ITO, New Delhi v. M/s Pawan Wadhwa, HUF,, Gurgaon

ITA 2904/DEL/2009 | 2004-2005
Pronouncement Date: 22-01-2010 | Result: Allowed

Appeal Details

RSA Number 290420114 RSA 2009
Assessee PAN AAEHP7705H
Bench Delhi
Appeal Number ITA 2904/DEL/2009
Duration Of Justice 7 month(s) 5 day(s)
Appellant ITO, New Delhi
Respondent M/s Pawan Wadhwa, HUF,, Gurgaon
Appeal Type Income Tax Appeal
Pronouncement Date 22-01-2010
Appeal Filed By Department
Order Result Allowed
Bench Allotted F
Tribunal Order Date 22-01-2010
Date Of Final Hearing 18-01-2010
Next Hearing Date 18-01-2010
Assessment Year 2004-2005
Appeal Filed On 16-06-2009
Judgment Text
I.T.A. NO. 2904/DEL/2009 1/8 IN THE INCOME TAX APPELLATE TRIBUNAL NEW DELHI BENCH F BEFORE SHRI K D RANJAN ACCOUTANT MEMBER AND SHRI GEORGE MATHAN JUDICIAL MEMBER ITA NO. 2904 /DEL/2009 (ASSESSMENT YEAR 2004-05) ITO WARD 20(4) VS. M/S. PAWAN WADHWA (HUF) NEW DELHI B-551 SUSHANT LOK-I GURGAON I.T.A. NO. 2905/DEL/2009 (ASSESSMENT YEAR 2004-05) ITO WARD 20(4) VS MRS. SAPNA WADHWA NEW DELHI B-551 SUSHANT LOK-I GURGAON (APPELLANTS) (RESPONDENTS) PAN / GIR NO. AAEHP7705H APPELLANT BY: SMT. SUNITA SINGH SR. DR RESPONDENT BY: SHRI G N GUPTA ADV. ORDER PER GEORGE MATHAN JM: 1. THESE ARE TWO CONNECTED APPEALS FILED BY THE REV ENUE AND ARE BEING DISPOSED OFF BY COMMON ORDER. I.T.A. NO. 2904/DEL/2009 IS THE APPEAL BY THE REVENUE AGAI NST THE ORDER OF LD. CIT(A)-XXII NEW DELHI IN APPEAL NO.230/2006-07 DATED 13.04.2009 FOR THE ASSESSMENT YEAR 2004-05 AND I.T.A. NO. 2905/DEL/2009 IS APPEAL BY THE REVENUE FILED AGAINST THE ORDER OF LD. CIT(A ) I.T.A. NO. 2904/DEL/2009 2/8 XXII NEW DELHI IN APPEAL NO.231/2006-07 DATED 13.04.2009 FOR THE ASSESSMENT YEAR 2004-05. SMT. SUNITA SINGH SR. DR REPRESENTED FOR THE REVENUE AN D SHRI G N GUPTA ADVOCATE REPRESENTED FOR THE ASSESS EE. 2. IN BOTH THE APPEALS THE ISSUE INVOLVED IS THAT THE REVENUE HAS CHALLENGED THE ACTION OF LD. CIT(A) IN DELETING THE ADDITION OF RS.14 LACS MADE BY THE A.O . ON ACCOUNT OF UNEXPLAINED GIFTS. IT WAS THE SUBMISSIO N BY THE LD. D.R. THAT THE ASSESSEES HAD FILED THEIR RET URNS OF INCOME WHEREIN THEY HAD SHOWN RECEIPT OF GIFTS FROM RELATIVES AND FRIENDS. IT WAS THE SUBMISSION THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEES HAD BEEN ASKED TO PRODUCE THE DONORS FOR EXAMINATION. IT WAS THE SUBMISSION THAT IN THE CASE OF M/S. PAWAN WADHWA HUF THE ASSESSEE HAD NOT PRODUCED ANY OF THE DONORS WHO ARE THE FRIENDS OF THE KARTA OF THE HUF. THE ASSESSEE HAD ONLY PRODUCED THE RELATIVE BEING T HE MOTHER-IN-LAW OF THE KARTA OF THE HUF WHO HAD CONFIRMED THE TRANSACTION AND THE SAME WAS ACCEPTED . IN THE CASE OF MRS. SAPNA WADHWA HER FATHER SHRI INDER MOHAN HAD APPEARED AND HAD CONFIRMED THE TRANSACTION AND THE SAME HAS BEEN ACCEPTED AS GENUI NE. IN SO FAR AS THE GIFTS RECEIVED BY BOTH THE ASSESSE ES FROM THE FRIENDS NONE OF THE DONORS HAD APPEARED NOR RESPONDED TO THE NOTICES ISSUED U/S 131 AND CONSEQUENTLY THE A.O. HAD TREATED THE GIFTS AS BOG US. I.T.A. NO. 2904/DEL/2009 3/8 IT WAS THE SUBMISSION THAT THE CIT(A) HAD GIVEN FIN DING THAT THE A.O. HAD NOT USED HIS POWERS U/S 131 AND 133(6) TO VERIFY THE GENUINENESS OF THE CLAIM OF TH E ASSESSEES BY VERIFYING THE DOCUMENTS FURNISHED BY T HEM WERE WRONG. IT WAS THE SUBMISSION THAT NOTICES U/S 133(6) HAD BEEN ISSUED AND EVIDENCES IN THE FORM OF BANK ACCOUNTS EXTRACT OF VARIOUS DONORS HAD BEEN OBTAINED AND ALL THE BANK ACCOUNTS SHOWED CASH HAVI NG BEEN INTRODUCED AND WITHDRAWN IMMEDIATELY THEREAFTE R LEAVING NOMINAL BALANCE. IT WAS ALSO THE SUBMISSIO N THAT THE NOTICES ISSUED U/S 131 DIRECTLY AND THROUG H REPRESENTATIVES OF THE ASSESSEES WERE NOT COMPLIED WITH AND NONE OF THE DONORS HAD ALSO APPEARED. IT WAS T HE FURTHER SUBMISSION THAT THE STATEMENTS HAD BEEN RECORDED FROM THE KARTA OF M/S. PAWAN WADHWA HUF AS ALSO MRS. SAPNA WADHWA AND THEY HAD ALSO UNDERTAKEN TO PRODUCE THE DONORS BY 08.12.2006 AND THIS WAS ALSO NOT DONE. IT WAS THE SUBMISSION THAT THE ORDER OF THE LD. CIT(A) WAS LIABLE TO BE REVERSED. 3. IN REPLY THE LD. A.R. SUBMITTED THAT THE ASSESS EE HAD PRODUCED THE PAN OF THE DONORS COPIES OF THEIR INC OME TAX RETURNS AS ALSO THEIR RATION CARDS COPIES. IT WAS THE FURTHER SUBMISSION THAT THE FACT THAT BANK ACCOUNTS OF THE DONORS WERE OBTAINED BY THE A.O. BEHIND THE BAC K OF THE ASSESSEE BY INVOKING THE POWERS AVAILABLE TO THE A.O. U/S 133(6) OF THE ACT SHOWS THAT THE DONORS DI D I.T.A. NO. 2904/DEL/2009 4/8 EXIST. IT WAS THE FURTHER SUBMISSION THAT THE FACT THAT THERE WAS SUBSTANTIAL TRANSACTION IN THE ACCOUNTS O F THE DONORS WENT TO PROVE THAT THE GIFTS RECEIVED BY THE ASSESSEES WERE GENUINE. IT WAS THE SUBMISSION THAT THE NOTICE ISSUED U/S 131 DID NOT GIVE ADEQUATE TIME FO R THE DONORS TO APPEAR AND CONSEQUENTLY THE DONORS COULD NOT APPEAR. IT WAS ALSO THE SUBMISSION THAT THOUGH THE ASSESSEES HAD UNDERTAKEN TO PRODUCE THE DONORS TH E SAME COULD NOT BE DONE DUE TO PAUCITY OF TIME. IT WAS THE SUBMISSION THAT THE CIT(A) HAD APPRECIATED ALL THE EVIDENCES AND HAD RIGHTLY DELETED THE ADDITIONS. H E FURTHER SUBMITTED THAT THE PAN OF THE DONORS HAVE B EEN PRODUCED AND THIS PROVES THE IDENTITY OF THE DONORS . THE AFFIDAVITS AND THE GIFT DEEDS HAVING BEEN PRODU CED FROM THE RESPECTIVE DONORS THE GENUINENESS OF THE GIFTS WAS LIABLE TO BE ACCEPTED AND THE FACT THAT THE BAN K ACCOUNTS OF THE DONORS DID HAVE SUBSTANTIAL TRANSAC TION CORROBORATE THE FACT THAT THE DONORS WERE CREDITWOR THY. IT WAS THE SUBMISSION THAT THE ASSESSEE HAD ALSO PRODUCED THE WEALTH TAX RETURNS OF THE DONORS WHIC H SHOWED THAT THE DONORS HAD ADEQUATE NET WORTH. IT WAS THE SUBMISSION THAT AS THE ASSESSEES HAD PROVED THE GENUINENESS CREDITWORTHINESS AND THE IDENTITY OF T HE DONORS THE ORDERS OF THE LD. CIT(A) IN DELETING TH E ADDITION WERE LIABLE TO BE UPHELD. HE ALSO DREW OU R ATTENTION TO THE COPIES OF THE AFFIDAVITS AND THE R ETURNS I.T.A. NO. 2904/DEL/2009 5/8 FILED BY THE VARIOUS DONORS IN THE PAPER BOOK. IN REPLY THE LD. D.R. SUBMITTED THAT BY FILING THE PAN AND T HE AFFIDAVITS OF THE DONORS THE RESPONSIBILITY OF THE ASSESSEES DID NOT REST. IT WAS THE SUBMISSION THAT THE A.O. HAD SPECIFICALLY ASKED FOR THE PERSONAL ATTEND ANCE OF THE DONORS FOR VERIFICATION AND THIS HAVING NOT BEEN DONE THE ASSESSEES COULD NOT BE HELD TO HAVE DISCH ARGED THEIR ONUS OF HAVING PROVED THE GIFTS RECEIVED BY T HE ASSESSEES. IT WAS THE SUBMISSION THAT THE ISSUE IN THESE APPEALS MAY BE RESTORED TO THE FILE OF THE A.O. TO GRANT THE ASSESSEES ADEQUATE OPPORTUNITY TO PRODUCE THE DONORS FOR EXAMINATION. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE HAVE ALSO PERUSED THE PAPER BOOK WHICH HAVE BEEN FILED IN BOTH THE CASES. IT IS NOTICED IN BOTH THE CASES TH AT THE STATEMENTS HAD BEEN RECORDED FROM THE ASSESSEES. I N BOTH THE CASES THE ASSESSEES HAD CONFIRMED THAT TH EY WOULD PRODUCE DONORS FOR EXAMINATION. HOWEVER IT I S NOTICED THAT THE DONORS HAD NOT BEEN PRODUCED. IT IS ALSO NOTICED THAT THOUGH THE LD. A.R. HAS SPECIFICA LLY MADE AVERMENTS THAT THE PAN HAVE BEEN PRODUCED AND THAT THE COPIES OF INCOME TAX RETURNS AND WEALTH TA X RETURNS OF THE DONORS HAVE BEEN PRODUCED IT IS NOTI CED THAT THE PAN HAVE BEEN PRODUCED BEFORE THE A.O. HOWEVER IN RESPECT OF THE INCOME TAX RETURNS AND WEALTH TAX RETURNS WHICH HAVE BEEN PRODUCED IT IS I.T.A. NO. 2904/DEL/2009 6/8 NOTICED THAT THE ASSESSMENT YEAR INVOLVED IS 2004-0 5 WHEREAS THE INCOME TAX RETURNS AND WEALTH TAX RETUR NS WHICH HAVE BEEN PRODUCED ARE OF 1999-2000 2001-02 AND 2002-03. NO COPY OF INCOME TAX RETUNS / WEALTH TAX RETURNS FOR THE RELEVANT ASSESSMENT YEAR 2004-05 IN RESPECT OF ANY DONOR ARE AVAILABLE IN EITHER OF THE CASES. OBVIOUSLY WHEN THE DONORS ARE FILING WEALTH TAX RET URNS AS ALSO THE INCOME TAX RETURNS THE FACTUM OF THE G IFTS WOULD BE RECORDED IN THEIR INCOME TAX AND WEALTH TA X RETURNS IF SUCH GIFTS IS GIVEN. THIS EVIDENCE IS CONSPICUOUS BY ITS ABSENCE. IN FACT IN RESPECT OF THE GIFTS WHICH HAVE BEEN ACCEPTED BY THE A.O. IN THE COURSE OF ASSESSMENT IT IS NOTICE THAT THE RETURN OF RELATIVES BEING THE MOTHER IN-LAW OF KARTA OF HUF IN THE CASE OF PAWAN WADHWA AND THE FATHER OF THE ASSESSEE IN THE CASE OF SMT. SAPNA WADHWA HAVE FIL ED THE RETURNS SHOWINGS THE FACTUM OF THE GIFTS. MERE FILING OF AFFIDAVIT WHICH IS NOT SUPPORTED BY THE P HYSICAL PRESENCE OF THE DEPONENT OF THE AFFIDAVIT WHEN DEMANDED FOR SPECIALLY WHEN THE AFFIDAVIT HAS BEEN GIVEN FOR THE PARTICULAR PURPOSE AND THE PRESENCE O F THE DEPONENT HAS BEEN DEMANDED FOR THAT VERY PARTICULAR PURPOSE IT CANNOT BE SAID THAT THE FILING OF AFFID AVIT PROVES THE GENUINENESS OF THE TRANSACTION. A PERUS AL OF THE NOTICES ISSUED U/S 131 ALSO SHOWS THAT ADEQUATE TIME HAS NOT BEEN GRANTED TO THE PERSONS THROUGH THE NOT ICES I.T.A. NO. 2904/DEL/2009 7/8 U/S 131. RECEIPT OF AN AMOUNT BY CHEQUE OR BANK DR AFT ALONE ALSO DOES NOT CONFIRM THE GENUINENESS OF TRANSACTION. THE FACT THAT THE COPY OF RETURNS OF THE DONORS FOR THE RELEVANT ASSESSMENT YEAR HAVE NOT BE EN PRODUCED ALSO PUT TO DOUBT THE GENUINENESS OF THE GIFTS. EVEN THOUGH THE ASSESSEES CANNOT BE HELD RESPONSIB LE FOR THE ACT OF THE DONORS IN THEIR BANK ACCOUNTS ST ILL THE FACT THAT THE A.O. HAS SPECIFICALLY BROUGHT OUT THA T THE DONORS HAVE INTRODUCED LARGE AMOUNTS IN THE FORM OF CASH AND WITHDRAWN THE SAME IMMEDIATELY THEREAFTER BY CHEQUE AND OTHER BANKING PROCEDURES THROW DOUBT ON THE CREDITWORTHINESS OF THE DONORS ESPECIALLY IN VI EW OF THE FACT THAT ONLY NOMINAL AMOUNTS ARE RETAINED IN THE BANK ACCOUNTS. HOWEVER CONSIDERING THE SUBMISSION S OF THE LD. A.R. AND THE LD. D.R. AS ALSO THE FACT T HAT THE CLAIMS OF THE ASSESSEES THAT ADEQUATE TIME HAD NOT BEEN GRANTED TO THE ASSESSES TO PRODUCE THE DONORS TO SUBSTANTIATE ITS CASE OF GIFTS WE ARE OF THE VIEW THAT THE ASSESSEE SHOULD BE GRANTED ONE MORE OPPORTUNITY TO PRODUCE THE DONORS. THIS IS ALSO BECAUSE IN BOT H THE CASES THE ASSESSEES HAVE CONFIRMED THAT THEY WOULD PRODUCE THE DONORS FOR EXAMINATION. IN THESE CIRCUMSTANCES THE ISSUE IN THESE APPEALS BEING IN R ESPECT OF THE GIFTS RECEIVED BY THE ASSESSEES IS RESTORED TO THE FILE OF THE A.O. FOR RE-ADJUDICATION. THE A.O. SHA LL GRANT THE ASSESSEES ADEQUATE OPPORTUNITY TO PRODUCE THE I.T.A. NO. 2904/DEL/2009 8/8 DONORS FOR EXAMINATION. THE A.O. IS ALSO AT LIBERT Y TO CALL FOR THE RETURNS OF THE DONORS FROM THEIR RESPE CTIVE ASSESSING AUTHORITIES ON THE BASIS OF PAN PROVIDED BY THE ASSESSEES. THE ASSESSEES SHALL COOPERATE IN TH E SET ASIDE PROCEEDINGS AND PRODUCE THE DONORS FOR EXAMINATION. IF THE ASSESSEES FAIL TO PRODUCE THE DONORS FOR EXAMINATION THE A.O. SHALL BE AT LIBERTY TO DR AW ADVERSE INFERENCE. IN THESE CIRCUMSTANCES BOTH TH E APPEALS OF THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. 5. IN THE RESULT BOTH THE APPEALS OF THE REVENUE S TAND ALLOWED FOR STATISTICAL PURPOSES. 6. THIS DECISION WAS PRONOUNCED IN THE OPEN COURT O N 22 ND JAN. 2010. SD./- SD./- (K. D. RANJAN) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:22 ND DEC. 2009 SP. COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT TRUE COPY: BY ORDER 4. CIT(A) 5. DR DY. REGISTRAR ITAT NEW DELHI