THE ITO 19(3)-4, MUMBAI V. MRS. SANT MATA BRIJ DEVI, MUMBAI

ITA 4938/MUM/2008

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62577 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 10 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2012
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 12-06-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 05-08-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: M SUBRAMANIAN
• Keywords: Unexplained cash credit; Gift
• Section: 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI E BENCH MUMBAI BENCHES, MUMBAI BEFORE SHRI G E VEERABHADRAPPA, PRESIDENT & SHRI VI JAY PAL RAO, JM ITA NO. 4938/MUM/2008 (ASSESSMENT YEAR 2005-06 ) THE INCOME TAX OFFICER 19(3)(4), MUMBAI VS SANT MATA BRIJ DEVI RADHA KRIPA A/60/569 GANDHI NAGAR BANDRA (E) MUMBAI 51 (APPELLANT ) (RESPONDENT) PAN NO. AQEPS9168B ASSESSEE BY SHRI M SUBRAMANIAN REVENUE BY SHRI P K B MENON DT.OF HEARING 12 TH JUNE 2012 DT OF PRONOUNCEMENT 15 TH ,JUNE 2012 ORDER PER VIJAY PAL RAO, JM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 12. 6.2008 OF COMMISSIONER OF INCOME TAX (APPEALS) FOR THE ASSESS MENT YEAR 2005 2006. 2 THE REVENUE HAS RAISED THE FOLLOWING GROUNDS IN T HIS APPEAL: 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION OF RS 1 9,46.681 / MADE BY THE A.O. BY TREATING THE GIFTS RECEIVED BY THE ASSES SEE AS UNEXPLAINED CASH CREDITS U/S 68 OF THE ACT, WITHOUT APPRECIATING THE FACT THAT A) THE ASPECT OF MUTUAL LOVE AND AFFECTION IS MISSI NG BETWEEN THE MAKHARIA FAMILY (DONORS) AND THE DONEE AS THE D ONOR HARDLY KNOWS THE ASSESSEE, HER ADDRESS AND THE ACTIVI TIES OF THE ASSESSEE. B) CREDITWORTHINESS AND GENUINENESS OF TRANSACTION O F SHRI I LARSH KAMANI AND SHRI GHANSHYAM PATEL CLAIMED TO HAVE GIVE N GIFT OF RS 10,00,000/- AND RS 50,000/-.- RESPECTIVELY WERE NOT ESTABLISHED; SANT MATA BRIJ DEVI ITA NO. 4938/MUM/2008 2 C) NO DETAILS SUCH AS NAME. ADDRESS ETC. WERE GIVEN IN RESPECT OF GIFT OF RS 1.97,925/-. 2) THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE A.O BE RESTORED . 3 THE ASSESSING OFFICER NOTICED FROM THE CAPITAL AC COUNT OF THE ASSESSEE THAT THE ASSESSEE HAS RECEIVED GIFTS OF RS. 19,36,065/- BEFORE 1.9.2004 AND GIFTS OF RS. 10,616/- AFTER 1.9.2004. THE ASSESSING OFFICER ASK ED THE ASSESSEE TO FILE THE DETAILS OF GIFTS RECEIVED AND ALSO FURNISH THE NAME AND ADDRE SSES OF THE DONORS, COPIES OF GIFT DEEDS ETC., TO ESTABLISH THE IDENTITY, CREDITWORTHI NESS AND GENUINENESS OF THE TRANSACTION. IN RESPONSE, THE ASSESSEE SUBMITTED T HE DETAILS OF THE GIFTS RECEIVED. THE DETAILS HAVE BEEN REPRODUCED BY THE ASSESSING OFFIC ER WHICH SHOWS THAT TOTAL 22 GIFTS WERE RECEIVED BY THE ASSESSEE. THE ASSESSING OFFICER SUMMONED AND EXAMINED 8 DONORS OUT OF 22 GIFTS WERE RECEIVED BY THE ASSESSEE. THE ASSESSEE HAS ALSO FILED CONFIRMATION/AFFIDAVITS OF THE DONORS IN SUPPORT OF THE CLAIM OF GIFTS. IT WAS THE CLAIM OF THE ASSESSEE AS WELL AS THE DONORS THA T THE ASSESSEE IS A SPIRITUAL GURU AND THE GIFTS WERE GIVEN BY DEVOTEES. SOME OF THE DONORS ARE NRI AND THE ASSESSEE FILED CONFIRMATION IN THE SHAPE OF AFFIDAVIT, PASSP ORT COPIES AND BANK RECORD TO SHOW THE TRANSFER OF MONEY. 3.1 THE ASSESSING OFFICER DID NOT ACCEPT THE CLAIM OF THE ASSESSEE ON THE GROUND THAT THERE IS NO NATURAL LOVE AND AFFECTION BETWEEN THE DONORS AND THE ASSESSEE, NO RELATIONSHIP BETWEEN THE ASSESSEE AND THE DONORS AN D NO OCCASION FOR GIVING THE GIFT. THE ASSESSING OFFICER RELIED UPON THE DECISIO N OF HONBLE SUPREME COURT IN CASE OF CIT VS DURGAPRASAD MORE REPORTED IN 82 ITR 540; IN CASE OF SUMATI DAYAL VS CIT REPORTED IN 214 ITR 801; DECISION OF HONBLE DELHI HIGH COURT IN CASE OF ACIT VS RAJIV TANDON REPORTED IN 294 ITR 219 AND THE DECISION OF HONBLE SUPREME COURT IN CASE SANT MATA BRIJ DEVI ITA NO. 4938/MUM/2008 3 OF COMMISSIONER OF INCOME-TAX V. P. MOHANAKALA REPO RTED IN 291 ITR 278 AS WELL AS DECISIONS OF THIS TRIBUNAL AND HELD THAT THE AMOUN T OFRS. 19,46,681/- RECEIVED BY THE ASSESSEE IS HER OWN INCOME AND ACCORDINGLY, TREATED AS INCOME U/S 68 OF THE I.T ACT. THE ASSESSEE CHALLENGED THE ACTION OF THE ASSESSING OFFICER BEFORE COMMISSIONER OF INCOME TAX(APPEALS). THE LD COMMISSIONER OF INCOME TAX (APPEALS) ALLOWED THE CLAIM OF THE ASSESSEE AND HELD THAT THE TREATMENT O F GIFT AS UNEXPLAINED CASH CREDIT BY THE ASSESSING OFFICER IS NOT JUSTIFIED. 4 BEFORE US THE LD DR HAS REFERRED THE ASSESSMENT O RDER AND SUBMITTED THAT THE ASSESSEE HAS NOT FURNISHED ANY DETAIL IN RESPECT OF CLAIM OF RECEIPT OF GIFTS FROM THE DONORS OTHER THAN MEMBERS OF MAKHARIA FAMILY. HE HA S FURTHER SUBMITTED THAT EVEN THE MAKHARIA FAMILY ARE NEITHER RELATIVES NOR FRIEN DS OF THE ASSESSEE AND THERE IS NO LOVE AND AFFECTION BETWEEN THE DONEE AND THE DONOR. THE LD DR HAS FURTHER SUBMITTED THAT IN RESPECT OF THE NRI DONORS, ONLY C OPY OF PASSPORT HAS BEEN FILED BY THE ASSESSEE AND NO OTHER DOCUMENT INDICATING THE C REDITWORTHINESS OF THESE PARTIES HAVE BEEN FURNISHED. THE LD DR HAS POINTED OUT THAT ALL THE AFFIDAVITS ARE IDENTICALLY WORDED WHEREIN IT HAS BEEN STATED THAT THE ASSESSEE IS THEIR FAMILY FRIEND AND GIFTS ARE BEING GIVEN OUT OF NATURAL LOVE AND AFFECTION; WHEREAS NO RELATION AND OCCASION HAS BEEN EXPLAINED FOR WHICH THE ALLEGED GIFTS HAVE BEEN GIVEN. 4.1 THE LD D.R. HAS EMPHASISED THAT THE ASSESSEE HA S CLAIMED TO BE THE SPIRITUAL GURU AND THE GIFTS WERE GIVEN BY THE DONORS OUT OF NATURAL LOVE AND AFFECTION WHEREAS IN THE AFFIDAVITS OF THE DONORS, IT HAS BEE N STATED THAT THE ASSESSEE WAS A FAMILY FRIEND AND THEREFORE, THE ASSESSEES CONTENT ION WAS NOT FOUND CORRECT. THE LD DR HAS FURTHER SUBMITTED THAT THE DONORS HAVE NEVER GIVEN ANY GIFTS TO THEIR FAMILY MEMBERS, THEN IT IS HIGHLY IMPROBABLE THAT THEY HAV E GIVEN THE GIFTS TO THE ASSESSEE. SANT MATA BRIJ DEVI ITA NO. 4938/MUM/2008 4 IT WAS FURTHER SUBMITTED THAT NEITHER IN THE EARLIE R YEAR NOR IN THE SUBSEQUENT YEARS SUCH GIFTS WERE RECEIVED BY THE ASSESSEE; THEREFORE , THE CLAIM OF THE ASSESSEE IS WRONG, NOT GENUINE AND NOT ACCEPTABLE. ONE OF THE DONORS ARE HAVING THE SAME ADDRESS AS OF THE ASSESSEE; THEREFORE, THE ASSESSEE S CLAIM OF RECEIPT OF GIFTS IS IN FACT AN ARRANGED TRANSACTION. THE LD DR HAS HEAVILY RELI ED UPON THE ORDER OF ASSESSING OFFICER AS WELL AS THE DECISIONS AS RELIED UPON BY THE ASSESSING OFFICER. 4.2 ON THE OTHER HAND THE LEARNED A.R. OF THE ASSES SEE HAS SUBMITTED THAT ALL GIFTS WERE GIVEN BY CHEQUES AND THROUGH BANKING CHANNELS; THEREFORE, THE CREDITWORTHINESS OF THE DONORS CANNOT BE DOUBTED. HE HAS FURTHER POINTED OUT THAT THE ASSESSING OFFICER SUMMONED 8 PERSONS OUT OF THE 22 DONORS WHO HAVE APPEARED BEFORE THE ASSESSING OFFICER AND MADE THE STATEMENT AS EXAMINED BY THE ASSESSING OFFICER. THE LD A.R. HAS REFERRED THE ASSESSMENT OR DER AND SUBMITTED THAT THE ASSESSING OFFICER HAS TAKEN NOTE OF NO DETAILS OF GIFT AT SERIAL NUMBER 9 OF THE DETAILS REPRODUCED BY THE ASSESSING OFFICER REGARD ING THE GIFT OF RS. 1, 97, 925/-. HOWEVER, THE SAID GIFT WAS GIVEN BY MR DEVANAND PAT EL AND THE ASSESSEE FILED CONFIRMATION OF THE SAME. THE LD AR OF THE ASSESSEE HAS FILED A COPY OF AFFIDAVIT OF MR DEVANAND PATEL. 4.3 THE LD AR HAS SUBMITTED THAT THE ASSESSEE VIDE ITS LETTER DATED 8.8.2007 FURNISHED THE ADDRESSES OF THE DONORS AS WELL AS CO NFORMATIONS BEFORE THE ASSESSING OFFICER. FURTHER THE PERMANENT ACCOUNT NUMBER OF TH E PARTIES WERE ALSO FURNISHED BEFORE THE ASSESSING OFFICER FOR VERIFICATION REGAR DING IDENTITY AND CREDITWORTHINESS OF THE DONORS. THE TRUE RELATIONSHIP BETWEEN THE AS SESSEE AND THE DONORS IS A SPIRITUAL GURU AND DEVOTEE. HE HAS FURTHER SUBMITT ED THAT THE IDENTITY, CAPACITY AND CREDITWORTHINESS OF THE DONOR HAVE BEEN PROVED BY F URNISHING THE RELEVANT RECORD. SANT MATA BRIJ DEVI ITA NO. 4938/MUM/2008 5 THE ASSESSING OFFICER HIMSELF EXAMINED AND RECORDED THE STATEMENT OF THE DONORS THEREFORE; THE GENUINENESS OF GIFT HAS BEEN PROVED. THE ASSESSEE IS SAINT AND NOT LEADING A NORMAL LIFE BEING A SPIRITUAL GURU. THE L D A.R OF THE ASSESSEE HAS FORCEFULLY CONTENDED THAT WHEN THE GIFTS WERE GIVEN BY THE DEV OTEES IS TO THE SPIRITUAL GURU, THAN THE RELATIONSHIP AND OCCASION IS NOT RELEVANT FOR THE PURPOSE OF GENUINENESS OF THE GIFT. THE ASSESSEE SUBMITTED AFFIDAVIT ALONG W ITH THE COPY OF PASSPORT AND DETAILS OF BANK ACCOUNT WITH RESPECT TO NRI DONORS AND THEREFORE DISCHARGED HER ONUS OF ESTABLISHING THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF GIFTS. 4.4 THE LD AR HAS REFERRED THE FACTS IN THE CASE O F SUMATI DAYAL (SUPRA) AS RELIED UPON BY THE ASSESSING OFFICER AND SUBMITTED THAT I N THE SAID CASE THE CLAIM OF THE ASSESSEE WAS AN IMPOSSIBLE AND THEREFORE, IT WAS FO UND AS NOT GENUINE BEING FRAUDULENT SALE AND PURCHASE OF WINNING TICKETS. 4.5 THE LD AR HAS ALSO DISTINGUISHED THE FACTS IN C ASE OF P. MOHANAKALA( SUPRA) AND SUBMITTED THAT IN THE SAID CASE THERE WERE MATE RIAL CONTRADICTION AND DISCREPANCIES IN THE STATEMENTS OF THE ASSESSEE AND ACCORDINGLY, THE CLAIM WAS FOUND AS NOT GENUINE. THE LD AR HAS RELIED UPON THE FOLLOWING DECISIONS I)NEMI CHAND KOTHARI V. COMMISSIONER OF INCOME-TAX ( 264 ITR 254) II)DEPUTY COMMISSIONER OF INCOME-TAX V. ROHINI BUIL DERS ( 256 ITR 360) III)COMMISSIONER OF INCOME-TAX V. SUNITA VACHANI (M RS.) (184 ITR 121(DEL) IV)COMMISSIONER OF INCOME-TAX V. R.S. SIBAL (269 IT R 429 V)VRISHALI HOTELS P LTD VS ACIT ( 66 TTJ 692 (PUNE) VI)AVINISH KUMAR SINGH VS ITO 27 DTR 241 (THIRD MEM BER) VII)MRS DELNA RUSTUM BOYCE ( 210) 214 TAXATION 794 (AAR) VIII)319 ITR 5 (STATUTES) 4.6 THE LD AR HAS SUBMITTED THAT THE INITIAL ONUS O F ESTABLISHING THE IDENTITY CREDITWORTHINESS, NATURAL LOVE AND AFFECTION HAS BE EN DISCHARGED BY THE ASSESSEE. THE ASSESSING OFFICER HAS ALSO SUMMONED SOME OF THE PARTIES, WHO CONFORMED THE SANT MATA BRIJ DEVI ITA NO. 4938/MUM/2008 6 GIFT GIVEN TO THE ASSESSEE. IN THE ABSENCE OF ANY M ATERIAL OR FACT CONTRARY PROVED BY THE ASSESSING OFFICER THE CLAIM OF THE ASSESSEE CAN NOT BE DENIED. 5 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. THE DETAILS OF GIFT AS RECORDED BY THE ASS ESSING OFFICER ARE AS UNDER: S.NO. DATE NAME OF THE DONOR AMOUNT VALUE IN INR 1 03/04/2004 MR GHANSHYAM A PATEL 50,000 50,000 2 16/04/2004 MRS SUDHA M MAKHARIA 51,000 51,000 3 16/04/2004 MR MADHUSUDAN M MAKHARIA 100,000 100,0 00 4 19/04/2004 29/04/2004 MR ALOK S MAKHARIA 150,000 100,000 5 19/04/2004 MR ADITYA S MAKHARIA 100,000 100,000 6 03/05/2004 MR HARSH A KAMANI 1,000,000 1,000,000 7 27/04/2004 MS LEENA DAVDA USD 1300 155,740 8 22/04/2004 MRS ASHA GOYAL 100,000 100,000 9 05/05/2004 DEVANDND PATEL 197,925 197,925 10 28/12/2004 MRS RAKSHA A ACHARYA USD 251 10,616 11 03/04/2004 MR RAMAND RAM PRASAD 10,000 10,000 12 03/07/2004 MR ADITYA SABOO 1,100 1,100 13 03/07/2004 MRS PUNITA SABOO 1,100 1,100 14 03/07/2004 MR AMIT SABOO 1,100 1,100 15 03/07/2004 MRS ARCHANA SABOO 1,100 1,100 16 07/07/2004 MRS SARLA SETH 5,000 5,000 17 08/07/2004 MRS USHA DIDWANIA 2,100 2,100 18 08/07/2004 MR LALIT SABOO 2,100 2,100 19 08/07/2004 MR KAUSHAL RAJAGRIA 1,100 1,100 20 08/07/2004 MR SATARY NARAYAN DIDWANIA 2,100 2,10 0 21 08/07/2004 MRS BHAGWATI SABOO 2,100 2,100 22 08/07/2004 MRS SHEELA PUNJABI 2,500 2,500 TOTAL 1,946,681 IN ORDER TO VERIFY THE GENUINENESS OF GIFT, IDENTI TY AND CREDITWORTHINESS OF THE DONORS, THE ASSESSING OFFICER EXAMINED 8 OF THE DONORS. IN CASE OF MR MADHUSUDAN M MAKHARIA, MRS SUDHA M MAKHARIA, MR ALOK S MAKHARIA AND MR ADITYA |S MAKHARIA, THE ASSESSING OFFICER RECORDED STATEMENTS UNDER SE CTION 131 OF INCOME TAX ACT. APART FROM THE STATEMENT RECORDED BY THE ASSESSING OFFICER, CONFIRMATION LETTER, AFFIDAVIT OF DONORS, ACKNOWLEDGEMENT OF RETURN OF I NCOME, BALANCE SHEET AND CAPITAL ACCOUNTS WERE ALSO PRODUCED BEFORE THE ASSE SSING OFFICER. THUS, AS FAR AS SANT MATA BRIJ DEVI ITA NO. 4938/MUM/2008 7 NON NRI DONORS ARE CONCERNED, IT HAS BEEN FULLY ES TABLISHED DURING THE INVESTIGATION BY THE ASSESSING OFFICER THAT THE GIFTS WERE GENUI NE, THE IDENTITY AND CREDITWORTHINESS WAS PROVED BY PRODUCTION OF RETURN OF INCOME, BALANCE SHEET AND CAPITAL ACCOUNT OF THE DONORS. 5.1 SIMILARLY IN CASE OF MRS ASHA GOYAL, CONFIRMATI ON LETTER AND AFFIDAVIT OF DONOR WERE FURNISHED. APART FROM THIS, THE ACKNOWLEDGEMEN T OF RETURN OF INCOME AND BANK STATEMENT OF THE DONOR WAS ALSO SUBMITTED BEFORE TH E ASSESSING OFFICER. WHEN THE ASSESSING OFFICER DID NOT CHOOSE TO SUMMON AND EXAM INE THE DONOR, THAN THE MATERIAL PRODUCED BEFORE THE ASSESSING OFFICER IS ENOUGH TO ESTABLISH THE IDENTITY AND CREDITWORTHINESS OF THE DONOR. SINCE IT IS NOT A CASE OF GIFT BETWEEN TWO ORDINARY PERSONS, BUT THE GIFTS WERE GIVEN BY THE D EVOTEE TO A SPIRITUAL GURU, THEN THE OCCASION AND RELATIONSHIP, AS REQUIRED IN OTHER CASES, IS NOT SO RELEVANT ONCE THE DONOR HAS STATED THAT THE GIFT WAS GIVEN DUE TO THE RELATIONSHIP OF GURU AND DEVOTEE. 5.2 AS REGARDS THE MR HARSH K KAMANI, MR GHANSHYAM A PATEL, MR DEVANAND PATEL AND MRS LEENA DAVDA, ONLY CONFIRMATION LETTE R, AFFIDAVIT AND COPY OF PASSPORT WERE FILED EXCEPT IN CASE OF MR DEVANAND P ATEL WHERE ONLY AN AFFIDAVIT WAS FILED. THESE DONORS ARE NRI AND THEREFORE COUL D NOT APPEAR BEFORE THE ASSESSING OFFICER. HOWEVER, TO ESTABLISH THE CLAIM OF CREDITWORTHINESS OF THE DONOR THE BANK STATEMENT OF THE DONOR IS REQUIRED TO BE P RODUCED. 5.3 THUS AS FAR AS THE GIFTS GIVEN BY THE NON-NRI D ONORS THE SAME HAS BEEN DULY PROVED BY THE ASSESSEE AND THERE IS NO REASON TO DO UBT THE SAME WHEN THE ASSESSEE HAS DISCHARGED ITS ONUS BY PRODUCING THE D ONORS BEFORE THE ASSESSING OFFICER ALONG WITH ALL RELEVANT EVIDENCE VIZ CONFIR MATION LETTER/AFFIDAVIT, SANT MATA BRIJ DEVI ITA NO. 4938/MUM/2008 8 ACKNOWLEDGEMENT OF RETURN, BALANCE SHEET AND CAPITA L ACCOUNT. FURTHER WHEN THE DONORS WERE EXAMINED BY THE ASSESSING OFFICER ON OA TH AND THEY CONFORMED THE TRANSACTION OF GIFT THROUGH BANKING CHANNEL AND BY CHEQUES, THAN THERE IS NO SCOPE OF ANY DOUBT OF IDENTITY AND CREDITWORTHINESS OF TH E DONOR. THEREFORE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF COMMISSIO NER OF INCOME TAX(APPEALS) IN ACCEPTING THE CLAIM OF THE ASSESSEE WITH RESPECT TO THE GIFTS GIVEN BY THE DONORS OTHER THAN THE NRI DONORS. 6 HOWEVER, AS REGARDS THE GIFT GIVEN BY NRI DONORS NAMELY MR HARSH A KAMANI, MR GHANSHYAM A PATEL, MR DEVANAND PATEL AND MRS LE ENA DAVDA, OF RS. 10 LAKH, RS. 50, 000/-, RS. 1 LAKH AND RS. 1,55,740/- , THE MATTER IS REMANDED TO THE RECORD OF THE ASSESSING OFFICER AND THE ASSESSEE IS DIRECTED TO PRODUCE THE STATEMENT OF BANK ACCOUNT OF THE THESE DONORS OR THE DONORS IN PERSON FOR VERIFICATION AND EXAMINATION. THE ASSESSING OFFICER ACCORDINGLY SHAL L DECIDE THE ISSUE IN RESPECT OF THESE 4 DONORS AS PER LAW. 7 IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS PARTLY ALLOWED. ORDER PRONOUNCED ON THIS 15 TH , DAY OF JUNE 2012 SD/- SD/- ( G E VEERABHADRAPPA ) PRESIDENT ( VIJAY PAL RAO ) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 15 TH , JUNE 2012 RAJ* SANT MATA BRIJ DEVI ITA NO. 4938/MUM/2008 9 COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI