SHEETAL VINOD GANJU, MUMBAI V. ITO 25(1(2), MUMBAI

ITA 4848/MUM/2013

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9335 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 10-11-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 24-06-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Gift; Non passing of speaking order
• Section: 143(3); 131; 56

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUM BAI , , BEFORE S/SHRI RAJENDRA, A.M. AND SANDEEP GOSAIN,J.M . ./ ././ ./ ITA NO. 4848/MUM/2013 / ASSESSMENT YEAR: 2010-11 MS. SHEETAL VINOD GANJU B-202, MAHESH DARSHAN KANDARPADA, DAHISAR (W) MUMBAI-400 068. PAN: AITPG 5166 A VS. THE ITO 25(1)(2) BANDRA INCOME TAX OFFICE MUMBAI. ( / APPELLANT ) ( / RESPONDENT ) REVENUE BY: SHRI V. JUSTIN-DR ASSESSEE BY: S/SHRI JITENDRA SANGHAVI & AMIT KHATIWALA / // / DATE OF HEARING: 25/09/2017 !' / DATE OF PRONOUNCEMENT: 27.09.2017 , ,, , 1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) , ,, , -PER RAJENDRA,AM: CHALLENGING THE ORDER,DT.23/04/2013 OF CIT(A) -35,M UMBAI THE ASSESSEE HAS FILED THE PRESENT APPEAL.ASSESSEE,AN INDIVIDUAL FILED HER RETURN OF I NCOME ON 30/07/2010,DECLARING TOTAL INCOME OF RS.3.23 LAKHS.THE ASSESSING OFFICER(AO)CO MPLETED THE ASSESSMENT ON 29/3/1, U/S. 143(3) OF THE ACT,DETERMINING HER INCOME AT RS.73.2 3 LAKHS. 2. EFFECTIVE GROUND OF APPEAL IS ABOUT TREATING LOAN O F RS.70 LAKHS AS GIFT U/S. 56 (2)(VI) OF THE ACT.DURING THE ASSESSMENT PROCEEDINGS THE AO FO UND THAT THE ASSESSEE WAS ONE OF THE ALLOTTEES IN ADARSH HOUSING SOCIETY.HE DIRECTED HE R TO FILE COMPLETE DETAILS OF PURCHASE / ALLOTMENT OF THE FLAT ALONG WITH SOURCE OF INVESTME NT. IN HER EXPLANATION THE ASSESSEE STATED THAT SHE HAD OBTAINED LOAN OF RS.70 LAKHS FROM MRS. NEELU T. KAUL (NTK) .THE AO RECORDED HER STATEMENT U/S. 131 OF THE ACT AND DIRECTED HER TO FURNISH THE BANK STATEMENT OF THE CREDITOR TO PROVE THE GENUINENESS AND CREDITWORTHINESS WITH A COPY OF RETURN OF INCOME. ON PERUSAL OF THE RETURN OF INCOME OF NTK,THE AO OBSERVED THAT T HE TRANSACTION RAISED DOUBT ABOUT THE GENUINENESS OF THE LOAN,THAT LOAN WAS REPAYABLE, WI THIN A PERIOD OF 15 YEARS AFTER GETTING POSSESSION OF FLAT IN THE SOCIETY AT THREE DIFFEREN T INTEREST RATES I.E. 3% FOR 1 ST FIVE YEARS, 5% 4848/M/13-(10-11) SHEETAL VINOD GANJU 2 FOR ANOTHER 5 YEARS AND 7.5% FOR THE REMAINING 5 YE ARS, THAT THE ASSESSEE HAD REPAID RS.1 LAKHS TO THE LENDER ON 30/12/2010 AND 10/03/2011, T HAT THE ASSESSEE WAS NOT HAVING SUFFICIENT INCOME TO REPAY THE LOAN AMOUNT IN THE SPECIFIED YE ARS AS PER THE LOAN AGREEMENT, THAT THE SOURCE OF INCOME OF THE ASSESSEE WAS NOT COMMISERA TING WITH THE LIABILITY CREDITED BY HER IN THE FORM OF SO CALLED LOAN, THAT THE ONUS WAS ON TH E ASSESSEE TO PROVE THE GENUINENESS OF THE TRANSACTION BY SHOWING HER REPAYMENT CAPACITY, SHE COULD NOT TAKE SHELTER OF BEING A RELATIVE OF NTK.THE AO ISSUED SUMMONS TO NTK AND RECORDED HE R STATEMENT ALSO. AFTER CONSIDERING BOTH THE STATEMENTS THE AO HELD T HAT ASSESSEE WAS ONLY A BENAMIDAR OF THE PROPERTY FUNDED BY NTK, THAT THE CHEQUE WAS GIVEN D IRECTLY TO AADARSH HOUSING SOCIETY , THAT IT WAS ONLY A MUTUAL ADJUSTMENT BETWEEN THE AS SESSEE AND NTK ALONG WITH HER HUSBAND TO GET ALLOTMENT OF THE ADJACENT FLAT IN SAME SOCIE TY AND ON THE SAME FLOOR TO AVOID ENQUIRIES OF CONCERNED AUTHORITIES.THE AO ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THE LOAN AMOUNT OF RS.70 LAKHS SHOULD NOT BE TREATED AS RECEIPTS IN HE R HANDS AS PER THE PROVISIONS OF SECTION 56 (2)(VI)OF THE ACT . AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE ,D TD. 9/3/2012,THE AO HELD THAT SAME WAS NOT ACCEPTABLE,THAT THE HUSBAND OF THE ALLEGED LOAN CREDITOR WAS ALSO AN ALLOTTEE ON THE SAME FLOOR OF THE ASSESSEE,THAT SHE HAD NO CAPACITY TO R EPAY THE LOAN, THAT THE INTENTION OF THE LOAN CREDITOR WAS MALAFIDE, THAT THE EXPLANATION OF THE ASSESSEE WAS A LINEAL DECEDENT OF LOAN CREDITOR.FINALLY,HE HELD THAT LOAN OF RS.70 LAKHS R ECEIVED BY THE ASSESSEE FROM NTK WAS TO BE TREATED AS RECEIPT U/S.56 (2)(VI) OF THE ACT. 3. AGGRIEVED BY THE ORDER OF THE AO,THE ASSESSEE PREFE RRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY AND MADE DETAILED SUBMISSIONS .AFTER CONSIDERING THE AVAILABLE MATERIAL, THE FAA REPRODUCED THE PART OF THE ORDER OF THE AO AS IT WAS AND HE DISMISSED THE APPEAL FILED BY THE ASSESSEE . 4848/M/13-(10-11) SHEETAL VINOD GANJU 3 4. DURING THE COURSE OF HEARING BEFORE US THE AUTHORIS ED REPRESENTATIVE(AR)CONTENDED THAT THE FAA HAD NOT APPLIED HIS MIND,THAT HE HAD PASSED AN ORDER BY MERELY COPYING THE ASSESSMENT ORDER IN VERBATIM WITHOUT TAKING COGNIZA NCE OF THE SUBMISSIONS AND ARGUMENTS OF THE ASSESSEE, THAT THE ORDER OF THE FAA WAS ARBITRA RY AND UNJUST ,THAT THE COLOUR OF TRANSACTION FROM LOAN TO GIFT COULD NOT BE UNILATERALLY CHANGED WHEN THE ASSESSEE AS WELL AS LENDER HAD CONFIRMED THE TRANSACTION.HE REFERRED TO THE CASE O F CHARDRAKANT S. SHAH (124ITD177) THAT WAS CONFIRMED BY THE HON'BLE BOMBAY HIGH COURT ON 0 6.09.2010 (INCOME TAX APPEAL NO. 3154 OF 2009). THE DEPARTMENTAL REPRESENTATIVE(DR) STATED THAT THE FAA HAD PASSED THE ORDER AFTER APPLYING HIS MIND. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US. WE FIND THAT THE ASSESSEE HAD CLAIMED TO HAVE RECEIVED A LOAN OF RS. 70 LAKHS FROM NTK,THAT THE AO HAD REJECTED THE CLAIM MADE BY HER,THAT HE HAD RECORDED THE STATEMENTS OF ASSESSEE AND THE CREDITOR,THAT HE HELD THAT THE AMOUNT IN QUESTION W AS TO BE TAXED AS PER PROVISIONS OF SECTION 56(2)(VI) OF THE ACT, THAT THE FAA HAS PASSED A VER Y CRYPTIC AND NON SPEAKING ORDER.WE FIND THAT AT PARA 5.3.10.1 TO 5.3.10.6 HE HAD SIMPLY CO PIED THE ORDER OF THE AO. HE HAD NOT GIVEN ANY REASONS AS TO WHY HE WAS NOT CONVINCED BY THE S UBMISSIONS MADE DURING THE APPELLATE PROCEEDINGS.IN OUR OPINION BEING FAA,THE CIT(A) SHO ULD PASS A REASONED AND SPEAKING ORDER.THE SIZE OF THE ORDER MAY NOT BE OF MATERIAL IMPORTANCE,BUT WHAT IS IMPORTANT IS REASONING FOR ACCEPTING/REJECTING THE ARGUMENTS/SUB MISSIONS OF THE AO/ASSESSEE. IT IS RIGHT OF AO AS WELL AS ASSESSEE TO GET A REASONED AND SPEAKI NG ORDER.CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE,WE ARE OF THE OPINION THA T IN THE INTEREST OF JUSTICE MATTER SHOULD BE SENT BACK TO THE FILE OF FAA AND HE IS DIRECTED TO PASS A REASONED AND SPEAKING ORDER AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND CAS E LAWS RELIED UPON BY THE ASSESSEE. EFFECTIVE GROUND OF APPEAL , RAISED BY THE ASSESSEE IS ALLOWED HER FAVOUR IN PART. AS A RESULT, APPEAL FILED BY ASSESSEE STANDS PARTLY ALLOWED. 4848/M/13-(10-11) SHEETAL VINOD GANJU 4 # $%& ' ( )*+,- . ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH SEPTEMBER, 2017. 27 2017 SD/- SD/- ( /SANDEEP GOSAIN) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; .* /DATED : 27.9.2017 . JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR E BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.