ANITA RAJ HINGORANI, MUMBAI V. ITO 11(1)(1), MUMBAI

ITA 7127/MUM/2011

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3311 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 27-07-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 20-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRAMOD NIKALE
• Assessee Lawyers: SANJEIV M SHAH
• Keywords: Unexplained cash credit; Gift
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI JOGINDER SINGH, JUDICIAL MEMBER ITA NO. 7127/MUM/2011 (ASSESSMENT YEAR : 2007-08) MRS. ANITA RAJ HINGORANI, 8, NIBHANA, PALLI HILL, BANDRA (W), MUMBAI 400 050 ... APPELLANT PAN:AASPH 2436H VS. THE INCOME TAX OFFICER 11(1)(1) AAYKAR BHAVAN, M.K.ROAD, MUMBAI 400 020 .... RESPONDENT APPELLANT BY : SHRI SANJEIV M. SHAH RESPONDENT BY : SHRI PRAMOD NIKALE DATE OF HEARING : 03/02/2016 DATE OF PRONOUNCEMENT : 16/03/2016 ORDER PER G.S. PANNU,AM: THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRECTED A GAINST THE ORDER OF CIT(A)-3, MUMBAI DATED 22/09/2011, WHICH I N TURN HAS ARISEN FROM THE ORDER PASSED BY THE ASSESSING OFFICER DA TED 30/12/2009 UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT), PERTAINING TO THE ASSESSMENT YEAR 2007-08. 2 ITA NO. 7127/MUM/2011 (ASSESSMENT YEAR : 2007-08 2. THE ONLY ISSUE IN THIS APPEAL RELATES TO AN ADD ITION OF RS.7,62,367/- MADE BY THE INCOME TAX AUTHORITIES ON ACCOUNT OF UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT . 3. IN BRIEF, THE FACTS ARE THAT APPELLANT IS AN IND IVIDUAL WHO FILED HER RETURN OF INCOME FOR THE ASSESSMENT YEAR 2007-08, D ECLARING AN INCOME OF RS.8,55,050/-, WHICH WAS SUBJECT TO A SCRUTINY A SSESSMENT. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFF ICER NOTED THAT IN THE BALANCE SHEET AS ON 31/03/2007, ASSESSEE HAD RE PORTED AN OUTSTANDING LOAN OF RS.7,62,367/- IN THE NAME OF M/ S. SAVVY DESIGNS, A PROPRIETARY CONCERN OF HER HUSBAND SHRI SUNIL HINGO RANI. IT WAS FURTHER NOTED BY ASSESSING OFFICER THAT ON VERIFICATION OF THE BALANCE SHEET OF HER HUSBAND, SHRI SUNIL HINGORANI, THERE WAS NO CO RRESPONDING DEBIT ENTRY. AS A CONSEQUENCE, THE ASSESSEE WAS SHOW CAU SED AS TO WHY SUCH CREDIT BE NOT TREATED AS UNEXPLAINED WITHIN THE MEA NING OF SECTION 68 OF THE ACT. 3.1 BEFORE ASSESSING OFFICER, IT WAS EXPLAINED THAT THE AMOUNT WAS RECEIVED AS LOAN FROM THE PROPRIETARY CONCERN OF TH E HUSBAND IN EARLIER YEARS, BUT IT TRANSPIRES THAT IN THE BOOKS OF ACCOU NT OF THE HUSBAND, THE SAID AMOUNT WAS SHOWN AS GIFT IN EARLIER YEARS AND, THEREFORE, THE BOOKS OF ACCOUNT OF HUSBAND DID NOT SHOW ANY CORRESPONDIN G ENTRY IN THE YEAR UNDER CONSIDERATION. IT WAS FURTHER ASSERTED THAT IT IS A CASE OF TRANSACTION BETWEEN A HUSBAND AND WIFE, WHERE BY MI STAKE THE TRANSACTION AMOUNT HAS BEEN SHOWN AS LOAN IN THE HA NDS OF THE ASSESSEE INSTEAD OF GIFT AND IN ANY CASE IT DOES N OT AFFECT THE COMPUTATION OF INCOME. THE ASSESSING OFFICER DID N OT ACCEPT THE EXPLANATION FURNISHED BY THE ASSESSEE ON THE GROUND THAT THE PLEA OF 3 ITA NO. 7127/MUM/2011 (ASSESSMENT YEAR : 2007-08 THE AMOUNT BEING TREATED AS GIFT BY HUSBAND WAS AN AFTERTHOUGHT AND, THEREFORE, IT WAS AN UNEXPLAINED CASH CREDIT WITHIN THE MEANING OF SECTION 68 OF THE ACT. THE SAID STAND OF THE ASSES SING OFFICER HAS SINCE BEEN AFFIRMED BY THE CIT(APPEALS), AGAINST WHICH TH E ASSESSEE IS IN FURTHER APPEAL BEFORE US. 4. BEFORE US, THE LD. REPRESENTATIVE FOR THE ASSESS EE HAS PRIMARILY REITERATED THE EXPLANATION FURNISHED BEFORE THE LOW ER AUTHORITIES. APART THEREFROM, THE LD. REPRESENTATIVE FOR THE ASS ESSEE POINTED OUT THAT THE DISCREPANCY, IF ANY, WAS IN THE BOOKS OF A CCOUNT OF THE HUSBAND AND THAT CANNOT DEFEAT THE EXPLANATION RENDERED BY THE ASSESSEE. IT WAS ALSO POINTED OUT THAT THE EXPLANATION, WHICH WA S DULY SUPPORTED BY THE CONFIRMATION FROM THE HUSBAND HAS BEEN UNJUSTLY REJECTED, IN AS MUCH AS, OTHER CONFIRMATIONS FROM THE HUSBAND FOR O THER TRANSACTIONS HAVE BEEN ACCEPTED. 5. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATI VE HAS RELIED UPON THE REASONING ADOPTED BY THE ASSESSING OFFICER IN SUPPORT OF THE CASE OF THE REVENUE, WHICH WE HAVE ALREADY ADVERTED TO IS NOT BEING REPRODUCED FOR THE SAKE OF BREVITY. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. QUITE CLEARLY, IN THE PRESENT CASE, SECTION 68 OF THE ACT HAS BEEN INVOKED BY THE ASSESSING OFFICER TO MAKE THE ADDITION OF RS.7,62,3 67/-. IN THE BALANCE SHEET FILED BY THE ASSESSEE, THE SAID SUM WAS REFLE CTED AS LOAN OUTSTANDING FROM ASSESSEES HUSBAND, SHRI SUNIL HIN GORANI (PROPRIETOR OF M/S. SAVVY DESIGNS). THERE IS NO DISPUTE TO THE FACT THAT SUCH SUM HAS NOT BEEN RECEIVED DURING THE YEAR. IT IS ALSO NOT IN DISPUTE THAT THE 4 ITA NO. 7127/MUM/2011 (ASSESSMENT YEAR : 2007-08 SAID AMOUNT WAS RECEIVED BY THE ASSESSEE FROM HER H USBAND IN EARLIER YEARS. THE ONLY POINT OF DIFFERENCE IS THAT IN THE BALANCE SHEET IT HAS BEEN PORTRAYED AS A LOAN RECEIVED IN EARLIER YEAR S, WHEREAS IN THE BOOKS OF ACCOUNT OF HER HUSBAND, THE SAID SUM WAS N OT APPEARING IN THE BALANCE SHEET AS IT WAS TREATED AS A GIFT IN THE EARLIER YEARS ITSELF. WE FIND THAT AFTER ASSESSING OFFICER REJECTED HER E XPLANATION, THE APPELLANT FURNISHED A GIFT CONFIRMATION BEFORE THE CIT(APPEALS), BUT THE SAME HAS BEEN OUT-RIGHTLY REJECTED. IN OUR CONSIDE RED OPINION, THE CIT(APPEALS) OUGHT TO HAVE CONSIDERED THE GIFT CONF IRMATION FILED BY ASSESSEES HUSBAND BECAUSE THE SAME WAS IN FACT REI TERATION OF THE EXPLANATION WHICH WAS ALREADY BEFORE THE ASSESSING OFFICER. HAVING REGARD TO THE ENTIRETY OF FACTS AND CIRCUMSTANCES O F THE CASE, IN OUR VIEW, EXPLANATION RENDERED BY THE ASSESSEE HAS BEEN UNJUSTLY REJECTED BY THE LOWER AUTHORITIES AND, THEREFORE, THE IMPUGN ED ADDITION MADE BY INVOKING SECTION 68 OF THE ACT IS UNSUSTAINABLE. WE HOLD SO. WE, THEREFORE, SET-ASIDE THE ORDER OF CIT(APPEALS) AND THE ASSESSING OFFICER IS DIRECTED TO DELETE THE ADDITION OF RS. RS.7,62,3 67/-. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 16/03/2016 SD/- SD/- (JOGINDER SINGH) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT ME MBER MUMBAI, DATED 16/03/2016 VM , SR. PS 5 ITA NO. 7127/MUM/2011 (ASSESSMENT YEAR : 2007-08 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. TH E CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE . BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI DETAILS DATE INITIALS DESIGNATION