Rajiv Gupta, Gurgaon V. ITO WARD - 20(2), New Delhi

ITA 8386/DEL/2019

AI Insights

The case involves Rajiv Gupta, the Assessee, who appealed against the order of the Commissioner of Income Tax (Appeals)-7, New Delhi, which upheld the additions made by the Income Tax Officer (ITO) for the assessment year 2016-17. The ITO had treated a gift of Rs. 68,00,000 from the Assessee's brother as bogus and added it to the Assessee's income, along with disallowing certain exemptions and additions related to capital gains. The Tribunal found that the Commissioner had not adequately addressed the Assessee's submissions and remanded the matter for a fresh decision.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 112574 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-12-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 13-12-2022
• Assessment Year: 2016-2017
• Appeal Filed On: 22-10-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift; Opportunity of being heard; Principle of natural justice; Set aside; Bogus
• Section: 68; 143(2); 48

Judgement Text

1 ITA No. 8386/Del/2019 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “F”: NEW DELHI BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER ITA No. 8386/Del/2019 Asstt. Yr: _2016-17 Rajiv Gupta, 1915A DLF Phase, Mangolia, Gurugram, Haryana-122002 PAN-AAOPG1096Q Vs Income-tax Officer, Ward-20(2), New Delhi APPELLANT RESPONDENT Assessee represented by Sh. Salil Kapoor, Adv. & Sh. Amarbir Singh Walia, CA Department represented by Sh. A.K. Arora, Sr. DR Date of hearing 14.12.2022 Date of pronouncement 28.12.2022 O R D E R PER N.K. CHOUDHRY, JM: The Assessee has preferred the instant appeal against the order dated 19.081.2019, impugned herein, passed by the Ld. Commissioner of Income tax (Appeals)-7, New Delhi, (in short “Ld. Commissioner”) u/s 250(6) of the Income Tax Act, 1961 (in short “the Act”), pertaining to the assessment year 2016-17. 2 ITA No. 8386/Del/2019 2. Brief facts relevant for adjudication of the instant appeal are that the Assessee by filing its return of income on 30.3.2017 declared an income of Rs. 28,06,860/-. The case of the Assessee was selected for scrutiny and resulted into issuance of notice u/s 143(2) and U/s 142(1) of the Act, in response to which the Assessee filed information and details. On consideration of the details, it was observed by the AO that the Assessee has earned dividend income amounting to Rs. 1,36,686/- and claimed exemption u/s 10(35) of the Act. Further, the Assessee also claimed to have received an amount of Rs. 68,00,000/- as gift from his brother Mr. Sanjay Gupta having PAN no. AXUPG8705D. Ultimately the AO treated the amount of Rs. 68,00,000/- as bogus on the ground that the Assessee had completely failed to discharge his onus as per section 68 of the Act and consequently added in the income of the Assessee. Further, the AO also made the disallowance of Rs. 1,36,686/- which was claimed as exempt u/s 10(35) of the Act by the Assessee. Further, AO also made the addition of Rs. 9,99,290/- u/s 48 of the Act which was claimed as exempt capital gain by the Assessee. 3 ITA No. 8386/Del/2019 3. The Assessee, being aggrieved preferred first appeal before the learned Commissioner, who vide impugned order, partly affirmed the said additions by concluding as under: 6. Ground No. 1 relates to addition of Rs. 68,00,000/- u/s 68 as bogus gift. In view of the enquiries conducted by the AO and reasons mentioned in para above the genuineness of the gift is not established. The cheque has been issued by the appellant himself on alleged verbal instructions not backed by documents and also the source is not explained adequately. In view of the observations in the letter dated 29.05.2019 the addition on this account is confirmed and the grounds of appeal is dismissed. Ground No. 2 relates to addition on account of disallowance of exemption u/s 10(35) of Rs. 1,36,686/-. As it forms part of holding of the appellant the dividend receive is exempt. AO to verify and allow the claim. The grounds of appeal is disposed accordingly. 4 ITA No. 8386/Del/2019 The 3 rd ground of appeal relates to addition on account of disallowance of transfer expenses. The AO made an addition of Rs. 9,99,990/- restricting the share of the appellant to the percentage share in property i.e. 5%. There is no justification for additional claim as the appellant had only 5% stakes in the property. The grounds of appeal are therefore dismissed.” 4. The Assessee being aggrieved, against the affirmation of addition of Rs. 68,00,000/- Rs. 9,90,290/- made u/s 68 and 48 of the Act respectively , preferred the instant appeal by raising following grounds of appeal: “1. That the CIT(A) has grossly erred on facts and in law in upholding the additions made by the AO. The order passed by the AO and CIT(A) are illegal and bad in law. 2. That the CIT(A) has grossly erred on facts and in law in upholding addition of Rs. 68,00,000 under section 68. This addition of Rs. 68,000 made by the AO and upheld by the CIT(A) is illegal and should be deleted. 5 ITA No. 8386/Del/2019 3. That the Assessee has received gift from his real brother and the same is not taxable in hands of the Assessee. The lower authorities have rejected the claim without any valid reason. 4. That the CIT(A) has grossly erred on facts and in law in upholding addition of Rs. 9,99,290/- made by the AO. This addition is illegal and should be deleted. 5. That the Assessee is eligible to claim transfer expenses on sale of property and the same is permitted under the law. 6. The various observations of the AO and CIT(A0 made in impugned order against the Assessee are illegal, bad in law and contrary to the facts. 7. That the remand report submitted the AO to the CIT(A) is illegal and has recorded incorrect facts. 8. That the lower authorities have not considered our submission and material produced before them in a judicious manner. The additions made and upheld are illegal and highly excessive. 9. That the lower authorities have passed the orders in undue haste without granting us a proper opportunity to be heard. The orders are passed in gross violation of principles of natural justice. 10. The Assessee craves leave to add, amend, alter and/or delete any of the above grounds of appeal at or before the time of hearing.” 6 ITA No. 8386/Del/2019 5. Heard the parties and perused the material available on record. At the time of argument, learned counsel did not press ground nos. 1 & 4 to 10, therefore, the only grounds remains to be adjudicated are ground nos. 2 & 3 which pertains to the upholding the addition of Rs. 68,00,000/- u/s 68 of the Act by the learned CIT(Appeals). 6. We have given thoughtful consideration to the determination made by the learned Commissioner. As it appears from para 6, the learned Commissioner without mentioning and analyzing the submissions made by the Assessee, decided the issue in cryptic manner and by unreasoned conclusion, therefore, we are inclined to set aside the determination made by the learned Commissioner on the issue in hand and deem it appropriate to remand the same to the file of the learned Commissioner for decision afresh, suffice to say by affording reasonable opportunity of being heard to the Assessee. The Assessee would be at liberty to agitate its claim against the issue under consideration and to file the relevant documents, if any to be needed for the just decision of the case and proper adjudication of the appeal. 7 ITA No. 8386/Del/2019 7. In the result, the appeal filed by the Assessee stands allowed for statistical purposes. Order pronounced in the open court on 28.12.2022. Sd/- Sd/- (ANIL CHATURVEDI) (N.K. CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER *MP* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI