Shri Babubhai Vallabhbhai Tejani, Surat v. The Income tax Officer,Ward-9(1),, Surat

ITA 3720/AHD/2008 | 2005-2006
Pronouncement Date: 13-01-2011 | Result: Partly Allowed

Appeal Details

RSA Number 372020514 RSA 2008
Assessee PAN AAKPT5637Q
Bench Ahmedabad
Appeal Number ITA 3720/AHD/2008
Duration Of Justice 2 year(s) 1 month(s) 29 day(s)
Appellant Shri Babubhai Vallabhbhai Tejani, Surat
Respondent The Income tax Officer,Ward-9(1),, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 13-01-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted C
Tribunal Order Date 13-01-2011
Date Of Final Hearing 10-01-2011
Next Hearing Date 10-01-2011
Assessment Year 2005-2006
Appeal Filed On 14-11-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BENCH C AHMEDABAD BENCH C AHMEDABAD BENCH C BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI N NN N. .. .S. SAINI S. SAINI S. SAINI S. SAINI ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER AND AND AND AND SHRI SHRI SHRI SHRI MAHAVIR SINGH JUDICIAL MEMBER MAHAVIR SINGH JUDICIAL MEMBER MAHAVIR SINGH JUDICIAL MEMBER MAHAVIR SINGH JUDICIAL MEMBER DATE OF HEARING : 11-1-2011 DRAFTED ON: 11-1-20 11 ITA NO. 3720 /AHD/ 2 0 08 ASSESSMENT YEAR : 2005-06 SHRI BABUBHAI VALLABHBHAI TEJANI B-9 ASHIYANA APTS. KAKADIA COMPOUND LAL DARWAJA SURAT. VS. INCOME TAX OFFICER WARD 9(1) AAYAKAR BHAVAN MAJURA GATE SURAT. PAN/GIR NO. : AAKPT 5637 Q (A PPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI SUNI L TALATI. RESPONDENT BY: SHRI DILIP KUMAR D.R. O R D E R O R D E R O R D E R O R D E R PER N.S.SAINI ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-V SURAT DATE D 29-9-2008. 2. THE SOLE ISSUE INVOLVED IN GROUND NOS.1 TO 3 OF THE APPEAL IS THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE GIFTS RECEIVED FROM THREE PARTIES AGGREGATING TO `.15 LAC S. 3. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE ASSESSMENT PROCEEDINGS THE LEARNED ASSESSING OFFICER OBSERVED THAT THE APP ELLANT HAD RECEIVED GIFTS FROM VARIOUS PARTIES IN ALL AMOUNTING TO `.15 00 00 0/- VIZ. `.5 00 000/- FROM ONE MR. KETAN M. PATEL A RESIDENT OF DUBAI SUM OF `.10 00 000/- CONSISTED OF TWO GIFT `.6 00 000/- MADE ON 27-5-2004 AND `.4 00 000/- ON 3-6-2004. INCIDENTALLY THE AMOUNT RECEIVED BY WAY OF SUCH GIF TS WERE FURTHER GIFTED TO SON AND DAUGHTER IN LAW. 4. THE APPELLANT WAS ASKED TO PROVE THE AFORESAID G IFTS. IN RESPONSE TO WHICH THE APPELLANT HAD SUBMITTED COPIES OF THE PAS SPORT DECLARATION OF GIFTS AND IN CASE OF SHRI KETAN M. PATEL THE AMOUNT WAS T RANSFERRED THROUGH EMIRATES PAGE 2 OF 6 BANK WHERE FROM TWO TRANSFERS WERE EFFECTED ON OF U AE DHS. 48762 AND UAE DHS. 32492/- ON 27.5.2004 AND 3.6.2004 WHICH WERE E NCASHED IN THE APPELLANTS ACCOUNT THROUGH CENTRAL BANK OF INDIA. IT IS ALSO OBSERVED BY THE ASSESSING OFFICER THAT PRIOR TO SUCH GIFTS BEING GI VEN BY THE DONOR HE HAD DEPOSITED CASH OF UAE DHS. IN HIS BANK SUM OF UAE D HS. 71000/- ON 24.5.2004. IT WAS EXPLAINED BY THE APPELLANT THAT THE SAID MR. KETAN M. PATEL WAS DOING JEWELLERY BUSINESS IN DUBAI IN THE NAME OF FINE ART JEWELLERY LLC. IN CASE OF SHRI VINOD V. PATEL THE APPELLANT HAD SUBMITTED THE COPY OF CHEQUE DRAWN ON BANK OF BARODA SHIMPHOLI MUMBAI NRE A/C. 449388 ON VERIFICATION OF THE SIGNATURES OF THE PERSON SIGNING AS MANDATEE ON CHE QUE AND THE PERSON REMITTING MONEY FROM DUBAI ARE THE SAME. FURTHER AC CORDING TO THE ASSESSING OFFICER THE APPELLANT COULD NOT SUBSTANTIATE THE CR EDITWORTHINESS OF THE DONORS. THUS ACCORDING TO THE ASSESSING OFFICER APART FROM IDENTITY OF THE PERSON THE ASSESSEE SHOULD ALSO PROVE THE CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS. FURTHER IN THE INSTANT CASE THE ASSES SING OFFICER HAD ISSUED VARIOUS NOTICES FROM TIME TO TIME TO THE APPELLANT TO GIVE REQUISITE DETAILS IN THIS REGARD WHICH THE APPELLANT HAD IGNORED AND HAD FILED THE DETAILS LATE SUCH THAT THE ASSESSING OFFICER COULD NOT FURTHER PROBE THE ISSUE AND THEREFORE ACCORDING TO THE ASSESSING OFFICER SINCE THE APPELL ANT HAD AVOIDED GIVING DETAILS IT WAS NOT POSSIBLE TO VERIFY THE ELEMENTS OF GIFTS LIKE NATURAL LOVE AND AFFECTION THEIR RELATIONS ETC. IT IS ALSO NOTED B Y THE ASSESSING OFFICER THAT THE APPELLANT HAD NOT EXPLAINED ANY SUCH RELATION NOR H AD FILED ANY DETAILS IN THIS REGARD HENCE ACCORDING TO THE ASSESSING OFFICER THE APPELLANT HAD FAILED TO ESTABLISH THE GENUINENESS OF THE TRANSACTION AS WEL L AS CREDITWORTHINESS OF THE DONOR AND THEREFORE CONSIDERING THESE FACTS THE ASS ESSING OFFICER ADDED THE AMOUNT SO RECEIVED AS INCOME OF THE APPELLANT. 5. ON APPEAL BEFORE THE LEARNED COMMISSIONER OF INC OME TAX (APPEALS) THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE S UBMITTED THE COPIES OF PASSPORT DECLARATION OF GIFTS FROM BOTH THE PARTIE S THE APPELLANT HAS ALSO SUBMITTED THE COPIES OF VARIOUS PAGES SHOWING VARIO US VISITS MADE BY THOSE PARTIES IN DIFFERENT COUNTRIES TO SUGGEST THAT BOTH THE PARTIES WERE MOVING OUT IN VARIOUS COUNTRIES AND WERE THE PERSONS OF MEANS. THE APPELLANT HAS ALSO SUBMITTED THE COPIES OF TRANSACTIONS AND BANK ACCOU NT STATEMENT TO PROVE THE CREDITWORTHINESS OF THE PARTIES. ACCORDING TO THE A PPELLANT SINCE HE HAD PAGE 3 OF 6 DISCHARGED INITIAL ONUS LIED ON HIM NO ADDITION COU LD BE MADE ON THIS ACCOUNT. THE APPELLANT HAS RELIED ON THE FOLLOWING JUDGMENT VIZ. IN CASE OF D. C. JAIN V. ITO 32 TTJ 442 (ITAT DEL) DCIT VS. ROHINI BUILDERS 256 ITR 360 (GUJ.) CIT VS. PRAGATI CO-OP. BANK LTD. 278 ITR 178 (GUJ.) SAROG I CREDIT CORP VS. CIT 103 ITR 344 (PAT) ORIENTAL TRADING CO. LIMITED V. CIT 49 I TR 723 (BOM) WHERE IT HAS BEEN HELD THAT WHERE ONCE THE EXISTENCE OF THE PERS ON IS PROVED AND ON THE BASIS OF RELEVANT EVIDENCES IT IS PROVED THAT CREDI T ENTRY IS NOT FAKE THE PRIMARY ONUS CAST ON THE ASSESSEE IS DISCHARGED AND THAT AS SESSEE IN SUCH CASES CANNOT BE EXPECTED TO PROVE THE SOURCE OF SOURCE. I T IS FURTHER SUBMITTED THAT WHERE THE EXPLANATION OF THE ASSESSEE IS NOT ACCEPT ED BY THE ASSESSING OFFICER WOULD NOT AUTOMATICALLY BECOME GROUND FOR SUCH ADDI TION. THE APPELLANT HAS ALSO RELIED ON THE JUDGMENT OF ITAT RAJKOT IN THE C ASE OF ACIT VS. RADHESHYAM BANSAL REPORTED IN 68 TTJ 136 WHERE IT IS HELD THAT WHERE SUBSEQUENT GIFT IS NOT DOUBTED BY THE DEPARTMENT THE ADDITION SHOULD NOT BE MADE. THUS RELYING ON THIS CASE LAW THE APPELLANT HAS VEHEMENTLY ARGUED T HAT IN ITS OWN CASE WHERE HE HAD GIVEN GIFTS TO HIS SON AND THE DAUGHTER IN L AW ARE SINCE NOT QUESTIONED NOR FOUND TO BE FALSE NO ADDITION IN HIS CASE SHOUL D HAVE BEEN MADE. THE APPELLANT HAS ALSO RELIED ON THE JUDGMENT OF APEX C OURT IN CASE OF CIT VS. ORISSA CORPORATION 159 ITR-78. 6. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) AFTER CONSIDERING THE SUBMISSIONS OF THE LEARNED AUTHORISED REPRESENT ATIVE OF THE ASSESSEE HAS OBSERVED AS UNDER:- I HAVE GONE THROUGH THE ARGUMENTS OF THE APPELLAN T AS WELL AS THAT OF THE ASSESSING OFFICER. FROM VERIFICATION OF RECO RD IT IS SEEN THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER HAD ISSUED MANY NOTICES CALLING THE ASSESSEE TO PROVE THE GENU INENESS OF GIFTS AND ALSO TO PERSONALLY ATTEND BEFORE THE ASSESSING OFFI CER BUT THE SAME WERE IGNORED. IT IS ONLY WHEN THE TIME OF COMPLETING THE ASSESSMENT WAS REACHED AT ITS FAG END THAT THE ASSESSEES REPRESEN TATIVE HAD GIVEN CERTAIN DETAILS VIDE LETTER DATED 24-12-2004. THUS PRACTICALLY THE ASSESSING OFFICER WAS NOT GIVEN ANY TIME TO PROBE T HE ISSUE REGARDING THE GENUINENESS OF THE TRANSACTION. HOWEVER ON PERU SAL OF THE ORDER OF THE ASSESSING OFFICER HAS CLEARLY INDICATED THAT HE COULD NOT VERIFY THE GENUINENESS OF TRANSACTIONS WITH RESPECT TO LOVE AN D AFFECTION BETWEEN THE PARTIES I.E. DONOR AND DONE. IT WAS ALSO OBSERV ED BY THE ASSESSING OFFICER THAT BEFORE TRANSFERRING THE AMOUNT TO GIFT TO THE APPELLANT ON 27- 5-2004 THE SAID DONOR HAD DEPOSITED CASH IN HIS ACC OUNT. THUS THE APPELLANT HAS RATHER SUBMITTED THE COPIES OF PASSPO RT DETAILS OF BANK TRANSACTION AND LETTER OF CONFIRMATIONS. BARRING TH ESE DOCUMENTS THE PAGE 4 OF 6 APPELLANT HAS NOT PRODUCED ANY EVIDENCE WHICH COULD SUGGEST THE MAIN INGREDIENT OF GIFT I.E. NATURAL LOVE AND AFFECTION. THE OCCASION OF GIFT THE APPELLANT HAS NOT SUBMITTED ANYTHING ABOUT THE RELA TION BETWEEN THOSE PARTIES THEIR TENURE OF RELATION AND AS TO HOW ONE COULD GIVE SO MUCH OF GIFT WITHOUT ANY OCCASION. THUS IF EVERYTHING IS LO OKED INTO WITH REGARDS TO HUMAN PROBABILITIES THE APPELLANT HAS FAILED TO ESTABLISH RELATION BETWEEN THE DONOR AND HIMSELF HE HAS NOT PRODUCED ANY REASON FOR SUCH GIFTS. IT IS NOT UNCOMMON THAT NORMALLY THE GIFTS A RE GIVEN ON SOME OCCASION AND NOT OTHERWISE. FURTHER THE APPELLANT H AS NOT BROUGHT ON RECORD ANY MATERIAL TO SHOW THAT HE HAD EVER GIVEN ANY GIFTS ON ANY SUCH OCCASIONS TO THOSE PARTIES AND THEREFORE IN ABSENCE OF SUCH MATERIAL MAIN INGREDIENT OF LOVE AND AFFECTION AND GENUINENE SS OF PARTIES IS NOT ESTABLISHED. IN THE INSTANT CASE THE APPELLANT HAS SUBMITTED DOCUMENTS FOR SUBJECTIVE SATISFACTION WHERE AS WHAT IS ENVISA GED IS THAT THE APPELLANT SHOULD OBJECTIVELY PROVE THE GENUINENESS OF SUCH GIFTS AND THEREFORE IN ABSENCE OF SUCH MATERIAL BROUGHT ON RE CORD I AM UNABLE TO ACCEDE TO THE ARGUMENTS OF THE APPELLANT THAT HE HA D PROVED THE GIFTS TO BE GENUINE. IN THIS REGARD RELIANCE IS PLACED ON TH E JUDGMENT OF APEX COURT OF SUMATI DAYAL REPORTED IN 214 ITR 804 WHERE THEIR LORDSHIP HAS THUS OBSERVED THAT THERE IS NO DISPUTE THAT THE AMOUNTS WERE RECEIVED BY THE APPELLANT FROM VARIOUS RACE CLUBS ON THE BASIS OF W INNING TICKETS PRESENTED BY HER. WHAT IS DISPUTED IS THAT WERE THE Y REALLY THE WINNINGS OF THE APPELLANT FROM THE RACES. THIS RAIS ES THE QUESTION WHETHER THE APPARENT CAN BE CONSIDERED AS THE REAL. AS LAID DOWN BY THIS COURT THE APPARENT MUST BE CONSIDERED THE R EAL UNTIL IT IS SHOWN THAT THERE ARE REASONS TO BELIEVE THAT THE AP PARENT IS NOT THE REAL AND THAT THE TAXING AUTHORITIES ARE ENTITL ED TO LOOK INTO THE SURROUNDING CIRCUMSTANCES TO FIND OUT THE REALITY A ND THE MATTER HAS TO BE CONSIDERED BY APPLYING THE TEST OF HUMAN PROBABILITIES. (SEE: CIT V.DURGA PRASAD MORE [1971] 82 ITR 540 (SC ) AT PAGES 545 547). THUS THEIR LORDSHIP HAS THUS OBSERVED THAT WHAT IS APPARENT COULD NOT BE ACCEPTED AS REAL UNLESS THE SAME MEET THE HUMAN PROBABILITIES. IN THE INSTANT CASE WHAT IS FOUND IS THAT THE APPELLANT HAS ADVANCED THOSE DOCUMENTS WHICH SHOWS THE MOVEME NT OF FUNDS FROM ONE ACCOUNT TO THE OTHER BUT WHAT IS NOT ESTABLISHED IS THE PURPOSE AND INGREDIENT OF GIFT I.E. NATURAL LOV E AND AFFECTION. FURTHER THE APPELLANT HAS VEHEMENTLY ARGUED THAT GI FT GIVEN BY THE FATHER TO THE SON AND DAUGHTER IN LAW IS NOT DOUBTE D. TRUE IS THE FACT THAT IF THE GIFT WAS RECEIVED BY THE APPELLANT FROM SUCH A RELATION THE SAME WOULD HAVE THE SAME FATE AS IN CA SE OF HIS OWN SON AND DAUGHTER IN LAW. BUT WHAT IS RECEIVED AS A GIFT FROM THE PERSONS ARE NOT IMMEDIATE RELATION NOR THE FRIENDSH IP IS ESTABLISHED BETWEEN THE DONOR AND DONE. IT IS ALSO SEEN THAT THE LEARNED ASSESSING OFFICERS REQUEST TO PERSONALLY A TTEND WAS NOT MET WITH WHERE THE LEARNED ASSESSING OFFICER WOULD HAVE ASKED CERTAIN QUESTIONS WHICH THE APPELLANT HAD NOT PROBA BLE ANSWERS. THUS AVOIDANCE OF PERSONAL ATTENDANCE ITSELF SUGGES T THAT THE APPELLANT WAS AVOIDING THE SITUATIONTO ARISE WHERE HE COULD NOT PAGE 5 OF 6 PROVE THE FACTS. THUS CONSIDERING THE OVERALL SITUA TION OF THE FACT I AM NOT INCLINED TO ACCEPT THE ARGUMENT OF THE APPEL LANT THAT HE HAD ESTABLISHED THE GENUINENESS OF THE GIFTS AND TH EREFORE ADDITION MADE DESERVES TO BE CONFIRMED. IT IS PERTINENT TO N OTE THAT EVEN WHERE THE ADDITION HAS BEEN MADE ON THE GROUND OF J USTIFICATION OF NATURAL LOVE AND AFFECTION THE APPELLANT HAS NOT PR ODUCED BEFORE ME ANY MATERIAL TO SHOW THE ELEMENT OF SUCH RELATIO N AND IT IS ALSO PERTINENT TO NOTE THAT THE MANDATE SIGNATORY IN BOT H THE CASES WAS THE SAME PERSON MEANING THEREBY THAT HE WAS THE PER SON RESPONSIBLE TO ARRANGE SUCH GIFTS AND THAT THERE WA S NOTHING LIKE NATURAL LOVE AND AFFECTION BETWEEN THE PARTIES. THU S CONSIDERING THE OVERALL FACTS OF THE CASE ADDITION MADE BY THE ASSESSING OFFICER IS CONFIRMED. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE THE ASSESSEE CLAIMED TO HAVE RECEIVED GIFT OF `.15 LACS FROM TWO PERSONS NAMELY SHRI KETAN M. PATEL `.10 LACS AND VINODBHAI V. PATE L `.5 LACS. THE LEARNED ASSESSING OFFICER TREATED THE GIFT AS NOT GENUINE A ND ADDED THE SAME TO THE INCOME OF THE ASSESSEE AS INCOME FROM OTHER SOURCES . ON APPEAL THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OBSERVED THAT THE ASSESSEE FURNISHED THE DETAILS OF THE GIFTS AT A VERY LATER STAGE WHIC H LEFT NO TIME WITH THE LEARNED ASSESSING OFFICER TO VERIFY THE GENUINENESS OF THE DOCUMENTS FILED BEFORE THE LEARNED ASSESSING OFFICER. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OBSERVING THAT NO MATERIAL TO ESTABLISH NATURAL LOV E AND AFFECTION WAS BROUGHT ON RECORD BY THE ASSESSEE AND THEREFORE CONFIRMED T HE ACTION OF THE ASSESSING OFFICER. WE FIND THAT THE DETAILS AND MATERIAL REGA RDING GIFT IN QUESTION WAS FURNISHED BY THE ASSESSEE ON 24-12-2004 BEFORE THE LEARNED ASSESSING OFFICER AND THE ORDER WAS PASSED BY THE LEARNED ASSESSING O FFICER ON THE SAME DATE. THUS IT IS OBSERVED THAT THE LEARNED ASSESSING OFF ICER COULD NOT EXAMINE THE DOCUMENTS FILED BY THE ASSESSEE DUE TO PAUCITY OF T IME. IN THE ABOVE CIRCUMSTANCES WE SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND RESTORE THE MATTER BACK TO THE FILE OF THE LEARNED ASSESSING OF FICER FOR PROPER VERIFICATION AND THEREAFTER ADJUDICATING AFRESH AS PER LAW AFTER ALLOWING ASSESSEE A REASONABLE OPPORTUNITY OF HEARING. THUS THIS GROUN D OF APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. 8. GROUND NO.4 OF THE APPEAL RELATES TO CONFIRMING THE DISALLOWANCE OF EXPENSES OF `.20 000/- MADE BY THE LEARNED ASSESSIN G OFFICER. PAGE 6 OF 6 9. AT THE TIME OF THE HEARING THE LEARNED AUTHORISE D REPRESENTATIVE OF THE ASSESSEE DID NOT MAKE ANY ARGUMENTS ON THE ABOVE GR OUND OF APPEAL. THEREFORE THE SAME IS DISMISSED FOR WANT OF PROSEC UTION. 10. IN THE RESULT THE APPEAL OF THE APPEAL IS PART LY ALLOWED STATISTICAL PURPOSES. ORDER SIGNED DATED AND PRONOUNCED IN THE COURT ON 13 TH DAY OF JANUARY 2011. SD/- SD/- ( MAHAVIR SINGH) (N.S. S AINI) JUDICIAL MEMBER A CCOUNTANT MEMBER DATED: AHMEDABAD 13 TH DAY OF JANUARY 2011. COMPILED AND COMPARED BY: PATKI COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)- 5. THE DR AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER //TRUE COPY// (DY./ASSTT.REGISTRAR) ITAT AHMEDABAD DATE INITIALS 1. DRAFT DICTATED ON 12-1-2011 --------------- ---- 2. DRAFT PLACED BEFORE AUTHORITY 12-1-2011 ------ ------------- 3. DRAFT PROPOSED & PLACED 12-1-2011 ------------ ------- JM BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED 12-1-2011 ----------- -------- JM/AM BY SECOND MEMBER 5. APPROVED DRAFT COMES TO P.S 13-1-2011 --------- ----------- 6. KEPT FOR PRONOUNCEMENT ON 13-1-2011 ---------- ---------- 7. FILE SENT TO THE BENCH CLERK 13-1-2011 ------- ------------- 8. DATE ON WHICH FILE GOES TO THE ---------------- -------------------- A.R. 9. DATE OF DISPATCH OF ORDER ---------------- --- ------------------