Taxc/176/2010 Of Commissioner Of Income Tax,Raipur v. Smt. Sushila Devi Jain

IN THE^HIGH^OU^T OF_ JUbICATURE AT BILASPUR:-:„ 'll@^c;''..<.Tax Case ^^^) N0. J ^^_/2010 I;iw>^^ :.^'APPELLAj^^'^'Commis&'ionerofIncomeTax,Raipuri.L.:^/<w'.^^"^y^i^^^^^tft^X^";.'^'^.vsst^..'R^SPONDENTSmt. Sushila bevi jain, c/o Prem(Assessee)Jewellers, Durg (CG)APPEAL UNDER SECTION 260-A OF THE INCOME TAXACT. 1961 y HIGH COURT OF CHHATTISGARH AT BILASPURDIVISION BENCH CORAM:HON'BLE SHRI YATINDRA SINGH, C.J.HON'BLE SHRI SUNIL KUMAR SINHA, J 1. TaxCaseNo.40of2011 Income Tax Appeals under Section 260-A of the Income Tax. 1961 JUDGEMENT(29thAugust,2013) 1. These four tax appeals are under section 260A ofthe Income Tax, 1961(the Act) are against the order of the Income Tax Appellate Tribunal,Bilaspur (the Tribunal) in respect of the assessment year 2004-05 forSmt. Hulas Devi Jain and Smt Sushila Devi Jain (the Assessees) as well asthe penalty proceedings for the same year and for the same persons. B \^vh"^.^•..A^.^''"/ z THE FACTSRelating to the assessment proceedings2.The Assessees are related to each other.Smt. Hulas Devi Jain ismother-in-law of Smt. Sushila Devi Jain.Both of them received a gift of^20,00,0007- each (given in the form of4 demand drafts of ^5,00,000/-) on09.10.2003 from one Shri Hasmukh Bhagwanji Pattani (the Donor) fromUAE Exchange Centre Limited Corporation, PB No. 170 Abu-Dhabi, UAE,Sharjah Branch. 3. The aforesaid drafts were also credited in the saving bank accounts ofthe Assessees in Industrial Development Bank of India (the Bank) on15.10.2003. 4.The Assessees filed their written on 16th and 17th February, 2005 inwhich the aforesaid amounts were mentioned as gifts. 5. The cases of the Assessees were taken up for the scrutiny and therelevant notices under section 142(1) ofthe Act were issued. 6. The Assessing Officer (the AO) also asked the Assessees to producethe Donor, but he was not produced.Subsequently, the AO passed anorder on 29.12.2006 holding that the gifts were not satisfactorily explainedand he added the income of ^20,00,000/- each in the income of theAssessees. 7.Aggrieved by the aforesaid orders, the Assessees filed separateappeals before the Commissioner of Income Tax (Appeals) (the CIT-A). 8.Before the CIT-A, the Assessees were again required to produce theDonor.However, instead of producing the Donor, they produced certainmore documents. The CIT-A dismissed the appeals by separate orders on18.01.2008.-— 9.Aggrieved by the aforesaid orders, the Assessees filed separateappeals before the Tribunal. They were allowed on 21.01 .2010. 10.Aggrieved by the aforesaid orders, the Income Tax Department (theDepartment) has fited Tax Case Numbers 40 and 42 of 2011. Relating to penalty proceedings11.The AO while finalising the assessment proceedings on 29.12.2006also directed to initiate the penalty proceedings.Subsequently, the AO byorder dated 18.03.2009 imposed penalty under section 271(1) (c) of theAct. 12.Against the aforesaid orders, the Assessees filed appeals before theCIT-A. They were dismissed on 08.10.2009. 13. Aggrieved by the aforesaid orders, the Assessees filed appeals beforethe Tribunal. They were allowed by separate orders on 03.06.2010 on theground that the addition has been deleted. 14. Aggrieved by the aforesaid orders, the Department has filed Tax CaseNumbers 175 and 176 of2010. THE DECISION 15. We have heard counsel for the parties. 16. The appeals by the Department against the order dated 21.01.2010 inthe assessment proceedings were admitted on the following substantialquestion of law: 'Whether on the facts and circumstances of the case, theTribunal was legally justifiedin deleting the addition of^20,00,000/-receivedby the Assesseeby way of giftparticular when the Assessee has not given any cogent ^ reasontotheoftheandprovegenuinenessgiftcreditworthiness of the Donor?' 17.The appeals against the order of the Tribunal dated 03.06.2010 in thepenalty proceedings were also admitted on the following substantialquestion of law: 14. Aggrieved by the aforesaid orders, the Department has filed Tax CaseNumbers 175 and 176 of2010. THE DECISION 15. We have heard counsel for the parties. 16. The appeals by the Department against the order dated 21.01.2010 inthe assessment proceedings were admitted on the following substantialquestion of law: 'Whether on the facts and circumstances of the case, theTribunal was legally justifiedin deleting the addition of^20,00,000/-receivedby the Assesseeby way of giftparticular when the Assessee has not given any cogent ^ reasontotheoftheandprovegenuinenessgiftcreditworthiness of the Donor?' 17.The appeals against the order of the Tribunal dated 03.06.2010 in thepenalty proceedings were also admitted on the following substantialquestion of law: 'Whether on facts and in the circumstances of the case and inlaw theTribunalwas justifiedindeletingthepenalty of^20,00,0007- imposed by the AO and which was sustained bythe CIT-A also?' Assessment Proceedings 18. The Assessees along with the return had also filed separate copies ofdedaration executed by the Donor written on the stamp purchased on21.01.2004, executed in Mumbai.Thereafter, they also filed anotherdeclaration dated 16.10.2006 as well as affidavit ofthe Donor. 19.The Donor is an Indian citizen though residing in UAE.Before theCIT-A,the Assessees also fileda declarationof the Donor dated11.04.2007 executed before the Embassy official at Abu-Dhabi alongwiththe letter of Abu-Dhabi Commercial Bank that they are maintaining hisaccount.In the declaration, it is also mentioned that the Donor is holdingan Indian Passport number 8965000. 20. The CIT-A confirmed the order passed the AO. However, the TribunalafterconsideringthedocumentsallowedtheappealsfiledbytheAssessees. 21.The AO has disbelieved the genuineness of the gifts and as such,added the amount in the income of the Assessees.However, he did notmention under which section it has been added. The CIT-A has discussedsection 68 of the Act. However, he has also not specifically mentioned thatunder which section he was adding the amount in the income of the (^ Assessees. The Tribunal has merely believed the genuineness ofthe gifts,but has also not mentioned any specific provision of the Act. 22.Section 69A of the Act is titled['Unexplained]money, etc.'.It providesthat in case an assessee is found to be the owner of any money and he isunable to explain it satisfactorily, then that may be deemed to be incomeof that assessee. 23.It was not disputed by the Assessees that ^20,00,0007- each werecredited in their accounts and they were owner of the same.In case theycould not satisfactorily explain the same, then the said amount could beadded in their income under section 69A of the Act. 24. Nevertheless, the Tribunal after considering the declaration, certificateand the affidavit filed by the Donor and the circumstances that the entiretransaction was through the Bank, has believed the genuineness of thegift.This being a finding of fact, no interference is warranted in theseappeals. The appeals have no merit. They are dismissed. Penalty Proceedings 25.It is not disputed that in case the appeals arising out of theassessment proceedings are dismissed, then there is no merit in theappeals arising out of the penalty proceedings and they are liable to bedismissed.In view of the same, the appeals of the Department againstthe penalty proceedings are also dismissed. CONCLUSION 26.In view of above, there is merit in all the four appeals.They aredismissed.,—- — —- Sd/-Sd/-Sunil Kumar SinhaChief JusticeJudge