Smt. Mohini Devi Chopra, JODHPUR V. ACIT, BARMER

ITA 516/JODH/2013

• Counselvise Citation: 51623314 RSA 2013
• Duration Of Justice: 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 20-02-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 12-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENC H : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 516/JODH/2013 (A.Y. 2009-10) SMT. MOHINI DEVI CHOPRA, VS. ACIT , CIRCLE, C/O KISHAN GOYAL & CO., CAS, BARMER. BERIA MOHALLAH, OUTSIDE SOJATI GARE, JODHPUR. PAN NO. AAKPD 2182 N (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI KISHAN GOYAL, DEPARTMENT BY : SHRI MAHESH KUMAR - D.R. DATE OF HEARING : 20/02/2014. DATE OF PRONOUNCEMENT : 27/03/2014. O R D E R PER N.K. SAINI, A.M THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDE R DATED 20/08/2013 OF LD. CIT(A), JODHPUR. THE FOLLOWING G ROUNDS HAVE BEEN RAISED IN THIS APPEAL: 1. THAT THE AUTHORITIES BELOW HAVE ERRED IN LAW AN D IN FACTS WHILE APPLYING SECTION 64(1)(VI) OF THE I.T. ACT. 2. THAT THE AUTHORITIES BELOW HAS ERRED IN MAKING T HE HYPOTHETICAL ADDITION OF RS. 26,254/- U/S 64(1)(VI) OF THE I.T. ACT PARTICULARLY WHEN 2 APPELLANT HAS NOT MADE ANY GIFT TO HER DAUGHTER-IN- LAW SO AS TO ATTRACT THE PROVISION OF SECTION 64(1)(VI) OF THE I .T. ACT. 3. THAT THE APPELLANT HAS MADE A GIFT TO SMT. MANSH I BEFORE THE MARRIAGE AND ON THE OCCASION OF HER MARRIAGE WITH A PPELLANT SON. 4. THAT THE AUTHORITIES BELOW HAS SERIOUSLY ERRED W HILE MISAPPLYING THE PROVISION OF SECTION 64(1)(VI) OF THE I.T. ACT, WHE REAS APPELLANT CASE IS COVERED BY OF SECTION 56(2)(VI)(BUSINESS) OF THE I. T. ACT, AS THE APPELLANT HAS MADE GIFT ON THE OCCASION OF HER MARR IAGE. 2 THE ONLY GRIEVANCE OF THE ASSESSEE IN THIS APPEAL RELATES TO THE SUSTENANCE OF ADDITION OF RS. 26,254/- MADE BY THE ASSESSING OFFICER UNDER SECTION 64(1)(VI) OF THE I.T. ACT, 1961 (HERE INAFTER REFERRED TO AS THE ACT IN SHORT). 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSE E FILED HER RETURN OF INCOME BY DECLARING AN INCOME OF RS. 8,00,730/-, WH ICH WAS PROCESSED UNDER SECTION 143(1) OF THE ACT ON 03/11/2009. LAT ER ON, CASE WAS SELECTED FOR SCRUTINY. DURING THE COURSE OF ASSESS MENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE MADE A GIFT OF RS. 5 LAC TO HER DAUGHTER IN LAW SMT. MANSHI AT THE TIME OF HER MARR IAGE ON 06/12/2007. THE ASSESSING OFFICER ASKED THE ASSESSEE THAT AS PE R THE PROVISIONS OF SECTION 64(1)(VI) OF THE ACT, THE INCOME ARISING DI RECTLY OR INDIRECTLY FROM THE GIFT AMOUNT TO HER DAUGHTER-IN-LAW SHOULD BE IN CLUDED IN HER TOTAL 3 INCOME. HE ALSO ASKED THE ASSESSEE TO EXPLAIN AS T O WHY THE INCOME EARNED ON THE AMOUNT OF GIFT MAY NOT BE ADDED IN HE R TOTAL INCOME. THE ASSESSEE STATED THAT THE GIFT WAS MADE AT THE OCCAS ION OF MARRIAGE OF WOULD BE WIFE OF HER SON AS SUCH IT COULD BE TREA TED AS GIFT TO THE DAUGHTER-IN-LAW AND THE PROVISIONS OF SECTION 64(1) (VI) OF THE ACT WERE NOT APPLICABLE. THE ASSESSING OFFICER DID NOT ACC EPT THE EXPLANATION OF THE ASSESSEE AND OBSERVED THAT THE GIFT WAS GIVEN T O SMT. MANSHI DUE TO RELATIONSHIP OF MOTHER-IN-LAW AND THE MARRIAGE WAS ALSO CEREMONIZED ON THE SAME DAY I.E ON 06/12/2007, THE DAY ON WHICH GI FT WAS GIVEN. THE ASSESSING OFFICER, ACCORDINGLY HELD THAT CLUBBING P ROVISIONS OF SECTION 64(1)(VI) OF THE ACT WERE APPLICABLE IN THE CASE OF THE ASSESSEE. 4. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED THAT THE ASSESSEE HAD MADE A GIFT OF RS. 5 LAC TO HER WOULD BE DAUGHTER-IN-LAW BEFORE HER MARRIAGE ON 0 6/12/2007 AND A GIFT DEED WAS EXECUTED WHICH WAS FILED BEFORE THE ASSESS ING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS, WHEREIN IT WA S CLEARLY MENTIONED THAT CHEQUE OF GIFT WAS HANDED OVER TO THE WOULD BE WIFE OF ASSESSEES SON ON THE OCCASION OF MARRIAGE AND AS SUCH GIFT MA DE BY THE ASSESSEE TO WOULD BE DAUGHTER-IN-LAW WAS NOT COVERED BY SECTI ON 64 OF THE ACT. IT WAS FURTHER STATED THAT THE ASSESSEE HAD NOT MADE A NY GIFT TO HER 4 DAUGHTER-IN-LAW SO AS TO ATTRACT THE PROVISIONS OF SECTION 64(1)(VI) OF THE ACT, BUT MADE THE GIFT TO HER WOULD BE DAUGHTER-IN -LAW ON THE OCCASION OF MARRIAGE OF HER SON. IT WAS FURTHER STATED THAT THE INTEREST INCOME OF RS. 26,254/- WAS DECLARED BY THE DAUGHTER-IN-LAW IN HER RETURN OF INCOME AS SUCH SAID ADDITIONS RESULTED INTO DOUBLE TAXATIO N OF INTEREST INCOME. 5. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS O F THE ASSESSEE OBSERVED THAT THE GIFT WAS MADE AT THE OCCASION OF MARRIAGE WITH FULL KNOWLEDGE AND CERTAINTY OF RELATIONSHIP BETWEEN THE DONAR MOTHER-IN-LAW AND DONEE DAUGHTER-IN-LAW AND THAT THE MONEY WAS TR ANSFERRED ON THE OCCASION OF MARRIAGE I.E. ONLY AFTER RELATIONSHIP T OOK A DEFINITE FORM AND ATTAINED CERTAINTY AND WHETHER RITUAL OR CEREMONY T OOK PLACE AFTER OR BEFORE THE TRANSFER OF MONEY WAS NOT MATERIAL. THE LD. CIT(A) FURTHER OBSERVED THAT THE STRICT RULES OF EVIDENCE DO NOT A PPLY IN THE INCOME-TAX PROCEEDINGS AND THAT THE GIFT WAS MADE TO WOULD BE DAUGHTER IN LAW DID NOT MITIGATE THE REAL NATURE OF TRANSACTION WHICH W AS MEANT FOR DAUGHTER-IN-LAW ONLY AND WHETHER THE GIFT WAS GIV EN PRIOR TO FORMAL FINALIZATION OF MARRIAGE OR SUBSEQUENTLY WAS IMMATE RIAL INSOFAR AS THE ASSESSEES INTENTION AND PURPOSE WAS TO GIFT HER DA UGHTER-IN-LAW ONLY. THE LD. CIT(A), ACCORDINGLY, SUSTAINED THE ADDITION MADE BY THE ASSESSING OFFICER. NOW THE ASSESSEE IS IN APPEAL. 5 6 . LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE S UBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT A GIFT OF RS. 5 LAC WAS GIVEN BY THE ASSESSEE OUT OF HER DECLARED I NCOME OF MORE THAN RS.8 LAC TO WOULD BE WIFE OF HER SON ON THE OCCAS ION OF MARRIAGE. THEREFORE, THE INCOME EARNED ON THE SAID GIFT WAS N OT COVERED UNDER THE PROVISIONS OF SECTION 64(1)(VI) OF THE ACT RATHER I T WAS COVERED UNDER THE PROVISIONS OF SECTION 56(2)(VI)(B) OF THE ACT. 7 . IN HIS RIVAL SUBMISSIONS, LEARNED D.R. SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 8 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT THE ASSESSEE MADE A GIFT OF RS. 5 LAC TO SMT. MANSHI ON 06/12/2007 AND THE CLAIM OF THE ASSE SSEE IS THAT AT THE TIME OF GIVING GIFT, SMT. MANSHI WAS NOT WIFE OF HE R SON RATHER SHE WAS WOULD BE WIFE. 9. TO RESOLVE THIS CONTROVERSY, IT IS RELEVANT TO DISC USS THE PROVISIONS OF SECTION 64(1)(VI) OF THE ACT WHICH READ AS UNDER:- 6 64(1) IN COMPUTING THE TOTAL INCOME OF ANY INDIVIDUAL, T HERE SHALL BE INCLUDED ALL SUCH INCOME AS ARISES DIRECTLY OR INDI RECTLY (I) X X X X X X (II) X X X X X X (III) X X X X X X (IV) X X X X X X (V) X X X X X X (VI) TO THE SONS WIFE, OF SUCH INDIVIDUAL FROM ASSETS T RANSFERRED DIRECTLY OR INDIRECTLY ON OR AFTER THE 1ST DAY OF J UNE, 1973, TO THE SONS WIFE BY SUCH INDIVIDUAL OTHERWISE THAN FO R ADEQUATE CONSIDERATION. FROM THE ABOVE PROVISIONS, IT IS CLEAR THAT INCOME EARNED ON THE ASSETS TRANSFERRED DIRECTLY OR INDIRECTLY TO SONS WIFE, SHALL BE INCLUDED IN THE INCOME OF THE INDIVIDUAL, WHO TRANSFERRED THE A SSET. IN THE PRESENT CASE, THE ASSESSEE MADE A GIFT ON 06/12/2007 AND GI FT DEED WAS MADE ON 19/12/2007, WHEREIN IT WAS MENTIONED THAT THE ASSES SEE MADE A GIFT OF RS. 5 LAC BY HDFC BANK CHEQUE NO. 119101 DATED 06/1 2/2007 WHICH WAS ACCEPTED BY SMT. MANSHI JUST BEFORE NICK TIME OF HE R MARRIAGE. IN THE SAID GIFT DEED, IT IS CLEARLY MENTIONED THAT THE AM OUNT IS GIFTED TO DONEE WOULD BE WIFE OF ASSESSEES SON, ON THE OCCASION OF HER MARRIAGE AND THE SAID CHEQUE WAS HANDED OVER TO THE DONEE AT JOD HPUR, WHO TOOK IT AND ACCEPTED JUST BEFORE NICK TIME OF HER MARRIAGE AS A GIFT FROM WOULD BE MOTHER IN LAW. THEREFORE, IT IS CLEAR THAT TH E CHEQUE OF GIFT WAS GIVEN IN THE CAPACITY OF WOULD BE MOTHER-IN LAW A ND NOT AS MOTHER-IN- LAW. IT IS ALSO RELEVANT TO POINT OUT THAT THE LD . CIT(A) WHILE CONFIRMING 7 THE ACTION OF THE ASSESSING OFFICER HAS OBSERVED TH AT WHETHER RITUAL OR CEREMONY TOOK PLACE AFTER OR BEFORE THE TRANSFER OF MONEY IS NOT MATERIAL. IN OUR OPINION, TO BECOME A WIFE AS PER HINDU CUSTOMS, THE RITUAL OR CEREMONY IS MOST IMPORTANT AND BEFORE COM PLETION OF THE MARRIAGE RITUALS I.E. SAPTAPADI OR SATFERE (SEVEN C IRCLES) AROUND HOLY FIRE, MUST BE PERFORMED AND ONLY THEREAFTER THE RELATIONS HIP OF HUSBAND AND WIFE COMES INTO EXISTENCE. IN THE PRESENT CASE, NO THING IS BROUGHT ON RECORD TO SUBSTANTIATE THAT THE GIFT IN QUESTION WA S GIVING TO SMT. MANSHI AFTER SHE BECAME WIFE OF SON OF THE ASSESSEE. THER EFORE, WE ARE OF THE VIEW THAT AT THE TIME OF ACCEPTING THE GIFT, SMT. M ANSHI WAS NOT THE DAUGHTER-IN-LAW RATHER SHE WAS WOULD BE DAUGHTER-IN -LAW OF THE ASSESSEE AS SUCH THE PROVISIONS OF SECTION 64(1)(VI) OF THE ACT WERE NOT APPLICABLE AND THE ADDITION SUSTAINED BY THE LD. CIT(A) WAS NO T JUSTIFIED. ACCORDINGLY, THE SAME IS DELETED. 10 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. (ORDER PRONOUNCED IN THE COURT ON 27 TH MARCH, 2014). SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 27 TH MARCH, 2014. 8 VR/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R ASSISTANT REGISTRAR, ITAT, JODHPUR.