ITO 15(2)(1), MUMBAI V. MADHU DINESH SANGHVI, MUMBAI

ITA 5382/MUM/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7826 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 27-08-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M KHARE MR VIKRAM GAUR
• Keywords: Gift; Business income; Residential status
• Section: 43; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI BEFORE SHRI. PRAMOD KUMAR (A.M.) AND SHRI. R.S. PAD VEKAR (J.M.) ITA NO.5382/MUM/2008 ASSESSMENT YEAR : 2005-2006 INCOME TAX OFFICER 15(2)(1), ROOM NO.111, MATRU MANDIR, MUMBAI 400 007. VS. MADHU DINESH SANGHVI 901/B, PRATIKSHA TOWER, R.S. NIMKAR MARG, MUMBAI 400 008. PAN : ANZPS1061M (APPLICANT) (RESPONDENT) APPLICANT BY : M. KHARE/ MR. VIKRAM GAUR (D.R.) RESPONDENT BY : MR. HARISH MOTIWALLA/ PIYUSH CHHAJED. O R D E R PER R.S. PADVEKAR, J.M. THIS APPEAL IS FILED BY THE REVENUE CHALLENGING THE IMPUGNED ORDER OF THE LEARNED CIT (A) XV, MUMBAI DATED 17.06.2008 F OR THE ASSESSMENT YEAR 2005-06. THE REVENUE HAS TAKEN FOLLOWING GROUND: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED CIT (A) HAS ERRED IN DELETING TH E ADDITION OF RS.50 LAKH U/S.68 BEING GIFT RECEIVED BY THE ASSESS EE, IGNORING THE FACTS THAT THE ASSESSEE HAS NEITHER SATISFACTOR ILY EXPLAINED CREDITWORTHINESS OF THE DONOR NOR ESTABLISHED RELAT ION WITH THE DONOR AS REQUIRED BY THE I.T. ACT, 1961 FOR THE PUR POSE OF AVAILING EXEMPTION OF SAID GIFT. 2. THE FACTS ARE REVEAL FROM THE RECORD ARE AS UNDE R. THE ASSESSEE IS AN INDIVIDUAL WHO IS ENGAGED IN THE MANUFACTURING AND DEALER IN GOLD ORNAMENTS AS A PROPRIETOR OF M/S. PURVI JEWELLERS. THE ASSESSEE FILED ITS RETURN OF INCOME WHICH WAS SELECTED FOR SCRUTINY AN D ASSESSMENT OF THE ASSESSEE WAS COMPLETED U/S.143(3) OF THE ACT. IT W AS NOTICED BY THE ITA NO.5382/MUM/2008 A.Y.: 2005-2006 2 ASSESSING OFFICER THAT THE ASSESSEE HAS SHOWN THE G IFT OF RS.50 LAKHS FROM ONE NON-RESIDENT SHRI JITENDRA F. MEHTA BY CHEQUE N O.881733 DATED 23.06.2004 WHICH WAS DRAWN FROM SB NRE ACCOUNT NO. 74001 WITH BANK OF INDIA, GHATKOPAR(WEST) BRANCH, MUMBAI. THE ASSES SING OFFICER SOUGHT EXPLANATION ON THE SAID AMOUNT AND ALSO CALLED FOR CERTAIN DETAILS. AS REQUIRED BY THE ASSESSING OFFICER ASSESSEE FURNISHE D COPY OF THE MEMORANDUM OF GIFT DATED 20.07.2004 AND ALSO THE CO PIES OF PASSPORT OF THE DONOR, BANK STATEMENT OF DONOR OF SB-NRE ACCOUNT NO .74001. THE ASSESSEE ALSO INFORMS RESIDENTIAL ADDRESS OF THE DONOR NAMEL Y SHRI JITENDRA F. MEHTA WHO WAS RESIDING AT 86, SOUTHOVER, WOOD SID PARK, L ONDON. THE ASSESSING OFFICER ISSUED SUMMONS TO THE ASSESSEE AND ALSO REC ORDED HER STATEMENT U/S.131 OF THE I.T. ACT WHO STATED IN THE STATEMENT THAT THE DONOR IS HER BROTHER FROM HER PARENTS SIDE AND THE SAID GIFT WAS GIVEN AS PER THE INDIAN TRADITION VIZ. MAMERA. SHE ALSO STATED THAT TH OUGH THE DONOR IS BROTHER FROM HER PARENT SIDE BUT LAST THREE YEARS THEY ARE NOT MET AS HE IS RESIDING IN LONDON. SHE ALSO STATED INFORMATION IN RESPEC T OF TRANSACTION HOW IT TOOK PLACE AND HOW THE CHEQUE WAS DEPOSITED IN HER ACCOUNT. B) IT APPEARS THAT THE ASSESSING OFFICER ALSO CALLE D FOR THE INFORMATION FROM THE BANK OF INDIA, GHATKOPAR BRANCH U/S.133(6) OF THE ACT THAT WAS NO MORE CONTEXT WITH THE INSTRUMENT OF RS.50 LAKHS BUT BANK INFORMED THE ASSESSING OFFICER THAT COPY OF THE INSTRUMENT COULD NOT BE MADE AVAILABLE AS SAME IS DESTROYED BY RAIN IN 26.07.05. IT WAS AL SO FOUND BY THE ASSESSING OFFICER THAT DONOR SHRI JITENDRA F. MEHTA HAS SOLD THE FLAT IN MUMBAI. THE ASSESSING OFFICER ISSUED SUMMONS U/S.131 OF THE ACT TO THE DONOR SHRI JITENDRA F. MEHTA WHO PERSONALLY APPEARS BEFORE THE ASSESSING OFFICER ON 18.09.2007 AND HIS STATEMENT OF SHRI JITENDRA F. ME HTA IS REPRODUCED BY THE ASSESSING OFFICER ON PAGE 3 TO 5 OF THE ASSESSM ENT ORDER WHICH IS AS UNDER: Q.NO.1 PLEASE IDENTIFY YOURSELF. CONFIRM THAT OATH HAS BEEN ADMINISTERED TO YOU. ALSO CONFIRM THAT ALL THE CON SEQUENCES ARE EXPLAINED FOR GIVING ANY FALSE STATEMENT. ANS. MYSELF, JITENDRA FATEHLAL MEHTA, AGE 34 YEARS RESIDING AT ADDRESS 73/2, BARNES PLACE, COLUMBO-7, EDUCATIONAL QUALIFICATION-B.COM, RESIDENTIAL STATUS -NON ITA NO.5382/MUM/2008 A.Y.: 2005-2006 3 RESIDENT OF UNITED KINGDOM. I CONFIRM THAT OATH H AS BEEN ADMINISTERED TO ME AND ALSO CONFIRM THAT ALL CONSEQ UENCES ARE EXPLAINED FOR GIVING ANY FALSE STATEMENT. Q.NO.2 PLEASE STATE WHETHER YOU FILE INCOME TAX RETURN IN INDIA? IF YES, WHAT IS THE SOURCE OF INCOME? GIVE D ETAILS OF YOUR BUSINESS INCOME, PAN NUMBER. ANS. DETAILS WILL BE FORWARDED TO YOU. Q.NO.3 PLEASE GIVE DETAILS OF YOU FAMILY MEMBERS. ANS. FATHER SHRI FATEHLAL MEHTA, AGE 60 YEARS RETURNE D FROM BUSINESS SINCE APPROX 3 TO 4 YEARS. MOTHER SMT. KAMALA MEHTA, AGE 58 YEARS, HOUSE WIFE. WIFE NUTAN MEHTA, AGE 33 YEARS, HOUSE WIFE. Q.NO.4 PLEASE STATE HAVE YOU EVER GIFTED MONEY TO ANY OF YOUR FAMILY MEMBERS, FRIENDS ANY OTHER RELATIVES. PLEASE GIVE DETAILS. ANS. YES, I HAVE GIFTED TO MY FRIENDS AND FAMILY MEMBER S. DETAILS OF SAME WILL BE SUBMITTED. Q.NO.5 PLEASE STATE HAVE YOU GIFTED ANY SUM TO SMT. MADHU DINESH SANGHVI. IF YES, WHEN MODE OF PAYMENT, AMOU NT AND REASON FOR GIVING SUCH GIFT. PLEASE ALSO STATE YO UR RELATION WITH SMT. MADHU DINESH SANGHVI. ANS. YES, I HAVE GIFTED A SUM OF RS.50 LAKHS TO SMT. MADHU DINESH SANGHVI BY CHEQUE AND WE ARE FAMILY RE LATIVES. Q.NO.6 PLEASE STATE EXACT RELATION WITH SMT. MADHU DINESH SANGHVI AND ON WHAT OCCASION THE GIFT WAS GIVEN BY YOU. ANS. IT IS A FAMILY RELATIONSHIP AND FAMILIES ARE KNOWN TO EACH OTHER SINCE AGES. THERE WAS USUALLY HELP PRO VIDED TO US BY THEIR GRAND GRAND FATHERS. SO WHEN THEY WERE IN NEED I HELPED HER AND THERE WAS NO SPECIFIC OCCASION FOR G IVING THE AMOUNT. WE DONT HAVE ANY FIRST BLOOD RELATIONSHIP WITH HER. Q.NO.7 PLEASE STATE THAT WHEN WAS THE GIFT GIVEN TO HER. ANS. THE GIFT OF RS.50 LAKHS WAS GIVEN BY MODE OF CHEQU E DATED 23.06.2004 AND GIFT DECLARATION DATED 20.07.2 004 WAS SIGNED BY ME LATER. Q.NO.8 PLEASE STATE HAVE YOU EVER MET SMT MADHU DINESH SANGHVI OR HAVE YOU EVER COMMUNICATED WITH HER AFTE R GIFT TRANSACTION BETWEEN YOU AND SMT MADHU D. SANGHVI WA S COMPLETED. ANS. WE HAVE TALKED BUT NEVER MET. Q.NO.9 DO YOU HAVE ANY INFORMATION ABOUT THE ASSESSMENT PROCEEDINGS PENDING IN CASE OF SMT MADHU D. SANGHVI . HAVE SHE COMMUNICATED YOU FOR GIVING ANY CONFIRMATION IN RELATED TO GIFT TO THE INCOME TAX DEPARTMENT. ANS. NO, I WAS NOT INFORMED OF ANY PROCEEDINGS IN CASE OF SMT. MADHU D. SANGHVI PENDING BEFORE INCOME TAX ITA NO.5382/MUM/2008 A.Y.: 2005-2006 4 DEPARTMENT. HOWEVER, ONE LETTER WAS SEND COMMUNICA TED TO ME AND RETURNED TO HER BACK AFTER SIGNING SAME BY M E. Q.NO.10 PLEASE STATE HAVE YOU EVER CHANGED YOU SIGNATURE. PLEASE GIVE DETAIL EVIDENCE. ANS. YES. THAT WAS GOD EIGHT TO TEN YEARS BACK. NO EVIDENCE FOR SAME IS AVAILABLE NOW WITH ME. Q.NO.11 PLEASE STATE WHETHER SIGNATURE IN PASSPORT SUBMITT ED BY SMT MADHU D. SANGHVI DURING THE ASSESSMENT PROCE EDINGS AND THE SIGNATURE ON THE GIFT DECLARATION DATED 20. 07.2004 AND CONFIRMATION DATED NIL SUBMITTED DURING THE ASSESSM ENT PROCEEDINGS ARE DONE BY YOU. ANS. THE SIGNATURE ON PASSPORT AND GIFT DEED AND CONFIRMATION ARE THE SAME. BUT ON PASSPORT THE SIG NATURE IS PASTED WRONGLY. Q.NO.12 PLEASE AGAIN STATE DO YOU HAVE ANY BLOOD RELATIONS HIP WITH MADHU D. SANGHVI. ANS. NO FIRST BLOOD RELATIONSHIP WITH MADHU D. SANGHVI. Q.NO.13 DO YOU WANT TO SAY ANYTHING ELSE. ANS. NO. C)THE ASSESSING OFFICER ALSO TRIED TO ASCERTAIN IN FORMATION IN RESPECT OF THE FAMILY OF THE DONOR NAMELY SHRI JITENDRA F. MEH TA WITH AGE, OCCUPATION AND PRESENT RESIDENTIAL ADDRESS, DOCUMENTARY EVIDEN CE FOR IMPORT AND EXPORT BUSINESS WHICH WAS CLAIMED AS HIS BUSINESS B Y THE DONOR. THE ASSESSEE FILED THE REPLY VIDE LETTER DATED 08.11.20 07 & STATED THAT THE IDENTITY OF THE DONOR SHRI JITENDRA F. MEHTA HAS BE EN ESTABLISHED. HE HAS BUSINESS IN OVERSEAS AND HAS REMITTED AN AMOUNT OF RS.50 LAKHS TO HIS NRE BANK ACCOUNT WITH BANK OF INDIA, GHATKOPAR BRAN CH ON 24.06.2004 IN U.S. DOLLAR. IT WAS ALSO CLAIMED BY THE ASSESSEE THAT SHRI JITENDRA F. MEHTA HAS GIVEN GIFT OUT OF LOVE AND AFFECTION AS H E WAS BROTHER FROM HIS MOTHER SIDE. THE ASSESSEE ALSO STATED THAT DUE DE CLARATION OF THE GIFT BY SHRI JITENDRA MEHTA WAS ALSO PLACED ON RECORD AND D ONOR HAD SUFFICIENT BANK BALANCE WHEN THE GIFT WAS GIVEN. THE ASSESS ING OFFICER WAS NOT CONVIENCE WITH THE EXPLANATION GIVEN BY THE ASSESSE E. IN VIEW OF THE ASSESSING OFFICER, THE PERSON RECEIVING THE SAME SH OULD HAVE INTIMATE BLOOD RELATIONSHIP BECAUSE IN ABSENCE OF THESE CRITERIA N O PRUDENT PERSON WOULD READY TO SACRIFY FOR ANY VALUABLE OR MONEY. THE A SSESSING OFFICER ALSO NOTED THAT IN INDIA NORMALLY GIFT IS GIVEN ON SPECIFIC OC CASION, NO SUCH OCCASION ITA NO.5382/MUM/2008 A.Y.: 2005-2006 5 WAS THERE TO MAKE OUT THE GIFT. THE ASSESSING OFFIC ER ALSO TOOK THE NOTE OF THE STATEMENT GIVEN BY THE DONOR SHRI JITENDRA F. M EHTA U/S.131 OF THE ACT AND MORE TO THE EXTENT OF THE DONOR. IN REPLY TO Q .NO.1 DONOR STATED THAT HIS PRESENT RESIDENTIAL ADDRESS WAS IN COLOMBO BUT IN R EPLY TO Q.NO.9 HE STATED THAT HIS PRESENT RESIDENTIAL ADDRESS WAS LONDON. D) THE ASSESSING OFFICER ALSO ANALYSE STATEMENT MA DE BY THE DONOR SHRI JITENDRA F. MEHTA IN HIS DEPOSITION U/S.131 OF THE ACT. THE ASSESSING OFFICER HAS ALSO NOTED THAT NO EVIDENCE TO PROVE TH E CAPACITY OF THE DONOR TO GIVE SUCH BIG GIFT WAS PRODUCED. THE ASSESSING OF FICER ALSO NOTED THAT NO EVIDENCE IN FORM OF INCOME TAX DETAILS OF THE DONOR HAD BEEN PRODUCE AT THAT TIME OR DURING THE COURSE OF ASSESSMENT PROCEE DINGS. IT APPEARS THAT ASSESSEE FILED THE EVIDENCE IN FORM OF STATEMENT AN D TAX DOCUMENTS OF M/S. SAKSHI INTERNATIONAL (P) LTD. FOR THE YEAR ENDED 30 .03.2003 IN WHICH DONOR WAS SHOWN AS A DIRECTOR. THE ASSESSING OFFICER DID NOT AGREE WITH THE DOCUMENTARY EVIDENCE FILED IN RESPECT OF M/S. SAKSH I INTERNATIONAL (P) LTD., AS NO ORIGINAL DOCUMENTS WERE PRODUCED FOR VERIFICA TION. THE ASSESSING OFFICER FINALLY REJECTED ALL THE EXPLANATION GIVEN BY THE ASSESSEE AND MADE THE ADDITION U/S.68 OF THE ACT AS NO EXPLANATION OF CASH CREDIT TO THE EXTENT OF RS.50 LAKH. 3. THE ASSESSEE CHALLENGED THE SAID IMPUGNED ADDITI ON BEFORE THE LEARNED CIT (A) AND LEARNED CIT (A) DELETED THE ADD ITION AND PART OF HIS REASONING IS AS UNDER. 5. I HAVE CIRCUMSPECTED THE FACTS AVAILABLE ON REC ORD. I FIND THAT THE APPELLANT HAS FILED A COPY OF PASSPOR T OF THE DONOR WHICH IS SUFFICIENT PROOF TO ESTABLISH THE IDENTITY OF THE DONOR. MOREOVER, THE DONOR HIMSELF HAS BEEN EXAMINED BY TH E ASSESSING OFFICER WHOSE THE STATEMENT RECORDED U/S. 131. THEREFORE, THE IDENTITY OF THE DONOR IS BEYOND DOUB T. REGARDING THE GENUINENESS OF THE TRANSACTION, I FIND THAT THE ENTRIES MADE IN THE BANK ACCOUNT OF THE APPELLANT IN SARASWAT CO -OP BANK, GR. LF., 6385 AND THE NRE A/C., S.N. 74001 WITH BAN K OF INDIA, GHATKOPAR OF JITENDRA MEHTA SUFFICIENTLY PROVE THE GENUINENESS OF THE GIFT TRANSACTION. THE VERY FACT THAT THE T RANSACTIONS ARE PASSED THROUGH THE BANKING CHANNEL, IT PROVES THE G ENUINENESS OF TRANSACTION PRIMA-FACIE, UNLESS AND UNTIL SOME O THER ITA NO.5382/MUM/2008 A.Y.: 2005-2006 6 MATERIALS ARE AVAILABLE ON RECORD TO REBUT THE CONS EQUENCES OF BANKING ENTRIES. FURTHER, I ALSO FIND THAT THE DEC LARATION OF THE GIFT MADE BY DONOR DT.28.07.2004 SUBSTANTIATES THE GENUINENESS OF GIFT TRANSACTION, WHEREIN IT HAS CLE ARLY REFLECTED. ON TOP OF EVERYTHING, THE DONOR HIMSELF APPEARED IN PERSON BEFORE THE ASSESSING OFFICER ON 18.09.2007 WHO WAS EXAMINED BY THE ASSESSING OFFICER. IN HIS STATEMENT MR. JIT ENDRA MEHTA, UNEQUIVOCALLY ACCEPTED THE FACTUM OF THE GIFT GIVEN BY HIM TO THE APPELLANT. THESE ARE THE HARD DOCUMENTARY EVI DENCE WHICH CANNOT BE BRUSHED ASIDE BY THE ASSESSING OFFI CER TO RAISED ANY QUESTION ON THE GENUINENESS. AS REGARDS TO THE CREDITWORTHINESS AND CAPACITY OF THE DONOR, I FIND THAT IT IS NOT POSSIBLE TO RAISE ANY QUESTION ON THIS POINT, LOOKI NG TO THE FINANCIAL STATEMENT OF SAKSHI INTERNATIONAL PVT. LT D. FOR FY 2002-03 WHEREIN THE JITENDRA MEHTA HAPPENED TO BE A MANAGING DIRECTOR. I ALSO FIND THAT MR. JITENDRA M EHTA HAS BEEN SHOWN AS MANAGING DIRECTOR OF THE COMPANY BY C OLOMBO EMIGRATION AUTHORITY WHILE ISSUING THE VISA TO THE DONOR. I HAVE ALSO PERUSED THE FINANCIAL STATEMENT OF THE SAKSHI INTERNATION PVT. LTD. FOR THE FY 2002-03. WHEREIN THE COMPANY HAS A FINANCIAL NET WORTH IN EXCESS OF RS.36 CRS. INVOLVI NG ANNUAL TURNOVER OF MORE THAN RS.300 CRS. IN THIS WAY, I FIND THAT THE QUESTIONING THE CREDITWORTHINESS OF MR. JITENDRA ME HAT IS OUT OF QUESTION. THE ASSESSING OFFICER APPEARS TO HAVE QU ESTIONED THE AUTHENTICITY OF FINANCIAL STATEMENT GIVEN OF SA KSHI INTERNATIONAL PVT. LTD. THIS DOES NOT APPEARS TO BE CORRECT. IF THE ASSESSING OFFICER HAS ANY DOUBT ON THAT, HE COU LD HAVE MADE NECESSARY VERIFICATION BEFORE MAKING SUCH COMM ENT. 5.1 AS REGARDS TO THE ASSESSING OFFICERS FINDING T HAT THE DONORS ARE NOT CLOSE RELATIVES OR FAMILY MEMBERS OF THE DONEES, I FIND THAT THE APPELLANT IN HIS STATEMENT HAS ALRE ADY STATED THAT THE DONOR AND DONEEE WERE KNOWN TO EACH OTHER FORM AGENTS. THE APPELLANT ALSO STATED THAT IT WAS GIV EN IN NATURAL LOVE & AFFECTION. THE ASSESSING OFFICER APPEARS TO HAVE GIVEN MORE EMPHASIS ON THE ABSENCE OF BLOOD RELATIONSHIP OF THE DONEE & DONOR WHICH ITSELF CANNOT PROVE THAT GIFTS ARE BOGUS. HERE, IT IS IMPORTANT TO MENTION THE DECISION OF HO NBLE DELHI HIGH COURT IN THE CASE OF CIT VS. MRS. SUNITA VACHA NI, 184 ITR 121 WHEREIN THE HONBLE DELHI HIGH COURT HELD THAT I IS NOT NECESSARY THAT GIFT SHOULD BE RECEIVED OR GIVEN BY A FAMILY MEMBER AS IT COULD BE FROM THE STRANGER FROM ABROAD ALSO. IN THE AFORESAID CASE, THE HONBLE HIGH COURT ALSO HEL D THAT IF THE MOUNT OF GIFT HAS BEEN GIVEN ORIGINATING FROM THE F OREIGN COUNTRIES THROUGH BANKING CHANNEL THE GENUINENESS C ANNOT BE DOUBTED. SIMILAR PROPOSITION OF LAW WAS ALSO REIT ERATED BY HONBLE HIGH COURT IN THE CASE OF CIT VS. PADAM SIN G CHOWHAN, 215 ITR 303(RAJ.). MOREOVER, THERE IS NO FICTION OF LAW THAT VALID GIFT CAN ONLY BE GIVEN BY A PERSON, WHO HAS BLOOD WITHIN BOUNDARY OF BLOOD RELATIONSHIP FOR THE PURPOSE OF GIFT. RELATIONSHIP CANNOT BE OR NEED NOT BE CONFI NED TO BLOOD RELATION BUT IT HAS TO TRAVEL BEYOND THAT. HUMAN R ELATIONSHIP DOES NOT HAVE WELL DEMARCATED BOUNDARY. THE GIFT G IVER HAS VERY INTIMATE TO DONEEE AS SATED BY BOTH THE PARTIE S. IN THIS ITA NO.5382/MUM/2008 A.Y.: 2005-2006 7 WAY, ALL THE THREE INGREDIENTS OF THE GENUINE GIFTS I.E. IDENTITY OF THE GIVER, HIS CREDITWORTHINESS AND CAPACITY, THE G ENUINENESS OF THE GIFT ARE ESTABLISHED BEYOND DOUBT. 5.2 THE ASSESSING OFFICER HAS TRIED TO APPLY THE DO CTRINE OF PREPONDERANCE OF PROBABILITY ON THE FACT OF THE CASE BY CITING LARGE NUMBER OF DECISIONS. I HAVE PERUSED THE DECI SION. VIS-- VIS, THE FACTS OF THE APPELLANTS CASE. IN MY CONS IDERED OPINION, I DO NOT FIND ADVERSE SURROUNDING FACTUAL CIRCUMSTA NCES IN THE APPELLANTS CASE WHICH WARRANT TO ADVERSE SURROUNDI NG FACTUAL CIRCUMSTANCES IN THE APPELLANTS CASE WHICH WARRANT TO APPLY THE RATIO OF ABOVE DOCTRINE I.E. PREPONDERANCE OF P ROBABILITY. I DO NOT SEE ANY WORTHWHILE PROBABILITY THAT THE GIFT MAY BE NON- GENUINE. THE ASSESSING OFFICER HAS ALSO NOT GIVEN ANY ADVERSE CIRCUMSTANCES, WHICH RAISES FINGER ON THE GENUINENE SS OF GIFT. 5.3 I ALSO FIND THAT THE ASSESSING OFFICER UNNECESS ARILY CITED THE REFERENCE OF NEW AMENDMENT BROUGHT U/S.56 (2)(V) WHICH IS APPLICABLE ONLY W.E.F. 01.09.2004 WHEREAS THE FIT WAS GIVEN ON 23.06.2004. SINCE, THE AMENDMENT WAS NOT HAVING RETROSPECTIVE APPLICATION; IT IS FUTILE TO PLACE RE LIANCE ON AFORESAID DECISION. 4. THE LEARNED CIT (A) ALSO EXPLAINED DIFFERENT DEC ISIONS RELIED ON BY THE ASSESSING OFFICER. NOW THE REVENUE HAS CHALLENGED IMPUGNED ORDER OF THE LEARNED CIT (A) BEFORE US. 5. WE HAVE GIVEN OUR ANXIOUS CONSIDERATION TO THE R IVAL SUBMISSIONS OF THE PARTIES. WE HAVE ALSO CAREFULLY GONE THROUGH DO CUMENTS FILED BY THE ASSESSEE IN THE PAPER BOOK. THERE IS NO DISPUTE I N RESPECT OF THE FACT THAT THE GIFT TO THE ASSESSEE WAS GIVEN BY THE CHEQUE FR OM NRE A/C. OF THE DONOR. THERE IS ALSO NO DISPUTE ABOUT FACT THAT ASSESSING OFFICER ISSUED SUMMONS TO THE DONOR U/S.131 OF THE ACT AND HIS STATEMENT W AS RECORDED. IT IS TRUE THAT MERELY BECAUSE THE TRANSACTION IS ROUTED THROU GH BANK CHANNEL THAT MAY NOT BE CONCLUSIVE TO SAY THAT ASSESSEE HAS DISC HARGE HIS BURDEN PUT ON HER U/S.68 OF THE ACT. AS PER DEPOSITION GIVEN BY DONOR SHRI J. F. MEHTA, HE WAS NON-RESIDENT OF UNITED KINGDOM. AS PER Q.NO. 5 OF HIS STATEMENT, IN CLEAR TERMS THE DONOR STATED THAT HE HAS MADE GIFT OF RS.50 LAKHS TO THE ASSESSEE AND THEY HAVE FAMILY RELATIONS. HE ALSO STATED THAT THERE WAS NO SPECIFIC OCCASION FOR MAKING GIFT TO THE ASSESSEE. THE LEARNED D.R. DREW OUR ATTENTION TO Q.NO.8 TO SUPPORT HIS ARGUMENT THAT TH E DONOR NEVER MET THE ITA NO.5382/MUM/2008 A.Y.: 2005-2006 8 ASSESSEE. WE ARE UNABLE TO ACCEPT HIS INTERPRETA TION GIVEN THE Q.NO.8 AND IT IS ANSWER. IT IS NECESSARY TO REPRODUCE THE RELE VANT QUESTION AND ANSWER: Q.NO.8 PLEASE STATE HAVE YOU EVER MET SMT MADHU DINESH SANGHVI OR HAVE YOU EVER COMMUNICATED WITH HER AFTE R GIFT TRANSACTION BETWEEN YOU AND SMT MADHU D. SANGHVI WA S COMPLETED. ANS. WE HAVE TALKED BUT NEVER MET. AS PER QUESTION THE ASSESSING OFFICER TRIED TO UND ERSTAND WHETHER THE DONOR MET THE ASSESSEE AFTER THE GIFT TRANSACTION W AS COMPLETED AND TO THE SAID QUESTION THE DONOR GIVEN THE ANSWER THAT THERE AFTER THEY NEVER MET BUT THEY HAVE TALKED. WE HAVE TO INTERPRET THE ANSWER IN THE CONTEXT OF THE QUESTION PUT TO THE PERSON OR WITNESS IN THE PRESEN T CASE. SHRI JITENDRA F. MEHTA THE DONOR APPEARED AS A WITNESS AND THERE IS DENIAL BY SHRI JITENDRA F. MEHTA THAT THE ASSESSEE IS UNKNOWN TO HIM. 6. AS PER THE ASSESSING OFFICER THERE IS CONTRADICT ION IN THE STATEMENT GIVEN BY THE DONOR AND THE ASSESSEE IN RESPECT OF T HE RESIDENTIAL ADDRESS OF THE DONOR SHRI JITENDRA F. MEHTA. AS PER THE DON OR WHEN THE STATEMENT WAS RECORDED HE WAS RESIDING AT 73/2, BARNES PLACE, COLOMBO-7 AND AS PER THE STATEMENT OF THE ASSESSEE HE WAS RESIDING AT 86 , SOUTHOVER, WOOD SID PARK, LONDON-12. THE LEARNED COUNSEL EXPLAINED TH AT THE DONOR HAS THE BUSINESS IN THE COLOMBO ALSO AND IT IS NOT NECESSAR Y THAT THE ASSESSEE MUST KNOW EACH AND EVERY BUSINESS PLACE OF THE DONOR AND THE PERUSAL OF THE DEPOSITION OF THE DONOR IT IS SEEN THAT ONLY ONE RE SIDENTIAL ADDRESS IS GIVEN. THE ASSESSEE HAS ALSO FILED COPIES OF THE FINANCIAL STATEMENT OF SAKSHI INTERNATIONAL PVT. LTD. FOR THE YEAR ENDED 31.03.20 03 WHICH ARE AUDITED BY THE CHARTERED ACCOUNTANT (PAGE 43 TO 56). AND TH E SAID CHARTERED ACCOUNTANT FIRM ARE FROM THE COLOMBO. THE ASSESS ING OFFICER HAS ALSO MADE THE REFERENCE OF THE SAID FINANCIAL STATEMENT IN THE ASSESSMENT ORDER. THE LEARNED COUNSEL ARGUED THAT DONOR IS THE DIRECT OR OF THE SAKSHI INTERNATIONAL PVT. LTD. AND THE AMOUNT HAS BEEN WIT HDRAWN AND TRANSFER FROM THE SAID COMPANY TO THE ACCOUNT OF THE DONOR I N INDIA. THE LEARNED COUNSEL ALSO REFERRED TWO COPIES OF THE PASSPORT OF THE DONOR AT PAGE NO.35 ITA NO.5382/MUM/2008 A.Y.: 2005-2006 9 TO 39 OF THE PAPER BOOK AS WELL AS THE COPIES OF TH E GIFT DECLARED AT PAGE NO.40 TO 41 OF THE PAPER BOOK AND SUBMITTED THAT TH E IDENTITY OF THE DONOR, CREDITWORTHINESS OF THE DONOR AND GENUINENESS OF TH E DONOR HAS BEEN ESTABLISHED BY THE ASSESSEE BEYOND DOUBT AND THE LE ARNED CIT (A) RIGHTLY DELETED THE ADDITION. WE FIND FORCE IN THE ARGUME NT OF THE LEARNED COUNSEL THOUGH THE ASSESSING OFFICER AS WRITTEN LOT OF THIN GS ON THE PRINCIPLE OF DOCTRINE OF PROPER OF THE PRUDENT BUT IN OUR OPINIO N LIMITED ISSUE BEFORE US IS WHETHER THE ASSESSEE HAS DISCHARGED THE BURDEN P UT ON HER U/S.68 OF THE ACT BY DISCLOSING THE IDENTITY OF THE DONOR AND PRO VING THE CREDITWORTHINESS AND GENUINENESS OF THE GIFT. IN OUR OPINION, ASSES SEE HAS SUCCESSFULLY DISCHARGED THE MANDATE OF SECTION 68 WHICH IS ADMIT TEDLY RULE OF EVIDENCE. NOTHING HAS BEEN PRODUCE ON THE RECORD OF THE ASSES SING OFFICER THAT THE MONEY WAS REJECTED BY THE ASSESSEE TO THE DONOR. I T IS WELL SETTLED MEMBER IN TAX LAWS THAT THERE IS NO CASE FOR SURMISES AND SUSPICIONS. 7. AFTER CAREFULLY CONSIDERED THE FACTS AS WELL AS EVIDENCE BEFORE US, IN OUR OPINION, NO INTERFERENCE IN THE ORDER BY THE LE ARNED CIT (A) AND WE ACCORDINGLY CONFIRMED THE SAME. 8. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED ON THIS DAY OF 25 TH FEBRUARY, 2010. SD/- (PRAMOD KUMAR) (ACCOUNTANT MEMBER) SD/- (R.S. PADVEKAR) (JUDICIAL MEMBER) MUMBAI, DATED 25 TH FEBRUARY, 2010. JANHAVI COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)-XIII, MUMB AI 4. COMMISSIONER OF INCOME TAX, CITY-XIII, MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH B, MUMBAI ITA NO.5382/MUM/2008 A.Y.: 2005-2006 10 //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI ITA NO.5382/MUM/2008 A.Y.: 2005-2006 11 DATE INITIALS 1. DRAFT DICTATED ON 02-02-10 PS 2. DRAFT PLACED BEFORE AUTHOR 04-02-10 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER AM/JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/J M 5. APPROVED DRAFT COMES TO THE SR. PS PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER