AMIT P. DHINGRA (HUF), MUMBAI V. ITO WD 14(1)(1), MUMBAI

ITA 3886/MUM/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 7834 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 15-06-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRAVAN KUMAR
• Keywords: Gift
• Section: 56(2); 234B

Judgement Text

1 ITA NO.3886/MUM/2009 ASSTT. YEAR : 2005-06. IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER. I.T.A. NO. 3886/MUM/2009. ASSESSMENT YEAR : 2005-06. AMIT P. DHINGRA (HUF), THE INCOME TAX OFFICER, 41, SONAW3ALA BLDG., VS. WARD 14(1)(1), 1 ST FLOOR, 3 RD BHOIWADA LANE, MUMBAI . BHULESHWAR, MUMBAI 400002. PAN AADHA2075E APPELLANT RESPONDENT. APPELLANT BY : SHRI K. SHIVRAM. RESPONDENT BY : SHRI SHRAVAN KUMAR. O R D E R PER J. SUDHAKAR REDDY, A.M. : THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED A GAINST THE ORDER OF THE CIT(APPEALS)-XIV, MUMBAI DATED 20-03-2009 ON THE FOLLOWING REVISED GROUNDS OF APPEAL. 1. THE LD. CIT(A) FAILED TO APPRECIATE THE FACT THAT R S.4,78,000/- FROM SMT. NIRMALA DEVI WAS INITIALLY GIFTED TO THE SON I.E. SHRI AMIT P. DINGRA, WHO HAD, THEN, IMPRESSED THE AMOUNT TO THE COMMON H OTCHPOTCH OF HIS HUF, HENCE NO ADDITION CAN BE MADE IN THE U/S 56(2) (V) IN THE HANDS OF THE HUF. 2. THE LD. CIT(A) ERRED IN APPRECIATING THAT THE INDI VIDUAL AS MENTIONED IN THE EXPLANATION TO SECTION 56(2)(V) INCLUDES DUA L CAPACITY OF AN INDIVIDUAL AS AN KARTA OF HUF. 2 ITA NO.3886/MUM/2009 ASSTT. YEAR : 2005-06. 3. WITHOUT PREJUDICE TO ABOVE, THE CIT(A) FAILED TO AP PRECIATE THE FACT THAT SMT. NIRMALA DEVI, HAD DISTRIBUTED THE ASSETS OF TH E LATE PARMANAND DINGRA AND ACCORDINGLY THE SON, I.E. SHRI AMIT P. D INGRA, HAD 1/3 RD RIGHT ON THE FATHERS PROPERTY AFTER THE DEATH. HENCE, NO ADDITION CAN BE MADE U/S 56(2)(V). 4. ON MERITS, THE APPELLANT DENIES THE LIABILITY OF PE NAL INTEREST U/S 234A, 234B AND 234C. THE SOLE ISSUE THAT ARISES IN THIS APPEAL IS AN ADD ITION U/S 56(2). 2. FACTS IN BRIEF: THE ASSESSEE MR. AMIT DHINGRA, IN THE CAPACITY AS KARTA OF THE HUF, FILED A RETURN OF INCOME ON 23-08-2005 DECLARING TOTAL INCO ME OF RS.1,19,170/-. THE ASSESSEES FATHER MR. PARMANAND DHINGRA EXPIRED IN JULY, 1986. AT THAT TIME BOTH HIS SONS VINOD AND THE ASSESSEE AMIT WERE MINORS. M R. PARMANAND DHINGRA OWNED VARIOUS EQUITY SHARES WHICH WERE IN THE JOINT NAME OF HIS WIFE MRS. NIRMALADEVI DHINGRA. 3. MRS. NIRMALADEVI DHINGRA SOLD ALL THE INHERITED SHARES IN THE PREVIOUS YEAR 2004-05 RELEVANT TO THE ASSESSMENT YEAR 2005-06 AND GIFTED THE SHARES TO MR. AMIT DHINGRA. MR. AMIT DHINGRA, AFTER RECEIVING THE GIFT DESIRED TO BRING THE SAID AMOUNT INTO THE COMMON HOT POTCH OF HIS HUF. HE REQ UESTED MRS. NIRMALADEVI DHINGRA TO ISSUE CHEQUES DIRECTLY TO THE HUF ACCOUN T. ACCORDINGLY AN AMOUNT OF RS.4,78,000/- WAS TRANSFERRED FROM MRS. NIRMALADEVI DHINGRA TO THE HUF. THE AO HELD THAT THE AMOUNT IS A GIFT RECEIVED BY THE HUF AFTER 01-09-2004 AND AS, IN THE VIEW OF THE AO, THE ASSESSEE IS NOT ENTITLED TO ANY EXEMPTION, IT SHOULD BE TAXED AS INCOME OF THE ASSESSEE. ON APPEAL, THE FIRST APPELL ATE AUTHORITY CONFIRMED THE SAME. FURTHER AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD MR. K. SHIVRAM, LEARNED COUNSEL FO R THE ASSESSEE AND MR. SHRAVAN KUMAR, LEARNED DR. 3 ITA NO.3886/MUM/2009 ASSTT. YEAR : 2005-06. 5. ON A CAREFUL CONSIDERATION OF THE FACTS AND CIRC UMSTANCES OF THE CASE AND A PERUSAL OF THE PAPERS ON RECORD AND THE ORDERS OF T HE AUTHORITIES BELOW, WE HOLD AS FOLLOWS. 6. AT PAGES 10 AND 11 OF THE ASSESSEES PAPER BOOK A COPY OF THE GIFT CONFIRMATION GIVEN BY MRS. NIRMALADEVI DHINGRA IS GIVEN. AT PARA 7 OF THIS CONFIRMATION, IT IS CLEARLY STATED THAT THE AMOUNT HAS BEEN GIVEN TO THE SON AS A GIFT. IN OTHER WORDS, THE DONOR MAKES IT VERY CLEAR THAT THE GIFT IS NOT GIVEN TO THE HUF BUT TO THE SON. WHILE SO THE AO, WITHOUT ANY EVIDEN CE, HOLD OTHERWISE. MRS. NIRMALADEVI DHINGRA HAS NOT BEEN EXAMINED NOR MR. A MIT HAS BEEN EXAMINED. ALL THE DOCUMENTS HAVE BEEN SUMMARILY REJECTED AND CONC LUSIONS WERE DRAWN BY THE AO BASED MERELY ON SURMISES AND CONJECTURES. WHEN T HE AMOUNT IS GIFTED TO THE SON, SECTION 56(2)(V) DOES NOT APPLY. EVEN IF IT IS ACCEPTED THAT THE AMOUNT WAS GIVEN TO THE HUF, THE MOTHER IS A MEMBER OF THE HUF AND WHEN SHE THROWS CERTAIN AMOUNT INTO THE COMMON HOT POTCH OF THE HUF , WE DO NOT SEE HOW THE GIFT COMES INTO EXISTENCE. FOR ALL THESE REASONS, WE UP HOLD THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE AND DELETE THE ADD ITION MADE U/S 56(2). 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH MARCH , 2011. SD/- SD/- (R.S.PADVEKAR) (J. SUD HAKAR REDDY) JUDICIAL MEMBER. ACCOUNT ANT MEMBER MUMBAI, DATED: 30 TH MARCH, 2011. WAKODE 4 ITA NO.3886/MUM/2009 ASSTT. YEAR : 2005-06. COPY TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, A-BENCH (TRUE COPY) BY ORDER ASSTT. REGISTRA R, ITAT, MUMBAI.