Smt. Samta Kamal Drolia, Baroda V. The Income tax Officer,Ward-2(3), Baroda

ITA 894/AHD/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1340 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 30-05-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 01-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS SMITI SAMANT
• Keywords: Gift
• Section: 56(2)

Judgement Text

, SMC IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER ./ ITA NO.894/AHD/2013 / ASSTT. YEAR: 2008-2009 SMT.SAMTA KAMAL DROLIA B-202, SAMRAJYA FLATS, VASNA ROAD NR.SABRI SCHOOL, BARODA 390015. PAN : AJPPD 1350 C VS ITO, WARD - 2(3) BARODA. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI MUKUND BAKSHI REVENUE BY : MRS.SMITI SAMANT, SR.DR / DATE OF HEARING : 02/06/2016 / DATE OF PRONOUNCEMENT: 02/06/2016 $%/ O R D E R THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAI NST THE ORDER OF THE LD.CIT(A)-II, BARODA DATED 20.12.2012 PASSED IN THE ASSTT.YEAR 2008-09. 2. SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT THE L D.CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.2,40,000/- WHICH W AS RECEIVED BY THE ASSESSEE (MINOR SO, THROUGH MOTHER) AS GIFT FROM HI S STEP-FATHER, SHRI KAMAL DROLIA AND KAMAL DROLIA (HUF). 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA D FILED HIS RETURN OF INCOME ON 11.9.2008 DECLARING TOTAL INCOME AT RS.1, 72,700/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMEN T AND NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED ON 19.8.2009. ON SCRUTINY OF THE ACCOUNTS IT REVEALED TO THE AO THAT THE ASSESSEE HA D RECEIVED A SUM OF RS.2,20,000/- THROUGH DIFFERENT CHEQUES OF RS.20,00 0/- EACH FROM 1 ST OF ITA NO.894/AHD/2013 2 EVERY MONTH I.E. FROM MAY TO MARCH FROM SHRI KAMAL DROLIA. HE FURTHER OBSERVED THAT A SUM OF RS.20,000/- WAS RECEIVED BY THE ASSESSEE THROUGH CHEQUE NO.343904 DATED 28.4.2007 OF ABN AMR O BANK. THIS AMOUNT RECEIVED FROM M/S.KAMAL DROLIA, HUF. WHEN T HE ASSESSEE WAS CONFRONTED, WITH REGARD TO THE RECEIPT OF THIS AMOU NT, IT WAS CONTENDED BY THE ASSESSEE THAT SHRI KAMAL DROLIA, IS STEP-FAT HER OF THE ASSESSEE. HE RECEIVED THE AMOUNTS IN GIFT. WITH REGARD TO TH E AMOUNT RECEIVED FROM HUF, IT WAS CONTENDED THAT THIS AMOUNT WAS BEL OW THE LIMIT OF RS.50,000/-, AND THERFORE, THE ASSESSEE WAS NOT SUP POSED TO EXPLAIN. THE LD.AR HAS REJECTED THE EXPLANATION OF THE ASSES SEE ON THE GROUND THAT THE ASSESSEE IS STEP-SON OF SHRI KAMAL DROLIA, THEREFORE, THEIR RELATIONSHIP DOES NOT FALL WITHIN THE AMBIT OF RELA TIONSHIP EXPLAINED IN EXPLANATION APPENDED TO SECTION 56(2). APPEAL TO THE CIT(A) DI D NOT BRING ANY RELIEF TO THE ASSESSEE. 4. THE LD.COUNSEL FOR THE ASSESSEE, WHILE IMPUGNING THE ORDER OF THE REVENUE AUTHORITIES TOOK ME THROUGH SECTION 56(2) A ND THE EXPLANATION (V), (VI) AND (VII) OF THE INCOME TAX ACT. HE SUBM ITTED THAT THE EXPRESSION RELATIVE HAS BEEN EXPLAINED IN THE EXPLANATION APPENDED TO SECTION 56(2) OF THE INCOME TAX ACT. AS PER THE ME ANING GIVEN AT SERIAL NO.(V), (VI) AND (VII), IT EMERGES OUT THAT ANY LINEAL ASCENDANT OR DESCENDANT OF THE INDIVIDUAL WILL BE ENTITLED TO RE CEIVE GIFT. HE POINTED OUT THAT THE ASSESSEE IS AN INDIVIDUAL. HIS STEP-FA THER IS THE SPOUSE OF HIS MOTHER, AND THEREFORE, THEIR RELATIONSHIP SHALL BE WITHIN THE MEANING OF RELATIVE GIVEN AT SERIAL NO.(V), (VI) AND (VII ) AND THEREFORE, ENTITLED FOR THE EXEMPTION APPLICABLE IN THE PRESENT CASE. FOR BUTTRESSING HIS CONTENTION, HE FURTHER MADE REFERENCE TO THE DECISI ON OF THE HONBLE ANDHRA PRADESH HIGH COURT IN THE CASE OF INCOME-TAX APPELLATE TRIBUNAL VS. ESTATE OF LATE NULI LAKSHMINARAYANA, R EPORTED IN 116 ITR 739 (AP). HE POINTED OUT THAT THIS IS RELATED TO T HE ESTATE DUTY ACT, 1953. THE QUESTION AROSE THERE WAS, WHETHER AN ADO PTED SON CAN BE ITA NO.894/AHD/2013 3 REGARDED AS A LINEAL DESCENDANT FOR THE PURPOSE OF LEVY OF ESTATE DUTY. ON THE STRENGTH OF THIS DECISION, HE POINTED THAT T HE ASSESSEE BEING AN INDIVIDUAL FALLS WITHIN THE AMBIT OF EXPRESSION RE LATIVE OF HIS STEP- FATHER. 5. ON THE OTHER HAND, THE LD.DR RELIED ON THE ORDER OF THE LD.CIT(A) AND CONTENDED THAT THIS ASPECT HAS BEEN CONSIDERED BY THE LD.CIT(A) AND IT HAS BEEN RIGHTLY STATED THAT STEP-SON DOES N OT FALL WITHIN THE AMBIT OF RELATIVE. 6. I HAVE GONE THROUGH THE RECORD CAREFULLY. IT IS PERTINENT TO TAKE NOTE OF THE RELEVANT SECTION 56(2) AND THE EXPLANATION APPENDED THERETO. THEY READ AS UNDER: 56. (1) INCOME OF EVERY KIND WHICH IS NOT TO BE EX CLUDED FROM THE TOTAL INCOME UNDER THIS ACT SHALL BE CHARGEABLE TO INCOME-TAX UNDER THE HEAD INCOME FROM OTHER SOURCES, IF IT I S NOT CHARGEABLE TO INCOME-TAX UNDER ANY OF THE HEADS SPE CIFIED IN SECTION 14, ITEMS A TO E. (2) IN PARTICULAR, AND WITHOUT PREJUDICE TO THE GEN ERALITY OF THE PROVISIONS OF SUB-SECTION (1), THE FOLLOWING INCOME S, SHALL BE CHARGEABLE TO INCOME-TAX UNDER THE HEAD INCOME FRO M OTHER SOURCES, NAMELY : ***** ***** [(VI) WHERE ANY SUM OF MONEY, THE AGGREGATE VALUE O F WHICH EXCEEDS FIFTY THOUSAND RUPEES, IS RECEIVED WITHOUT CONSIDERATION, BY AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY, IN AN Y PREVIOUS YEAR FROM ANY PERSON OR PERSONS ON OR AFTER THE 1ST DAY OF APRIL, 2006 [BUT BEFORE THE 1ST DAY OF OCTOBER, 2009], THE WHOL E OF THE AGGREGATE VALUE OF SUCH SUM: PROVIDED THAT THIS CLAUSE SHALL NOT APPLY TO ANY SU M OF MONEY RECEIVED ITA NO.894/AHD/2013 4 ***** EXPLANATION.FOR THE PURPOSES OF THIS CLAUSE, RELA TIVE MEANS ****** (V) ANY LINEAL ASCENDANT OR DESCENDANT OF THE INDIV IDUAL; (VI) ANY LINEAL ASCENDANT OR DESCENDANT OF THE SPOU SE OF THE INDIVIDUAL; (VII) SPOUSE OF THE PERSON REFERRED TO IN CLAUSES ( II) TO (VI);] 7. A BARE PERUSAL OF THE ABOVE EXPLANATION WOULD INDICATE THAT THE EXPRESSION RELATIVES WOULD RECOGNIZE THE RELATION SHIP BETWEEN THE STEP-FATHER AND STEP-SON FOR THE PURPOSE OF EXEMPTI ON AVAILABLE UNDER SECTION 56(2) OF THE INCOME TAX ACT. THEREFORE, TH E GIFT RECEIVED BY THE ASSESSEE CANNOT BE TREATED AS INCOME FROM OTHER SOU RCES, AND THE SAME IS DELETED AND THE APPEAL OF THE ASSESSEE IS A LLOWED. 8. IN RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE COURT ON 2 ND JUNE, 2016 AT AHMEDABAD. SD/- (RAJPAL YADAV) JUDICIAL MEMBER