ACIT, v. Gurumukh M. Jagwani,

ITA 1770/PUN/2007 | 2001-2002
Pronouncement Date: 15-10-2010

Appeal Details

RSA Number 177024514 RSA 2007
Assessee PAN ACXPJ0669D
Bench Pune
Appeal Number ITA 1770/PUN/2007
Duration Of Justice 2 year(s) 9 month(s) 20 day(s)
Appellant ACIT,
Respondent Gurumukh M. Jagwani,
Appeal Type Income Tax Appeal
Pronouncement Date 15-10-2010
Appeal Filed By Department
Bench Allotted A
Tribunal Order Date 15-10-2010
Assessment Year 2001-2002
Appeal Filed On 26-12-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE SHRI I.C.SUDHIR JM AND SHRI RAJENDRA SINGH AM I.T.A. NO. 1764 & 1765/PN/2007 (ASSTT. YEAR : 1999-2000 & 2000-01 ) ASSTT. COMMISSIONER OF INCOME TAX APPELLANT CENTRAL CIRCLE AURANGABAD VS. SHRI. JETHANAND M. JAGWANI RESPONDENT M/S. LAXMI GLOBAL COMPANY 88/1 AJANTHA ROAD JALGAON PAN :AAXPJ0671P I.T.A. NO. 1768 TO 1770/PN/2007 (ASSTT. YEAR : 1999-2000 & 2001-02 ) ASSTT. COMMISSIONER OF INCOME TAX APPELLANT CENTRAL CIRCLE AURANGABAD VS. SHRI GURUMUKH M. JAGWANI RESPONDENT C/O SHRI JETHANAND M. JAGWANI M/S. LAXMI INDUSTRIES 84 CHINCHOLI VILLAGE JALGAON PAN: ACXPJ0669D APPELLANT BY : SHRI HARESHWAR SHARMA RESPONDENT BY : SHRI S.U. PATHAK ORDER PER BENCH IN THESE APPEALS THE REVENUE HAS QUESTIONED FIRST APPELLATE ORDERS ON THE COMMON GROUND THAT THE LD CIT(A) HAS ERRED IN DELET ING ADDITIONS MADE U/S. 68 OF THE ACT ON ACCOUNT OF AMOUNT CREDITED IN THE BOOKS OF ACCOUNT AS GIFTS IN THE NAME OF VARIOUS PERSONS. 2. IN THE CASES OF SHRI GURUMUKH JAGWANI THE FIRST APPELLATE ORDER HAS ALSO BEEN QUESTIONED BY THE REVENUE ON THE GROUND THAT I N THE A.YS. 1999-2000 AND 2001-02 THE LD CIT(A) HAS ERRED IN DELETING THE AD DITIONS MADE U/S. 68 OF THE ACT ITA NO.1764 1765 1768 TO 1770/PN/2007 SHRI JETHANAND M JAGWANI ETC. (A.YS. 1999-00 2000-01 & 2001-02) 2 MADE ON ACCOUNT OF AMOUNT CREDITED IN THE BOOKS OF ACCOUNT AS LOAN IN THE NAME OF VARIOUS PERSONS. 3. AT THE OUTSET OF HEARING THE LD. A.R. SUBMITTED THAT AN IDENTICAL ISSUE UNDER THE SIMILAR FACTS AND CIRCUMSTANCES HAS BEEN SET AS IDE TO THE FILE OF THE LD CIT(A) FOR FRESH CONSIDERATION BY THE TRIBUNAL IN GROUP CA SES OF SHRI BRIJLAL M. JAGWANI AND OTHERS IN ITA NOS. 1333 TO 1336/PN/2007 (A.YS. 2000 -01 TO 2003-04) (COPY SUPPLIED). THE LD. A.R. ADOPTED ARGUMENTS ADVANCED THEREIN ON BEHALF OF THE ASSESSEE AND REFERRED PARA NOS. 8 9 & 17 OF THE S AID ORDER OF THE TRIBUNAL. 4. THE LD. D.R. DID NOT DISPUTE THE ABOVE SUBMISSIO N OF THE LD. A.R. HE HOWEVER PLACED RELIANCE ON THE ASSESSMENT ORDER IN SUPPORT OF THE GROUND RAISED IN THE APPEALS. HE SUBMITTED FURTHER THAT THE LD CIT( A) WAS NOT JUSTIFIED IN DELETING ADDITIONS MADE ON ACCOUNT OF NON-GENUINE GIFTS AND CASH CREDITS WITHOUT EXAMINING THE GENUINENESS OF THE TRANSACTIONS AND BY IGNORIN G THE FINDINGS GIVEN BY THE HONBLE SUPREME COURT IN THE CASE OF SMT.SUMATI DAY AL V/S. CIT (1995) 214 ITR 801 (S.C). 5. HAVING GONE THROUGH THE ORDERS OF THE LOWER AUTH ORITIES IN VIEW OF THE ABOVE CITED DECISION AND MATERIAL AVAILABLE ON RECORD WE FIND THAT IN THE CASE OF JETHANAND M. JAGWANI THE ASSESSEE SHRI JETHANAND M . JAGWANI CLAIMED TO HAVE RECEIVED GIFT OF RS.8 48 000/- FROM THE DONOR SHRI JAYKUMAR CHANDIRAM IN THE A.Y. 1999-2000 AND GIFTS OF RS. 18 00 000/- FROM THE DON ORS SHRI JAYKUMAR CHANDIRAM (RS. 9 00 000/- + RS. 8 00 000/-) AND SMT. BHAGIBAI JAGWANI (RS. 1 00 000/-) IN THE A.Y. 2000-01. ACTUALLY SEARCH ACTION WAS CARRIED OUT AT THE PREMISES OF SHRI JETHANAND M. JAGWANI AND AT THE PREMISES OF HIS SIX BROTHERS AND CLOSE ASSOCIATED MEMBERS. FROM THE DETAILS GATHERED IT WAS NOTED T HAT DURING THE ASSESSMENT YEARS UNDER CONSIDERATION THE ASSESSEE HAD RECEIVED ABOV E STATED GIFTS. THE A.O DOUBTED GENUINENESS OF THE CLAIMED GIFTS AND ADDED THE AMO UNT DONATED IN THE INCOME OF ITA NO.1764 1765 1768 TO 1770/PN/2007 SHRI JETHANAND M JAGWANI ETC. (A.YS. 1999-00 2000-01 & 2001-02) 3 THE ASSESSEE U/S. 68 OF THE ACT. THE LD. CIT(A) HAS DELETED THE ADDITION IN QUESTION WITH THIS OBSERVATION THAT THE ASESSEE HAS SATISFAC TORILY EXPLAINED THE CREDIT IN AS MUCH AS IDENTITY GENUINENESS AND CREDIT WORTHINESS OF CREDITORS ARE CONCERNED WITH EVIDENCE IN THE SUPPORT. THIS ACTION OF THE LD CIT (A) HAS BEEN QUESTIONED BY THE REVENUE BEFORE THE TRIBUNAL. LIKEWISE IN THE CASE OF SHRI GURUMUK M. JAGWANI THE ASSESSEE CLAIMED TO HAVE RECEIVED GIFT OF RS. 18 48 000/- FROM KASAN BADANI (RS. 5 00 000/- BINAKUMAR BADANI RS. (5 00 000/-) AND JAYKUMAR CHANDIRAM (RS.8 48 000/-) THUS RS. 18 48 000/- IN TOTAL IN T HE A.Y. 1999-2000; OF RS. 12 00 000/- FROM LAJWANI AHUJA (RS. 10 00 000/-) AN D BHAGIBAI JAGWANI (RS. 2 00 000/-) IN A.Y.2000-01 AND OF RS. 1 00 000/- F ROM SANTOSHKUMAR LOKWANI IN A.Y. 2001-02. THE ASSESSEE ALSO CLAIMED TO HAVE RE CEIVED CASH CREDIT OF RS. 75000/- FROM THE CREDITOR SHRI HIRANAND ROHRA IN A .Y. 1999-2000 AND RS. 30 95 000/- FROM BIHARILAL BUDHANI (RS. 11 95 000/- ) SMT. BEENA BADANI (RS.2 00 000/-) GUNGRUMAL CHUG (RS.5 00 000/-) SH ILA BUDHANI (RS.7 00 000/-) AND SMT. SUNAINA BUDHANI (RS. 5 00 000/-) IN A.Y. 2001- 02. THE A.O. DOUBTED THE GENUINENESS OF THESE TRANSACTIONS AND ADDED THE SAM E IN THE INCOME OF THE ASSESSEE. THE LD CIT(A) HAS DELETED THE ADDITIONS M ADE ON ACCOUNT OF GIFTS WITH THE OBSERVATIONS THAT THE ASSESSEE HAS ESTABLISHED THE IDENTITY AND CREDIT WORTHINESS OF THE DONORS AS WELL AS GENUINENESS OF THE TRANSACTIO N. HE HAS ALSO DELETED THE ADDITIONS MADE ON ACCOUNT OF AMOUNT CREDIT IN THE BOOKS OF ACCOUNT AS LOAN ON THE BASIS THAT THE ASSESSEE HAS SATISFACTORILY EXPLAINE D THE CREDIT IN AS MUCH AS IDENTITY GENUINESS AND CREDIT WORTHINESS OF THE CREDITORS. THESE ACTIONS OF THE LD CIT(A) HAS BEEN QUESTIONED BEFORE US. THE MAIN CONTENTION OF THE LD. D.R. REMAINED THAT THE ASSESSES HAVE FAILED TO ESTABLISH THE GENUINENE SS OF THE TRANSACTIONS. 6. WE FIND THAT UNDER SIMILAR FACTS AND CIRCUMSTANC ES IN THE CASE OF SHRI BRIJLAL M. JAGWANI AND SMT. ANITA B. JAGWANI (SUPRA) OF THE GROUP THE TRIBUNAL HAD SET ASIDE THE MATTER TO THE FILE OF THE LD CIT(A) FOR F RESH CONSIDERATION. THE RELEVANT ITA NO.1764 1765 1768 TO 1770/PN/2007 SHRI JETHANAND M JAGWANI ETC. (A.YS. 1999-00 2000-01 & 2001-02) 4 PARA NOS. 8 9 & 10 OF THE SAID ORDER OF THE TRIBUN AL IN THE CASE OF SHRI BRIJLAL M. JAGWANI (SUPRA) ARE BEING REPRODUCED HERE-IN-UNDER FOR READY REFERENCE : 8. WE HAVE HEARD BOTH THE SIDES AT LENGTH AND ALSO CAREFULLY EXAMINED THE ORDERS OF THE AUTHORITIES BELOW IN THE LIGHT O F THE COMPILATION FILED AND THE CASE LAWS CITED. AT THE OUTSET IT APPEARS THA T THE LEARNED CIT(APPEALS) HAS IGNORED THE COMMENTS OF THE CONCERNED ASST.CIT CENTRAL CIRCLE AURANGABAD AS MADE IN THE FORM OF REMAND REPORT DAT ED 22/03/2007 WHEREIN HE HAS ASKED THE ASSESSEE TO SUBMIT THE PAP ER-BOOK WHICH WAS CLAIMED TO HAVE BEEN FURNISHED BEFORE THE FIRST APP ELLATE AUTHORITY. THOUGH THE FIRST APPELLATE AUTHORITY HAS CALLED FOR A REMA ND REPORT BUT ALTOGETHER THERE WAS NO DISCUSSION IN THE IMPUGNED APPELLATE O RDER NOW CHALLENGED BEFORE US. FROM THE SIDE OF THE REVENUE AN OFFICE R OF THE RANK OF ASST.CIT CENTRAL CIRCLE WAS PRESENT BUT THE IMPUGNED ORDER O F THE LEARNED CIT(APPEALS) IS DEVOID OF HIS COMMENTS. THESE ARE FEW FUNDAMENTAL REASONS WHICH COMPELS US TO RATHER CONSIDER TWICE BEFORE AP PROVING IF AT ALL THE VIEW OF LEARNED CIT(APPEALS). 9. AS FAR AS THE FACTS OF THE CASE ARE CONCERNED U NDISPUTEDLY CONFIRMATIONS AFFIDAVITS IDENTITY ETC. WERE VERY MUCH BEFORE THE REVENUE AUTHORITIES BUT IN ADDITION TO THE SAID EVIDENCE T HE LEGAL REQUIREMENT IS SOMETHING ELSE RATHER OVER AND ABOVE THE FULFILLMEN T OF THESE PRELIMINARY CONDITIONS SPECIALLY WHEN THE QUESTION IS AN ACCEPT ANCE OF GIFT U/S. 68 OF THE I.T. ACT 1961. AN ALLEGATION HAS ALSO BEEN MADE BY THE ASSESSING OFFICER THAT HE WANTED THE PRESENCE OF THE MR. SUBHASH BHA TIJA TO BE PRODUCED BY THE ASSESSEE HOWEVER THE SAID DONOR WAS NEVER PRO DUCED. ON ACCOUNT OF THE NON-PRODUCTION OF MR. SUBHASH BHATIJA THE ASSE SSING OFFICER HAS HELD THAT THE GENUINENESS OF THE GIFT REMAINED UNVERIFIE D. AN ANOTHER FACT CAN ALSO NOT BE IGNORED IN RESPECT OF THE GIFTS MADE BY THE DONOR MR.BALDEVKUMAR KEWALRAMANI THAT IMPUGNED AMOUNT OF RS.15 LACS WAS STATED TO BE THE SAME AMOUNT WHICH WAS TRANSFERRED FROM M/S. SAI TRADERS A PROPRIETARY CONCERN OF THE ASSESSEE. HENCE THE STRONG OBJECTION OF T HE ASSESSING OFFICER WAS THAT THE AMOUNT WHICH WAS RECEIVED FROM THE ASSESSE E HAD IN FACT IN TURN GIFTED BY THE SAID DONOR BACK TO THE ASSESSEE. THO UGH THE EXPLANATION WAS THAT THE SAID AMOUNT WAS ADVANCED BY THE DONOR TO T HE ASSESSEE WAY BACK IN THE ASSESSMENT YEAR 2000-01 WHICH WAS ACCEPTED BY T HE REVENUE DEPARTMENT THEREFORE THE SOURCE OF THE SAID GIFT IN THE HANDS OF THE DONOR WAS NOT UNDER CLOUT. THIS WAS THE ONE SIDE OF THE COIN HOWEVER THE OTHER ITA NO.1764 1765 1768 TO 1770/PN/2007 SHRI JETHANAND M JAGWANI ETC. (A.YS. 1999-00 2000-01 & 2001-02) 5 SIDE OF THE COIN HAVE REVEALED DIFFERENT FACTS THAT THERE WAS A PALTRY BANK BALANCE OF RS.12 874/- IN THE ACCOUNTS OF THE DONOR JUST BEFORE THE GIFT. THAT WAS ONE OF THE REASONS THAT THE ASSESSING OFFICER H AS DOUBTED THE GENUINENESS OF THE GIFT. BE THAT AS IT WAS A LEGA L ISSUE HAS YET TO BE ANSWERED AS RAISED BY THE LEARNED AUTHORISED REPRES ENTATIVE OF THE ASSESSEE THAT WHETHER THE PROCEEDINGS INITIATED U/S. 153A CO NSEQUENCE UPON THE SEARCH WERE LEGAL IN VIEW OF THE FACT THAT THE ASS ESSMENT WAS FINALIZED BEFORE THE DATE OF THE SEARCH? THIS LEGAL ASPECT W AS NOT TOUCHED BY THE LEARNED CIT(APPEALS) WHILE DECIDING THE APPEAL HEN CE THIS CAN BE ONE OF THE VALID REASONS TO RESTORE THE ENTIRE ISSUE BACK TO THAT STAGE. WE HAVE ALSO NOTICED AS DISCUSSED ABOVE THAT THE OFFICER OF TH E REVENUE DEPARTMENT WANTED CERTAIN INFORMATION AND THE PAPER-BOOK SO TH AT THE REMAND REPORT COULD BE FURNISHED. HOWEVER THAT ATTEMPT WAS NOT MADE FROM THE SIDE OF THE ASSESSEE AND THE REPRESENTATION FROM THE SIDE O F THE REVENUE REMAINED INCOMPLETE. FOR THIS REASON AS WELL WE DEEM IT JU STIFIABLE TO RESTORE THE ENTIRE ISSUE BACK TO THE STAGE OF LEARNED CIT(APPEA LS) SO THAT NOT ONLY THE ASSESSEE BUT THE REVENUE DEPARTMENT SHOULD ALSO GET FAIR OPPORTUNITY PARTICULARLY TO REPRESENT THEIR RESPECTIVE STANDS B EFORE THE FIRST APPELLATE AUTHORITY. 10. WITH THESE REMARKS WE HEREBY SET ASIDE THE ORD ER OF THE LEARNED CIT(APPEALS) AND RESTORE THE ISSUE BACK TO THAT STA GE TO BE DECIDED DE NOVO AS PER LAW AS WELL AS PER OUR DIRECTIONS. SIMILAR VIEW HAS BEEN FOLLOWED BY THE TRIBUNAL ON THE ISSUE IN THE CASE OF SMT. ANITA B.JAGWANI (SUPRA) VIDE PARA NO. 17 OF THE ORD ER. WE THUS FOLLOWING THE ABOVE DECISIN OF THE TRIBUNAL IN THE CASES OF SHRI BRIJLAL M. JAGWANI AND SMT. ANITA B. JAGWANI (SUPRA) ON AN IDENTICAL ISSUE UNDER THE SIMILAR FACTS AND CIRCUMSTANCES SET ASIDE THE MATTER TO THE FILE OF THE LD. CIT(A) TO DECIDE IT AFRESH AS PER THE ABOVE DIRECTION OF THE TRIBUNAL IN THOSE CASES. THE GROU ND RAISING THE ISSUE OF GENUINENESS OF GIFTS IN THE APPEALS IS THUS ALLOW ED FOR STATISTICAL PURPOSES. 7. ON SIMILAR LINE WE ALSO SET ASIDE THE ISSUE OF GENUINENESS OF THE CASH CREDIT AS HERE-IN ALSO THE THREE INGREDIENTS OF SECTION 68 OF THE ACT I.E. GENUINENESS OF ITA NO.1764 1765 1768 TO 1770/PN/2007 SHRI JETHANAND M JAGWANI ETC. (A.YS. 1999-00 2000-01 & 2001-02) 6 THE TRANSACTION IDENTITY AND CREDIT WORTHINESS OF THE CREDITORS ARE REQUIRED TO BE ESTABLISHED BY THE ASSESSEE AND THE SAME ISSUE IS INVOLVED HERE-IN ALSO AS ABOVE IN THE CASE OF THE CLAIMED GIFTS. THE GROUND NO.1 INVOLVING THE ISSUE OF GENUINENESS OF CASH CREDIT IN THE APPEALS RELATING TO SHRI GURUMUKH JAGWANI IS THUS ALLOWED FOR STATISTICAL PURPOSES. 8. CONSEQUENTLY THE APPEALS ARE ALLOWED FOR STATIS TICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 15TH OCTOB ER 2010 SD/- SD/- (RAJENDRA SINGH) (I.C. SUDHIR) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE DATED THE 15TH OCTOBER 2010 US COPY OF THE ORDER IS FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A)- I NAGPUR 4. CIT (CENTRAL) NAGPUR 5. D.R. ITAT A BENCH 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES PUNE