Sou. Sangeeta Subhash Gadekar, Kolhapur V. Pr. Commisisoner of Income-tax - 2,

ITA 761/PUN/2015

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7280 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 22-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIRUPAMA KOTRU
• Keywords: Gift; Difference of opinion
• Section: 148; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE . , , , BEFORE SHRI D. KARUNAKARA RAO , AM AND SHRI VIKAS AWASTHY, JM . / I TA NO. 761 /PUN/20 15 / ASSESSMENT YEAR : 2009 - 10 SOU. SANGEETA SUBHASH GADEKAR, PLOT NO. 10, RAJARAM RIFLES, 13 TH LANE, RAJARAMPURI, KOLHAPUR - 416 008 PAN : ALTPG5845K ....... / APPELLANT / V/S. THE PR. COMMISSIONER OF INCOME TAX - 2, KOLHAPUR. / RESPONDENT / RESPONDENT A SSESSEE BY : SHRI M.K.KULKARNI REVENUE BY : SMT. NIRUPAMA KOTRU / DATE OF HEARING : 05.09.2017 / DATE OF PRONOUNCEMENT : 27 .10.2017 / ORDER PER VIKAS AWASTHY, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX - 2, KOLHAPUR DATED 27.03.2015 PASSED U/S. 263 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 2 ITA NO. 761/PUN/2015 A.Y.2009 - 10 2. THE BRIEF FACTS O F THE CASE AS EMANATING FROM RECORD ARE : THE ASSESSEE FILED HER RETURN OF INCOME FOR ASSESSMENT YEAR 2009 - 10 ON 30.03.2012 DECLARING TOTAL I NCOME OF RS.31,67,200/ - . NOTICE U/S. 148 OF THE ACT WAS ISSUED TO THE ASSESSEE ON 31.03.2012. IN RESPONSE TO THE NOTICE, THE ASSESSEE REQUESTED TO TREAT HER RETURN FILED ON 30.03.2012 AS RETURN IN RESPONSE TO THE NOTICE ISSUED U/S. 148 OF THE ACT. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSERVED THAT ASSESSEE HAS RE CEIVED GIFTS TO THE TUNE OF RS. 30,00,000/ - IN CASH FROM HER GRAND - PARENTS, FATHER AND RELATIVES. THOUGH NO ADDITION WAS MADE IN RESPECT OF GIFTS RECEIVED, ASSESSING OFFICER MADE ADDITION TO THE TUNE OF RS.1,58,487/ - ON OTHER ACCOUNTS. THE COMMISSIONER OF INCOME TAX INVOKED PROVISIONS OF SECTION 263 OF THE ACT AND ISSUED NOTICE TO THE ASSESSEE ON 08.12.2014 . THE COMMISSIONER OF INCOME TAX INITIATED REVISIONAL PROCEEDINGS ON THE GROUND THAT THE ASSESSING OFFICER ACCEPTED THE AMOUNT OF SO CALLED GIFT S TO THE TUNE OF ASSESSING OFFICER ACCEPTED THE AMOUNT OF SO CALLED GIFT S TO THE TUNE OF RS.30,00,000/ - AS GENUINE WITHOUT CALLING FOR EXPLANATION SHOWING THE GENUINENESS OF THE TRANSACTIONS AND CREDITWORTHINESS OF THE DONORS . THE COMMI SSIONER OF INCOME TAX RAISED DOUBT OVER GENUINENESS OF THE CASH GIFTS RECEIVED BY THE ASSESSEE AND DIRECTED THE ASSESSING OFFICER TO RE - EXAMINE THE FACTS. AGGRIEVED BY THE ORDER OF COMMISSIONER OF INCOME TAX PASSED U/S. 263 OF THE ACT, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3 . SHRI M.K. KULKARNI APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT DURING ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAD EXAMINED THE GENUINENESS OF THE TRANSACTIONS AND CREDIT - WORTHINESS OF DON O RS. THE ASSESSEE HAS R ECEIVED GIFTS FROM GRAND PARENTS, FATHER AND 3 ITA NO. 761/PUN/2015 A.Y.2009 - 10 HER UNCLE. ALL THE AFORESAID PERSONS ARE AGRICULTURIST. THE ASSESSEE HAD FURNISHED COPIES OF 7/2 EXTRACTS TO SHOW CREDITWORTHINESS OF ALL DONORS. THE ASSESSING OFFICER AFTER VERIFYING THE FACTS ACCEPTED GENUINENE SS OF GIFTS RECEIVED BY THE ASSESSEE. THE LD. AR CONTENDED THAT THE COMMISSIONER OF INCOME TAX HAS ERRED IN INVOKING THE PROVISION OF SECTION 263 OF THE ACT. THE COMMISSIONER OF INCOME TAX BEFORE INVOKING REVISIONAL JURISDICTION , HAS FAILED TO ESTABLISH TH AT THE ASSESSMENT ORDER PASSED U/S. 14 3 R.W.S 147 OF THE ACT IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE . THE MANDATORY CONDITION FOR INVOKING THE PROVISIONS OF SECTION 263 ARE MISSING IN THE PRESENT CASE. THE LD. AR IN SUPPORT OF HIS SUBMISSIONS PLACED RELIANCE ON THE DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. RELIANCE COMMUNICATIONS LTD. REPORTED IN 396 ITR 217 . THE LD. AR SUBMITTED THAT THE COMMISSIONER OF INCOME TAX CANNOT INV OKE EXTRAORDINARY PROVISION S OF S ECTION 263 MERELY FOR THE REASON THAT THE ASSESSING PROVISION S OF S ECTION 263 MERELY FOR THE REASON THAT THE ASSESSING OFFICER AFTER HAVING CONDUCTING ENQUIRIES AND BEING SATISFIED WITH THE SUBMISSIONS OF ASSESSEE, DID NOT RECORD ELABORATE FINDINGS ON THE ISSUE IN ASSESSMENT ORDER. 4 . ON THE OTHER HAND, SMT. NIRUPAMA KOTRU REPRESENTING THE DEPARTMENT DEFENDING THE ORDER OF COMMISSIONER OF INCOME TAX SUBMITTED THAT THE ASSESSING OFFICER WITHOUT CALLING FOR FURTHER INFORMATION AND CONDUCTING ENQUIRIES ABOUT THE CREDIT - WORTHINESS OF THE DONORS HAS ACCEPTED UNREGISTERED G IFT DEEDS. THE ASSESSING OFFICER HAS FAILED TO EXAMINE CREDIT - WORTHINESS OF THE DONORS AND THEIR SOURCE OF INCOME. THE ASSESSING OFFICER MERELY ON THE BASIS OF 7/12 EXTRACTS FURNISHED BY ASSESSEE HAS ACCEPTED ASSESSEES CONTENTIONS REGARDING CREDIT - WORTHIN ESS OF THE DONORS. 4 ITA NO. 761/PUN/2015 A.Y.2009 - 10 5 . WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW. THE COMMISSIONER OF INCOME TAX HAS INVOKED THE PROVISION OF SECTION 263 AS THE ASSESSING OFFICER FAILED TO CONDUCT PROPER ENQUIRIES IN RESPECT OF GIFTS RECEIVED BY THE ASSESSEE. THE ASSESSEE HAS RECEIVED GIFTS IN CASH TO THE TUNE OF RS. 30,00,000/ - FROM FOLLOWING PERSONS : SL. NO. NAME RELATION WITH THE ASSESSEE AMOUNT RECEIVED 01. SHRI BABU @ N ARAYAN NAMDEO KALE GRANDFATHER RS.25,00,000 02. SHRI BABURAO NAMDEO SHINDE FATHER RS. 75,000/ - 03. SHRI MADHUKAR NAMDEO SHINDE UNCLE RS. 50,000/ - 04. RAJABAI NAMDEO SHINDE GRANDMOTHER RS.3,00,000/ - 05. SHRI DHANAJI NAMDEO SHINDE UNCLE RS.75,000/ - IT IS RELEVANT TO MENTION THAT THE ASSESSMENT ORDER HAS BEEN PASSED U/S. 143 (3) R.W.S 147 OF THE ACT. A PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT IN PARA NO. 2.3 THE ASSESSING OFFICER HAS MENTIONED THAT THE ASSESSEE HAS FURNISHED 7/12 EXTRACTS EVIDENCI NG HOLDING OF AGRICULTURAL LAND BY THE PERSONS MAKING GIFTS AND THE ASSESSEE HAS ALSO FILED CONFIRMATION S IN SUPPORT OF THE GIFTS . A PERUSAL OF THE ASSESSMENT ORDER INDICATE THAT ASSESSING OFFICER HAS APPLIED HIS MIND IN RESPECT OF CASH GIFTS RECEIVED BY THE ASSESSEE AND HAS CONDUCTED SOME ENQUIRIES AS WELL. MERELY FOR THE REASON THAT THE COMMISSIONER OF INCOME TAX DOES NOT CONCUR WITH THE VIEW OF ASSESSING OFFICER IN ACCEPTING THE GIFTS AS GENUINE , CANNOT BE A GROUND FOR INVOKING REVISIONAL JURISDICTION . IT IS A WELL SETTLED LAW THAT COMMISSIONER OF INCOME TAX CAN INVOKE THE TOTAL RS.30,00,000/ - 5 ITA NO. 761/PUN/2015 A.Y.2009 - 10 P ROVISION OF S ECTION 263 ONLY WHEN TWIN CONDITIONS I.E. ORDER OF ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE REVENUE , ARE SATISFIED . IN THE IMPUGNED ORDER, THE COMMISSIONER OF INCOME TAX HAS FAILED TO SHOW THAT THE FINDINGS OF THE ASSESSING OFFICER IN ACC EPTING GIFTS AS GENUINE IS ERRONEOUS. 6. THE COMMISSIONER OF INCOME TAX IS EMPOWERED UNDER SECTION 263 TO CALL FOR AND EXAMINE THE RECORD. THE COMMISSIONER OF INCOME TAX HAS FAILED TO CONDUCT ANY PRELIMINARY ENQUIRY IN THIS REGARD AND HAS MADE OBSERVATIO NS MERELY ON DIFFERENCE OF OPINION WITH ASSESSING OFFICER. THE HON'BLE DELHI HIGH COURT IN A RECENT DECISION IN THE CASE OF P R. COMMISSIONER OF INCOME TAX VS. DELHI AIRPORT METRO EXPRESS PVT. LTD IN ITA NO. 705/2017 DECIDED ON 05.09.2017 HAS HELD THAT FOR THE PURPOSE S OF EXERCISING JURISDICTION U/S. 263 , THE CONCLUSION OF THE PR. COMMISSIONER OF INCOME TAX THAT THE ORDER OF THE ASSESSING OFFICER IS COMMISSIONER OF INCOME TAX THAT THE ORDER OF THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE HAS TO BE PRECEDED BY SOME MINIMAL INQUIRY . IF THE P R. COMMISSIONER OF INCOME TAX IS OF THE VIEW THAT THE ASSESSING OFFICER DID NOT UNDERTAKE ANY ENQUIRY , IT BECOMES INCUMBENT ON THE PR. COMMISSIONER OF INCOME TAX TO CONDUCT SUCH INQUIRY. IN THE PRESENT CASE, TH E ONLY REASON FOR INVOKING REVISIONAL JURISDICTION IS THAT THE ASSESSING OFFICER HAS FAILED TO CONDUCT REQUISITE ENQUIRIES WITH REGARD TO GENUINENESS OF EXPLANATION AND CREDITWORTHINESS OF GIFT MAKERS. WE ARE OF CONSIDERED VIEW THAT ORDER OF COMMISSIONER OF INCOME TAX PASSED U/S. 263 FALLS SH ORT OF THE MANDATORY CONDITIONS AS ENVISAGED U/S. 263 FOR INVOKING REVISIONAL JURISDICTION. THUS, THE IMPUGNED ORDER IS SET ASIDE AND APPEAL OF THE ASSESSEE IS ALLOWED. 6 ITA NO. 761/PUN/2015 A.Y.2009 - 10 7. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. ORDER PRO NOUNCED ON FRIDAY , THE 2 7 TH DAY OF OCTOBER , 201 7 . SD/ - SD/ - ( . / D. KARUNAKARA RAO ) ( /VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 27 TH OCTOBER , 2017 . SB / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE PR. CIT - 2, KOLHAPUR. 4 . , , , / DR, ITAT, B BENCH, PUNE. 5 . / GUARD FILE. // TRUE COPY // / BY ORDER, / PRIVATE SECRETARY , / ITAT, PUNE .