Commissioner Of Income Tax, Faridabad v. Ita

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. Date of Decision: February 15, 2009 ITA No. 67 of 2010 Commissioner of Income Tax, Faridabad …Appellant Versus Smt. Shweta Bhuchar …Respondent ITA No. 75 of 2010 Commissioner of Income Tax, Faridabad …Appellant Versus Shri Sharad Gilani …Respondent CORAM:HON'BLE MR. JUSTICE M.M. KUMAR HON’BLE MR. JUSTICE JITENDRA CHAUHAN Present:Ms. Urvashi Dhugga, Advocate, for the appellant-revenue. 1.To be referred to the Reporters or not? 2.Whether the judgment should be reported inthe Digest?the Digest? M.M. KUMAR, J. By this order we propose to dispose of ITA Nos. 67 and75 of 2010 as common questions of law and fact are involved.However, facts are being referred from ITA No. 67 of 2010. The revenue has approached this Court by filing theinstant appeal under Section 260A of the Income-Tax Act (for brevity‘the Act’) challenging order dated 8.4.2009, passed by the Income Tax Appellate Tribunal, Delhi Bench ‘G’, Delhi (for brevity, ‘theTribunal’), in ITA No. 1578(Del) 2008, for the assessment year 2004-05. The revenue has claimed various questions of law but at thetime of arguments the following three questions were pressed:- “(i)Whether on the facts and in the circumstances ofthe case, the Tribunal was justified in deleting theaddition of Rs. 6,43,800/- on account ofunexplained investment in the purchase ofproperty, instead of getting proper enquiry madeby directing the Assessing Officer to make areference to the Valuation Officer in terms of sub-section 2 of Section 50C of the Act? (ii) Whether the failure of the Tribunal to get properenquiry made by the lower authority throughreference to the Valuation Officer in a case wherethe facts and circumstances so demanded doesnot result in failure which lays open the action ofthe Tribunal to correction by a higher authority inthe light of the ratio of the judgment of BombayHigh Court in Brabhavati S. Shah v. CIT, 231 ITR277 (Bom.)? (iii) Whether the Tribunal’s decision in respect ofaddition of Rs. 17,00,000/- on account ofsupposed gifts was justified in view of the fact thatcreditworthiness for making gifts was not provedand in the light of the decision of the Calcutta HighCourt in the case of CIT v. Precision Finance (P)Ltd., [1994] 208 ITR 465; and CIT v. Korlay Trading Co. Ltd., [1998] 232 ITR 820, wherein itwas held that mere payment by account payeecheque and mere filing of the Income Tax filenumber of the creditors is not enough to prove thegenuineness of credits unless the assesseeproves genuineness on all 3 points viz. the identityof the creditors/ their creditworthiness/ thegenuineness of the transactions?” It is appropriate to mention that the Tribunal has noticedin its order that the issue involved in the case before it was squarelycovered by the order of the Tribunal passed on 27.2.2009 in ITA No.1580 (Del) 08, for the assessment year 2004-05, in the case of Smt.Chandni Bhuchar, a co-assessee of the present assessee. Againstthe aforesaid order passed by the Tribunal, the revenue hasapproached this Court by filing ITA No. 653 of 2009 (TheCommissioner of Income Tax, Faridabad v. Chandni Bhuchar), whichwas dismissed on 7.1.2010, holding that the value adopted orassessed by any authority of the State Government for the purposeof payment of stamp duty in respect of land or building at the time ofexecution of the transfer deed cannot be taken as sale considerationreceived for the purpose of Section 48 of the Act. Accordingly, it washeld that no additions could have been made by the AssessingOfficer merely because the State Government assessed the price ofthe property at a much higher value for the purposes of payment ofstamp duty. Accordingly, the first two questions deserves to beanswered against the revenue, as has been done in the case of co-assessee in ITA No. 653 of 2009, dismissed on 7.1.2010. The third question is that creditworthiness for making gift was not proved. Again it has to be decided against the revenuebecause in the case of co-assessee, namely, Smt. Chandni Bhucharit was found from the bank statements of Smt. Shweta Bhuchar,respondent in the instant appeal, Shri Rishi Bhuchar and M/s S.R.Ashok & Associates, wherein it was proved that a sum of Rs.17,00,000/- was drawn by donor through two cheques from M/s S.R.Ashok and Associates, which were encashed from the bank accountof the firm on 23.5.2003 and the capital account of the co-assesseein the said firm was debited after receiving the cheque from the firmby the donors, the donors issued a cheque amounting to Rs.17,00,000/- to his sister-in-law Smt. Shweta Bhuchar-respondent.Therefore, there is no doubt about the creditworthiness of theassessee-respondent to make the gift. Accordingly, the thirdquestion is also decided against the revenue and in favour of theassessee-respondent. Accordingly, these appeals stands disposed of in theabove terms. A photocopy of this order be placed on the file ofconnected appeal. (M.M. KUMAR)JUDGE February 15, 2010 Pkapoor (JITENDRA CHAUHAN) JUDGE