S.Ganesh Kumar, Udamalpet V. ITO, Pollachi

ITA 540/CHNY/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52002 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-11-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 03-11-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 23-04-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ALAMELU LAKSHMINARAYANAN
• Assessee Lawyers: D ANAND
• Keywords: Gift

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER I.T.A. NO. 540/MDS/2010 (ASSESSMENT YEAR : 2004-05) SHRI . S. GANESH KUMAR, NO.5, AISWARYA NAGAR, 7 TH STREET, UDUMALPET 26. PAN : AEKPG1840G (APPELLANT) V. THE INCOME TAX OFFICER, WARD I(1), POLLACHI. (RESPONDENT) APPELLANT BY : SHRI D. ANAND, ADVOCATE RESPONDENT BY : SMT. ALAMELU LAK SHMINARAYANAN, JCIT DATE OF HEARING : 03.11.2011 DATE OF PRONOUNCEMENT : 03.11.2011 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY THE ASSESSEE, HE HAS RAIS ED TWO EFFECTIVE GROUNDS. FIRST IS REGARDING PERCENTAGE OF PROFIT O N GROSS RECEIPTS ESTIMATED AT 20% BY THE A.O. WHICH WAS SCALED DOWN TO 10% BY LD. CIT(APPEALS). THE SECOND ISSUE IS REGARDING AN ADD ITION OF ` 5 LAKHS I.T.A. NO. 540/MDS/10 2 MADE DISBELIEVING THE GIFT RECEIVED BY THE ASSESSEE AT THE TIME OF HIS MARRIAGE. 2. VIS--VIS THE FIRST ISSUE, LEARNED A.R. FAIRLY A DMITTED THAT SIMILAR DISALLOWANCES MADE IN THE EARLIER YEARS WERE ACCEPT ED BY THE ASSESSEE. IN VIEW OF THIS AND ALSO FOLLOWING THE R ULE OF CONSISTENCY, WE DISMISS THE GROUNDS REGARDING ADOPTION OF 10% OF RECEIPTS AS PROFIT. 3. VIS--VIS THE SECOND ISSUE, LEARNED A.R. SUBMITT ED THAT A SUM OF ` 5 LAKHS WAS RECEIVED BY THE ASSESSEE AT THE TIME O F HIS SECOND MARRIAGE, FROM FATHER AND TWO BROTHERS OF THE BRIDE . AS PER THE LEARNED A.R., THE AMOUNT WAS PAID TO THE FIRST WIFE FROM WHOM DIVORCE WAS OBTAINED BY THE ASSESSEE BY MUTUAL CONSENT. FU RTHER, LEARNED A.R. SUBMITTED THAT CONFIRMATION LETTERS FOR ` 3 LAKHS RECEIVED FROM SHRI K. RANGASWAMY, FATHER-IN-LAW OF ASSESSEE AND ` 1 LAKH EACH RECEIVED FROM RECEIVED FROM SHRI R. RAJAN AND SHRI R. SOUNDARARAJAN, BROTHERS-IN-LAW OF ASSESSEE WERE PRO DUCED BEFORE LD. CIT(APPEALS). AS PER LEARNED A.R., LD. CIT(APPEALS ) SIMPLY STATED THAT ABILITY OF THE CONCERNED PERSONS TO GIFT SUCH A HUGE SUM WAS NOT I.T.A. NO. 540/MDS/10 3 PROVED BEYOND DOUBT. IT WAS FURTHER SUBMITTED THAT FATHER-IN-LAW OF ASSESSEE HAD RETIRED FROM PWD AND BROTHERS-IN-LAW W ERE WORKING IN A MILL. THEREFORE, THEY HAD THE CAPACITY TO MAKE S UCH A GIFT. 4. PER CONTRA, LEARNED D.R. SUBMITTED THAT THE GIFT WAS NOT PROVED BEYOND DOUBT AND LD. CIT(APPEALS) WAS JUSTIFIED IN CONFORMING THE ADDITION. 5. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL C ONTENTIONS. IT IS NOT DISPUTED THAT FATHER-IN-LAW OF THE ASSESSEE WAS A RETIRED EMPLOYEE OF PWD AND BROTHERS-IN-LAW WERE WORKING IN A MILL. IT IS ALSO NOT DISPUTED THAT CONFIRMATION LETTERS WERE FI LED BEFORE LD. CIT(APPEALS). IT IS NOT UNCOMMON FOR GIFTS OF THIS NATURE TO BE RECEIVED AT THE TIME OF MARRIAGE. WHAT IS REQUIRED IN INCOME-TAX PROCEEDINGS IS NOT PROOF BEYOND DOUBT, BUT THE RULE OF PREPONDERANCE FOR PROBABILITY SHOULD BE SATISFIED. RECEIVING GIF TS FROM THE IN-LAWS AT THE TIME OF MARRIAGE IS A NORMAL CUSTOM. LD. CIT(A PPEALS) DISBELIEVED THE GIFT RELYING ON THE DECISION OF DEL HI BENCH OF THIS TRIBUNAL IN THE CASE OF ITO V. SMT. USHA AGGARWAL 2 010-T10L-40- ITAT-DELHI. ACCORDING TO HIM, ASSESSEE COULD NOT P ROVE THE GIFTS I.T.A. NO. 540/MDS/10 4 BEYOND DOUBT. IN OUR OPINION, THIS WAS NOT APPROPR IATE, SINCE ASSESSEE HERE COULD DEFINITELY ESTABLISH THE IDENTI TY AND FINANCIAL CAPACITY OF DONORS. NONE OF THE DONORS WERE EXAMIN ED BY THE LOWER AUTHORITIES TO COME TO ANY ADVERSE CONCLUSION. RUL E OF PREPONDERANCE OF PROBABILITY STOOD SATISFIED. THER EFORE, IN OUR OPINION, THE ADDITION OF ` 5,00,000/- WAS NOT WARRANTED AND IT STANDS DELETED. RELATED GROUNDS ALLOWED. 6. IN THE RESULT, APPEAL FILED BY ASSESSEE IS PARTL Y ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON 3 RD NOVEMBER, 2011. SD/- SD/- (GEORGE MATHAN) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 3 RD NOVEMBER, 2011. KRI. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A)-II, COIMBATORE (4) CIT-III, COIMBATORE (5) D.R. (6) GUARD FILE