Paresh Rayashi Gala, Thane vs Assessee

BEFORE HON'BLE S/SHRI H.L. KARWA, PRESIDENT AND B.R.BASKARAN (AM) सव ी एच.एल. कावा, अ य एवं बी.आर.बा करन, लेखा सद य

आयकर अपील सं./I.T.A. No.4578/Mum/2013 ( नधारण वष / Assessment Year :2003-04)

Paresh Rayashi Gala, बनाम/ Income Tax Officer, Ward 3(3), A/11, Sharda Kunj Building, Vs. Ashar I T Park, 6th floor, "B" Wing, 4th floor, HDFC Bank, Room No.22, Road No.16Z, Dr.Moose Road, Talaopali, Wagle Industrial Estate, Thane(W)-400601 Thane-400604 (अपीलाथ /Appellant) .. ( यथ / Respondent)

थायी ले ख ा सं . /जीआइआर सं . /PAN/GIRNo. :AGBPG3867A

अपीलाथ ओर से / Assessee by : Shri Subodh Ratnaparakhi यथ क ओर से/Respondent by : Shri Neil Phlip.

सन ु वाई क तार ख / Date of Hearing : 31.12.2014 घोषणा क तार ख /Date of Pronouncement : 07.01.2015

आदे श / O R D E R Per B.R.BASKARAN, Accountant Member:

The appeal of the assessee is directed against the order dated 28.01.2013 passed by Ld CIT(A)-I, Thane and it relates to the assessment year 2003-04. The assessee is aggrieved by the decision of Ld CIT(A) in confirming the assessment of cash credit of Rs.5.00 lakhs u/s 68 of the Act.

2. The Ld Counsel appearing for the assessee submitted that the assessee had received a sum of Rs.5.00 lakhs by way of gift from a person named Shri Mahesh Aswani. The assessing officer had assessed the same as cash credit u/s 68 of the Act. When the matter reached the ITAT, the Tribunal restored the matter back to the file of the assessing officer with the direction to the AO to given one more opportunity to the assessee to produce Shri Mahesh Aswani before him in order to prove the gift receipt. The Ld Counsel submitted that the 2 ITA No.4578/M/13

donor Sri Mahesh Aswani, in the mean time, had migrated to Dubai and hence the assessee could not produce him before the AO during the course of set aside proceedings. However, the donor submitted an affidavit given by him before the Consulate General of Dubai, copy of his pass port, relevant bank statements directly to the assessing officer in order to confirm the factum of giving of gift amount. However the AO rejected them on the sole ground that the assessee has failed to produce the donor before him as per the directions of ITAT. The Ld CIT(A) also confirmed the same for identical reasons.

3. The Ld Counsel further submitted that the above said donor had also given gifts to another person named Shri Krishnakumar K Ashar. The assessing officer of the above said person also assessed the gifts u/s 68 of the Act and the same was also confirmed by the Ld CIT(A) in the appeal filed by Shri Krishnakumar K Ashar. In fact, in the original assessment proceedings, the AO had followed the decision taken in the case of Shri Krishnakumar K Ashar for assessing the gift amount of Rs.5.00 lakhs in the hands of the assessee. The Ld Counsel submitted that Shri Krishnakumar K Ashar had filed appeal before ITAT and the Tribunal has, however, deleted the addition made u/s 68 of the Act, vide its order dated 21-02-2008 passed in ITA No.9355/Mum/2004 passed in the hands of Shri Krishnakumar K Ashar.

4. Accordingly, the Ld A.R submitted that the assessee had, in fact, discharged the initial burden placed upon him u/s 68 of the Act for proving the gift received by him. He submitted that the assessee could not produce the donor before the assessing officer for the reasons beyond his control and the same also been duly explained. Accordingly, he submitted that the tax authorities are not justified in rejecting the explanations and also the inability of the assessee in this regard.

5. On the other hand, the Ld D.R submitted that the assessee has failed to produce the donor as per the directions of the Tribunal.

6. We have heard the rival contentions and perused the record. As noticed earlier, the Tribunal had restored the matter to the file of the assessing officer with the direction to the assessing officer to give one more opportunity to the 3 ITA No.4578/M/13

assessee to produce the donor before him for examination. The Tribunal had further observed that the AO shall decide the issue afresh and in accordance with law after giving due opportunity of being heard to the assessee. Thus, it is seen that the Tribunal has given open hand to the assessing officer and in our view, it cannot be considered as a case of giving direction to the assessee to produce the donor.

7. In the instant case, it is noticed that the donor had migrated to Dubai and hence he could not appear before the assessing officer in person. Hence, there is merit in the submission of the assessee that it was beyond his control to produce the donor under the above said circumstances. Hence, the assessee has persuaded the donor to give necessary documents to the assessing officer to prove the factum of giving of gift. Accordingly, the donor has written a letter directly to the AO confirming the payment of gift along with an affidavit deposed before the Consulate General of Dubai, his pass port, his bank statements in Dubai and the copy of relevant bank account, where from the gift was given to the assessee. Thus, the identity of the donor stands proved. We notice that the donor has given the impugned gift from out of current account maintained in the name of M/s Devious Exports. Hence the genuineness of transaction also stands proved. A perusal of the said bank account would show that the donor had received Export related amount of Rs.24.44 lakhs on 15.05.2002 and he has used the same for giving impugned gift to the assessee. Thus, it is seen that it was not a case of depositing of cash into the bank account before giving gift. We further notice that the donor, in his declaration dated 14.05.2002, has stated that he was assessed to Income tax under PAN No.AAFPA4740C. Hence, in our view, the credit worthiness of the donor also stands proved.

8. We notice that the assessee has proved the identify of the donor, genuineness of transaction and the credit worthiness of the donor. Though the donor has failed to furnish the occasion on which the gift was given, yet we are of the view that, in the facts and circumstances prevailing in the instant case, there is no reason to suspect the genuineness of the claim. Accordingly, we set aside the order of Ld CIT(A) on this issue and direct the AO to delete the assessment of gift amount of Rs.5.00 lakhs made u/s 68 of the Act.

4 ITA No.4578/M/13 9. In the result, the appeal filed by the assessee is allowed.

The above order was pronounced in the open court on 7th Jan,2015.

घोषणा खुले यायालय म दनांकः 7th Jan 2015 को क गई ।

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(एच.एल. कावा/ H.L. KARWA) (बी.आर. बा करन,/ B.R. BASKARAN) अ य / PRESIDENT लेखा सद य/Accountant Member मब ुं ई Mumbai: 7th Jan, 2015.

व. न.स./ SRL , Sr. PS

आदे श क त ल प अ े षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. आयकर आयु त(अपील) / The CIT(A)- concerned 4. आयकर आयु त / CIT concerned 5. वभागीय त न ध, आयकर अपील य अ धकरण, मब ंु ई / DR, ITAT, Mumbai concerned 6. गाड फाईल / Guard file.

आदे शानस ु ार/ BY ORDER, true copy सहायक पंजीकार (Asstt. Registrar) आयकर अपील य अ धकरण, मुंबई /ITAT, Mumbai