Seemabanu S. Varteji, Bhavnagar v. The ACIT., Circle-1,, Bhavnagar

ITA 2177/AHD/2007 | 2004-2005
Pronouncement Date: 16-12-2011 | Result: Allowed

Appeal Details

RSA Number 217720514 RSA 2007
Assessee PAN ABCPV0536H
Bench Ahmedabad
Appeal Number ITA 2177/AHD/2007
Duration Of Justice 4 year(s) 6 month(s) 23 day(s)
Appellant Seemabanu S. Varteji, Bhavnagar
Respondent The ACIT., Circle-1,, Bhavnagar
Appeal Type Income Tax Appeal
Pronouncement Date 16-12-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 16-12-2011
Date Of Final Hearing 12-12-2011
Next Hearing Date 12-12-2011
Assessment Year 2004-2005
Appeal Filed On 23-05-2007
Judgment Text
ITA NO S.2177 TO 2179/AHD/2007 ASSESS MENT YEAR 2004-05. 1 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE SHRI G.C. GUPTA V.P. & B.P. JAIN A.M.) SR.NO. ITA NO. ASSESSMENT YEAR APPELLANT RESPONDENT 1. 2177/AHD/2007 2004-05 SEEMABANU S. VARTEJI PLOT NO.36- A DEVBAUG DUDH DAIRY ROAD BHAVNAGAR. PAN:ABCPV0536H ASSISTANT COMMISSIONER OF INCOME-TAX CIRCLE-1 BHAVNAGAR. 2. 2178/AHD/2007 2004-05 KHAIRUNBEN V. VARTEJI LOT NO.36-A DEVBAUG DUDH DAIRY ROAD BHAVNAGAR. PAN:ACKPV3351P -DO- 3. 2179/AHD/2007 2004-05 SAIDABANU S. VARTEJI PLOT NO.36- A DEVBAUG DUDH DAIRY ROAD BHAVNAGAR. PAN:ABJPV 2691N APPELLANT BY : SHRI TUSHAR P. HEMANI RESPONDENT BY : SHRI U.B. MISHRA SR. D.R. DATE OF HEARING : 12-12-2011 DATE OF PRONOUNCEMENT : 16-12-2011 ITA NO S.2177 TO 2179/AHD/2007 ASSESS MENT YEAR 2004-05. 2 ORDER . PER: SHRI B.P. JAIN A.M. THESE THREE APPEALS OF THREE DIFFERENT ASSESSEES HA VE BEEN FILED FROM THE ORDERS OF LD. CIT (A)-XIX AHMEDABAD EACH DATED 30- 3-2007 FOR THE ASSESSMENT YEAR 2004-05. 2. ALL THESE APPEALS ARE BEING DECIDED BY THIS CONS OLIDATED ORDER SINCE ISSUE INVOLVED IN ALL THE APPEALS ARE IDENTICAL ON FACTS. 3. FIRST OF ALL WE TAKE UP THE APPEAL OF THE ASSESS EE KHAIRUNBEN V. VARTEJI IN ITA NO.2178/AHD/2007 AND THE ASSESSEE HAS RAISED FO LLOWING GROUNDS OF APPEAL:- 1. THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS I N CONFIRMING THE ACTION OF AO IN ADDING GIFT RECEIVED BY THE APPELLANT AMOU NTING TO RS.15 LACS UNDER SECTION 68 OF THE ACT. 2. THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF AO IN NOT APPRECIATING THAT THE APPELLANT HAS PR OVED THE IDENTITY GENUINENESS AND CREDITWORTHINESS OF THE DONOR AND T HEREFORE NO ADDITION UNDER SECTION 68 OF THE ACT WAS CALLED FOR. 3. THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF AO IN DISALLOWING A SUM OF RS.77 875/- BEING THE LOSS ON SALE OF MOTOR CAR. 4. BOTH THE LOWER AUTHORITIES HAVE ERRED IN LAW AND ON FACTS IN NOT PROPERLY APPRECIATING AND CONSIDERING VARIOUS SUBMI SSIONS EVIDENCES AND SUPPORTING PLACED ON RECORD DURING THE COURSE OF TH E ASSESSMENT PROCEEDINGS AND NOT PROPERLY APPRECIATING VARIOUS FACTS AND LAW IN ITS PROPER PERSPECTIVE. 5. LEVY OF INTEREST U/S. 234A/B/C OF THE ACT IS NO T JUSTIFIED. ITA NO S.2177 TO 2179/AHD/2007 ASSESS MENT YEAR 2004-05. 3 6. THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE INITIATION OF PENALTY PROCEEDINGS UNDER SECTION 271 (1)(C ) OF THE ACT WITHOUT RECORDING MANDATORY SATISFACTION CONTEMPLATED UNDER THE SAID SECTION. 4. THE ASSESSEE HAS NOT PRESSED GROUND NO.3 AND THE SAME IS DISMISSED AS NOT PRESSED. 5. GROUND NO.4 AND 6 ARE GENERAL IN NATURE AND THER EFORE DO NOT REQUIRE ANY ADJUDICATION. 5. AS REGARDS GROUND NO.5 WHICH IS WITH REGARD TO C HARGING OF INTEREST U/S. 234A 234B AND 234C IS MANDATORY AND CONSEQUENTIAL IN NATURE. 6. THE EFFECTIVE GROUNDS BEFORE US ARE GROUND NO.1 AND 2 AND THE BRIEF FACTS ARE THAT THE ASSESSEE HAD RECEIVED RS. 15 LACS FROM MRS . MUNIRABEN IMTIYABHAI CONTRACTOR RESIDENT OF DUBAI THROUGH DEMAND DRAFT W HICH WAS DATED 24-10-2003 MADE OF AL RAZOUKI INTERNATIONAL EXCHANGE CO. DUBA I. THE ASSESSEE HAD SUBMITTED A GIFT DEED AND COPY OF THE DEMAND DRAFT BEFORE THE AO. THE ASSESSEE SUBMITTED BEFORE THE AO THAT THE DONOR IS NRI AND R ESIDING IN DUBAI AND DOES NOT MAINTAIN ANY BANK ACCOUNT IN DUBAI. THERE IS NO REQ UIREMENT OF MAINTAINING THE BANK ACCOUNT IN DUBAI BEING FREE TRADE ZONE. THE DO NORS HUSBAND MR. IMTIYAZBHAI IS ENGAGED IN THE BUSINESS OF EXPORT AND IMPORT AND TRADING OF PETROLEUM PRODUCTS AND IS PROVIDING EVERY MONTH UAE DIHRAM 25 000 TO H IS WIFE MRS. MUNIRABEN I. CONTRACTOR FOR HOUSEHOLD EXPENSES. MRS. MUNIRABEN IS IN DUBAI WITH HER HUSBAND FOR THE LAST 17 YEARS AND SHE SAVED MONEY OUT OF HE R SAVINGS RECEIVED FROM HER HUSBAND. IT WAS ALSO BROUGHT ON RECORD BY THE AO TH AT THE DONOR MRS. MUNIRABEN I. CONTRACTOR HAD GIVEN A GIFT OF RS.10 LACS EACH BY D EMAND DRAFT DATED 20-10-2003 ITA NO S.2177 TO 2179/AHD/2007 ASSESS MENT YEAR 2004-05. 4 TO SEEMABANU S. VAFRTEJI AND SAIDABANU S. VARTEJI A LSO. THE AO OBSERVED THAT THE ASSESSEE HAS NOT PROVED THE GENUINENESS AND CREDITW ORTHINESS OF THE SO-CALLED DONOR WHO IS NOT MAINTAINING ANY BANK ACCOUNT. REL YING UPON THE DECISION OF ITAT DELHI BENCH IN THE CASE OF D. C. RASTOGI VS. A CIT (57 ITD 295 ) HELD THAT IN CASE OF NRI GIFTS ONUS LIES ON THE ASSESSEE TO ESTABLISH IDENTITY AND CAPACITY OF THE CREDITOR AND THE GENUINENESS OF THE TRANSACTION . MERE FACT OF MONEY HAVING BEEN RECEIVED IN FOREIGN EXCHANGE WOULD NOT BE SUFF ICIENT TO RELIEVE THE ASSESSEE OF THE BURDEN OF ESTABLISHING THE IDENTITY AND FINANCI AL CAPACITY OF THE DONOR AND GENUINENESS OF GIFTS. FURTHER RELYING UPON THE DECI SION OF HONBLE SUPREME COURT IN THE CASE OF SUMATI DAYAL (214 ITR 801) (SC) THE AO OBSERVED THAT THE ASSESSEE HAD NOT ESTABLISHED THE CAPACITY AND THE GENUINENE SS OF THE TRANSACTION AND THEREFORE TREATED THE SAID SUM OF RS.15 LACS RECEIV ED BY THE ASSESSEE AS NOT GENUINE AND ADDED TO THE INCOME OF THE ASSESSEE U/S. 68 OF THE ACT. 7. DURING THE APPELLATE PROCEEDINGS THE ASSESSEE SU BMITTED COPY OF THE PASSPORT OF THE DONOR COPY OF THE BANK ACCOUNT OF THE DONOR S HUSBAND ALONG WITH THE WRITTEN SUBMISSION WHICH WAS SENT TO THE AO THROUG H FORWARDING LETTER DATED 29- 12-2007. THE AO IN THE REMAND REPORT HAD SUBMITTED THAT THERE IS NO EVIDENCE TO LINK WITHDRAWALS MADE BY THE HUSBAND OF THE DONOR F ROM HIS BANK ACCOUNT AND THE ULTIMATE GIFT. THE AO ALSO EXAMINED THE DONOR IN TH E PRESENCE OF HER HUSBAND WHO HAD COME FROM DUBAI TO GIVE THE STATEMENT BEFORE TH E AO IN THE REMAND PROCEEDINGS. THE LD. CIT (A) ON PERUSAL OF THE DOCU MENTS PLACED BEFORE HIM AND THE REMAND REPORT OBSERVED THAT THE ASSESSEE COULD NOT ESTABLISH THE CREDITWORTHINESS OF THE DONOR AND EVEN THE STATEMEN T OF HER HUSBAND IS ALSO NOT HELPFUL IN ESTABLISHING HER CREDITWORTHINESS. RELYI NG ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. DURGA PRASAD M ORE REPORTED IN 82 ITR 540 ITA NO S.2177 TO 2179/AHD/2007 ASSESS MENT YEAR 2004-05. 5 AND IN THE CASE OF SUMATI DAYAL VS. CIT 214 ITR 801 THE LD. CIT (A) CONFIRMED THE ACTION OF THE AO. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THERE IS NO DISPUTE TO THE FACT THAT THE DONOR IN THE PRE SENT CASE IS RELATIVE OF THE DONEE ASSESSEE. THE ASSESSEE HAD SUBMITTED THE NAME AND A DDRESS OF THE DONOR ALONG WITH COPY OF THE GIFT DEED PARSSPORT OF THE DONOR CONF IRMATION AND AFFIDAVIT OF THE DONOR AND COPIES OF BANK ACCOUNT OF THE HUSBAND OF THE DONOR. THE DONOR HAD GIVEN GIFT TO THE ASSESSEE AMOUNTING TO RS.15 LACS VIDE DEMAND DRAFT DATED 24-10- 2003 AND RS.10 LACS TO SEEMABANU S. VARTEJI AND SAI DABANU S. VARTEJI EACH DATED 20-10-2003. THE LD. COUNSEL FOR THE ASSESSEE MR. TU SHAR HEMANI BROUGHT OUR ATTENTION AT PAGES 28 TO 32 OF THE PAPER BOOK WHERE THE BANK STATEMENT OF THE HUSBAND OF THE DONOR HAS BEEN PLACED WHICH REVEALS THE MAJOR WITHDRAWALS FROM 1 ST OCTOBER 2003 TO 24 TH OCTOBER 2003 OF ABOUT RS.2 84 000/- UAE DIHRAM APA RT FROM OTHER WITHDRAWALS. THESE WITHDRAWALS WERE MADE FOR GIVING CASH GIVE TO HIS WIFE APART FROM THE SAVINGS BY HIS WIFE OUT OF THE MONEY GIVEN @ 25 000/- UAE DIHRAM PER MONTH. OUT OF WHICH I.E. 15 000/- UAE D IHRAM WERE GIVEN TO THE PRESENT ASSESSEE AND 10 000/- UAE DIHRAM EACH TO SE EMABANU S.VARGTEJI AND SAIDABANU S. VARTEJI. MOREOVER THE ASSESSEE HAD G IVEN COMPLETE NAME AND ADDRESS OF THE DONOR WHO HAD BEEN ISSUED SUMMONS U/ S.131 OF THE ACT AND HAD BEEN EXAMINED. THE DONEE HAS GIVEN THE STATEMENT BE FORE THE AO IN THE REMAND PROCEEDINGS AND HAD CONFIRMED TO HAVE GIVEN THE GIF T VIDE ANSWER TO QUESTION NO.4. THE DONOR HAS ALSO SUBMITTED THE AFFIDAVITS W HICH WERE ATTESTED BY INDIAN COUNSEL GENERAL AT DUBAI IN THIS REGARD. AS REGARD S ANSWER TO QUESTION NO.5 IN THE REMAND PROCEEDINGS BEFORE THE AO THE DONOR HAS REP LIED THAT NO OTHER GIFTS WERE GIVEN DURING THE YEAR TO ANY RELATIVE IN INDIA CANN OT BE MADE BASIS TO CONFIRM THE ADDITION MADE BY THE AO SINCE THE STATEMENTS TAKEN BY THE AO CANNOT BE TAKEN AS ITA NO S.2177 TO 2179/AHD/2007 ASSESS MENT YEAR 2004-05. 6 MEMORY TEST AND DOCUMENTARY EVIDENCES PLACED ON REC ORD CANNOT BE IGNORED. MOREOVER THE DONOR HAD SUBMITTED AN AFFIDAVIT TO C ORRECT HER STATEMENT GIVEN BEFORE THE AO IN THE REMAND PROCEEDINGS WHICH IS AL SO ON RECORD IS NOT UNDER DISPUTE. BY PERUSING THE BANK STATEMENT OF THE HUS BAND OF THE DONOR THE CONFIRMATION AND AFFIDAVITS GIVEN BY THE DONOR AND ALSO THE STATEMENT RECORDED BY THE AO THE DONOR HAVING CONFIRMED IN THE PRESENCE OF HER HUSBAND WE ARE OF THE VIEW THAT THERE IS NO REASON WITH THE LD. CIT (A) T O CONFIRM THE ACTION OF THE AO. THE ASSESSEE HAS DISCHARGED HER ONUS OF PROVING THE IDENTITY CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION. THEREFORE THE RELI ANCE PLACED BY THE AUTHORITIES BELOW ON THE DECISIONS OF HONBLE SUPREME COURT IN THE CASE OF DURGA PRASAD MORE AND SUMATI DAYAL CANNOT BE OF ANY USE TO THE R EVENUE. ALSO THE DECISION OF ITAT DELHI IN THE CASE OF D.C. RASTOGI CANNOT BE OF ANY HELP TO THE REVENUE. IN THE CIRCUMSTANCES AND FACTS OF THE CASE THE AO IS NOT JUSTIFIED IN TREATING THE SUM OF RS.15 LACS AS UNEXPLAINED AND CANNOT BE ADDED TO THE INCOME OF THE ASSESSEE AND HE IS DIRECTED TO DELETE THE ADDITION SO MADE. THE ORDER OF THE LD. CIT (A) IS ACCORDINGLY REVERSED. 9. THUS APPEAL OF THE ASSESSEE IN ITA NO.2178/AHD/2 007 IS ALLOWED. 10. NOW WE TAKE UP THE APPEAL OF THE ASSESSEE IN I TA NO.2177/AHD/2007. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL :- 1. THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS I N CONFIRMING THE ACTION OF AO IN ADDING GIFT RECEIVED BY THE APPELLANT AMOU NTING TO RS.10 LACS UNDER SECTION 68 OF THE ACT. 2. THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF AO IN NOT APPRECIATING THAT THE APPELLANT HAS PR OVED THE IDENTITY ITA NO S.2177 TO 2179/AHD/2007 ASSESS MENT YEAR 2004-05. 7 GENUINENESS AND CREDITWORTHINESS OF THE DONOR AND T HEREFORE NO ADDITION UNDER SECTION 68 OF THE ACT WAS CALLED FOR. 3. BOTH THE LOWER AUTHORITIES HAVE ERRED IN LAW AND ON FACTS IN NOT PROPERLY APPRECIATING AND CONSIDERING VARIOUS SUBMI SSIONS EVIDENCES AND SUPPORTING PLACED ON RECORD DURING THE COURSE OF TH E ASSESSMENT PROCEEDINGS AND NOT PROPERLY APPRECIATING VARIOUS FACTS AND LAW IN ITS PROPER PERSPECTIVE. 4. LEVY OF INTEREST U/S. 234A/B/C OF THE ACT IS NO T JUSTIFIED. 5. THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE INITIATION OF PENALTY PROCEEDINGS UNDER SECTION 271 (1)(C ) OF THE ACT WITHOUT MANDATORY SATISFACTION CONTEMPLATED UNDER THE SAID SECTION. 11. THE FACTS IN THE PRESENT CASE ARE IDENTICAL TO THE FACTS IN THE CASE OF KHAIRUNBEN V. VARTEJI. THE AO ACCORDINGLY MADE AN A DDITION OF RS.10 LACS IN THIS CASE AND WHICH ACTION OF THE AO WAS CONFIRMED BY LD . CIT (A). 12. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. SINCE THE FACTS IN THE PRESENT CASE ARE IDENTICAL TO THE FACTS IN THE CASE OF KHAIRUNBEN V. VARTEJI IN ITA NO.2178/AHD/2007 OF EVEN DATE HEREIN ABOVE WHICH HAS BEEN DECIDED BY US. FOLLOWING THE SAME WE ALLOW GROUND N O.1 2 AND 3 OF THE ASSESSEE. 13. GROUND NO.4 OF THE ASSESSEE IS WITH REGARD TO T HE CHARGING OF INTEREST U/S. 234A/B & 234C WHICH IS MANDATORY AND CONSEQUENTIAL IN NATURE. 14. AS REGARDS GROUND NO.5 THE SAME IS GENERAL IN N ATURE AND THEREFORE DO NOT REQUIRE ANY ADJUDICATION. 15. THUS APPEAL OF THE ASSESSEE IN ITA NO.2177/AHD /2007 IS ALLOWED. ITA NO S.2177 TO 2179/AHD/2007 ASSESS MENT YEAR 2004-05. 8 16. NOW WE TAKE UP THE APPEAL OF THE ASSESSEE IN IT A NO.2179/AHD/2007. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF AO IN ADDING GIFT RECEIVED BY THE APPELLA NT AMOUNTING TO RS.10 LACS UNDER SECTION 68 OF THE ACT. 2. THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF AO IN NOT APPRECIATING THAT THE APPELLANT HAS PR OVED THE IDENTITY GENUINENESS AND CREDITWORTHINESS OF THE DONOR AND T HEREFORE NO ADDITION UNDER SECTION 68 OF THE ACT WAS CALLED FOR. 3. BOTH THE LOWER AUTHORITIES HAVE ERRED IN LAW AND ON FACTS IN NOT PROPERLY APPRECIATING AND CONSIDERING VARIOUS SUBMI SSIONS EVIDENCES AND SUPPORTING PLACED ON RECORD DURING THE COURSE OF TH E ASSESSMENT PROCEEDINGS AND NOT PROPERLY APPRECIATING VARIOUS FACTS AND LAW IN ITS PROPER PERSPECTIVE. 4. LEVY OF INTEREST U/S. 234A/B/C OF THE ACT IS NO T JUSTIFIED. 5. THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE INITIATION OF PENALTY PROCEEDINGS UNDER SECTION 271 (1)(C ) OF THE ACT WITHOUT MANDATORY SATISFACTION CONTEMPLATED UNDER THE SAID SECTION. 17. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. SINCE THE FACTS IN THE PRESENT CASE ARE IDENTICAL TO THE FACTS IN THE CASE OF KHAIRUNBEN V. VARTEJI IN ITA NO.2178/AHD/2007 OF EVEN DATE HEREIN ABOVE WHICH HAS BEEN DECIDED BY US. FOLLOWING THE SAME WE ALLOW GROUND N O.1 2 AND 3 OF THE ASSESSEE. 18. GROUND NO.4 OF THE ASSESSEE IS WITH REGARD TO T HE CHARGING OF INTEREST U/S. 234A/B & 234C WHICH IS MANDATORY AND CONSEQUENTIAL IN NATURE. ITA NO S.2177 TO 2179/AHD/2007 ASSESS MENT YEAR 2004-05. 9 19. AS REGARDS GROUND NO.5 THE SAME IS GENERAL IN N ATURE AND THEREFORE DO NOT REQUIRE ANY ADJUDICATION. 20. IN THE RESULT THE APPEAL OF THE ASSESSEE IN IT A NO .2177 & 2179/AHD/2007 ARE ALLOWED AND APPEAL IN ITA NO.2178/AHD/2007 IS P ARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 16 - 12 - 2011 . SD/- SD/- (G. C. GUPTA) (B. P. JAIN) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD. S.A.PATKI. COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS)-XIX AHMEDABAD. 4. THE CIT CONCERNED. 5. THE DR. ITAT AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT AHMEDABAD. ITA NO S.2177 TO 2179/AHD/2007 ASSESS MENT YEAR 2004-05. 10 1.DATE OF DICTATION 12 - 12 -2011 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 13 / 12 / 2011 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S 14 -12 -2011. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 16 - 12 -2011 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 16 - 12 -2011 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 16 - 12 -2011. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..