ITO 25(3)(2), MUMBAI v. HARSHA D. SHAH, MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H MUMBAI BEFORE SHRI RAJENDRA SINGH A.M. AND SHRI V. DURGA RAO J.M. ITA NO. 2709/MUM/2010 ASSESSMENT YEAR: 2006-07 INCOME TAX OFFICER APPELLANT 25(3)(2) C-11 R.NO. 306 PRATYAKSHA KAR BHAVAN BANDRA-KURLA COMPLEX BANDRA (EAST). MUMBAI 400 051 VS. SMT. HARSHA D. SHAH RESPONDENT PROP. M/S ZEN COUNTER ZEN BUSINESS CENTRE (BARODA) A-1 NAVRANG BLDG. 3 RD FLOOR PAREKH LANE KANDIVALLI (W) MUMBAI 400 067. APPELLANT BY : MR. SHRAVAN KUMAR RESPONDENT BY : NONE . ORDER PER V. DURGA RAO J.M.: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF CIT(A)- 35 MUMBAI PASSED ON 01/01/2010 FOR THE AS SESSMENT YEAR 2006-07 WHEREIN THE REVENUE HAS RAISED THE FOLLOWIN G GROUNDS OF APPEAL:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW LD. CIT(A) ERRED IN DELETING THE ADDITION MADE IN R ESPECT OF GIFT RECEIVED OF RS. 6 50 000/- WITHOUT APPRECIATING THE FACT THAT DESPITE SEVERAL OPPORTUNITIES GIVEN THE ASSESSEE F AILED TO DISCHARGE THE ONUS OF PROVING THE RELATION BETWEEN THE DONOR AND THE DONEE AND IDENTITY AND CAPACITY OF THE DONOR. ITA NO. 2709/M/2010 SMT. HARSHA D. SHAH 2 2. THE APPELLANT PRAYS THAT THE ORDER OF LD. CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE AO BE RESTORED . 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE IS AN INDIVIDUAL AND SHE FILED HER RETURN OF INCOME ON 3 0/07/2006 DECLARING TOTAL INCOME AT RS. 1 26 416/- WHICH WAS ACCEPTED U/S 143(1) BY THE AO. ON SCRUTINY ASSESSMENT THE AO CO MPLETED ASSESSMENT U/S 144 OF THE ACT DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS. 8 74 127/-. THE AO NOTICED THAT THE ASSESSEE RECEIVED GIFT OF RS. 3 50 000/- FROM AMRUTBAI DHANJI SHAH AN D RS. 3 00 000/- FROM DHANJI HANSRAJ SHAH AS PER CAPITAL ACCOUNT. SI NCE THE ASSESSEE DID NOT FILE THE DETAILS AS TO WHO THEY ARE AND HOW THEY ARE RELATED TO THE ASSESSEE AND HOW THE GIFTS WERE GIVEN THE AO A DDED THE SAID AMOUNTS OF RS. 6 50 000/- TO THE TOTAL INCOME OF TH E ASSESSEE AS UNEXPLAINED CREDIT. BEFORE THE CIT(A) THE LEARNED AR OF THE ASSESSEE SUBMITTED THAT VIDE LETTER DATED 20/11/2008 THE ASS ESSEE HAD ALREADY FILED THE PAN NO. OF THE DONORS BEFORE THE AO AND T HE AO COULD HAVE VERIFIED THE GIFT WITH RESPECT TO THE RETURNS FILED BY THE DONORS. HE FURTHER SUBMITTED COPIES OF RETURNS FILED BY DHANJ I HANSRAJ SHAH THE ASSESSEES FATHER ON 30/07/2006 WITH ITO-25(3)(2) IN WHICH AS PER THE CAPITAL ACCOUNT A SUM OF RS. 3 00 000/- WAS WIT HDRAWN TOWARDS GIFT TO THE ASSESSEE AND A COPY OF RETURN FILED BY AMRUTBAI DHANJI SHAH MOTHER ON 30/07/06 WITH ITO-25(3)(3) FROM WHI CH IT IS SEEN THAT AS PER THE CAPITAL ACCOUNT A SUM OF RS. 3 50 000/- WAS GIVEN TO THE ASSESSEE BY WAY OF GIFT. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE THE CIT(A) DELETED THE ADDITION MADE BY T HE AO ON THE GROUND THAT THE IF THE AO DOUBTED THE GENUINENESS O F THE GIFT HE COULD HAVE VERIFIED THE SAME WITH REFERENCE TO THE RETURNS FILED BY THE DONORS AS IN FACT THE ASSESSEE RECEIVED GIFT FROM H IS MOTHER AND FATHER WHO WERE ALREADY ASSESSED TO INCOME TAX IN SAME RAN GE AS PER THE RETURNS FILED BY THEM AND AS PER THE RETURNS FILED BY THEM THE GIFTS TO THE ASSESSEE WERE ENTERED IN THEIR CAPITAL ACCOUNTS . ITA NO. 2709/M/2010 SMT. HARSHA D. SHAH 3 3. NONE APPEARED ON BEHALF OF THE RESPONDENT-ASSESS EE AT THE TIME OF HEARING BEFORE US. HOWEVER WE PROCEED TO DECIDE THIS APPEAL AFTER HEARING THE LEARNED DR AND ON MERIT. 4. AFTER HEARING THE LEARNED DR AND PERUSING THE RE LEVANT MATERIAL ON RECORD IT IS OBSERVED THAT THE AO BEFORE MAKING ADDITION MADE A REMARK IN THE ASSESSMENT ORDER THAT THE ASSESSEE DI D NOT FILE THE DETAILS AND FAILED TO DISCHARGE ONUS OF PROVING THE RELATION BETWEEN THE DONOR AND THE DONEE AND IDENTITY AND CAPACITY O F THE DONOR. ON THE OTHER HAND THE CIT(A) DELETED THE ADDITION BY HOLDING THAT THE ASSESSEE HAD GIVEN COMPLETE DETAILS ABOUT THE GIFT WHICH WAS RECEIVED FROM FATHER AND MOTHER WITHOUT GIVING BASIS OF SUCH FINDING. HOWEVER THE CIT(A) HAS NOT CALLED FOR ANY REMAND REPORT FRO M THE AO TO ASCERTAIN WHETHER THE DETAILS FILED BY THE ASSSSEE ARE GENUINE OR NOT. IN THESE CIRCUMSTANCES WE REMIT THE MATTER BACK TO THE FILE OF THE AO TO DECIDE THE ISSUE AFRESH AFTER EXAMINING ALL THE DETAILS IN RESPECT OF THE GIFT RECEIVED BY THE ASSESSEE AND THE ASSESSEE IS REQUIRED TO DISCHARGE ONUS OF PROVING THE RELATION BETWEEN THE DONOR AND THE DONEE AND IDENTITY AND CAPACITY OF THE DONORS BY WA Y OF FILLING THE DETAILS IN SUPPORT OF HER CASE. NEEDLESS TO SAY TH E AO SHALL PROVIDE REASONABLE OPPORTUNITY OF HEARING THE ASSESSEE IN T HE MATTER. 5. IN THE RESULT THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 25 TH DAY OF FEBRUARY 2011. SD/- SD/- (RAJENDRA SINGH) (V. DU RGA RAO) ACCOUNTANT MEMBER JUDI CIAL MEMBER MUMBAI DATED: 25 TH FEBRUARY 2011 ITA NO. 2709/M/2010 SMT. HARSHA D. SHAH 4 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) CONCERNED. 4) THE CIT CONCERNED. 5) THE DEPARTMENTAL REPRESENTATIVE H BENCH I.T .A.T. MUMBAI. BY ORDER //TRUE COPY// ASST. REGISTRAR I.T.A.T. MUMBAI. KV