Shri Mayank Vijay Umbarkar, Nagpur V. CIT-II, Nagpur

ITA 8/NAG/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93302 (ITAT-NAGPUR)
• Duration Of Justice: 2 year(s) 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 09-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Assessee Lawyers: J M RANADE
• Keywords: Gift
• Section: 260A; 263

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : NAGPUR BENCH : NAGPUR BEFORE SHRI MUKUL K. SHRAWAT JUDICIAL MEMBER & SHRI SHAMIM YAHYA , ACCOUNTANT MEMBER. ITA NO. 08 / NAG /2013 (A.Y. 200 8 - 09 ) SHRI MAYANK VIJAY UMBARKAR, 224, LENDRA PARK, RAMDASPETH, NAGPUR. VS. CIT - II, NAGPUR. PAN NO. AAKPU 7041 H (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI J.M. RANADE CA. DEPARTMENT BY : SHRI NARENDRA KANE SR. DR DATE OF HEARING : 09 / 04 /201 5 . DATE OF PRONOUNCEMENT : 10 /0 4 /201 5 . O R D E R PER SHAMIM YAHYA, A.M TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT - II, NAGPUR, DATED 07/12/2012 AND PERTAINS TO A.Y. 2008 - 09 . 2 THE GROUND RAISED IS THAT LD. CIT ERRED IN PASSING ORDER U/S. 263(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT', FOR 2 SHRI MAYANK VIJAY UMBARKAR 08/NAG/2013 SHORT) DIRECTING THE ASSESSING OFFICER TO ADD BACK GIFT OF RS. 85,000/ - RECEIVED BY ASSESSEE FROM M/S. V.K. UMBARK AR (HUF). 3. IN THIS CASE, ON EXAMINATION OF THE RECORD, LD. CIT OBSERVED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE FILED CONFIRMATION OF GIFT OF RS. 85,000/ - RECEIVED FROM V.K. UMBARKAR (HUF), PROP. OF VASUDHEIV TRADE LINKS OF WHI CH HE IS A MEMBER. THAT AS THE AGGREGATE VALUE OF THE GIFT EXCEEDS FIFTY THOUSAND RUPEES, THE SAID GIFT BECOMES TAXABLE UNDER THE HEAD INCOME FROM OTHER SOURCE AS PER PROVISIONS OF SEC. 56(2)(VI) OF THE ACT. THEREFORE, LD. CIT WAS OF THE OPINION THAT THE ORDER PASSED BY THE ASSESSING OFFICER WAS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE. HENCE, NOTICE FOR REVISION OF ASSESSMENT U/S. 263 OF THE ACT WAS ISSUED. LD. CIT NOTED THAT ASSESSEES COUNSEL ATTENDED AND FILED WRITTEN SU BMISSION. 4. LEARNED CIT CONSIDERED AND HELD AS UNDER: - 1. IT IS TRUE THAT ASSESSEE RECEIVED A GIFT OF RS. 85,000/ - FROM V.K. UMBARKAR (HUF) OF WHICH HE IS A MEMBER. 2. ASSESSEE RELIES ON THE ORDER OF ITAT, RAJKOT BENCH, RAJKOT IN UNREPORTED CASE (IT A NO. 583/RJT/2007 DATED 17/05/2011) VENEETKUMAR RAGHAVJIBHAI BHALODIA V. ITO WHERE UNDER THE SIMILAR FACTS, IT WAS HELD AS UNDER: - 3 SHRI MAYANK VIJAY UMBARKAR 08/NAG/2013 XXXXXXXXXXXXXXXXXXXXXX 5. HOWEVER, THE ABOVE ORDER OF THE ITAT IS NOT ACCEPTED AND THE REVENUE HAS FILED AN APPEAL U/S. 2 60A BEFORE THE HON'BLE GUJARAT HIGH COURT VIDE TAX APPEAL NO. 1326/2011 IN ITA NO. 583/RJT/2007 FOR A.Y. 2005 - 06. 6. IN VIEW OF ABOVE, THE A.O. IS DIRECTED TO ADD BACK GIFT OF RS. 85,000/ - RECEIVED FROM HUF TO THE INCOME OF THE ASSESSEE AND PASS A REVISED ORDER ACCORDINGLY. 7. ORDER PASSED U/S. 263(1) OF THE I.T.ACT, 1961 ACCORDINGLY. AGAINST THE ABOVE ORDER, ASSESSEE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORD. 6 . LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT LD. CIT HAS TOTALLY ERRED IN PASSING THE ORDER U/S. 263 OF THE ACT AS THE ISSUE INVOLVED IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY SEVERAL DECISIONS OF THE TRIBUNALS AS UNDER: - 1) VENEETKUMAR RAGHAVJIBHAI BHALODIA V. ITO, ITAT RAJKOT IN I.T.A.NO . 583/RJT/2007 VIDE ORDER DATED 17/05/2011 REPORTED IN 140 TTJ 58. 2) DECISION OF ITAT HYDERABAD BENCH IN THE CASE OF ITO V. DR. M. SHOBHA RAGHUVEERA VIDE ORDER DATED 03/03/2014. 3) HARSHADBHAI DAHYALAL VAIDHYA (HUF) V. ITO IN I.T.A.NO. 1527/AHD/2010 VIDE ORDER DATED 26/04/2013. 4 SHRI MAYANK VIJAY UMBARKAR 08/NAG/2013 HENCE, LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT WHEN THE ISSUE INVOLVED IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISIONS OF THE TRIBUNALS, THERE WAS NO JUSTIFICATION BY THE LD. CIT TO ASSUME JURISDICTION U/S. 263 OF THE ACT. 7 . LEARNED D.R., ON THE OTHER HAND, RELIED UPON THE ORDER OF THE LD. CIT. HE SUBMITTED THAT DEFINITION OF RELATIVE IS DULY INCORPORATED IN SEC. 56(2)(VI) OF THE ACT. IN THIS DEFINITION, THE TERM HUF HAS NOT BEEN LISTED, HENCE, HE SUBMITT ED THAT ORDER OF LD. CIT IS JUSTIFIABLE. 8 . WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS AND PERUSED THE RECORD. WE FIND THAT THE ISSUE INVOLVED IS THE TAXABILITY OF GIFT OF RS. 85,000/ - BY THE ASSESSEE RECEIVED FROM V.K. UMBARKAR (HUF ) OF WHICH HE IS A MEMBER UNDER INCOME FROM OTHER SOURCES AS PER THE PROVISIONS OF SEC. 56(2)(VI) OF THE ACT. SECTION 56(2)(VI) PROVIDES FOR CHARGEABILITY OF AMOUNTS AS INCOME FROM OTHER SOURCES. [(VI) WHERE ANY SUM OF MONEY, THE AGGREGATE VALUE OF WHICH EXCEEDS FIFTY THOUSAND RUPEES, IS RECEIVED WITHOUT CONSIDERATION, BY AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY, IN ANY PREVIOUS YEAR FROM ANY PERSON OR PERSONS ON OR AFTER THE 1 ST DAY OF APRIL, 2006 [BUT BEFORE THE 1 ST DAY OF OCTOBER, 2009], THE WHOLE OF THE AGGREGATE VALUE OF SUCH SUM: PROVIDED THAT THIS CLAUSE SHALL NOT APPLY TO ANY SUM OF MONEY RECEIVED - (A) FROM ANY RELATIVE; OR 5 SHRI MAYANK VIJAY UMBARKAR 08/NAG/2013 (B) ON THE OCCASION OF THE MARRIAGE OF THE INDIVIDUAL; OR (C) UNDER A WILL OR BY WAY OF INHERITANCE; OR (D) IN CONTEMPLATION OF DEATH OF THE PAYER; OR (E) FROM ANY FUND OR FOUNDATION OR UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION OR HOSPITAL OR OTHER MEDICAL INSTITUTION OR ANY TRUST OR INSTITUTION REFERRED TO IN CLAUSE (23C) OF SECTION 10; OR (G) FROM ANY TRUST OR INSTITUTION REGISTERED UNDER SECTION 12AA. EXPLANATION FOR THE PURPOSES OF THIS CLAUSE, RELATIVE MEANS (I) SPOUSE OF THE INDIVIDUAL; (II) BROTHER OR SISTER OF THE INDIVIDUAL; (III) BROTHER OR SISTER OF THE SPOUSE OF THE INDIVIDUAL; (IV) BROTHER OR S ISTER OF EITHER OF THE PARENTS OF THE INDIVIDUAL; (V) ANY LINEAL ASCENDANT OR DESCENDANT OF THE INDIVIDUAL; (VI) ANY LINEAL ASCENDANT OR DESCENDANT OF THE SPOUSE OF THE INDIVIDUAL; (VII) SPOUSE OF THE PERSON REFERRED TO IN CLAUSES (II) TO (VI);] NOW THE BENCHES OF THE TRIBUNALS AS NOTED IN THE DECISIONS ABOVE HAD AN OCCASION TO CONSIDER WHETHER AMOUNT RECEIVED FROM HUF AND PAID TO HUF CAN BE CONSIDERED AS SUMS RECEIVED FROM AND SUMS PAID TO RELATIVE OR NOT. THE TRIBUNALS HAD EQUIVOCALLY HELD THAT IN BOTH THE CASES, SUM SHOULD BE TREATED AS AMOUNT RECEIVED/PAID FROM RELATIVE. IN THIS VIEW OF THE MATTER, IT WAS HELD THAT ASSESSEE SHOULD NOT BE VISITED WITH THE RIGOR OF PROVISIONS OF SEC. 56(2)(VI) OF THE ACT. 9 . FROM THE ABOVE, IT IS CLEAR THAT THE ISSUE INVOLVED IS COVERED IN FAVOUR OF THE ASSESSEE AND GIFT RECEIVED BY THE ASSESSEE FROM HUF, OF WHICH HE IS A MEMBER, CANNOT BE CONSIDERED AS INCOME FROM OTHER SOURCES. HENCE, IN OUR CONSIDERED OPINION, THE ORDER PASSED U/S. 263 OF 6 SHRI MAYANK VIJAY UMBARKAR 08/NAG/2013 THE ACT BY THE LD. CIT IS NOT SUSTAINABLE. BEFORE PARTING, WE OBSERVE THAT DECISION OF ITAT, RAJKOT BENCH WAS FURNISHED BY THE ASSESSEES COUNSEL TO THE LD. CIT, WHO OBSERVED THAT THE SAME IS NOT ACCEPTABLE AS THE REVENUE HAD FILED AN APPEAL U/S. 260A OF THE ACT BEFORE THE HON 'BLE GUJARAT HIGH COURT VIDE TAX APPEAL NO. 1326/2011. WE NOTE THAT LEARNED D.R. HAS NOT BROUGHT BEFORE US ANY ORDER PASSED BY THE GUJARAT HIGH COURT ON THE SAID ISSUE. IN THIS VIEW OF THE MATTER, THE ORDER PASSED BY THE LD. CIT IS NOT SUSTAINABLE AND A CCORDINGLY, THE SAME IS QUASHED. 10 . IN THE RESULT, ASSESSEES APPEAL STANDS ALLOWED. ( ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH APRIL , 201 5) . SD/ - SD/ - (MUKUL K. SHRAWAT) ( SHAMIM YAHYA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 10 TH APRIL , 201 5 . VR/ - COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD. CIT 4. THE CIT(A) 5. THE D.R. 6. GUARD FILE. ASSISTANT REGISTRAR , ITAT, NAGPUR. 7 SHRI MAYANK VIJAY UMBARKAR 08/NAG/2013 DATE INITIAL ORIGINAL DICTATION PAID IS ENCLOSED AT THE END OF FILE 1. DRAFT DICTATED ON 9.4.2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 9.4.2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. DATE OF PRONOUNCEMENT SR.PS 7. FILE SENT TO THE BENCH CLERK SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER