USHA A. SHAH, MUMBAI v. ITO 24(2)-4, MUMBAI

ITA 3501/MUM/2008 | 2004-2005
Pronouncement Date: 25-02-2011 | Result: Partly Allowed

Appeal Details

RSA Number 350119914 RSA 2008
Assessee PAN THFEB2011S
Bench Mumbai
Appeal Number ITA 3501/MUM/2008
Duration Of Justice 2 year(s) 9 month(s) 4 day(s)
Appellant USHA A. SHAH, MUMBAI
Respondent ITO 24(2)-4, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 25-02-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted F
Tribunal Order Date 25-02-2011
Date Of Final Hearing 15-11-2010
Next Hearing Date 15-11-2010
Assessment Year 2004-2005
Appeal Filed On 21-05-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F MUMBAI BEFORE SHRI S V MEHROTRA ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO JUDICIAL MEMBER ITA NO. 3501/MUM/2008 (ASSESSMENT YEAR 2004-05) USHA A SHAH 403 ASHOK PALACE JITENDRA ROAD MALAD (E) MUMBAI-400097 PAN:AAQOS1855B . APPELLANT VS INCOME TAX OFFICER WARD 24 (2)(4) C-13 BUILDING 6 TH FL. BANDRA KURLA COMPLEX BANDRA (E) MUMBAI-400051 .RESPONDENT APPELLANT BY : SHRI VIJAY MEHTA RESPONDENT BY : SMT.ASHIMA GUPTA O R D E R PER VIJAY PAL RAO JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 28.03.2008 OF CIT(A) FOR THE ASSESSME NT YEAR 2004-05. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS : 1A. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN IN LAW THE LD. CIT(A) ERRED IN CONFIRMING THE ADDIT ION OF RS.9 00 000/- U/S 68 OF IT ACT. ITA NO. 3501/MUM/2008 (ASSESSMENT YEAR 2004-05) 2 1B. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN IN LAW THE AO AS WELL AS LD. CIT(A) FAILED TO APPRECIATE THE ASSESSMENT RECORDS OF THE DONOR AND ERRONEOUSLY HELD THAT THE IDENTITY OF THE DONOR IS NOT ESTABLISHED BECAUSE THE DONOR WAS NOT PRODUCED BEFORE THE AO; 1C. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN IN LAW THE LD. CIT(A) ERRED IN NOT CONSIDERING TH E DECLARATION MADE BEFORE NOTARY PUBLIC IN USA AND ERRED IN HOLDING THAT THE IDENTITY OF THE DONOR IS NOT ESTABLISHED; 1D. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN IN LAW THE LD. CIT(A) FAILED TO APPRECIATE THE FA CT THAT THE DONOR IS CAPABLE OF GIVING THE GIFT OF RS.9.00 LAKHS WHEN HE HAD A CAPITAL OF RS.6 CRORES AT THE BEGINNING OF THE YEAR AND FURTHER CIT(A) ERRED IN DRAWING ADVERSE INFERENCE BECAUSE OF MEAGER INCOME RECEIVED BY THE DONOR DURING THE YEAR UNDER CONSIDERATION; 2B. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN IN LAW THE LD. CIT(A) ERRED IN HOLDING THAT THE AL LEGED NOTICE U/S 143(2) MIGHT HAVE BEEN SERVED IN TIME HENCE THE ASSESSMENT ORDER IS VALID ORDER; 2B. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN IN LAW THE LD. CIT(A) ERRED IN HOLDING THAT SINCE THE APPELLANT HAD ATTE3NDED THE ASSESSMENT PROCEEDINGS AFTER THE ISSUE OF SO CALLED NOTICE U/S 143(2) HENC E NO PREJUDICE WAS CAUSED TO THE APPELLANT BY THE IRREGULARITY IN ISSUE OF THE NOTICE; 2C ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN IN LAW THE LD. CIT(A) FAILED TO APPRECIATE IN RESP ONSE TO THE NOTICE U/S 142(1) OF THE IT ACT DATED 5.8.20 05 AND FURTHER FAILED TO APPRECIATE THE FACT THAT THE STATUTORY REQUIREMENT FOR ISSUE OF THE NOTICE U/S 143(2) WITHIN THE TIME HAS NOT BEEN COMPLIED WITH 2D ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN IN LAW THE LD. CIT(A) ERRED IN ACCEPTING REMAND REPORT SUBMITTED BY THE LD. AO AND FAILED TO APPRECIATE THE FACT THAT THE NOTICE U/S 143(2) WAS REALLY ISSUED ON 29 TH JULY 2005 OR NOT ITA NO. 3501/MUM/2008 (ASSESSMENT YEAR 2004-05) 3 3. GROUNDS OF APPEAL NO.1A AND 2A ARE THE MAIN GRO UNDS OF APPEAL AND OTHER GROUNDS ARE IN THE NATURE OF A RGUMENT AND SUPPORTIVE TO THESE GROUNDS. 4. FIRST WE WILL TAKE GROUNDS OF APPEAL NO.2 REGAR DING THE VALIDITY OF THE ASSESSMENT ORDER. 4.1 THE ASSESSEE FILED RETURN OF INCOME ON 21.7.200 4. THE RETURN OF INCOME WAS PROCESSED U/S 143(1) AND SUBSE QUENTLY THE CASE WAS TAKEN UP FOR SCRUTINY U/S 143(2) AND NOTICE WAS ISSUED ON 29.7.2005. THE ASSESSMENT WAS COMPLETED ON 24.11.2006 BY MAKING THE ADDITION OF RS.9 LAKHS WI TH RESPECT TO THE GIFT TREATING IT AS A INCOME FROM OTHER SO URCES. THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER BEFORE THE CIT(A) AND TOOK THE GROUND AGAINST THE VALIDITY OF THE ASS ESSMENT ORDER ON THE BASIS THAT THE NOTICE U/S 143(2) WAS NOT SERVED ON THE ASSESSEE IN TIME. THE CIT(A) REJECTED THE G ROUND TAKEN BY THE ASSESSEE RAISED AGAINST THE VALIDITY O F THE ASSESSMENT AND HELD THAT THE ASSESSMENT WAS VALID. 4.2 BEFORE US THE LEARNED AR OF THE ASSESSEE HAS SUBMITTED THAT THERE WAS A FLOOD IN MUMBAI ON 2 6.7.2005 AND THEREFORE NOTICE ISSUED ON 29.7.2005 COULD NOT BE SERVED ITA NO. 3501/MUM/2008 (ASSESSMENT YEAR 2004-05) 4 ON THE ASSESSEE TILL 31.7.2005. HE HAS FURTHER SU BMITTED THAT EVEN OTHERWISE 30.7.2005 AND 31.7.2005 BEING SATUR DAY AND SUNDAY THERE WAS NO POSSIBILITY OF SERVICE OF NOTI CE BEFORE E EXPIRY OF LIMITATION PERIOD ON 31.7.2005. HE HAS FURTHER CONTENDED THAT DURING THE APPELLATE PROCEEDINGS BE FORE THE CIT(A) THE REMAND ORDER WAS PASSED AND IN THE REMA ND REPORT THE AO HAS STATED THAT THE NOTICE U/S 143( 2) WAS ISSUED BY THE SPEED POST ON 29.7.2005. HE HAS ENCL OSED THE POSTAL RECEIPT DATED 29.7.2005. THE LEARNED AR HA S POINTED OUT THAT THE POSTAL RECEIPT ATTACHED BY THE AO I S NOT FOR THE SPEED POST BUT IT IS FOR THE REGISTERED POST THERE FORE THE REMAND REPORT OF THE AO IS NOT BASED ON THE CORRECT FACT. THE LEARNED AR HAS SUBMITTED THAT THE ASSESSEE HAS FILE D THE AFFIDAVIT DATED 23.7.2009 WHEREIN THE ASSESSEE HAS STATED THAT SHE HAS NOT RECEIVED ANY SUCH NOTICE U/S 143( 2) HENCE THE QUESTION OF SERVING THE NOTICE DOES NOT ARISE. THE LEARNED AR OF THE ASSESSEE HAS THEN REFERRED THE S ECTION 27 OF GENERAL CLAUSE ACT 1897 AND SUBMITTED THAT THE REVENUE HAS FAILED TO PROVE THAT THE NOTICE WAS SENT ON COR RECT AND PROPER ADDRESS. IN ABSENCE OF SATISFYING THE CON DITIONS PROVIDED U/S 27 OF GENERAL CLAUSES ACT 1897 IT CA NNOT BE PRESUMED AS PROPER NOTICE. HE HAS RELIED UPON THE DECISION OF THE HON. DELHI HIGH COURT IN THE CASE OF NULON INDIA LTD V/S INCOME TAX OFFICER REPORTED IN 183 TAXMAN 229 (DELHI) ITA NO. 3501/MUM/2008 (ASSESSMENT YEAR 2004-05) 5 AND THE DECISION OF THE PATNA BENCH OF THIS TRIBUN AL IN THE CASE OF ASIAN AUTOMOBILE PVT. LTD REPORTED IN 128 TTJ PAT 589. HE HAS ALSO RELIED UPON THE DECISION OF THE HON. PUNJAB AND HARYANA HIGH COURT IN THE CASE OF CIT V/S CEB ON INDIA LTD REPORTED IN 184 TAXMAN 290. 4.3 THE LEARNED AR HAS SUBMITTED THAT WHEN THERE I S NO NOTICE AT ALL THEN THE QUESTION OF SERVING OF NOTI CE WITHIN THE LIMITATION DOES NOT ARISE AND ACCORDINGLY THE ASS ESSMENT WITHOUT PROPER NOTICE IS BAD IN LAW. IT IS FURTH ER CONTENDED THAT THE NOTICE U/S 143(2) IS MANDATORY PROVISIONS AND THEREFORE IT GIVES THE JURISDICTION TO THE AO TO FRAME THE ASSESSMENT. IN ABSENCE OF NOTICE THERE CANNOT BE ANY ASSESSMENT. THE LEARNED AR ALSO REFERRED THE CITI ZENS CHARTER INDIA POST AND SUBMITTED THAT AS PER THE D ELIVERY STANDARDS TABLES FOR POSTAL AND RURAL POSTAL PROD UCT AND SERVICES THE STANDARD TIME PERIOD IS PRESCRIBED AS TWO DAYS FOR DELIVERY OF MAIL WITHIN THE CITY OR INTER METR O CITIES. IN THE CASE OF ANY NOTICE SENT THROUGH THE REGISTERED POS T. THEREFORE AS PER THE DELIVERY STANDARD TIME THE DELIVERY IN THIS CASE WAS NOT POSSIBLE UP TO 31.7.2005 BECAUSE 31.7.2005 WAS A SUNDAY. ITA NO. 3501/MUM/2008 (ASSESSMENT YEAR 2004-05) 6 4.4 ON THE OTHER HAND THE LEARNED DR HAS SUBMITTED THAT THE NOTICE WAS SENT BY THE REGISTERED POST ON THE C ORRECT ADDRESS OF THE ASSESSEE ON 29.7.2005. THE ASSESSEE DID NOT OBJECT TO THE SERVICE OF THE NOTICE DURING THE COU RSE OF ASSESSMENT PROCEEDINGS AND RAISED THIS OBJECTION ON LY AFTER COMPLETION OF THE ASSESSMENT FOR THE FIRST TIME BEF ORE THE CIT(A). SINCE THE ASSESSEE HAS PARTICIPATED IN TH E PROCEEDINGS AND NO PREJUDICE WAS CAUSED TO THE ASS ESSEE THEREFORE AND WHEN THE NOTICE WAS ISSUED IN TIME A ND WAS NOT RECEIVED BACK UNDELIVERED IT IS DEEMED AS PROPER S ERVICE. HE HAS RELIED UPON THE DECISIONS OF THE HON. DELHI CO URT IN THE CASE OF CIT V/S YAMU INDUSTRIES LTD REPORTED IN 306 ITR 309 (DEL) IN THE CASE OF CIT V/S MADHSY FILMS (P) LTD REPORTED IN 301 ITR 69(DEL) AND IN THE CASE OF CIT V/S VINS OV ERSEAS INDIA LTD REPORTED IN 305 ITR 320. THE LEARNED DR ALSO PRODUCED THE ASSESSMENT RECORD WHICH WAS CONTAININ G THE OFFICIAL COPY OF NOTICE U/S 143(2) DATED 29.7.2005. 4.5 WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND RE LEVANT RECORD. WE FIND FROM THE NOTICE DATED 29.7.2005 T HAT THE SAME WAS ISSUED AND SENT AT THE CORRECT ADDRESS O F THE ASSESSEE VIDE REGISTERED POST A COPY OF POSTAL RE CEIPT WAS PRODUCED BEFORE US BY THE ASSESSEE IN THE PAPER BOO K. IN THE REMAND REPORT THOUGH THE AO HAS STATED THAT THE NOT ICE WAS ITA NO. 3501/MUM/2008 (ASSESSMENT YEAR 2004-05) 7 ISSUED BY THE SPEED POST HOWEVER THE AO ANNEXED T HE COPY OF THE POSTAL RECEIPT WHICH CLEARLY SHOWS THAT THE NOTICE WAS ISSUED THROUGH REGISTERED POST ACKNOWLEDGMENT AND NOT BY SPEED POST. THEREFORE WE DO NOT FIND ANY SERIOUS DEFECT IN THE REMAND REPORT WHEN THE AO HAS ANNEXED THE COPY OF THE POSTAL RECEIPT BY WHICH THE NOTICE WAS SENT. THUS UNDISPUTEDLY THE NOTICE WAS ISSUED THROUGH THE REG ISTERED POST ON 29.7.2005 AND THE SAME WAS SENT AT THE COR RECT ADDRESS OF THE ASSESSEE. EVEN THE ASSESSEE HAS NOT DISPUTED THE CORRECTNESS OF THE ADDRESS ON WHICH THE NOTIC E WHEN THE NOTICE WAS ISSUED ON 29.7.2005. IN THE NORMAL COUR SE IT HAS TO BE DELIVERED WITHIN TWO DAYS WITHIN THE CITY AS PER THE DELIVERY STANDARD. EVEN IF THE 31 ST JULY 2005 IS A SUNDAY THEN THE NOTICE SHOULD BE DELIVERED ON 1.4.2005 WHICH WILL BE CONSIDERED THE FIRST WORKING DAY AFTER THE HOLIDAY AND AS SUCH THE SERVICE OF THE NOTICE WITHIN THE PERIOD OF LIMI TATION. 4.6 IT IS SETTLED PROPOSITION OF LAW THAT IF THE L AST DATE OF THE EXPIRY OF THE LIMITATION PERIOD IS HOLIDAY AND IF THE VERY NEXT DATE THE COMPLIANCE IS MADE THEN THE SAME WILL BE C ONSIDERED WITHIN THE LIMITATION PERIOD. EVEN OTHERWISE THE AS SESSEE DID NOT OBJECT DURING THE ASSESSMENT PROCEEDINGS THAT THE ASSESSEE HAS NOT RECEIVED THE NOTICE ISSUED UNDER SECTION 143(2) AND CONSEQUENTLY NO VALID SERVICE OF THE N OTICE. THE ITA NO. 3501/MUM/2008 (ASSESSMENT YEAR 2004-05) 8 ASSESSMENT PROCEEDINGS CONTINUED FOR ABOUT 17 MONTH S AND DURING THAT PERIOD THE ASSESSEE DID NOT RAISED SUCH OBJECTION. IT IS INCUMBENT UPON THE ASSESSEE TO RAISE ALL LEGA L OBJECTIONS AT THE FIRST INSTANCE. WHEN THE ASSESSEE HAD NOT RE CEIVED NOTICE THEN THE ASSESSEE WAS SUPPOSE TO RAISE THIS ISSUE AT THE VERY FIRST OPPORTUNITY BEFORE THE AO. ONCE THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) AND THE CONSIDER ABLE TIME HAS LAPSED THEN IT BECOMES IMPOSSIBLE FOR THE AUTH ORITIES TO VERIFY THE DELIVERY OF THE NOTICE AND PARTICULARLY THE DATE OF DELIVERY OF THE NOTICE BECAUSE AFTER THE EXPIRY OF CERTAIN PERIOD THE POST-OFFICE DOES NOT KEEP THE RECORD OF THE DEL IVERY OF NOTICE. THE ASSESSEE CHOOSE NOT TO RAISE THESE LEG AL OBJECTION BEFORE THE AO AND LET THE ASSESSMENT COM PLETED WHICH PRE-EMPT AND PRECLUDED THE AO TO TAKE OTHER REMEDIES AVAILABLE IN THE ACT. IN THE PRESENT CASE THE NO TICE U/S 143(2) WAS SENT WITHIN A PERIOD OF LIMITATION. IN SUCH CASES IF THE AO FINDS THAT THE NOTICE HAS NOT BEEN SERVED W ITHIN THE TIME PERIOD OF LIMITATION PRESCRIBED UNDER THE ACT THEN THE AO CAN INVOKE THE PROVISIONS OF SECTION 147 BUT IN T HE CASE WHERE THE ASSESSEE ALLOWED THE ASSESSMENT U/S 143(3 ) WITHOUT RAISING ANY OBJECTION OF SERVICE OF NOTICE THEN THE ASSESSEE CANNOT BE ALLOWED TO RAISE THIS OBJECTION AT A LATER STAGE UNLESS AND UNTIL THE ASSESSEE ESTABLISHES FRO M THE ITA NO. 3501/MUM/2008 (ASSESSMENT YEAR 2004-05) 9 RECORD THAT THE ASSESSEE HAS NOT RECEIVED THE NOTIC E AT ALL OR THE NOTICE WAS RECEIVED AFTER THE LIMITATION PERIOD WAS EXPIRED. 4.7 IN THE CASE IN HAND THE NOTICE ISSUED BY REGIS TERED POST WAS NOT RECEIVED BACK UNDELIVERED. THEREFORE IN VI EW OF THE DECISIONS OF THE HON. DELHI HIGH COURTS IN THE CASE S OF CIT V/S YAMU INDUSTRIES LTD CIT V/S MADHSY FILMS (P) LTD AND CIT V/S VINS OVERSEAS INDIA LTD (SUPRA) IF THE NOT ICE IS SENT BY REGISTERED POST AT THE CORRECT ADDRESS OF THE A SSESSEE AND THE SAME WAS NOT RECEIVED BACK UNDELIVERED THEN AS PER THE GENERAL CLAUSES ACT THE PRESUMPTION OF PROPER SERV ICE OF NOTICE WILL LIE IN FAVOUR OF THE REVENUE. FURTHER I T IS TO BE NOTED THAT BEFORE THE CIT(A) THE ASSESSEE HAS NOT DENIED THE RECEIPT OF THE NOTICE BUT IT WAS STATED IN THE STAT EMENT OF FACT THAT THE ASSESSEE DOES NOT HAVE A COPY OF THE SAID NOTICE IN HER RECORD AS SUCH SHE IS NOT IN A POSITION TO ASCE RTAIN AS TO WHETHER THE SAID NOTICE HAS BEEN SERVED ON THE ASSE SSEE OR NOT. THIS STATEMENT OF THE ASSESSEE CLEARLY SHOWS THAT THE ASSESSEE DID NOT WANT TO COME WITH CLEAN HAND ABOUT THE SERVICE OF NOTICE BUT TO TEST THE RECORD OF THE DE PARTMENT WHETHER ANY PROOF OF SERVICE WAS THERE OR NOT. PARA GRAPHS 2 OF THE STATEMENT OF FACT DULY SIGNED BY THE ASSESSEE B EFORE THE CIT(A) IS REPRODUCED AS UNDER : ITA NO. 3501/MUM/2008 (ASSESSMENT YEAR 2004-05) 10 2. IN THE ASSESSMENT ORDER IT IS STATED THAT THE RETURN OF INCOME WAS PROCESSED U/S 143(1) OF THE AC T AND SUBSEQUENTLY THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE U/S 143(2) OF THE ACT WAS ISSUED ON 29.7.2005 BUT THE DATE OF SERVICE OF THE NOTICE WAS NOT GIVEN AND NOT KNOWN. THE APPELLANT DOES NOT HAVE A COPY OF THE SAID NOTICE U/S 143(2) ON HERE RECORD AND AS SUCH NOT IN A POSITION TO ASCERTAIN AS TO WHETHER THE SAID NOTICE HAS BEEN SERVED ON THE APPELLANT OR NOT. THE BURDEN IS ON THE LEARNED AO TO PROVE THE DATE OF SERVICE OF THE NOTICE AND TO PROV E THAT IT WAS SERVED BEFORE THE DUE DATE. IT IS FURT HER STATED IN THE ASSESSMENT ORDER THAT THE FIRST NOTIC E FOR HEARING U/S 142(1) CALLING FOR THE INFORMATION WAS ISSUED ON 5.8.2005. THIS PRIMA FACIE INDICATES THA T THE SAID NOTICE U/S 143(2) WAS SERVED ONLY AFTER 5.08.2005. THE APPELLANT CLAIMS THAT NO VALID NOTI CE U/S 143(2) WAS SERVED ON THE APPELLANT. 4.8 THE ASSESSEE TOOK A STAND BEFORE US THAT SHE HAS NOT RECEIVE ANY SUCH NOTICE U/S 143(2) BY FILING THE AF FIDAVIT DATED 23.7.2009. THIS STAND OF THE ASSESSEE APPEARS TO B E AN AFTER THOUGHT AND SELF SERVING BECAUSE THE AFFIDAVIT HAS BEEN FILED AFTER ABOUT FOUR YEARS AND SECONDLY WHEN THE ASSESS EE DID NOT RAISE ANY SUCH OBJECTION BEFORE THE AO AND TOOK VA GUE STAND BEFORE THE CIT(A) AS EVIDENT FROM THE STATEMENT O F THE FACT THEN THE AFFIDAVIT FILED BY THE ASSESSEE CANNOT BE ACCEPTED AS CONCLUSIVE EVIDENCE. THE HON.DELHI HIGH COURT IN THE CASE OF CIT V/S VINS OVERSEAS INDIA LTD(SUPRA) HELD THA T THE AFFIDAVIT DENYING THE SERVICE OF NOTICE FILED BEFO RE THE TRIBUNAL CANNOT BE RELIED UPON. WE FURTHER NOTE THAT THE AF FIDAVIT FILED BY THE ASSESSEE IS WITHOUT ANY VERIFICATION. THE DECISION RELIED UPON BY THE ASSESSEE ARE NOT APPLICABLE IN T HE FACTS AND ITA NO. 3501/MUM/2008 (ASSESSMENT YEAR 2004-05) 11 CIRCUMSTANCES OF THE CASE. IN VIEW OF THE ABOVE D ISCUSSION AND HAVING REGARD TO THE FACTS OF THE PRESENT CASE WE HOLD THAT THE NOTICE ISSUED U/S 143(2) ON 29.7.2005 THROUGH REGISTERED POST AT THE CORRECT ADDRESS OF THE ASSESSEE AND NOT RECEIVED BACK UNDELIVERED IS DEEMED TO BE A PROPER AND EFFEC TIVE SERVICE OF NOTICE ON THE ASSESSEE WITHIN THE PERIO D OF LIMITATION. 5. GROUNDS OF APPEAL NO.2 IS DISMISSED. 6. GROUNDS OF APPEAL NO.1 IS REGARDING THE CONFIRM ATION OF THE ADDITION OF RS.9 LAKHS U/S 68 OF THE ACT. THE ASSESSEE HAS SHOWN A GIFT OF RS.9 LAKHS FROM SHRI SHAILESH SHAN TILAL MEHTA. THE AO ASKED THE ASSESSEE TO ESTABLISH THE GENUINENESS OF THE GIFT TRANSACTION CREDITWORTHIN ESS OF THE DONOR AND HER RELATIONSHIP WITH THE DONOR. THE AO FOUND THAT THE ASSESSEE IS NOT A RELATIVE OF THE DONOR THERE WAS NO OCCASION TO GIVE GIFT OR MOTIVE OF GIFT. HE ASKED THE ASSESSEE TO PRODUCE THE DONOR FOR EXAMINATION. TH E ASSESSEE COULD NOT PRODUCE THE DONOR BEFORE THE AO . THE AO FURTHER NOTICED THAT THE DONOR HAS SHOWN INCOME OF RS.1 78 401/- DURING THE ASSESSMENT YEAR 2004-05 AN D DRAWINGS OF RS.49 013 FOR HOUSE HOLD EXPENSES. FR OM THE CAPITAL ACCOUNT OF THE DONOR THE AO FOUND THAT THE DONOR MADE THE GIFTS OF MORE THAN RS.4 03 00 000/- TO VARIOUS PERSONS ITA NO. 3501/MUM/2008 (ASSESSMENT YEAR 2004-05) 12 DURING THE YEAR 2004-05. THE AO WAS OF THE VIEW T HAT A PERSON OF SUCH LOW MEANS OF INCOME CANNOT GIFT OF MORE THAN FOUR CRORES WITHOUT ANY REASON OR MOTIVE. ACCORDIN GLY THE AO HELD THAT THE GIFT IS UNEXPLAINED CASH CREDIT A ND ADDED THE SAME TO THE INCOME OF THE ASSESSEE U/S 68 OF THE AC T. 7. ON APPEAL THE CIT(A) HAS CONFIRMED THE ADDITI ON MADE BY THE AO BY FOLLOWING THE DECISION OF THE HON. S UPREME COURT IN THE CASE OF CIT V/S P MOHANAKALA REPOR TED IN (2007) 291 ITR 278 (SC) THE DECISION OF THE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF JASPAL SINGH V/S CIT (2007) 290 ITR 306 (P&H) AND THE DECISION OF THE DELHI H IGH COURT IN THE CASE OF ACIT V/S RAJEEV TONDON (2007) 294 I TR(AT) 219(DELHI) 7.1 BEFORE US THE LEARNED AR OF THE ASSESSEE HAS S UBMITTED THAT SINCE THE DONOR IS NON-RESIDENCE AND SETTLED IN USA THEREFORE THE ASESEEE COULD NOT PRODUCE THE DONOR BEFORE THE AO DURING THE ASSESSMENT PROCEEDINGS. HE HAS FURTH ER SUBMITTED THAT THE GIFT WAS GIVEN BY THE DONOR OU T OF LOVE AND AFFECTION. HE IS A FAMILY FRIEND OF THE ASSESSEES HUSBAND. THE ASSESSEE HAS FILED AN AFFIDAVIT OF THE DONOR P HOTOGRAPH AND A COPY OF THE PAN CARD ALONG WITH THE APPLICAT ION FOR ADMISSION OF THE ADDITIONAL EVIDENCE UNDER RULE 29 OF THE ITA NO. 3501/MUM/2008 (ASSESSMENT YEAR 2004-05) 13 INCOME TAX APPELLATE RULES 1963. THE LEARNED AR O F THE ASSESSEE HAS SUBMITTED THAT SINCE THE DONOR IS NON -RESIDENCE AND SETTLED IN USA THEREFORE THE ASSESSEE HAS NO T PRODUCED THE DONOR BEFORE THE AO. HENCE THE ASSESSEE FILED THE AFFIDAVIT OF THE DONOR IN SUPPORT OF THE CLAIM WHIC H MAY BE ADMITTED AS ADDITIONAL EVIDENCE. APART FROM THIS THE ASSESSEE ALSO FILED THE COPY OF THE UNDATED LETTER ISSUED BY LALBHAI KALIDAS AND CO. A FIRM BELONGING TO SHR I SAILESH SHANTILAL MEHTA THE DONOR SHOWING THE PURCHASE OF MOTOR VEHICLE AND A COPY OF THE DEBIT NOTE DATED 14 TH OCTOBER 1997 ISSUED BY THE DONOR IN FAVOUR OF BY LALBHAI KALID AS AND CO. 7.2 WE HAVE HEARD THE RIVAL CONTENTIONS ON THE AP PLICATION ON THE ADMISSION OF THE ADDITIONAL EVIDENCE AND C ONSIDERED THE RELEVANT RECORD. AT THE OUTSET WE NOT THAT T HE AFFIDAVIT DATED 19.06.2009 HAS NOT BEEN VERIFIED AND THE SAME HAS BEEN ATTESTED AND NOTARIZED ON 24.6.2009 THEREFORE IT IS CLEAR FROM THE AFFIDAVIT THAT THE AFFIDAVIT WAS NOT SIGN ED BEFORE THE NOTARY AND AT THE TIME OF ATTESTATION BY THE NOTA RY. WHEN THE AFFIDAVIT IS NOT VERIFIED AND ALSO NOT SIGNED BEF ORE THE ATTESTING AUTHORITY THEN THE SAME CANNOT BE ACCEP TED AS EVIDENCE AT THIS STAGE. AS REGARDS THE OTHER DOCUM ENTS FILED BY THE ASSESSEE THE SAME ARE VERY OLD DOCUMENTS AND NO REASON HAS BEEN STATED AS TO WHY THESE DOCUMENTS WE RE NOT ITA NO. 3501/MUM/2008 (ASSESSMENT YEAR 2004-05) 14 PRODUCED BEFORE THE AO AND CIT(A). EVEN OTHERWISE WE FAILED TO UNDERSTAND THE RELEVANCE OF THE OTHER DO CUMENTS WHICH ARE PHOTOGRAPHS PAN CARD LETTER FOR SALE OF CAR AND DEBIT NOTE. IN VIEW OF THE ABOVE FACTS AND CIRCUM STANCES OF THE CASE AS DISCUSSED ABOVE WE DO NOT FIND ANY SUB STANCE IN THE PRAYER OF THE ASSESSEE FOR ADMISSION OF THE ADD ITIONAL EVIDENCE. ACCORDINGLY WE REJECT THE ADDITIONAL EVI DENCE FILED BY THE ASSESSEE. 7.3 ON MERITS THE LEARNED AR OF THE ASSESSEE SUBMI TTED THAT THE ASSESSEE HAS DISCHARGED HER ONUS IN PRODU CING THE RELEVANT RECORD OF THE DONOR TO SHOW THE GENUINENES S OF THE TRANSACTIONS CREDITWORTHINESS OF THE DONOR AND THE IDENTITY OF THE DONOR. THEREFORE IN THE PECULIAR FACTS AND CI RCUMSTANCES OF THE CASE PERSONAL APPEARANCE SHOULD NOT BE INSI STED. THE GIFT IS THROUGH CHEQUES AND THE AMOUNT HAS BEEN TRA NSFERRED FROM THE BANK ACCOUNT OF THE DONOR TO THE ASSESSEE ACCOUNT AND THE ASSESSEE HAS FILED CONFIRMATION OF THE DONO R AND ALSO THE RETURN OF INCOME OF THE DONOR. THUS THE ASSE SSEE PROVED THE IDENTITY CAPACITY AND GENUINENESS OF TH E TRANSACTIONS. THE LEARNED AR HAS FURTHER POINTED O UT THAT DUE TO SHORTAGE OF THE TIME THE ASSESSEE COULD NOT PROD UCE THE DONOR BEFORE THE AO. ITA NO. 3501/MUM/2008 (ASSESSMENT YEAR 2004-05) 15 7.4 ON THE OTHER HAND THE LEARNED DR HAS SUBMITTE D THAT WHEN THE ASSESSEE HAS FAILED TO PROVE THE MOTIVE OCCASION AND RELATIONSHIP AS WELL AS TO PRODUCE THE DONOR F OR EXAMINATION THEN THE ASSESSEE DID NOT DISCHARGE TH E ONUS TO PROVE THE GENUINENESS OF THE TRANSACTION OF GIFT. H E HAS RELIED UPON THE ORDER OF THE CIT(A) AND THE DECISIONS RELI ED UPON BY THE LEARNED CIT(A). 7.5 WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND RE LEVANT RECORD. WE NOTE THAT THE NOTICE BY THE AO FOR PROD UCING THE DONOR WAS ISSUED ON 6.11.2006 AND THE ASSESSMENT OR DER WAS PASSED ON 24.11.2006 THEREFORE THE ASSESSEE DID N OT HAVE A SUFFICIENT TIME FOR PRODUCING THE DONOR WHO IS NRI AND SETTLED IN USA. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN THE INTEREST OF JUSTICE WE ARE OF THE CONSIDERED OPINI ON THAT IF ONE MORE OPPORTUNITY IS GIVEN TO THE ASSESSEE TO PROVE HER CASE NO PREJUDICE WOULD BE CAUSED TO THE REVENUE. ACCOR DINGLY WE SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE TH IS ISSUE TO THE RECORD OF THE AO FOR FRESH ADJUDICATION ON TH E ISSUE. THE ASSESSEE IS ALSO DIRECTED TO CO-OPERATE WITH THE A O AND PRODUCE THE DONOR AND RELEVANT DOCUMENT FOR SPEEDY DISPOSAL OF THE CASE. 7.6 THE GROUND NO.1 IS ALLOWED FOR STATISTICAL PURP OSE. ITA NO. 3501/MUM/2008 (ASSESSMENT YEAR 2004-05) 16 8 N THE RESULT APPEAL OF THE ASSESSEE IS PARTLY AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28TH FEB 2011 SD SD (S V MEHROTRA ) (VIJAY PAL RAO) ACCOUNTANT MEMBER JUDICIAL M EMBER MUMBAI DATED 28 TH FEB 2011 SRL:22211 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT CONCERNED 4. CIT(A) CONCERNED 5. DR CONCERNED BENCH BY ORDER TRUE COPY ASSTT. REGISTRAR ITAT MUMBAI