Smt. Komal Jadhwani, Gwalior V. The I.T.O., Gwalior

ITA 81/AGR/2010

• Counselvise Citation: 8120314 RSA 2010
• Duration Of Justice: 1 year(s) 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 08-08-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 29-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K SHARMA
• Assessee Lawyers: VITHAL DAS
• Keywords: Gift
• Section: 143(3); 142(1); 148; 263

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCHA, AGRA BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI K.G. BANSAL, ACCOUNTANT MEMBER ITA NO.81/AGR/2010 ASSESSMENT YEAR: 2001-2002 SMT. KOMAL JADHWANI, VS. INCOME TAX OFFICER, L/H., OF L/SHRI A.K. JADHWANI, RANGE I(1), GWA LIOR. B-76, SAMADHIYA COLONY, LASHKAR, GWALIOR. (PAN: ABWPJ 4858 L) (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI VITHAL DAS, ADVOCATE RESPONDENT BY: SHRI A.K. SHARMA, JR. D.R. ORDER PER BENCH: THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE IMPUGNED ORDER DATED 21.01.2010 PASSED BY THE LD. CIT(A), GWALIOR FOR TH E ASSESSMENT YEAR 2001-02. 2. IN THIS APPEAL, THE ASSESSEE HAS TAKEN UP ONLY O NE SUBSTANTIVE GROUND TO THE EFFECT THAT THE LD CIT(A) ERRED IN SUSTAINING THE A DDITION OF RS.80,000/-, IN RESPECT OF TWO GIFTS RECEIVED FROM SMT. MOHINI DEVI AND SHR I SUBHASH KUMAR TO THE INCOME OF THE ASSESSEE. 2 2.1. THE FACTS OF THE CASE ARE THAT THE ASSESSEE FI LED HER RETURN ON 10.07.2001 DECLARING TOTAL INCOME OF RS.71,060/-. SHE IS CARR YING ON THE BUSINESS OF BAKERY. NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT, 196 1 (THE ACT HEREINAFTER) WAS ISSUED ON 12.01.2005 ON THE FAILURE ON ACCOUNT OF D ISCLOSING ALL THE MATERIAL FACTS IN RESPECT OF THE AFORESAID GIFTS. THEREAFTER, THE ASSESSEE WAS HEARD BY ISSUING STATUTORY NOTICES UNDER SECTION 143(2) AND 142(1) O F THE ACT. FINALLY, THE ASSESSMENT WAS COMPLETED AT A TOTAL INCOME OF RS.1, 51,060/- AFTER ADDING THE AFORESAID GIFTS TO THE TOTAL INCOME BY HOLDING THAT THE SAME REMAINED UNPROVED. 2.2 BEFORE THE LD CIT(A), IT WAS INTER ALIA SUBMITT ED THAT BOTH THE DONORS WERE ASSESSED TO INCOME TAX, AND THE REQUISITE VERIFICA TION COULD BE MADE FROM RECORD. THE LD. CIT(A) CONSIDERED THE FACTS OF THE CASE AND CAME TO THE CONCLUSION THAT THE ASSESSEE CAN ONLY BE SAID TO HAVE ESTABLISHED T HE IDENTITY OF THE DONORS. THEIR CREDITWORTHINESS AND THE GENUINENESS OF THE TRANSAC TION WERE NOT PROVED BY THE ASSESSEE. THE APPEAL WAS DISMISSED. 3. THE SHORT SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE BEFORE US HAS BEEN THAT THE REVENUE HAD MADE SIMILAR ADDITIONS IN LARG E NUMBER OF CASES BY HOLDING THAT CERTAIN PERSONS INDULGED IN GIFT RACKET TO INT RODUCE UNACCOUNTED MONEY IN THE 3 BOOKS OF ACCOUNTS. A NUMBER OF THEM WERE DECIDED B Y THE AGRA BENCH OF THE TRIBUNAL IN A CONSOLIDATED ORDER DATED 31.03.2009, A COPY OF WHICH HAS BEEN PLACED BEFORE US. THE FINDINGS OF THE TRIBUNAL ARE CONTAINED IN PARAGRAPH NOS.22 & 23. THESE FINDINGS ARE REPRODUCED BELOW :- 22. IT IS APPARENT FROM THE MACROSCOPICAL READING OF THE ASSESSMENT ORDERS PASSED U/S 143(3) READ WITH SEC.147 OR THE O RDERS DROPPING THE RE-ASSESSMENT PROCEEDINGS, THAT NO RELATION, CONNEC TION OR NEXUS OR DIRECT/INDIRECT LINK WAS FOUND TO EXIST WITH THE AL LEGED SCAM-TAINTED BANK ACCOUNTS, WHICH WERE USED FOR LAUNDERING OF BL ACK-MONEY. EVEN OTHERWISE THERE IS NO COGENT PROOF WITH THE DEPARTM ENT TO COME TO A VALID CONCLUSION THAT INCOME HAS ESCAPED ASSESSMENT OR THAT ANY OF THESE ASSESSEE(S) WAS THE BENEFICIARY OR RECIPIENT OF MONEY IN THE GARB OF HUNDI OR GIFT FROM THE ALLEGED TAINTED BANK ACCO UNT(S). IN ALL THESE CASES THE ASSESSEES HAVE FURNISHED ALL THE REQUIRED AND REQUISITE DOCUMENTS TO PROVE THEIR GIFTS, ETC. THE SATISFACT ION, AS ENVISAGED IN THE ACT, IS THAT OF LD. A.O., WHO HAS SATISFIED HIM SELF REGARDING THE GENUINITY OF THE GIFTS ETC., AND THAT IS WHY HE HAS EITHER DROPPED THE (RE)ASSESSMENT PROCEEDINGS OR HAS ACCEPTED THE EXP LANATION OF THE ASSESSEE(S). THE POWER OF LD. CIT ARE NOT UNFETTER ED OR UNCHEQUERED. HE CAN ONLY REVISE AN ORDER IF IT IS BOTH ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE, AS HAS BEEN ELABORATE LY DISCUSSED IN THE EARLIER PART OF THIS ORDER. SO, THE ARGUMENTS OF L D. CIT (D.R.) THAT THERE IS NO LEGAL BAR AGAINST THE ACTION OF LD. CIT IN CASE HE IS OF THE VIEW THAT THE A.O. HAS NOT MADE PROPER ENQUIRIES PR IOR TO THE PASSING OF THE RE-ASSESSMENT ORDER TO REVISE THE SAME IS NO T TENABLE. THIS ARGUMENT OF LD. D.R. IS NOT VALID AS PER LAW. THE POWERS OF LD. CIT ARE NOT UNIVERSAL AS SAID ABOVE AND, MOREOVER, IT I S THE SATISFACTION OF THE A.O. WHICH PRIMARILY MATTERS. EVEN, IN A CASE, THE LD. CIT ARRIVES AT A DIFFERENT CONCLUSION ON SAME SET OF FACTS BUT IF THE LD. A.O. HAS TAKEN A DIFFERENT BUT A PLAUSIBLE VIEW, THE SAME CA NNOT BE SUBSTITUTED BY LD. CIT BY HIS VIEW. THE OTHER ARGUMENT OF LD. CIT (D.R.) THAT BY SETTING ASIDE AND RESTORING THE MATTER BACK, ASSESS EE SHOULD NOT HAVE 4 GRIEVANCE IS ALSO OF NO MOMENT, THERE HAS TO BE AN END AND FINALITY TO LITIGATION. THE LENGTH OF THE ASSESSMENT ORDER OR THE RE-ASSESSMENT ORDER DOES NOT MATTER IF THE A.O. HAS PROPERLY EXAM INED THE DISPUTED ISSUE(S). THE HONBLE ALLAHABAD HIGH COURT HAS GON E EVEN TO THE EXTENT IN HOLDING THAT EVEN IF THE ORDER OF A.O. IS CRYPTIC THIS CAN NOT BE REVISED. IT WAS SO HELD IN THE CASE OF CIT VS. MAHENDRA KUMAR BANSAL (2008) 297 ITR 99 (ALL) THAT MERELY BECAUSE THE ITO HAD NOT WRITTEN A LENGTHY ORDER IT WOULD NOT ESTABLISH WITH OUT BRINGING ON RECORD SPECIFIC INSTANCES THAT THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3)/148 OF THE ACT IS ERRONEOUS AND PREJ UDICIAL TO THE INTEREST OF THE REVENUE. WE ARE IN AGREEMENT WITH LD. CIT (D.R.) TO THE EXTENT THAT THE CIT IS NOT REQUIRED TO COME TO A CONCLUSION TO THE HILT, BUT UNDER THE FOUR-CORNERS OF THE PROVISION O F S.263, HE IS DUTY BOUND TO ESTABLISH THAT THE ORDER IS ERRONEOUS IN S O FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. HE HAS TO GIVE A FINDING TO THAT EFFECT THAT HOW THE ORDER IS ERRONEOUS AND WHY IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. SIMPLY MAKING A GENER AL OBSERVATION WOULD NOT SUFFICE. NOW WE WILL DISCUSS THE POINTS RAISED IN THE WRITTEN SUBMISSION FILED BY THE DEPARTMENT THE FIRS T POINT THAT THE A.O. COMPLETED THE ASSESSMENTS WITHOUT MAKING ANY INQUIR Y THROUGH INSPECTOR OF INCOME TAX IS OF NO AVAIL. THERE IS N O SUCH LEGAL REQUIREMENT. IT IS THE SATISFACTION OF LD. A.O. WH ICH MATTERS AND NOT THE MODE OF INVESTIGATION. FROM THE DOCUMENTS FILE D BY THE ASSESSEE IT BECOMES AMPLY CLEAR THAT THE A.O. HAS MADE AMPLE IN QUIRIES TO SATISFY THAT THESE GIFTS ARE GENUINE AND NOT RELATED TO THE REASONS TAKEN FOR RE-OPENING OF ASSESSMENTS. THE A.O. HAS VERY MUCH EXAMINED THE IDENTITY OF THE DONOR(S), THEIR CREDITWORTHINESS AS WELL AS GENUINITY OF GIFTS. THE LD. CIT CANNOT GO INTO THE SUFFICIENCY OF THE INVESTIGATION MADE BY LD. A.O. THE A.O. HAS EXAMINED THE ORIGIN OF GIFTS, THE SOURCE(S) OF THE DEPOSIT ETC. ALTHOUGH RELATION IS NOT MATERIAL NOW, YET LD. A.O. HAS VERIFIED AND EXAMINED THE RELATION BET WEEN THE DONOR(S) AND THE DONEE(S). THE GIFT AMOUNTS ARE NOT OF VERY HIGH AMOUNTS AS COMPARED TO THE INCOME(S) OF THE DONOR(S). ALL THE DONOR(S) HAVE ACCEPTED THEIR GIFTS, HAVE EXPLAINED THEIR RESPECTI VE SOURCES AND HAVE PAID THEM MOSTLY THROUGH CHEQUES/DRAFTS. THE DECIS ION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF IISHWARI DEVI V S. ITO (SUPRA) IS ON DIFFERENT FACTS. THE FACTS OF THE CASES UNDER R EFERENCE ARE ENTIRELY DIFFERENT. WE HAVE EXTENSIVELY DEALT WITH SIMILAR ARGUMENTS OF THE 5 DEPARTMENT IN THE CASE OF SMT. BABITA ARORA (SUPRA) AND IN THE OTHER CASES REFERRED TO ABOVE. THE DECISIONS RELIED UPON BY THE DEPARTMENT ARE ON DIFFERENT FOOTING ARISING OUT OF ENTIRELY DI FFERENT SET OF FACTS. THE A.O. HAS MADE THE ENTIRE REQUISITE ENQUIRIES, T HEREFORE, THE DECISION OF HONBLE SUPREME COURT, IN THE CASE OF R AMPYARI DEVI SARAGOI & SMT. TARA DEVI AGGARWAL (SUPRA) RELIED BY LD. CIT (DR) ARE NOT OF ANY HELP TO HER CASES. WE ARE IN AGREEM ENT WITH LD. CIT (DR) THAT THE ORDER DROPPING THE (RE)ASSESSMENT PRO CEEDINGS IS A REVISABLE ORDER. WE HAVE, OURSELVES, CAREFULLY TRE ADED THROUGH EACH AND EVERY CASE BEFORE US AND ARE SATISFIED THAT NON E OF THESE CASES IS FOUND TO BE RELATED WITH THE ALLEGED SCAM CASES. T HUS, THERE IS NO POINT IN FURTHER WAITING FOR AN ADDITIONAL WRITTEN SUBMISSION FOR THAT PURPOSE ONLY. 23. THE ABOVE FINDING IS TRUE IN ALL THE OTHER CASE S BEFORE US AND, THE AFORESAID REASONING ARE ALSO APPLICABLE IN THEM . THE FACTS, THE CIRCUMSTANCES, THE REASONS FOR RE-OPENING AND THE I NVOLVEMENT OF GIFT(S), ETC., THE NATURE AND EXTENT OF EXAMINATION OF EVIDENCES SO PRODUCED AND THE NOTICE U/S 263 AND THE REASONS GIV EN IN THE ORDER UNDER APPEAL ARE ALL MUTATIS MUTANDIS, IDENTICAL, T HEREFORE, THE ARGUMENTS, REASONS GIVEN IN THE ABOVE CASE WOULD AL SO APPLY TO ALL OTHER CASES. ALL THESE CASES ARE FULLY COVERED BY THE DECISIONS OF THIS BENCH RENDERED IN THE CASES REFERRED TO ABOVE. THE REFORE, BY RESPECTFULLY FOLLOWING THE ABOVE CASES, REFERRED TO IN THE FORMER PART OF THIS ORDER, WE ACCEPT ALL THESE APPEALS. ACCORDI NGLY, WE ALLOW ALL THE ABOVE CAPTIONED APPEALS OF THE ASSESSEE AND SET ASIDE THE IMPUGNED ORDER(S) OF LD. CIT PASSED IN ALL THESE CA SE AND RESTORE THE ORDER(S) REVISED THEREBY. 3.1 IN REPLY, THE LD. DEPARTMENTAL REPRESENTATIVE R ELIED ON THE ORDER OF THE LOWER AUTHORITIES. 6 4. WE HAVE CONSIDERED THE FACTS OF THE CASE AND THE SUBMISSIONS MADE BEFORE US. THE ISSUE STANDS COVERED BY THE ORDER OF THE T RIBUNAL MENTIONED ABOVE. RESPECTFULLY FOLLOWING THE DECISION, IT IS HELD THA T NO ADDITION COULD HAVE BEEN MADE IN THE CASE OF THE ASSESSEE IN RESPECT OF AFOR ESAID GIFTS. THEREFORE, WE DELETE THE SAME BY ACCEPTING THE APPEAL FILED BY THE ASSES SEE. 5. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 09.08.20 11). SD/- SD/- (H.S. SIDHU ) (K.G. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: AGRA DATE: 9 TH AUGUST, 2011 PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT BY ORDER 3. CIT CONCERNED 4. CIT (APPEALS) CONCERNED 5. DR, ITAT, AGRA BENCH, AGRA 6. GUARD FILE ASSISTANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY