO PR OVE THAT GIFT WAS BOGUS AND HAS NOT POINTED OUT ANY EVIDENCE TO INDIC ATE THAT IT WAS APPELLANTS MONEY WHICH HAS BEEN ROOTED AS GIFT. R ELIANCE IN THIS RESPECT WAS PLACED ON THE FOLLOWING CASE LAWS: I) ACIT VS UJJAGAR SINGH OBEROI 121 TTJ 228 II) CIT VS PADAM SINGH CHOUHAN 315 ITR 433 (RAJ.) III) ACIT VS MANOJ KUMAR SEKHRI 86 TTJ 510 (ASR.) 9. LD. A.R. FURTHER SUBMITTED THAT ARGUMENT OF LD. D.R. THAT ASSESSEE HAD ROOTED ITS OWN MONEY, IS NOT SUBSTANTIATED BY A NY MATERIAL AND ONUS IS ON THE REVENUE TO ESTABLISH THE SAME. IN THE AB SENCE OF ESTABLISHMENT OF ANY ONUS, THE ARGUMENT OF A.O. AND LD. D.R. CANN OT STAND ON ITS FEET. RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS: ITA NO.3378 , 3379/DEL/2011 9 I) ITO VS SMT. BIBI RANI BANSAL 133 TTJ 394 II) ARAVALI TRADING CO. VS ITO 220 CTR 622 III) ORIENT TRADING CO. LTD. VS CIT 49 ITR 723. 10. LD. A.R. FURTHER SUBMITTED THAT THE A.O. HAS RE LIED UPON VARIOUS CASE LAWS WITHOUT SUMMARIZING AS TO HOW THEY ARE AP PLICABLE TO THE PRESENT CASE. IT WAS SUBMITTED THAT IN THE CASE OF SHYAM SUNDER GUPTA VS ITO 51 TTJ 436 RELIED UPON BY A.O., THE ASSESSEE COULD NOT GIVE ADDRESS OF THE DONOR. SIMILARLY, IN THE CASE OF LA L CHAND KALRA VS CIT 22 CTR 135 ADDITION WAS CONFIRMED BECAUSE IT WAS HE LD THAT DONORS WERE NOT MEN OF MEANS AND ONE OF THEM WAS A STRANGER. S IMILARLY, IN THE CASE OF CIT VS PRECISION FINANCE PVT. LTD. 208 ITR 465 E VEN THE IDENTITY OF CREDITOR WAS NOT ESTABLISHED AND IN THE CASE OF SAJ AN DAS & SONS VS CIT 264 ITR 435 THE DONOR HAD DENIED OF HAVING MADE ANY GIFT. WHEREAS, IN THE CASE OF APPELLANT THESE FACTS DO NOT EXIST BECA USE DONOR IS THE SON OF ASSESSEE AND HAD SUFFICIENT FUNDS TO GIFT TO HIS PA RENTS. THE A.O. HAD ALSO RECORDED THE STATEMENT OF DONOR WHEREIN HE HAS CONF IRMED HAVING MADE GIFT TO HIS PARENTS. IT WAS SUBMITTED THAT LD. D.R . RAISED FRESH ISSUE WHICH DOES NOT EMANATES FROM THE ASSESSMENT ORDER. IT WA S SUBMITTED THAT LD. D.R. HAS NO JURISDICTION TO GO BEYOND THE ORDER PAS SED BY A.O. AND RELIANCE IN THIS RESPECT WAS PLACED ON THE FOLLOWIN G CASE LAWS: I) MAHINDRA & MAHINDRA LTD. VS DCIT 122 TTJ 577 11. IT WAS SUBMITTED THAT IF THE LD. D.R. IS ALLOWE D TO TAKE UP A NEW CONTENTION DE-HORSE THE VIEW TAKEN BY A.O., IT WOUL D AMOUNT TO DR OF STEPPING INTO THE SHOWS OF CIT TO EXERCISE JURISDIC TION U/S 263 THEREFORE, DR SHOULD NOT BE PERMITTED TO TRANSGRESS THE BOUNDA RIES OF HIS ARGUMENTS. RELIANCE WAS PLACED ON THE CASE LAW OF KEWAL PRO EX PORTS VS ACIT 109 TTJ 869. WITHOUT PREJUDICE TO THE ABOVE ARGUMENTS, LD. A.R. SUBMITTED ITA NO.3378 , 3379/DEL/2011 10 THAT RELIANCE PLACED BY LD. D.R. ON THE CASE LAW OF SUMATI DAYAL 214 ITR 801, AND DURGA DAS 82 ITR 540 TO EMPHASIZE THAT HUM AN PROBABILITIES SHOULD BE CONSIDERED, LD. A.R. SUBMITTED THAT THER E WAS NO IMPROBABILITY IN SON GIVING GIFT TO PARENTS OUT OF NATURAL LOVE A ND AFFECTION. THEREFORE GIVING GIFT BY SON TO PARENTS IS WITHIN THE FOUR WA LLS OF HUMAN PROBABILITIES. AS REGARDS ARGUMENT OF LD. D.R. THA T THERE MUST BE SOME OCCASION TO MAKE GIFT, HE HAD RELIED ON THE FOLLOWI NG CASE LAWS: I) RAJEEV TANDON 294 ITR 488 II) CHAINSUKH RATHI VS CIT 270 ITR 368 AND III) LAL CHAND KALRA, 22 CTR 135 12. LD. A.R. SUBMITTED THAT IN THE CASES OF RAJIV TANDON, AND CHAINSUKH RATHI, THE GIFT WAS NOT BETWEEN MOTHER AN D SON AND IN THE CASE OF LAL CHAND KALRA, GIFT WAS FROM BROTHERS WIFE OF THE DONE. IT WAS SUBMITTED THAT ALL THE FACTORS ARE ABSENT IN THE CA SE OF ASSESSEE WHICH IS SQUARELY COVERED BY THE CASE LAW OF CIT VS SURESH K AKKAR WHEREIN IT HAS BEEN HELD THAT IN THE CASE OF GIFT FROM MOTHER THER E IS NO OCCASION REQUIRED FOR MAKING GIFT OUT OF NATURAL LOVE AND AF FECTION AND WHICH IMPLIES THAT NO OCCASION IS REQUIRED FOR MAKING GIF TS BY A SON TO HIS PARENTS. AS REGARDS THE ARGUMENTS OF LD. D.R. THAT GIFT DEED WAS NOT REGISTERED AND WAS NOT WITNESSED, LD. A.R. SUBMITTE D THAT THE GIFT WAS OF A MOVABLE PROPERTY AND DELIVERY OF PROPERTY WAS SUF FICIENT EVIDENCE TO PROVE EXISTENCE OF GIFT AND MOREOVER, THE DONOR HAD CONFIRMED THE FACTUM OF GIFT IN HIS STATEMENT RECORDED U/S 132(4) OF THE ACT. AS REGARDS THE DIFFERENCE IN SIGNATURES ON PASSPORT AND MEMO OF GI FT, LD. A.R. SUBMITTED THAT PASSPORT WAS MADE IN 1994 WHEREAS GIFT WAS MAD E IN 2007 AND THE DIFFERENCE IS BECAUSE OF FACT THAT DONOR HAD CHANGE D HIS SIGNATURES BETWEEN THE INTERVENING PERIOD. AS REGARDS THE ARG UMENT OF LD. D.R. THAT DONOR HAD FILED RETURN OF INCOME FROM CALCUTTA WHER EAS HE WAS LIVING IN ITA NO.3378 , 3379/DEL/2011 11 DELHI, HE SUBMITTED THAT AT PAGE 1 OF ASSESSMENT OR DER ITSELF IT WAS WRITTEN THAT CASE OF ASSESSEE WAS TRANSFERRED FROM CALCUTTA TO DELHI AND EARLIER HE WAS RESIDING IN CALCUTTA AND SUBSEQUENTL Y, HE SHIFTED TO DELHI. AS REGARDS ARGUMENT OF LD. D.R. THAT AMOUNTS HAD BE EN TRANSFERRED TO ANOTHER SON, LD. A.R. SUBMITTED THAT USE OF AMOUNT BY DONOR IN HER OWN RIGHT CANNOT BE QUESTIONED FOR EXAMINING GENUINENE SS OF GIFT. RELIANCE IN THIS RESPECT WAS PLACED ON THE CASE LAW OF PADAM SINGH CHAUHAN 314 ITDR 433. AS REGARDS RELIANCE PLACED BY LD. D.R. O N THE CASE LAW OF STATE OF PUNJAB VS SURINDER KUMAR, 194 ITR 434 (S.C .), IT WAS ARGUED THAT RELIANCE WAS TOTALLY MISPLACED BECAUSE THE CAS E WAS NOT UNDER I. T. ACT, 1961 AND SECONDLY THE CASE LAW WAS A WRIT MAT TER WHEREAS CASE OF S K KAKKAR WAS A MATTER OF APPEAL U/S 260A. 13. AFTER CONCLUSION OF ARGUMENTS BY LD. A.R., LD. D.R. REQUESTED THAT HE BE PERMITTED TO FILE WRITTEN SUBMISSIONS RE LATING TO BOTH THE GROUNDS OF APPEAL TO WHICH LD. A.R. OBJECTED AND SU BMITTED THAT IF LD. D.R. IS PERMITTED NOW TO FILE WRITTEN SUBMISSIONS, THEN HE SHOULD ALSO BE PROVIDED AN OPPORTUNITY TO FILE WRITTEN REPLY TO SU CH SUBMISSIONS. LD. D.R. HAD NO OBJECTION TO THE REQUEST OF LD. A.R., T HEREFORE, BOTH THE PARTIES WERE PERMITTED TO FILE WRITTEN SUBMISSIONS. LD. D.R. FILED WRITTEN SUBMISSIONS ON 12 TH JAN., 2015 AND LD. A.R. FILED HIS REPLY TO THE SAM E ON 15 TH JAN., 2015. FOR COMPLETENESS OF THIS ORDER, WE DE EM IT APPROPRIATE TO REPRODUCE WRITTEN ARGUMENTS OF LD. D.R. AS WELL AS LD. A.R. A. WRITTEN ARGUMENTS OF LD. D.R. ARE PRODUCED AS U NDER: 02. ISSUE OF RULE 46A 2.1.1 IN SO FAR AS THE ISSUE OF COMPLIANCE OF RULE 46A IS CONCERNED IT IS SEEN THAT THE TRIBUNAL HAS DEALT WITH THIS GROUND B Y WAY OF PASSING AN INTERIM ORDER ON 28-11-2014 DISMISSING THE REVENUE S GROUND. WHEN HEARING TOOK PLACE AFTER THE INTERIM ORDER SHORT SU BMISSIONS WERE FILED ITA NO.3378 , 3379/DEL/2011 12 AS TO WHAT WERE REVENUES ARGUMENTS AND AS TO HOW T HE TRIBUNAL DEALT WITH THEM IN THE INTERIM ORDER AND A PRAYER WAS MAD E TO THE BENCH TO CONSIDER THESE SUBMISSIONS WHILE PASSING THE FINAL ORDER. 2.1.2 A DOUBT WAS RAISED WHETHER RE-VISITING THIS I SSUE WHILE PASSING THE FINAL ORDER WOULD NOT AMOUNT TO RE-VIEW OF THE INTE RIM ORDER. IN THIS CONTEXT, IT IS SUBMITTED THAT ADJUDICATION THE REVE NUES SPECIFIC GROUND ABOUT COMPLIANCE OF RULE 46A FINALLY AT THE TIME OF PASSING OF THE FINAL ORDER WOULD NOT AMOUNT TO REVIEW BY THE TRIBUNAL BECAUSE FIRSTLY THE CONCLUSIONS ARRIVED AT THE INTERIM STAGE ARE ALWAYS TENTATIVE AND NOT FINAL AND THE TRIBUNAL WOULD BE WITHIN ITS POWERS TO VARY OR ALTER INTERIM ORDERS IF SO WARRANTED ON FACTS AND LAW AND IN THIS CONNECTION RELIANCE IS PLACED ON CALCUTTA HIGH COURT JUDGMENT IN SUSANTA K UMAR NAYAK V. UOI (1990) 185 ITR 627 (CAL.) WHICH HAS BEEN RELIED HEA VILY BY THE DELHI BENCH OF THE TRIBUNAL IN ITS ORDER DATED 10 TH APRIL, 2013 IN ITS INTERIM ORDER IN ITA NO.5797/DEL/2012 IN THE CASE OF MOTORO LA SOLUTIONS IND. LTD. V. DCIT. 2.1.3 THAT APART, IT IS PRAYED TO APPRECIATE THAT W HILE PASSING THE INTERIM ORDER FULL EFFECT ( ESPECIALLY THE SECOND STAGE OPPORTUNITY TO THE AO T O COMMENT ON THE RELIABILITY OF THE EVIDENCE BEING IN TRODUCED) OF DELHI HIGH COURT JUDGMENT AND RULE 46A HAS NOT BEEN TAKEN NOTE OF AND HENCE FINALLY ADJUDICATING THE ISSUE IN THE FINAL ORDER I NSTEAD OF BEING REVIEW WOULD JUST BE BRINGING THE ORDER IN CONFORMITY WITH THE BINDING WRITS OF THE JURISDICTIONAL HIGH COURT. KINDLY APPRECIATE T HAT SINCE SECOND STAGE HAS NOT BEEN TAKEN CARE OF BY THE TRIBUNAL IN ITS I NTERIM ORDER IT CAN BE SAID THAT THERE WAS OMISSION IN TRIBUNALS ORDER OR THE PATENT ERRORS CREPT THEREIN FOR WHICH TRIBUNAL IS FULLY EMPOWERED TO RECTIFY AND IN FACT IS DUTY BOUND IN LAW WHILE WORKING WITHIN THE TERRI TORIAL JURISDICTION OF DELHI HIGH COURT. 2.2 AS MENTIONED, MANY OF THE VITAL ARGUMENTS TAKEN BY THE REVENUE DURING THE COURSE OF HEARING IN THE CONTEXT OF RULE 46A WHICH VERY OBVIOUSLY MUST HAVE BEEN TAKEN NOTE OF BY THE HONB LE MEMBERS IN THEIR LOG BOOK HAVE BEEN LEFT TO BE TOUCHED UPON. ITA NO.3378 , 3379/DEL/2011 13 (A) IT WAS SPECIFICALLY ARGUED THAT RULE 46A, AS EX PLAINED BY DELHI HIGH COURT IN ITS JUDGMENT IN THE CASE OF MANISH BUILDWE LL PVT. LTD {204 TAXMAN 106 DEL}, MANDATES THE CIT(A) TO AFFORD AO T WO OPPORTUNITIES I.E. ONE AT THE TIME OF INTRODUCTION OF THE ADDITIO NAL EVIDENCES INVITING HIS OBJECTIONS FOR INTRODUCTION; AND SECOND ABOUT THE R ELIABILITY/GENUINENESS THEREOF AT THE TIME WHEN CIT(A) FINALLY DECIDES TO TAKE THEM ON RECORD. THE FAILURE OF THE CIT(A) IN REFERENCE TO THIS HAS NOT BEEN DEALT WITH BY THE BENCH. (B) ABOUT THE DECISION OF THE ITAT IN THE CASE OF D DIT V HUMAN CARE MEDICAL CHARITABLE TRUST (ITA 2333/DEL/2009) IT WAS POINTED OUT THAT THIS DECISION IS FIRSTLY OF THE TRIBUNAL AND HENCE CANNOT BE GIVEN PREFERENCE OVER THE HIGH COURT ORDER AND SECONDLY I T WAS GIVEN PRIOR TO JUDGMENT OF THE JURISDICTIONAL HIGH COURT ( IN MANI SH BUILDWELL) AND HENCE HAS TO BE IGNORED. UNFORTUNATELY, THE TRIBUN AL HAS NOT DEALT WITH THIS ARGUMENT AT ALL. (C ) THAT APART ATTENTION IS DRAWN TO PAGE 7 (PART OF PARA 7) OF THE INTERIM ORDER WHERE THE TRIBUNAL HAS OBSERVED AS UN DER; .LD. CIT(A) HAS ACCEPTED THE ADDITIONAL EVIDENCES INSPITE OF THE FACT THAT SUFFICIENT OPPORTUNITIES WERE PROVIDE D TO THE ASSESSEE WHEREAS FROM ASSESSMENT ORDER, WE DO NOT FIND ANY S UCH OPPORTUNITIES. THEREFORE, THE GROUND TAKEN BY THE REVENUE IS FACTUALLY IN CORRECT. AS A MATTER OF RECORDS KINDLY APPRECIATE THAT THESE EVIDENCES WERE NOT FILED BEFORE THE AO AND WERE FILED BEFORE THE CIT(A ) FOR THE FIRST TIME HENCE THESE WERE CLEARLY OF THE NATURE OF ADDITIONA L EVIDENCES AND NEEDED TO BE ADMITTED ONLY ENSURING COMPLIANCE OF R ULE 46A. UNFORTUNATELY, THE ARGUMENT OF THE CIT (DR) MADE TO THAT RESPECT HAS NOT BEEN TAKEN NOTE OF. 2.3 FURTHER, IT WAS ARGUED THAT ONCE REMAND HAD B EEN MADE WHICH INDICATE THAT DOCUMENTS AS AVAILABLE WERE NOT SUFFI CIENT ENOUGH TO COME TO ANY JUDICIAL DECISION CIT(A) HAD NO CHOICE BUT T O HOLD ON THE APPEAL DECISION TILL THE RECEIPT OF THE REMAND REPORT. UN FORTUNATELY THIS ARGUMENT HAS SKIPPED THE INDULGENCE OF THE BENCH. ITA NO.3378 , 3379/DEL/2011 14 2.4 FOR THE SAKE OF ENTHUSING CONFIDENCE IN THE LIT IGANT PARTIES IT IS PRAYED TO PUT THESE ARGUMENTS ON RECORD AND DEAL WI TH THEM AT THE TIME OF PASSING THE FINAL ORDER. 2.5 CASE LAWS RELIED BY THE ASSESSEE : WHEN THE APPEALS WERE ARGUED LAST TIME, IT WAS PRAY ED BY THE AR TO CONSIDER CERTAIN DECISIONS RELIED BY HIM DURING THE COURSE OF HEARING EARLIER. IN THIS CONNECTION, IT IS SUBMITTED THAT THE JUDGMENTS OR THE DECISIONS RELIED BY THE AR ARE NOT APPLICABLE SO AS TO BE USED FOR HOLDING THAT COMPLIANCE OF RULE 46A WAS THERE. THESE DECI SIONS ARE DISTINGUISHABLE AS SHOWN BELOW: (A) CIT V. TEXT HUNDRED PVT. LTD. 2011 TIOL 55 HC-IT: THIS CANNOT BE PRESSED INTO SERVICE BECAUSE THERE THE CASE WAS OF INADVERTENT ERROR OR OMISSION ON THE PART OF THE ASSESSEE WHEREAS IN THE CASE IN HAND THERE WAS NO INADVERTENCE AND RATHER IT WAS A CASE WHERE THE ASSESSEE FAILED TO PRODUCE THE EVIDENCE CALLED BY THE ASSESSEE. FURTH ER, THIS JUDGMENT IS PRIOR TO BINDING JUDGMENT OF THE DELHI HIGH COURT I N MANISH BUILD P. LTD WHICH REVENUE IS PRAYING TO PRESS INTO SERVICE. (B) CIT V. MUKTA METAL WORKS (2011) 336 ITR 555(P&H ): FIRSTLY, IT IS OF NON-JURISDICTIONAL HIGH COURT WHEREAS WE HAVE JUDGMENT OF THE JURISDICTIONAL DELHI HIGH COURT IN MANISH BUILD P. LTD AND SECONDLY, THAT JUDGMENT IS ALSO DISTINGUISHABLE IN THE SENSE THAT UNLIKE THERE IN THE CASE IN HAND BY NO WAY EVIDENCES BEING INTRODUCED COULD HAVE BEEN SAID TO BE AUTHENTIC BECAUSE THE LD. CIT(A) FAILED TO AFFORD O PPORTUNITY TO THE AO TO THAT EFFECT AS MANDATED IN RULE 46A AS EXPLAINED BY DELHI HIGH COURT IN MANISH BUILDWELL P. LTD. (C) ACIT V. SHRI MANOJ NARAIN AGGARWAL ITA 5524/DEL/20 12 DT. 30- 01-2014 : THIS CANNOT BE APPLIED IN VIEW OF THE BINDING JUD GMENT OF THE DELHI HIGH COURT IN MANISH BUILDWELL P. LTD WHICH H AS TO BE GIVEN PRIMACY OVER THE TRIBUNALS ABOVE DECISION. FURTHE R, EVEN OTHERWISE, THIS DECISION IS IN NOT APPLICABLE IN AS MUCH AS TH ERE THE CIT(A) HAD GIVEN OPPORTUNITY OF ENQUIRY & INVESTIGATION ALSO W HEREAS IN THE PRESENT ASSESSEES CASE THE CIT(A) HAD NOT GIVEN ANY 2 ND STAGE OPPORTUNITY TO THE AO WHICH HE WAS REQUIRED TO PROVIDE AS EXPLAINED BY DELHI HIGH COURT. (D) ROHTAK CO-OP MILK PRODUCER UNION LTD. 2012-TIOL 425 DEL: THIS DECISION HAS TO BE REJECTED BECAUSE IT IS BASED ON MUKTA METAL WORLKS ITA NO.3378 , 3379/DEL/2011 15 JUDGMENT REFERRED TO EARLIER WHICH HAS BEEN DEMONST RATED TO BE NOT HOLDING THE FIELD FOR THE PURPOSE OF THE DECIDING T HE ISSUE IN HAND. (E) M/S AF FERGUSON ASSOCIATES TS-127 ITAT 2014-MUM: KINDLY APPRECIATE THAT THIS IS THE DECISION OF THE TRIBUNA L THAT TOO OF THE NON- JURISDICTIONAL BENCH OF THE TRIBUNAL. THIS CANNOT BE APPLIED IN VIEW OF BINDING JUDGMENT OF THE DELHI HIGH COURT IN MANISH BUILDWELL P. LTD WHICH HAS TO BE GIVEN PRIMACY OVER THE TRIBUNALS A BOVE DECISION. FURTHER IN VIEW OF THE FACTS NARRATED BY THE AO IN THE ASSESSMENT ORDER EVEN OTHERWISE THE ADDITIONAL EVIDENCES ADMITTED BY THE CIT(A) CANNOT BE SAID TO BE RELIABLE AND CLINCHING ONES. 03. ISSUE OF GIFT: 3.1 BEFORE PROCEEDING FURTHER IT IS CONSIDERED NECE SSARY TO BRING TO THE NOTICE OF THE HON'BLE TRIBUNAL THAT THE PAPER BOOK AS FILED CONTAINING 44 PAGES IN ITA N0.3378 NEEDS TO BE REJECTED FOR FOLLO WING REASONS; PAGE REASONS FOR REJECTION/DISCREPANCIES I UNDATED & NO EVIDENCE OF IT HAVING BEEN FILED. NOT A TRUE COPY. 2-3 MEMORANDUM OF GIFT [OR 2.05 CRORES - APPEARS TO BE NOT TRUE & RELIABLE BECAUSE THE SIGNATURE OF THE DONOR MOHIT PURI ARE AT VARIANCE FROM HIS SIGNATURE IN PASS PORT (PAGE 37 ). IT APPEARS THAT THIS DEED IS SIGNED BY SOME PERSON OTH ER THAN THE DONOR. EVEN OTHERWISE IT DOES NOT APPEAR TO BE TRU E COPY BECAUSE IMPRESS IONS OF SIGNATURES ON THE LEFT HAN D SIDE ARE NOT THERE IN THE COPY AVAILABLE ON RECORD OF THE A.O. A S PRODUCED BEFORE THE BENCH ALSO DURING HEARING. 5 IS NOT THE TRUE COPY IN AS MUCH AS THE DATE 08-1 2-09 IS NOT THERE IN THE COPY A AVAILABLE ON ASSESSMENT RECORDS. 14 IS NOT THE TRUE COPY IN AS MUCH AS THE WHILE HE RE THERE ARE NO SIGNATURES WHEREAS IN THE COPY AS AVAILABLE IN ASSE SSMENT RECORDS SIGNATURES ARE THERE. 1-9 EMPLOYMENT AGREEMENT (WITH FRIEND'S GENERAL TR ADING FZCO SEEMS TO BE CONCOCTED ONE & NOT RELIABLE AS THE SIG NATURES ON THIS ITA NO.3378 , 3379/DEL/2011 16 OF MOHIT PURI ARE AT VARIANCE FROM THE SIGNATURES A S FOUND IN THE PASS PORT (PAPER BOOK PAGE NO.37). 31-36 CO-OPERATION AGREEMENT WITH SMART INSPECTIO N INDUSTRIAL EQUIPMENT LLC SEEMS TO BE CONCOCTED ONE & NOT RELIABLE AS THE SIGNATURES ON THIS OF MOHIT PURI AR E AT VARIANCE FROM THE SIGNATURES AS FOUND IN THE PASS PORT (PAPE R BOOK PAGE NO.37 & 36) 26-28 TO BE REJECTED AS THESE ARE THE DOCUMENTS OF VIKRANT PURI AND NOT OF THE ASSESSEE. 3.2 AT THE OUTSET IT IS MENTIONED THAT NOT ONLY THI S YEAR, EVEN IN OTHER YEARS STRANGELY THE ASSESSEE HAS RECEIVED GIFTS THA T TOO FROM ABROAD. READY REFERENCE CAN BE MADE OF AY 04-05 WHEREIN THE ASSESSEE RECEIVED HUGE GIFT OF RS.10.72 LACS FROM ONE DIKSHANT SUKHIJ A (A BRITISHER) AND IN THIS YEAR INCLUDING THIS AMOUNT OTHER MEMBERS OF TH E FAMILY RECEIVED A TOTAL GIFT OF ABOUT 57 LACS. KINDLY APPRECIATE THAT RECEIPT OF HUGE GIFTS BY THE ASSESSEE AND HER FAMILY WAS UNNATURAL. THE AO ADDED GIFT RECEIVED BY THE ASSESSEE OF 10.72 LACS WHICH HAS BEEN CONFIR MED BY THE CIT(A). IF RECEIPT OF THE GIFT AMOUNT IN THIS YEAR IS KEPT IN VIEW WE CAN APPRECIATE THAT THE RECEIPT OF REPEATED GIFTS FROM ABROAD WAS PROBABLY NOT GENUINE. BESIDES THIS, IT WOULD BE RELEVANT TO TAKE NOTE OF THE FOLLOWING IMPORTANT ASPECTS AS EMANATING FROM THE ASSESSMENT ORDER (FOR CONVENIENCE SAKE AY 07-08 RECORDS ARE REFERRED TO) (A) IT MAY KINDLY BE NOTED THAT IN THE CASE OF AS SESSEE GROUP SEARCH TOOK PLACE ON 28-02-2007 AND BY THE TIME OF SEARCH HUGE SUMS HAD BEEN RECEIVED FROM ABROAD STARTING FROM JUNE/JULY, 2006 ONWARDS AND BECAUSE OF THE SEARCH ACTION THE DONOR AS WELL AS THE DONEE REALIZED THAT THEIR CASES WOULD ANY WAY BE ASSESSED U/S 153A OR 153C OR 143(3) AND ON SCRUTINY THEY WOULD BE QUESTIONED ABOUT THE AMOUNTS RECEIVED AND ON THEIR FAILING TO FILE ACCEPTABLE EXPLANATION IN EVE RY LIKELIHOOD THOSE SUMS WOULD BE TAXED. HENCE, TO DODGE THE REVENUE, ALL T HESE PARTIES CAMOUFLAGED THESE TRANSACTIONS AS GIFTS AND IN THAT PROCESS THEY CREATED GIFT DEEDS DATED 31-03-2007. THUS, DRAWING OF GIFT DEED SUBSEQUENT TO RECEIPT OF GIFTS GOES TO SHOW THAT THE AMOUNTS WERE NOT RECEIVED AS GIFTS AND ONLY AS AN AFTER THOUGHT TO HIDE THE TRUE NATUR E OF THE TRANSACTIONS, ITA NO.3378 , 3379/DEL/2011 17 THESE HAVE BEEN TERMED AS GIFTS. THIS ALONE GOES T O SHOW THAT THE AMOUNTS WERE NOT RECEIVED AS GIFTS. (B) STATEMENT OF MOHIT PURI RECORDED WHERE HE ACCEP TED TO HAVE GIVEN GIFTS IS ALSO NOT OF MUCH RELEVANCE AND THI S IS ALSO THE RESULT OF AFTERTHOUGHT. THEIR ATTEMPT TO HIDE THE TRUE NATUR E OF TRANSACTION WOULD ALSO BECOME CLEAR FROM THE FACT THAT DESPITE THAT T HE DONOR AND DONEE ARE RESIDENTS OF DELHI THEY WERE FILING RETURNS AT KOLK ATA KNOWING VERY WELL THAT THEIR CORRECT JURISDICTION WAS AT DELHI. (C) EVEN THE EMPLOYMENT AGREEMENT OF MOHIT PURI IS ALSO THE RESULT OF AFTERTHOUGHT. KINDLY APPRECIATE THAT EMP LOYMENT AGREEMENT WITH FRIENDS GENERAL IS DATED 25-04-2006 (WHICH FAL LS IN THE AY RELEVANT TO THE DATES OF GIFTS) WHICH HAS BEEN DONE TO COVER THE DATE OF REMITTANCES TO INDIA IN THE BANK ACCOUNTS OF PARENTS WHICH WERE LATER ON TERMED AS GIFTS. ABSENCE OF AGREEMENTS FOR EARLIER PERIOD OR ABSENCE OF BANK ACCOUNTS OF THE DONOR ALSO INDICATE THEIR ATTEMPT T O SUPPRESS THE TRUE NATURE OF TRANSACTIONS. IS IT NOT UNNATURAL THAT T HE SON WOULD GIFT HIS ENTIRE INCOME TO THE PARENTS THAT TOO WITHOUT THEIR BEING ANY OCCASION. (D) AFTER THOUGHT WOULD ALSO BECOME CLEAR FROM THE IMPORTANT FACT THAT (I) IN THE RETURN FILED THERE WAS NO DISCLOSURE OF RECEIPT OF ANY GIFT AND ONLY DURING THE COURSE OF SEARCH THE FACTUM OF RECEIPT OF GIFT CAME TO THE KNOWLEDGE OF REVENUE. (II) IN THE RETURN THE ASSESSEE HAS ADMITTED TO BE INVOLVED IN DOING SOME BUSINESS FOR WHICH INCOME IS FILED U/S 44AD. ITA NO.3378 , 3379/DEL/2011 18 (III) AO HAD ISSUED THE ASSESSEE NOTICE U/S 143(2) WHICH WAS NOT COMPLIED. (IV) ON 22-04-2009 ASSESSEE WAS ISSUED DETAILED QUE STIONNAIRE SOLICITING INFORMATION ON 20 POINTS RELEVANT TO ASS ESSMENT BUT THIS WAS NOT COMPLIED WITH. (V) ON 24-09-2009 ONE MORE NOTICE U/S 143(2) WAS I SSUED TO ATTEND ON 13-10-2009 WHICH WAS COMPLIED ONLY IN PART. IN REG ARD TO THIS IT IMPORTANT TO NOTE THE FOLLOWING; (A) VIDE POINT NO.11 (OF COMPLIANCE LETTER DATED 13 -10-2009) ASSESSEE SAID IN THE ABSENCE OF BUSINESS ACTIVITY, NO DEBTORS/CREDITORS WERE OUTSTANDING AS ON BALANCE SH EET. WHICH IS ABSOLUTELY FALSE & CONTRARY TO RETURN FILED WHEREIN ADMITTING BUSINESS INCOME U/S 44AD IS FOUND SHOWN. (B) APART FROM RECEIVING GIFT FROM SON VIKRANT PURI STRANGELY THE ASSESSEE HAS SHOWN TO HAVE GIVEN HIM (VIKRANT) GIFT OF 3.50 LACS. (VI) ABOUT THE RECEIPT OF GIFT OF 2.05 CRORES FROM HER SON MOHIT PURI, IT IS TO BE NOTED THAT; (A) ALL THE GIFTS HAVE BEEN RECEIVED BY CHEQUE ISSU ED IN SERIATUM {(A) BY 21 CHEQUES 650018 TO 650038-ICICI BANK, MUM BAI EACH OF 5 LACS ON 05-12-2006 & (B) BY 20 CHEQUES 018303 TO 018308 & 108312 TO 018314 & 010712 TO 010721-CATHOLIC SYRIYAN BANK, NEW DELHI EACH OF 5 LACS ON 06-02-2007} AS IF THE BANK ACCOUNTS WERE BEING MAINTAINED ONLY FOR GIVING GIFTS. ITA NO.3378 , 3379/DEL/2011 19 (B) GIFT DEED IS UNSIGNED, UNREGISTERED, UNWITNESSE D, NOT EVEN NOTORIZED & PLACE OF EXECUTION OF DEED IS ALSO ABSE NT. (VII) ABOUT THE RECEIPT BY SHRI VINAY PURI OF RS.3 .45 CRORES FROM MOHIT PURI, SON WHOM SMT. SHASHI PURI IS REPRESENTING AS LEGAL HEIR, THERE IS NEITHER PAPER BOOK FROM ASSESSEES SIDE NOR ANY DOC UMENTS FILED EVEN DURING THE COURSE OF HEARING & HENCE IT IS NOT POSS IBLE TO COMMENT AS TO ABOUT THE COMPLIANCE OF RULE 46A & HENCE THIS BEING THE MAJOR ISSUE IT IS PRAYED THAT THIS APPEAL BE DELINKED FOR WHICH REQUE ST WAS MADE EARLIER ALSO WHEN THE CASE WAS TAKEN UP FOR HEARING. (VIII) FROM THE ASSESSMENT ORDER IT WOULD BE NOTICE D THAT (A) MOHIT PURI, THE DONOR BECAME NON-RESIDENT ONLY IN AY 06-07 AND THE DONEE , THE ASSESSEE FAILED TO PROVE THE CA PACITY OF EARNING INCOME BY HIM IN DUBAI TO MAKE SUCH HUGE GIFTS. (B) IN ACTION U/S 132 THE DOCUMENT FOUND (INCOME CO MPUTATION SHEET ) SHOWED NEGLIGIBLE INCOME OF MOHIT PURI. ST RANGELY THE DONOR FIRST BECAME THE DONEE (GIFTS RECEIVED FROM INTERNA TIONAL WORLD) AND THEN BECAME DONOR AND APPLIED THE GIFT MONEY IN GIVING G IFTS TO MOTHER & FATHER. (C) GIFTS RECEIVED BY SHASHI PURI & VINAY PURI ARE FOUND TO HAVE BEEN GIVEN TO VIKRANT PURI ANOTHER SON AGAINST WHOM ALLEGATION OF BEING INVOLVED IN HAWALA RACKET WAS THERE. THUS, C LEARLY THE CIRCUMSTANTIAL EVIDENCES AS REFERRED TO WOULD SHOW THAT HAWALA EARNED INCOME OF VIKRANT PURI HAS BEEN LAUNDERED FIRST AS GIFTS TO DONORS AND THEN TO DONEE (SHASHI PURI & VINAY PURI) AND THEN F INALLY RESTS WITH HIM AS LOANS ETC FOR BEING USED IN PURCHASING PROPE RTIES. (D) DISCUSSION MADE IN PARA 3 OF THE ASSESSMENT ORDER S HOWS THAT VIKRANT PURI WHO WAS LAUNDERING THE MONEY WAS INVOL VED IN HAWALA OPERATIONS AND WAS ASSISTING SANJEEV NANDA (SON OF SURESH NANDA AGAINST WHOM ALLEGATION OF ILLEGAL INCOME ON ARMS D EALS WAS THERE) OTHERWISE WHERE WAS THE NEED OF HIS GOING TO MUMBAI OR REPRESENTING SANJEEV NANDA BEFORE BIPIN SHAH & ANAND SHUKLA OTHE R ASSOCIATES OF SURESH NANDA & SANJEEV NANDA. ITA NO.3378 , 3379/DEL/2011 20 (E) HUMBLE ATTENTION IS DRAWN TO DELHI HIGH COURT J UDGMENT DATED 07-11-2013 IN DIT-I, INTERNATIONAL TAXATION V. ALCA TEL LUCENT USA, INC (COPIES ALREADY PLACED ON RECORDS DURING HEARING) W HERE THE COURT QUOTED IN EXTENSO ESTHURI ASWATHIAH V. CIT 66 ITR 478 SC AND VIEWED THAT IN INCOME TAX PROCEEDINGS CONCLUSIVE PROOF IS NOT PREDICATED AND THE TRIBUNAL MAY ACT UPON PROBABILITIES AND PRESUMPTION S. CONSIDERING THE PECULIAR CIRCUMSTANCES OF THE CASE NARRATED ABOVE, IT WOULD BE BUT LOGICAL FOR THE TRIBUNAL (LIKE THE AO DID), TO INFE R THAT THE IMPUGNED AMOUNTS DO NOT REPRESENT GENUINE GIFTS. 3.3 ON THE BASIS OF DISCUSSION AND EVIDENCES AO CONCLUD ED THAT (I) MOHIT PURI DOES NOT HAVE ABILITY/CAPACITY TO MA KE DONATIONS; (II) IN THE GARB OF GIFTS UNACCOUNTED INCOME HAS BE EN INTRODUCED; (III) THERE IS NO SPECIFIC REASON/OCCASION TO RECEI VE SUCH GIFTS; (IV) VIKRANT PURI IS A HAWALA OPERATOR. WHILE MAKING ADDITION THE AO INTER ALIA RELIED UPON 5 DECISIONS OF THE TRIBUNAL/HIGH COURT INCLUDING OF THE JURISDICTIONAL DELHI HIGH COURT. 3.4 BEFORE DISCUSSING AS TO WHAT SPECIFICALLY WAS H ELD BY THE CIT(A) IT WOULD NOT BE OUT OF PLACE TO MENTION THAT UNDER THE INCOME TAX ACT THE CIT(A) HAS BEEN CONFERRED PLENARY POWERS MEANING TH EREBY THAT WHILE ADJUDICATING APPEALS HE IS DUTY BOUND TO TAKE CARE OF THE SHORT-COMINGS CREPT ON THE PART OF THE AO BECAUSE TIME LIMITATION IS NOT THERE ON CIT(A) AND WHEN IT IS SO IT IS NATURAL TO INFER QUA THE IN TERESTS OF REVENUE THAT BECAUSE OF THE PAUCITY OF TIME FULL CONSIDERATION W OULD NOT HAVE BEEN THERE ON THE AOS PART. IN THIS CONTEXT READY REFE RENCE IS DRAWN TO K. MOHAMMED V. ITO 107 ITR 808 KER WHERE IT WAS HELD T HAT THE CIT(A) IS NOT ONLY EMPOWERED BUT IS ALSO OBLIGED TO ALLOW A F URTHER ENQUIRY SO AS TO FIND OUT THE TRUE STATE OF AFFAIRS . WHILE SUBMITTING THAT THE CIT(A) FORGOT HIS ROLE, IT IS SEEN THAT HE HAS DELETED THE ADDITION FOR THE FOLLOWING REASONS; (A) HE ADMITTED (PARA 2 OF ORDER) ADDITIONAL EVIDEN CES WITH THE REASONS THAT ITA NO.3378 , 3379/DEL/2011 21 (I) AO DID NOT FILE REMAND REPORT ON THE ADDITIONAL EVIDENCES; (II) AO FRAMED ORDER AFTER A LAPSE OF 23 DAYS OF TH E LAST HEARING; AND RELIED ON ITAT JAIPUR BENCH DECISION IN ELECTRA (JAIPUR) P. LTD. 23 ITD 236 WHICH HELD THAT WHERE THE EVIDENCE IS GENUI NE, RELIABLE, PROVES THE CASE OF THE ASSESSEE ADDITIONAL EVIDENCE NEED T O BE ADMITTED. (B) HE IN PARA 2 CONSIDERED AOS ORDER, AR SUBMISSI ONS, REMAND REPORT & ARS REJOINDER TO AOS REMAND REPORT. (C) HE VIEWED THE GIFT DEED FILED BEFORE THE AO EXP LAINING THE GIFT TO BE OUT OF LOVE AND AFFECTION AND PLACING RELIANC E ON DELHI HIGH COURT JUDGMENT IN SURESH KAKARS CASE { 324 ITR 321} HELD THAT THERE NEED NOT BE ANY OCCASION FOR GIFT TO BE OUT OF NATURAL LOVE AND AFFECTION. (D) QUA THE GENUINENESS CIT(A) SAID THAT (I) AO HAD NOT GIVEN ANY REASONS FOR DOUBTS IN HIS MIND & HELD THAT ADDITION CANNOT BE MADE ON THE BASIS OF DOUBTS AND FOR THAT RELIANCE WAS PLACED ON ITAT, MUMBAI BENCH DECISION IN GURUPR ERNA ENTERPRISES. (II) HE ALSO NOTED THAT THE DONOR IS THE SON OF THE DONEE AND HE HAD ADMITTED FACTUM OF MAKING GIFT IN HIS STATEMENT RECORDED U/S 132(4) AND THAT AO FAILED TO BRING FORTH ANY MATERIAL ON R ECORD TO PROVE THAT THE GIFT IS BOGUS AND THAT HE HAD ALSO FAILED TO FIND F AULT WITH THE ADDITIONAL EVIDENCES FILED BEFORE HIM. (III) HE ALSO HELD IRRELEVANT AOS OBSERVATIONS QUA VIKRANT PURI, HER ANOTHER SON TO BE HAWALA OPERATOR THAT TOO WHEN NO EVIDENCE IS BROUGHT ON RECORD ESPECIALLY WHEN HE (VIKRANT PURI) WAS NOT EVEN THE DONOR/DONE. WITH THIS CIT(A) HELD THE GIFT TO BE GENUINE AND ALSO THAT AO CANNOT INVESTIGATE SOURCE OF THE SOURCE. (E) ON THE BASIS OF CONFIRMATION FROM EMPLOYER (PAG E 5 OF PAPER BOOK FILED BEFORE HIM) HE ALSO HELD THE AO TO HAVE ARRIVED AT HASTY CONCLUSION. HE WITH THAT HAS ADMITTED DOCUMENTS FI LED BY THE ASSESSEE IN APPEAL U/R 46A OF THE ACT. ITA NO.3378 , 3379/DEL/2011 22 (F) ABOUT THE DECISIONS RELIED/REFERRED BY THE AO I N HIS ORDER, THE CIT(A) HELD THEM TO BE DISTINGUISHABLE AND INAPPLIC ABLE BECAUSE; (I) IN SHYAM SUNDER GUPTA {51 TTJ 436 JPR} DONOR F AILED TO GIVE DONORS ADDRESS; (II) IN LAL CHAND KALRA { 22 CTR 135 P&H} DONORS WE RE MEN OF NO MEANS; (III) IN PRECISION FINANCE {208 ITR 465 CAL} EVEN I DENTITY WAS NOT ESTABLISHED; (IV) IN SAJAN DAS & SONS CASE {264 ITR 435 DEL} DON OR HAD DENIED MAKING ANY GIFT. 3.5 WHY ORDER OF THE CIT(A) CANNOT BE SUSTAINED: (I) IN SO FAR AS ADMISSION OF ADDITIONAL EVIDENCES ARE CONCERNED FOR THE REASONS MENTIONED ABOVE, THE DECISION OF THE CI T(A) NEEDS TO BE REVERSED AS IT IS NOT ONLY AGAINST THE REQUIREMENT OF RULE 46A BUT ALSO AGAINST THE JUDGMENT OF THE DELHI HIGH COURT IN MAN ISH BUILDWELL P. LTD.{ 204 TAXMAN 106 DEL}. IN REGARD TO CIT(A) FINDING WHERE HE HELD THE GIFT S TO BE GENUINE IT IS SUBMITTED THAT HE WHILE ADJUDICATING THE APPE AL FAILED TO TAKE NOTE OF THE BINDING JUDGMENTS OF THE SUPREME COURT. AS A M ATTER OF FACT WHEN SEEN DISPASSIONATELY BENCH WOULD NOTICE THAT THE OR DER OF THE CIT(A) IS IN DISREGARD OF THE JUDGMENT OF THE SUPREME COURT IN S UMATI DAYAL V. CIT{ 214 ITR 801 SC} WHERE REFERRING ITS OWN JUDGMENT I N DURGA PRASAD MORE {82 ITR 540 SC} IT WAS LAID DOWN THAT TAXING A UTHORITIES ARE ENTITLED TO LOOK INTO THE SURROUNDING CIRCUMSTANCES TO FIND OUT THE REALITY AND THE MATTER HAS TO BE CONSIDERED BY APPLYING THE TEST OF HUMAN PROBABILITIES . RECEIPT OF REPEATED AMOUNTS BY THE ASSESSEE AS W ELL AS HER HUSBAND FROM THE DONOR (SON) THAT TOO WITHOUT THERE BEING OCCASION; FILING OF RETURN AT KOLKATA DESPITE ACTUALLY BEING RESIDENTS OF DELHI; NON- DISCLOSURE OF GIFT IN THE RETURN; FIRST RECEIVING M ONEY AND THEN DRAWING GIFT DEED ETC. ARE CLEARLY AGAINST THE HUMAN PROBAB ILITIES IN WHICH ANY GENUINE GIFT TRANSACTION IS MADE. IN THE FACTS AND CIRCUMSTANCES NARRATED BY THE AO IT WAS CLEAR THAT THE TRANSACTIONS CAMOUF LAGED AS GIFTS WERE REALLY NOT OF THE NATURE OF GIFT. HAD THE CIT(A) PRESSED ( WHICH HE WAS ITA NO.3378 , 3379/DEL/2011 23 DUTY BOUND TO DO SO) INTO SERVICE THE TEST OF HUMA N PROBABILITIES AS LAID BY THE SUPREME COURT IN ITS ABOVE JUDGMENTS AS ALSO REITERATED BY DELHI HIGH COURT IN ITS RECENT JUDGMENT DATED 07-11-2013 IN ALCATEL LUCENT LTD. SUPRA HE WOULD HAVE VERY EASILY COME TO CONCLU SION THAT THE TRANSACTION WAS CLEARLY NOT OF GENUINE GIFT. (II) IN SO FAR RELIANCE OF THE CIT(A) ON DELHI HIG H COURT JUDGMENT IN SURESH KUMAR KAKAR (324 ITR 321) IS CONCERNED IT IS SUBMITTED THAT THIS DECISION HAS BEEN WRONGLY RELIED UPON BY THE CIT(A) AS THIS IS A JUDGMENT WHEREIN REVENUES APPEAL HAS BEEN DISMISS ED HOLDING THAT NO SUBSTANTIAL QUESTION OF LAW ARISES AND HENCE THIS DID NOT HAVE ANY PRECEDENTIAL VALUE BECAUSE TO CALL ANY JUDGMENT TO BE HAVING ANY PRECEDENTIAL VALUE THERE MUST BE A QUESTION OF LAW AND TO SAY SO READY RELIANCE IS PLACED ON SUPREME COURT JUDGMENTS IN ST ATE OF PUNJAB 194 ITR 434 SC & STATE OF UP V. SYNTHETICS AND CHEMICA LS LTD.{(1991 4 SCC 139 SC}. THAT APART, EVEN OTHERWISE FACT SITUATION IN THAT C ASE WAS DIFFERENT FROM THE CASE IN HAND IN THE SENSE THAT THERE THE G IFT WAS BETWEEN THE PARENTS & THE SON WHICH IS A QUITE NORMAL INCIDENCE ( PARENTS GIVING GIFTS TO THEIR SONS/DAUGHTERS) OF INDIAN LIFE WHEREAS IN THE PRESENT CASE STRANGELY IT IS GIVEN BY THE SON TO THE MOTHER. F URTHER, IN SURESH KUMARS CASE THERE WAS NO DOUBT ABOUT THE CAPACITY OF THE DONOR WHEREAS IN THE PRESENT CASE AO WAS NOT SATISFIED AB OUT THE CAPACITY OF THE DONOR. (III) IN SO FAR AS ATTEMPT OF THE CIT(A) IN REJECT ING THE AOS RELIANCE ON SHYAM SUNDER GUPTA CASE; LAL CHAND KALRA; PRECISIO N FINANCE; AND SAJAN DAS & SONS CASE IS CONCERNED IT IS POINTED OU T INSTEAD OF GOING BY THE SPIRIT OF THE THESE DECISIONS THE CIT(A) HAS DI SCARDED THEM BY JUST HAIR SPLITTING. THAT APART, IT IS SUBMITTED THAT E VEN OTHERWISE THE DECISION OF THE CIT(A) IS CONTRARY TO FOLLOWING JUDGMENTS OF JURISDICTIONAL DELHI HIGH COURT; (A) RAJEEV TANDON V. ACIT { 294 ITR 488 DEL} WHERE TRIBUNALS ACTION IN SUSTAINING ADDITION MADE BY THE AO TAKING INTO ACCOUNT THE SURROUNDING CIRCUMSTANCES WAS ENDORSED. FACT SITUA TION OF THIS CASE FITS INTO THE CASE IN HAND IN AS MUCH AS FOR HOLDING GIF T TO BE NOT GENUINE, THE ITA NO.3378 , 3379/DEL/2011 24 AO HAS MADE A DETAILED DISCUSSION IN THE ORDER TO C OME TO THE CONCLUSION THAT THE TRANSACTION WAS CLEARLY NOT OF A GENUINE GIFT. (B) SAJJAN DASS AND SONS { 264 ITR 435 DEL} WHERE T RIBUNALS ACTIONIN SUSTAINING ADDITION MADE BY THE AO OF GIF T AND HOLDING THAT JUST RECEIPT OF GIFT BY CHEQUE OR MERE IDENTIFICATI ON OF DONOR BY THEMSELVES ARE NOT ENOUGH TO HOLD A TRANSACTION OF GENUINE GIFT-- WAS ENDORSED. LIKE THAT CASE, IN THE PRESENT CASE ALSO THOUGH GIFT IS RECEIVED BY CHEQUE AND DONOR IS IDENTIFIED BUT UNFORTUNATELY CIRCUMSTANCES NARRATED IN THE ORDER WERE CLEARING CASTING DOUBT O N THE CAPACITY OF THE DONOR AND IN TURN ON THE GENUINENESS OF TRANSACTION AS A GIFT. (C) CIT V. ANIL KUMAR { 292 ITR 552 DEL} WHERE ACT ION OF THE AO WAS ULTIMATELY ENDORSED BECAUSE LIKE THE CASE IN HA ND THE DONOEE ASSESSEE HAD FAILED TO PROVE THE CREDITWORTHINESS O F THE DONOR. KINDLY NOTE THAT IN THE CASE IN HAND IN THE ASSESSMENT NO DOCUMENTS WERE FILED PROVING THE CAPACITY OF THE DONOR. ON THE CONTRARY THE CIRCUMSTANCES AS NARRATED BY THE AO WERE CLEARING SHOWING THAT THE D ONOR APPARENTLY DID NOT HAVE ANY GENUINE CAPACITY TO GIVE SUCH HUGE AMO UNTS AS GIFTS THAT TOO TO OWN MOTHER THAT TOO WITHOUT THERE BEING ANY OCCA SION. 3.6 IN SUPPORT OF REVENUES STAND FURTHER RELIANCE IS PLACED ON (D) JASPAL SINGH V. CIT { 290 ITR 306 P&H} WHERE IT WAS HELD THAT IF DONEE FAILS TO PROVE THAT THE DONOR HAD MEANS AN D THAT IT WAS A GENUINE GIFT ADDITION CAN BE MADE. LIKE THAT IN THE CASE I N HAND ALSO IT WOULD BE NOTICED THAT THE DONEE ASSESSEE HAD FAILED TO BRING ON RECORDS BEFORE THE AO SUPPORTING EVIDENCES TO PROVE THE GENUINE CAPACI TY OF THE DONOR CONSIDERING THE REPEATED MAKING OF GIFTS BY THE DON OR ON ABOUT 41 OCCASIONS THAT TOO BY CHEQUES IN SERIATUM. (E) CHAINSUKH RATHI V. CIT { 270 ITR 368 RAJ} WHERE THE FACT SITUATION WAS IDENTICAL (GIFT BETWEEN FATHER & SON) ADDITION WAS SUSTAINED BECAUSE GIFT WAS WITHOUT THERE BEING ANY OCCASION. IN THE CASE IN HAND ALSO GIFTS ARE RECEIVED (REPEATEDLY) FROM THE SON B UT WITHOUT ANY SPECIFIC OCCASION. THUS, GOING BY THIS JUDGMENT, ABSENCE OF OCCASION WAS RIGHTLY CONSIDERED BY THE AO A RELEVANT FACTOR TO TREAT TH E GIFT TO BE NOT A GENUINE TRANSACTION OF GIFT. ITA NO.3378 , 3379/DEL/2011 25 3.7 DURING THE COURSE OF HEARING THE AR ARGUED THAT THE MANNER IN WHICH ARGUMENTS HAVE BEEN MADE AMOUNTS TO MAKING OU T A NEW CASE BY THE DR AT THE APPELLATE STAGE WHICH REVENUE CANNOT DO. IN THIS CONNECTION, IT IS SUBMITTED THAT ATTEMPT ON REVENUE S PART DOES NOT AMOUNT TO MAKING OUT ENTIRELY A NEW CASE DIFFERENT FROM THAT OF THE AO. IT NEEDS TO BE APPRECIATED THAT BEFORE THE AO THE A SSESSEE DID NOT COMPLY WITH MANY OF THE VITAL DETAILS AND THERE WAS FAILUR E ON THE PART OF THE CIT(A) IN MAKING COMPLIANCE OF STATUTORY PROVISIONS (E.G. RULE 46A). KINDLY APPRECIATE THAT WHATEVER ARGUMENTS ARE MADE THEY ARE MADE ON THE BASIS OF THE EVIDENCES FILED BY THE ASSESSEE AN D THE ASSESSMENT ORDER FRAMED BY THE AO. AR MUST APPRECIATE THAT THE TRIB UNAL CANNOT THROW AWAY VITAL ARGUMENTS TOUCHING UPON THE CERTAIN ASPE CTS OF THE CASE WHICH, WHEN TOUCHED UPON, WILL ENSURE SUBSTANTIAL J USTICE AND ON THIS READY REFERENCE IS MADE OF THE SUPREME COURT JUDGME NT IN KILLICK NIXEN & CO., {66 ITR 719 SC} WHERE IT WAS HELD THAT THE TRIBUNAL BEING THE FINAL AUTHORITY ON FACTS IS BOUND TO CONS IDER ALL THE EVIDENCE AND THE ARGUMENTS MADE BY THE PARTIES. . IN VIEW OF THIS IT IS PRAYED THAT HONBLE TRIBUNAL MAY KINDLY DEAL WITH EACH AND EVERY CONTENTION BEING RAISED NOW IN THE S UBMISSIONS AS WELL AS RAISED AT THE TIME OF ORAL ARGUMENTS. 3.8 REBUTTAL TO WRITTEN NOTE FILED BY AR AT THE CON CLUSION OF HEARING: WHILE SUBMITTING THAT ALL THE POINTS RAISED IN THE ABOVE WRITTEN SUBMISSIONS NEED TO BE REJECTED IN VIEW OF THE PRES ENT SUBMISSIONS OF THE REVENUE IT IS FURTHER SUBMITTED THAT; (A) WHEN THE LAW IS THAT ASSESSEE HAS TO ESTABLISH THE CREDITWORTHINESS IT IS BUT NATURAL THAT AO BEFORE G ETTING SATISFIED CAN ENQUIRE INTO THE SOURCE OF THE SOURCE AND THIS IS WHAT HAS BEEN HELD BY THE HIGH COURTS IN VARIOUS CASE LAWS REFERRED BY TH E REVENUE BOTH IN THE ORAL AND WRITTEN ARGUMENTS. (B) IN SO FAR AS THE RELIANCE OF THE ASSESSEE ON DE LHI HIGH COURT JUDGMENT IN THE CASE OF MS. MAYAWATI {338 ITR 563 D EL }IS CONCERNED IT IS SUBMITTED THAT THIS ORDER ALSO DOES NOT CARRY PR ECENDETIAL VALUE BECAUSE THE HIGH COURT INSTEAD OF FRAMING THE QUEST ION OF LAW DISMISSED ITA NO.3378 , 3379/DEL/2011 26 THE REVENUES APPEAL BY SAYING THAT IN ITS OPINION SUBSTANTIAL QUESTION OF LAW DOES NOT ARISE SO AS TO INVOKE THE JURISDICTION OF THE HIGH COURT U/S 260A OF THE ACT. (C) IN SO FAR AS ARGUMENTS QUA VIKRANT PURI ARE CON CERNED THE ASSESSEE DOES NOT APPRECIATE THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE (AS BROUGHT OUT IN THE ASSESSMENT ORDER AS WEL L AS IN THE PRESENT SUBMISSIONS) THE INFERENCES/CONCLUSIONS DRAWN BY TH E REVENUE WERE VERY REASONABLE & LOGICAL. FURTHER, THE DEFENCE THAT MR . BB SHAH HAD GIVEN THE STATEMENT TO SAVE HIS SKIN IS JUST AN IMAGINATI ON; AND WITHOUT APPRECIATING AS TO WHY MR. BB SHAH WHO WAS BASED IN BOMBAY WILL IMPLICATE MR. VIKRANT PURI UNLESS HE WAS REALLY KNO WN OR ASSOCIATED WITH HIM OR WITH MR. SANJEEV NANDA WHO WERE BASICALLY BA SED IN DELHI. (D) ON THE ARGUMENT THAT DR HAS MADE A NEW CASE AS ALREADY POINTED OUT, IT NEEDS TO BE APPRECIATED THAT DR HAS NOT MADE A NEW CASE AT ALL AND HAS JUST INVITED THE ATTENTION OF THE HO NBLE BENCH ABOUT THE CORE ISSUE OF GENUINENESS OF GIFTS IN REGARD TO CE RTAIN CRUCIAL ASPECTS OF THE CASE THAT TOO BASED UPON THE DOCUMENTS FILED BY THE ASSESSEE BEFORE THE TRIBUNAL. BENCH IS PRAYED TO APPRECIATE THAT T O HOODWINK THE AO, THERE WAS VIRTUALLY NO EFFECTIVE COMPLIANCE(AS INDI CATED IN THESE SUBMISSIONS TOO) NOR THE CIT(A) HAD DIRECTED AO TO INVESTIGATE THE MATTER FURTHER BY PASSING SPECIFIC REMAND ORDER AND BECAUSE OF THIS AO DID NOT GET ANY REASONABLE OPPORTUNITY TO HIGHLIGHT VERY CLEARLY CERTAIN CRUCIAL ASPECT OF THE CASE. (E) ON REPLY TO REVENUES RELIANCE ON SUPREME COURT JUDGMENT IN STATE OF PUNJAB V. SURINDER KUMAR {194 ITR 434 } & STATE V.MAHADEV SHETTY {(2003) SC 4172} IT IS POINTED THAT THE ASSE SSEE HAS NOT APPRECIATED THAT A RATIO OF A CASE CANNOT BE DISCAR DED ESPECIALLY WHEN COMING FROM THE SUPREME COURT WITH THE FLIMSY ARGUM ENT THAT THOSE CASES WERE NOT UNDER THE INCOME TAX ACT. THE ASSESSEE SH OULD APPRECIATE THAT WHAT IS BINDING IN A JUDGMENT IS THE RATIO DECIDEN DI AND THAT RATIO CANNOT BE DISCARDED BY JUST SAYING THAT DECISION IN THAT CASE WAS UNDER A DIFFERENT LAW THAT TOO WITHOUT SHOWING AS TO HOW TH OSE DECISIONS CANNOT BE APPLIED UNDER THE INCOME TAX ACT. ITA NO.3378 , 3379/DEL/2011 27 B. THE WRITTEN ARGUMENTS OF LD. A.R. ARE REPRODUCED AS UNDER: 1. (A) BEFORE THE ARGUMENTS OF THE LD. D. R. ARE TAKEN UP, KIND ATTENTION OF THE HON'BLE BENCH IS DRAWN TO THE GROU ND NO. 3 OF THE DEPTT WHICH IS EXTRACTED BELOW:- 'WHETHER THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS. 2,05,00,000/- RECEIVED AS GIFT AS VITAL FACTS HAVE BEEN IGNORED BY THE CIT (A)'. (B) THE ONLY GROUND IS THAT CIT (A) HAS IGNORED THE VITAL FACTS WHILE DELETING THE ADDITION. THE LD. DR HAS NOT POI NTED OUT ANY VITAL FACT WHICH HAS BEEN IGNORED BY THE LD. CIT(A) . A PERUSAL OF THE CIT(A)'S ORDER CLEARLY INDICATES THAT ALL THE F ACTS MENTIONED IN THE ASSESSMENT ORDER HAVE BEEN DULY CONSIDERED. THE REFORE, THE APPEAL OF THE REVENUE CAN BE DISMISSED ON THIS GROU ND ONLY. 2. AS REGARDS RULE 46A (PARA 2 OF DR'S SUBMISSION), INTERIM ORDER IS W.R.T THE APPEAL FILED BY THE REVENUE. IT IS NOT AN INTERIM ORDER ON THE ISSUE U/R 46A, I.E., GROUND NO. 2. THIS GROUND HAS BEEN FINALLY DECIDED AGAINST THE REVENUE VIDE PARA 10 OF THE INT ERIM ORDER DT. 28/1112004. THERE IS NOTHING INTERIM W.R.T. GROUND NO. 2 AS IS CLEAR FROM THE ORDER ITSELF. THEREFORE, THE DECISION REGARDING RULE 46A BEING FI NAL, IN MY HUMBLE OPINION, CANNOT BE REVIEWED NOW AS IT IS A C LOSED MATTER. 3. THE LD. DR HAS MADE A REQUEST FOR REJECTING THE PAPER BOOK (PARA 3.1 OF DR'S SUBMISSION) ON VARIOUS GROUNDS WH ICH ARE BASED ON SURMISES AND CONJECTURES. THE CORRECT FACTS ARE STATED AS UNDER:- I) PAGE 1 OF PAPER BOOK: - THIS IS ALREADY CERTIFI ED AS TRUE COPY. DURING THE COURSE OF HEARING BEFORE THE AO, P APERS ARE FILED ACROSS THE TABLE AND NO ACKNOWLEDGMENT IS TAKEN. MO REOVER, DR HIMSELF CONFIRMED FILING OF THIS SHEET FROM THE ASS ESSMENT RECORDS DURING THE COURSE OF FINAL HEARING ON 17112/2014 BE FORE THE HON'BLE BENCH. ITA NO.3378 , 3379/DEL/2011 28 II) PAGE 2 AND 3 OF PAPER BOOK:- KINDLY SEE PARA 10 (III) & (IV) OF SYNOPSIS OF SUBMISSIONS FILED BY ME ON 17112/2014 D URING THE COURSE OF HEARING BEFORE THE HON'BLE BENCH. AS REGA RDS SOME IMPRESSIONS ON THE LEFT SIDE, IT IS BECAUSE OF SOME ERROR DURING PHOTOCOPY. III) PAGE 5 OF PAPER BOOK: - DURING THE COURSE OF LAST HEARING, THE LD. DR CONFIRMED FROM THE ASST. RECORDS THAT TH IS LETTER WAS FILED ON 08112/2009. IV) PAGE 14 OF PB: - THIS PAGE IS THE TRANSLATION OF THE AGREEMENT AS MENTIONED ON THE TOP AND IS DULY SIGNE D BY THE TRANSLATOR. THE AGREEMENT IS ON PAGE 23 WHERE IT IS DULY SIGNED BY THE EMPLOYER, THE EMPLOYEE, I.E., THE DONOR AND THE WITNESS AS SEEN BY THE LD. DR HIMSELF IN THE ASST. RECORDS. THIS IS JUST MISLEADING THE HON'BLE BENCH BY TWISTING THE FACTS. V) PAGE 1 TO 9 PB: - PAGES ARE WRONGLY MENTIONED. EMPLOYMENT AGREEMENT IS NOT ON PAGE 1 TO 9 BUT ON P AGE 15 TO 25. DIFFERENCE IN SIGNATURE IS ALREADY EXPLAINED IN PAR A 10(IV) OF THE SYNOPSIS OF SUBMISSIONS FILED BY ME D URING THE COURSE OFLAST HEARING. THE LD. DR HAS CONVENIENTLY IGNORED THE SAME. VI) PAGE 31 TO 36 PB: - DIFFERENCE IN SIGNATURE IS ALREADY EXPLAINED IN PARA 10(IV) OF THE SYNOPSIS OF SUBMISS IONS FILED BY ME DURING THE COURSE OF LAST HEARING. VII) PAGE 26 TO 28 PB: - HE HAS NOT READ THE PAPER S. THEY DON'T RELATE TO SHRI VIKRANT PURI BUT TO SHRI MOHIT PURI, THE DONOR. DURING THE SEARCH PROCEEDINGS, THE STATUS OF SHRI M OHIT PURI WAS EXPLAINED TO THE DDI VIDE THIS LETTER. 4. I) THE LD. DR HAS MENTIONED THAT THE EMPLOYMENT AGREEMENT AND THE COOPERATION AGREEMENT SEEM TO BE CONCOCTED ONCE. THE USE OF WORD 'SEEMS' CLEARLY INDICATES THAT HE IS NOT SU RE WHAT HE WANTS TO CONVEY. IT IS ONLY A DOUBT IN HIS MIND ON THE BA SIS OF SURMISES AND CONJECTURES ONLY. NO ADDITION CAN BE BASED ON D OUBTS AS EXPLAINED IN PARA 5(II) OF MY ITA NO.3378 , 3379/DEL/2011 29 SYNOPSIS OF SUBMISSIONS BY RELYING UPON THE DECISIO N OF HON'BLE IT AT MUMBAI IN THE CASE OF GURUPRERNA ENTERPRISES. II) FURTHER THERE IS A LATEST JUDGMENT FROM HON'BLE DELHI HIGH COURT IN THE CASE OF GLOBUS INFOCOM LTD. VS. CIT, ( 2014) 108 DTR (DEL) 363, WHEREIN IT HAS BEEN HELD THAT THE USE OF WORD 'POSSIBLE' MEANS NO FINDING BUT ONLY SURMISES AND CONJECTURES. RELEVANT EXTRACT IF REPRODUCED HEREUNDER:- 'COMMISSIONER, INSTEAD OF COMMENTING UPON OR GIVIN G A FINAL FINDING WHETHER AFORESAID APPORTIONMENT WAS A CCEPTABLE OR NOT, OBSERVED THAT IT WAS POSSIBLE THAT THERE WAS A N ATTEMPT TO INFLATE EXPENSES ON TRADING ACTIVITY AND AN ATTEMPT MIGHT HAVE BEEN MADE TO REDUCE ACTUAL EXPENSES OF THE EXEMPT UNIT-U SE OF WORD 'POSSIBLE' WOULD INDICATE THAT THERE WAS NO FINDING AND ADJUDICATION BY COMMISSIONER AND HIS OBSERVATIONS W ERE BASED ON MERE SUSPICION AND CERTAINLY UNCERTAIN-COMMISSIONER WAS UNSURE WHETHER OR NOT BIFURCATION WAS RIGHT.. .. ' III) IN FACT IT IS REVENUE'S APPEAL AND IT WAS THE DUTY OF THE REVENUE TO FILE THE PAPER BOOK IF IT WAS SERIOUS TO DEFEND THE AO'S ORDER. BUT THE LD. DR DID NOT DO SO AND WANTED THE ASSESSE E'S PAPER BOOK TO BE REJECTED ON FLIMSY GROUNDS AND NON EXISTING F ACTS. 5. IN PARA 3.2 (A), THE LD. DR HAS DISCUSSED A. Y. 2004-05 WHICH IS NOT RELEVANT HERE AND IN FACT THE APPEAL AGAINST TH E ORDER OF LD. CIT (A) IS PENDING BEFORE THE HON'BLE ITAT. IN ALL FAIRNESS, THE LD. DR SHOULD HAVE POINTED OUT THAT THE ASSESSEE DID NO T RECEIVE ANY GIFT DURING A. Y. 2005- 06 AND 2006-07 IN BETWEEN A . Y. 2004-04 AND 2007-08. 6. I) THE LD. DR (PARA 3.2 (B)) HAS STATED THAT GIF T DEED IS AN AFTERTHOUGHT. SEARCH WAS CONDUCTED ON 28/02/2007. G IFTS WERE GIVEN IN DEE, 2006 AND FEB, 2007. DURING THE COURSE OF SEARCH, STATEMENT OF SHRI MOHIT PURI, DONOR, WAS RECORDED W HEREIN HE CLEARLY STATED THAT HE HAS GIVEN THE GIFTS TO HIS P ARENTS. THEREFORE, HOW CAN THE FACTUM OF GIFT CAN BE AN AFTERTHOUGHT B ECAUSE THE SEARCH ACTION WAS SUDDEN ACT AND SHRI MOHIT PURI WA S IN DELHI ON HOLIDAY. IT COULD BE AN AFTERTHOUGHT, IF THE DEPART MENT HAD GIVEN A ITA NO.3378 , 3379/DEL/2011 30 NOTICE OF SEARCH BEFORE THE ACTION TAKEN WHICH IS N EVER THE CASE. THEREFORE, THE CONCEPT OF AFTERTHOUGHT IS ONLY AN I MAGINATION. II) EARLIER, PURIS WERE LIVING IN KOLKATTA AND FILE D THE RETURNS THERE BY STATING THE THEN ADDRESS OF KOLKATTA. THE OBJECT IONS OF LD. DR COULD BE VALID IF THE DEPTT. AT KOLKATTA HAD BEEN D IFFERENT THAN DEPTT. IN DELHI. (PARA 3.2 (B)) III) THE LD. DR SAYS (PARA 3.2 (C)) THAT EMPLOYMENT AGREEMENT DATE OF 25/04/2006 IS FOR EXPLAINING THE GIFTS AS THERE IS NO AGREEMENT PRIOR TO THIS DATE. IT IS A FACT ON RECORD THAT SHR I MOHIT PURI LEFT INDIA FOR EMPLOYMENT IN DUBAI ON 09/04/2006 (PAGE 5 , PB). COPY OF PASSPORT IS IN POSSESSION OF DDI (INV) (PAGE 28, PB). SINCE HE WAS IN INDIA UPTO 08-04-2006, HOW COULD THERE BE AN Y AGREEMENT FOR EMPLOYMENT IN DUBAI PRIOR TO APRIL, 2006. AGREE MENT FOR THIS YEAR WAS FILED AS THE LD. AO HAS ASKED FOR THE CRED ITWORTHINESS OF THE DONOR. IV) THE LD. DR HAS STATED (PARA 3.2 (C)) THAT THE S ON GIVING GIFTS TO PARENTS AND THAT TOO WITHOUT ANY OCCASION IS UNNATU RAL. IN THIS REGARD KINDLY SEE PARA 10(I) AND 5 (III) OF MY SYNO PSIS FILED DURING LAST HEARING. V) THE LD. DR SAYS (PARA 3.2 (D)(I)) THAT GIFT IS N OT DECLARED IN THE RETURN. IN FACT SEARCH WAS CONDUCTED DURING THE F. Y. OF THE GIFTS ITSELF. BY THAT TIME, RETURN HAD NOT BECOME DUE. EV EN THE PREVIOUS YEAR CONCERNING THE GIFT DID NOT END AT THE TIME OF SEARCH. MOREOVER, DURING SEARCH, .FACTUM OF GIFTS WAS CLEAR LY ADMITTED BY THE DONOR. FURTHER, THERE IS NO COLUMN IN THE RETUR N OF INCOME FOR A. Y. 2007-08 TO MENTION THE GIFTS. VI) THE LD. DR SAYS (PARA 3.2 (D) (II), (III) AND ( IV)) THAT THE QUESTIONNAIRE ISSUED BY THE LD. AO WAS NOT COMPLIED WITH. THIS IS AGAINST THE FACTS ON RECORD. THE LD. AO HAS ADMITTE D ON THE FIRST PAGE OF THE ASST. ORDER ITSELF THAT SHRI ADITYA PUR WAR, CA, ATTENDED THE PROCEEDINGS FROM TIME TO TIME, FILED NECESSARY DETAILSL CLARIFICATIONS AND THE CASE WAS DISCUSSED WITH HIM. THEREFORE, IT IS VERY CLEAR THAT ALL THE DETAILS WERE FILED. SINCE T HE AO WAS SATISFIED, HE DID NOT MAKE ANY ADDITION EXCEPT ON G IFT. IT APPEARS ITA NO.3378 , 3379/DEL/2011 31 THAT THE CIT (DR) IS STEPPING INTO THE SHOES OF THE CIT AND IS REVIEWING THE ASST. ORDER U/S 263 WHICH IS NOT WITH IN THE JURISDICTION OF THE DR AS MENTIONED IN PARA 9 OF SY NOPSIS OF SUBMISSIONS FILED DURING LAST HEARING. VII) PARA 3.2 (D)(V): - THE ASSESSEE HAS NOT RECEIV ED ANY GIFT FROM SHRI VIKRANT PURI. ) ONE DONOR IS SHRI MOHIT PURI. 7. PARA 3.2 (D)(VI)(A): - AS REGARDS GIFT OF RS. 2. 05 CRORE, THE BASIC INGREDIENTS HAVE BEEN EXPLAINED IN PARA 3 OF MY SYN OPSIS OF SUBMISSIONS AND THE LD. DR HAS NOT FOUND ANY FAULT ON THE CONTENTS THEREOF. 8. AS REGARDS LATE SHRI VINAY PURI, LD. DR SAYS (PA RA 3.2 (D)(VII) THAT NO PAPER BOOK WAS FILED. HE HAS AGAIN MISREPRE SENT THE FACTS BECAUSE PAPER BOOK WAS DULY RECEIPTED IN HIS OFFICE AS WELL AS IN THE OFFICE OF HON'BLE IT AT ON 26/08/2011. IN FACT THE OFFICE OF ITAT ACCEPTS THE PAPER BOOK ONLY AFTER SEEING THE R ECEIPT OF LD. DR. MOREOVER, EVEN IN THE CASE OF LATE SHRI VINAY P URI, IT IS THE APPEAL OF DEPARTMENT AND THEREFORE, LD. DR SHOULD H AVE FILED THE PAPER BOOK. 9. PARA 3.2 (D) (VIII) (A):- AS REGARDS CAPACITY OF DONOR, KINDLY SEE PARA 3 (E), (F) AND 6 OF MY SYNOPSIS OF SUBMISSIONS FILED DURING THE COURSE OF LAST HEARING. 10. PARA 3.2 (D) (VIII) (B): - DURING SEARCH, COMPU TATION SHEET FOUND WAS FOR A. Y. 2004-05 WHEN HE WAS RESIDENT IN INDIA AND DID NOT HAVE ANY INCOME FROM ABROAD. THIS FACT IS IRREL EVANT AS FAR AS THE GIFT IN QUESTION IS CONCERNED. THE SOURCE OF GI FT HAS ALREADY BEEN EXPLAINED IN PARA 3 (E) OF MY SYNOPSIS OF SUBM ISSIONS FILED DURING THE COURSE OF LAST HEARING. 11. A) THE LD. DR SAYS (PARA 3.2 (D)(VIII)(C THAT SHRI MOIT PURI APPLIED THE GIFT RECEIVED TO GIVE GIFT TO PARE NTS WHICH IS AGAIN AGAINST THE FACTS ON RECORD. GIFT AMOUNT IS OUT OF HIS EARNING IN DUBAI FOR WHICH SUFFICIENT EVIDENCE HAD BEEN FILED BEFORE THE LD. AO HIMSELF (PAGE 5 PB). ITA NO.3378 , 3379/DEL/2011 32 B) THE LD. DR SAYS THAT IT IS VIKRANT PURI'S INCOM E WHICH HAS BEEN GIVEN TO THE DONOR AND THEN TO THE DONE AND UL TIMATELY TO VIKRANT PURI. IT IS ONLY HIS IMAGINATION BECAUSE HE HAS NOT LED ANY EVIDENCE TO PROVE THE SAME. INTERESTINGLY, THE LD. DR ADMITS THAT MONEY DOES 01 BELONG TO SASHI PURI AND VINAY PURI. THEREFORE, BY LD. DR'S OWN ADMISSION, NO ADDITION CAN BE MADE IN THE HANDS OF ASSESSEE. C) LD. DR HAS ALSO REFERRED TO THE USE OF MONEY BY THE DONEE AND ACTIVITIES OF SHRI VIKRANT PURI. IN THIS REGARD, PA RA 5 (IV) OF MY SYNOPSIS OF SUBMISSIONS FILED DURING THE COURSE OF LAST HEARING MAY KINDLY BE SEEN. 12. PARA 3.2 (D)(VIII)(D): - THE LD. DR IS REFERRIN G TO THE VISIT OFSHRI VIKRANT PURI TO MUMBAI FOR REPRESENTING SHRI SANJEEV NANDA. THERE IS NO SUCH MATERIAL ON RECORD AND IS B ASED ONLY ON HIS IMAGINATION. KINDLY ALSO SEE PARA 5 (IV) OF MY SYNOPSIS OF SUBMISSIONS FILED DURING THE COURSE OF LAST HEARING . 13. PARA 3.2 (D)(VIII)(E): - THE LD. DR SAYS THAT P ROBABILITIES AND PRESUMPTIONS SHOULD BE CONSIDERED. SURPRISINGLY WHE N THERE ARE CLEAR EVIDENCES REGARDING IDENTITY, GENUINENESS AND CREDITWORTHINESS WHICH HAVE NOT BEEN DISPUTED BY TH E LD. AO, WHERE IS THE SCOPE FOR PROBABILITIES AND PRESUMPTIO NS. KINDLY SEE PARA 3,4,5 AND 6 OF MY SYNOPSIS OF SUBMISSIONS FILE D DURING THE COURSE OF LAST HEARING. 14. PARA 3.3: - IN THIS REGARD KINDLY SEE PARA 4,5, 6,7 & 8 OF MY SYNOPSIS OF SUBMISSIONS FILED DURING THE COURSE OF LAST HEARING 15. PARA 3.4: - THE LD. DR SAYS THAT CIT (A) IS DUT Y BOUND TO PLUG THE LOOPHOLES IN THE ASST. ORDER BECAUSE AO HAS TIM E LIMITATION FOR COMPLETING THE ASSESSMENT WHILE CIT (A) DOES NOT. I F THIS ARGUMENT IS ACCEPTED, IT WILL MAKE SECTION 153, PROVIDING TI ME LIMIT FOR COMPLETION OF ASSESSMENT, REDUNDANT. THE LD. DR EMP HASIZES THAT CIT (A) MUST STRENGTHEN THE WEAKNESS IN THE ASST. O RDER BY COMPULSORILY CONDUCTING FURTHER INVESTIGATION WHICH WAS NOT DONE BY THE AO. BUT THE IT ACT DOES NOT SAY SO. SECTION 250 LAYS DOWN THE PROCEDURE IN APPEAL BEFORE CIT (A). SECTION 250 (4) CLEARLY ITA NO.3378 , 3379/DEL/2011 33 SAYS THAT CIT (A) 'MAY' MAKE FURTHER ENQUIRY. THE L EGISLATURE IN ITS WISDOM HAS NOT USE THE WORD 'SHALL'. THEREFORE, CIT (A) IS NOT DUTY BOUND TO MAKE FURTHER ENQUIRY. HE CAN MAKE FURTHER ENQUIRY ONLY WHEN HE THINKS IT TO BE NECESSARY. IN FACT CIT (A) GAVE SECOND CHANCE TO THE AO TO VERIFY THE SUBMISSIONS OF THE A SSESSEE VIDE LETTER DATED 04/03/2011. THE LD. AD DID NOT SEND AN Y ADVERSE COMMENT EVEN FOR A MONTH. THEREFORE, AFTER WAITING FOR A MONTH, CIT (A) HAS DECIDED THE APPEAL ON MERITS. MOREOVER, EVEN AFTER APPEAL WAS FILED, THE AO WAS GIVEN THE FIRST CHANCE TO REPRESENT THE CASE BEFORE CIT (A) BUT HE DID NOT ATTEND THE HEARI NG. ALL THESE FACTS CLEARLY LEAD TO THE ONLY LEGAL INFERENCE THAT AO HAD NOTHING TO SAY IN THE MATTER AND AGREES WITH THE ARGUMENTS OF THE ASSESSEE. 16. PARA 3.5 (I): - IN THIS PARA LD. DR REFERS TO T HE JUDGMENT IN THE CASE OF SUMATI DAYAL. IN THIS REGARD, KINDLY SEE PA RA 10(I) OF MY SYNOPSIS OF SUBMISSIONS FILED DURING THE COURSE OF LAST HEARING. 17. PARA 3.5 (II): - IN THIS LD. DR HAS OBJECTED TO THE CASE LAW OF SHRI SURESH KUMAR KAKKAR BY RELYING ON SOME CASE LA WS. IN THIS REGARD, KINDLY SEE PARA 10(VIII) OF MY SYNOPSIS OF SUBMISSIONS FILED DURING THE COURSE OF LAST HEARING. FURTHER, A PERUS AL OF THE DELHI HIGH COURT JUDGMENT IN THE CASE OF SHRI SURESH KUMA R KAKKAR CLEARLY SHOWS THAT THE HON'BLE COURT HAS APPLIED IT S MIND ON MERITS ALSO AS IS CLEAR FROM THE EXTRACT BELOW: - '2. WE HAVE HEARD THE COUNSEL FOR THE PARTIES. AT T HE OUTSET, WE MAY STATE THAT WE HAVE NOT GONE INTO THE ISSUE OF T HE VALIDITY OF THE PROCEEDINGS UNDER S. 147 OF THE SAID ACT IN AS MUCH AS WE FIND THAT THE TRIBUNAL HAS COME TO A CORRECT CONCLUSION ON TH E MERITS OF THE MATTER. ON MERITS, WE FIND THAT THE POINTS IN ISSUE ARE GIFTS TOTALING TO RS. 24.77 LAKHS MADE BY THE MOTHER OF THE ASSESS EE IN FAVOUR OF THE ASSESSEE DURING THE FINANCIAL YEAR 1999-2000. T HE AD REJECTED THE CONTENTION OF THE ASSESSEE THAT THESE WERE GIFT S MADE BY THE MOTHER AND HELD THE SAME TO BE UNACCOUNTED INCOME O F THE ASSESSEE AND MADE AN ADDITION OF RS. 24.77 LAKHS UN DER S. 68 OF THE SAID ACT. THE CIT(A) EXAMINED THE MATTER AND AGREED WITH THE FINDINGS OF THE AD WITH REGARD TO THE GENUINENESS O F THE GIFTS. ACCORDING TO THE CIT(A), THE GIFTS WERE NOT GENUINE . ONE OF THE ITA NO.3378 , 3379/DEL/2011 34 REASONS, AND STRANGELY SO, WAS THAT GIFTS ARE NORMA LLY GIVEN ON THE EVE OF SOME OCCASION AND SINCE THESE GIFTS WERE NOT GIVEN IN RELATION TO ANY OCCASION, THE SAME WERE DOUBTFUL. W E FAIL TO UNDERSTAND THE LOGIC ADOPTED BY THE CIT(A). WE MUST KEEP IN MIND THAT THIS IS A CASE OF GIFTS MADE BY A MOTHER TO A SON. SUCH GIFTS DO NOT REQUIRE ANY OCCASION AND THE MOTHER CAN MAKE A GIFT TO HER SON AT ANY TIME.' 18. PARA 3.5 (III) AND 3.6:- A) THE LD. DR HAS REFE RRED TO CERTAIN CASE LAWS RELIED UPON BY HIM AND AO. IN THIS REGARD , PARA 8 AND 10(II) OF MY SYNOPSIS OF SUBMISSIONS FILED DURING L AST HEARING MAY KINDLY BE SEEN. MOREOVER, IN THE CASE OF SAJJAN DAS & SONS, THE ONLY CLAIM WAS RECEIPT OF GIFT BY CHEQUE AND IN TH E CASE OF SHRI ANIL KUMAR AND SHRI JASPAL SINGH, THE CREDITWORTHIN ESS OF DONOR WAS NOT PROVED WHILE IN THE CASE OF ASSESSEE, HIS S TATEMENT WAS RECORDED CONFIRMING THE GIFT AND SOURCE OF FUNDS WA S FULLY PROVED BEYOND ANY SHADOW OF DOUBT AS EXPLAINED IN PARA 3 ( E) OF MY SYNOPSIS OF SUBMISSIONS. THEREFORE, NONE OF THE CAS E LAWS REFERRED TO BY THE AD 1 LD. DR IS APPLICABLE TO THE PRESENT CASE. B) IN FACT, THERE IS NO RELEVANCE OF INCOME W.R.T. THE QUANTUM OF GIFT. THIS VIEW IS FURTHER CONFIRMED BY THE JUDGMEN T OF HON'BLE ITAT AGRA IN THE CASE OF SHRI AVNISH KUMAR SINGH VS . ITO, 2009- TIOL-768-1TAT-AGRA-TM, THE RELEVANT EXTRACT FROM WH ICH IS REPRODUCED HEREUNDER: - ' J) SOURCE OF THE GIFT IS THE RECEIPT THROUGH A CHEQUE OF RS.2,46,000 RECEIVED BY THE DONOR FROM THE BALAJI T RADING CORPORATION, DELHI, AND A CASH AMOUNT OF RS.3500. T HE ADVERSE FACTS AS POINTED OUT BY THE ACCOUNTANT MEMBER I) TH AT THE ASSESSEE OR HIS FAMILY HAD NEVER MADE ANY GIFT OF ANY AMOUNT TO ANYBODY; II) THAT THE GIFT WAS NOT ON ANY OCCASION OR FUNCTION; III) THAT THE DONOR VISITED HIS HOUSE ONE OR TWO TIMES THOUGH, NEVER BE YOND THE DRAWING ROOM; IV) THAT THE DONOR IS THE PERSON OF L OW FINANCIAL STATUS HAVING MONTHLY INCOME OF LESS THAN RS.5,000/ - AND HAS SHOWN WITHDRAWALS FROM HIS CAPITAL ACCOUNT LESS THA N RS.3000/- PER MONTH; V) THAT THE DONOR HAS NO HOUSE NO TELEPH ONE NUMBER, NO FIXED DEPOSIT AND NOT ANY OTHER IMMOVEABLE ASSETS; OR THAT THE ITA NO.3378 , 3379/DEL/2011 35 ORIGINAL DEPOSIT BY THE DONOR OF RS.1,25,000 WITH B ALAJI TRADING CORP. WAS NOT PROVED ARE NOT SO MATERIAL TO HOLD TH E GIFT NOT A GENUINE ONE OR SOURCES THEREOF UNSATISFACTORY . ORDER PER: I C SUDHIR: DUE TO DIFFERENCE OF OPINION BETWEEN THE MEMBERS OF THE BENCH, THE MATTER WAS REFERRED TO THE THIRD MEMBER. THE LD . THIRD MEMBER HAS AGREED WITH THE VIEW TAKEN BY THE LD. JU DICIAL MEMBER. THUS, KEEPING IN MIND THE MAJORITY VIEW, THE APPEAL PREFERRED BY THE ASSESSEE IS ALLOWED. 2. IN THE RESULT, THE APPEAL IS ALLOWED.' 19. PARA 3.7: - THE LD. DR INSISTS THAT HE HAS A RI GHT TO PRESENT THE CASE IN ANY MANNER IF THERE IS FAILURE ON THE PART OF AO I CIT (A). LD. DR IS FORGETTING THAT HE IS NOT FUNCTIONING U/S 263. LD. DR CANNOT TAKE UP A NEW CONTENTION DEHORS THE VIEW TAK EN BY THE AO. ACCORDING TO HIM, AO, CIT (A) AND DR, ALL ARE SUPPO SED TO CONTINUE TO FRAME ASSESSMENT. LIMITATIONS OF DR IS DISCUSSED IN PARA 9 OF MY SYNOPSIS OF SUBMISSIONS FILED DURING L AST HEARING. HE HAS NOT STATED AS TO WHY THE JUDGMENT OF IT A T SPE CIAL BENCH IN THE CASE OF MAHINDRA & MAHINDRA SHOULD NOT BE FOLLO WED. 20. PARA 3.8 (A): - AS REGARDS SOURCE OF SOURCE, KI NDLY SEE PARA 3 (T) OF MY SYNOPSIS OF SUBMISSIONS FILED DURING LAST HEARING. DR HAS NOT FOUND ANY FAULT WITH THESE CASE LAWS WHICH MEAN S THAT THEY ARE APPLICABLE TO THE PRESENT CASE. FURTHER, RELIANCE C AN ALSO BE PLACED ON THE JUDGMENT OF HON'BLE ITAT DELHI IN THE CASE O F MOONGIPA INVESTMENT LTD. VS. ITO, (2012) 70 DTR (DEL)(TRIB) 132. RELEVANT EXTRACT IS REPRODUCED HEREUNDER: - 'HELD: -: SINCE THE ASSESSEE HAS PROVED THE IDENTITY AND ALSO CREDITWORTHINESS OF THESE LENDERS, THE ASSESSEE CAN NOT BE ASKED TO PROVE THE SOURCE OF THE SOURCE OF THE CREDITORS. TH ERE IS NO EVIDENCE ON THE RECORD WHICH COULD SHOW THAT THE DE POSITS MADE IN THE BOOKS OF ACCOUNT OF THE CREDITORS WERE FROM THE MONEY ITA NO.3378 , 3379/DEL/2011 36 BELONGING TO THE ASSESSEE ITSELF. SIMILARLY, THE EX PLANATION ABOUT THE SOURCE OF DEPOSIT IN THE CREDITORS ACCOUNT, IF NOT FOUND TO BE ACCEPTABLE, THEN ALSO THE ADDITION CANNOT BE MADE I N THE HANDS OF THE ASSESSEE. IT MAY BE SUBJECTIVE TO THE PROCEEDIN GS FOR INCLUSION OF THE AMOUNT AS INCOME OF THE DEPOSITORS FROM THE UNDISCLOSED SOURCES OR IF THEY ARE FOUND BENAMI THEN THE REAL O WNER CAN BE BROUGHT TO THE TAX.' 21. PARA 3.8(B): - LD. DR HAS OBJECTED TO THE JUDGM ENT OF HON'BLE DELHI HIGH COURT IN THE CASE OF MS. MAYAWATI. IN FA CT, THE MERITS OF THE CASE WERE ALSO DISCUSSED BY THE HON'BLE HIGH COURT AS IS CLEAR FROM PARA 5(III) OF MY SYNOPSIS OF SUBMISSION S ALREADY FILED. 22. PARA 3.8(C): - AGAIN, HERE LD. DR REFERS TO SHR I VIKRANT PURI, SHRI B. B. SHAH AND SHRI SANJEEV NANDA. THEY ARE NE ITHER DONOR NOR DONEE. IN FACT, THEY ARE ALIEN TO THE GIFT UNDE R QUESTION. MOREOVER, SUCH A REFERENCE HAS ALREADY BEEN EXPLAIN ED IN PARA 5(IV) OF MY SYNOPSIS OF SUBMISSIONS ALREADY FILED. THE LD. DR HAS NOT FOUND ANY FAULT WITH THESE SUBMISSIONS. 23. PARA 3.8 (D): - LD. DR SAYS THAT ASSESSEE DID N OT MAKE ANY COMPLIANCE BEFORE THE LD. AO AND LD. CIT (A) DID NO T GIVE ANY OPPORTUNITY TO THE AO. THESE CONTENTIONS ARE TOTALL Y BASELESS AS DISCUSSED IN PARA 6 (VI) ABOVE. 24. PARA 3.8 (E): - THE JUDGMENT IN THE CASE OF SHR I SURINDER KUMAR HAS ALREADY BEEN DISCUSSED IN PARA LO(VIII) O F MY SYNOPSIS OF SUBMISSIONS ALREADY FILED. 25. IN THE CASE OF GIFT, THE ASSESSEE HAS TO ESTABL ISH THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE DONOR WHICH HAS BEEN DONE AS EXPLAINED IN PARA 3 OF MY SYNOPSIS OF SUBMI SSIONS ALREADY FILED. RELIANCE IS ALSO PLACED ON THE CASE LAWS IN PARA 6 OF MY SYNOPSIS OF SUBMISSIONS ALREADY FILED. 6. WE HAVE HEARD RIVAL PARTIES AND HAVE GONE THROUG H THE MATERIAL PLACED ON RECORD. FIRST OF ALL, WE MUST STATE THAT WE ARE NOT CONVINCED WITH THE ARGUMENT OF LD. D.R. THAT CASE LAW OF MANI SH BUILDWELL HAS NOT BEEN CONSIDERED WHILE DECIDING GROUND NO.2 AND THER EFORE, IT WAS REQUESTED THAT THE SAME MAY BE CONSIDERED WHILE PAS SING FINAL ORDER. IN THIS RESPECT, IT IS TO BE NOTED THAT GROUND NO.2 HA S ALREADY BEEN DECIDED ITA NO.3378 , 3379/DEL/2011 37 VIDE ORDER DATED 28.11.2014. IF THE REVENUE WAS N OT SATISFIED WITH THIS ORDER, THE REVENUE SHOULD HAVE FILED MA FOR RECTIFI CATION OF MISTAKE IF ANY. THE TRIBUNAL ORDER DATED 28.11.2014 IS A FINAL ORDE R SO FAR AS GROUND NO.2 IS CONCERNED AND LD.D.R. WHILE RAISING CERTAIN OBJECTIONS WITH RESPECT TO THAT ORDER HAS PROBABLY NOT READ OUT THA T ORDER IN ITS RIGHT PERSPECTIVE. THOUGH, WE ARE NOT OBLIGED TO CLARIFY OUR UNDERSTANDING OF THE LAW, YET FOR THE SAKE OF COMPLETENESS OF ORDER, WE WOULD LIKE TO STATE THAT REQUIREMENT OF LAW FOR ACCEPTANCE OF ADDITIONA L EVIDENCE AS PER JUDGEMENT IN THE CASE OF MANISH BUILDWELL AS DECIDE D BY HON'BLE DELHI HIGH COURT WAS VERY MUCH FOLLOWED IN THE APPEALS UN DER CONSIDERATION. AS PER THE CASE LAW OF MANISH BUILDWELL, THE LD. CI T(A) IS OBLIGED TO PROVIDE OPPORTUNITY TO A.O. TWICE I.E. ONE BEFORE A CCEPTING THE ADDITIONAL EVIDENCE AND SECONDLY AFTER ADMISSION OF ADDITIONAL EVIDENCE. 7. NOW, LET US EXAMINE AS TO WHETHER THESE REQUIREM ENTS WERE MET OR NOT IN THE PRESENT CASES. IN I.T.A .NO. 3378/DEL/2 011, LD. CIT(A) HAS NOTED AT PARA 2 THAT APPLICATION OF ADDITIONAL EVID ENCE WAS FORWARDED TO A.O. VIDE LETTER DATED 20.01.2010 (2010 SHOULD BE R EAD AS 2011). THE LD. CIT(A) FURTHER MENTIONS THAT NO REMAND REPORT WAS R ECEIVED TILL THE PASSING OF ORDER I.E. TILL 06.04.2011. THEREAFTER, AFTER WAITING FOR REMAND REPORT, HE ADMITTED THE SAME IN THE CONCLUDING LINE S OF PARA 2 OF HIS ORDER. PARA 2 OF HIS ORDER IS EXHAUSTIVE AND SELF EXPLANAT ORY. AFTER ADMISSION OF ADDITIONAL EVIDENCE, THE WRITTEN SUBMISSIONS OF AS SESSEE DATED 10.02.2011 AS PLACED IN PAPER BOOK PAGES 40-44 WHIC H INCLUDED THE MERITS OF ADDITIONAL EVIDENCE WERE FORWARDED TO A.O . VIDE LETTER DATED 04.03.2011. LD. CIT(A) NOTED THAT A.O. DID NOT OFF ER HIS COMMENTS ON MERITS ALSO THEREFORE, AFTER WAITING FOR THE REPLY, HE DECIDED THE ISSUE ON MERITS. THESE FACTS ARE NOTED IN PARA 3 OF HIS ORD ER. ITA NO.3378 , 3379/DEL/2011 38 8. SIMILAR IS THE POSITION IN I.T.A.NO. 2279/DEL/20 11 WHERE APPLICATION FILED UNDER RULE 46A WAS FORWARDED TO A .O. ON 20.01.2011 AND AFTER NOT RECEIVING REMAND REPORT ON ADDITIONAL EVIDENCE THOSE WERE ADMITTED AND AFTER ADMITTING THE SAME WRITTEN SUBMI SSIONS, INCLUDING MERITS OF ADDITIONAL EVIDENCE PLACED IN PAPER BOOK PAGES 29-33 WERE FORWARDED TO A.O. FOR HIS COMMENTS. IN THIS APPEAL EVEN REMINDER WAS SENT ON 24.02.2011 BUT A.O. DID NOT BOTHER TO REPLY . THESE FACTS ARE NOTED IN PARA 3& 4 OF HIS ORDER. 9. FROM THE ABOVE NOTED FACTS, IT IS APPARENT THAT LAW LAID DOWN BY HONBLE DELHI HIGH COURT IN THE CASE OF MANISH BUIL DWELL WAS DULY FOLLOWED BY LD. CIT(A) AND A.O. WAS GIVEN OPPORTUNI TY ON TWO OCCASIONS I.E. ONE BEFORE ACCEPTING THE ADDITIONAL EVIDENCE AND ANOTHER AFTER ACCEPTING THE ADDITIONAL EVIDENCE. THIS ARGU MENT OF LD. D.R. THAT ADDITIONAL EVIDENCES WERE ACCEPTED IN VIOLATION OF JUDGEMENT OF HONBLE JURISDICTIONAL HIGH COURT, IS MISPLACED. 10. NOW UNDER SUCH CIRCUMSTANCES, WHEN THE A.O. DOE S NOT REPLY TO LD. CIT(A) WHAT LD. CIT(A) CAN DO. LD. CIT(A) CANN OT HOLD APPELLATE PROCEEDINGS FOR A LONG PERIOD AND THAT TOO FOR THE FAULT OF A.O. THE ANSWER TO TACKLE SUCH A SITUATION HAS BEEN GIVEN BY HONBLE TRIBUNAL IN THE CASE OF DDIT VS HUMAN CARE CHARITABLE TRUST, WH ICH WAS RELIED UPON BY LD. A.R. UNDER THESE FACTS AND CIRCUMSTANC ES, GROUND NO.2 WAS DECIDED AGAINST REVENUE. FOR THE SAKE OF CONVENIEN CE, THE FINDINGS OF THE TRIBUNAL IN RESPECT OF GROUND NO.2 IN ITS ORDER DATED 28.11.2014 IS REPRODUCED BELOW: 5. WE HAVE HEARD RIVAL PARTIES AND HAVE GONE THROU GH THE MATERIAL PLACED ON RECORD. WITHOUT COMMENTING UPON MERITS OF THE APPEALS, THE ISSUE OF VIOLATION OF RULE 46A IS BEIN G DECIDED THROUGH THIS INTERIM ORDER. WE NOTE THAT THE FACTS IN BOTH THE APPEALS ARE ITA NO.3378 , 3379/DEL/2011 39 SIMILAR WHEREIN GIFTS WERE SENT BY ONE MR. MOHIT PU RI TO HIS PARENTS MR. VINAY PURI & MRS. SHASHI PURI. MR.VINAY PURI HAS SINCE EXPIRED, SMT. PURI IS NOW ASSESSEE IN BOTH TH ESE APPEALS ONE IN HER INDIVIDUAL CAPACITY AND ONE AS LEGAL HEIR. W E OBSERVE THAT THE A.O. ORIGINALLY ISSUED NOTICE U/S 142(1) ON 22. 04.2009 AND THEN AGAIN AFTER A PERIOD OF 5 MONTHS THE A.O. AGAIN ISS UED DETAILED QUESTIONNAIRE ON 23.09.2009 AND HAS PASSED ORDER ON 29.12.2009. THE A.O. AT PAGE 2 OF HIS ORDER HAS MENTIONED THAT NO DETAILS WERE FURNISHED BY THE ASSESSEE WHEREAS PAGE 5 IS A LETTE R DATED 08.12.2009 WRITTEN TO A.O. AND RECEIVED BY HIS OFFI CE WHEREIN THE ASSESSEE HAD SUBMITTED CERTAIN EVIDENCES TO PROVE T HE CREDITWORTHINESS OF MOHIT PURI. IN THE SAME LETTER, THE ASSESSEE HAD SUBMITTED THAT ANOTHER EVIDENCE OF INCOME OF MR. PU RI WAS NOT YET AVAILABLE BUT WILL BE FURNISHED SHORTLY. 6. FOR THE SAKE OF CONVENIENCE, CONTENTS OF THIS L ETTER ARE REPRODUCED BELOW: 'IN RESPECT OF ABOVE SAID MATTER, UNDER INSTRUCTION S OF THE ASSESSEE, IT IS BRING TO YOUR KIND NOTICE THAT MR. MOHIT PURI LEFT INDIA FOR THE PURPOSE OF EMPLOYMENT WITH MIS. FRIEND'S GENERAL TRADING FZCO, DUBAI ON 09.04.2006. A COPY O F HIS EMPLOYMENT AGREEMENT IS ENCLOSED. CONFIRMATION FROM THE SAID EMPLOYER REGARDING PAYMENT OF REIMBURSEMENTS A ND COMMISSION DURING THE PERIOD APRIL 2006 TO DECEMBER , 2006 ARE ENCLOSED. ADDITIONALLY, THE ASSESSEE WAS ENGAGE D IN THE BUSINESS OF REAL ESTATE BROKERAGE ABROAD WITH M/S. SMART INSPECTION INDUSTRIAL EQUIPMENTS LLC, DUBAI. A COPY OF CONFIRMATION FOR THE SAME IS AWAITED AND WILL BE FU RNISHED SHORTLY.' 7. THE A.O. WITHOUT COMMENTING UPON THIS LETTER HEL D THAT NO DETAILS WERE FURNISHED BY THE ASSESSEE. WE FURTHER NOTE THAT THE ASSESSEE WAS IN FACT PREVENTED BY SUFFICIENT AND RE ASONABLE CAUSE FOR NOT SUBMITTING THE ADDITIONAL EVIDENCE BEFORE T HE A.O. AS ASSESSEE WAS ASKED TO FURNISH SUPPORTING EVIDENCE O N 23.09.2009 AND ASSESSMENT WAS COMPLETED WITHIN A SHORT PERIOD ON 29.12.2009. THE HIGH HANDEDNESS OF THE A.O. CAN BE JUDGED FROM ITA NO.3378 , 3379/DEL/2011 40 THE FACT THAT LETTER DATED 08.12.2009 WRITTEN BY AS SESSEE IN SUPPORT OF GIFT DOES NOT FIND MENTION IN THE ASSESSMENT ORD ER. MOREOVER WE FURTHER NOTE THAT LD. CIT(A) HAD DULY FORWARDED THE COPY OF ADDITIONAL EVIDENCE UNDER RULE 46A ON 20.01.2011 IN BOTH THE CASES WHICH WAS FOLLOWED BY REMINDER DATED 10.02.20 11 AND 24.02.2011 IN LT.A.NO. 3379/DE1L2011. WE FURTHER OB SERVE THAT LD. CIT(A) HAD FORWARDED COPY OF WRITTEN SUBMISSION S ON 04.03.2011 AND 10.02.2011 IN LT.A. NO. 3378/DE1L201 1 AND 3379IDE1L2011 RESPECTIVELY TO WHICH A.O. DID NOT RE PLY. THEREFORE, LD. CIT(A) HAS PASSED THE ORDER AFTER TA KING INTO ACCOUNT THE ADDITIONAL EVIDENCES ON MERITS. THEREFO RE, THESE ARE NOT THE CASES WHERE THE PROCEDURE FOR ACCEPTING ADD ITIONAL EVIDENCE UNDER RULE 46A WAS VIOLATED. WHEREAS, THES E ARE THE CASES WHERE A.O. HAD NOT SUBMITTED REMAND REPORT WI THIN A REASONABLE PERIOD OF ABOUT 3 MONTHS AND, THAT TOO D ESPITE REMINDERS THEREFORE, THE LD. CIT(A) WAS JUSTIFIED I N PASSING THE ORDER AFTER WAITING FOR REMAND REPORT. THE REVENUE HAS TAKEN THE GROUND THAT LD. CIT(A) HAS ACCEPTED THE ADDITIONAL EVIDENCES IN- SPITE OF THE FACT THAT SUFFICIENT OPPORTUNITIES WER E PROVIDED TO ASSESSEE WHEREAS FROM ASSESSMENT ORDER, WE DO NOT F IND ANY SUCH OPPORTUNITIES. THEREFORE, THE GROUND TAKEN BY REVEN UE IS FACTUALLY IN CORRECT. MOREOVER WE OBSERVE THAT VIDE LETTER DA TED 08.12.2009, THE ASSESSEE HAD SUBMITTED TO A.O. REGARDING ANOTHE R SOURCE OF INCOME OF MR. MOHIT PURI FOR WHICH ONLY CONFIRMATIO N WAS TO BE FILED WHICH COULD NOT BE FILED BEFORE A.O. AS ASSES SMENT ORDER WAS PASSED ON 29.12.2009 AND THEREFORE, THE SAME WAS FI LED BEFORE LD. CIT(A) AS ADDITIONAL EVIDENCE. 8. IN SIMILAR CIRCUMSTANCES, ITAT IN THE CASE OF DD IT VS HUMAN CARE MEDICAL CHARITABLE TRUST IN LT.A.NO. 2333/DE1/ 2009 HAS HELD IN FAVOUR OF THE ASSESSEE BY HOLDING AS UNDER: 'WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED TH E MATERIAL ON RECORD. WE FIND MERIT IN THE ARGUMENT O F LD. COUNSEL. CIT(A) HAS VALIDLY EXERCISED HIS POWER TO ADMIT ADDITIONAL EVIDENCE UNDER RULE 46A BY SENDING COPY THEREOF TO A.O., WHO INSTEAD OF COMMENTING ON THE ADDITIONA L EVIDENCE FILED, SAT ON THE PROCEEDINGS. WE ALSO FIN D THESE ITA NO.3378 , 3379/DEL/2011 41 EVIDENCES ARE FILED BEFORE A.O. ON 26.12.2007 AND T HE SAME WAS NOT CONSIDERED AND THE ASSESSMENT ORDER WAS PAS SED ON THE SAME DAY. IN OUR VIEW, NO VIOLATION OF RULE 46A CAN BE DISCERNED. IN VIEW THEREOF, WE UPHOLD THE ORDER OF CIT(A).' 9. THE CASE LAW OF MANISH BUILDWELL RELIED UPON BY LD. D.R. IS NOT APPLICABLE AS IN THAT CASE, THE ADDITIONAL EVIDENCE S WERE ADMITTED WITHOUT CONFRONTING TO A.O. WHEREAS IN THE PRESENT APPEALS, THE ADDITIONAL EVIDENCES WERE FORWARDED TO A.O. BUT HE DID NOT REPLY. FOR THE SAKE OF CONVENIENCE THE FINDINGS OF HON'BLE DELHI HIGH COURT IN THE CASE OF MANISH BUILDWELL ARE REPRODUCE D BELOW: '24. IN THE PRESENT CASE, THE CIT (A) HAS OBSERVED THAT THE ADDITIONAL EVIDENCE SHOULD BE ADMITTED BECAUSE THE ASSESSEE WAS PREVENTED BY ADDUCING THEM BEFORE THE ASSESSING OFFICER. THIS OBSERVATION TAKES CARE OF CLAUSE (C) OF SUB-RU LE (1) OF RULE 46A THE OBSERVATION OF THE CIT (A) ALSO TAKES CARE OF SUB-RULE (2) UNDER WHICH HE IS REQUIRED TO RECORD H IS REASONS FOR ADMITTING THE ADDITIONAL EVIDENCE. THUS, THE RE QUIREMENT OF SUB-RULES (1) AND (2) OF RULE 46A HAVE BEEN COMP LIED WITH. HOWEVER, SUB-RULE (3) WHICH INTERDICTS THE CI T(A) FROM TAKING INTO ACCOUNT ANY EVIDENCE PRODUCED FOR THE F IRST TIME BEFORE HIM UNLESS THE ASSESSING OFFICER HAS HAD A REASONABLE OPPORTUNITY OF EXAMINING THE EVIDENCE AN D REBUT THE SAME, HAS NOT BEEN COMPLIED WITH. THERE IS NOTH ING IN THE ORDER OF THE CIT (A) TO SHOW THAT THE ASSESSING OFF ICER WAS CONFRONTED WITH THE CONFIRMATION LETTERS RECEIVED B Y THE ASSESSEE FROM THE CUSTOMERS WHO PAID THE AMOUNTS BY CHEQUES AND ASKED FOR COMMENTS. THUS, THE END RESUL T HAS BEEN THAT ADDITIONAL EVIDENCE WAS ADMITTED AND ACCE PTED AS GENUINE WITHOUT THE ASSESSING OFFICER FURNISHING HI S COMMENTS AND WITHOUT VERIFICATION. SINCE THIS IS AN INDISPENSABLE REQUIREMENT, WE ARE OF THE VIEW THAT THE TRIBUNAL OUGHT TO HAVE RESTORED THE MATTER TO THE C IT(A) WITH THE DIRECTION TO HIM TO COMPLY WITH SUB-RULE ( 3) OF RULE 46A. ' ITA NO.3378 , 3379/DEL/2011 42 10. THEREFORE, AFTER ANALYSIS OF BOTH CASE LAWS REL IED UPON BY LD. D.R. AND LD. A.R., WE FIND THAT THE FACTS AND CIRCU MSTANCES OF THE PRESENT APPEALS ARE SIMILAR TO THE FACTS AND CIRCUM STANCES OF CASE LAW RELIED UPON BY LD. A.R. THEREFORE, FOLLOWING AB OVE AND KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE PRESENT APPEALS, WE DISMISS GROUND NO.2 OF THE REVENUE'S APPEAL. 11. IN VIEW OF ABOVE, GROUND NO.2 OF APPEAL AS ALRE ADY DISMISSED VIDE ORDER DATED 28.11.2014 REMAINS DISMISSED. 12. NOW. COMING TO THE MERITS OF THE CASES, WE FIND THAT THE A.O. QUESTIONED THE GENUINENESS OF GIFT AS WELL AS CREDI TWORTHINESS OF DONOR BECAUSE OF THE REASON THAT IN HIS OPINION, MR. VIKR ANT PURI BROTHER OF MOHIT PURI, THE DONOR, WAS A HAWALA OPERATOR WHO HA D RECEIVED HIS ILL GOTTEN MONEY BY FIRST GETTING IT GIFTED FROM HIS BR OTHER MOHIT PURI FROM DUBAI IN THE NAME OF HIS PARENTS AND THEN GETTING I T TRANSFERRED THE SAME IN HIS OWN ACCOUNT. THE A.O. HAS MADE THE ADDITION BASED UPON THIS EXPRESSION OF DOUBT AND HAS NOT COMMENTED UPON THE EVIDENCES FILED BY ASSESSEE IN SUPPORT OF ESTABLISHING CREDITWORTHINES S OF DONOR. THE A.O. THOUGH HAS HELD IN THE ASSESSMENT ORDER THAT THE TO TAL INCOME OF ASSESSEE IN DUBAI AS ADMITTED BY HIM WAS RS.3.6 CRORES ONLY BUT HE HELD THAT THE SAME WAS NOT SUBSTANTIATED. HOWEVER, THE FACT REMA INS THAT VIDE LETTER DATED 08.12.2009 PLACED AT PAPER BOOK PAGE 5, ASSES SEE HAD PLACED ON RECORD PART PROOF OF EARNING OF DONOR IN DUBAI AND HAD ALSO MENTIONED THAT PROOF OF ANOTHER SOURCE OF INCOME WAS AWAITED AND WILL BE FILED SHORTLY. THIS PROOF OF ANOTHER SOURCE OF INCOME WH ICH WAS INCOME FROM REAL ESTATE BROKERAGE WAS FILED AS ADDITIONAL EVIDE NCE. DURING APPELLATE PROCEEDINGS BEFORE US, THIS LETTER WAS FOUND PLACED IN ASSESSMENT RECORD BUT A.O. HAS NOT COMMENTED UPON THESE DOCUMENTS AND RATHER HELD THAT NO PROOF WAS FILED WHICH IS CONTRARY TO THE FACTS. ITA NO.3378 , 3379/DEL/2011 43 13. DURING APPELLATE PROCEEDINGS BEFORE US, LD. D.R . EXTENSIVELY ARGUED ON THE MERITS AND WENT TO THE EXTENT THAT EV IDENCES FILED BY ASSESSEE IN SUPPORT OF CLAIM OF INCOME OF DONOR WAS NOT RELIABLE AT ALL AS HE RAISED MANY OBJECTIONS ON THE DOCUMENTS ESPECIAL LY MISMATCH OF SIGNATURE OF DONOR ON EMPLOYMENT AGREEMENT BUT WE A RE OF THE VIEW THAT IF REVENUE INTENDS TO DISLODGE AN EVIDENCE SUBMITTE D BY ASSESSEE, IT HAS TO DO IT BY BRINGING CONTRARY EVIDENCE ON RECORD WHICH HAS NOT BEEN DONE IN THESE CASES. WHAT TO FIND FAULT IN THE EMPLOYMENT AGREEMENT, A.O. DID NOT MENTION ABOUT THE SAME IN THE ASSESSMENT ORDER. IF THE REVENUE AUTHORITIES HAD DOUBTS ABOUT THE AGREEMENT, IT SHOU LD HAVE MADE INQUIRIES REGARDING THE EXISTENCE OF THE FIRM WITH WHICH AGRE EMENT WAS MADE. THEREFORE, ALL THE ARGUMENTS OF LD. D.R. WITH REGAR D TO NON RELIABILITY OF EVIDENCE IN SUPPORT OF INCOME OF ASSESSEE DOES NOT HOLD ANY FORCE IN VIEW OF THE FACT THAT NO CONTRARY EVIDENCE WAS BROUGHT O N RECORD. ALL ARGUMENTS OF LD. D.R. ARE BASED UPON THE ALLEGATION OF REVENUE THAT BROTHER OF DONOR WAS A HAWALA OPERATOR. 14. SIMILARLY, LD. D.R. ARGUED MISMATCHING OF SIGNA TURES OF DONOR ON GIFT DEED AND RAISED FURTHER ISSUE THAT GIFT DEED W AS AN AFTERTHOUGHT. IN THIS RESPECT, WE FIND THAT GIFTS ARE OF MONEY TRANS FERRED BY DONOR TO THE ACCOUNT OF DONEES AND GIFTS ARE OF MOVABLE PROPERTY , THEREFORE, GIFT CAN TAKE PLACE IN THE ABSENCE OF EVEN GIFT DEED. SO, T HE ARGUMENTS WITH RESPECT TO MISTAKES IN GIFT DEED LIKE WITNESSING OF DEED, MISMATCH OF SIGNATURES DOES NOT HOLD MUCH FORCE AS IN THE CASE OF GIFT OF MOVABLE PROPERTY, ORAL GIFT CAN BE MADE. MOREOVER, WE FIND THAT DONOR IN HIS STATEMENT RECORDED U/S 132(4) HAS ADMITTED THE FACT OF HAVING MADE GIFT TO PARENTS AND THIS FACT IS NOTED IN ASSESSMENT ORDER. 15. LD. D.R. HAS ALSO RELIED UPON THE DECISION OF S UMATI DAYAL VS CIT 214 ITR 801 DECIDED BY HON'BLE SUPREME COURT WHERE HON'BLE SUPREME ITA NO.3378 , 3379/DEL/2011 44 COURT HAD HELD THAT MATTER HAS TO BE CONSIDERED BY APPLYING THE TEST OF HUMAN PROBABILITIES. IT WAS ARGUED THAT RECEIPT OF REPEATED AMOUNTS BY ASSESSEE AS WELL AS HER HUSBAND FROM DONOR SON WITH OUT THERE BEING ANY OCCASION WAS CLEARLY AGAINST HUMAN PROBABILITIES. IN THIS RESPECT, WE FIND THAT THE GIFTS WERE RECEIVED FROM SON AND THERE IS NOTHING WRONG IN RECEIPT OF GIFT BY PARENTS FORM A SON AS LONG AS THE SOURCE OF SENDING SUCH GIFTS IS EXPLAINABLE. WE FIND THAT THE WHOLE ARGUMENT OF LD . D.R. REVOLVED AROUND THE DOUBT OF REVENUE THAT THE GIFTS IN FACT REPRESENTED ILL GOTTEN MONEY OF VIKRANT PURI BROTHER OF DONOR WHO HAD FIRS T SIPHONED THE AMOUNT FROM INDIA TO DUBAI AND THEN HAD BROUGHT BAC K THE SAME IN THE FORM OF GIFT BY HIS BROTHER TO THE PARENTS. HOWEVE R, THIS DOUBT IS BASED UPON SURMISES AND CONJECTURES AS THERE IS NO PROOF TO ESTABLISH THAT VIKRANT PURI SIPHONED THE FUNDS FROM INDIA TO DUBAI AND MOREOVER, THE EVIDENCES FILED BY ASSESSEE IN SUPPORT OF THE CLAIM OF CREDITWORTHINESS HAS NOT BEEN DISLODGED BY FILING SOME CONTRARY EVID ENCE. THEREFORE, IN VIEW OF THE ABOVE, THE EVIDENCES FILED BY ASSESSEE CANNOT BE DISREGARDED. LD. D.R. HAD ALSO ARGUED THAT NO OCCASION WAS THERE TO MAKE THE GIFT. IN THIS RESPECT, WE FIND THAT FOR MAKING GIFT BY SON T O PARENTS, NO OCCASION IS REQUIRED AS THERE IS ALWAYS NATURAL LOVE AND AFFECT ION BETWEEN PARENTS AND SON. THE UTILIZATION OF GIFT AMOUNT BY DONEE ALSO CANNOT DETERMINE THE NON GENUINENESS OF GIFT. THOUGH A.O. HAS NOT MENTI ONED THE SECTION UNDER WHICH ADDITION WAS MADE BUT WE FIND THAT ADDI TIONS WERE MADE BY A.O. ON THE BASIS THAT GIFTS WERE NON GENUINE AND P ROBABLY THE ADDITIONS WERE MADE U/S 68. THE REQUIREMENT OF SECTION 68 IN CLUDES THAT IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE PERSON FORM THE AMOUNTS ARE RECEIVED HAS TO BE ESTABLISHED. THERE IS NO DOUBT ABOUT THE IDENTITY AS THE DONOR IS HAVING PASSPORT AND PAN. THE GENUINENESS OF TRANSACTIONS CANNOT BE DOUBTED AS THE AMOUNTS WERE RECEIVED THRO UGH PROPER BANKING CHANNELS AND WAS MONEY RECEIVED FROM A SON TO HIS P ARENTS. THE AMOUNTS ITA NO.3378 , 3379/DEL/2011 45 RECEIVED BY ASSESSEE WERE CONFIRMED TO HAVE BEEN SE NT BY DONOR IN HIS STATEMENT RECORDED U/S 132(4). THESE ARE NOT THE C ASES WHERE DONORS ARE UNKNOWN PERSONS AND AFTER MAKING GIFTS HAD DISAPPEA RED. AS REGARDS CREDITWORTHINESS OF DONOR, THE ASSESSEE HAD FILED T HE PROOF OF INCOME OF DONOR. A PART OF PROOF OF INCOME WAS FILED DURING ORIGINAL ASSESSMENT PROCEEDINGS AND A PART WAS FILED AS ADDITIONAL EVID ENCE. THE REVENUE COULD NOT BRING TO OUR NOTICE ANYTHING ADVERSE AGAI NST PROOF OF INCOME OF DONOR EXCEPT HIGHLIGHTING CERTAIN DEFECTS INCLUDING MISMATCH OF SIGNATURES OF DONOR ON EMPLOYMENT AGREEMENT WITH TH AT ON PASSPORT WHICH IN OUR OPINION, CAN HAPPEN OVER A PERIOD OF T IME AS THERE IS CONSIDERABLE TIME GAP BETWEEN THE DATE OF PREPARATI ON OF PASSPORT AND THAT OF AGREEMENT. THE CASE LAWS RELIED UPON BY A. O. AND LD. D.R. ARE DISTINGUISHABLE ON FACTS. WE FIND THAT LD. CIT(A) HAS PASSED A SPEAKING AND WELL REASONED ORDER WHEREIN HE HAS TAKEN NOTE O F SOURCES OF DONOR. FOR THE SAKE OF CONVENIENCE, THE ORDER OF LD. CIT(A ) IN I.T.A.NO. 3378/DEL/2011 IS REPRODUCED BELOW IN THE CASE OF I. T.A. NO. 3378/DEL/2011: 5. I HAVE CONSIDERED THE AO'S ORDER, THE AR'S SUBM ISSIONS, THE REMAND REPORT AND THE REJOINDER BY AR AS WELL AS TH E POSITION OF LAW AND THE FACTS OF CASE. THE APPELLANT HAS ~ THE FOLLOWING DOCUMENTS TO PROVE THE GENUINENESS AND THE CREDITWO RTHINESS. I) MEMORANDUM OF GIFT II) COPY OF INCOME TAX RETURN OF THE DONOR. III) COPY OF EMPLOYMENT AGREEMENT WITH M/S FRIEND 'S GENERAL TRADING FICO, DUBAI INDICATING SALARY OF 40 ,000 DH PER MONTH (RS. 4,96,400/- APPROX. @ 1 DH = RS. 1 2.41 IN APRIL, 2006) + COMMISSION @ 12.5% BESIDES REIMBURSEMENT OF EXPENSES IN RESPECT OF BOARDING, L ODGING, TRANSPORT, COMMUNICATION, MEALS, ETC. ITA NO.3378 , 3379/DEL/2011 46 IV) CONFIRMATION FROM EMPLOYER REGARDING REIMBURSEMENT OF VARIOUS PERSONAL EXPENSES. V) CONFIRMATION FROM EMPLOYER REGARDING PAYMENT OF COMMISSION VI) AGREEMENT WITH M/S SMART INSPECTION INDUSTRIAL EQUIPMENT LLC, DUBAI. VII) CONFIRMATION FROM M/S SMART INSPECTION INDUST RIAL EQUIPMENT LLC, DUBAI, REGARDING COMMISSION PAID TO SHRI MOHIT PURI FROM JULY 2006 TO NOVEMBER 2006 VIII) COPY OF PASSPORT OF SHRI MOHIT PURI ALONGWIT H RESIDENCE VISA OF UAE. 6. MEMORANDUM OF GIFT FILED BEFORE THE LD. AO CLEAR LY MENTIONS THAT THE GIFT WAS MADE OUT OF NATURAL LOVE AND AFFE CTION. I HAVE ALSO GONE THROUGH THE JUDGMENT DATED 27.4.2010 FROM JUR ISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. SURESH KUMAR KAK AR, 2010- TIOL-294-HC-DEL-IT, WHEREIN IT IS CLEARLY HELD THAT THERE IS NO OCCASION REQUIRED FOR MAKING A GIFT OUT OF LOVE AND AFFECTION AND ACCORDINGLY THE REVENUE'S APPEAL WAS DISMISSED. THE REFORE, IT IS HELD THAT NO OCCASION IS REQUIRED FOR GIVING A GIFT OUT OF NATURAL LOVE AND AFFECTION. 7. AS REGARDS THE GENUINENESS, THE AO HAS MENTIONE D THAT GENUINENESS TRANSACTION IS IN DOUBT. HE HAS NOT GIV EN ANY REASONS FOR THE DOUBTS IN HIS MIND. THE ADDITIONS CANNOT BE BASED ON DOUBTS AND HAVE TO BE BASED ON DEFINITE FINDINGS RE LYING ON EVIDENCES TO THAT EFFECT. I AGREE WITH THE AR THAT ADDITION CANNOT BE MADE ON THE BASIS OF SUSPICIONS, SURMISES AND CONJE CTURES~ HON'BLE ITAT MUMBAI HAS CLEARLY UPHELD THIS RATIO I N THE CASE OF GURUPRERNA ENTERPRISES VIDE ITS ORDER DATED 7/1/201 1 IN ITA NO. 255/256/257/MUM/2010, PAGE 26 PARA 36 WHEREIN IT WA S HELD THATTHE ADDITION CANNOT BE MADE BY MAKING AN OBSERV ATION THAT THE LOANS DO NOT APPEAR TO BE GENUINE. 8. SHRI MOHIT PURI, THE DONOR, IS A RESIDENT OF DUB AI AS EVIDENCED BY HIS PASSPORT WHERE RESIDENCE VISA IS ENDORSED. M OREOVER, THIS FACT THAT SH. MOHIT PURI WAS NON RESIDENT DURING AY 2007-08 WAS EXPLAINED IN DETAIL EVEN BEFORE DDIT(LNV.), AIU, NE W DELHI AS EARLY AS 09/05/2007, I.E., WITHIN 3 MONTHS OF THE S EARCH. A COPY OF ITA NO.3378 , 3379/DEL/2011 47 THIS LETTER WAS ALSO FILED. LETTER DATED 811212009 FILED BEFORE THE AO ALSO CATEGORICALLY MENTIONS THAT SHRI MOHIT PURI LEFT INDIA ON 9/4/2006 FOR EMPLOYMENT WITH MIS FRIEND'S GENERAL T RADING FICO, DUBAI. THE GIFT HAS BEEN GIVEN THROUGH PROPER BANKING CHANNEL AS EVIDENCED BY MEMORANDUM OF GIFT ITSELF. THE DONOR IS THE SON OF THE DONEE. THE STATEMENT OF THE DONOR WA S ALSO RECORDED U/S 132(4) DURING THE COURSE OF SEARCH ON 28/2/2007 WHEREIN HE HAS CATEGORICALLY ADMITTED THAT HE HAS GIVEN GIFTS TO HIS PARENTS. THE AO HAS NOT FOUND ANY FAULT WITH THE DOCUMENTS F ILED BY THE APPELLANT. HE HAS ALSO NOT BROUGHT ANY MATERIAL ON RECORD TO PROVE THAT THE GIFT IS BOGUS. I HAVE ALSO GONE THROUGH TH E JUDGMENT OF HON'BLE ITAT DELHI IN THE CASE OF ACIT VS. UJJAGAR SINGH OBEROI, (2009) 121 TIJ (DEL) 228, WHEREIN IT WAS HE LD THAT IF THE AO HAS FOUND ANY FAULT WITH THE LETTERS ISSUED BY T HE DONORS CONFIRMING THE GIFT OR WITH THE COPIES OF RETURN OF INCOME TAX OF THE DONORS, IN THE ABSENCE OF ANY INDEPENDENT VERIFICAT ION OF GIFT, CIT (A) WAS JUSTIFIED IN HOLDING THAT THE GIFT WAS GENU INE. IN THE CASE OF THE APPELLANT ALSO, THE AO HAS NOT FOUND ANY FAULT WITH THE DOCUMENTS FILED BEFORE HIM OR U/R 46A. HE HAS NOT C ARRIED OUT ANY INDEPENDENT VERIFICATION LEADING TO ANY FINDING ABO UT NON- GENUINENESS OF THE GIFT. UNDER THE CIRCUMSTANCES, I HEREBY HOLD THAT GENUINENESS OF GIFT IS DULY ESTABLISHED. 9. THE AO HAS ALSO DOUBTED THE GENUINENESS ON THE P LEA THAT DONEE HAS GIVEN LOAN TO SHRI VIKRANT PURI, HER ANOTHER SO N. AO HAS ALSO MENTIONED THAT SHRI VIKRANT PURI IS A HAWALA OPERAT OR. HE HAS NOT BROUGHT ANY MATERIAL ON RECORD TO ESTABLISH THAT MR . VIKRANT PURI IS A HAWALA OPERATOR. MOREOVER, MR. VIKRANT PURI IS NEITHER A DONOR NOR A DONEE AND THEREFORE, NO REFERENCE IS RE QUIRED TO BE MADE TO HIM. FOR GIFT TO BE GENUINE, IDENTITY, GENU INENESS AND CREDITWORTHINESS OF DONOR IS TO BE ESTABLISHED. THE USE OF MONEY BY DONEE IN HER OWN RIGHT CANNOT BE A QUESTION TO DECI DE THE GENUINENESS OF GIFT. HENCE, AS HELD IN THE PREVIOUS PARA, THE GENUINENESS OF GIFT IS FULLY ESTABLISHED. 10. AS REGARD THE AO HAS MENTIONED THAT NO PROOF OF DONOR'S INCOME IN DUBAI HAS BEEN FILED. I FIND FROM THE PAP ER BOOK, PAGE ITA NO.3378 , 3379/DEL/2011 48 NO. 5 THAT ON 8/12/2009, THE FOLLOWING FACTS WERE B ROUGHT TO HIS NOTICE: - 'IT IS TO BRING TO YOUR KIND NOTICE THAT MR. MOHIT PURI LEFT INDIA FOR THE PURPOSE OF EMPLOYMENT WITH M/S FRIEND S GENERAL TRADING FZCO, DUABI ON 91412006. A COPY OF HIS EMPLOYMENT AGREEMENT IS ENCLOSED. CONFIRMATION FROM THE SAID EMPLOYER REGARDING PAYMENT OF REIMBURSEMENT AN D COMMISSION DURING THE PERIOD APRIL, 2006 TO DECEMBE R, 2006 ARE ENCLOSED. ADDITIONALLY THE ASSESSEE WAS EN GAGED IN THE BUSINESS OF REAL ESTATE BROKERAGE ABROAD WITH M /S SMART INSPECTION INDUSTRIAL EQUIPMENTS LLC, DUBAI. A COPY OF CONFIRMATION FOR THE SAME IS AWAITED AND WILL BE FURNISHED SHORTLY. IN CASE ANY OTHER INFORMATION IS REQUIRED, IT WILL BE SUBMITTED ON DEMAND. HOWEVER, THE AO IGNORED THESE FACTS AND ARRIVED AT A HASTY CONCLUSION. FROM THE DOCUMENTS FILED BY THE ASSESSE E BEFORE AO AND U/S 46A, IT IS CLEAR THAT THE DONOR WAS PAID SA LARY OF 40,000 DH PER MONTH (RS.4,96,400/- APPROX. @ 1 DH = RS. 12 .41 IN APRIL, 2006) BESIDES COMMISSION OF 54,54,545 DH (RS . 6,76,90,903/- APPROX.) IN NINE MONTHS FROM APRIL, 0 6 TO DECEMBER, 2006. ALL HIS PERSONAL EXPENSES LIKE RENT, FOOD AND BEVERAGES, TRAVELLING, COMMUNICATION AND MISCELLANEOUS EXPENSE S WERE REIMBURSED BY THE EMPLOYER. HE WAS ALSO ENGAGED IN THE BUSINESS OF REAL ESTATE BROKERAGE ABROAD WITH MIS SMART INSP ECTION INDUSTRIAL EQUIPMENTS LLC, DUBAI. DURING THE PERIOD FROM JULY, 2006 TILL NOVEMBER, 2006, SHRI MOHIT PURI ALSO RECE IVED COMMISSION OF 26,89,550 DH (RS. 3,33,77,316 APPROX. ) FROM THE REAL ESTATE BROKERAGE. THEREFORE, HE HAD ENOUGH FUN DS TO THE TUNE OF RS. 10,55,35,819/- (4,96,400X9 + 6,76,90,903 + 3 ,33,77,316) UPTO DECEMBER, 2006 TO GIVE GIFTS TO HIS PARENTS FR OM DECEMBER, 2006 TO FEBRUARY, 2007. THE AO HAS NOT FOUND ANY FA ULT WITH THE DOCUMENTS FILED BY THE APPELLANT. HE HAS ALSO NOT B ROUGHT ANY MATERIAL ON RECORD TO PROVE THAT THE GIFT IS BOGUS. HE HAS ALSO NOT POINTED TO ANY EVIDENCE TO INDICATE THAT IT WAS APP ELLANT'S MONEY WHICH HAS BEEN ROUTED AS GIFT. EVIDENCE FOR INCOME IN DUBAI IN THE FORM OF CONFIRMATION FOR INCOME FROM REAL ESTATE BU SINESS IN ITA NO.3378 , 3379/DEL/2011 49 DUBAI ALONG WITH CONFIRMATION REGARDING EMPLOYMENT AND REMUNERATION IN DUBAI HAVE ALSO BEEN FILED. I HAVE ALSO GONE THROUGH THE VARIOUS CASE LAWS RELIED UPON BY THE AR . IT WAS HELD BY HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. PADAM SINGH CHOUHAN THAT THE ASSESSEE HAVING PRODUCED COPIES OF GIFT DEEDS AND AFFIDAVITS OF NRI DONORS, IN THE ABSENCE OF ANY THING TO SHOW THAT THE TRANSACTION WAS BY WAY OF MONEY LAUNDERING , ADDITION COULD NOT BE MADE IN THE HANDS OF ASSESSEE DONEE IN SPITE OF THE FACT THAT CASH DEPOSITS WERE MADE BY THE DONORS IN THEIR BANK ACCOUNTS SOON BEFORE THE GIFT AND THE DONEE HAS WITHDRAWN TH E FUNDS SOON THEREAFTER. SIMILARLY, HON'BLE ITAT AMRITSAR IN THE CASE OF ACIT VS. MANOJ KUMAR SEKHRI HAS HELD THAT CIT(A) RIGHTLY DELETED THE ADDITION MADE BY THE AD WITHOUT REBUTTING ASSESSEE' S EXPLANATION AND WITHOUT SHOWING THAT MONEY ALLEGEDLY RECEIVED B Y ASSESSEE THROUGH GIFT WAS IN FACT HIS OWN MONEY. 11. I HAVE ALSO GONE THROUGH THE OTHER CASE LAWS RE LIED UPON BY THE AR WHEREIN IT IS CLEARLY HELD THAT SOURCE OF SOURCE CANNOT BE INVESTIGATED [CIT VS. DIAMOND PRODUCTS LTD., (2009) 21 DTR (DEL) 9, JAIKISHAN DADLANI VS. ITO, (2005) 4 SOT 138 (MUM ), TOLARAM OAGA VS. CIT, (1966) 59 ITR 632 (ASSAM)]. VARIOUS C OURTS HAVE ALSO HELD THAT IT IS FOR THE AD TO ESTABLISH THAT T HE ASSESSEE HAD INTRODUCED HIS OWN UNACCOUNTED MONEY THROUGH THE CR EDITOR / DONOR [(ITO VS. SMT. BIBI RANI BANSAL, (2010) 133 T F J (AGRA) (TM) 394,ARAVALI TRADING CO. VS. ITO, (2008) 220 CT R (RAJ.) 622, CIT VS. VALUE CAPITAL SERVICES (P) LTD., (2008) 307 ITR 334 (DEL), ORIENT TRADING CO. LTD. VS. CIT, (1963) 49 ITR 723 (BOM)]. SINCE IN THE CASE OF THE APPELLANT, THE EXISTENCE OF THE DONOR HAS BEEN PROVED BECAUSE HIS STATEMENT WAS RECORDED U/S 132(4 ) AND HE HAS OWNED UP THE GIFT, PRIMARY ONUS PLACED ON THE APPEL LANT IS DISCHARGED. THEREAFTER, THE ONUS SHIFTED ON THE REV ENUE TO ESTABLISH THAT IT WAS DONEE'S MONEY WHICH WAS ROUTED THROUGH THE DONOR. BUT THE AD HAS NOT BROUGHT ANY MATERIAL ON RECORD TO PR OVE THAT IT WAS APPELLANT'S MONEY WHICH WAS ROUTED THROUGH HER SON, I.E., DONOR. ITA NO.3378 , 3379/DEL/2011 50 12. I HAVE ALSO GONE THROUGH THE CASE LAWS MENTIONE D IN THE ASSESSMENT ORDER THOUGH HE HAS NOT DISCUSSED AS TO HOW THEY ARE APPLICABLE TO THE APPELLANT. IN THE CASE OF SHYAM S UNDER GUPTA VS. ITO, (1995) 51 TTJ (JP) 436, ADDITION WAS UPHELD BE CAUSE THE ASSESSEE COULD NOT GIVE EVEN THE ADDRESS OF THE DON OR AND THEREFORE, IT WAS HELD THAT GENUINENESS OF GIFT FRO M A STRANGER CANNOT BE ACCEPTED WHO HAD BECOME ASSESSEE'S FRIEND MERELY ON THE ASSERTION THAT THE ALLEGED DONOR OCCASIONALLY S TAYED WITH THE ASSESSEE IN NEPAL. IN THE CASE OF LAL CHAND KALRA V S. CIT, 22 CTR (P&H) 135, ADDITION WAS CONFIRMED BECAUSE IT WAS HE LD THAT THE DONORS WERE NOT MEN OF MEANS AND ONE OF THEM WAS A STRANGER WHILE THE OTHER WAS A RELATIVE BUT HAD MORE IMPORTA NT LIABILITIES. IN THE CASE OF CIT VS. PRECISION FINANCE PVT. LTD., 20 8 ITR 465 (CAL), EVEN THE IDENTITY OF THE CREDITORS WAS NOT ESTABLIS HED. IN THE CASE OF SAJAN DAS & SONS VS. CIT, 264 ITR 435 (DEL), THE DO NOR DENIED HAVING MADE ANY GIFT. IN THE CASE OF THE APPELLANT, THESE FACTORS ARE NONEXISTENT BECAUSE THE DONOR IS SON OF THE APPELLA NT AND HAD SUFFICIENT FUNDS TO GIVE GIFTS. THE AO HAS ALSO REC ORDED THE STATEMENT OF THE DONOR WHEREIN HE HAS CONFIRMED HAV ING GIVEN GIFTS TO HIS PARENTS. THEREFORE, THESE CASE LAWS DO NOT S UPPORT THE CASE OF AO. 13. UNDER THE CIRCUMSTANCES, THE CREDITWORTHINESS O F THE CREDITOR IS DULY ESTABLISHED. SINCE, THE GENUINENESS OF THE GIF T AND THE CREDITWORTHINESS OF THE CREDITOR ARE ALSO DULY ESTA BLISHED, ADDITION OF RS. 2,05,00,000/- MADE BY THE AO IS HEREBY DELET ED. 16. FROM THE ABOVE FINDINGS OF LD. CIT(A), WE DO NO T FIND ANY INFIRMITY IN THE SAME. THEREFORE, GROUND NO.3 IS ALSO DISMIS SED. 17. GROUND NOS. 1 AND 4 ARE GENERAL AND DO NOT REQU IRE ADJUDICATION. 18. IN NUTSHELL, APPEALS FILED BY REVENUE ARE DISMI SSED. 19. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD JAN., 2015. SD./- SD./- (H.S.SIDHU ) (T.S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER ITA NO.3378 , 3379/DEL/2011 51 DATE: 23.01.2015 SP. COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 15/1 SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR 18,19,20,21,22 SR. PS /PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR. PS/PS 6 KEPT FOR PRONOUNCEMENT SR. PS/PS 7 FILE SENT TO BENCH CLERK SR. PS/PS 8 DATE ON WHICH THE FILE GOES TO HEAD CLERK 9 DATE ON WHICH FILE GOES TO A.R. 10 DATE OF DISPATCH OF ORDER