The ITO, Ward 5 (3), RAJKOT-GUJARAT v. Smt Ilaben Rajeshbhai Daftary, RAJKOT-GUJARAT

ITA 158/RJT/2008 | 2004-2005
Pronouncement Date: 04-11-2011 | Result: Allowed

Appeal Details

RSA Number 15824914 RSA 2008
Assessee PAN ABJPD0414H
Bench Rajkot
Appeal Number ITA 158/RJT/2008
Duration Of Justice 3 year(s) 7 month(s) 15 day(s)
Appellant The ITO, Ward 5 (3), RAJKOT-GUJARAT
Respondent Smt Ilaben Rajeshbhai Daftary, RAJKOT-GUJARAT
Appeal Type Income Tax Appeal
Pronouncement Date 04-11-2011
Appeal Filed By Department
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 04-11-2011
Date Of Final Hearing 02-11-2011
Next Hearing Date 02-11-2011
Assessment Year 2004-2005
Appeal Filed On 19-03-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH RAJKOT BEFORE SHRI T.K. SHARMA (JM) AND SHRI A.L. GEHLOT ( AM) I.T.A. NO.158/RJT/2008 (ASSESSMENT YEAR 2004-05) ITO WD.5(1) VS SMT. ILABEN RAJESHBHAI DAFTARY RAJKOT ARIHAND A-PARK SHRAMJIVI SOCIETY DHEBHAR ROAD RAJKOT PAN : ABJPD0414H (APPELLANT) (RESPONDENT) DATE OF HEARING : 02-11-2011 DATE OF PRONOUNCEMENT : -11-2011 APPELLANT BY : SHRI AVINASH KUMAR RESPONDENT BY : SHRI JC RANPURA O R D E R PER AL GEHLOT (AM) THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE CIT(A)-IV RAJKOT DATED 30-01-2008 FOR THE ASSESSMENT YEAR 200 4-05. 2. THE FOLLOWING EFFECTIVE GROUND IS RAISED IN THE APPEAL: 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.15 00 000/- ON ACCOUNT OF GIFT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS ENGAGED IN THE BUSINESS OF SALE AND PURCHASE OF SHARES. DURING TH E YEAR UNDER CONSIDERATION THE ASSESSEE HAS RECEIVED A SUM OF RS.15 LAKHS AS G IFT FROM SHRI LAXMAN DHANJI HIRANI AN NRI RESIDING IN THE REPUBLIC OF SEYCHELL ES. THE ASSESSING OFFICER HELD THAT THE GIFT WAS BOGUS AND INGENUINE. THE CIT(A) DELETED THE ADDITION. ITA NO.115/RJT/2011 2 4. THE LD.REPRESENTATIVES OF THE PARTIES SUBMITTED THAT ON IDENTICAL SET OF FACTS THE RAJKOT BENCH OF THE TRIBUNAL IN ITA NO.4 38/RJT/2005 IN THE CASE OF JAYANTILAL G KUNDALIYA & ORS ORDER DATED 24-06-2011 SENT BACK THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR DECISION AFRESH I N THE LIGHT OF SUPREME COURT JUDGMENT IN THE CASE OF CIT VS P MOHANA KALA (2007) 291 ITR 278 (SC). 5. WE HAVE HEARD THE LD.REPRESENTATIVES OF THE PART IES AND RECORD PERUSED. THE ASSESSEE HAS FILED ADJOURNMENT APPLICATION. HO WEVER AT THE TIME OF HEARING THE APPLICATION WAS REJECTED IN VIEW OF THE SUBMISS IONS OF BOTH SIDES. WE FIND THAT ON IDENTICAL SET OF FACTS THE ITAT IN ITA NO. 438/RJT/2005 IN THE CASE OF JAYANTILAL G KUNDALIYA & ORS ORDER DATED 24-06-2011 SENT BACK THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR DECISION AFRESH I N THE LIGHT OF SUPREME COURT JUDGMENT IN THE CASE OF CIT VS P MOHANA KALA (2007) 291 ITR 278 (SC). THE RELEVANT PORTION OF THE ORDER OF THE TRIBUNAL IN TH IS CASE IS AS UNDER: 17. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EI THER SIDE AND HAVE ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTEDLY CASH CREDIT WAS FOUND IN THE FORM OF NRI GIFT. THE ASSESSEE CLAIMED THAT THE DONOR IS A FRIEND. ADMITTEDLY TH E DONOR IS NOT A RELATIVE OF THE ASSESSEE. NORMALLY THERE SHOULD BE AN OCCASION FOR GIVING GIFT BY A PERSON WHO IS NOT BLOOD RELATIVE. IN CASE OF BLOOD RELATIVE ONE MAY SAY THAT NO OCCASION IS REQUIRED F OR GIVING GIFT. MOTHER FATHER BROTHER SISTER MAY GIFT AT ANY TIM E TO THEIR CHILDREN / GRAND CHILDREN BROTHER SISTER RESPECTIVELY. BUT THAT IS NOT THE CASE IN RESPECT OF OTHER PERSONS. NORMALLY THE THIRD P ARTIES WOULD GIFT ON AN OCCASION. SUCH A GIFT IS ALSO NEEDS TO BE RECIP ROCATED APPROPRIATELY. ALL THESE FACTS WOULD DEPENDENT UPON THE FACTS OF EACH CASE. ONE CANNOT LAY DOWN ANY RULE / PRESCRIPT ION FOR GIVING / RECEIVING GIFTS. IT IS TO BE ESTABLISHED SATISFACT ORILY DEPENDING UPON THE FACTS OF EACH CASE. ITA NO.115/RJT/2011 3 18. WE FIND THAT THE APEX COURT IN THE CASE OF P MO HANA KALA (SUPRA) HAD AN OCCASION TO CONSIDER AN IDENTICAL SE T OF FACTS. IN THE CASE BEFORE THE APEX COURT THE ASSESSEE RECEIVED F OREIGN GIFT FROM A DONOR. THE PAYMENT WAS MADE THROUGH BANKING CHAN NEL AND IT WAS CREDITED IN THE BANK ACCOUNT. THE DONOR IN THE CASE BEFORE APEX COURT CLAIMED THAT HE WAS PAYING TAX IN ENGLAN D AND HAD SUFFICIENT FUNDS FOR GIVING GIFT. THE APEX COURT F OUND THAT THE STATEMENT MADE BY THE DONOR IS A SELF-SERVING STATE MENT AND THERE IS NO MATERIAL EVIDENCE AS REGARDS TO HIS FINANCIAL STATUS. ULTIMATELY THE APEX COURT FOUND THAT THE TRANSACTI ONS THOUGH APPARENT WERE HELD TO BE NOT REAL ONES. MAY BE THE MONEY CAME BY WAY OF BANK CHEQUE AND WAS PAID THROUGH THE PROC ESS OF BANKING TRANSACTION BUT THAT ITSELF IS OF NO CONSEQ UENCE. IN FACT THE APEX COURT OBSERVED ON PAGE 289 OF THE ITR AS FOLL OWS: RELYING ON THE DECISIONS OF THIS COURT IN BEJOY G OPAL MUKHERJI V. PRATUL CHANDRA GHOSE AIR 1953 SC 153 A ND ORIENT DISTRIBUTORS V. BANK OF INDIA LTD. AIR 1979 SC 867 SHRI IYER LEARNED SENIOR COUNSEL CONTENDED THAT THE ISSUE REL ATING TO THE PROPRIETY OF THE LEGAL CONCLUSION THAT COULD BE DRA WN ON THE BASIS OF PROVED FACTS GIVES RISE TO A QUESTION OF LAW AND T HEREFORE THE HIGH COURT IS JUSTIFIED IN INTERFERING IN THE MATTER SIN CE THE AUTHORITIES BELOW FAILED TO DRAW A PROPER AND LOGICAL INFERENCE FROM THE PROVED FACTS. WE ARE UNABLE TO PERSUADE OURSELVES TO ACCE PT THE SUBMISSIONS. THE FINDINGS OF FACT ARRIVED AT BY TH E AUTHORITIES BELOW ARE BASED ON PROPER APPRECIATION OF THE FACTS AND THE MATERIAL AVAILABLE ON RECORD AND SURROUNDING CIRCUM STANCES. THE DOUBTFUL NATURE OF THE TRANSACTION AND THE MANNER I N WHICH THE SUMS WERE FOUND CREDITED IN THE BOOKS OF ACCOUNTS M AINTAINED BY THE ASSESSEE HAVE BEEN DULY TAKEN INTO CONSIDERATIO N BY THE AUTHORITIES BELOW. THE TRANSACTIONS THOUGH APPAREN T WERE HELD TO BE NOT REAL ONES. MAY BE THE MONEY CAME BY WAY OF BANK CHEQUES AND PAID THROUGH THE PROCESS OF BANKING TRANSACTION BUT THAT ITSELF IS OF NO CONSEQUENCE. IN VIEW OF THE ABOVE MERELY BECAUSE THE TRANSACTION WAS MADE THROUGH BANKING CHANNEL THAT ALONE WILL NOT PROVE T HE GENUINENESS OF THE TRANSACTION. SOMETHING MORE IS REQUIRED TO BE PROVED IN RESPECT OF FOREIGN GIFT. BOTH THE AUTHORITIES BELO W HAD NO OCCASION TO CONSIDER THIS JUDGMENT OF THE APEX COURT IN THE CASE OF P MOHANA KALA (SUPRA). THE ASSESSEE HAD ALSO NO OCCA SION TO EXPLAIN THE CONSEQUENCE OF THE JUDGMENT OF THE APEX COURT IN THE CASE OF P MOHANA KALA (SUPRA). THEREFORE IN OUR O PINION THE MATTER NEEDS TO BE RECONSIDERED BY THE ASSESSING OF FICER IN THE LIGHT OF THE JUDGMENT OF THE APEX COURT IN THE CASE OF P MOHANA KALA (SUPRA) AFTER GIVING ADEQUATE OPPORTUNITY TO THE AS SESSEE. ITA NO.115/RJT/2011 4 19. WE HAVE ALSO GONE THROUGH THE DECISION OF THE M UMBAI BENCH OF THE TRIBUNAL IN THE CASE OF MRS. ASHA HAMP ANNAVAR (SUPRA). IN THE CASE BEFORE THE MUMBAI BENCH OF TH E TRIBUNAL THE DONOR WAS FOUND TO BE NOT A STRANGER TO THE ASSESSE E. THE MUMBAI BENCH AFTER EXAMINING THE FACTS OF THE CASE FOUND THAT THE GENUINENESS OF THE TRANSACTION WAS ESTABLISHED BY T HE ASSESSEE. ON FURTHER APPEAL BY THE REVENUE BEFORE THE BOMBAY HIGH COURT THE BOMBAY HIGH COURT FOUND THAT THERE IS ABSOLUTEL Y NO QUESTION OF LAW ARISE FOR CONSIDERATION. SIMILARLY THE APE X COURT REJECTED THE SPECIAL LEAVE PETITION OF THE REVENUE ON THE GR OUND THAT THE HIGH COURT FOUND THAT THE GIFT WAS GENUINE AND NO M ATERIAL WAS AVAILABLE ON RECORD TO SHOW THAT THE CONFIRMATION W AS NOT CORRECT. THEREFORE IT IS CLEAR THAT EACH CASE HAS TO BE EXA MINED ON ITS OWN FACTS AND WE HAVE TO FIND OUT THE GENUINENESS OF TH E TRANSACTION. THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL UP HOLDING THE GENUINENESS OF THE TRANSACTION WAS CONFIRMED BY THE BOMBAY HIGH COURT ON THE GROUND THAT THERE IS NO QUESTION OF LA W. NO LAW WAS LAID DOWN BY THE APEX COURT WHILE REJECTING THE SLP . HOWEVER IN THE CASE OF P MOHANA KALA (SUPRA) THE HONBLE APEX COURT EXAMINED THE ISSUE IN DEPTH AND CATEGORICALLY HELD THAT MERELY BECAUSE THE TRANSACTION WAS MADE THROUGH BANKING CH ANNEL THAT ALONE WILL NOT ESTABLISH THE GENUINENESS OF THE TRA NSACTION. MOREOVER BOTH THE AUTHORITIES BELOW HAVE NOT EXAM INED THE ISSUE OF FOREIGN GIFT IN THE LIGHT OF THE JUDGMENT OF THE APEX COURT IN THE CASE OF P MOHANA KALA (SUPRA). THEREFORE IN OUR O PINION THE FACTS OF THE CASE NEED TO BE EXAMINED IN THE LIGHT OF THE JUDGMENT OF THE HONBLE APEX COURT IN THE CASE OF P MOHANA KALA (SU PRA). ACCORDINGLY WE SET ASIDE THE ORDERS OF LOWER AUTHOR ITIES AND REMAND BACK THE MATTER TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL EXAMINE THE ISSUE AFRESH AN D THEREAFTER DECIDE THE SAME IN ACCORDANCE WITH LAW AFTER CONSID ERING THE JUDGMENT OF THE HONBLE APEX COURT IN THE CASE OF P MOHANA KALA (SUPRA). NEEDLESS TO POINT OUT THAT THE ASSESSING OFFICER SHALL GIVE SUFFICIENT OPPORTUNITY TO THE ASSESSEE BEFORE DECID ING THIS ISSUE. 6. CONSISTENT WITH THE ABOVE DECISION OF THE TRIBUN AL IN THE CASE OF JAYANTILAL G KUNDALIYA & ORS (SUPRA) WE SEND THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER WITH SIMILAR DIRECTION. THE ASSESSING OFFI CER IS DIRECTED TO REDECIDE THE ISSUE AFRESH IN THE LIGHT OF ABOVE DECISION OF THE TRIBUNAL AFTER HEARING THE ASSESSEE. ITA NO.115/RJT/2011 5 7. IN THE RESULT THE APPEAL FILED BY THE REVENUE I S TREATED AS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 04-11-2011. SD/- SD/- (T.K. SHARMA) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER RAJKOT DT : 04 TH NOVEMBER 2011 PK/- COPY TO: 1. ASSESSEE 2. REVENUE 3. THE CIT(A)-IV RAJKOT 4. THE CIT-III RAJKOT 5. THE DR I.T.A.T. RAJKOT (TRUE COPY) BY ORDER ASSTT.REGISTRAR ITAT RAJKOT