The ITO, Ward-2(4), v. Shri Jayantilal Govindji Kundaliya,

ITA 804/RJT/2005 | 1999-2000
Pronouncement Date: 29-07-2011 | Result: Allowed

Appeal Details

RSA Number 80424914 RSA 2005
Assessee PAN OFAIR1970G
Bench Rajkot
Appeal Number ITA 804/RJT/2005
Duration Of Justice 6 year(s) 1 month(s) 18 day(s)
Appellant The ITO, Ward-2(4),
Respondent Shri Jayantilal Govindji Kundaliya,
Appeal Type Income Tax Appeal
Pronouncement Date 29-07-2011
Appeal Filed By Department
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 29-07-2011
Date Of Final Hearing 25-07-2011
Next Hearing Date 25-07-2011
Assessment Year 1999-2000
Appeal Filed On 10-06-2005
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH RAJKOT BEFORE SHRI A.L. GEHLOT (AM) AND SHRI N.R.S. GANESA N (JM) I.T.A. NO.804/RJT/2005 (ASSESSMENT YEAR 1999-2000) ITO WD.2(4) VS SHRI JAYANTILAL GOVINDJI KUNDALI YA RAJKOT VEGETABLE MARKET PARA BAZAR RAJKOT PAN : NOT AVAILABLE (APPELLANT) (RESPONDENT) C.O. NO.687/RJT/2005 (ARISING OUT OF I.T.A. NO.804/RJT/2005) (ASSESSMENT YEAR 1999-2000) SHRI JAYANTILAL GOVINDJI KUNDALIYA VS ITO WD.2(4) RAJKOT RAJKOT (CROSS OBJECTOR) (RESPONDENT) REVENUE BY : SHRI MK SINGH ASSESSEE BY : SHRI DM RINDANI O R D E R PER N.R.S. GANESAN JM THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(A)-III RAJKOT DATED 30-03-2005 FOR ASSESSMENT YEAR 1999-20 00. THE ASSESSEE HAS FILED THE CROSS OBJECTION. THEREFORE WE HEARD THE APPEAL AND THE CROSS OBJECTION TOGETHER AND DISPOSE THEM OFF BY THIS COMMON ORDER. 2. THE ASSESSEE HAS CHALLENGED THE REOPENING OF THE ASSESSMENT U/S 147 IN THE CROSS OBJECTION. SINCE THE REOPENING GOES TO T HE ROOT OF THE MATTER WE DEEM IT FIT TO TAKE UP THE CROSS OBJECTION FIRST. ITA NO.804/RJT/2005 CO NO. 687/RJT/2005 2 3. SHRI DM RINDANI THE LD. REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER HAD CALLED FOR THE DETAILS OF THE GIFTS RECEIVED BY THE ASSESSEE FROM NON RESIDENT INDIANS. THE ASSESSEE H AD FILED THE CONFIRMATION LETTERS DETAILS OF THE DONORS ETC BEFORE THE ASSE SSING OFFICER. THE ASSESSING OFFICER AFTER CONSIDERING THE CONFIRMATIONS AND OT HER LETTERS FOUND THAT THE GIFTS RECEIVED BY THE ASSESSEE ARE GENUINE; HOWEVER HE H AS NOT EXPRESSLY STATED SO IN THE ASSESSMENT ORDER. WITHOUT REFERRING ANYTHIN G ABOUT THE GIFTS RECEIVED BY THE ASSESSEE THE ASSESSING OFFICER ACCEPTED THE RE TURN FILED BY THE ASSESSEE. THEREFORE ACCORDING TO THE LD.REPRESENTATIVE ONCE THE ASSESSING OFFICER HAD CALLED FOR THE DETAILS AND EXAMINED THE SAME IT CA NNOT BE SAID THAT THERE WAS AN ESCAPEMENT OF INCOME. REFERRING TO THE JUDGMENT OF THE GUJARAT HIGH COURT IN NITIN P SHAH ALIAS MODI VS DCIT (2005) 276 ITR 411 (GUJ) THE LD.REPRESENTATIVE SUBMITTED THAT IN THE ABSENCE OF ANY INDEPENDENT RE ASON TO BELIEVE THAT THE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT TH E ASSESSMENT CANNOT BE REOPENED U/S 147 OF THE ACT. ACCORDING TO THE LD.R EPRESENTATIVE THE CASE WAS REOPENED DUE TO CHANGE OF OPINION. THEREFORE THE REOPENING OF THE ASSESSMENT IS INVALID. 4. ON THE CONTRARY SHRI MK SINGH THE LD.DR SUBMIT TED THAT THE ASSESSING OFFICER HAS NOT EXAMINED THE GENUINENESS OF THE GIF TS IN THE LIGHT OF THE JUDGMENT OF THE APEX COURT IN THE CASE OF CIT VS P MOHANA KA LA (2007) 291 ITR 278 (SC). MERELY BECAUSE THE GIFTS WERE RECEIVED THROUGH BANK ING CHANNEL THAT ALONE WOULD NOT PROVE THE GENUINENESS. SINCE THE ASSESSI NG OFFICER HAD NOT EXPRESSED ANY OPINION IN THE ASSESSMENT ORDER NO ONE COULD S AY THAT THE ASSESSING OFFICER HAS REOPENED THE ASSESSMENT DUE TO CHANGE OF OPINIO N. MERE PRODUCTION OF DOCUMENTS IS NOT SUFFICIENT. THE LD.DR SUBMITTED T HAT SINCE THE ASSESSMENT WAS REOPENED WITHIN FOUR YEARS THE ASSESSING OFFICER IS WELL WITHIN HIS RIGHT TO ASSESS ALL THE INCOMES WHICH ARE ESCAPED FROM THE ASSESSME NT. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND HAVE ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTED LY THE ASSESSMENT WAS ITA NO.804/RJT/2005 CO NO. 687/RJT/2005 3 COMPLETED U/S 143(3) OF THE ACT. THE COPY OF THE A SSESSMENT ORDER IS AVAILABLE AT PAGE 25 OF THE PAPER BOOK. A PERUSAL OF THE ASS ESSMENT ORDER SHOWS THAT THE ASSESSING OFFICER HAS NOT EXPRESSED ANY OPINION ABO UT THE GIFTS RECEIVED FROM NON RESIDENT INDIANS. THERE IS NO DISCUSSION THER E IS NO WHISPER ABOUT THE GIFTS. THE ASSESSEE CONTENDS THAT THE DETAILS WERE FURNISH ED BEFORE THE ASSESSING OFFICER AND THEREFORE THE ASSESSING OFFICER EXAMIN ED AND ACCEPTED THE GENUINENESS OF THE GIFTS. WE FIND THAT THE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS SUNIL KUMAR GOEL (2005) 274 ITR 53 ( P&H) EXAMINED THIS ISSUE ELABORATELY AND AFTER REFERRING TO THE JUDGMENT OF THE APEX COURT IN S.N. MUKHERJEE VS UNION OF INDIA (1990) AIR 1990 SC 1984 AND THE FULL BENCH DECISION OF THE GUJARAT HIGH COURT IN TESTEELS LTD VS N.M. DESAI (1970) AIR 1970 GUJ 1 (FB) FOUND THAT THE QUASI JUDICIAL AUTHO RITIES HAVE TO RECORD REASON FOR TAKING THE DECISION. FOR THE PURPOSE OF CONVENIENC E WE ARE REPRODUCING BELOW THE JUDGMENT OF THE APEX COURT AND THE GUJARAT HIGH COURT AS REPRODUCED BY THE PUNJAB & HARYANA HIGH COURT AT PAGES 56 57 58 & 5 9 OF THE REPORTED JUDGMENT: IN S.N. MUKHERJEE V. UNION OF INDIA AIR 1990 SC 1984 A CONSTITUTION BENCH OF THE SUPREME COURT DISCUSSED T HE DEVELOPMENT OF LAW ON THIS SUBJECT IN INDIA AUSTRA LIA CANADA ENGLAND AND THE UNITED STATES OF AMERICA AND AFTER MAKING REFERENCE TO A LARGE NUMBER OF JUDICIAL PRECEDENTS THEIR LORDSHIPS CULLED OUT THE FOLLOWING PROPOSITIONS (PAGE 1995): THE DECISIONS OF THIS COURT REFERRED TO ABOVE INDI CATE THAT WITH REGARD TO THE REQUIREMENT TO RECORD REASO NS THE APPROACH OF THIS COURT IS MORE IN LINE WITH THAT OF THE AMERICAN COURTS. AN IMPORTANT CONSIDERATION WHICH HAS WEIGHED WITH THE COURT FOR HOLDING THAT AN ADMINIST RATIVE AUTHORITY EXERCISING QUASI-JUDICIAL FUNCTIONS MUST RECORD THE REASONS FOR ITS DECISION IS THAT SUCH A DECISION I S SUBJECT TO THE APPELLATE JURISDICTION OF THIS COURT UNDER ARTI CLE 136 OF THE CONSTITUTION AS WELL AS THE SUPERVISORY JURISDICTIO N OF THE HIGH COURTS UNDER ARTICLE 227 OF THE CONSTITUTION A ND THAT THE REASONS IF RECORDED WOULD ENABLE THIS COURT OR TH E HIGH COURTS TO EFFECTIVELY EXERCISE THE APPELLATE OR SUP ERVISORY POWER. BUT THIS IS NOT THE SOLE CONSIDERATION. TH E OTHER CONSIDERATIONS WHICH HAVE ALSO WEIGHED WITH THE COU RT IN TAKING THIS VIEW ARE THAT THE REQUIREMENT OF RECORD ING ITA NO.804/RJT/2005 CO NO. 687/RJT/2005 4 REASONS WOULD (I) GUARANTEE CONSIDERATION BY THE AU THORITY; (II) INTRODUCE CLARITY IN THE DECISIONS; AND (III) MINIMISE CHANCES OF ARBITRARINESS IN DECISION MAKING. IN TH IS REGARD A DISTINCTION HAS BEEN DRAWN BETWEEN ORDINARY COURTS OF LAW AND TRIBUNALS AND AUTHORITIES EXERCISING JUDICIAL F UNCTIONS ON THE GROUND THAT A JUDGE IS TRAINED TO LOOK AT THING S OBJECTIVELY UNINFLUENCED BY CONSIDERATIONS OF POLICY OR EXPEDIE NCY WHEREAS AN EXECUTIVE OFFICER GENERALLY LOOKS AT THI NGS FROM THE STAND POINT OF POLICY AND EXPEDIENCY. REASONS WHEN RECORDED BY AN ADMINISTRATIVE AUTHOR ITY IN AN ORDER PASSED BY IT WHILE EXERCISING QUASI-JUDICI AL FUNCTIONS WOULD NO DOUBT FACILITATE THE EXERCISE O F ITS JURISDICTION BY THE APPELLATE OR SUPERVISORY AUTHOR ITY. BUT THE OTHER CONSIDERATIONS REFERRED TO ABOVE WHICH HAVE ALSO WEIGHED WITH THIS COURT IN HOLDING THAT AN ADMINIST RATIVE AUTHORITY MUST RECORD REASONS FOR ITS DECISION ARE OF NO LESS SIGNIFICANCE. THESE CONSIDERATIONS SHOW THAT THE R ECORDING OF REASONS BY AN ADMINISTRATIVE AUTHORITY SERVES A SALUTARY PURPOSE NAMELY IT EXCLUDES CHANCES OF ARBITRARINE SS AND ENSURES A DEGREE OF FAIRNESS IN THE PROCESS OF DECI SION- MAKING. THE SAID PURPOSE WOULD APPLY EQUALLY TO AL L DECISIONS AND ITS APPLICATION CANNOT BE CONFINED TO DECISIONS WHICH ARE SUBJECT TO APPEAL REVISION OR JUDICIAL R EVIEW. IN OUR OPINION THEREFORE THE REQUIREMNT6 THAT REASON S BE RECORDED SHOULD GOVERN THE DECISIONS OF AN ADMINIST RATIVE AUTHORITY EXERCISING QUASI-JUDICIAL FUNCTIONS IRRES PECTIVE OF THE FACT WHETHER THE DECISION IS SUBJECT TO APPEAL REVISION OR JUDICIAL REVIEW. IT MAY HOWEVER BE ADDED THAT IT IS NOT REQUIRED THAT THE REASONS SHOULD BE AS ELABORATE A IN THE DECISION OF A COURT OF LAW. THE EXTENT AND NATURE OF THE REASONS WOULD DEPEND ON PARTICULAR FACTS AND CIRCUMSTANCES. WHAT IS NECESSARY IS THAT THE REASO NS ARE CLEAR AND EXPLICIT SO AS TO INDICATE THAT THE AUTHO RITY HAS GIVEN DUE CONSIDERATION TO THE POINTS IN CONTROVERS Y. THE NEED FOR RECORDING OF REASONS IS GREATER IN A CASE WHERE THE ORDER IS PASSED AT THE ORIGINAL STAGE. THE APPELLA TE OR REVISIONAL AUTHORITY IF IT AFFIRMS SUCH AN ORDER NEED NOT GIVE SEPARATE REASONS IF THE APPELLATE OR REVISIONAL AUT HORITY AGREE WITH THE REASONS CONTAINED IN THE ORDER UNDER CHALLENGE. IN TESTEELS LTD V. N.M. DESAI (1970) 37 FJR 7; AIR 1970 GUJ 1 A FULL BENCH OF THE GUJARAT HIGH COURT HAS MADE AN EXTREMELY LUCID ENUNCIATION OF LAW ON THE SUBJECT AND WE CAN DO NO BETTER ITA NO.804/RJT/2005 CO NO. 687/RJT/2005 5 THAN TO EXTRACT SOME OF THE OBSERVATIONS MADE IN TH AT DECISION. THE SAME ARE (HEADNOTE OF AIR 1970 GUJ)): :THE NECESSITY OF GIVING REASONS FLOWS AS A NECESS ARY COROLLARY FROM THE RULE OF LAW WHICH CONSTITUTES ON E OF THE BASIC PRINCIPLES OF THE INDIAN CONSTITUTIONAL SET-U P. THE ADMINISTRATIVE AUTHORITIES HAVING A DUTY TO ACT JUD ICIALLY CANNOT THEREFORE DECIDE ON CONSIDERATIONS OF POLICY OR EXPEDIENCY. THEY MUST DECIDE THE MATTER SOLELY ON THE FACTS OF THE PARTICULAR CASE SOLELY ON THE MATERIAL BEFO RE THEM AND APART FROM ANY EXTRANEOUS CONSIDERATIONS BY APPLYIN G PRE- EXISTING LEGAL NORMS TO FACTUAL SITUATIONS. NOW TH E NECESSITY OF GIVING REASONS IS AN IMPORTANT SAFEGUARD T ENSUR E OBSERVANCE OF THE DUTY TO ACT JUDICIALLY. IT INTRO DUCES CLARITY CHECKS THE INTRODUCTION OF EXTRANEOUS OR IRRELEVANT CONSIDERATIONS AND EXCLUDES OR AT ANY RATE MINIMI ZES ARBITRARINESS IN THE DECISION-MAKING PROCESS. ANOTHER REASON WHICH COMPELS MAKING OF SUCH AN ORD ER IS BASED ON THE POWER OF JUDICIAL REVIEW WHICH IS P OSSESSED BY THE HIGH COURT UNDER ARTICLE 226 AND THE SUPREME COURT UNDER ARTICLE 32 OF THE CONSTITUTION. THESE COURTS HAVE THE POWER UNDER THE SAID PROVISIONS TO QUASH BY CERTIOR ARI A QUASI-JUDICIAL ORDER MADE BY AN ADMINISTRATIVE OFFI CER AND THIS POWER OF REVIEW CAN BE EFFECTIVELY EXERCISED O NLY IF THE ORDER IS A SPEAKING ORDER. IN THE ABSENCE OF ANY R EASONS IN SUPPORT OF THE ORDER THE SAID COURTS CANNOT EXAMIN E THE CORRECTNESS OF THE ORDER UNDER REVIEW. THE HIGH CO URT AND THE SUPREME COURT WOULD BE POWERLESS TO INTERFERE S O AS TO KEEP THE ADMINISTRATIVE OFFICER WITHIN THE LIMITS O F THE LAW. THE RESULT WOULD BE THAT THE POWER OF JUDICIAL REVI EW WOULD BE STULTIFIED AND NO REDRESS BEING AVAILABLE TO THE CITIZEN THERE WOULD BE INSIDIOUS ENCOURAGEMENT TO ARBITRARI NESS AND CAPRICE. IF THIS REQUIREMENT IS INSISTED UPON THE N THEY WILL BE SUBJECT TO JUDICIAL SCRUTINY AND CORRECTION. IF THE ORDER PASSED BY HE TRIBUNAL IS SCRUTINIZED IN THE LIGHT OF THE AFOREMENTIONED PROPOSITION OF LAW WE DO NOT FI ND ANY DIFFICULTY IN SETTING ASIDE THE SAME ON THE GROUND OF VIOLATIO N OF THE RULES OF NATURAL JUSTICE. THE FLOWERY LANGUAGE USED BY THE TRIBUNAL TO JUSTIFY ITS ACCEPTANCE OF THE RESPONDENTS PLEA THAT HE DID NOT KNOW THE LAW DOES NOT WARRANT OUR AFFIRMATION. IN OUR OPINI ON THE TRIBUNAL WAS DUTY BOUND TO RECORD TANGIBLE AND COGENT REASON S FOR UPSETTING WELL REASONED ORDERS PASSED BY THE ASSESSING OFFICE R AND HE COMMISSIONER OF INCOME-TAX (APPEALS). IT SHOULD HA VE DIRECTED ITS ATTENTION TO THE LANGUAGE OF SECTIONS 271D AND 271E OF THE ACT IN ITA NO.804/RJT/2005 CO NO. 687/RJT/2005 6 CONJUNCTION WITH OTHER PROVISIONS OF THE SAME FAMIL Y AND THEN DECIDED BY A REASONED ORDER WHETHER THE RESPONDENT HAD BEEN ABLE TO MAKE OUT A CASE FOR DELETING THE PENALTY. THE ORDER PASSED BY THE TRIBUNAL SHOULD HAVE CLEARLY REFLECTED THE A PPLICATION OF MIND BY THE LEARNED MEMBERS. 6. IN VIEW OF THE JUDGMENT OF THE APEX COURT IN THE CASE OF S.N. MUKHERJEE (SUPRA) AND TESTEELS LTD V N.M. DESAI (SUPRA) IT IS INCUMBENT UPON THE ASSESSING OFFICER TO RECORD REASONS FOR ACCEPTING THE GENUINE NESS OF THE GIFTS RECEIVED FROM NON RESIDENT INDIANS. IN THE ABSENCE OF ANY REASON S RECORDED BY THE ASSESSING OFFICER WE CANNOT PRESUME THAT THE ASSESSING OFFICE R HAS TAKEN A VIEW. IT IS OBVIOUS THAT THE ASSESSING OFFICER HAS NOT TAKEN AN Y VIEW / OPINION WITH REGARD TO THE GIFTS RECEIVED BY THE ASSESSEE FROM THE NON RES IDENT INDIANS. THEREFORE THERE IS NO QUESTION OF CHANGE OF OPINION. ADMITTE DLY THE NOTICE U/S 148 WAS ISSUED FOR REOPENING THE ASSESSMENT WITHIN FOUR YEA RS. THEREFORE THE ASSESSING OFFICER IS WELL WITHIN HIS RIGHTS TO REOPEN THE ASS ESSMENT FOR THE PURPOSE OF ASSESSING THE INCOME WHICH ESCAPED THE ASSESSMENT. IN VIEW OF THE ABOVE WE DO NOT FIND ANY SUBSTANCE IN THE CROSS OBJECTION FI LED BY THE ASSESSEE. 7. NOW COMING TO THE MERIT OF THE CASE SHRI RM RIN DANI THE LD.REPRESENTATIVE FOR THE ASSESSEES SUBMITTED THAT THE ASSESSEES RECEIVED GIFT THROUGH BANKING CHANNEL. THE CHEQUE WAS GIVEN IN T HE NRE ACCOUNT MAINTAINED BY THE NON RESIDENT INDIAN. THEREFORE THE GENUINE NESS OF THE TRANSACTION CANNOT BE DOUBTED AT ALL. THE IDENTITY OF THE DONO R IS ALSO NOT IN DOUBT. THE NON RESIDENT INDIAN WHO GIFTED THE AMOUNT WAS A BUSINE SSMAN IN THE FOREIGN COUNTRY AND THE NON RESIDENT INDIAN HAS SUFFICIENT BANK BALANCES IN THE NRE ACCOUNT. THEREFORE THE CAPACITY OF THE DONOR TO G IVE THE GIFT HAS ALSO BEEN SUFFICIENTLY EXPLAINED. THEREFORE ACCORDING TO TH E LD.REPRESENTATIVE THE QUESTION OF MAKING ANY ADDITION U/S 68 WOULD NOT ARISE FOR C ONSIDERATION. 8. ON THE CONTRARY SHRI M.K. SINGH THE LD.DR SUBM ITTED THAT MERELY BECAUSE THE ASSESSEE HAS RECEIVED THE GIFT THROUGH BANKING CHANNEL THAT ALONE CANNOT ESTABLISH THE GENUINENESS OF THE TRANSACTION . IT IS FOR THE ASSESSEE TO ITA NO.804/RJT/2005 CO NO. 687/RJT/2005 7 ESTABLISH THE OCCASION FOR GIVING THE GIFT. ADMITT EDLY IN ALL THE CASES THE GIFT WAS GIVEN BY STRANGERS AND THE ASSESSEE CLAIMED THE DON OR AS FRIEND. MOREOVER THERE IS NO OCCASION FOR THE ASSESSEE TO RECIPROCAT E SUCH KINDNESS OF GIVING GIFT. ACCORDING TO THE LD.DR THE GIFT CANNOT BE ONE WAY. IT IS TO BE RECIPROCATED APPROPRIATELY AT THE APPROPRIATE OCCASION. THESE F ACTS WERE NOT ESTABLISHED BEFORE THE LOWER AUTHORITY. THEREFORE MERELY BECA USE THE AMOUNT WAS RECEIVED THROUGH BANKING CHANNEL THAT ALONE CANNOT ESTABLISH THE GENUINENESS OF THE TRANSACTION. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND HAVE ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTED LY CASH CREDIT WAS FOUND IN THE FORM OF NRI GIFT. THE ASSESSEE CLAIMED THAT TH E DONOR IS A FRIEND. ADMITTEDLY THE DONOR IS NOT A RELATIVE OF THE ASSE SSEE. NORMALLY THERE SHOULD BE AN OCCASION FOR GIVING GIFT BY A PERSON WHO IS NOT BLOOD RELATIVE. IN CASE OF BLOOD RELATIVE ONE MAY SAY THAT NO OCCASION IS REQUIRED F OR GIVING GIFT. MOTHER FATHER BROTHER SISTER MAY GIFT AT ANY TIME TO THEIR CHILD REN / GRAND CHILDREN BROTHER SISTER RESPECTIVELY. BUT THAT IS NOT THE CASE IN R ESPECT OF OTHER PERSONS. NORMALLY THE THIRD PARTIES WOULD GIFT ON AN OCCASI ON. SUCH A GIFT IS ALSO NEEDS TO BE RECIPROCATED APPROPRIATELY. ALL THESE FACTS WOUL D DEPENDENT UPON THE FACTS OF EACH CASE. ONE CANNOT LAY DOWN ANY RULE / PRESCRIPT ION FOR GIVING / RECEIVING GIFTS. IT IS TO BE ESTABLISHED SATISFACTORILY DEPENDING UP ON THE FACTS OF EACH CASE. 10. WE FIND THAT THE APEX COURT IN THE CASE OF P MO HANA KALA (SUPRA) HAD AN OCCASION TO CONSIDER AN IDENTICAL SET OF FACTS. IN THE CASE BEFORE THE APEX COURT THE ASSESSEE RECEIVED FOREIGN GIFT FROM A DONOR. T HE PAYMENT WAS MADE THROUGH BANKING CHANNEL AND IT WAS CREDITED IN THE BANK ACCOUNT. THE DONOR IN THE CASE BEFORE APEX COURT CLAIMED THAT HE WAS PAYI NG TAX IN ENGLAND AND HAD SUFFICIENT FUNDS FOR GIVING GIFT. THE APEX COURT F OUND THAT THE STATEMENT MADE BY THE DONOR IS A SELF-SERVING STATEMENT AND THERE IS NO MATERIAL EVIDENCE AS REGARDS TO HIS FINANCIAL STATUS. ULTIMATELY THE A PEX COURT FOUND THAT THE TRANSACTIONS THOUGH APPARENT WERE HELD TO BE NOT RE AL ONES. MAY BE THE MONEY ITA NO.804/RJT/2005 CO NO. 687/RJT/2005 8 CAME BY WAY OF BANK CHEQUE AND WAS PAID THROUGH THE PROCESS OF BANKING TRANSACTION BUT THAT ITSELF IS OF NO CONSEQUENCE. IN FACT THE APEX COURT OBSERVED ON PAGE 289 OF THE ITR AS FOLLOWS: RELYING ON THE DECISIONS OF THIS COURT IN BEJOY G OPAL MUKHERJI V. PRATUL CHANDRA GHOSE AIR 1953 SC 153 A ND ORIENT DISTRIBUTORS V. BANK OF INDIA LTD. AIR 1979 SC 867 SHRI IYER LEARNED SENIOR COUNSEL CONTENDED THAT THE ISSUE REL ATING TO THE PROPRIETY OF THE LEGAL CONCLUSION THAT COULD BE DRA WN ON THE BASIS OF PROVED FACTS GIVES RISE TO A QUESTION OF LAW AND T HEREFORE THE HIGH COURT IS JUSTIFIED IN INTERFERING IN THE MATTER SIN CE THE AUTHORITIES BELOW FAILED TO DRAW A PROPER AND LOGICAL INFERENCE FROM THE PROVED FACTS. WE ARE UNABLE TO PERSUADE OURSELVES TO ACCE PT THE SUBMISSIONS. THE FINDINGS OF FACT ARRIVED AT BY TH E AUTHORITIES BELOW ARE BASED ON PROPER APPRECIATION OF THE FACTS AND THE MATERIAL AVAILABLE ON RECORD AND SURROUNDING CIRCUM STANCES. THE DOUBTFUL NATURE OF THE TRANSACTION AND THE MANNER I N WHICH THE SUMS WERE FOUND CREDITED IN THE BOOKS OF ACCOUNTS M AINTAINED BY THE ASSESSEE HAVE BEEN DULY TAKEN INTO CONSIDERATIO N BY THE AUTHORITIES BELOW. THE TRANSACTIONS THOUGH APPAREN T WERE HELD TO BE NOT REAL ONES. MAY BE THE MONEY CAME BY WAY OF BANK CHEQUES AND PAID THROUGH THE PROCESS OF BANKING TRANSACTION BUT THAT ITSELF IS OF NO CONSEQUENCE. IN VIEW OF THE ABOVE MERELY BECAUSE THE TRANSACTION WAS MADE THROUGH BANKING CHANNEL THAT ALONE WILL NOT PROVE THE GENUINENESS O F THE TRANSACTION. SOMETHING MORE IS REQUIRED TO BE PROVED IN RESPECT OF FOREIGN GIFT. BOTH THE AUTHORITIES BELOW HAD NO OCCASION TO CONSIDER THIS JUDGMENT OF THE APEX COURT IN THE CASE OF P MOHANA KALA (SUPRA). THE ASSESSEE HAD ALSO NO OC CASION TO EXPLAIN THE CONSEQUENCE OF THE JUDGMENT OF THE APEX COURT IN TH E CASE OF P MOHANA KALA (SUPRA). THEREFORE IN OUR OPINION THE MATTER NEE DS TO BE RECONSIDERED BY THE ASSESSING OFFICER IN THE LIGHT OF THE JUDGMENT OF T HE APEX COURT IN THE CASE OF P MOHANA KALA (SUPRA) AFTER GIVING ADEQUATE OPPORTUNI TY TO THE ASSESSEE. A SIMILAR VIEW WAS TAKEN BY THIS TRIBUNAL IN ASSESSEE S OWN CASE FOR ASSESSMENT YEARS 1997-98 1998-99 & 2001-02 IN ITA NO. 438/RJT /2005 & ORS VIDE ORDER DATED 24-06-2011. ITA NO.804/RJT/2005 CO NO. 687/RJT/2005 9 11. ACCORDINGLY WE SET ASIDE THE ORDERS OF LOWER AU THORITIES AND REMAND BACK THE MATTER TO THE FILE OF THE ASSESSING OFFICER. T HE ASSESSING OFFICER SHALL EXAMINE THE ISSUE AFRESH AND THEREAFTER DECIDE THE SAME IN ACCORDANCE WITH LAW AFTER CONSIDERING THE JUDGMENT OF THE HONBLE APEX COURT IN THE CASE OF P MOHANA KALA (SUPRA). NEEDLESS TO POINT OUT THAT TH E ASSESSING OFFICER SHALL GIVE SUFFICIENT OPPORTUNITY TO THE ASSESSEE BEFORE DECID ING THIS ISSUE. 12. IN THE RESULT THE APPEAL OF THE REVENUE IS TRE ATED AS ALLOWED FOR STATISTICAL PURPOSE AND THE CROSS OBJECTION OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29-07-2011. SD/- SD/- (A.L. GEHLOT) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER RAJKOT DT : 29 TH JULY 2011 PK/- COPY TO: 1. ASSESSEE 2. REVENUE 3. THE CIT(A)-III RAJKOT 4. THE CIT-II RAJKOT 5. THE DR I.T.A.T. RAJKOT (TRUE COPY) BY ORDER ASSTT.REGISTRAR ITAT RAJKOT