Shri Chintan Bharatbhai Patel, Surat V. The ACIT.,Range-3, Surat

ITA 351/AHD/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80301 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 02-07-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 04-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SONIA KUMAR
• Assessee Lawyers: RASESH SHAH
• Keywords: Gift
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER ITA NO.351/AHD/2010 A.Y.2006-07 CHINTAN BHARATBHAI PATEL, 13, HETALNAGAR SOCIETY, OPP. NAVNIRMAN PRESS, RANDER ROAD, SURAT. PAN: AJPPP 7550A VS ACIT, RANGE-3, SURAT. (APPELLANT) (RESPONDENT) REVENUE BY : SMT. SONIA KUMAR, SR.D.R., ASSESSEE(S) BY : SHRI RASESH SHAH, AR / // / DATE OF HEARING : 27/08/2014 / DATE OF PRONOUNCEMENT: 28/08/2014 / O R D E R PER SHRI MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE ARISING FRO M THE ORDER OF LD. CIT(APPEALS)-V, SURAT, DATED 05/11/2009 AND THE ONLY GROUND RAISED IS REPRODUCED BELOW: 1. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE A S WELL AS ALW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME-TAX (AP PEALS) HAS ERRED IN CONFIRMING THE ACTION OF ASSESSING OFFICER IN MAKIN G ADDITION OF RS.10,50,000/- ON ACCOUNT OF NON-GENUINE GIFTS U/S. 68 OF THE ACT. 2. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S. 143(3) DATED 21.10.2008 WERE THAT THE A SSESSEE IN INDIVIDUAL CAPACITY HAS DECLARED AN INCOME OF RS.6,16,300/-, H OWEVER IT WAS NOTED BY THE AO THAT THE ASSESSEE HAS RECEIVED GIFTS FROM SEVERAL PERSONS AMOUNTING TO RS.10,50,000/- WHICH WAS TAXED U/S.68 OF IT ACT. ITA NO.351/AHD/2010 SHRI CHINTAN B. PATEL VS. ACIT, RANGE-3, SURAT FOR A.Y. 2006-07 - 2 - 3. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APP ELLATE AUTHORITY, LEARNED CIT(A) HAS AFFIRMED THE ACTION OF THE AO BY ASSIGNING FOLLOWING REASONS: 6. I HAVE GONE THROUGH THE VIEWS OF THE ASSESSING OFFICER AS WELL AS THE SUBMISSIONS OF THE APPELLANT. IT IS A FACT THAT THE APPELLANT HAS FURNISHED COPIES OF ACKNOWLEDGEMENT OF RETURN OF INCOME FILED BY VARIOUS DONORS, BALANCE SHEET AND THEIR CAPITAL ACCOUNT. THE ASSESS EE HAS ALSO FILED SOME CONFIRMATIONS FROM VARIOUS DONORS. IN THE GIVEN FAC TS OF THE CASE IT DOES NOT ESTABLISH THE GENUINENESS OF THE GIFTS. THE ASSESSI NG OFFICER HAS GIVEN A DEFINITE FINDING THAT THE ASSESSEE FAILED TO PRODUC E THE ALLEGED DONORS WHICH IS NOT DISPUTED BY THE APPELLANT. IT IS ALSO A FACT TH AT THE COPIES OF GIFT DEEDS IN SUPPORT OF THE CLAIM OF THE GIFTS HAVE NOT BEEN FUR NISHED. THE CONTENTION THAT SUCH GIFTS DEEDS HAVE BEEN DESTROYED IN FLOODS IN T HE YEAR 2006 IS TOO SIMPLE TO ACCEPT. IT CAN BE TRUE THAT THE COPIES IN POSSES SION OF THE APPELLANT COULD HAVE BEEN DESTROYED IN FLOODS. DEEDS IN ORIGINAL OR COPIES THEREOF RETAINED WITH THE DONORS COULD HAVE BEEN OBTAINED BY THE ASS ESSEE AND BE PRODUCED BEFORE THE ASSESSING OFFICER. IT IS NOT THE CASE OF THE APPELLANT THAT SUCH DOCUMENTS RETAINED WITH THE DONORS WERE ALSO DESTRO YED IN FLOODS. IT IS DIFFICULT TO ACCEPT THIS EXPLANATION AND IT APPEARS THAT SUCH AN EXPLANATION HAVE BEEN ADVANCED TO WITHHELD THE TRUE AND CORRECT INFORMATION FROM THE ASSESSING OFFICER. THE GIFT DEEDS ARE REQUIRED TO B E REGISTERED WITH THE SUB- REGISTRAR OFFICE. IF THE PLEA OF DESTROY IS VALID T HEN THE ASSESSING OFFICER COULD HAVE OBTAINED A COPY OF THE SAME DEED FROM THE SUB- REGISTRAR OFFICE OR FROM DONORS FOR FURNISHING BEFORE THE ASSESSING OFFICER. THE GIFTS WERE MADE IN CASH. IT WAS, THEREFORE, NECESSARY TO VERIFY WHETHE R THE DONORS HAD SUCH FUND AVAILABILITY WHICH WAS GIFTED TO THE APPELLANT. IN THAT CONNECTION THE ASSESSING OFFICER HAD SPECIFICALLY ASKED FOR RELEVANT DETAILS . THE ASSESSING OFFICER HAS OBSERVED THAT THE ASSESSEE FAILED TO PROVE THE AVAI LABILITY OF FUNDS ON THE DATE OF GIFT TRANSACTION BY NOR FURNISHING THE COPY OF B ANK STATEMENT OR CASH BOOK. IN VIEW OF THIS, I DO NOT AGREE WITH THE APPELLANT' S CONTENTIONS THAT THE ADDITIONS WERE MADE SOLELY ON THE REASON OF NON PRO DUCTION OF DONORS. AS MENTIONED ABOVE, THE ASSESSEE FAILED BY PRODUCING N ECESSARY, RELEVANT AND SPECIFIC EVIDENCES TO PROVE THE GENUINENESS OF GIFT TRANSACTIONS. IN THE PRESENT CASE IT CAN BE SEEN THAT THE GIFTS WERE MADE IN CAS H, THE DONORS WERE ALL RELATIVES AND THEY HAVE MADE GIFTS FOR THE FIRST TI ME. THEREFORE ONUS ON THE ASSESSEE IS GREATER AND THE RIGOR OF PROOF TO ESTAB LISH GENUINENESS IS ALSO VERY HIGH. SINCE THE ASSESSEE HAS FAILED TO COMPLY WITH THE SPECIFIC DETAILS, THE GENERAL EXPLANATION OFFERED BY THE ASSESSEE DOES NO T MEET THE REQUIREMENT OF DISCHARGING OF ONUS IN PROVING THE GENUINENESS OF T HE GIFT TRANSACTIONS. IN THESE CIRCUMSTANCES, THE ADDITION MADE BY THE ASSES SING OFFICER, IS CONFIRMED. 4. FROM THE SIDE OF THE ASSESSEE, LEARNED AR, MR. R ASHESH SHAH APPEARED AND INFORMED THAT THE REVENUE AUTHORITIES HAVE NOT APPRECIATED ITA NO.351/AHD/2010 SHRI CHINTAN B. PATEL VS. ACIT, RANGE-3, SURAT FOR A.Y. 2006-07 - 3 - THE EVIDENCES FILED SUCH AS ACKNOWLEDGEMENT OF INCO ME TAX RETURN, CAPITAL ACCOUNT, BALANCE SHEET OF ALL THE DONORS DU LY REFLECTING THE AMOUNT GIFTED TO THE ASSESSEE AT THE TIME OF MARRIAGE HELD ON 3 RD OF DECEMBER, 2005. LEARNED AR HAS PLACED AN AFFIDAVIT AFFIRMING THE MARRIAGE AND THE PHOTOGRAPHS ALONG WITH PHOTOCOPY OF THE MARRIAGE IN VITATION. ONE MORE FACT HAS BEEN PLACED ON RECORD BY LEARNED AR THAT I T WAS FACTUALLY WRONG ON THE PART OF THE LEARNED CIT(A) TO PRESUME THAT T HE AMOUNT OF GIFT WAS IN CASH, BUT THE FACT WAS THAT THE AMOUNTS WERE REC EIVED THROUGH BANK TRANSACTION. THE CONFIRMATION OF THE DONORS WAS VER Y MUCH ON RECORD TO FURTHER SUBSTANTIATE THAT THE DONORS HAVE GIVEN THE DETAILS OF THE BANK ALONG WITH CHEQUE NUMBER THROUGH WHICH THE GIFTED A MOUNT WAS DONATED TO THE ASSESSEE. 5. ON THE OTHER HAND, FROM THE SIDE OF THE REVENUE, LEARNED SR.D.R., MRS. SONIA KUMAR HAS VEHEMENTLY SUPPORTED THE ORDER S OF THE AO AND LEARNED CIT(A). LEARNED SR.D.R. HAS PLEADED THAT SU CH A HUGE AMOUNT WAS NOT PRACTICALLY POSSIBLE TO BE GIFTED AT THE TI ME OF MARRIAGE. THE RELATIVES HAVE GIFTED THE AMOUNTS RANGING FROM RS.5 0,000/- TO RS.1,00,000/-. THE DONATED AMOUNT WAS EXCEPTIONALLY HIGH; HENCE; CASTED A SERIOUS DOUBT ABOUT THE GENUINENESS OF THE GIFT. LEARNED SR.D.R. HAS PLACED RELIANCE ON THE FOLLOWING ORDER: 1 . PRAKASHCHANDRA SINGHVI VS. ITO, (2012) 134 ITD 28 3 2. DINESH BABULAL THAKKAR VS. ACIT, (2012) 341 ITR 632 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. WE HAVE NOTED THAT THE REVENUE AUTHORITI ES HAVE LISTED THE NAMES OF ALL THOSE RELATIVES WHO HAVE GIFTED THE AM OUNTS STATED TO BE AT THE TIME OF MARRIAGE. AT THE OUTSET, WE HAVE NOTED THAT THE DATE OF ITA NO.351/AHD/2010 SHRI CHINTAN B. PATEL VS. ACIT, RANGE-3, SURAT FOR A.Y. 2006-07 - 4 - MARRIAGE WAS 3 RD OF DECEMBER 2005 AND THE AMOUNTS IN QUESTION HAVE BEEN DEPOSITED IN CO-OPERATIVE BANK ON 5 TH , 6 TH AND 7 TH DECEMBER, 2005. THE SAID DATE OF MARRIAGE HAS DULY BEEN CONFIRMED B Y AN AFFIDAVIT AS WELL AS THE INVITATION CARD, ALSO SHOWN TO US IN ORIGINA L. NEXT IS THE QUESTION THAT WHETHER THOSE RELATIVES WERE IN CAPACITY TO GI FT THE AMOUNT RANGING FROM RS.50,000/- TO RS.1,00,000/-, THAT TOO THROUGH BANKING CHANNEL. IN THIS REGARD, OUR ATTENTION HAS BEEN DRAWN ON THE RE TURN FILED BY THOSE DONORS ALONG WITH THEIR CAPITAL ACCOUNT DEMONSTRATI NG THE WITHDRAWAL OF THE AMOUNT OF GIFT. ON PAGE 6 OF THE COMPILATION, T HE ASSESSES HAS ALSO PLACED NAMES AND ADDRESSES OF THE DONORS STATING TH EIR RELATIONSHIP AND THE AMOUNT GIFTED ALONG WITH INFORMATION OF PAN ISS UED BY THE REVENUE DEPARTMENT. HENCE, WE CAN HOLD THAT THE DONORS HAVE NOT ONLY AFFIRMED THROUGH DECLARATION THE GIFTED AMOUNT BUT ALSO IN S UPPORT FURNISHED THEIR RESPECTIVE INCOME TAX RETURN DISCLOSING THE AMOUNT GIFTED UNDISPUTEDLY THROUGH BANK TRANSACTION. UNDER THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE NOT INCLINED TO A CCEPT THE ALLEGATION OF THE REVENUE DEPARTMENT THAT REQUISITE INFORMATION A S PRESCRIBED U/S.68 HAS NOT BEEN FURNISHED BY THE ASSESSEE OR THE ONUS WAS NOT DISCHARGED BY THIS ASSESSEE. THEREFORE, THE CASE LAWS CITED BY LE ARNED SR.D.R. CAN BE SAID TO BE NOT APPLICABLE ON THE FACTS OF THIS CASE . RESULTANTLY, THE FINDINGS OF THE AUTHORITIES BELOW ARE HEREBY REVERS ED AND THE GROUND RAISED BY THE ASSESSEE IS HEREBY ALLOWED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. SD/- SD/- (N.S. SAINI) (MUKUL KR. SHRAWAT) ACCOUNTANT MEMBER JUD ICIAL MEMBER AHMEDABAD; DATED 28/08/2014 ITA NO.351/AHD/2010 SHRI CHINTAN B. PATEL VS. ACIT, RANGE-3, SURAT FOR A.Y. 2006-07 - 5 - PRABHAT KR. KESARWANI, SR. P.S. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT. 3. #$#% ' '& / CONCERNED CIT 4. ' '&() / THE CIT(A)-III, AHMEDABAD 5. )*' %, ' ' % , ,-$ / DR, ITAT, AHMEDABAD 6. *./ 0 / GUARD FILE. / BY ORDER, 1 11 1/ // /,' #2 ,' #2 ,' #2 ,' #2 ( DY./ASSTT.REGISTRAR) ' ' % ' ' % ' ' % ' ' % , , , , ,-$ ,-$ ,-$ ,-$ / ITAT, AHMEDABAD