Smt. D.Padmaja, Secunderabad v. ACIT, Hyderabad

ITA 497/HYD/2010 | 2000-2001
Pronouncement Date: 31-01-2011 | Result: Allowed

Appeal Details

RSA Number 49722514 RSA 2010
Assessee PAN AEJPD7429K
Bench Hyderabad
Appeal Number ITA 497/HYD/2010
Duration Of Justice 9 month(s) 23 day(s)
Appellant Smt. D.Padmaja, Secunderabad
Respondent ACIT, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 31-01-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 31-01-2011
Assessment Year 2000-2001
Appeal Filed On 07-04-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A HYDERABAD BEFORE SHRI N.R.S. GANESAN JUDICIAL MEMBER AND SHRI CHANDRA POOJARI ACCOUNTANT MEMBER ITA.497 /HYD/2010 ASSESSMENT YEAR 2000-01 SMT. D. PADMAJA SECUNDERABAD (PAN AEJPD 7429K) VS THE ACIT CIRCLE 1 (3) HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI V. SRINIVAS RESPONDENT BY : SMT. V. MADHUVANI DR O R D E R PER CHANDRA POOJARI ACCOUNTANT MEMBER: THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECT ED AGAINST THE ORDER PASSED BY THE CIT(A) II HYDERABAD DATED 25. 1.2010 AND PERTAINS TO THE ASSESSMENT YEAR 2000-01 TO 2004-05. 2. THE ONLY GRIEVANCE IN ASSESSEE APPEAL IS WITH REGARD TO UPHOLDING THE ADDITION OF RS.5 LAKH BEING THE AMOUN T RECEIVED FROM ASSESSEES SISTER INITIALLY FOR PROPOSED INVESTMENT IN HEALING TOUCH HOSPITAL AND LATER CONVERTED INTO GIFT. 3. BRIEF FACTS OF THE ISSUE ARE THAT THE ASSESSIN G OFFICER HAS COMPLETED THE ASSESSMENT BY MAKING AN ADDITION OF R S.5 LAKH AS INCOME FROM UNEXPLAINED SOURCES. THE OBSERVATIONS OF THE ASSESSING OFFICER IN THIS REGARD ARE THAT THE SEIZED MATERIAL MARKED A/DR/10 PAGE NO.76 IS PURPORTED TO BE A LETTER DATED 8.4.2002 ADDRESSED T O THE ASSESSEE BY DR. S.R. GANDHAM AND MRS. SARADA GANDHAM WHICH READS AS FOLLOWS: WE WOULD BE MOST GRATEFUL IF YOU COULD OBTAIN A RE CEIPT OR SOME FORM OF WRITTEN CONFIRMATION FOR THE ABOVE AMOUNTS (TOTAL 2 0 LAKH RUPEES) FROM THE ITA NO.497/H/2010 SMT. D. PADMAJA SECUNDERABAD 2 2 MD OR TREASURER OF THE COMPANY AND KEEP IT SAFELY W ITH YOU AS EVIDENCE OF OUR SHARES INVESTMENT IN THE HOSPITAL PROJECT. WE MAY NEED A COPY OF THE SAME TO SUBMIT TO TAX PEOPLE IF CALLED UPON. PLEA SE REGISTER OUR SHARE INTEREST IN THE JOINT NAMES SAYI RAMESH GANDHAM & SARADA GANDHAM IF POSSIBLE IF NOT PLEASE REGISTER THE SHARES IN SARA DA GANDHAM/S NAME. 3.1. THE ASSESSING OFFICER CONFRONTED THE LETTER TO THE ASSESSEE AND SOUGHT HER COMMENTS AS TO HOW 5 LAKHS OUT OF RS.20 LAKHS RECEIVED FROM MRS. SARADA G COULD BE CONSIDERED AS GIFT TO HER WH EN THE LETTER FOUND DURING THE SEARCH CLEARLY STATES THAT THE SAID 20 L AKHS WAS MRS. SARADA G. INVESTMENT IN M/S HEALING TOUCH HOSPITAL. THE ASSE SSEE HAS REPLIED TO THE ASSESSING OFFICER WHICH IS AS FOLLOWS: DURING THE YEAR UNDER CONSIDERATION I RECEIVED GIFT OF RS.5 LAKH FROM MY SISTER SISTER G. SARADA WHO IS A RESIDENT OF 27 THE FLASHES GONSALI STAFFORD UK. THE GIFT AMOUNT WAS CREDIT ED IN MY SB A/C WITH ANDHRA BANK ON 5.7.1999 FOR RS.4 98 230 AFTER DEDUCTION OF RS.1 770/- TOWARDS BANK COLLECTION CHARGES . 4. ON APPEAL THE CIT(A) OBSERVED THAT THE DOCUME NTS SEIZED DURING THE SEARCH OPERATION MARKED A/DR/10 CONTAINE D THREE LETTERS WITH SIGNATURES OF ASSESSEES SISTER SMT. G. SARADA AS B LANK WITHOUT DATE AND AMOUNTS. THE IMPUGNED GIFT LETTER DATED 18.5.1999 CLAIMED BY THE ASSESSEE AS EVIDENCE WAS FOUND DURING THE SEARCH ON 3.11.2004. THE AMOUNT OF RS.5 LAKHS WAS FILLED AT THE END OF THE S ENTENCE WISHING HAPPY PONDAL AND UGADI. THE PONGAL AND UGADI WERE ALSO F ILLED. WHEN THE ACTUAL GIFT SAID TO HAVE BEEN RECEIVED BY HE ASSES SEE ON 5.7.1999 OF RS.5 LAKHS WISHING FOR PONDA (JANUARY) AND UGADI (MARCH) AFTER THREE TO SIX MONTHS SHOWS THAT THE SAID LETTER WAS FABRICATED AN D IN THE PROCESS COMMITTED ERRORS MENTIONED ABOVE AS TRAIL OF FABRIC ATION. 4.1. WRITTEN SUBMISSIONS FILED BY THE ASSESSEE DU RING THE FIRST APPELLATE PROCEEDINGS ON 10.9.2008 BROUGHT OUT THAT ON 8.4.2002 WHEN THE BOARD OF DIRECTORS OF HEALING TOUCH HOSPITAL DE CIDED TO RESTRICTED THE ITA NO.497/H/2010 SMT. D. PADMAJA SECUNDERABAD 3 3 INVESTMENT OF G. SARADA AND D. RAMESH TO 10 LAKHS ( AGAINST THEIR PROPOSED RS.20 LAKHS) THE ASSESSEE INFORMED THE SAI D DECISION TO HER SISTER SARADA THEN I.E. AFTER 8.4.2002 SMT. SARADA HAD AS KED THE ASSESSEE TO TREAT RS.5 LAKHS AS GIFT TO HER AND THAT THE ASSESS EE COULD KEEP ANOTHER AMOUNT OF RS.4.5 LAKHS WITH HER AND RETURN THE SAME AS AND WHEN REQUIRED BY HER SISTER. THIS VERSION OF THE ASSESS EE CLEARLY SHOWS THAT HER SISTER HAD GIVEN THE GIFT AFTER 8.4.2002 AND NOT O N 18.5.1999 AS PER THE GIFT LETTER OF SARADA OR ON 5.7.1999 WHEN THE ASSES SEE CLAIMS TO HAVE RECEIVED THE GIFT WHICH IS NOT TRUE. THE ASSESSEE HERSELF GAVE CONFLICTING VERSIONS OF GIFT RECEIVED ON THREE DIFFERENT DATES. 4.2. VIDE HER SUBMISSIONS DATED 20.1.2010 DURING FIRST APPELLATE PROCEEDINGS THE ASSESSEE CLAIMED THAT THE AMOUNT O F RS. 4 98 230/- WAS RECEIVED ON 18.5.1999AS CUSTODY AMOUNT AND SUBSEQ UENTLY AFTER 8.4.2002 CONVERTED THE SAME INTO GIFT AS PER THE D ESIRE OF THE ASSESSEES SISTER AS EXPRESSED IN HER AFFIDAVIT DATED 18.6.200 7. THIS STATEMENT OF THE ASSESSEE IS INCONSISTENT WITH THE ABOVE STATEMENTS REGARDING RECEIVING OF GIFT IN THE FINANCIAL YEAR 1999-2000. THESE FACTS SHOW THAT THE ASSESSEE DID NOT RECEIVE ANY GIFTS IN THE PREVIOUS YEAR RELE VANT TO THE ASSESSMENT 2000-01. 4.3. FURTHER HE OBSERVED THAT THE ASSESSEE INTRO DUCED HER OWN UNDISCLOSED INCOME IN THE FORM OF GIFT FROM HER SIS TER BY UTILIZING HER RELATIONSHIP WITH THE DONOR FRAUDULENTLY UTILIZING THE BLANK SHEETS WITH SIGNATURES OBTAINED FROM HER SISTER SMT. SARADA A S EVIDENCE FOR A GIFT OF RS.5 LAKH WHICH WAS NOT A GIFT BUT CLAIMED AS SUCH BY HER. SHE ALSO UNSUCCESSFULLY ATTEMPTED TO PROVIDE EVIDENCE IN THE FORM OF AN AFFIDAVIT FROM HER SISTER AFTER A LAPSE OF SEVEN YEARS FROM T HE DATE OF ALLEGED TRANSACTION AS A COVER OF BID. THUS ON THE FACTS AND IN THE CIRCUMSTANCES IT IS HELD BY THE CIT(A) THAT THE CLAIM OF GIFT RE CEIVED BY THE ASSESSEE IS NOT ITA NO.497/H/2010 SMT. D. PADMAJA SECUNDERABAD 4 4 GENUINE AND AS SUCH THE ASSESSING OFFICER WAS JUSTI FIED IN TREATING IT AS INCOME FROM UNEXPLAINED SOURCES. AGAINST THIS THE ASSESSEE FILED BEFORE US. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED TH E MATERIALS AVAILABLE ON RECORD. SEC. 68 READS AS FOLLOWS: CASH CREDIT: WHERE ANY SUM IS FOUND CREDITED IN T HE BOOKS OF ACCOUNT OF THE ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT IN THE OPINI ON OF THE ASSESSING OFFICER SATISFACTORY THE SUM SO CREDITED MAY BE C HARGED TO INCOME TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. THE QUESTION IS WHAT IS THE TRUE NATURE AND SCOPE O F SECTION 68 OF THE ACT? WHEN AND IN WHAT CIRCUMSTANCES WOULD S.68 OF THE ACT COME INTO PLAY? A BARE READING OF SECTION 68 SUGGES TS THAT THERE HAS TO BE CREDIT OF AMOUNTS IN THE BOOKS MAINTAINED BY THE ASSESSEE; SUCH CREDIT HAS TO BE OF A SUM DURING THE PREVIOUS YEAR AND THE ASSESSEES OFFER NO EXPLANATION ABOUT THE NATURE AND SOURCE OF SUCH CREDIT FOUND IN THE BOOKS; OR THE EXPLANATION OFFER ED BY THE ASSESSEES IN THE OPINION OF THE ASSESSING OFFICER I S NOT SATISFACTORY IT IS ONLY THEN THE SUM SO CREDITED MAY BE CHARGED TO INCOME TAX AS THE INCOME OF THE ASSESSEES OF THAT PREVIOUS YEAR. THE EXPRESSION THE ASSESSEES OFFER NO EXPLANATION MEANS WHERE TH E ASSESSEES OFFER NO PROPER REASONABLE AND ACCEPTABLE EXPLANATION AS REGARDS THE SUMS FOUND CREDITED IN THE BOOKS OF ACCOUNT MAINTAI NED BY THE ASSESSEES. IT IS TRUE THE OPINION OF THE ASSESSIN G OFFICER FOR NOT ACCEPTING THE EXPLANATION OFFERED BY THE ASSESSEES AS NOT SATISFACTORY IS REQUIRED TO BE BASED ON PROPER APPR ECIATION OF MATERIAL AND OTHER ATTENDING CIRCUMSTANCES AVAILABL E ON RECORD. THE OPINION OF THE ASSESSING OFFICER IS REQUIRED TO BE FORMED OBJECTIVELY ITA NO.497/H/2010 SMT. D. PADMAJA SECUNDERABAD 5 5 WITH REFERENCE TO THE MATERIAL AVAILABLE ON RECORD. APPLICATION OF MIND IS THE SINE QUA NON FOR FORMING THE OPINION. 6. IT IS TRUE THAT EVEN AFTER REJECTING THE EXPL ANATION GIVEN BY THE ASSESSEES IF FOUND UNACCEPTABLE THE CRUCIAL ASPEC T WHETHER ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE IT SHOULD BE INF ERRED THE SUMS AND CREDITED IN THE BOOKS OF ACCOUNT OF THE ASSESSEES C ONSTITUTED INCOME OF THE PREVIOUS YEAR MUST RECEIVE THE CONSIDERATION OF THE AUTHORITIES PROVIDED THE ASSESSEES REBUT THE EVIDENCE AND THE INFERENCE DRAWN TO REJECT THE EXPLANATION OFFERED AS UNSATISFACTORY. THE PROVISI ONS OF SECTION 68 OF THE ACT ITSELF PROVIDES WHERE ANY SUM IS FOUND CREDITE D IN THE BOOKS OF THE ASSESSEES FOR ANY PREVIOUS YEAR THE SAME MAY BE CH ARGED TO INCOME TAX AS INCOME OF THE ASSESSEES OF THE PREVIOUS YEAR IF THE EXPLANATION OFFERED BY THE ASSESSEES ABOUT THE NATURE AND SOURCE OF SUCH S UMS FOUND CREDITED IN THE BOOKS OF THE ASSESSEES IN THE OPINION OF THE AS SESSING OFFICER NOT SATISFACTORY. SUCH OPINION FORMED ITSELF CONSTITUT ES A PRIMA FACIE EVIDENCE AGAINST THE ASSESSEES. 7. IN THE PRESENT CASE THE ASSESSEE GIVEN EXPLAN ATION THAT GIFT IS RECEIVED FROM HER SISTER AND ALSO IT WAS CONFIRMED BY HER VIDE LETTER DATED 5.7.1999 AND THE SAME WAS ACCEPTED BY THE ASSESSEE. ACCORDING TO THE DEPARTMENT THE SEIZED MATERIALS MARKED A/DR/1 CONT AINED 3 LETTERS OF THE ASSESSEES SISTER. THESE LETTERS CONTAINING NO DATES AND AMOUNTS. FURTHER THERE WAS A LETTER DATED 18.5.99 WHICH WAS FOUND DURING THE COURSE OF SEARCH ON 3.11.04. THE AMOUNT OF RS.5 LA KHS WAS FILLED AT THE END OF THE SENTENCE WISHING HAPPY PONGAL AND HAPPY UGADI. SINCE THE GIFT WAS RECEIVED ON 5.7.1999 AFTER A LAPSE OF SIX MONTH S OF THESE FESTIVALS THERE WAS A DOUBT IN THE MIND OF THE DEPARTMENT REG ARDING THE GENUINENESS OF THE GIFT. IN OUR OPINION THERE IS A RELATION BETWEEN THE DONOR AND THE DONEE AND ALSO THERE IS ALSO OCCASION TO GIVE THE GIFT. MORE ITA NO.497/H/2010 SMT. D. PADMAJA SECUNDERABAD 6 6 SO THE CAPACITY IDENTITY AND CREDITWORTHINESS OF T HE DONEE IS NOT DOUBTED ONLY BECAUSE THE GIFT WAS MADE AFTER A LAPSE OF SIX MONTHS FROM THE DATE OF THE FESTIVAL THE GENUINENESS WAS DOUBTED. IN OUR OPINION THESE DISCREPANCIES ARE NOT ENOUGH TO COME TO THE CONCLUS ION THAT THE GIFT IS INVALID OR BOGUS. SINCE THE IDENTITY AND CREDITWOR THINESS OF THE DONOR IS PROVED AND ALSO THE TRANSACTION IS CONFIRMED BY THE DONOR AND IT IS BEING BETWEEN THE CLOSE RELATIVES WE ARE INCLINED TO DEL ETE THE ADDITIONS ON THIS ACCOUNT. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IN ITA NO.497/H/2010 STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 31.1.2011 SD/- SD/- N.R.S. GANESAN CHANDRA POOJARI JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 31.1.2011 COPY FORWARDED TO: 1. SMT. D. PADMAJA PLOT NO.6 ROAD NO.10 DHANALAK SHMI HOUSING SOCIETY MAREDPALLY SECUNDERABAD-26 2. THE ACIT CIRCLE 1(3) HYDERABAD 3. CIT(A)-II HYDERABAD. 4. CIT HYDERABAD 5. THE D.R. ITAT HYDERABAD. NP