Sh. Gaurav Mittal, Delhi V. ITO, New Delhi

ITA 5793/DEL/2013

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3036 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 04-01-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 30-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROBIN RAWAL
• Keywords: Gift
• Section: 68

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C : NEW DELHI BEFORE SHRI H.S.SIDHU , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI , ACCOUNTANT MEMBER I TA NO . 5793/DEL/2013 (ASSESSMENT YEAR: 2010 - 11 ) GAURAV MITTAL, 4861 - 62, GANESH BAZAR, CLOTH MARKET, DELHI PAN:ALHPM1926H VS. ITO, WARD - 29(1), NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI R.S.SINGHVI, C A RESP ONDENT BY : SH RI ROBIN RAWAL, SR. DR DATE OF HEARING 08 /01/2016 DATE OF PRONOUNCEMENT 07 / 03 /2016 O R D E R PER PRASHANT MAHARISHI , A . M . 1 . THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) - XXV, NEW DELHI DATED 03.09.2013 FOR THE ASSESSMENT YEAR 2010 - 11, RAISING FOLLOWING GROUNDS OF APPEAL: - 1 (I) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) WAS NOT JUSTIFIED IN CONFIRMING ADDITION OF RS, 11 LACS IN RESPECT OF GIFT RECEIVED FROM HIS MAUSI (MOTHER SISTER) AS INCOME FROM OTHER SOURCES WITHOUT APPRECIATING THE FACT THAT ISSUE IS FULL Y AND SQUARELY COVERED BY ORDER OF ITAT IN ASSESSEE'S OWN CASE FOR A.Y. 2009 - 10. (II) THAT DONOR AND DONEE BEING SAME AND AS SUCH FINDING OF ITAT IS RELEVANT IN RESPECT OF SOURCE AND GENUINENESS OF GIFT. 2. THAT CIT(A) HAS NOT PROPERLY APPRECIATED THE FACT OF THE CASE AND ALSO NOT ALLOWED PROPER AND REASONABLE OPPORTUNITY AND IMPUGNED ORDER IS NOT SUSTAINABLE. 3. THAT ORDERS OF THE LOWER AUTHORITIES ARE NOT JUSTIFIED ON FACTS AND SAME ARE BAD IN LAW. 2 . THE ONLY GROUND OF APPEAL IN THE CASE OF THE ASS ESSEE IS A GIFT RECEIVED OF RS.11 LAC FROM SISTER OF HIS MOTHER WHICH HAS BEEN TAXED AS INCOME OF THE ASSESSEE UNDER THE HEAD INCOME FROM OTHER SOURCES . DURING THE COURSE OF ASSESSMENT IT WAS NOTICED THAT THERE IS A CREDIT OF RS. 11 LACS IN THE BANK A CCOUNT OF THE ASSESSEE MAINTAINED WITH TAMIL NADU MERCANTILE BANK OF RS.11 LACS. ON ENQUIRY THE ASSESSEE SUBMITTED THAT THIS AMOUNT IS RECEIVED AS GIFT FROM MS. USHA AGARWAL, SISTER OF HIS MOTHER WHO IS RESIDING IN NEPAL. THE PAGE 2 OF 4 ABOVE SAID AMOUNT IS RECEIVED THROUGH BANKING CHANNEL AND DURING THE COURSE OF ASSESSMENT THE ASSESSEE SUBMITTED AN AFFIDAVIT IN SUPPORT OF GIFT FROM DONOR, COPY OF THE PASSBOOK OF THE DONOR, THE INFORMATION ABOUT FINANCIAL STATUS OF THE DONOR. FURTHER THE ASSESSEE COULD NOT SUBMIT BA NK ACCOUNT/ RETURN OF INCOME AND WEALTH TAX RETURN OF MS. USHA AGARWAL. HOWEVER, THE ASSESSEE SUBMITTED THAT TRILOK CHANDRA AGARWAL WHO IS HUSBAND OF MS. USHA AGARWAL ARE PROMOTERS OF BANKS OF NEPAL AND ALSO ENGAGED IN VARIOUS BUSINESS ACTIVITIES IN NEPAL. THE LD AO DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE AND THEREFORE MADE AN ADDITION OF RS.11 LACS AS TAXABLE INCOME AS INCOME FROM OTHER SOURCE. THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF THE AO HAS PREFERRED AN APPEAL BEFORE THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) REITERATING THE FACTS STATED BEFORE THE AO. BEFORE THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) IT WAS SUBMITTED THAT ISSUE IS COVERED IN FAVOUR O F THE ASSESSEE IN HIS OWN CASE FOR ASSESSMENT YEAR 2009 - 10, WHEREIN THE GIFT RECEIVED FROM THE SAME PERSON WAS ACCEPTED AS GENUINE AND CREDITWORTHINESS OF THE DONOR WERE ACCEPTED. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) REJECTED THE SUBMISSION OF THE ASSESSEE AND CONFIRMED THE ACTION OF THE AO. THEREFORE THE ASSESSEE IS IN APPEAL BEFORE US. 3 . THE LD AR OF THE APPELLANT HAS SUBMITTED THAT THE ISSUE IS SQUARELY COVERED BY ORDER OF ITAT IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2009 - 10, WHEREIN ITAT H AS ACCEPTED THE GIFT OF RS. 11 LACS FROM THE SAME PERSON. HE SUBMITTED THAT THE ADDITION IN THE CASE OF THE ASSESSEE IS NOT MADE U/S 68 OF THE ACT BUT AS INCOME FROM OTHER SOURCES , HE SUBMITTED THAT IDENTITY AND GENUINENESS OF THE TRANSACTION IS NOT A T ALL DOUBTED BY THE LOWER AUTHORITIES BUT ONLY THE CREDITWORTHINESS OF THE DONOR WHO IS RELATIVE OF THE ASSESSEE HAS NOT BEEN ACCEPTED BY THE LOWER AUTHORITIES. HE FURTHER SUBMITTED THAT IN SUPPORT OF THE CREDITWORTHINESS OF THE DONOR A . AN AFFIDAVIT OF TH E DONOR STATING THE DETAILS OF THE BANK ACCOUNT IN WHICH GIFT IS RECEIVED AND CERTIFICATES OF THE BANK FROM WHICH MONEY IS GIVEN BY THE DONOR I.E. EVEREST BANK LTD., NEPAL THAT THE DEMAND DRAFT HAVE BEEN TAKEN BY THE DONOR FROM THAT BANK . B . A STATEMENT SHOWING TOTAL INCOME RECEIVED BY THE DONOR FOR THE YEAR IS APPROXIMATELY 45 , 81 , 750/ - NEPALI RUPEES. PAGE 3 OF 4 C . VARIOUS BALANCE SHEETS OF VARIOUS BANKS WHERE THE HUSBAND OF THE ASSESSEE IS THE CHAIRMAN AND MAJOR SHAREHOLDERS OF THE BANK ALONG WITH HIS FAMILY MEMBER S. D . A CERTIFICATE OF INLAND REVENUE DEPARTMENT OF GOVT. OF NEPAL SHOWING TDS TRANSACTION ON SUCH DIVIDEND IN THE NAME OF THE HUSBAND OF THE DONOR. E . JOINT INCOME STATEMENT OF THE DONOR AND HER SPOUSE, WHEREIN THE DIVIDEND INCOME RECEIVED IS MORE THAN 1 CRORE IN ONE YEAR. IN VIEW OF THIS IT WAS SUBMITTED THAT THE ASSESSEE HAS PROVED CREDITWORTHINESS WHICH WAS IN QUESTION. 4 . THE LD DR RELIED ON THE ORDERS OF LOWER AUTHORITIES. 5 . WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS. IT IS ACCEPTED FACT THAT DURING THE YEAR THE APPELLANT HAS RECEIVED A GIFT OF RS.11 LACS FROM SISTER OF HIS MOTHER WHO IS RESIDING IN NEPAL. THERE IS NO DISPUTE ON THE IDENTITY AND GENUINENESS OF THE TRANSACTION BUT ONLY DISPUTE IS CREDITWORTHINESS I.E. REGARDING THE FINANCIAL CAPACITY OF THE DONOR TO GIVE SUCH GIFT. THE ASSESSEE HAS SUBMITTED EVIDENCE REGARDING THE FINANCIAL CAPACITY OF THE DONOR WHICH ARE IN THE FORM OF DETAILS OF INCOME RECEIVED BY THE ASSESSEE FROM GLOBAL TRADING UNITS LTD AND SALE OF SHARES OF THAT COMPANIES WHICH IS NEPALI RS. 36 , 59 , 250/ - . FURTHER IT IS UNDISPUTED FACT THAT SHRI TRILOK CHANDRA AGARWAL WHO IS HUSBAND OF THE DONOR IS ASSOC I ATED WITH MANY BANKS OF NEPAL AS ITS PROMOTER AND HIS FAMILY HOLDS MAJORITY OF SHARES IN SUCH BANKS SUCH AS BANK OF ASIA NEPAL LTD. , NEPAL INDUSTRIAL AND COMMERCIAL BANK LTD. ETC. TO SHOW THE SIZE OF THESE BANKING COMPANIES THE ASSESSEE HAS AL SO SUBMITTED THE COPIES OF THE BALANCE - SHEET OF THOSE BANKS WHERE THE NAMES OF THE SHAREHOLDERS AND THE DIRECTOR CHAIRMAN BEING HUSBAND OF THE ASSESSEE IS MENTIONED. FURTHER CERTIFICATE OF INLAND REVENUE OF GOVT. OF NEPAL ALSO SHOWS DIVIDEND INCOME RECEI VED BY THE HUSBAND OF THE ASSESSEE IS 175 LACS NPR FROM PARAMOUNT ELECTRONICS PVT. LTD. SUPPORTED BY THE HISTORY OF THE PARAMOUNT ELECTRONICS PVT LTD DECLARED HUGE DIVIDEND IN THE RANGE OF 200% FROM 150 TO 300% FOR THREE YEARS . IN VIEW OF THE ABOVE FACTS IT IS EVIDENT THAT THE FAMILY OF THE DONOR AS WELL AS THE DONOR HERSELF HAS SHOWN HER CREDITWORTHINESS FOR GIFT GIVEN BY HER OF RS 11 LAKHS TO THE ASSESSEE. PAGE 4 OF 4 FURTHERMORE THE COORDINATE BENCH OF ITAT IN ASSESSEES OWN CASE FOR AY 2009 - 10 ON IDENTICAL FACTS AND CIRCUMSTANCES HAS ACCEPTED THE CREDITWORTHINESS OF THE DONOR. IN VIEW OF THIS AND FOLLOWING THE DECISION OF COORDINATE BENCH IN CASE OF THE ASSESSEE FOR AY 2009 - 10 , WE ARE OF THE VIEW THAT THE ASSESSEE HAS FAIRL Y DEMONSTRATED THE CREDITWORTHINESS OF THE DONOR FOR RECEIVING GIFT OF RS.11 LACS FROM HIS RELATIVE. REGARDING THE PROVISION OF SECTION 56(2)(VI) WE ALSO OF THE VIEW THAT IF THE IDENTITY, CREDITWORTHINESS, AND GENUINENESS OF THE TRANSACTION IS ESTABLIS HED WHICH HAS BEEN FAIRLY DEMONSTRATED BY THE ASSESSEE NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE UNDER THE HEAD INCOME FROM OTHER SOURCES. IN THE RESULT WE REVERSE THE ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) AND DELETE THE A DDITION OF RS.11 LACS MADE IN THE HANDS OF THE ASSESSEE ON ACCOUNT OF GIFT RECEIVED FROM SISTER OF HIS MOTHER. 6 . IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 0 7 / 03 /2016 . - S D / - - S D / - ( H.S.SIDHU ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 0 7 / 03 / 2016 A K KEOT COPY FORWARDED TO 1 . APPLICANT 2 . RESPONDENT 3 . CIT 4 . CIT (A) 5 . DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI