The ITO, Indore V. Smt Madhu Dadu, Mhow

ITA 582/IND/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2755 (ITAT-INDORE)
• Duration Of Justice: 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 06-07-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 15-12-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APARNA KARAN
• Keywords: Gift; Source of fund
• Section: 68

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI V.K. GUPTA, ACCOUNTANT MEMBER ITA NO.582/IND/2009 A.YS. 2004-05 INCOME TAX OFFICER 5(3), INDORE APPELLANT VS SMT. MADHU DADU MHOW PAN AHJPD-2974-J RESPONDENT APPELLANT BY : SMT. APARNA KARAN, SR. DR RESPONDENT BY : SHRI MANOJ GUPTA, CA O R D E R PER JOGINDER SINGH, JM THE REVENUE HAS CHALLENGED THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) DATED 22.9.200 9 ON THE GROUND THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN DELET ING THE ADDITION OF RS.5,88,818/- MADE U/S 68 OF THE ACT ON ACCOUNT OF RECEIPT OF GIFTS FROM UNEXPLAINED SOURCES. 2 2. DURING HEARING OF THIS APPEAL WE HAVE HEARD SMT. APARNA KARAN, LEARNED SENIOR DR AND SHRI MANOJ GUPTA, LD. COUNSEL FOR THE ASSESSEE. THE CRUX OF ARGUMENTS ON BEHALF OF THE R EVENUE IS THAT THE LEARNED AO IS JUSTIFIED IN MAKING THE IMPUGNED ADDI TION AS THE GIFTS RECEIVED BY THE ASSESSEE ARE FROM UNEXPLAINED SOURC ES. IT WAS ALSO SUBMITTED THAT NECESSARY DETAILS OF SUCH GIFTS WERE NOT FURNISHED BY THE ASSESSEE. ON THE OTHER HAND, THE ASSERTION MADE ON BEHALF OF THE REVENUE WAS CONTROVERTED BY THE LD. COUNSEL FOR THE ASSESSEE BY SUBMITTING THAT THE NECESSARY DETAILS WERE VERY MUC H FURNISHED BY THE ASSESSEE BEFORE THE AO AND EVEN OPPORTUNITY WAS PRO VIDED TO THE AO BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) . IT WAS FURTHER SUBMITTED THAT EVEN AT APPELLATE STAGE EACH AND EVE RY DETAIL ALONG WITH ELABORATE CONTENTION EXPLAINING THE TRUE FACTS WAS FILED. IT WAS CONTENDED THAT THE ASSESSEE GOT MARRIED ON 18.5.2003 AND THE GIFTS WERE GIVEN TO HER BY HER MOTHER-IN-LAW. THE COPIES OF THE GIFT D EED, CHEQUE AND BANK ACCOUNT WERE ALSO CLAIMED TO HAVE BEEN FILED BEFORE THE LEARNED AO. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATER IAL AVAILABLE ON RECORD. BEFORE COMING TO ANY CONCLUSION, WE WOULD L IKE TO DRAW THE FAMILY TREE OF LATE MUKESH DADU AS UNDER :- 3 LATE MUKESH DADU I SMT. SHOBHA DADU (WIFE) I -------------------------I-------------------- I I SHRI ASHISH DADU SHWETA DADU (SON) (DAUGHTER) I SMT. MADHU DADU (WIFE) THE BRIEF FACTS OF THE CASE ARE SUMMARIZED AS UNDER :- 1. SHRI MUKESH DADU DIED ON 15.12.98 IN A ROAD ACCI DENT. 2. SMT. SHOBHA DADU RECEIVED FOLLOWING CLAIMS FROM INSURANCE COMPANIES :- A. FROM ORIENTAL INSURANCE CO. LTD. CLAIM RECEIVED ON 10.3.2000 RS.10,00,000 B. FROM LIC OF INDIA CLAIM RECEIVED ON VARIOUS DATES RS. 8,74,900 C. THIRD PARTY MOTOR ACCIDENT CLAIM RECEIVED ON 24.10.2002 RS. 4,50,000/- TOTAL CLAIM RECEIVED RS.23,24,900/- (I) AS PER DIRECTIONS OF MOTOR ACCIDENT CLAIM TRIBU NAL SMT. SHOBHA DADU MADE FDR OF RS. 4.50 LACS WITH STATE BA NK OF INDORE, MHOW ON 20.11.2002 FOR 2 MONTHS. REST OF THE MONEY WAS UTILISED FOR GIVING LOAN TO FRIENDS & REL ATIVES & FOR HER OWN EXPENSES. SHE HAS WITHDRAWN CASH ON MATURITY OF FDR ON 24.01.2003 OF RS. 4.50 LACS AND GIVEN 4 IT TO HER SON ASHISH DADU FOR GIVING THE SAID AMOUN T AS LOAN TO THE FIRM M/S NANESH INDUSTRIES, KHETIYA. (II) SIMULTANEOUSLY SMT. SHOBHA GAVE A GIFT OF RS.1 .50 LACS TO HIS SON ASHISH DADU OUT OF VARIOUS AMOUNT RECEIVED BY HER OF INSURANCE CLAIMS BY CHEQUE OF CENTRAL BANK O F INDIA, MHOW, ON 25.06.2002 WHICH HE HAS DEPOSITED I N HIS SAVINGS BANK A/C NO. 13342 OF CENTRAL BANK OF INDIA , MHOW & LATER ON ASHISH DADU WITHDREW THE SAID MONEY ON 29.7.2002 FOR GIVING A LOAN TO M/S NANESH INDUST RIES, KHETIYA. (III) ON 5.3.2003 SHRI ASHISH DADU OPENED A BANK AC COUNT NO. 3461 IN HIS NAME WITH STATE BANK OF INDORE, KHE TIYA AND DEPOSITED THE CASH OF RS. 4.50 LACS OF HIS MOTH ER & RS. 1.50 LACS HIS OWN MONEY RECEIVED AS GIFT FROM M OTHER, TOTALLY RS. 6 LACS IN THE SAID ACCOUNT ON 17.3.2003 AND GAVE A CHEQUE NO. 1792721 OF RS. 6 LACS TO M/S NANE SH INDUSTRIES, KHETIYA AS LOAN. THE SAME HAS BEEN PROP ERLY REFLECTED IN THE IT RETURN OF SHOBHA DADU AND ASHIS H DADU FOR THE ASSESSMENT YEAR 2003-04 AND OFFERED INTEREST INCOME AS THEIR TAXABLE INCOME. (IV) SHRI ASHISH DADU MARRIED ON 18.5.2003 WITH MAD HU AND SMT. SHOBHA DADU AND ASHISH DADU WANTED TO GIVE GIF T TO 5 THE ASSESSEE. M/S NARESH INDUSTRIES RETURNED RS. 5 .50 LACS TO ASHISH DADU OUT OF WHICH RS. 4.50 LACS WAS DEPOSITED IN BANK. LIKEWISE, SMT. SHOBHA DADU RECEI VED HER LOAN BACK FROM SHRI PRADEEP GOYAL (RS.1,52,600/ -), SMT. KRISHNA GOYAL (RS. 3,27,000/-) ALONG WITH INTE REST OF RS.1,69,467/- (FROM SHRI PRADEEP GOYAL) AND RS. 3,41,715/-(FROM SMT. KRISHNA GOYAL) ON 14.10.2003 AND 11.10.2003 RESPECTIVELY. THESE AMOUNTS WERE DEPOSIT ED IN HER BANK ACCOUNT. (V) SMT. SHOBHA DADU GIFTED RS. 9.50 LACS TO THE AS SESSEE (DAUGHTER-IN-LAW) FROM HER BANK ACCOUNT NO. 13417 UCO BANK, NEW PALASIA, BY CHEQUE NO. 243272 DATED 6.10.2003 (RS.3,65,000/-), CHEQUE NO. 243277 DATED 15.10.2003 (RS. 5,65,000/-, CHEQUE NO. 243279 DATED 15.10.2003 (RS.50,000/-). (VI) SMT. SHOBHA DADU AND SHRI ASHISH DADU PERSONAL LY APPEARED BEFORE THE LEARNED AO AND THEIR STATEMENTS WERE RECORDED ON 14.7.2006 WHEREIN THEY CATEGORICAL LY CONFIRMED MAKING OF GIFTS AND THE SOURCE OF FUNDS W ITH THEM. (VII) CERTAIN ADDITION EVIDENCE WERE ALSO FURNISHED AT THE FIRST APPELLATE STAGE WHICH WERE CONFRONTED TO THE AO. AL L THE 6 EVIDENCES FURNISHED BY THE ASSESSEE WERE SUPPORTED BY NECESSARY DOCUMENTS. 4. IF THE FACTUAL FINDINGS NARRATED IN THE IMPUGNED ORDER AND THE ASSERTION MADE BEFORE US ARE ANALYSED, WE FIND THAT THERE WAS AVAILABILITY OF FUNDS WITH THE DONORS OUT OF WHICH THE GIFT WAS GIVEN TO THE PRESENT ASSESSEE BY MOTHER-IN-LAW AND HUSBAND RESPE CTIVELY. THE STATEMENTS OF DONORS WERE RECORDED WHEREIN THEY SPE CIFICALLY CONFIRMED MAKING OF THE GIFT. THE SOURCE OF THE GIFTED AMOUN T WAS ALSO VERY MUCH EXPLAINED BEFORE THE AUTHORITIES, CONSEQUENTLY, WE ARE IN AGREEMENT WITH THE FINDING OF THE LEARNED COMMISSIONER OF INC OME TAX (APPEALS) THAT IT CANNOT BE SAID TO BE UNEXPLAINED GIFT, THER EFORE, THE CONCLUSION DRAWN BY HIM IS AFFIRMED AS THE NECESSARY INGREDIEN TS FOR MAKING THE GIFTS VIZ-A-VIZ SECTION 68 ARE FULFILLED. IT IS NO T THE CASE THAT OWN MONEY OF THE ASSESSEE HAS BEEN ROUTED THROUGH BANKING CHA NNEL. THE AO MADE THE ADDITION MERELY ON PRESUMPTIVE BASIS. WE ARE OF THE CONSIDERED OPINION THAT PRESUMPTION CANNOT TAKE THE SHAPE OF EVIDENCE HOWSOEVER STRONG IT MAY BE UNLESS IT IS CORROBORATE D WITH DOCUMENTARY EVIDENCE. THE FACTUAL FINDING MENTIONED IN THE IMP UGNED ORDER WAS NOT EVEN CONTROVERTED BY THE REVENUE BEFORE BY PLACING ANY CONTRARY EVIDENCE. EVEN OTHERWISE, THE SOURCE OF THE AMOUNT AND MAKING THE GIFT IS THROUGH BANKING CHANNEL. IN VIEW OF THESE FAC TS, THERE IS NO MERIT IN THE APPEAL OF THE REVENUE. THE SAME IS DISMISSED. 7 ORDER PRONOUNCED IN OPEN COURT IN THE PRESENCE OF L EARNED REPRESENTATIVES OF BOTH THE SIDES AT THE CONCLUSION OF HEARING ON 6 TH JULY, 2010. (V.K. GUPTA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER 6 TH JULY, 2010 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, G UARD FILE *DBN/