ICHUDEVI L CHORARIA, MUMBAI V. ITO 14(2)(3), MUMBAI

ITA 3384/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88233 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 20-01-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 02-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SACHIDAND DUBEY
• Keywords: Gift; Source of fund
• Section: 143(3)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, M UMBAI BEFORE S/SHRI D. KARUNAKAR RAO, (AM) AND AMIT SHUKLA, (JM) . , , ./I.T.A. NO.3384/MUM/2013 ( ! / ASSESSMENT YEAR :2009-2010) SMT.ICHUDEVI L CHORARIA, 158/164, LAXMIBHAVAN, KALBADEVI ROAD, MUMBAI-400002 / VS. THE INCOME TAX OFFICER-14(2)(3), ROOM NO.306, 3 RD FLOOR, EARNEST HOUSE, NARIMAN POINT, MUMBAI-400021 ( '# / APPELLANT) .. ( $%'# / RESPONDENT) ' ./ &' ./PAN/GIR NO. :ACSPC5374P '# ( / ASSESSEE BY S/SHRI VIJAY MEHTA/NIKESH JAIN,ANUJ KISHNADWALLA $%'# ) ( / REVENUE BY SHRI SACHIDAND DUBEY ) * / DATE OF HEARING : 20.1.2015 +,! ) * /DATE OF PRONOUNCEMENT : 6.2.2015 / O R D E R PER AMIT SHUKLA, (JM) THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAI NST IMPUGNED ORDER DATED 4.3.2013, PASSED BY THE LD.CIT (A)-25, MUMBAI FOR THE QUANTUM OF ASSESSMENT PASSED UNDER S ECTION 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT) FOR THE ASSES SMENT YEAR 2009- 10. 2. THE SOLE ISSUE RAISED IN VARIOUS GROUNDS OF APPE AL IS THE ADDITION OF RS.48,61,232/- U/S 68 OF THE ACT, ON A CCOUNT OF GIFT RECEIVED FROM NRI RELATIVE. 3384/MUM/2013 2 3. THE BRIEF FACTS OF THE CASE ARE THAT, THE ASSESS EE IS AN INDIVIDUAL HAVING INCOME MAINLY FROM SALARY. THE RETURN OF INCOME WAS FILED DECLARING TOTAL INCOME OF RS.4,33,514/-. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE AO ON THE PERUSAL O F ASSESSEES CAPITAL ACCOUNT, AND BANK ACCOUNT NOTICED THAT THE ASSESSEE HAS RECEIVED A GIFT OF RS. 48,61,232/- FROM ONE, SMT. KANKAWARI NAHATA. IN RESPONSE TO THE SHOW CAUSE NOTICE, THE ASSESSEE SUBMITTED THAT GIFT HAS BEEN RECEIVED BY THE DONOR, WHO IS A RELA TIVE RESIDING IN HONG KONG AND HAS NRI STATUS. SHE HAS REMITTED A SUM OF US$99,990/-, FROM HER BANK ACCOUNT, WHICH IS EQUIV ALENT TO RS.48,61,514/-, AND WAS CREDITED TO THE ASSESSEES BANK ACCOUNT ON 6.2.2009. A COPY OF FOREIGN BILL TRANSACTION ADVICE , COPY OF DONORS PASS-PORT AND HER BANK ACCOUNT STATEMENT FOR THE M ONTH OF APRIL AND MAY 2009 WERE FILED TO PROVE THE GENUINENESS OF GIF T. INCOME TAX RETURN OF DONORS HUSBAND FILED IN HONG KONG WAS ALSO FURNISHED. HOWEVER, THE AO HELD THAT, THE ASSESSEE HAD NOT FUR NISHED ANY DOCUMENTARY EVIDENCE TO SUPPORT THE FINANCIAL CAPAC ITY OF THE DONOR AND THE INCOME TAX DETAILS OF INLAND REVENUE DEPART MENT, HONG KONG ONLY GO TO SHOW THAT HER HUSBAND, SHRI JAYCHA NDLAL NAHATA IS A SALARIED EMPLOYEE IN A MULTINATIONAL COMPANY. THE D OCUMENTS FURNISHED BY THE ASSESSEE ONLY REFLECTS THE INCOME AND FINANCIAL CAPACITY OF HER HUSBAND NOT OF THE DONOR. SECONDL Y, THE 3384/MUM/2013 3 GENUINENESS OF THE GIFT TRANSACTION IS NOT PROVED A S THE BANK ACCOUNTS OF THE SAID DONOR PERTAINING TO THE ENTIRE PERIOD HAS NOT BEEN FURNISHED. CERTAIN OTHER DISCREPANCIES WERE A LSO POINTED OUT BY THE AO WHICH HAS BEEN DISCUSSED IN THE ASSESSMENT ORDER. ACCORDINGLY, HE ADDED THE GIFT AMOUNT OF RS.48,61, 232/- TO THE TOTAL INCOME OF THE ASSESSEE U/S 68. 4. BEFORE THE LD.CIT(A),THE ASSESSEE FILED DETAIL W RITTEN SUBMISSIONS ALONG WITH THE VARIOUS OTHER EVIDENCES TO PROVE THE GENUINENESS OF THE GIFT AND ALSO FINANCIAL CAPACITY OF THE DONOR. IT WAS SUBMITTED THAT THE GIFT WAS RECEIVED FROM THE A SSESSEES SISTER- IN-LAW, WHICH HAD CAME THROUGH HER BANK ACCOUNT I N HONG KONG AND CREDITED TO THE ASSESSEES BANK ACCOUNT. THE DONOR, SMT. KANAKWARI NAHATA IS MARRIED TO SHRI JAYCHANDLAL NAHATA, BOTH ARE RESIDENT OF HONG KONG AND HER HUSBAND IS HAVING VERY HUGE REMUN ERATION FROM COMPANY M/S GOLDEN WHEEL IMPEX LTD. RELEVANT BANK E NTRIES AND CONFIRMATION OF GIFT WAS FILED ALONG WITH THE DETAI LS, OUTWARD REMITTANCE ADVICE AND, CERTIFICATE ISSUED BY HSBC D ONORS BANK AND ALSO BY THE DENA BANK, (BANK ACCOUNT OF THE ASSES SEE). BESIDES, CLARIFYING, THE VARIOUS DISCREPANCIES AS POINTED OU T BY THE AO, IT WAS SUBMITTED THAT THAT IMMEDIATE SOURCE OF FUNDS IN TH E ACCOUNTS OF DONOR WAS FROM THE BANK ACCOUNT OF M/S KEEN JADE LT D, WHICH WAS FAMILY OWNED CONCERN OF THE DONOR, WHEREIN SHE WAS ONE OF THE 3384/MUM/2013 4 DIRECTORS. THE FINANCIAL STATEMENT OF THE SAID COMP ANY WAS ALSO FILED WHICH SHOWED THAT THE FUNDS WERE TRANSFERRED FROM M /S KEEN JADES BANK ACCOUNT TO THE BANK ACCOUNT OF THE DONOR AND FROM THERE IT WAS REMITTED TO THE ASSESSEE. THE ASSESSEES DETAILED S UBMISSIONS IN THIS REGARD HAVE BEEN INCORPORATED BY THE LD. CIT(A) AT PAGES 3 TO 7 OF THE APPELLATE ORDER. HOWEVER, THE LD.CIT(A) CONFIRM ED THE SAID GIFT ON THE GROUND THAT THE ASSESSEE HAD NOT GIVEN ANY GIFT TO THE DONOR WHO IS HER SISTER-IN-LAW AND YOUNGER TO HER GIFT ARE A LWAYS RECIPROCAL. THE ASSESSEES EXPLANATION THAT GIFT WAS RECEIVED ON TH E OCCASION OF MARRIAGE OF HER GRAND DAUGHTER, WILL NOT MAKE THE GIFT GENUINE. HE ANALYZED THE FAMILY RELATIONS AND SAID THAT UNDER T HE INDIAN CUSTOM, GIFT FROM YOUNGER SISTERIN-LAW WITHOUT ANY RECIPRO CITY IS HARD TO BELIEVE. HIS ENTIRE REASONING ARE BASED ON CERTAIN PREMISES AND PRESUMPTIONS. THEREAFTER, HE HAS REFERRED CATENA OF DECISIONS IN HIS ORDER TO CONFIRM THE SAID ADDITION WHICH INCLUDE TH E FOLLOWING DECISIONS : A) CIT V/S P.MOHANAKALA (291 ITR 278) (SC); B) ACIT V/S RAJEEV TANDON (294 ITR (AT) 219) (DEL) 103 (ITD 560)(CONFIRMED BY HIGH COURT 294 ITR 488) C) CIT V/S ANIL KUMAR (DEL) 292 ITR 552 D) KALE KHAN MOHAMMAD HANIF V/S CIT (SC) 50 ITR 1 E) SUMATI DAYAL V/S CIT 214 ITR 801 (SC) F) D C RASTOGI V/S ACIT (57 ITD 295) ITAT, DELHI D BENCH. G) BANARSI PRASAD V/S CIT (304 ITR 239) (ALL) I) CIT V/S MIRA S KHURANA (333 ITR 488 (GUJ) J) YASH PAL GOEL V/S CIT (310 ITR 75) (P&H) 3384/MUM/2013 5 5. BEFORE US THE LD.AR, SHRI ANUJ KISHNADWALLA, SUBMITTED THAT THE GIFT HAS NOT BEEN RECEIVED BY A STRANGER BUT FROM A CLOSE RELATIVE WHO IS SISTER OF HER LATE HUSBAND. THE GIFT WAS RECEI VED ON THE OCCASION OF MARRIAGE CEREMONY OF ASSESSEES GRAND DAUGHTER. THE GENUINENESS OF THE TRANSACTION CAN BE SEEN FROM THE REMITTANCE FROM DONORS BANK ACCOUNT TO THE ASSESSEES BANK ACCOUNT WHICH HAS DULY BEEN SUPPORTED BY REMITTANCE CERTIFICATE ISSUED BY HSBC BANK AND ALSO FROM THE CERTIFICATE ISSUED BY THE DENA BANK IN INDIA. REGARDING FINANCIAL CAPACITY AND CREDITWORTHINESS, IT WAS SUBMITTED BY HIM THAT THE DONOR WAS A DIRECTOR OF M/S KEEN JA DE LTD, A FAMILY OWNED CONCERN AND THE MONEY CAME FROM THE BANK ACC OUNT OF THE SAID COMPANY TO HER BANK ACCOUNT AND FROM THERE IT HAS BEEN REMITTED TO INDIA IN ASSESSEES BANK ACCOUNT. IN S UPPORT OF THIS CONTENTION, HE SHOWED THE RELEVANT BANK ENTRIES AN D ALSO POINTED OUT ALL THE RELEVANT DOCUMENTS AND EVIDENCE WHICH HAVE BEEN PLACED IN THE PAPER BOOK. 6. ON THE OTHER HAND, THE LD.DR RELIED UPON THE ORD ERS OF AUTHORITIES BELOW AND SUBMITTED THAT GIFT SHOULD BE CONFIRMED AS INCOME FROM UNDISCLOSED SOURCE OF ASSESSEE, BECAUSE THE FINANCIAL CAPACITY OF THE DONOR WAS NOT FULLY PROVED. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED RELEVANT MATERIAL PLACED ON RECORD. THE ASSESSEE IS A WIDOW WHO HAS 3384/MUM/2013 6 RECEIVED A GIFT OF RS.US$ 99,990/- EQUIVALENT TO IN R48,61,514/-, FROM HER LATE HUSBANDS SISTER, WHO IS AN NRI BASED IN HONG KONG. THE GIFT WAS RECEIVED ON THE OCCASION OF HER GRAND DAUG HTERS MARRIAGE. SO FAR AS THE TRANSACTION OF GIFT IS CONCERN, THE S AME IS EVIDENCED FROM THE BANK STATEMENT OF THE ASSESSEE; REMITTANCE ADVICE OF DENA BANK; BANK STATEMENT OF THE DONOR, SMT. KANAKWARI N AHATA; FOREIGN REMITTANCE ADVICE ISSUED BY HSBC BANK HONG KONG. I T HAS BEEN FURTHER BROUGHT ON RECORD THAT THE MONEY IN BANK AC COUNT OF THE DONOR HAD COME FROM M/S KEEN JADE LTD, A FAMILY OWNED CO NCERN, WHEREIN THE DONOR WAS ONE OF THE DIRECTORS, ALONGWITH HER HUSBAND AND DAUGHTER-IN-LAW. FROM THE BANK ACCOUNT OF M/S KEEN JADE LTD,(A COPY WHICH HAS BEEN PLACED AT PAGE 20 OF THE PAPE R BOOK) IT IS SEEN THAT ON 5.2.2009 AN AMOUNT OF US$ 100,035. HAS BE EN DEBITED AND HAS BEEN CREDITED TO THE BANK ACCOUNT OF THE DON OR ON 5.2.2009, ITSELF. ON THE SAME DATE IT HAS BEEN REMITTED TO T HE ASSESSEES BANK ACCOUNT IN INDIA. THIS FACT IS EVIDENT FROM PAGE 16 OF THE PAPER BOOK WHICH IS, THE HSBC ACCOUNT OF THE DONOR. THUS, THE FLOW OF TRANSACTION AND THE FINANCIAL CAPACITY OF THE DONO R STANDS AMPLY PROVED. NOT ONLY THAT, THE ASSESSEE HAD ALSO FILED THE INCOME TAX RETURN OF M/S KEEN JADE LTD., WHEREIN THE DONOR HAS BEEN SHOWN AS A DIRECTOR OF THE COMPANY. FROM ALL THESE DETAILS AND EVIDENCE NOT ONLY THE GENUINENESS OF THE TRANSACTION IS PROVED BUT ALSO THE 3384/MUM/2013 7 CREDITWORTHINESS/FINANCIAL CAPACITY OF THE DONOR. T HE ASSESSEES PRIMARY ONUS HAS BEEN DISCHARGED. HERE, IN THIS CA SE, THE DONOR IS A CLOSE RELATIVE WHO HAS GIVEN THE GIFT CONFIRMATION IN A GIFT DEED GIVING ALL THE PARTICULARS OF THE GIFT TO THE ASSESSEE. TH E REASONING GIVEN BY THE LD.CIT(A) IS PURELY BASED ON HYPOTHESES AND PRE MISES, LIKE THE GIFT ALWAYS NEEDS TO BE RECIPROCAL AND WHY WOULD Y OUNGER SISTER-IN- LAW WILL GIVE GIFT TO ELDER SISTER-IN-LAW WITHOUT ANY RECIPROCITY. THIS ANALYSIS OF CUSTOMARY RELATIONSHIP CANNOT BE THE BASIS FOR CONFIRMING THE ADDITION, MORE SO, WHEN THE ENTIRE DETAILS OF TRANSACTION SPECIALLY RELATING TO FINANCIAL CAPACITY OF THE DONOR AND HOW THE MONEY HAS BEEN TRANSFERRED FROM M/S KEEN JADE LTD TO THE DONO RS ACCOUNT AND FROM THERE TO THE ASSESSEES ACCOUNT STANDS FULLY E XPLAINED. WITHOUT ANALYZING THESE DETAILS AND EVIDENCE, THE LD. CIT( A) HAS GIVEN HIS FINDINGS PURELY BASED ON CASE LAWS. THE RELIANCE U PON THE CASE LAWS ARE ONLY SECONDARY, ONE HAS TO ANALYZE THE FACTS FI RST AND THE EVIDENCES AND MATERIAL BROUGHT ON RECORD.THE CASELA W CANNOT BE RELIED BLINDLY DE-HORS THE APPRECIATION OF FACTS A ND EVIDENCES. NONE OF THE CASE LAW AS RELIED UPON THE BY THE LD. CIT( A) CAN BE HELD TO BE APPLICABLE, EITHER IN PRINCIPLE OR ON FACTS. THER EFORE, THE FINDINGS OF THE LD. CIT(A) IS REVERSED AND THE ADDITION OF RS. 48,61,232/- MADE U/S 68, STANDS DELETED. 3384/MUM/2013 8 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 6TH FEB, 2015 . +,! - ./ 6TH FEB, 2015 , ) 0 1 SD SD ( . / D. KARUNAKAR RAO) ( / AMIT SHUKLA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER 4 MUMBAI:6TH FEB,2015. . . ./ SRL , SR. PS ' # $%& '&($ / COPY OF THE ORDER FORWARDED TO : 1. '# / THE APPELLANT 2. $%'# / THE RESPONDENT. 3. ( ) / THE CIT(A)- CONCERNED 4. / CIT CONCERNED 5. 560 $7 , * 7 , 4 / DR, ITAT, MUMBAI CONCERNED 6. 0 8 / GUARD FILE. / BY ORDER, TRUE COPY 9 & (ASSTT. REGISTRAR) * 7 , 4 /ITAT, MUMBAI