Shri Naresh K.Shah, Dahod v. The ACIT.,Cent.Circle-1,, Baroda

ITSSA 38/AHD/2010 | 2001-2002
Pronouncement Date: 01-09-2010 | Result: Dismissed

Appeal Details

RSA Number 3820516 RSA 2010
Assessee PAN IFTOF1500D
Bench Ahmedabad
Appeal Number ITSSA 38/AHD/2010
Duration Of Justice 7 month(s) 19 day(s)
Appellant Shri Naresh K.Shah, Dahod
Respondent The ACIT.,Cent.Circle-1,, Baroda
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 01-09-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 01-09-2010
Date Of Final Hearing 26-08-2010
Next Hearing Date 26-08-2010
Assessment Year 2001-2002
Appeal Filed On 13-01-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI JM AND D. C. AGRAWAL AM) IT (SS) A NO. 38/AHD/2010 A. Y: 2001-02 SHRI NARESH K. SHAH LAXMI MILL COMPOUND CHAKALIA ROAD DAHOD(GUJARAT) VS THE A. C. I. T. CENTRAL CIRCLE-1 BARODA PA NO. AGTPS 89=051 J (APPELLANT) (RESPONDENT) APPELLANT BY SHRI DIVYAKANT PARIKH AR RESPONDENT BY SHRI K. M. MAHESH DR O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-IV AHMEDABAD DATED 26-10-2009 FOR THE ASSESSMENT YEAR 2001-02 ON THE FOLLOWING GROUNDS: 1. THE LEARNED C. I. T. (APPEALS) HAS ERRED IN CON FIRMING THE ADDITION OF RS.84 341/- ON ACCOUNT OF UNEXPLAIN ED GIFT. IT IS SUBMITTED THAT THE ASSESSEE HAD RECEIVE D THE GIFT OF 1500 DOLLARS AND 352 DOLLARS I.E. 1851 DOL LARS FROM U.S.A. FOR WHICH COMPLETE DETAILS LIKE CONFIRM ATION IDENTITY AND CAPACITY OF THE DONORS HAVE BEEN PROVE D BEYOND REASONABLE DOUBT. IN SPITE THEREOF THE C.I.T .(A) HAS ERRONEOUSLY HELD THAT IDENTITY AND CREDITWORTHI NESS OF THE DONOR IS NOT PROVED. SUCH FINDING AND ADDITI ON IS TOTALLY INCORRECT ILLEGAL AND BASELESS AND THEREFO RE THE CONSEQUENTIAL ADDITION OF RS.84 341/- BE DELETED. 2. THE ORDER PASSED BY THE LEARNED C. I. T. (APPEAL S) IS BAD IN LAW AND CONTRARY TO THE PROVISIONS OF LAW AN D FACTS. IT IS SUBMITTED THAT THE SAME BE HELD SO NOW . 2. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOT H THE PARTIES PERUSED THE FINDINGS OF THE AUTHORITIES BELOW AND C ONSIDERED THE MATERIAL ON RECORD. IT (SS) A NO. 38/AHD/2010 SHRI NARESH K. SHAH VS ACIT CC-1 BARODA 2 3. BRIEFLY THE FACTS OF THE CASE ARE THAT THE AO M ADE ADDITION OF RS.84 341/- ON ACCOUNT OF UNEXPLAINED GIFTS RECEIVE D FROM SHRI NAYAN SHAH. THE ASSESSEE WAS ASKED TO EXPLAIN THE NATURE AD PURPOSE OF THE SAID GIFTS AND WAS ALSO DIRECTED TO FILE CONFIRMATI ON OF THE GIFTS. HOWEVER THE ASSESSEE FAILED TO FILE CONFIRMATION OR ANY OTH ER SUBSTANTIATING COGENT PROOF IN SUPPORT OF THE CLAIM. THEREFORE ADDITION WAS MADE ON ACCOUNT OF UNEXPLAINED GIFTS. THE ASSESSEE BEFORE THE LD. CIT( A) FILED TWO ORIGINAL CONFIRMATIONS DATED 15-07-2000 FOR GIFT OF RS.67 172/- (1500 US DOLLAR) AND DATED 10-12-2000 FOR GIFT OF RS.16 169/- (351 U S DOLLAR). THE DONOR SHRI NAYAN SHAH WAS RESIDING IN USA SINCE 1978 AND WAS ENGAGED IN VIDEOGRAPHY WORK IN USA. HIS ANNUAL INCOME WAS CLAI MED AT 50 000 US DOLLAR. THE GIFTS WERE MADE BY ACCOUNT PAYEE CHEQUE S DRAWN ON HARISS BANK USA. THE PHOTOCOPIES OF THE CHEQUES WERE FILE D. THE LEARNED CIT(A) RELYING UPON THE DECISION OF THE HONBLE SUPREME CO URT IN THE CASE OF CIT VS P. MOHANKALA 291 ITR 278 NOTED THAT CONFIRMA TION IS ONLY ON BLANK PAPERS. THE IDENTITY OF THE DONOR AND HIS CRE DITWORTHINESS HAS NOT BEEN PROVED. THE RELATION BETWEEN THE DONOR AND THE DONEE AND THE SPECIAL OCCASION OF GIVING THE GIFTS WAS NOT PROVED ON RECORD. THE LEARNED CIT(A) IN THE ABSENCE OF ANY EVIDENCE TO PROVE THE IDENTITY OF THE DONOR AND HIS CREDITWORTHINESS DISMISSED THE APPEAL OF TH E ASSESSEE. 4. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSINS MADE BEFORE THE AUTHORITIES BELOW AND SUBMITTED THA T DECLARATION OF THE GIFTS WAS FILED BEFORE THE LEARNED CIT(A) AND THAT THE GIFTS WERE RECEIVED THROUGH BANKING CHANNEL AND THE DONOR IS CLOSE FRIE ND OF THE ASSESSEE AND THAT SOURCE OF HIS INCOME WAS FILED. HE HAS SUB MITTED THAT THE AO SHOULD HAVE MADE ENQUIRY FROM THE DONOR AT USA AND IN THE ABSENCE OF THE SAME; THE GIFTS SHOULD HAVE BEEN ACCEPTED. ON THE OTHER HAND THE LEARNED DR RELIED UPON T HE ORDERS OF THE AUTHORITI ES BELOW. IT (SS) A NO. 38/AHD/2010 SHRI NARESH K. SHAH VS ACIT CC-1 BARODA 3 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MAT ERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE R ECEIVED GIFTS FROM THE DONOR IN THE ABOVE AMOUNT. THE AO WANTED TO VERIFY THE GENUINENESS OF THE GIFTS IN THE MATTER AND ACCORDINGLY DIRECTED TH E ASSESSEE TO EXPLAIN THE NATURE AND PURPOSE OF THE SAID GIFTS AND ALSO D IRECTED TO FILE CONFIRMATION AND SUPPORTING EVIDENCE TO PROVE THE G ENUINENESS OF THE GIFTS. THE ASSESSEE HAS HOWEVER FAILED TO EXPLAIN THE NATURE AND PURPOSE OF THE GIFTS. NO RELATIONSHIP AND LOVE AND AFFECTIO N ARE PROVED. NO CONFIRMATION FROM THE DONOR WAS ALSO FILED. IN THE ABSENCE OF ANY EVIDENCE OR MATERIAL ON RECORD THE AO TREATED THE G IFTS TO BE NON- GENUINE. THUS THE ASSESSEE FAILED TO PROVE THE IDE NTITY OF THE DONOR AND HIS CREDITWORTHINESS AND SOURCE OF THE GIFTS IN THE MATTER. AT THE APPELLATE STAGE THE ASSESSEE FILED TWO DECLARATION S OF GIFTS DATED 15-07-2000 AND 10-12-2000 WHICH WERE AVAILABLE WITH THE ASSESSEE PRIOR TO PASSING OF THE ASSESSMENT ORDER. NOTHING WAS EXP LAINED WHY THESE EVIDENCES WERE CONCEALED FROM THE AO AT THE ASSESSM ENT STAGE. MERE FILING OF CONFIRMATION OR DECLARATION OF THE GIFTS WOULD NOT PROVE THE IDENTITY OF THE DONOR AND HIS CREDITWORTHINESS AND SOURCE OF MAKING THE GIFTS. THE ASSESSEE DID NOT FILE ANY EVIDENCE TO PR OVE THE IDENTITY OF THE DONOR. THE LEARNED COUNSEL FOR THE ASSESSEE ADMITTE D THAT EVEN COPY OF THE PASS PORT OF THE DONOR WAS NOT FILED BEFORE THE AUTHORITIES BELOW. THEREFORE NO EVIDENCE OF IDENTITY AND CREDITWORTHI NESS OF THE DONOR WERE FILED BEFORE THE AUTHORITIES BELOW. NO REASONS OR O CCASION OF GIFTS HAVE BEEN FILED ON RECORD. NO EVIDENCE OR MATERIAL SHOWI NG ANY LOVE AND AFFECTION HAS BEEN FILED BEFORE THE AUTHORITIES BEL OW. MERELY BECAUSE GIFTS WERE MADE THROUGH ACCOUNT PAYEE CHEQUES WOULD NOT P ROVE GENUINENESS OF THE GIFTS IN THE MATTER. THUS THE ASSESSEE FAIL ED TO PROVE ALL THE BASIC INGREDIENTS OF THE GENUINE GIFTS IN THE MATTER. EVE N NO COPY OF THE BANK ACCOUNT OF THE DONOR HAS BEEN FILED. SINCE NO SUFFI CIENT EVIDENCE HAS BEEN FILED BEFORE THE AUTHORITIES BELOW TO PROVE GE NUINENESS OF THE GIFTS IN THE MATTER THEREFORE IT IS CLEAR THAT GIFTS IN THE MATTER ARE NOT GENUINE IT (SS) A NO. 38/AHD/2010 SHRI NARESH K. SHAH VS ACIT CC-1 BARODA 4 GIFTS AND ARE ARRANGED AFFAIRS OF THE ASSESSEE. HON BLE DELHI HIGH COURT IN THE CASE OF CIT VS ANIL KUMAR 292 ITR 552 HELD IN THE CASE OF GIFTS MERE IDENTIFICATION OF THE DONOR AND SHOWING THE MO VEMENT OF THE GIFT AMOUNT THROUGH BANKING CHANNELS IS NOT SUFFICI ENT TO PROVE THE GENUINENESS OF THE GIFT. SINCE THE CLAIM OF GIFT IS MADE BY THE ASSESSEE THE ONUS LIES ON HIM NOT ONLY TO ESTABLIS H THE IDENTITY OF THE PERSON MAKING THE GIFT BUT ALSO HIS CAPACITY TO MAKE SUCH A GIFT. IN ASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEAR 1995-96 THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HA D RECEIVED TWO GIFTS OF RS.10 LAKHS EACH FROM N. R. E. ACCOUNTS OF TWO DONORS NAMELY V AND D. THE ASSESSING OFFICER FOUND THAT TH E ASSESSEE COULD NOT DISCHARGE HIS ONUS OF PROVING THE CREDIT- WORTHINESS OF THE DONORS AND HELD THAT THE AMOUNT OF RS.20 LAKHS WHIC H HAD BEEN DECLARED BY THE ASSESSEE AS GIFT WAS IN FACT HIS I NCOME AND ADDED TO HIS TOTAL INCOME UNDER SECTION 68. THE ADDITION WAS DELETED BY THE COMMISSIONER (APPEALS) AND THIS WAS UPHELD BY T HE TRIBUNAL. ON APPEAL TO THE HIGH COURT: HELD THAT THERE WAS NO THING ON RECORD TO SHOW AS TO WHAT WAS THE FINANCIAL CAPACITY OF TH E DONORS WHAT WAS THE CREDIT-WORTHINESS OF THE DONORS WHAT KIND OF RELATIONSHIP THE DONORS HAD WITH THE ASSESSEE WHAT WERE THE SOU RCES OF FUNDS GIFTED TO THE ASSESSEE AND WHETHER THEY HAD THE CAP ACITY OF GIVING LARGE AMOUNTS OF GIFT TO THE ASSESSEE. FURTHER THE ASSESSEE WAS ASKED TO APPEAR IN PERSON BEFORE THE ASSESSING OFFI CER BUT NEVER APPEARED. THE ADDITION OF RS.20 LAKHS WAS JUSTIFIED . THE HONBLE SUPREME COURT IN THE CASE OF CIT VS P. MOHANKALA 29 1 ITR 278 HELD THE ASSESSEE RECEIVED FOREIGN GIFTS FROM ONE COMMON DONOR. THE PAYMENTS WERE MADE TO THEM BY INSTRUMENTS ISSUED BY FOREIGN BANKS AND CREDITED TO THE RESPECTIVE ACCOUNT OF THE ASSESSEES BY NEGOTIATION THROUGH A BANK IN INDIA. MOST OF THE CH EQUES SENT FROM ABOARD WERE DRAWN ON THE CITIBANK N. A. SINGAPORE. THE EVIDENCE INDICATED THAT THE DONOR WAS TO RECEIVE SUITABLE CO MPENSATION FROM IT (SS) A NO. 38/AHD/2010 SHRI NARESH K. SHAH VS ACIT CC-1 BARODA 5 THE ASSESSEES. ON THIS MATERIAL THE ASSESSING OFFIC ER HELD THAT THE GIFTS THOUGH APPARENT WERE NOT REAL AND ACCORDINGLY TREATED ALL THOSE AMOUNTS WHICH WERE CREDITED IN THE ACCOUNT BO OKS OF THE ASSESSEES AS THEIR INCOME APPLYING SECTION 68 OF TH E INCOME-TAX ACT 1961. THE ASSESSEES DID NOT CONTEND THAT EVEN IF THEIR EXPLANATION WAS NOT SATISFACTORY THE AMOUNTS WERE N OT OF THE NATURE OF INCOME. THE COMMISSIONER (APPEALS) CONFIR MED THE ASSESSMENT. ON FURTHER APPEAL THERE WAS A DIFFEREN CE OF OPINION BETWEEN THE TWO MEMBERS OF THE APPELLATE TRIBUNAL A ND THE MATER WAS REFERRED TO THE VICE PRESIDENT WHO CONCURRED WI TH THE FINDINGS AND CONCLUSION OF THE ASSESSING OFFICER AND THE COM MISSIONER (APPEALS). ON APPEAL THE HIGH COURT RE-APPRECIATED THE EVIDENCE AND SUBSTITUTED ITS OWN FINDINGS AND CAME TO THE CO NCLUSION THAT THE REASONS ASSIGNED BY THE TRIBUNAL WERE IN THE RE ALM OF SURMISES CONJECTURE AND SUSPICION. ON APPEAL TO TH E SUPREME COURT: HELD REVERSING THE DECISION OF HIGH COURT THAT FINDINGS OF THE ASSESSING OFFICER THE COMMISSIONER (APPEALS) A ND THE TRIBUNAL WERE BASED ON THE MATERIAL ON RECORD AND NOT ON ANY CONJECTURES AND SURMISES. THAT THE MONEY CAME BY WAY OF BANK CH EQUES AND WAS PAID THROUGH THE PROCESS OF BANKING TRANSACTION WAS NOT BY ITSELF OF ANY CONSEQUENCE. THE HIGH COURT MISDIRECT ED ITSELF AND ERRED IN DISTURBING THE CONCURRENT FINDINGS OF FACT . HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF YASH PAL GOEL VS CIT 310 ITR 75 HELD THAT HELD DISMISSING THE APPEAL THAT THE FINANCIAL POS ITION OF M. SUGGESTED THAT HE NEITHER HAD THE CAPACITY TO MA KE THE GIFT NOR THE SOURCE FROM WHERE THE GIFT WAS MADE. NO REASON WHATSOEVER HAD BEEN ASSIGNED FOR GIFTING SUCH A HUGE AMOUNT BY M TO THE ASSESSEE. M NEVER VISITED THE HOME OF THE ASSESSEE AND HENCE THERE WAS NO LOVE AND AFFECTION. IT WAS NOTHING BUT A SUB TERFUGE TO AVOID INCOME-TAX. THE TRANSACTIONS WERE NOT GENUINE ONES . IT (SS) A NO. 38/AHD/2010 SHRI NARESH K. SHAH VS ACIT CC-1 BARODA 6 6. CONSIDERING THE ABOVE DISCUSSIONS IT IS CLEAR T HAT THE ASSESSEE FAILED TO PROVE ANY RELATION WITH THE DONOR AND HIS CREDITWORTHINESS. NO SUFFICIENT EVIDENCE OR MATERIAL IS FILED ON RECORD TO PROVE THE GENUINENESS OF THE GIFTS IN THE MATTER. MERELY SHOWING GIFTS WE RE MADE THROUGH BANKING CHANNEL IS NOT SUFFICIENT TO PROVE GENUINEN ESS OF THE GIFS IN THE MATTER. HONBLE SUPREME COURT IN THE CASE OF DURGA PRASAD MORE 82 ITR 540 AND IN THE CASE OF SUMATI DAYAL 214 ITR 801 HEL D THAT COURTS OF TRIBUNALS HAVE TO JUDGE THE EVIDENCE BEFORE THEM BY APPLYING THE TEST OF HUMAN PROBABILITIES. IF THE SAID TEST IS APPLIED IN THIS MATTER IT IS CLEARLY ESTABLISHED THAT THE ASSESSEE HAS FAILED TO PROVE GENUINE GIFTS IN THE MATTER. WE ACCORDINGLY DO NOT FIND ANY MERI T IN THE APPEAL OF THE ASSESSEE. THE SAME IS ACCORDINGLY DISMISSED. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 1-09-2010. SD/- SD/- (D. C. AGRAWAL) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 1- 09-2010 LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR ITAT AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR ITAT AHMEDABAD