Smt. Kavita Ramdas Raut, Nashik V. Income-tax Officer,

ITA 6/PUN/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1543 (ITAT-PUNE)
• Duration Of Justice: 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 04-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL
• Keywords: Gift; Capital receipt

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, PUNE . . , BEFORE SHRI R.K. PANDA, AM . / ITA NO.06/PN/2016 / ASSESSMENT YEAR : 2011-12 SMT. KAVITA RAMDAS RAUT, 136, KARNA NAGAR, PETH ROAD, IN FRONT OF RTO, MERRY OFFICE, NASHIK 422 004 PAN NO.AOQPR2253E . / APPELLANT V/S ITO, WARD - 3(2), NASHIK . / RESPONDENT / APPELLANT BY : SHRI SANKET JOSHI / RESPONDENT BY : SHRI P.L. KUREEL, ADDL.CIT / ORDER PER R.K.PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 01-10-2015 OF THE CIT(A)-I, NASHIK RELATING TO TH E ASSESSMENT YEAR 2011-12. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A N INDIVIDUAL AND A SPORTS WOMAN AND IS AN EMPLOYEE OF ONGC. SHE FILED HER RETURN OF INCOME ON 04-01-2012 DECLARING TOTAL INCOME OF RS.10,33,110/-. DURING THE COURSE OF ASSESSMENT PROCEEDIN GS THE AO OBSERVED THAT THE ASSESSEE HAS GOT AWARDS/REWARDS/G IFTS FROM GOVERNMENT, SEMI GOVERNMENT, LOCAL AUTHORITIES, PRIVATE TRU STS, COMPANIES, COOPERATIVE SOCIETIES AND PRIVATE PARTIES AMOUN TING TO RS.62,59,865/- WHICH HAS BEEN CLAIMED AS EXEMPT BEING CAPIT AL IN / DATE OF HEARING :20.07.2016 / DATE OF PRONOUNCEMENT:22.07.2016 2 ITA NO.06/PN/2016 NATURE. IT WAS SUBMITTED THAT THE ASSESSEE IS AN ADIVA SI STAYING IN RURAL AREA OF SAVARPADA VILLAGE AND IS AN AMATEUR SPORTS WOMAN AND IS NOT A PROFESSIONAL. IT WAS ACCORDINGLY SUBMITTED THAT T HE AMOUNT OF RS.62,59,865/- ARE EXEMPT FROM TAX U/S.10(17A) OF THE ACT B EING CAPITAL IN NATURE. 3. HOWEVER, THE AO WAS NOT FULLY SATISFIED WITH THE EXPLANA TION GIVEN BY THE ASSESSEE. HE OBSERVED THAT THE ASSESSEE COULD NOT PRODUCE THE NAME OF THE PRIVATE PARTIES FROM WHOM SHE H AS RECEIVED GIFTS OF RS.5,34,155/- OUT OF THE TOTAL GIFT OF RS.62,59,865/- RE CEIVED FROM VARIOUS PERSONS/ORGANIZATIONS ON ACCOUNT OF AWARDS/REWARDS/GIFTS. HE, THEREFORE, ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THE ABOVE AMOUNT OF RS.5,34,155/- SHOULD NOT BE TREATED AS REVENUE RECEIPTS. THE ASSESSEE SUBMITTED THAT THE ABO VE AWARD/REWARDS/GIFTS ARE CAPITAL RECEIPTS AND HENCE NOT T AXABLE IN THE HANDS OF THE ASSESSEE. THE DECISION OF THE DELHI BEN CH OF THE TRIBUNAL IN THE CASE OF ABHINAV BINDRA VS. DCIT VIDE ITA NO.2219/DELHI/2013 ORDER DATED 26-07-2013 WAS RELIED UPON. 4. HOWEVER, THE AO WAS NOT SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE. HE OBSERVED THAT IN THE INSTANT CASE T HE ASSESSEE WAS UNABLE TO GIVE THE NAMES OF THE PRIVATE PARTIES FROM WHOM SHE HAS GOT THE GIFTS. THE CONCERNED BANKS ALSO COULD NOT FURNISH THE NAMES OF THE PARTIES FROM WHOM THE CHEQUES WERE DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE. IN VIEW OF THE ABOVE, THE AO M ADE ADDITION OF RS.5,34,155/- AS UNDISCLOSED INCOME OF THE YEAR U/S.56 OF THE I.T. ACT. 3 ITA NO.06/PN/2016 5. IN APPEAL THE LD.CIT(A) FOLLOWING THE DECISION OF THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF AROON PURIE REPORTED IN 82 ITD 606 UPHELD THE ADDITION MADE BY THE AO. 6. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE IS IN APPEA L BEFORE THE TRIBUNAL. 7. THE LD. COUNSEL FOR THE ASSESSEE STRONGLY CHALLENGED THE ORDER OF THE CIT(A). HE SUBMITTED THAT THE DECISION RELIED UPON BY THE CIT(A) HAS SINCE BEEN REVERSED BY THE HONBLE DELHI HIGH COURT. IT HAS BEEN HELD IN THE SAID DECISION THAT WHERE THE AWARD RECEIVED F ROM THIRD PERSON IS FOR EXCELLENCY IN JOURNALISM, THE SAME IS NOT ASSE SSABLE AS INCOME. HE SUBMITTED THAT THE ASSESSEE IS AN AMATEUR S PORT WOMAN AND IS NOT A PROFESSIONAL ONE. SHE HAS RECEIVED CERTAIN G IFTS FROM GOVERNMENT, SEMI GOVERNMENT AND PRIVATE ORGANIZATIONS/INSTITUTIONS. SINCE SHE COMES FROM AN ADIVAS I FAMILY AND NOT WELL CONVERSANT WITH THE INTRICACIES OF THE INCOME TAX LAW SHE HAS NOT MAINTAINED DETAILS OF EACH AND EVERY GIFT FOR WHICH IT WAS NOT POSSIBLE ON HER PART TO GIVE THE DETAILS OF PRIVATE PA RTIES FROM WHOM SHE HAS RECEIVED GIFTS OF RS.5,34,155/- OUT OF THE T OTAL GIFT OF RS.62,59,865/-. RELYING ON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF AROON PURIE CITED (SUPRA) HE SUBM ITTED THAT THE AWARDS/REWARDS/GIFTS FROM THIRD PERSON FOR EXCELLENCE IN SP ORTS IS CAPITAL IN NATURE. 8. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HA ND HEAVILY RELIED ON THE ORDER OF THE CIT(A). HE SUBMITTED THAT THE ASSESSEE COULD NOT GIVE THE NAME OF THE PRIVATE PARTIES FROM WHOM SHE HAS RECEIVED GIFTS OF RS.5,34,155/-. THEREFORE, THE CIT(A) WAS JU STIFIED IN SUSTAINING THE ADDITION MADE BY THE AO. 4 ITA NO.06/PN/2016 9. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE AO AND THE CIT(A) AND THE PA PER BOOK FILED ON BEHALF OF THE ASSESSEE. I HAVE ALSO CONSIDERED THE VA RIOUS DECISIONS CITED BEFORE ME. I FIND THE ASSESSEE IN THE INSTA NT CASE IS AN INDIVIDUAL AND AMATEUR SPORTS WOMAN AND IS AN EMPLOYEE OF ONGC. SHE HAS RECEIVED AN AMOUNT OF RS.62,59,865/- ON ACCOUNT OF AWARDS/REWARDS/GIFTS FROM VARIOUS GOVERNMENTS, SEMI GOVERNMENTS AND PRIVATE INSTITUTIONS WHICH HAS BEEN CLAIM ED AS EXEMPT U/S.10(17A) OF THE I.T. ACT. I FIND THE AO ACCEPTE D AN AMOUNT OF RS.57,25,710/- AS EXEMPT U/S.10(17A). HOWEVER, HE REJECT ED THE CLAIM OF THE ASSESSEE FOR THE BALANCE AMOUNT OF RS.5,34,155/ - RECEIVED FROM CERTAIN PRIVATE PARTIES IN ABSENCE OF PRODU CTION OF DETAILS BY THE ASSESSEE. 10. I FIND FORCE IN THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE ASSESSEE COMES FROM AN ADIVASI FAMILY AND NOT WELL CONVERSANT WITH THE COMPLICATED INCOME TAX FOR WHICH SHE HAS NOT MAINTAINED COMPLETE DETAILS OF THE AWARDS/REWARDS/GIFTS REC EIVED FROM DIFFERENT ORGANIZATIONS/PRIVATE PARTIES. HOWEVER, THE A MOUNT HAS BEEN RECEIVED THROUGH BANKING CHANNEL. THE ASSESSE E IS A SALARIED EMPLOYEE AND HAS GOT NO OTHER SOURCE OF INCOME OTHER THAN SALARY AND THE AWARDS/REWARDS/GIFTS. UNDER THESE CIRCUM STANCES, IT HAS TO BE SEEN AS TO WHETHER THE AMOUNT OF RS.5,34,155/ - SHOULD BE EXEMPTED U/S.10(17A) OR NOT. 11. I FIND THE LD.CIT(A) WHILE DECIDING THE ISSUE HAS RELIED O N THE DECISION OF THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF A ROON PURIE (SUPRA). HOWEVER, THE SAID DECISION HAS BEEN REVERSED BY THE HONBLE DELHI HIGH COURT REPORTED AS 375 ITR 188. THE HONBLE H IGH COURT IN 5 ITA NO.06/PN/2016 THE SAID DECISION HAS HELD THAT THE RECEIPT OF THE AMOUN T OF RS.1 LAKH BY WAY OF AN AWARD FROM G.D. GOENKA FOUNDATION WAS NOT T AXABLE AS THE ASSESSEES INCOME BEING A CAPITAL RECEIPT. RESPECTFU LLY FOLLOWING THE DECISION OF THE HONBLE DELHI HIGH COURT I HOLD THAT TH E AMOUNT OF RS.5,34,155/- RECEIVED BY THE ASSESSEE AS AWARDS/REWARD S/GIFTS FROM PRIVATE PARTIES IS NOT INCOME TAXABLE UNDER THE ACT BEING CAPITAL RECEIPT. THE GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOW ED. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22-07-2016. SD/- ( R.K. PANDA ) ACCOUNTANT MEMBER PUNE ; DATED : 22 ND JULY, 2016. '# $# / COPY OF THE ORDER FORWARDED TO : / BY ORDER , // TRUE COPY // // $ % //TRUE &' % * / SR. PRIVATE SECRETARY *, / ITAT, PUNE 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT (A) - I, NASHIK 4. 5. 6. THE CIT-I, NASHIK $ %%*, *, SMC BENCH / DR, ITAT, SMC BENCH PUNE; 2 / GUARD FILE.