Shri Rajkumar Bajaj, V. The I T O 5 (1),

ITA 380/IND/2008

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 9601 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 27-12-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 20-08-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRADEEP KUMAR MITRA
• Assessee Lawyers: H P VERMA
• Keywords: Gift; Assessment record
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH : INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C.SHARMA, ACCOUNTANT MEMBER PAN NO. : ABEPB9712H I.T.A.NO.380/IND/2008 A.Y. : 2003-04 SHRI RAJKUMAR BAJAJ, INCOME-TAX OFFICER, 4, NAYAPURA, VS 5(1), INDORE. INDORE. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI H.P.VERMA, ADV. AND SHRI ASHISH GOYAL, CA RESPONDENT BY : SHRI PRADEEP KUMAR MITRA, SR. DR O R D E R PER R. C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) DATED 7 TH MAY, 2008, FOR THE ASSESSMENT YEAR 2003- 04, IN THE MATTER OF ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) DATED 2.3.2006. -: 2: - 2 2. THE ONLY GRIEVANCE OF THE ASSESSEE RELATES TO THE ADDITION OF RS. 4,32,750/- RECEIVED BY THE ASSESSEE AS GIFTS FROM FRIENDS AND RELATIVES. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. 4. IN THE COURSE OF SCRUTINY ASSESSMENT, THE AO FOUND THAT THE ASSESSEES CAPITAL ACCOUNT SHOWS NRE GIFT OF RS. 4,32,750/-. THE COPIES OF LETTERS OF GIFT RECEIVED FROM (1) SHRI SUDHIR MENGHANI, RS. 50,000/-, (2) SHRI MAHESH MENG HANI RS. 1,50,000/- (3) SHRI SUBHASH BHAMBANI US$ 2850 ( RS.) (4) SMT. SULOCHANA BHAMBANI US$2050 ( RS. ) WERE ENCLOS ED WITH THE RETURN OF INCOME. THE GIFT LETTERS ALSO MENTION THAT THE GIFTS WERE MADE OUT OF NATURAL LOVE AND AFFECTION T OWARDS THE ASSESSEE. VIDE OFFICE LETTER DATED 1.07.05, THE ASS ESSEE WAS REQUIRED TO FURNISH A) ORIGINAL GIFT-DEED; B) STATE THE RELATIONSHIP WITH THE DONOR; C) OCCASION AND REASON OF GIFT MADE. D) DETAILS OF CORRESPONDENCE/COMMUNICATION WITH THE DONOR; -: 3: - 3 E) COPY OF BANK ACCOUNT THROUGH WHICH THE SAID GIFT WAS RECEIVED. F) COMPLETE NAME AND PRESENT ADDRESS OF THE DONOR. VIDE HIS LETTER DATED 13 TH JULY, 2005, THE ASSESSEE HAS SUBMITTED AS TABULATED UNDER : S.NO. NAME OF DONOR RELATION AMOUNT REASON 1. SHRI SHUBHASH BHAMBANI HUSBAND OF ELDER SISTER OF WIFE US$2850/- OUT OF NATURAL LOVE AND AFFECTION 2. SMT. SULOCHANA BHAMBANI ELDER SISTER OF WIFE US$2050 (RS.97375) -DO- 3. SHRI MAHESH MENGHANI NEIGHBOURS, NOW LIVING ABORAD RS. 1,50,000/- -DO- 4. SHRI SUDHIR MENGHANI NEIGHBOURS, NOW LIVING ABROAD RS. 50,000/- -DO- 5. THE AO FURTHER STATES THAT THE ASSESSEE SHRI RAJKUMAR BAJAJ WAS EXAMINED ON OATH ON THIS ISSUE O N 23.8.2005. DURING HIS EXAMINATION HE HAS NARRATED T HE SAME FACT AS SUBMITTED IN HIS WRITTEN SUBMISSION. THE AO OBSERVED THAT ASSESSEE WAS UNABLE TO SUBMIT ANY PERSONAL KNO WLEDGE OF -: 4: - 4 THESE DONORS. ON BEING ASKED HE WAS UNABLE TO STATE THE NAME OF THE CHILDREN OF SHRI SHUBHASH AND SULOCHANA BHAM BANI, THOUGH THESE PEOPLE WERE STATED TO BE CLOSE RELATIO NS. 6. BEING NOT SATISFIED WITH THE ASSESSEES REPLY, THE AO HELD THAT THE GIFTS WERE ARRANGED BY THE ASSESSEE. ACCORDINGLY, THE ADDITION WAS MADE ON ACCOUNT OF THE GIFT RECEIV ED BY THE ASSESSEE. BY THE IMPUGNED ORDER, THE LD. CIT(A) CON FIRMED THE ADDITION AND THE ASSESSEE IS IN FURTHER APPEAL BEFO RE US. 7. WE HAVE CONSIDERED THE RIVAL CONTENTIONS, CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AN D FOUND FROM RECORD THAT SMT. SULOCHANA BHAMBANI IS ASSESSE ES WIFES ELDER SISTER ( SALI ), WORKING IN JEWELLERY- CUM- DEPARTMENTAL STORES IN U. S. A. THE OWNER BEING HUS BAND OF ELDER SISTER OF THE ASSESSEES WIFE WAS NON-RESIDEN T INDIAN WITH U. S. A. CITIZENSHIP LIVING IN U.S.A. FOR MORE THAN 10 YEARS. THE AMOUNT OF GIFTS WAS RECEIVED THROUGH CHEQUES FROM U . S. A. THE CHEQUES WAS REALIZED THROUGH COLLECTION CENTRE BY DONEE BANK THROUGH ST. THOMAS ( U.S.A.). IN SUPPORT OF TH E GIFT, THE ASSESSEE HAD FILED COPY OF ORIGINAL GIFT LETTER, CO PY OF CHEQUES -: 5: - 5 OF US $ 2850 OF FOREIGN BANK AND COPY OF PASS PORT OF THE DONOR. 8. SMT. SULOCHNA BHAMBANI IS REAL ELDER SISTER OF THE WIFE OF THE ASSESSEE MARRIED TO SUBHASH BHAMBANI LIVING IN U.S.A. ,THUS, HAVING CLOSE RELATION WITH THE ASSESSEE. THE DONOR IS A NON-RESIDENT INDIAN HAVING USA CITIZEN SHIP LIVING IN USA FOR MORE THAN 10 YEARS. THE AMOUNT OF GIFT WAS RECEIVED THROUGH CHEQUES FROM USA AND THE SAME WAS REALIZED THROUGH COLLECTION CENTRE BY DONEES BANK TO ST. THOMAS, US A. TO SUBSTANTIATE THE GIFT, THE ASSESSEE HAS FILED COPY OF ORIGINAL GIFT LETTER, COPY OF CHEQUE OF US$ 2050/- OF FOREIGN BAN K AND COPY OF PASS PORT. 9. IN CASE OF MAHESH MENGHANI BEING A C. A. SERVING IN A.L.AL-JAJNO CONSULTING & CONTRACTING FIRM EARNING APPROXIMATELY RS. 65,000/- PER MONTH. THE DONORS P ARENTS AND ASSESSEES FAMILY WAS NEIGHBOUR SINCE LAST 20 Y EARS HAVING FAMILY RELATIONS WITH HIS PARENTS AND OF FAM ILY MEMBERS. THE DONOR WAS LIVING AT KUWAIT, HE WAS SON OF RAKHI SISTER OF THE ASSESSEE ( CLOSE FAMILY FRIENDS ). TH E AMOUNT OF GIFT WAS DIRECTLY RECEIVED THROUGH DRAFT OF HDFC BA NK, KUWAIT -: 6: - 6 BRANCH, PAYABLE AT INDORE AND THE SAME WAS REALIZED THROUGH ASSESSEES BANK UNDER LOCAL CLEARING. IN SUPPORT OF GIFT, THE ASSESSEE HAD FILED COPY OF ORIGINAL GIFT LETTER, CO PY OF DEMAND DRAFT AND COPY OF PASS PORT. 10. SHRI SUDHIR MENGHANI IS A NON-RESIDENT INDIAN LIVIN G IN KUWAIT SINCE LAST FOUR YEARS. DONORS PARENTS AN D HIS FAMILY IS NEIGHBOUR SINCE LAST 20 YEARS HAVING FAMILY RELA TIONS WITH HIS PARENTS AND OF FAMILY MEMBERS. HE WAS STATED TO BE SON OF RAKHI SISTER OF THE ASSESSEE. GIFT WAS GIVEN OUT OF NATURAL LOVE AND AFFECTION TOWARDS THE ASSESSEE. DONOR IS A MECH ANICAL ENGINEER SERVING IN U.A.E. DRAWING SALARY OF RS. 1 LAKH PER MONTH. THE GIFT AMOUNT WAS RECEIVED DIRECTLY THROUG H DRAFT FROM KUWAIT, PAYABLE AT INDORE AND THE SAME WAS REA LIZED THROUGH ASSESSEES BANK IN LOCAL CLEARING. IN SUPPO RT OF GIFT, THE HAD FILED ORIGINAL GIFT LETTER, COPY OF DRAFT O F RS. 50,000/- OF FOREIGN BANK AND COPY OF PASS PORT OF THE DONOR. 11. THERE IS NO DISPUTE TO THE WELL SETTLED LEGAL PROPO SITION THAT IN CASE OF GIFT, THE ASSESSEE IS NOT ONLY REQU IRED TO ESTABLISH IDENTITY OF THE DONOR, GENUINENESS OF THE TRANSACTION OF THE GIFT BUT ALSO HIS CAPACITY TO PAY THE AMOUNT OF GIFT. AFTER -: 7: - 7 GOING THROUGH THE DOCUMENTS AS DISCUSSED HEREINABOV E, WE ARE SATISFIED THAT DONORS WERE EITHER HAVING CLOSE RELATIONS OR CLOSE FAMILY FRIENDS OF THE ASSESSEE. ALL WERE SETT LED EITHER IN USA OR KUWAIT HAVING GOOD SOURCE OF EARNING. THE ID ENTITY OF THE DONORS AND THE GENUINENESS OF THE GIFT WAS NOT DOUBTED BY THE ASSESSING OFFICER. HOWEVER, THE AO WAS OF THE V IEW THAT SINCE THE ASSESSEE WAS NOT KNOWING THE NAME OF THE CHILDREN OF THE DONOR AND THE PERSONAL DETAILS OF THE DONOR, HE HELD THAT GIFTS WERE ARRANGED AFFAIRS. THE AO ALSO DOUBTED TH E FINANCIAL CAPACITY OF THE DONOR. FROM THE DOCUMENTS PLACED ON RECORDS, WHICH WERE VERY MUCH FORMING PART OF THE ASSESSMENT RECORDS, WE FOUND THAT ALL THE DONORS WERE HAVING GOOD SOURC E OF EARNING AND THEY WERE QUALIFIED PERSONS HAVING CLOS E RELATION OR FAMILY FRIENDSHIP WITH THE ASSESSEE, THERE IS NO REASON TO DOUBT THE IDENTITY, GENUINENESS AND CREDITWORTHINES S OF THE DONOR. ALL WERE ESTABLISHED AS PER THE DOCUMENTARY EVIDENCES PLACED ON RECORD. ACCORDINGLY, WE ARE INCLINED TO A GREE WITH THE CONTENTION OF THE LD. AUTHORIZED REPRESENTATIVE , SHRI H.P.VERMA THAT THE ASSESSEE HAS DISCHARGED HIS ONUS OF PROVING ALL THE THREE INGREDIENTS OF GIFT AND THE L OWER -: 8: - 8 AUTHORITIES WERE NOT JUSTIFIED IN MAKING ADDITION. WE, THEREFORE, REVERSE THE FINDING AND CONCLUSION OF TH E LOWER AUTHORITIES AND ALLOW THE APPEAL IN FAVOUR OF THE A SSESSEE. 12. IN THE RESULT, THE APPEAL IS ALLOWED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 11 TH FEBRUARY, 2011. SD/- SD/- (JOGINDER SINGH) ( R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 11 TH FEBRUARY, 2011. CPU* 10