Smt Bhagwati Devi Joshi, Kolkata V. ITO, Ward 44(2), Kolkata, Kolkata

ITA 404/KOL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75012 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2014
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2002-2003
• Appeal Filed On: 13-03-2012
• Court: TRIBUNAL
• Department Lawyers: NIRANJAN SATPATI
• Assessee Lawyers: RAKESH KR JAIN
• Keywords: Gift; Reassessment proceedings
• Section: 143(3); 68; 6

Judgement Text

, C , IN THE INCOME TAX APPELLATE TRI BONDSUNAL C BENCH : KOLKATA () BEFORE , /AND . . . . ' '' ''# '#'# '#, $% ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI ABRAHAM P. GEORGE, AM] & & & & / I.T.A NO. 404/KOL/2012 '( )* '( )* '( )* '( )*/ // / ASSESSMENT YEAR: 2002-03 SMT. BHAGWATI DEVI JOSHI VS. INCOME-TAX OFFICER, WD-44(2), KOLKATA (PAN:ACXPJ2470Q) (,- /APPELLANT ) (./,-/ RESPONDENT ) DATE OF HEARING: 08.01.2014 DATE OF PRONOUNCEMENT: 27.01.2014 FOR THE APPELLANT: SHRI RAKESH KR. JAIN FOR THE RESPONDENT: SHRI NIRANJAN SATPATI, JCIT, SR. DR $0 / ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A)-XXX, KOLKATA IN APPEAL NO. 208/CIT(A)-XXX/WARD-44(4)/2009-10 DATED 29.12.2011. ASSESSMENT WAS FRAMED BY ITO, WARD-44(4), KOLKATA U/S. 143(3) R.W.S. 147 OF THE I NCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2002-03 VIDE HIS ORDER DATED 29.12.2009. 2. THE FIRST ISSUE IN THIS APPEAL OF ASSESSEE IS RE GARDING JURISDICTION ASSUMED BY AO FOR U/S 147 R.W.S.148 OF THE ACT FOR REOPENING OF ASSESSMEN T. FOR THIS, ASSESSEE HAS RAISED FOLLOWING GROUND NO.1: FOR THAT THE REASSESSMENT PROCEEDINGS U/S. 147 WE RE ILLEGAL AND VOID AB INITIO AND THE CIT(A) SHOULD HAVE ACCEPTED THE CONTENTION OF THE A SSESSEE IN THIS REGARD. 3. AT THE OUTSET, ASSESSEE BEFORE THE AO OR BEFORE THE CIT(A) COULD NOT EXPLAIN THAT REOPENING IS BAD IN LAW AND EVEN BEFORE US THE ASSE SSEE IS UNABLE TO EXPLAIN ANYTHING ON THIS GROUND. HENCE, THE SAME IS DISMISSED. 4. COMING TO THE ISSUE ON MERITS. THIS ISSUE IS RE GARDING THE ADDITION OF GIFT RECEIVED BY ASSESSEE BY WAY OF RESURGENT INDIA BONDS (RI BONDS) ISSUED BY STATE BANK OF INDIA (SBI) 2 ITA NO.404/K/2012 SMT. BHAGWATI DEVI JOSHI , AY:2002-03 FROM SHRI SUBASH DHUDANI AND SHRI MAHENDRA DURLABJ I DESAI. FOR THIS, ASSESSEE HAS RAISED FOLLOWING GROUND NO.2: FOR THAT THE CIT(A) SHOULD NOT HAVE ALSO CONFIRMED THE ADDITION OF RS.54,14,75/- AS INCOME FROM OTHER SOURCES REPRESENTING GIFT RECEIVE D BY WAY OF RESURGENT INDIA BONDS (RI BONDS) FROM SRI SUBHAS DUDHANI AND SRI MAHENDRA DURLABJI DESAI RESPECTIVELY, SINCE BOTH THE DONORS ARE NRI AND THEY ARE NOT SUBJ ECT TO INCOME TAX IN INDIA. IN VIEW OF THE FACTS AND VARIOUS SUBMISSIONS AND CONTENTION S MADE IN WRITTEN SUBMISSIONS FILED BEFORE HIM AND SHOULD HAVE DISCUSSED THE SAME. 5. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. BRIEFLY STATED FACTS ARE THAT THE AO RECEIVED INFOR MATION THAT THE ASSESSEE HAS RECEIVED RI BONDS ISSUED BY SBI FROM SUBHAS DUDHANI, AN NRI FOR AN AMOUNT OF 50000 US $ BY WAY OF GIFT. SIMILARLY, ASSESSEE ALSO RECEIVED RI BONDS O F SBI FROM MAHENDRA DURLABHJI DESAI FOR AN AMOUNT OF RS.25,11,765/-. AS THE ASSESSEE COULD NOT PRODUCE EVIDENCES BEFORE THE AO, HE TREATED THESE GIFTS I.E. GIFT FROM SHRI SUBHAS DUDH ANI AND SHRI MAHENDRA DURLABJJI DESAI AS UNEXPLAINED. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO ALSO CONFIRMED THE ACTION OF AO. 6. THE FACTS OF THE PRESENT CASE ARE THAT THE ASSES SEE FILED COMPLETE DETAILS OF RI BONDS BEFORE THE AO AND ALSO FILED COMPLETE DETAIL OF REC EIPT OF GIFTS OF RI BONDS OF US$50000 FROM SHRI SUBHAS DUDHANI WHICH WAS ENCASHED ON MATU RITY FROM SBI, NRI BRANCH, MUMBAI FOR AN AMOUNT OF RS.29,02,940/-. AS REGARDS TO BAL ANCE AMOUNT OF GIFT OF RI BONDS OF RS.25,11,765/- THE ASSESSEE HAS FILED COPIES OF PAS SPORT OF SHRI MAHENDRA DURLABJJI DESAI AND HIS COMPLETE NAME AND ADDRESS. THESE RI BONDS ARE EASILY MOVABLE AND THESE ARE PURCHASED BY NRIS AND NO SOURCE IS REQUIRED TO BE ESTABLISHED FOR THESE GIFTS. IT IS A FACT THAT SHRI SUBHAS DUDHANI AND SHRI MAHENDRA DURLABJI DESAI ARE NRIS A ND HAVE GIFTED THESE RI BONDS 1998 ISSUED BY SBI. IT IS ALSO A FACT THAT THESE RI BON DS WERE ENCASHED BY ASSESSEE ON MATURITY. ONCE THESE RI BONDS ARE ADMITTED BY REVENUE THAT TH ESE ARE PURCHASED BY DONORS ABOVE AND GIFTED TO THE ASSESSEE, THE PROVISIONS OF SECTION 6 8 WILL NOT BE APPLICABLE. EVEN AS PER THE TERMS OF OFFER OF THE RI BONDS BY SBI, THE TAX TREATMENT OF THE BONDS ARE THAT INCOME OF THE RI BONDS WILL BE EXEMPT IN THE HANDS OF THE SUBSCRIBER FROM INCOME TAX AS PER THE PROVISIONS OF THE ACT. THE RI BONDS WILL ALSO BE FREE FROM WE ALTH TAX AND GIFT TAX IN INDIA. THE TAX CONCESSIONS WILL BE AVAILABLE TILL THE MATURITY OF THE RI BONDS TO THE NRI HOLDERS/DONEES/TRANSFEREES IF THEY RETURN TO INDIA BEFORE MATURITY OF THE RI BONDS AND ALSO TO RESIDENT DONEE. IN CASE OF PREMATURE RETIREMENT OF THE RI BONDS IN NON-REPATRIABLE INDIAN 3 ITA NO.404/K/2012 SMT. BHAGWATI DEVI JOSHI , AY:2002-03 RUPEES BY HOLDERS/DONEES/SURVIVORS, THE PROCEEDS IN THE HANDS OF THE HOLDERS/DONEES/SURVIVORS WILL BE FREE FROM ANY TAX IN INDIA. THESE TRANSACT IONS ARE THROUGH BANKING CHANNEL AND THESE RI BONDS GIFTED BY TWO AFORESAID DONORS ARE ENCASHED B Y ASSESSEE IN HER BANK ACCOUNT. ONCE THIS IS THE POSITION, THE ADDITION CANNOT BE SUSTAI NED. WE DELETE THE ADDITION AND APPEAL OF ASSESSEE IS ALLOWED. 7. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. 8. ORDER IS PRONOUNCED IN THE OPEN COURT ON 27.01.2 014 SD/- SD/- . . . . ' '' ''# '#'# '# , $% , (ABRAHAM P. GEORGE) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 27TH JANUARY, 2013 12 '3' 4 JD.(SR.P.S.) $0 5 . 6$ )7- COPY OF THE ORDER FORWARDED TO: 1 . ,- / APPELLANT SMT. BHAGWATI DEVI JOSHI, 24, GOENKA LA NE, KOLKATA-700 007. 2 ./,- / RESPONDENT ITO, WARD-44(2), KOLKATA 3 . 0' ( )/ THE CIT(A), KOLKATA 4. 5. 0' / CIT KOLKATA <= .' / DR, KOLKATA BENCHES, KOLKATA / ./ TRUE COPY, $0'>/ BY ORDER, ' /ASSTT. REGISTRAR .