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TAXAP/287/2009 7/ 8 JUDGMENT
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No.287 of 2009
For
Approval and Signature:
HONOURABLE
MR.JUSTICE D.A.MEHTA Sd/-
HONOURABLE
MS.JUSTICE H.N.DEVANI Sd/-
===================================================
1
Whether
Reporters of Local Papers may be allowed to see the judgment ?
NO
2
To
be referred to the Reporter or not ?
NO
3
Whether
their Lordships wish to see the fair copy of the judgment ?
NO
4
Whether
this case involves a substantial question of law as to the
interpretation of the constitution of India, 1950 or any order
made thereunder ?
NO
5
Whether
it is to be circulated to the civil judge ?
NO
===========================================
COMMISSIONER
OF INCOME TAX-III - Appellant(s)
Versus
MIRA
S KHURANA - Opponent(s)
===================================================
Appearance
:
MR MR BHATT, SR. STANDING COUNSEL, with MRS
MAUNA M BHATT for Appellant(s) : 1,
MR JP SHAH with MR MANISH J
SHAH for Opponent(s):
1
===================================================
CORAM
:
HONOURABLE
MR.JUSTICE D.A.MEHTA
and
HONOURABLE
MS.JUSTICE H.N.DEVANI
Date
: 05/04/2010
ORAL
ORDER
(Per
: HONOURABLE MR.JUSTICE D.A.MEHTA)
On
08.03.2010 the following order was made:
1. Heard
learned Senior Standing Counsel for the Appellant Revenue.
2. Notice
for final disposal returnable on 30.03.2010.
Sd/-
Sd/-
(D.A.Mehta, J.) (H.N.Devani, J.) Heard
learned Senior Standing Counsel for the appellant-revenue and
learned advocate appearing for the respondent. ADMIT. The
following substantial question of law arises from impugned order of
Income Tax Appellate Tribunal (the Tribunal) dated 08.08.2008:
Whether
on the facts and in the circumstances of the case the Tribunal was
justified in law in restoring the matter to the file of the
Assessing Officer without recording any findings as to how the order
made by Commissioner (Appeals) was bad in law?
With
the consent of the learned counsel the appeal is taken up for final
hearing and disposal today.
The
grievance made by the appellant is that considering the findings
recorded by the Assessing Officer and Commissioner (Appeals) the
Tribunal has erred in law in shifting the onus on the revenue when
it was respondent-assessee who had failed to establish the
genuineness of the gift from the donors.
As
against that on behalf of the respondent it was submitted that
subsequent to the order made by the Tribunal the Assessing Officer
had passed a fresh order and hence, this appeal was required to be
dismissed. On merits it was submitted that the communication
addressed by the assessee to the Assessing Officer was not
considered by the Assessing Officer and hence, even for the
said reason the matter was required to be sent back to the Assessing
Officer. Therefore, also no error was committed by the Tribunal. It
was submitted that out of various documents filed before
Commissioner (Appeals) only one of the documents, namely,
certificate by the Chartered Accountants had been considered by the
Commissioner (Appeals) and for this reason also, impugned order made
by the Tribunal was not required to be interfered with.
As
can be seen from the facts on record the assessee received gift
worth Rs.15,00,000/- from one Non-resident Indian Shri Sajabhai
Ajabhai Karia of Al Fahidi Street, Khor, Dubai. The Assessing
Officer came to the conclusion that the assessee had failed to prove
sound financial capacity of the said donor; had failed to establish
the circumstances leading to gift; and had failed to establish that
the money was received as gift only. The explanation tendered by the
assessee was not found to be acceptable and the reasons recorded by
the Assessing Officer have been summarized in Paragraph No.2.4 of
the assessment order. The same reads as under:
It can
be seen from the above that the assessee has tried to legitimate the
transfer of funds in the garb of gift.
There
are no circumstances or a relationship as such which will legitimize
such a claim.
There is
no close relationship as claimed and the assessee has failed to
establish that the gift is out of the wealth of the donor. The onus
to produce at-least some financial data was on the assessee to prove
the capability of the person to give the gift. The same has been
done.
The
assessee has not been able to prove the financial capacity of the
donors nor any proof of the financial worth was submitted. Any
details which would prove the financial soundness, like details of
income and wealth with certified documents was not filed. As the
assessee has not submitted the information to prove the financial
capacity of the donor the only obvious conclusion which can be drawn
is that the donors do not have financial worth to make such gift.
Commissioner
(Appeals) has confirmed the aforesaid findings. While doing so
Commissioner (Appeals) has recorded as under:
.
. . . . Appellant is a resident of Ahmedabad while the alleged donor
when he was in India was staying at Khambhalia in Jamnagar. The
donor and donee belong to different communities. No link leading to
friendship of natural love and affection could be shown by the
appellant. The donor went to Dubai in the year 1998, and within a
period of less than 2 years i.e. May, 2000, he made a gift of Rs.15
lakhs to the appellant. There is no evidence to show that within
such a short time he became so rich to gift this amount to a near
stranger and unrelated person. . . . . .
When
one goes through the impugned order of the Tribunal it becomes
apparent on reading Paragraph Nos.9 and 10 of the order that the
findings recorded in Paragraph No.10 are not borne out from the
orders of the subordinate authorities. The Tribunal has failed to
appreciate that the Assessing Officer had granted opportunity to the
assessee to prove the genuineness of the gift and creditworthiness
of the donor but the assessee had failed to adduce any proof in this
regard. The onus then could not have been shifted to the Assessing
Officer without dealing with the findings recorded by the
subordinate authorities. The position in law is well-settled and it
is not necessary to refer to catena of decisions, suffice it to
state that as recorded by this Court in the case of Rameshchandra
M. Luthra Vs. Assistant Commissioner of Income-tax, [2002] 257
ITR 460 (Guj.) the Tribunal is duty bound to consider the reasons
given by the appellate authority for its decision before upsetting
the order made by the appellate authority.
In
the facts of the present case it is apparent that the Tribunal has
failed to undertake the aforesaid exercise and the impugned order is
thus vitiated in law.
In
the circumstances, without expressing any opinion on merits of the
controversy the impugned order dated 08.08.2008 made by Income Tax
Appellate Tribunal, ‘C’ Bench, Ahmedabad, in so far as it relates to
respondent assessee, is quashed and set aside and Income Tax Appeal
No.2692/Ahd/2004 for Assessment Year 2001-2002 stands restored to
file of Tribunal for being decided afresh in accordance with law
after granting an opportunity of hearing to the parties.
The
question is answered accordingly. The appeal is allowed in the
aforesaid terms with no order as to costs.
Sd/-
[D. A.
MEHTA, J]
Sd/-
[
H.N.DEVANI, J]
***
Bhavesh*
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