KISHINCHAND M. LAUNGANI, MUMBAI V. ITO WD 19(1)(1), MUMBAI

ITA 499/MUM/2012

• Counselvise Citation: 49919914 RSA 2012
• Duration Of Justice: 2 year(s) 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-05-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 13-05-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 23-01-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PARMINDER KAUR
• Assessee Lawyers: RAJESH KOTHARI
• Keywords: Gift; Source of fund; Additional evidence; Reasonable cause; Onus to prove
• Section: 68

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI - A BENCH. . , ! '#$% , # &' BEFORE S/SH.D.MANMOHAN, VICE-PRESIDEN T & RAJENDRA,ACCOUNTANT MEMBER /. ITA NO.499/MUM/2012, ( ( ( ( / ASSESSMENT YEAR-2008-09 KISHINCHAND M. LAUNGANI, 5 NEELKAMAL, S. V. ROAD, KHAR (W) MUMBAI-400052 VS ITO 19(1)(1) 3 RD FLOOR, PIRAMAL CHAMBERS, LALBAUG, MUMBAI-400012 PAN: AABPL1378D ( )* / APPELLANT) ( +,)* / RESPONDENT) -. -. -. -. / / / / # ## # / ASSESSEE BY : SHRI RAJESH KOTHARI '' 0 / # / REVENUE BY : SMT. PARMINDER KAUR 0 00 0 . . . . / DATE OF HEARING : 13-05-2014 1( 0 . / DATE OF PRONOUNCEMENT : 28-05-2014 , 1961 0 00 0 254 )1( # ## # $.2. $.2. $.2. $.2.     ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA,AM # # # # &' &' &' &' '#$% '#$% '#$% '#$% # ## # : CHALLENGING THE ORDER DT.25.11.2011 OF THE CIT(A)-2 2,MUMBAI,ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION U/S. 68 OF THE I TAX ACT OF RS.587442/-AND NOT CONSIDERED THE EVIDENCE OF PROOF OF BANK EXTRACT FROM WHICH THE GIFT WAS MADE ON THE GROUND AS AN ADDITIONAL EVIDENCE. YOUR APPELLANT CRAVES YOUR HONOURS LEAVE TO ADD, T O ALTER, AMEND, MODIFY, AND WITHDRAW ANY OF THE ABOVE GROUNDS OF APPEAL IF IT IS NECESSARY, ON OR BEFORE THE FINAL HEARING. DURING THE COURSE OF HEARING BEFORE US,AUTHORISED R EPRESENTATIVE(AR)OF THE ASSESSEE REQUESTED THAT ADDITIONAL EVIDENCES PRODUCED BY THE ASSESSEE SHOULD BE ADMITTED AS PER RULE 29 OF THE ITAT RULES, 1963. IT WAS STATED THAT EVIDENCES COULD NOT BE PRODUCED EARLIER AS THEY HAD TO BE OBTAINED FROM SRI LANKA, THAT THE DOCUMENTS WOULD HAVE DIREC T BEARING ON THE RESULT OF THE APPEAL. AFTER GOING THROUGH THE APPLICATION AND THE ADDITIONAL EV IDENCES, WE ARE OF THE OPINION THAT TO DECIDE THE ISSUE BEFORE THE SAME WOULD BE USEFUL. THEREFOR E, ADDITIONAL EVIDENCES PRODUCED BY THE ASSESSEE ARE TAKEN ON RECORD. 2. ASSESSEE,AN INDIVIDUAL,FILED HIS RETURN OF INCOME O N 04.03.2009,DECLARING TOTAL INCOME OF RS. 2,03,405/-.ASSESSING OFFICER(AO) FINALISED THE ASSE SSMENT U/S.143(3) OF THE ACT,ON 29.10.2010, , DETERMINING THE TOTAL INCOME AT RS.7.96,780/-. 2.1. THE ONLY GROUND OF APPEAL IS AGAINST ADDITION OF RS .5,87,442/- MADE U/S.68 OF ACT,BEING GIFT FROM DAUGHTER FROM ABROAD.DURING THE COURSE OF ASSE SSMENT PROCEEDINGS, AO NOTED THAT ASSESSEE HAS DEBITED AN AMOUNT OF RS.5,87,4421- IN THE CAPIT AL ACCOUNT WHICH WAS EXPLAINED TO BE GIFT FROM DAUGHTER.EXPLAINING THE SAME, IT WAS STATED BEFORE THE AO THAT THE SAME WAS RECEIVED THOUGH BANK DRAFT ISSUED BY HSBC OF RS 3,12,442/- DATED 07 .03.2008 AND RS. 2,75,000/- DATED 4.02.2008 2 ITA NO. 499/MUM/2012 KISHINCHAND M. LAUNGANI SENT BY DAUGHTER SMT LAXMI SETTLED AT SRI LANKA AND HAVING SUFFICIENT FUNDS.THE DRAFT WAS PURCHASED AT HONGKONG. AN AFFIDAVIT WAS ALSO FILED ALONG WITH GIFT DEED IN PLAIN PAPER. AO,WAS NOT CONVINCED WITH THE DETAILS FILED AND STATED THA T THE ASSESSEE HAD NOT FILED BANK EXTRACTS FROM WHICH THE SAID GIFT WAS STATED TO HAVE BEEN MADE, T HE GIFT DEED WAS SIGNED BY SMT.LAXMI ON PLAIN PAPER,NO BANK STATEMENT OF SMT. LAXMI SHOWING SAID DEBIT TRANSACTION WAS PRODUCED AND THERE WAS NO CO-RELATION OF DONORS FUNDS WITH THE DRAFT PURCHASED. AO ALSO NOTED THAT THE NAME OF THE DONOR IS NOT REFLECTED IN THE BANK REMITTANCE SUBMI TTED BY THE ASSESSEE .HE HELD THAT THE ASSESSEE HAD FAILED TO DISCHARGE ONUS TO PROVE GENUINENESS O F THE TRANSACTION AND THE CREDITWORTHINESS OF THE DONOR.ACCORDINGLY,HE TREATED THE SAME AS UNEXPL AINED CASH CREDIT AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 3. DURING THE COURSE OF APPELLATE PROCEEDINGS,BEFORE T HE FIRST APPELLATE AUTHORITY (FAA) IT WAS SUBMITTED THAT THE GIFTS WERE TRANSFERRED THROUGH B ANKING CHANNELS, THAT THE FOREIGN INWARD REMITTANCE CERTIFICATE ISSUED BY HSBC BANK PROVED T HAT GIFTS WERE FROM ABROAD, THAT THE IDENTITY AS WELL AS RELATIONSHIP OF DONORS WAS ESTABLISHED,T HAT THE GENUINENESS OF THE TRANSACTION BY SELF DECLARATION BY THE DONOR WAS DULY NOTORISED,THAT TH E CREDITWORTHINESS OF THE DONORS WAS ESTABLISH - ED BY SELF DECLARATION,THAT THE DONOR BEING DAUGHTE R OF THE ASSESSEE BLOOD RELATIONSHIP WITH THE ASSESSEE.ASSESSEE ALSO SUBMITTED A COPY OF CONFIRMA TION,DATED 20.102011,FROM SKD PACIFIC LIMITED STATING TO HAVE ISSUED TWO BANK DRAFTS IN A SSESSEES NAME, WHERE THE DONOR WAS STATED TO BE INTERESTE.HE ALSO FURNISHED COPY OF IT, RETURNS OF HUSBAND OF SMT. LAXMI THE DONOR FILED IN SRI LANKA. ACCORDINGLY, IT WAS REQUESTED THAT THE IDENT ITY, CREDITWORTHINESS AND GENUINENESS HAS BEEN PROVED AND HENCE THE GIFT MAY HE TREATED AS GENUINE . AFTER CONSIDERING THE ASSESSMENT ORDER,THE SUBMISSI ONS MADE BY THE ASSESSEE,FAA HELD THAT IN ORDER TO PROVE THE CREDITWORTHINESS THE ASSESSEE HA D MADE AN ATTEMPT TO PROVE THE SOURCE OF THE DRAFTS PURCHASED, THAT SAID EVIDENCE WAS NOT PRODUC ED BEFORE AO AND HENCE WAS AN ADDITIONAL EVIDENCE WHICH COULD NOT BE ADMITTED UNLESS ASSESSE E SHOWED SOME REASONABLE CAUSE FOR NOT SUBMITTING THE SAME BEFORE THE AO,THAT NO SITUATION HAD BEEN BROUGHT BEFORE HIM.HE REFUSED TO ADMIT THE ADDITIONAL EVIDENCE.HE FURTHER HELD THAT THAT NO COPY OF RETURN OF INCOME OF THE DONOR WAS FILED,THAT THERE WERE MISSING LINKS BETWEEN THE SOURCE OF FUNDS AND RECEIPTS BY THE ASSESSEE,THAT THERE WAS NOTHING ON RECORD TO PROVE THAT SKD PACIFIC LTD. WAS PAYING SALARY TO THE ASSESSEE AGAINST WHICH THESE DRAFTS WAS PREPARED EX CEPT THE LETTER OF SAID COMPANY,THAT THE COPY OF HSBC , ACCOUNT DID NOT BEAR THE NAME OF THE COMPANY OR THE DONOR,THAT THE DONOR WAS BASED AT SRI LANKA AND CLAIMED TO HAVE PURCHASED BANK DRAFT FROM HONGKONG AND SENT TO THE ASSESSEE IN INDIA,THAT SELF DECLARATION OF THE DONOR DID NOT PR OVE CREDITWORTHINESS,THAT THE CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION IS NOT CONCLUSIV ELY PROVED BY THE ASSESSEE.RELYING UPON THE JUDGMENTS OF JASPAL SING(290 ITR306),THIRTHRAM GUPT A(304ITR145),SWAMI PREMANAND (221 CTR 667),HE HELD THAT THE ONUS LIED ON THE ASSESSEE TO ESTABLISH IDENTITY, CAPACITY, RELATIONSHIP, LOVE AND AFFECTION AND CIRCUMSTANCES ON WHICH THE G IFT WAS MADE.FINALLY,CONFIRMING THE ORDER OF THE FAA,HE DISMISSED THE APPEAL FILED BY THE ASSESS EE. 4. BEFORE US, AR SUBMITTED THAT DAUGHTER OF THE ASSESS EE HAD GIFTED A SUM OF RS.5.87 LAKHS, THAT ALL NECESSARY EVIDENCES WERE PRODUCED BEFORE THE AO/FAA , THAT ADDITIONAL EVIDENCES PRODUCED BY THE ASSESSEE WOULD THROUGH LIGHT ON THE GENUINENESS AND CREDITWORTHINESS OF THE DONOR,THAT FAA HAD REFUSED TO ADMIT ADDITIONAL EVIDENCES THAT WERE VITAL AND HAD DIRECT BEARING ON THE OUTCOME OF THE APPEAL. DR SUPPORTED THE ORDER OF THE FAA. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.AS STATED EARLIER ADDITIONAL EVIDENCES PRODUCED BY THE ASSESSEE WOULD HAVE BEARING ON THE OUTCOME OF THE APPEAL. AS THE AO/FAA DID NOT HAVE BENEFIT OF THESE DOCUMEN TS AT THE TIME OF HEARING BEFORE THEM,SO,WE ARE OF THE OPINION THAT IN THE INTEREST OF JUSTICE MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE A O TO DECIDE THE ISSUE AFRESH AFTER CONSIDERING THE EV IDENCES PRODUCED BY THE ASSESSEE BEFORE US AND BEFORE THE FAA.WE ARE OF THE OPINION THAT EVIDENCED PRODUCED BY THE ASSESSEE AND NOT CONSIDERED 3 ITA NO. 499/MUM/2012 KISHINCHAND M. LAUNGANI BY THE FAA WILL ALSO HELPFUL TO TAKE A JUDICIAL AND BALANCED DECISION. THEREFORE,WE DIRECT THE AO TO AFFORD A REASONABLE OPPORTUNITY OF HEARING TO TH E ASSESSEE AND DECIDE THE APPEAL EFFECTIVE GROUND OF APPEAL IS ALLOWED IN FAVOUR OF THE ASSESSEE, IN PART. AS A RESULT, APPEAL FIL ED BY THE ASSESSEE STANDS PARTLY ALLOWED. 5.6 5.6 5.6 5.6 -. -. -. -. 7 7 7 7 &8 &8 &8 &8 0 00 0 2 22 2 '9. '9. '9. '9. 0 00 0 '. '. '. '. : :: : . ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH MAY, 2014 .     0 00 0 1( 1( 1( 1( # # # # $ $ $ $ ; ;; ; <& <&<& <& 28 , 201 4 0 00 0 2 22 2 = == = SD/- SD/- ( . / D.MANMOHAN) ( '#$% '#$% '#$% '#$% / RAJENDRA) ! / VICE PRESIDENT # # # # &' &' &' &' /ACCOUNTANT MEMBER / MUMBAI, <& /DATE: 28.05.2014. SK     0 00 0 +.> +.> +.> +.> ?#>(. ?#>(. ?#>(. ?#>(. / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / )* 2. RESPONDENT / +,)* 3. THE CONCERNED CIT(A)/ @ A , 4. THE CONCERNED CIT / @ A 5. DR A BENCH, ITAT, MUMBAI / >B2 +. , , . . $ . 6. GUARD FILE/ 2 5 ,>. ,>. ,>. ,>. +. +.+. +. //TRUE COPY//  / BY ORDER, / ' DY./ASST. REGISTRAR , /ITAT, MUMBAI