TALAKSHI L. NANDU, MUMBAI V. ACIT CEN CIR 17 & 28, MUMBAI

ITA 7547/MUM/2013

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0866 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 23-01-2017
• Assessment Year: 2003-2004
• Appeal Filed On: 24-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V JUSTIN
• Assessee Lawyers: VIPUL SHAH
• Keywords: Gift; Search and seizure; Earning of tax free income
• Section: 143(3); 153A; 68; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI PAWAN SINGH , JM ITA NO. 7547 / MUM/20 13 ( ASSESSMENT YEAR : 2003 - 04 ) SHRI TALAKSHI L NAIDU 301 - 302, DUNHILL CORNER PLOT NO.57, 7 TH GOLIBAR MAIN ROAD, SANTACRUZ (E) MUMBAI 400 055 VS. ACIT CENTRAL CIRCLE 17 & 28 MUMBAI PAN/GIR NO. AAFPN0503Q APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI VIPUL SHAH REVENUE BY SHRI V. JUSTIN DATE OF HEARING 18 / 10 /201 7 DATE OF PRONOUNCEME NT 15 / 01 /201 8 / O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY ASSESSEE AGAINST THE ORDER OF CIT(A) - 39, MUMBAI DATED 19/09/2013 FOR A.Y.2003 - 04 IN THE MATTER OF IMPOSITION OF PENALTY OF RS.2,87,700/ - U/S.271(1)(C) R.W.S. 274 OF THE INCOME TAX ACT, 1961. 2. THE FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE: - 1. RE: LEVY OF PENALTY ON TH E ADDITION U/S 68 WITH REGARD TO GIFT RECEIVED 1.1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER O F INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS 'THE LEARNED CIT (A)] ERRED IN AFFIRMING THE ACTION OF THE ASSESSING OFFICER OF LEVY OF PENALTY U/S. 271(L)(C) OF INCOME TAX ACT ON TREATMENT OF GIFTS RECEIVED AS 'INCOME FROM OTHER SOURCES' INSPITE OF THE FACT THAT ITA NO. 7547/MU M/2013 SHRI TALAKSHI L NANDU 2 NO INCRIMINATING EVIDENCE BEING FOUND DURING THE COURSE OF SEARCH PROCEEDINGS. 1.2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT (A) ERRED IN DISCARDING THE VARIOUS DOCUMENTARY EVIDENCE AND EXPLANATIONS GIVE N DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND APPEAL PROCEEDINGS TO PROVE THE GENUINENESS OF THE GIFT RECEIVED. 2. THE APPELLANT CRAVES LEAVE TO ADD TO, ALTER, AMEND OR DELETE ANY GROUND OF APPEAL. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECO RD PERUSED. 4. FACTS IN BRIEF ARE THAT A SEARCH AND SEIZURE ACTION U/S 132 OF THE IT. ACT, 1961 WAS CARRIED OUT ON 3.8.2006 ON EURO GROUP OF COMPANIES. THE ASSESSEE BEING AN ASSOCIATE PERSON OF THIS GROUP, HIS RESIDENTIAL PREMISES WERE ALSO SEARCHED. ACC O RDINGLY, THE SEARCH RELATED ASSESSMENT FOR THE YEAR UNDER CONSIDERATION WAS COMPLETED U/S 143(3) R.W.S. 153A OF THE ACT ON 30.12.2008 DETERMINING TOTAL INCOME AT RS. 11,11,290/ - AS AGAINST RETURNED INCOME OF RS.1,11,290/ - . DURING THE COURSE OF ASSESSMENT P ROCEEDINGS, IT WAS OBSERVED THAT THE ASSESSEE HAS CREDITED A SUM OF RS 10,00,000/ - BEING GIFT RECEIVED FROM ONE MR. GYANCHAND C. JAIN WHICH THE ASSESSEE HAD CLAIMED AS EXEMPT INCOME. 5 . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE COULD NOT P ROVE THE GENUINENE SS OF THE TRANSACTION OF RECEIPT OF THE SAID GIFT OF RS.10 LACS. THE VERIFICATION A N D ENQUIRIES CONDUCTED DURING THE COURSE OF ASSESSMEN T PROCEEDINGS REVEALED THAT THE DONOR IS NEITHER A RELATIVE OF THE ASSESSEE NOR THE ASSESSEE COULD FU RNISH THE DETAILS OF OCCASION ON WHICH HE RECEIVED THE GIFT. THE ASSESSEE COULD NO T ALSO PROVE THE CREDITWORTHINESS OF THE DONOR WHO HAD GIVEN TOTAL GIFTS OF RS. ITA NO. 7547/MU M/2013 SHRI TALAKSHI L NANDU 3 1,10,00,000 / - TO ELEVEN PERSONS OF THE SAME GROUP I.E. EURO GROUP. THUS THE CREDIT OF RS.10 LA CS APPEARING IN THE CAPITAL ACCOUNT OF THE ASSESSEE ON ACCOUNT OF GIFT WHICH WAS CLAIMED AS EXEMPT WAS CHARGED TO INCOME TAX AS THE ASSESSEE COULD NOT PROVE THAT THE SAID GIFT IS GIVEN BY THE DONOR VOLUNTARILY AND OUT OF LOVE AND AFFECTION. SINCE THE ASSES SEE CONCEALED THE PARTICULARS OF INCOME AND FURNISHED INACCURATE PARTICULARS IN THE RETURN FILED TO THE EXTENT OF RS. 10, 00,000 / - , PENALTY PROCEEDINGS U/S 271(1)(C) OF THE I.T. ACT, WERE INITIATED AND PENALTY OF RS.2,87,700/ - WAS LEVIED. 6. BY THE IMPUGNE D ORDER CIT(A) CONFIRMED THE ACTION OF AO AGAINST WHICH ASSESSEE IS IN FURTHER APPEAL BEFORE US. 7. AT THE OUTSET, LEARNED AR PLACED ON RECORD THE ORDER OF THE TRIBUNAL IN QUANTUM APPEAL FILED BY THE ASSESSEE WHEREIN ADDITION HAS BEEN DELETED BY THE TRIBU NAL IN ITA NO.3735/MUM/2011 VIDE ORDER DATED 24/05/2017. 8. WE HAVE CAREFULLY GONE THROUGH THE ORDER OF THE TRIBUNAL WHEREIN THE ADDITION SO MADE BY THE AO ON ACCOUNT OF GIFT HAS BEEN DELETED BY THE TRIBUNAL AFTER OBSERVING AS UNDER: - 7. WE HAVE E XAMINED THE DETAILS AND NOTICED THAT NOTICE U/S 143(2). OF THE ACT BECAME TIME BARRED ON 31.08.2004 AT THE TIME WHEN THE SEARCH TOOK PLACE MUCH LATER ON 03.08.2006. THEREFORE, IT FOLLOWS THAT AS ON THE DATE OF SEARCH,: THERE WAS AN ASSESSMENT COMPLETED OR PROCESSING OF RETURN OF INCOME OF THE ASSESSEE UNDER SECTION 143(1) OF THE ACT. SUBSEQUENTLY, THE A.O. INITIATED. PROCEEDINGS UNDER S. 153A AND IN THE ASSESSMENT COMPLETED UNDER S. 143(3) R.W . S 153A, THE A.O. HAS BROUGHT TO TAX A SUM OF RS. 10,00,000/ - BEING, THE AMOUNT OF GIFT RECEIVED FROM SHRI GAYANCHAND JAIN WITHOUT ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. ONCE THIS IS THE POSITION THE ISSUE IS CLEARLY COVERED IN FAVOUR OF ASSESSEE AND AGAINST THE REVENUE BY THE DECISION OF. HON 'BLE BOMBAY HIGH COURT IN THE CASE OF CONTINENTAL WAREHOUSING. CORPORATION (NHAVA SHEVA) LTD. (SUPRA). ITA NO. 7547/MU M/2013 SHRI TALAKSHI L NANDU 4 RESPECTFULLY, FOLLOWING THE SAME AND IN THE GIVEN SAID OF FACTS, WE ARE OF THE VIEW THAT THIS GIFT RECEIVED FROM SHRI GAYANDHAND JAIN FOR AN AMOUNT OF RS. 10,00,000/ - DISCLOSED IN THE RETURN OF INCOME AS EVIDENCE BY THE CAPITAL ACCOUNT AND WHICH HAS NOT BEEN ABATED, THE - ' AMOUNT OF GIFT CANNOT BE ADDED. ACCORDINGLY, WE REVERSE THE ORDERS OF CIT(A) AS, WELL AS THAT OF THE AO AND DELETE THE AD DITION IN ALL THESE ELEVEN APPEALS OF THE; ASSESSEE. 9. AS THE QUANTUM ITSELF HAS BEEN DELETED, THE PENALTY SO LEVIED HAS NO LEGS TO STAND. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 15 / 01 /201 8 S D/ - ( PAWAN SINGH ) S D/ - ( R.C.SHARMA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 15 / 01 /201 8 KARUNA SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLAN T 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//