THE DY CIT CIR 15(1), MUMBAI v. SHRI AMIT M. SHAH, MUMBAI

ITA 4758/MUM/2007 | 2004-2005
Pronouncement Date: 29-10-2010 | Result: Partly Allowed

Appeal Details

RSA Number 475819914 RSA 2007
Assessee PAN ABIPS0914N
Bench Mumbai
Appeal Number ITA 4758/MUM/2007
Duration Of Justice 3 year(s) 4 month(s)
Appellant THE DY CIT CIR 15(1), MUMBAI
Respondent SHRI AMIT M. SHAH, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 29-10-2010
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted H
Tribunal Order Date 29-10-2010
Date Of Final Hearing 29-09-2010
Next Hearing Date 29-09-2010
Assessment Year 2004-2005
Appeal Filed On 29-06-2007
Judgment Text
1 ITA 4758/M/07 SHRI AMIT M. SHAH. IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H BEFORE SHRI P.M. JAGTAP A.M. AND SHRI N.V. VASUDEV AN JM ITA NO. 4758/MUM/07 ASSESSMENT YEAR 2004-05 D.C.I.T. CIR. 15(1) MATRU MANDIR R. NO. 104 MUMBAI. VS. SHRI AMIT M. SHAH BHAGWAN BHUWAN IST FLOOR 103 TAMBAKANTA MUMBAI. 400 003 PAN ABIPS0914N APPELLANT RESPONDENT APPELLANT BY SHRI R.S. SRIVASTAV A RESPONDENT BY SHRI VIJAY KOTHARI ORDER PER P.M. JAGTAP A.M. THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST TH E ORDER OF LD. CIT(A) XV MUMBAI DATED 19.4.07 WHEREBY HE DELETED THE ADDITIO N OF ` 66 89 736/- MADE BY THE A.O. U/S 68 ON ACCOUNT OF GIFT OF RESURGENT INDIA B ONDS OF 1 LAC US DOLLAR GIVEN TO THE ASSESSEE BY SHRI ASHOK S. JAIN. 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVI DUAL WHO IS ENGAGED IN THE BUSINESS OF FINANCING AND DEALING IN SHARES AND SECURITIES. TH E RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY HIM ON 28.10.04 DECLARIN G TOTAL INCOME OF ` 1 00 30 337/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS NOTICED BY THE A.O. FROM THE PERUSAL OF ASSESSEES CAPITAL ACCOUNT THAT THE AMOUNT OF ` 66 89 736/- HAS BEEN CREDITED AS PROCEEDS OF RESURGENT INDIA BONDS WHICH WERE CLAIME D TO BE RECEIVED AS GIFTS FROM SHRI ASHOK S. JAIN A NON-RESIDENT INDIAN SETTLED IN USA . THE A.O. PROCEEDED TO EXAMINE THE GENUINENESS OF THE SAID GIFT CLAIMED TO BE RECEIVED BY THE ASSESSEE AND AFTER GIVING AN 2 ITA 4758/M/07 SHRI AMIT M. SHAH. OPPORTUNITY TO THE ASSESSEE TO SUPPORT AND SUBSTANT IATE HIS CLAIM FOR THE SAID GIFT AND AFTER TAKING INTO CONSIDERATION THE DETAILS AND DOCUMENTS FURNISHED BY THE ASSESSEE THE FOLLOWING FINDINGS/OBSERVATIONS WERE RECORDED BY HI M: (I) CONFIRMATION PURPORTEDLY ISSUED BY SHRI ASHOK JAIN INDICATES THAT HE WAS NOT ORIGINAL SUBSCRIBER TO THE BONDS BUT ACQUIRED THEM SUBSEQUE NTLY. (II) BY NOT FURNISHING COPY OF THE BONDS UNDER REFERENCE THE ASSESSEE HAS NOT PROVED THAT SHRI ASHOK JAIN WAS SUBSCRIBER OF THE BONDS. (III) FINANCIAL SOUNDNESS OF SHRI ASHOK JAIN IN ACQUIRING THE BONDS HAS NOT BEEN PROVED. (IV) THE CERTIFICATE ISSUED BY SHRI JAI GANDHI CPA ABOU T THE FINANCIAL SOUNDNESS BY SHRI ASHOK JAIN IS GENERAL IN NATURE AND DOES NOT INDICA TE THE BASIS OF ISSUE OF THE CERTIFICATE. (V) IDENTITY OF SHRI JAI GANDHI AND HIS AUTHORITY TO IS SUE CERTIFICATE HAS NOT BEEN ESTABLISHED. (VI) THE DONOR SHRI ASHOK JAIN WAS NOT A CLOSE RELATION OF THE ASSESSEE FAMILY (VII) THE ASSESSE HAS HARDLY ANY KNOWLEDGE ABOUT THE DONO RS FAMILY AND FROM THE STATEMENT GIVEN DOES NOT KNOW MUCH ABOUT THE DONOR ALSO. (VIII) THERE WAS NO SPECIFIC OCCASION FOR SHRI ASHOK JAIN TO MAKE GIFT TO THE ASSESSEE. ON THE BASIS OF THE ABOVE FINDINGS/OBSERVATIONS REC ORDED BY HIM THE A.O. HELD THAT THE GENUINENESS OF THE GIFT CLAIMED TO BE RECEIVED BY T HE ASSESSEE IN THE FORM OF RESURGENT INDIA BONDS WAS NOT ESTABLISHED AND THE PROCEEDS OF THE SAID BONDS AMOUNTING TO ` 66 89 736/- WERE ADDED BY HIM TO THE TOTAL INCOME O F THE ASSESSEE U/S 68 TREATING THE SAME AS UNEXPLAINED IN THE ASSESSMENT COMPLETED U/S 143(3) VIDE AN ORDER DATED 29.3.06. 3. AGAINST THE ORDER PASSED BY THE A.O. U/S 143(3) AN APPEAL WAS FILED BY THE ASSESSEE BEFORE THE LD. CIT(A) CHALLENGING INTER A LIA THE ADDITION OF ` 69 89 736/- MADE BY THE A.O. U/S 68 TREATING THE GIFT OF RESURGENT I NDIA BONDS AS UNPROVED/UNEXPLAINED. DURING THE COURSE APPELLATE PROCEEDINGS BEFORE THE LD. CIT(A) CERTAIN DETAILS AND DOCUMENTS WERE FURNISHED BY THE ASSESSEE AND ELABOR ATE SUBMISSIONS WERE MADE IN THE LIGHT OF THE SAID DETAILS AND DOCUMENTS. AFTER TAK ING INTO CONSIDERATION THE SAID 3 ITA 4758/M/07 SHRI AMIT M. SHAH. SUBMISSIONS AND AFTER PERUSING THE DETAILS/DOCUMENT S FURNISHED BY THE ASSESSEE THE LD. CIT(A) RECORDED HIS FINDINGS/OBSERVATIONS IN THE IM PUGNED ORDER AS UNDER: (I) I FIND THAT THE ASSESSEE HAS FILED A COPY OF P ASSPORT OF THE DONOR WHICH IS SUFFICIENT TO PROVE TO ESTABLISH THE IDENTITY OF TH E DONOR. (II) I FIND THAT THE SBI RESURGENT BONDS HAD BEEN PURCHASED LONG BACK BY THE DONOR I.E. IN 1998 IN USA THROUGH THE COLLECTING A GENT I.E. SBI NRI BRANCH MUMBAI AND THE CERTIFICATES TO THIS EFFECT HAD BEEN ISSUED BY THE BANK IN THE NAME OF THE DONOR WHICH WAS PRODUCED BEFORE THE LD. CIT( A). (III) APPREHENSIONS OF THE A.O. AS TO WHETHER THE DONOR HIMSELF WAS THE ORIGINAL SUBSCRIBER OR NOT WAS BASED ON THE FACT THAT THE AS SESSEE COULD NOT PRODUCE THE COPY OF THE BONDS. THIS APPREHENSION OF THE A.O. WA S MISPLACED TO DRAW SOME CONCLUSION ON THE BASIS OF NON-PRODUCTION OF SBI RE SURGENT BONDS AS NOTHING PREVENTED THE A.O. TO VERIFY THE ACTUAL FACTS FROM SBI NRI BRANCH MUMBAI. (IV) ONCE THE FACTUM OF DONOR HAVING ACQUIRED THE BONDS IN THE YEAR 1998 WAS ACCEPTED BY THE A.O. THERE WAS NO REASON TO QUESTI ON THE CREDITWORTHINESS AND FINANCIAL CAPACITY OF THE DONOR. (V). AS A MATTER OF FACT THE CREDITWORTHINESS OF THE DONOR WAS SEEMINGLY ESTABLISHED BY THE FACT THAT THE BONDS WERE HELD BY HIM FOR A PERIOD OF 5 YEARS BEFORE GIVING THE SAME AS GIFT TO THE ASSESSEE. (VI) IT WAS CERTIFIED BY THE PUBLIC ACCOUNTANT MR. JAY GANDHI THAT TOTAL SAVING AND INVESTMENT OF THE DONOR EXCEEDED US $ 30 LACS AND THE SAID CERTIFICATE WAS A GOOD EVIDENCE TO ESTABLISH THE CREDITWORTHINESS OF THE DONOR. (V) THE DONORS FATHER-IN-LAW SHRI SHANTILAL JAIN AND THE ASSESSEES FATHER SHRI MAFATLAL SHAH WERE FIRST COUSIN AND THE GIFT OF BON DS WAS GIVEN BY DONOR TO THE ASSESSEE OUT OF NATURAL LOVE AND AFFECTION. THERE WAS ALSO SUFFICIENT DOCUMENTARY EVIDENCE BROUGHT ON RECORD BY THE ASSESSEE TO ESTAB LISH THE GENUINENESS OF THE GIFT BEYOND ANY DOUBT AND THE FINDINGS OF THE A.O. TO DO UBT THE GENUINENESS OF THE SAID GIFT WERE BASED ONLY ON HIS ENGINEERED LAUNCH AND S URMISES. 4. ON THE BASIS OF THE ABOVE FINDINGS/OBSERVA TIONS RECORDED BY HIM THE LD. CIT(A) HELD THAT THE GIFT RECEIVED BY THE ASSESSEE FROM SH RI ASHOK JAIN WAS GENUINE AND THE 4 ITA 4758/M/07 SHRI AMIT M. SHAH. ADDITION MADE BY THE A.O. U/S 68 TREATING THE SAID GIFT AS UNPROVED/UNEXPLAINED WAS DELETED BY HIM. AGGRIEVED BY THE ORDER OF THE LD. CIT(A) THE REVENUE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 5. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDE S AND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. THE LIMITED GRIEVANCE OF THE RE VENUE AS PROJECTED IN THE GROUNDS RAISED IN THIS APPEAL AND AS FURTHER REITERATED BY THE LD. D.R. AT THE TIME OF HEARING BEFORE US IS THAT THE COPIES OF RESURGENT INDIA BONDS CERT IFICATES TO SHOW THAT THE DONOR WAS THE ORIGINAL SUBSCRIBER TO THE SAID BONDS WERE FILED BY THE ASSESSEE FOR THE FIRST TIME BEFORE THE LD. CIT(A) AND THIS CRUCIAL EVIDENCE FILED BY T HE ASSESSEE FOR THE FIRST TIME BEFORE HIM WAS RELIED UPON BY THE LD. CIT(A) WITHOUT GIVING AN Y OPPORTUNITY TO THE A.O. TO VERIFY THE SAME. AS SUBMITTED BY THE LD. D.R. THIS RELEV ANT EVIDENCE WAS NOT FILED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDING S DESPITE SUFFICIENT OPPORTUNITY HAVING BEEN AFFORDED BY THE A.O. AND THE A.O. THERE FORE HAD PROCEEDED TO DRAW AN ADVERSE INFERENCE AGAINST THE ASSESSEE IN THE ABSEN CE OF THE SAID EVIDENCE. THE LD. D.R. HAS CONTENDED THAT THERE IS THUS A CLEAR VIOLATION OF RULE 46A BY THE LD. CIT(A) IN RELYING ON THE SAID ADDITIONAL EVIDENCE FILED BY THE ASSESS EE WITHOUT GIVING ANY OPPORTUNITY TO THE A.O. TO VERIFY THE SAME. HE HAS URGED THAT THIS MA TTER MAY THEREFORE BE RESTORED TO THE FILE OF THE A.O. FOR GIVING SUCH OPPORTUNITY. WE F IND MERIT IN THIS CONTENTION RAISED BY THE LD. D.R. ACCORDINGLY THE MATTER IS RESTORED TO THE FILE OF THE A.O. FOR THE LIMITED PURPOSE OF VERIFYING THE COPIES OF RESURGENT INDIA BONDS CERTIFICATES FILED BY THE ASSESSEE AS AN ADDITIONAL EVIDENCE BEFORE THE LD. C IT(A) TO ASCERTAIN WHETHER THE DONOR WAS THE ORIGINAL SUBSCRIBER OF THE RESURGENT INDIA BONDS AND FOR DECIDING THE ISSUE KEEPING IN VIEW THE FINDING OF SUCH VERIFICATION. 5 ITA 4758/M/07 SHRI AMIT M. SHAH. 6. IN THE RESULT APPEAL OF THE REVENUE IS TREA TED AS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON 29 TH OCTOBER 2010. SD/- SD/ - (N.V. VASUDEVAN) (P.M. JAGTAP) JUDICIAL MEMBER ACC OUNTANT MEMBER MUMBAI DATED 29 TH OCTOBER 2010. RK COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) XV - MUMBAI 4. THE CIT- CITY 15 MUMBAI 5. THE DR BENCH H 6. MASTER FILE // TUE COPY// BY ORDER DY/ASSTT. REGISTRAR ITAT MUMBAI 6 ITA 4758/M/07 SHRI AMIT M. SHAH. DATE INITIALS 1. DRAFT DICTATED 20.9.10 SR.P.S./P.S. 2. DRAFT PLACED BEFORE AUTHOR 27.10.10 SR.P.S./P.S. 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER. - J.M./A.M. 4.DRAFT DISCUSSED/ APPROVED BY SECOND MEMBER. J.M./A.M. 5. APPROVED DRAFT COMES TO THE SR.P.S./P.S. SR.P.S./P.S. 6. KEPT FOR PRONOUNCEMENT ON SR.P.S./P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S./P.S. 8. DATE OF WHICH FILE GOES TO THE HEAD CLERK. 9. DATE OF DISPATCH OF ORDER.