DCIT CC 23, MUMBAI V. RIKIN BAROT, MUMBAI

ITA 6547/MUM/2011

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3224 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 19-02-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 28-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: B S BIST
• Keywords: Unexplained cash credit; Gift; Salary income; Condonation of delay; Documents seized
• Section: 153A; 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL H, BENCH MUM BAI , , , BEFORE SHRI RAJENDRA, AM AND SHRI RAM LAL NEGI, JM /. ITA NO.6547/MUM/2011 ( / ASSESSMENT YEAR: 2003-04) THE ASST. CIT CENTRAL CIRCLE- 23, ROOM NO. 464, 4 TH FLOOR, AAYAKAR BHAVAN, M.K.MARG, MUMBAI- 400020. VS. SHRI. RIKIN BAROT. B-22,ASHIRWAD, V.M.ROAD, VILE PARLE (W), MUMBAI- 400049. /. ! /. PAN/GIR NO. : AENPB9147G ( ' / APPELLANT ) .. ( #$ ' / RESPONDENT ) & #$ /. C.O.NO.259/MUM/2012 (ARISING OUT OF ITA 6547/MUM/2011) ( / ASSESSMENT YEAR: 2003-04) SHRI. RIKIN BAROT. B-22,ASHIRWAD, V.M.ROAD, VILE PARLE (W), MUMBAI- 400049. VS. THE ASST. CIT CENTRAL CIRCLE-23, ROOM NO. 464, 4 TH FLOOR, AAYAKAR BHAVAN, M.K.MARG, MUMBAI- 400020. /. ! /. PAN/GIR NO. : AENPB9147G ( ' / APPELLANT ) .. ( #$ ' / RESPONDENT ) %&' /ASSESSEE BY : SHRI. B.S.BIST /REVENUE BY : SHRI. VIJAY MEHTA ( ) * '+ / DATE OF HEARING : 16/02/2016 ,-./ * '+ / DATE OF PRONOUNCEMENT /03/2016 !' / O R D E R 2 ITA NO 6547/MUM/2011 & CO NO. 259/MUM/2012 ASSESSMENT YEAR: 2003-04 PER RAM LAL NEGI, JM THE PRESENT APPEAL HAS BEEN FILED BY THE REVEN UE AGAINST ORDER DATED 28/01/2010 PASSED BY THE LD. CIT(APPEALS)-40, MUMBAI PERTAINING TO THE ASSESSMENT YEAR 2003-04. THE ASSE SSEE HAS ALSO FILED CROSS OBJECTION NO. 259/MUM/2012 AGAINST THE AFORES AID ORDER ALONG WITH AN APPLICATION FOR CONDONATION OF DELAY OF 133 DAYS IN FILING THE PRESENT CROSS OBJECTION. 2. ITA NO. 6547/MUM/2011 A.Y. 2003-04. 2.1 THE REVENUE HAS CHALLENGED THE IMPUGNED ORDER D ATED 28/01/2010 PASSED BY THE LD. CIT(A) ON THE FOLLOWING EFFECTIVE GROUND :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT THE AMOUNT OF RS. 53,03,678/- AS RECEIVED BY THE ASSESSEE ON THE PRETEXT OF GIFT WA S NOT TO BE DISALLOWED U/S. 68 OF THE I.T.ACT, 1961 WITHOUT APP RECIATING THE FACT THAT THE ASSESSEE FAILED TO PUT FORTH ALL SUCH DETA ILS AND EVIDENCES TO PROVE THAT THE SAID TRANSACTION WAS IN THE NATURE OF GIFT. 2.2 BRIEF FACTS OF THE CASE ARE THAT IN A SEARCH AND SE IZURE ACTION UNDER SECTION 132(1) OF THE INCOME TAX ACT 1961(IN SHORT THE ACT) CARRIED OUT ON 19/7/2007, AT THE PREMISES OF THE BAROT GROUP OF ASSESSEES, CASH, CERTAIN DOCUMENTS, JEWELLERY AND OTHER VALUABLE ART ICLES INCLUDING BACKUP DATA PERTAINING TO THE GROUP ASSESSEES WERE SEIZED. ASSESSEE WAS ONE OF THE FAMILY MEMBERS OF THE BAROT GROUP. ACCOR DINGLY A NOTICE UNDER SECTION 153C READ WITH SECTION 153A OF THE ACT WAS SERVED UPON THE ASSESSEE. IN RESPONSE THEREOF THE ASSESSEE FILED RE TURN OF INCOME ON 3 ITA NO 6547/MUM/2011 & CO NO. 259/MUM/2012 ASSESSMENT YEAR: 2003-04 17/12/2008 DECLARING TOTAL INCOME OF RS. 9, 86, 865 /. NOTICE UNDER SECTION 143(2) OF THE ACT ISSUED ON 5/1/2009, WAS S ERVED ON THE ASSESSEE. 2.3 THE ASSESSEE HAD SHOWN INCOME FROM SALARY, INCO ME FROM HOUSE PROPERTY AND INCOME FROM OTHER SOURCES. ON PERUSAL OF THE DETAILS FILED BY THE ASSESSEE IT WAS OBSERVED THAT THE ASSESSEE H AD RECEIVED THE PROCEEDS OF ENCASEMENT OF STATE BANK OF INDIA MILLE NNIUM DEPOSITUSD (IMD) NON-CUMULATIVE SERIES AMOUNTING TO RS. 53,03, 678/ AS GIFT FROM MR. NARESH C MAKHIJA AND MR SURESH T JADHWANI. THE AO TREATING THE SAME AS UNEXPLAINED CASH CREDIT IN THE BOOKS OF ASS ESSEE ADDED THE SAID AMOUNT TO THE INCOME OF THE ASSESSEE UNDER SECTION 68 OF THE ACT HOLDING THAT THE ASSESSEES CLAIM OF RECEIPT OF GIFTS AMOUN TING TO RS. 5303678/ ARE NOT GENUINE. 2.4 AGGRIEVED BY THE IMPUGNED ASSESSMENT ORDER THE ASSESSEE CHALLENGED THE SAME BEFORE THE CIT (A), INTER ALIA ON THE GROUND THAT THE AO HAS WRONGLY TREATED THE AMOUNT IN QUESTION AS UNEXPLAIN ED INCOME UNDER SECTION 68 OF THE ACT. IT WAS ARGUED ON BEHALF OF T HE ASSESSEE THAT IMDS ARE TRANSFERABLE MERELY BY ENDORSEMENT AND DELIVERY BY NRIS AND THE ASSESSEE HAS SUBMITTED ALL RELEVANT PAPERS, FURNIS HED ADDRESSES OF THE DONORS, THEIR NATURE OF BUSINESS AND RELATIONSHIP W ITH THE ASSESSEE ETC IN ORDER TO ESTABLISH THE GENUINENESS OF THE TRANSACTI ON. THE LEARNED CIT(A) ALLOWED THIS GROUND OF APPEAL HOLDING THAT AS PER T HE TERMS AND CONDITIONS, INCOME ON IMD IS NOT TAXABLE. SINCE THE STATE BANK OF INDIA HAS ISSUED THE IMDS IN QUESTION, THE GIFTS IN QUEST ION CANNOT BE CALLED INTO QUESTION. 3. THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AGA INST THE SAID ORDER OF THE LEARNED CIT(A). THE SOLE GRIEVANCE OF THE REVEN UE IS THAT THE LEARNED CIT(A) HAS WRONGLY SET ASIDE THE FINDINGS OF THE AO WITH THE DIRECTION TO 4 ITA NO 6547/MUM/2011 & CO NO. 259/MUM/2012 ASSESSMENT YEAR: 2003-04 TREAT THE GIFTS IN QUESTION AS GENUINE AND DELETE T HE ADDITION OF RS. 53,03,678/MADE UNDER SECTION 68 OF THE ACT. 4. BEFORE US THE LEARNED DR SUBMITTED THAT THE LEAR NED CIT (A) HAS ALLOWED THIS GROUND OF APPEAL OF THE ASSESSEE DESPI TE THE FACT THAT ASSESSEE HAS FAILED TO ESTABLISH THE PARAMETERS LAI D DOWN BY THE COURTS TO PROVE THE TRANSITION OF A VALID GIFT. SINCE THE ASSESSEE HAS FAILED TO DISCHARGE THE ONUS, THE AMOUNT IN QUESTION WAS CERT AINLY REQUIRED TO BE TREATED AS UNEXPLAINED CASH UNDER SECTION 68 OF THE ACT. THEREFORE, THE IMPUGNED ORDER IS ERRONEOUS. ON THE OTHER HAND, THE LEARNED AR REITERATED THE STAND TAKEN BY THE ASSESSEE BEFORE T HE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE LEARNED CIT(A) HAS R IGHTLY SET ASIDE THE FINDINGS OF AO. THE CASES REFERRED BY THE AO ARE NO T APPLICABLE TO THE PRESENT APPEAL AS THE FACTS OF THE PRESENT CASE ARE ENTIRELY DIFFERENT. THE FINDINGS OF THE LEARNED CIT(A) ARE, THEREFORE, IN A CCORDANCE WITH THE SETTLED LAW. THE LEARNED AR RELYING ON THE ORDER OF THE KOLKATA BENCH OF ITAT, PASSED IN INCOME TAX OFFICER VERSUS SNEHA GOYAL, ITA NO/1367/KOL/2010, FOR THE ASSESSMENT YEAR 200607, DATED 11/3.2011, SUBMITTED THAT SIMILAR ISSUE HAS BEEN DE CIDED BY THE KOLKATA BENCH OF ITAT IN FAVOUR OF THE ASSESSEE AND THE APP ELLANTS CASE IS COVERED BY THE SAID DECISION. 5. WE HAVE HEARD THE RIVAL CONTENTION AND ALSO PERU SED THE MATERIAL PLACED BEFORE US INCLUDING THE DECISIONS/CASE LAWS CITED BY THE PARTIES. THE LEARNED CIT(A) HAS SET ASIDE THE FINDINGS OF TH E AO HOLDING THAT AS PER THE TERMS AND CONDITIONS INCOME ON IMD IS NOT T AXABLE AND THE FACT THAT STATE BANK OF INDIA HAS ISSUED THE IMDS IN QUE STION ESTABLISHES THE HOLDING CAPACITY OF THE DONORS, THEREFORE, THE GIFT S IN QUESTION CANNOT BE CALLED INTO QUESTION, THE APPELLANT HAS SUBMITTED A LL NECESSARY PAPERS TO SUBSTANTIATE HIS CLAIM. 5 ITA NO 6547/MUM/2011 & CO NO. 259/MUM/2012 ASSESSMENT YEAR: 2003-04 6. THE KOLKATA BENCH OF ITAT HAS DECIDED THE SIMILA R ISSUE IN FAVOUR OF THE ASSESSEE IN INCOME TAX OFFICER VERSUS SNEHA GOY AL (SUPRA) HOLDING AS UNDER:- THUS, THE ONLY ISSUE THAT IS TO BE DECIDED BY US I S AS TO WHETHER THE AMOUNT OF RS. 34,33,189/ CREDITED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE WAS UNEXPLAINED IN TERMS OF SECTION 68 OR NOT. THERE IS NO DISPUTE THAT THE SAID AMOUNT WAS RECEIVED BY THE ASSESSEE ON REDEMPTION OF INDIA MILLENNIUM DEPOSIT. COPY OF THE CHEQUE FOR RECEIVING THE SAID AMOUNT FROM SBI, NRI BRANCH MUMB AI HAS BEEN FURNISHED BY THE ASSESSEE, AVAILABLE AT PAGE 54 OF THE APB. IN THIS VIEW OF THE MATTER, WE ARE OF THE CONSIDERED OPINIO N THAT IT CANNOT BE SAID THAT THE CREDIT OF THE SAID AMOUNT IN THE A SSESSEES BOOKS OF A/C WAS NOT PROPERLY EXPLAINED IN TERMS OF SECTI ON 68 OF THE ACT. THUS, WE HOLD THAT THE AMOUNT CANNOT BE ADDED UNDER SECTION 68 OF THE ACT. THE GROUNDS TAKEN BY THE REVENUE ARE, T HEREFORE REJECTED. 7. IN OUR CONSIDERED VIEW, THE FACTS OF THE PRESENT CASE ARE IDENTICAL TO THE FACTS OF THE AFORESAID CASE. THEREFORE, RESPECT FULLY FOLLOWING THE DECISION OF THE ITAT KOLKATA, WE HOLD THAT THE IMPU GNED ORDER DOES NOT SUFFER FROM ANY LEGAL INFIRMITY TO INTERFERE WITH. ACCORDINGLY, WE UPHOLD THE ORDER OF THE LEARNED CIT(A) AND DISMISS THIS GR OUND OF THE APPEAL FILED BY THE REVENUE . 2. CO NO. 259/MUM/2012 A.Y. 2003-04. THE ASSESSEE HAS FILED THE PRESENT CROSS OBJECTION AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (A) 40, MUMBAI, HAS RAISING THE FOLLOWING EFFECTIVE GROUNDS OF OBJECTION: 6 ITA NO 6547/MUM/2011 & CO NO. 259/MUM/2012 ASSESSMENT YEAR: 2003-04 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, IN THE ABSENCE OF ANY MATERIAL FOUND IN THE SEARCH RELATIN G TO THIS ASSESSEE AND /OR RECORDING OF THE SATISFACTION FOR ISSUING THE NOTICE U/S 153C AND ALSO COMMUNICATING THE SAME TO THE APP ELLANT, THE LEARNED CIT (A) ERRED IN CONFIRMING THE ACTION OF T HE LD. AO OF ISSUING NOTICE U/153C OF THE ACT AND PASSING ASSESS MENT ORDER UNDER SECTION 143 (3) R.W.S.153C THEREAFTER. THE EN TIRE PROCEEDING IS BAD IN LAW AND ASSESSMENT ORDER NEEDS TO BE QUAS HED. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, IN THE ABSENCE OF ANY INCRIMINATING MATERIAL FOUND IN THE SEARCH RELATING TO THIS ASSESSEE ON THE SUBJECT OF A RECEIPT OF GIF T OR ANY ITEM OF INCOME FOR THIS YEAR THE LEARNER CIT (A) ERRED IN H OLDING THAT THE ACT DOES NOT SPECIFY THAT THE DOCUMENTS CONCERNED MUST BE INCRIMINATING. 2. SINCE THE ASSESSEE HAD ALREADY FILED AN APPLICA TION FOR CONDONATION OF DELAY OF 133 DAYS IN FILING THE PRESENT CROSS OBJEC TION, THE LEARNED AR AT THE VERY OUTSET SUBMITTED THAT DELAY IN FILING CROS S OBJECTION IS NEITHER INTENTIONAL NOR THE NEGLIGENT ACT BUT IT HAS HAPPEN ED DUE TO BONA FIDE MISTAKE AND COMMUNICATION GAP BETWEEN THE ASSESSEE AND THE CONCERNED CA. THE LEARNED AR RELYING ON THE DECISIO NS PASSED IN COLLECTOR LAND REVENUE V. MST.KATIJI & OTHERS (167 ITR 471), N. BALAKRISHNAN V. M.RAMAMURTHY (1998,7SCC 123) SONERA O SADASHIVRAO PATIL & ANOTHER V. GODAWARIBAI (1999, 2MH.L.J. 273) AND VENKATADRI TRADERS LTD. V. CIT (248 ITR 681 MAD.) FURTHER SUBMITTED THAT IN VIEW OF THE RATIO LAID DOWN IN THE AFORESAID CASES, THE APP LICATION FOR CONDONATION OF DELAY MAY BE ALLOWED IN THE INTEREST OF JUSTICE. AFTER HEARING THE LEARNED DR, WE ALLOWED THE APPLICATION OF THE ASSESSEE AND PERMITTED THE LEARNED AR TO ARGUE THE CASE ON MERIT S. 7 ITA NO 6547/MUM/2011 & CO NO. 259/MUM/2012 ASSESSMENT YEAR: 2003-04 3. THE LEARNED AR SUBMITTED THAT SINCE NO INCREMENT ING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH ACTION AND NO SAT ISFACTION WAS RECORDED FOR ISSUING NOTICE UNDER SECTION 153C OF T HE ACT, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF THE A O. RELYING UPON THE VARIOUS JUDGMENTS/DECISIONS, THE LEARNED AR SUBMITT ED THAT THE ASSESSMENT ORDER PASSED UNDER SECTION 143 (3) READ WITH SECTION 153C OF THE ACT IS BAD IN LAW. ON THE OTHER HAND THE LEARNE D DR SUBMITTED THAT THE LEARNED CIT(A) HAS GIVEN DETAILS OF DOCUMENTS S EIZED ON THE BASIS OF WHICH PROCEEDINGS AGAINST THE ASSESSEE WERE INITIAT ED IN ITS ORDER. THE FACTS OF THE CASES RELIED UPON BY THE ASSESSEE ARE DIFFERENT FROM THE FACTS OF THIS CASE. THEREFORE, THE LEARNED CIT(A) HAS RIG HTLY DISMISSED THIS GROUND OF APPEAL OF THE ASSESSEE. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL PLACED BEFORE US. WE HAVE NOTICED THAT THE LEARNED CIT(A) HAS MENTIONED THE DETAILS OF DOCUMENTS SEIZED DURING THE SEARCH AND S EIZURE ACTION U/S 132(1) OF THE ACT, ON THE BASIS OF WHICH THE PROCEE DINGS WERE INITIATED. THE LEARNED CIT(A) HAS RIGHTLY POINTED OUT THAT WHE RE THE ASSESSING OFFICER FINDS THAT THE SEIZED ARTICLES BELONG TO SO ME OTHER PERSON, ONLY THEN, HE IS REQUIRED TO SEND A SATISFACTION NOTE TO THE ASSESSING OFFICER HAVING JURISDICTION TO ASSESS SUCH PERSON. HOWEVER, IN THE PRESENT CASE SINCE THE ASSESSING OFFICER IS THE SAME, HIS SATISF ACTION CANNOT BE CALLED INTO QUESTION. WE, THEREFORE, DO NOT FIND ANY LEGAL INFIRMITY IN THE FINDINGS OF THE LEARNED CIT(A) AND UPHOLD THE SAME. THIS GROUND OF CROSS OBJECTION OF THE ASSESSEE IS ACCORDINGLY DISMISSED. 5. SO FOR AS THE SECOND GROUND IS CONCERNED, SINCE THE SAME IS CONNECTED TO THE SOLE GROUND THE REVENUES APPEAL IN ITA NO 6 547/MUM/2011 A.Y. 2003-04, AND WE HAVE ALREADY DECIDED THE RELATED I SSUE IN FAVOUR OF THE 8 ITA NO 6547/MUM/2011 & CO NO. 259/MUM/2012 ASSESSMENT YEAR: 2003-04 REVENUE, IN OUR CONSIDERED OPINION THERE IS NO NEED TO ADJUDICATE THIS ISSUE SEPARATELY. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE A ND THE CROSS OBJECTION FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST MARCH, 2016 SD/- SD/- ( RAJENDRA ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER ( 0) MUMBAI; 1 DATED:31/03/2016 !'#$%&'&$ / COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT 2. #$ ' / THE RESPONDENT. 3. ( 3' ( ) / THE CIT(A)- 4. ( 3' / CIT 5. 67 #'8% , + 8%/ , ( 0) / DR, ITAT, MUMBAI 6. 9) / GUARD FILE. !' / BY ORDER, $6' #' //TRUE COPY// ()*+ (DY./ASSTT. REGISTRAR) , ( 0) / ITAT, MUMBAI PRAMILA