ITO 14(1)-4, MUMBAI V. DEVENDRA LABHSHANKAR VYAS, MUMBAI

ITA 5266/MUM/2010

• Counselvise Citation: 526619914 RSA 2010
• Duration Of Justice: 1 year(s) 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: J
• Next Hearing Date: 29-11-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 25-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D S SUNDER SINGH
• Keywords: Gift; Business income
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH J,MUMBAI BEFORE SHRI D.K. AGARWAL (JM) & SHRI B. RAMAKOTAI AH (AM) I.T.A. NO.5266/MUM/2010 (A.Y. 2007-08 ) INCOME-TAX OFFICER-14(1)-4, 2N FLOOR, EARNEST HOUSE, NARIMAN POINT, MUMBAI-400 021. VS. SHRI DEVENDRA LABHSHANKAR VYAS, 103, 5 TH FLOOR, R.J. BUILDING, 22/24, ANANT WADI, MUMBAI-400 002. PAN: AABPV 7777 J APPELLANT RESPONDENT APPELLANT BY SHRI D.S. SUNDER SINGH. RESPONDENT BY NONE. DATE OF HEARING 29-11-2011 DATE OF PRONOUNCEMENT 0 9 - 12 - 2011 O R D E R PER D.K. AGARWAL, JM : THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AG AINST THE ORDER DATED 05-04-2010 PASSED BY THE LD. CIT(A) FOR THE ASSESSMENT YEAR 20 07-08. 2. AT THE TIME OF HEARING, NONE ATTENDS ON BEHALF O F THE ASSESSEE NOR FILED ANY APPLICATION FOR ADJOURNMENT OF THE CASE. IT WAS, THEREFORE, DECIDED TO DISPOSE OF THE APPEAL EX PARTE, QUA THE ASSESSEE, ON MERITS, AFTER HEARING THE LD. D.R. 3. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE, AN INDIVIDUAL, DERIVES BUSINESS INCOME BY WAY OF COMMISSION AND ALSO INCOME FROM OT HER SOURCES. THE RETURN WAS FILED DECLARING TOTAL INCOME AT RS.85,573/-. DURING THE C OURSE OF ASSESSMENT PROCEEDINGS, ON A QUERY RAISED BY THE AO REGARDING THE SOURCES OF INVESTMEN T OF RS.36,53,125/- WITH DOCUMENTARY EVIDENCES IN RESPECT OF PURCHASE OF IMMOVABLE PROP ERTY, IT WAS EXPLAINED THAT SOME OF THE AMOUNTS WERE RECEIVED AS GIFT FROM SON BHAVIN D. VY AS AND FLAT IS JOINTLY PURCHASED AND HELD ITA NO.5266/M/2010 DEVENDRA L. VYAS. 2 WITH WIFE SMT. KOKILABEN AND SON BHAVIN D. VYAS AND ALSO FURNISHED THE DETAILS OF DATEWISE PAYMENT, MODE OF PAYMENT AND AMOUNT PAID ETC. REGA RDING THE AMOUNT OF GIFTS RECEIVED FROM THE SON, A FAXED COPY OF LETTER DATED 28-12-2009 IS SUED BY THE EMPLOYER M/S. ELEGANT DIAMOND LLC, DUBAI, CERTIFYING PAYMENT OF SALARY TO THE ASS ESSEES SON FROM THE YEAR 2000 TO 2007, WAS FURNISHED. THE ASSESSEE ALSO ENCLOSED PHOTOCOPY OF WORK PERMIT CARD OF UAE, COPIES OF PASSPORT AND PHOTOCOPY OF STAMPED VISA OF IRAN ETC. AND AN U NDATED CERTIFICATE FROM CENTRAL BANK OF INDIA WAS ALSO FURNISHED. THE AO, HOWEVER, DID NOT FIND T HESE DOCUMENTS AS SUFFICIENT PROOF AND FURTHER REQUIRED THE ASSESSEE TO SHOW CAUSE AS TO W HY THE SUMS REFLECTED AND CREDITED IN THE BANK ACCOUNT CHANNELIZED TO MAKE THE PAYMENT OF PUR CHASE OF FLAT SHOULD NOT BE TREATED AS INCOME U/S.68 OF THE I.T. ACT, 1961 (THE ACT). IN REPLY, THE ASSESSEE SUBMITTED THAT SINCE THE SOURCE OF THE AMOUNT CREDITED HAVING BEEN EXPLAINED WITH EVIDENCES AND MONEY RECEIVED FROM THE SON AS GIFT AND BEING ONE OF THE PURCHASE PARTI ES, IT IS NOT THE INCOME OF THE ASSESSEE, THEREFORE, SHOULD NOT BE ADDED U/S.68 OF THE ACT. THE AO, HOWEVER, DID NOT ACCEPT THE ASSESSEES EXPLANATION AND MADE ADDITION OF RS.15 LAKHS U/S.68 OF THE ACT AND ACCORDINGLY COMPLETED THE ASSESSMENT AT AN INCOME OF RS.15,85,570/- VIDE ASSE SSMENT ORDER DATED 29-12-2009 PASSED U/S. 143(3) OF THE ACT. 4. ON APPEAL, THE LD. CIT(A), AFTER EXAMINING THE E VIDENCE FILED BY THE ASSESSEE, DELETED THE ADDITION MADE BY THE AO. 5. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE US TAKING THE FOLLOWING GROUNDS OF APPEAL : 1. THE ORDER OF THE CIT(A) IS OPPOSED TO THE LAW AND FACTS OF THE CASE. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION M ADE OF RS.15,00,000/- BY THE AO U/S.68 OF THE I.T. ACT. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN NOT APPRECIATING THE FACTS THAT : ITA NO.5266/M/2010 DEVENDRA L. VYAS. 3 I) EVENTHOUGH THE SAID AMOUNT OF RS.15.00 LACS WAS REC EIVED BY THE ASSESSEE THROUGH BANKING CHANNEL, THE ASSESSEE COUL D NOT SUBSTANTIATE THAT THE SOURCE OF REMITTANCE WAS FROM HIS SON. II) FOREIGN INWARD REMITTANCE CERTIFICATE ISSUED BY CAN ARA BANK AND DEFINING THE BENEFICIARY WITH ADDRESS AND BANK ACCO UNT BY ITSELF DOES NOT SUPPORT THE GENUINENESS OF THE TRANSACTION OR ITS SOURCE. III) THE SUBJECT MATTER OF WHOLE ISSUE IS NOT ABOUT THE PAYMENT OF AMOUNT TOWARDS PURCHASE OF FLAT BUT THE ISSUE WAS T HE CREDIT WORTHINESS/SOURCE OF REMITTANCE WHICH COULD NOT BE SUBSTANTIATED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IV) THE ADDITION WAS NOT MADE ON ACCOUNT OF THE REASON THAT CERTIFICATE ISSUED BY THE CENTRAL BANK OF INDIA WAS UNDATED. 4. FOR THESE REASONS AND OTHER REASONS THAT MAY BE URGED AT THE TIME OF HEARING, IT IS REQUESTED THAT THE ORDER OF THE CIT( A) BE QUASHED AND THAT OF THE AO RESTORED. 6. AT THE TIME OF HEARING, THE LD. D.R. SUBMITS THA T FOR THE REASONS AS MENTIONED IN THE ASSESSMENT ORDER AND THE PLEA TAKEN IN THE GROUNDS OF APPEAL, THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION MADE BY THE AO. HE, THEREFORE , SUBMITS THAT THE ADDITION MADE BY THE AO BE RESTORED. 7. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE LD. D.R. AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE FACTS ARE NOT IN DISPUTE INASMUCH AS IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE HAS FILED VARIOUS DOCUMENTARY EVI DENCE TO PROVE THAT THE MONEY WAS RECEIVED FROM FOREIGN THROUGH BANKING CHANNEL AS EVIDENCED B Y : A) CERTIFICATE ISSUED BY CENTRAL BANK OF INDIA TH E BANKER OF ASSESSEE IN WHICH SAVING BANK A/C. NO.1015922397 (OLD NO.34817) EXISTS IN THE NAME OF SHRI DEVENDRA LANBHSHANKAR VYAS ASSESSEE AND MRS . KOKILABEN VYAS. B) FOREIGN INWARD REMITTANCE CERTIFICATE ISSUED BY CANARA BANK IN RESPECT OF REMITTANCE BY MR. BHAVIN VYAS FOR CREDIT OF THE BENEFICIARY SHRI DEVENDRA L. VYAS AND MRS. KOKILABEN VYAS. C) CERTIFICATE OF REMITTANCE BEARING ELECTRONIC TRA NSFER NO.377335239 CLEARLY DEFINING THE BENEFICIARY WITH ADDRESS AND B ANK ACCOUNT ALONG WITH THE DRAWEE BANK, THE DETAILS OF REMITTER AND THE A MOUNT. ITA NO.5266/M/2010 DEVENDRA L. VYAS. 4 APART FROM THIS, THE ASSESSEE HAS ALSO FILED A FAXE D COPY OF LETTER DATED 28-12-2009 ISSUED BY THE EMPLOYER M/S. ELEGANT DIAMOND LLC, DUBAI, CERTIFYIN G PAYMENT OF SALARY TO THE ASSESSEES SON FROM THE YEAR 2000 TO 2007 AND PHOTOCOPY OF WORK PE RMIT CARD OF UAE, COPIES OF PASSPORT AND PHOTOCOPY OF STAMPED VISA OF IRAN ETC. AND AN UNDAT ED CERTIFICATE FROM CENTRAL BANK OF INDIA. THE LD. CIT(A), AFTER EXAMINING THE SAME, HAS HELD VIDE PARA 6.1 OF HIS ORDER AS UNDER : 6.1 .I FIND CONSIDERABLE FORCE IN THESE CONTEN TIONS OF THE APPELLANT PARTICULARLY IN VIEW OF THE FACT THAT ALL THE DOCUMENTS CLAIMED HAVING FURNISHED BEFORE THE AO ARE FOUND HAVING FUR NISHED AND ADMITTED BY THE AO AS DISCUSSED IN THE ASSESSMENT ORDER ITSE LF. EVEN THE PHOTO COPY OF WORK PERMIT CARD FROM UAD, COPY OF PASSPORT AND STAMPED VISA OF IRAN ETC. AND ALSO WORK CERTIFICATE BY THE EMPLOYER ARE ADMITTED TO HAVE BEEN FILED AS DISCUSSED BY THE AO IN THE ASSESSMENT ORDE R. MERELY ON THE GROUND THAT CERTIFICATE OF CENTRAL BANK OF INDIA IS UNDATE D, THE CLAIM OF THE APPELLANT CANNOT BE REJECTED SUMMARILY AS DONE BY T HE AO THAT TOO WITHOUT CROSS VERIFICATION OF ALL THESE DOCUMENTS AT HIS LE VEL. UNLESS A FINDING BY WAY OF CROSS VERIFICATION OF EITHER THE DOCUMENTS B EING NON GENUINE OR THE CONTENTS OF THE DOCUMENTS BEING NOT PERTAINING TO T HE TRANSACTIONS DURING THE YEAR, THESE CANNOT BE EITHER IGNORED OR REJECTE D. THEREFORE, IN THE ABSENCE OF SUCH FINDING, THE CONTENTION OF THE APPE LLANT BASED UPON AND SUPPORTED WITH SUCH DOCUMENTS AND EVIDENCES ARE LIA BLE TO BE ACCEPTED. THEREFORE, THE ADDITION MADE BY THE AO U/S.68 OF TH E I.T. ACT IS NOT JUSTIFIED. I ALSO FIND FORCE IN THE CONTENTION OF THE APPELLA NT THAT THIS SECTION IS NOT AT ALL APPLICABLE TO THE TRANSACTIONS DONE DURING THE YEAR FOR THE REASON THAT EVEN IF THE ADDITION IS TO BE MADE ON ACCOUNT OF UN PROVED GIFT, THE SAME SHOULD HAVE BEEN MADE U/S.56 OF THE I.T. ACT. BUT I N THE CASE OF THE APPELLANT, THE SOURCE OF GIFT AND THE AMOUNT RECEIV ED IN ITS BANK ACCOUNT HAVING BEEN EXPLAINED WITH SUPPORTING DOCUMENTARY E VIDENCE, NO ADDITION COULD HAVE BEEN MADE AND ALSO THE GIFT HAVING RECEI VED FROM SON IS NOT LIABLE FOR TAX U/S.56 AT ALL. ACCORDINGLY, THE ADDI TION MADE BY THE AO OF RS.15,00,000/- IS DELETED. THE GROUNDS RAISED ARE, THUS, DECIDED IN FAVOUR OF THE APPELLANT. IN THE ABSENCE OF ANY CONTRARY MATERIAL PLACED ON R ECORD BY THE REVENUE AGAINST THE FINDING OF THE LD. CIT(A) AND KEEPING IN VIEW THAT IN THE CERTIFICATE FROM THE CENTRAL BANK OF INDIA, THOUGH UNDATED BUT OTHER PARTICULARS SHOW ING THE ACCOUNT NUMBER, AMOUNT, DATE AND RECEIVED FROM ARE DULY MENTIONED, AND ALSO KEEPING IN VIEW THAT IT IS SETTLED POSITION OF LAW THAT THE ASSESSEE IS NOT REQUIRED T O PROVE THE SOURCE OF SOURCE, WE ARE OF THE VIEW THAT THE AO WAS NOT JUSTIFIED IN MAKING AN ADDITION OF RS.15 LAKHS U/S. 68 OF THE ITA NO.5266/M/2010 DEVENDRA L. VYAS. 5 ACT AND ACCORDINGLY THE ORDER PASSED BY THE LD. CIT (A) IN DELETING THE SAME DOES NOT CALL FOR ANY INTERFERENCE. THE GROUNDS TAKEN BY THE REVE NUE ARE, THEREFORE, REJECTED. 8. IN THE RESULT, THE REVENUES APPEAL STANDS DISMI SSED. ` ORDER PRONOUNCED IN THE OPEN COURT ON THE 09TH DAY OF DECEMBER, 2011. SD/- SD/- (B. RAMAKOTAIAH) (D.K. AGARWAL) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI: 09TH DECEMBER , 2011. NG: COPY TO : 1. DEPARTMENT. 2.ASSESSEE. 3 CIT(A)-25,MUMBAI. 4 CIT-IX, MUMBAI. 5.DR,B BENCH,MUMBAI. 6.MASTER FILE. (TRUE COPY) BY ORDER, ASST.REGISTRAR, ITAT, MUMBAI. ITA NO.5266/M/2010 DEVENDRA L. VYAS. 6 DETAILS DATE INITIALS DESIGNATI ON 1. DRAFT DICTATED ON 29-11-2011 SR.PS/ 2. DRAFT PLACED BEFORE AUTHOR 30-11-2011 SR.PS/ 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/A M 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/ 6. KEPT FOR PRONOUNCEMENT ON SR.PS/ 7. FILE SENT TO THE BENCH CLERK SR.PS/ 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9. DATE ON WHICH FILE GOES TO THE AR 10. DATE OF DISPATCH OF ORDER