Ita/73/2020 Of E.ummer Bava v. The Commissioner Of Income Tax

IN THE HIGH COURT OF KERALA AT ERNAKULAMPRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR.JUSTICE VIJU ABRAHAM MONDAY, THE 13 DAY OF SEPTEMBER 2021 / 22ND BHADRA, 1943 ITA NO. 73 OF 2020 AGAINST THE ORDER IN ITA 356/2015 OF I.T.A.TRIBUNAL,COCHIN BENCH,ERNAKULAM APPELLANT/S: E.UMMER BAVAAGED 77 YEARSCONTRACTOR,SAKEENA MANZIL,DOWN HILL,MALAPPURAM-676519. BY ADVS.P.RAGHUNATHSRI.PREMJIT NAGENDRAN RESPONDENT/S: THE COMMISSIONER OF INCOME TAXKOZHIKODE. OTHER PRESENT: SC CHRISTOPHER ABRAHAM THIS INCOME TAX APPEAL HAVING COME UP FOR HEARING ON 13.09.2021,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ITA No.73/2020 S.V.Bhatti,J. J U D G M E N T Heard Advocates Mr Premjit Nagendran and MrChristopher Abraham appearing for the parties. 2.E Ummer Bava/Assessee is the appellant. The Commissioner of Income Tax, Kozhikode/Revenue is therespondent. 2.1The assessee, being aggrieved by the orders whichculminated in the final confirmation by the Income TaxAppellate Tribunal in ITA No.356/Coch/2015 dated01.03.2019, has filed the present appeal. The subject matter ofthe appeal relates to the issues arising in the return filed for theAssessment Year 2004-05. It is, at the outset, very contextual toadvert to the very same controversy and its outcome betweenthe assessee and the Revenue for the Assessment Year 2005-06. ITA No.73/2020 To appreciate the chronology of events, the details are furnished in the following tabular statement: 3.The assessee during the Assessment Years 2004-05 received Rs.80 lakhs from his brother E Hamza Bava, a Non- Resident Indian, through Demand Drafts. The Assessing Officertreated the receipt from assessee's brother as revenue receiptsand determined the tax payable by the assessee on the amountreceived from his brother. 3.1Similarly, for the Assessment Year 2005-06, theassessee received Rs.35 lakhs by Demand Draft, cheques, from ITA No.73/2020 his brother. To appreciate the infirmity or illegality in the order of the Tribunal, a short narrative of thehappenings/orders in 2005-06 are adverted to: The assessmentorder was confirmed by the Commissioner of Income Tax(Appeals); Income Tax Appellate Tribunal (ITAT) and this Courtin ITA No.153/2013. The assessee carried the matter in SpecialLeave to the Supreme Court and in Civil Appeal No.1246/2020, the Supreme Court allowed the appeal of the assessee, thus: “Having heard learned counsel for both the parties andhaving perused the affidavit dated 15.03.2011 of Shri E HamzaBava and in particular, paragraph 3 thereof, we are of the viewthat Rs.35 lakhs that was sent by demand drafts by him to hisbrother, the assessee before us, as gifts in 2004 and 2005 aregenuine, creditworthiness of Shri E Hamza Bava not being indispute. This being the case, we set aside the judgment of theKerala High Court dated 20.05.2016 and delete the addition ofthis sum for the assessment year concerned. The appeal is allowed in the aforesaid terms.” ITA No.73/2020 -5- 3.2For the subject Assessment Year 2004-05, the Tribunal followed its decision between the parties in assessee's own case, ITA No.515/Coch/2011 dated 08.02.2013, anddismissed the appeal filed by the assessee. Hence the appeal atthe instance of the assessee. 3.3The substantial questions of law raised are as follows: “A: WHETHER, in the facts and circumstances, the authoritieswere right in invoking the provisions of Sec. 68 of the Act inrespect of the gift received from the appellant's brother? This being the case, we set aside the judgment of theKerala High Court dated 20.05.2016 and delete the addition ofthis sum for the assessment year concerned. The appeal is allowed in the aforesaid terms.” ITA No.73/2020 -5- 3.2For the subject Assessment Year 2004-05, the Tribunal followed its decision between the parties in assessee's own case, ITA No.515/Coch/2011 dated 08.02.2013, anddismissed the appeal filed by the assessee. Hence the appeal atthe instance of the assessee. 3.3The substantial questions of law raised are as follows: “A: WHETHER, in the facts and circumstances, the authoritieswere right in invoking the provisions of Sec. 68 of the Act inrespect of the gift received from the appellant's brother? B: WHETHER the authorities below were right indicating thatsuch receipts SHOULD HAVE BEEN THROUGH THE NREACCOUNT OF THE DONOR in order to establish a link betweenthe amounts received from the LLC and the gift when theAppellant had received the gifts in the form of Demand DraftsInstruments issued by Foreign Banks and credited to therespective account of the Appellant by negotiation through aBank in India with whom the Appellant maintains account? C: WHETHER, in view of the fact that [1]: the donor is thebrother of the appellant, [2]: admittedly he has received Rs. 110lakhs from his firm from which retired [as certified by thefirm], [3]; the gift of Rs. 80 lakhs was made through Demand ITA No.73/2020 Drafts, the authorities were right in holding that "thegenuineness of the transactions cannot be considered to havebeen established and that creditworthiness of the donor hasnot been established"? 4.Advocate Premjit Nagendran contends that the issue,in fact, in both the Assessment Years is one and the same. Theobjection of the Department resulting in addition of income andthe reply of the assessee are considered in separate orders forassessment years, however resulting in the conclusion that theclaim of assessee that the transaction is not a revenue receiptfrom his brother, was negatived by the Tribunal and this Court.The Supreme Court has reversed all the views taken in thisbehalf by the authorities and the Tribunal. The Tribunal, as amatter of fact, referred to assessee's own case in ITANo.515/Coch/2011, and dismissed the appeal filed by theassessee. The consequence of allowing the appeal of assesseefor the Assessment Year 2005-06 would entail same result in the ITA No.73/2020 subject Assessment Year as well. 5.MrChristopherAbrahamsubmitsthatcreditworthiness of assessee's brother was the kernel of the matter. Having regard to the view expressed by the SupremeCourt in assessee's own case, both the Assessment Years weremoving parallelly, and as Tribunal has referred to its earlierorder, the subject appeal is to be considered in the light of theorder of the Supreme Court. 6.We appreciate the limited submission and we are satisfied firstly that the circumstances surrounding thecontroversy in both the assessment years are substantially sameand similar. The Tribunal referred to its order in ITANo.515/Coch/2011 and dismissed ITA No.356/Coch/2015 filedfor the Assessment Year 2004-05. Consequence of the order ofthe Supreme Court is that the view taken in respect of theassessee's claim has been accepted by the Supreme Court. By following Annexure-F order in Civil Appeal No.1246/2020, thequestions are answered in favour of the assessee, against theRevenue. Income Tax Appeal is allowed. No order as to costs. Sd/- S.V.BHATTIJUDGE Sd/- VIJU ABRAHAMJUDGE jjj ITA No.73/2020 APPENDIX OF ITA 73/2020 PETITIONER ANNEXURE ANNEXURE ACOPY OF ASSESSMENT ORDER FOR 2004.05 DT.25.05.2006. ANNEXURE BCOPY OF ORDER OF COM.OF IT DT.03.03.2008 U/S 263 ANNEXURE CCOPY OF THE ASSMT.ORER U/S 143(3)R/W 263 DT.25.11.2008 FO4 2004.05DT.25.11.2008 FO4 2004.05 ANNEXURE DCOPY OF ORDER OF ITA IN ITA NO.515/COCH/2011 DT.08.02.2013DT.08.02.2013 ANNEXURE ECOPY OF ORDER OF HIGH COURT OF ITA NO.153/2013 DT.20.05.2013DT.20.05.2013 following Annexure-F order in Civil Appeal No.1246/2020, thequestions are answered in favour of the assessee, against theRevenue. Income Tax Appeal is allowed. No order as to costs. Sd/- S.V.BHATTIJUDGE Sd/- VIJU ABRAHAMJUDGE jjj ITA No.73/2020 APPENDIX OF ITA 73/2020 PETITIONER ANNEXURE ANNEXURE ACOPY OF ASSESSMENT ORDER FOR 2004.05 DT.25.05.2006. ANNEXURE BCOPY OF ORDER OF COM.OF IT DT.03.03.2008 U/S 263 ANNEXURE CCOPY OF THE ASSMT.ORER U/S 143(3)R/W 263 DT.25.11.2008 FO4 2004.05DT.25.11.2008 FO4 2004.05 ANNEXURE DCOPY OF ORDER OF ITA IN ITA NO.515/COCH/2011 DT.08.02.2013DT.08.02.2013 ANNEXURE ECOPY OF ORDER OF HIGH COURT OF ITA NO.153/2013 DT.20.05.2013DT.20.05.2013 ANNEXURE FCOPY OF ORDER OF SUPREME COURT IN C.A.N0.1246/2020 DT.07.02.2020C.A.N0.1246/2020 DT.07.02.2020 ANNEXURE GCOPY OF ORDER OF CITA IN ITA 20/R-2/CIT/08.09. DT.20.03.2015 IN APPEAL AGAINST ANN.'C' ORDER FOR 2004.05DT.20.03.2015 IN APPEAL AGAINST ANN.'C' ORDER FOR 2004.05 ANNEXURE HCOPY OF ORDER OF ITAT IN ITA NO.356/COCH/2015 DT.01.034.2019DT.01.034.2019