ITO,WD-24(1), KOL, Kolkata V. Smt. Anjana Garodia, Kolkata

ITA 34/KOL/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78326 (ITAT-KOLKATA)
• Duration Of Justice: 4 year(s) 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 20-04-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 06-01-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJENDRA PRASAD
• Assessee Lawyers: MALAY DHAR
• Keywords: Gift
• Section: 131

Judgement Text

I.T.A. NO. 34/KOL./2010 ASSESSMENT YEAR: 2004-05 PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA C BENCH, KOLKATA BEFORE SHRI SHAMIM YAHYA (ACCOUNTANT MEMBER), AND SHRI GEORGE MATHAN (JUDICIAL MEMBER) I.T.A. NO. 34/KOL. / 2010 ASSESSMENT YEAR : 2004-05 INCOME TAX OFFICER,.................. ...APPELLANT WARD-24(1), KOLKATA, BAMBOO VILLA, 9 TH FLOOR, 169, A.J.C. BOSE ROAD, KOLKATA-700 014 -VS.- SMT. ANJANA GARODIA,............................. .........RESPONDENT 10/1, PRINCEP STREET, KOLKATA-700 072 [PAN : ADPPG 3085 K] APPEARANCES BY: SHRI RAJENDRA PRASAD, JCIT, SR. D.R., FOR THE DEPARTMENT SHRI MALAY DHAR, ADVOCATE, FOR THE ASSESSEE DATE OF CONCLUDING THE HEARING : APRIL 30, 2014 DATE OF PRONOUNCING THE ORDER : MAY 2 ND , 2014 O R D E R PER GEORGE MATHAN: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-XIV, KOLKATA I N APPEAL NO. 388/CIT(A)-XIV/06-07 DATED 30.09.2009 FOR THE ASSES SMENT YEAR 2004- 05. 2. SHRI RAJENDRA PRASAD, JCIT, SR. D.R. REPRESENTED ON BEHALF OF THE REVENUE AND SHRI MALAY DHAR, ADVOCATE, REPRESENTED ON BEHALF OF THE ASSESSEE. 3. THE APPEAL FILED BY THE REVENUE IS DELAYED BY 14 DAYS, FOR WHICH NECESSARY AFFIDAVIT HAS BEEN FILED. LD. A.R. OF THE ASSESSEE HAD NO I.T.A. NO. 34/KOL./2010 ASSESSMENT YEAR: 2004-05 PAGE 2 OF 6 OBJECTION FOR CONDONING THE DELAY. CONSEQUENTLY DEL AY IN FILING OF THE APPEAL BY THE REVENUE IS CONDONED AND THE APPEAL IS DISPOSED OF ON MERITS. 4. IT WAS THE SUBMISSION BY THE LD. D.R. THAT THE O NLY ISSUE IN THE REVENUES APPEAL WAS AGAINST THE ACTION OF THE LD. CIT(APPEALS) IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER REPRESENTING GIFTS RECEIVED BY THE ASSESSEE. IT WAS THE SUBMISSION BY THE LD. D.R. THAT THE ASSESSEE IS AN INDIVIDUAL WHO IS HAVING SALARY INCO ME, HOUSE PROPERTY INCOME, AND INCOME FROM OTHER SOURCES. THE ASSESSEE HAD CLAIMED TO HAVE RECEIVED GIFTS TO AN EXTENT OF RS.11,88,000/- FROM VARIOUS PERSONS. CONSEQUENTLY IN THE COURSE OF ASSESSMENT, NOTICES U NDER SECTION 131 WERE ISSUED TO ALL THE DONORS TO APPEAR PERSONALLY. EXCE PT IN RESPECT OF FOUR CASES ALL THE NOTICES WERE RECEIVED BY THE DONORS. IN RESPECT OF THE PERSONS ON WHOM THE NOTICES WERE NOT SERVED, THE AS SESSEE WAS REQUESTED TO GIVE THE FRESH ADDRESSES AND THE NOTIC ES WERE SERVED ON THE ADDRESSES AS PROVIDED BY THE ASSESSEE. NONE OF THE DONORS APPEARED BEFORE THE ASSESSING OFFICER IN RESPONSE TO THE NOT ICES UNDER SECTION 131. THERE WERE 13 DONORS. ON 11.12.2006, A LETTER WAS I SSUED TO THE ASSESSEE POINTING OUT THAT NONE OF THE DONORS HAD APPEARED I N RESPONSE TO THE NOTICES UNDER SECTION 131. THE ASSESSEE WAS CONSEQU ENTLY ALSO DIRECTED TO PRODUCE THE SAID DONORS ON 18.12.2006, 19.12.200 6 AND 20.12.2006. ON 15.12.2006, THE ASSESSEE FILED A LETTER STATING THA T IT WAS NOT POSSIBLE TO PRODUCE THE DONORS BUT HOWEVER, ENCLOSED PHOTO-COPY OF DOCUMENTS IN RESPECT OF THE DONORS. ON 18.12.2006 LD. A.R. OF TH E ASSESSEE AND THE HUSBAND OF THE ASSESSEE APPEARED AND PLEADED THEIR INABILITY TO ENSURE PERSONAL APPEARANCE OF THE DONORS. THE ASSESSING OF FICER HAD ANALYSIS THE VARIOUS DOCUMENTS PRODUCED IN RESPECT OF THE DONORS AND HAD FOUND THAT ALL THE DONORS HAD SOLD THEIR SHARES AND AFTER CLEA RANCE OF THE CHEQUES THEY GIFTED THE AMOUNTS BY CHEQUE TO THE ASSESSEE. ALL THE DONORS HAD STATED THAT THE GIFTS WERE MADE OUT OF LOVE AND AFF ECTION AND THERE WERE VERY THIN RELATIONSHIP AND IN MOST CASES WERE NO BL OOD RELATIONSHIP WITH I.T.A. NO. 34/KOL./2010 ASSESSMENT YEAR: 2004-05 PAGE 3 OF 6 THE DONORS. IT WAS FURTHER SUBMISSION THAT IN ALL T HE CASES BEFORE THE AMOUNTS WERE CREDITED WHICH WERE GIFTED TO THE ASSE SSEE, THE BALANCES IN THE BANK ACCOUNTS WERE NOMINAL AND IN MANY CASES LE SS THAN A THOUSAND. IT WAS THE SUBMISSION THAT CONSEQUENTLY THE ASSESSI NG OFFICER HAD TREATED THE GITS RECEIVED AS INCOME FROM UNDISCLOSED SOURCE S IN THE HANDS OF THE ASSESSEE. IT WAS THE SUBMISSION THAT ON APPEAL, LD. CIT(APPEALS) HAD DELETED THE ADDITION ON THE GROUND THAT THE DOCUMEN TS RELATED TO THE DONORS AVAILABLE WITH THE ASSESSING OFFICER WERE OV ERWHELMING BEING EVIDENCE TO PROVE THE GENUINENESS OF THE GIFTS. IT WAS THE SUBMISSION THAT THE ASSESSEE HAVING NOT PROVED THE IDENTITY OF THE DONORS AND CREDITWORTHINESS OF THE DONORS, THE ORDER OF THE LD . CIT(APPEALS) WAS LIABLE TO BE REVERSED. 5. IN REPLY, LD. A.R. SUBMITTED THAT THE ASSESSEE H AS PRIMA FACIE DISCHARGED HER BURDEN BY PRODUCING RELEVANT AND COG ENT EVIDENCES WHICH ARE AUTHENTICATED AND THEN THE ASSESSING OFFICER CO ULD NOT GO FURTHER AND READ HIS MIND AS TO HOW DONORS DECIDED TO MAKE THE SUBSTANTIAL GIFTS. HE RELIED UPON THE DECISION OF THE HONBLE MADRAS HIGH COURT IN THE CASES OF A. RAJENDRAN, A. SRINIVASAN, S. BALAJI MANIKANDAN, R. MOHANAKALA, S. KALAVATHY VS.- ACIT REPORTED IN (2007) 291 ITR 178 (MAD.). IT WAS THE SUBMISSION THAT THE DONORS ARE INCOME-TAX ASSESSES AND THE ASSESSING OFFICER COULD NOT GO INTO THE MOTIVE OR PURPOSE OF THE GIFT AS THE SAME WOULD BE IRRELEVANT ONCE THE RELEVANT FACTS ALONGWI TH THE DOCUMENTS ARE PRODUCED. HE PLACED RELIANCE ON THE PAGES 19 TO 145 OF THE PAPER BOOK, WHICH WERE LETTERS OF THE DONORS, DEEDS OF GIFTS, B ANK STATEMENTS OF THE DONORS, BALANCE-SHEET AND THE PROFIT & LOSS A/C OF THE DONORS, INCOME & EXPENDITURE STATEMENT OF THE DONORS AND ALSO PAN CA RD COPIES OF SOME OF THE DONORS AND ELECTION ID CARD COPIES OF SOME OF T HE DONORS. HE ALSO RELIED UPON THE FOLLOWING DECISIONS:- (I) CIT VS.- DAULAT RAM RAWATMULL (1973) 87 ITR 349 (SC); (II) CIT VS.- SURESH KUMAR KAKAR (2010) 324 ITR 231 (DELHI); (III) CIT VS.- R.S. SIBAL (2004)269 ITR 429 (DEL HI); I.T.A. NO. 34/KOL./2010 ASSESSMENT YEAR: 2004-05 PAGE 4 OF 6 (IV) MURLIDHAR LAHORIMAL VS.- CIT (2006) 280 ITR 512 (GUJ.); (V) CIT VS.- DIVINE LEASING & FINANCE LTD., (II) GENERAL EXPORTS & CREDITS LTD. (III) LOVELY EXPORTS P. LTD. (2008) 299 ITR 268 (DELHI); (VI) CIT VS.- OASIS HOSPITALITIES P. LTD. (2011) 3 33 ITR 119 (DELHI); IT WAS THE SUBMISSION THAT THE ORDER OF LD. CIT(APP EALS) WAS LIABLE TO BE UPHELD. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERU SAL OF THE ASSESSMENT ORDER CLEARLY SHOWS THAT THE ASSESSING O FFICER HAS ISSUED NOTICES UNDER SECTION 131 TO THE DONORS. THE ASSESS ING OFFICER MENTIONED THAT ON 18.12.2006, THE LD. A.R. OF THE ASSESSEE AN D HER HUSBAND APPEARED AND PLEADED THEIR INABILITY TO ENSURE PERSONAL APPE ARANCE OF THE DONORS. HOWEVER, ON PERUSAL OF PAGES 16 & 17 OF THE PAPER B OOK SHOWS OF A LETTER DATED 04.01.2007 WHEREIN THE ASSESSEE SEEMS TO HAVE MADE STATEMENT THAT THE ASSESSEE HAD PRODUCED 8 DONORS PERSONALLY TO THE OFFICE OF THE ASSESSING OFFICER AND THAT THE ASSESSING OFFICER WA S NOT PRESENT IN THE OFFICE. THIS LETTER IS DATED 27.12.2006 BUT FILED O N 04.01.2007. THE ASSESSMENT ORDER IS DATED 29.12.2006. A PERUSAL OF PAGE 18 OF THE PAPER BOOK SHOWS THAT THE ASSESSEE HAS FILED A LETTER DAT ED 15.12.2006 ON 15.12.2006 WHEREIN THE ASSESSEE SAYS THAT PERSONAL REPRESENTATION BY EACH OF THE DONORS WOULD BE PRACTICALLY IMPOSSIBLE AS SOME OF THEM ARE ELDERLY LADIES AND SOME HAVE BEEN MARRIED AND ARE N OT STAYING IN KOLKATA ANYMORE AND SOME SCARED ABOUT GOING TO INCOME TAX D EPARTMENT. A PERUSAL OF THE OTHER PAPERS IN RELATION TO THE DONO RS SHOWS THAT THE INCOME-TAX RETURNS IN RESPECT OF THE DONORS AND THE ELECTION ID CARD, PAN CARD, BANK PASS BOOK HAVE BEEN PRODUCED. THE ELECTI ON ID CARDS SHOW THE ADDRESS AS OF KOLKATA. THE AFFIDAVITS OF THE VA RIOUS DONORS SHOW THEIR ADDRESSES AS KOLKATA OR HOWRAH. EVEN BEFORE THE LD. CIT(APPEALS) IT IS ONLY ON THE BASIS OF THE DOCUMENTS PRODUCED THE REL IEF HAS BEEN GRANTED. INTERESTINGLY IN PAGE 17 OF THE PAPER BOOK THE ASSE SSEE SAYS THAT SHE I.T.A. NO. 34/KOL./2010 ASSESSMENT YEAR: 2004-05 PAGE 5 OF 6 WAITED WITH THE DONORS FOR ONE HOUR BUT IN THE ORDE R OF LD. CIT(APPEALS) IN THE SUBMISSIONS MADE BEFORE HIM THAT IN PAGE 6 S UB-PARA 4.4 IT IS CLAIMED THAT SHE WAS WAITED FOR MORE THAN TWO HOURS ON 28.11.2006. EVEN THOUGH THE ASSESSEE SAYS THAT BEFORE THE LD. CIT(AP PEALS) THAT SHE WAITED FOR 2 HOURS ON 28.11.2006 TO MEET THE ASSESSING OFF ICER WITH THE DONORS, THE ASSESSEE HAS FILED A LETTER DATED 15.12.2006, W HEREIN SHE SAYS THAT PERSONAL REPRESENTATION BY EACH OF THE DONORS WOULD BE PRACTICALLY IMPOSSIBLE AND THERE IS NOTHING MENTIONED REGARDING PRODUCING THE DONORS BEFORE THE ASSESSING OFFICER AND THE ASSESSI NG OFFICER NOT BEING PRESENT. IT IS ONLY IN THE LETTER DATED 27.12.2006 FILED ON 04.01.2007 THAT FOR THE FIRST TIME IT WAS MENTIONED IN THE STATEMEN T THAT THE ASSESSEE HAD COME PERSONALLY WITH EIGHT OF THE DONORS BEFORE THE ASSESSING OFFICER. ADMITTEDLY, THERE ARE DISCREPANCIES WHICH ARE NOT R ECONCILABLE IN RESPECT OF THE CLAIMS MADE BY THE ASSESSEE AND IN RESPECT O F THE PRODUCTION OF THE DONORS BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICE HAS TREATED THE ALLEGED GIFTS AS INCOME FROM OTHER SOURCES IN THE H ANDS OF THE ASSESSEE. NOW WHEN THE ASSESSEE CLAIMS GIFT, IT IS FOR THE AS SESSEE TO PROVE THE (I) IDENTITY OF THE DONORS, (II) CREDITWORTHINESS OF TH E DONORS AND (III) GENUINENESS OF THE TRANSACTIONS. IF ANYONE OF THE A BOVE THREE STANDS DISPROVED OR UNPROVED, ADDITION UNDER THE HEAD UND ISCLOSED SOURCES WOULD STAND. ADMITTEDLY, THE ASSESSEE HAS PRODUCED SUBSTANTIAL DOCUMENTARY EVIDENCES. HOWEVER, IDENTITY OF THE DON ORS REMAINS TO BE PROVED. MORE SO, THE CREDITWORTHINESS OF THE DONORS . INTERESTINGLY IN THE PRESENT CASE AN ASSESSEE WHO IS HAVING ASSETS OF NE ARLY RS.31 LAKHS IS RECEIVING GIFTS FROM PERSONS WHOSE CAPITAL VARIES F ROM RS.1.5 LAKHS TO ABOUT RS.4 LAKHS AND ALL THESE PERSONS ARE GIVING G IFTS OF RS.1 LAKH AND MORE TO THE ASSESSEE AND EXCEPT FOR ONE OF THE DONO RS, NONE OF THE DONORS HAVE ANY DIRECT BLOOD RELATIONSHIP WITH THE ASSESSE E. THIS BEING SO BEFORE APPLYING THE VARIOUS CASE LAWS, WHICH ARE BEING REL IED UPON BY THE ASSESSEE, THE BASIC FACTUM OF THE IDENTITY OF THE D ONORS NEEDS TO BE ESTABLISHED. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE ISSUES IN THIS APPEAL MUST BE RESTORED TO THE FILE OF ASSESSI NG OFFICER FOR RE- I.T.A. NO. 34/KOL./2010 ASSESSMENT YEAR: 2004-05 PAGE 6 OF 6 ADJUDICATION AND WE DO SO. THE ASSESSING OFFICER SH ALL ISSUE FRESH 131 NOTICES TO THE DONORS AND IF THERE IS NO RESPONSE O F PERSONAL APPEARANCE AS REQUIRED UNDER SECTION 131 BY THE DONORS, OPPORT UNITY SHALL BE GIVEN TO THE ASSESSEE TO PRODUCE SUCH DONORS AS THE ASSES SING OFFICER DEEMS NECESSARY FOR VERIFYING THE IDENTITY, CREDITWORTHIN ESS AND GENUINENESS OF THE GIFTS. IN THE RESULT, THE ISSUES IN THIS APPEAL ARE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR RE-ADJUDICATION AFTER GRA NTING THE ASSESSEE ADEQUATE OPPORTUNITY TO SUBSTANTIATE HER CASE. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 2 ND MAY, 2014. SD/- SD/- SHAMIM YAHYA GEORGE MATHAN (ACCOUNTANT MEMBER) (JU DICIAL MEMBER) KOLKATA, THE 2 ND DAY OF MAY, 2014 COPIES TO : (1) INCOME TAX OFFICER, WARD-24(1), KOLKATA, BAMBOO VILLA, 9 TH FLOOR, 169, A.J.C. BOSE ROAD, KOLKATA-700 014 (2) SMT. ANJANA GARODIA, 10/1, PRINCEP STREET, KOLKATA-700 072 (3) COMMISSIONER OF INCOME-TAX (APPEALS) (4) COMMISSIONER OF INCOME TAX (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.