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Asst. Commissioner of Income Tax Central Circle 14, R.No. 1102, 11th Floor, Old CGO Annexe Bldg., Mumbai-400 020.
December, 06th 2012
                              , 
              IN THE INCOME TAX APPELLATE TRIBUNAL
                   MUMBAI BENCHES "J" MUMBAI

                         [^ .., .       / 
        BEFORE SHRI B.R. MITTAL, JUDICIAL MEMBER                    /AND
                                  ^ ], ..
                SHRI RAJENDRA, ACCOUNTANT MEMBER


                            ITA No. 3606/M/2008
                            Assessment Year 2001-02
            Asst. Commissioner of           Smt. Jalpa B. Mehta,
            Income Tax ­ Central            708, Golden Chamber,
            Circle 14,                      7th Floor, Andheri (West),
            R.No. 1102, 11th Floor, Vs.     Mumbai -58.
            Old CGO Annexe Bldg.,
            Mumbai-400 020.
                                            PAN: AEVPM 0565 P

                             C.O. No. 195/M/2008
                            Assessment Year 2001-02
            Smt. Jalpa B. Mehta,           Asst. Commissioner of
            708, Golden Chamber,           Income Tax ­ Central
            7th Floor, Andheri (West), Vs. Circle 14,
            Mumbai -58.                    R.No. 1102, 11th Floor,
                                           Old CGO Annexe Bldg.,
            PAN: AEVPM 0565 P              Mumbai-400 020.
               ( /Appellant)                 ( / Respondent)

              Revenue by                          : Shri B.D. Patil
              Assessee by                         : Shri Firoz Andhyarjuna

              / Date of Hearing                   : 04-12-2012
          / Date of Pronouncement                 : 04-12-2012






                                     / O R D E R
PER RAJENDRA, AM

   Challenging the order of the CIT(A) Central-III, Mumbai dt. 19-03-2008, assessee
as well as the Assessing Officer (AO) have raised the following Grounds of
Appeal/Cross Objection in the appeals filed by them:
                                               2                               ITA No. 3606/M/2008
                                                                               C.O. No. 195/M/2008
                                                                                 Smt. Jalpa B. Mehta

ITA No. 3606/M/08 - AY 2001-02

"(i) On the facts and circumstances of the case and in law, the Ld. CIT (A) has erred in
deleting the addition of Rs.35 lacs on account of unexplained gift by relying solely on the
remand report of the A.O. and without examining that the A.O.'s report is not based on any
enquiries conducted by the A.O. to find out the genuineness of the Certificate of Shah & Co.
and the certificate does not give the nature of profession/ business of Mr. Bipin R. Shah.

(ii) Without prejudice to ground No.1 the Ld. CIT( A) erred in not taking into consideration
that the A.O.'s remand report dated 15.11.2007 was forwarded by the Addl. CIT, CR-3,
Mumbai by letter dated 16.11.2007 with the comments that with regard to gifts received from
Shri Bipin R. Shah, it may be noted that the A.O. has based his report solely on the basis of
credits in the account of Shri. Bipin R. Shah being from outside the country and the local
address in the D-mat statement of Shri. Bipin Shah was incorrect.

(iii) Without prejudice to ground No.1 the Ld. CIT (A) erred in holding that the gift of Rs. 35
lacs is genuine, even though Shri. Bipin R. Shah was not found available at the Mumbai
address and the details submitted before the A.O. by UCO Bank, Nariman Point, Mumbai in
letter dated 7.11. 2007 (referred to in remand report ) do not reflect the source of the deposit
as being from the Singapore account of Shri. Bipin R. Shah."

2. The Appellant craves leave to add, to amend and / or to alter any of the grounds of appeal,
if need be.

3. The Appellant, therefore, prays that on the grounds stated above, the order of the CIT (A),
Central-III, Mumbai may be set aside and that of the Assessing Officer restored."


CO. 195/M/08 GROUNDS OF CROSS OBJECTIONS


1 .1 On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in
completing the appellate proceedings without giving proper opportunity to the respondent in
the matter of gift of Rs. 10,00,000/- from Mr. Subhash Dudani.

1.2 The learned CIT(A) erred in not considering letters dated February 27, 2008, March
10,2008 and March 21, 2008 submitted in the course of the appellate proceedings.

2. On the facts and in the circumstances of the case and in law, the addition of Rs. 10,00,000/-
received as gift from Mr. Subhash Dudani is improper, invalid and bad in law and hence may
be deleted.

3. All the grounds of appeal are mutually exclusive and without prejudice to one another.

4. The Respondent craves leave to add, alter, amend or modify any or all grounds till the
appeal is heard.





        Assessee, an individual filed her Return of Income on 15-11-2006 declaring
total income at Rs. 1.47 Lakhs. Assessment was finalised by the Assessing Officer
(AO) on 28-12-2006 u/s. 143(3) r.w.s. 153A of the Income Tax Act, 1961 (Act)
determining income at Rs. 46.56 Lakhs.
                                              3                               ITA No. 3606/M/2008
                                                                              C.O. No. 195/M/2008
                                                                                Smt. Jalpa B. Mehta

2.     A Search Seizure action u/s. 132 of the Act was carried out in the case of Shri
Bimal Natwarlal Mehta (husband of the assessee) and his associates on 24-06-2004.
During the assessment proceedings, AO found that assessee had received the
following gifts for which gift declaration was found and seized during the Search and
Seizure proceedings:

S.No.      Name of the              Instrument details            Amount           Dt. Of
              Donor                                                 Rs.         receipt of gift
 01      Bipin Shah           Chq.No. 033052 UCO Bank,           20,00,000       03/07/2000
                                  Nariman Pt. Mumbai
 02      Bipin Shah           Chq.No. 033055 UCO Bank, 15,00,000                  26/01/2001
                                  Nariman Pt. Mumbai
 03      Subash Dudhani       Chq.No. 623763 Indian Bank, 10,00,000               29/01/2001
                                   Mahim, Mumbai


3.      AO directed the assessee to produce further evidence in support of the
creditworthiness of the donors. After considering reply filed by the assessee, he held
that identity and genuineness of the transaction was established, that creditworthiness
of the donor was not proved, that assessee had not produced any proof in support of
the contention that donor was having net worth of more than Rs. 50 Crores. He added
an amount of Rs. 35 Lakhs shown as gift as deemed income of the assessee for the
year under consideration.


3.1     With regard to gift received from Shri Subash Dudhani, AO found that the
Mehta family (Shri Bimal Mehta, assessee and two minor daughters) had received
gifts amounting to Rs. 1.11 Crores from Shri Dudhani during the period January 2001
to October 2001, that husband of the assessee could not provide the address and
contact number of Shri Dudhani, that Shri Dudhani was neither close friend nor the
relative of the assessee. He held that gift made by Shri Dudhani was strange and un-
natural, that gifts claimed to have been received were not out of natural love and
affection, that gift confirmation letters seized during the Search Operation proved
identity and genuineness of the transaction. He finally held that assessee had not
proved creditworthiness of the donor Shri Dudhani. Therefore, an amount of Rs. 10
Lakhs shown as gift received from him was treated as income of the assessee for the
AY under consideration.


4.     Assessee preferred an appeal before the First Appellate Authority (FAA).
After considering the submissions of the assessee, FAA called for a Remand Report
from the AO. In the Remand Report, AO reported as under:

      "The information as asked for revealed that the deposits in the bank account of Mr.
      Bipin R. Shah have been remitted from Singapore and it appears that Mr. Bipin R. Shah
      has the capacity to give the gifts of Rs. 5,00,000/- for the A.Y. 1999-2000 and Rs.
      35,00,000/- for the AY 2001-02 (copy of the details as obtained from the bank is also
      enclosed)".

      "From the certificate, it appears that Shri Bipin Shah has the capacity to give gifts of
      Rs. 5 Lakhs for the AY 99-00 and Rs. 35 Lakhs for the AY 2001-02 to the assessee".
                                             4                               ITA No. 3606/M/2008
                                                                             C.O. No. 195/M/2008
                                                                               Smt. Jalpa B. Mehta



     After considering the Remand Report and submissions of the assessee, FAA held
that no addition was called for on grounds as gifts being non-genuine in the case of
Shri Bipin Shah. Addition amounting to Rs. 35 Lakhs made by the AO was deleted
by him.

    With regard to gift received from Shri Subash Dudhani, FAA had called Remand
Report from the AO. In his Remand Report, AO observed as under:


     "As the bank failed to produce any records related to the credit entries and the various
     cash transactions as is evident from the bank statement indicates that the transaction
     with Smt. Jalpa B. Mehta does not appear to be genuine and also the creditworthiness of
     Shri Subhash Dudhani remained unverified".


      He confronted the assessee with the above findings of the AO vide his office
letter dt. 06-02-2008, and the assessee was required to explain the source of credit in
the Current A/c No. 9034 of the UCO Bank. No details were filed before the FAA
about the creditworthiness of the donor. He finally held that in the absence of any
explanation regarding the credit entries immediately before the date of gifts, the gifts
in question could not be treated as genuine. He confirmed the addition made by the
AO amounting to Rs. 10 Lakhs to the income of the assessee.


5.    Revenue has filed appeal against the deletion of the addition made by the AO
whereas assessee preferred an appeal for addition sustained by the FAA.

        Before us, Departmental Representative (DR) submitted that creditworthiness
of donor was not proved that gifts received by the assessee was her own income.
Authorised Representative (AR) supported the order of the FAA. We have heard the
rival submissions and perused the material placed before us. We find that AO had
submitted a Remand Report. As per the direction of the FAA in the Remand Report
he has given a categorical finding that creditworthiness of the donor was established.
We find that genuineness of the transaction and identity of the donor was accepted by
the AO in the Assessment Order itself. In these circumstances, we are of the opinion
that there is no need to interfere with the order of the FAA.

     Appeal filed by the Revenue stands Dismissed.


C.O. No. 195/M/2008

6.      Facts of the case have already been discussed in the earlier paragraphs. Before
us, AR submitted that gift received by the assessee was genuine, that creditworthiness
of the donor was established. DR relied upon the order of the FAA. After hearing the
rival submissions, we find that assessee has failed to prove the creditworthiness of the
donor, address of the donor was not supplied by the assessee to the AO or the FAA.
Remand Report submitted by the AO to the FAA is self-explanatory. FAA had also
                                           5                             ITA No. 3606/M/2008
                                                                         C.O. No. 195/M/2008
                                                                           Smt. Jalpa B. Mehta

provided an opportunity to the assessee to explain her stand about the gift in question.
In our opinion, assessee had failed to prove the creditworthiness of the donor.
Upholding the order of the FAA, we dismiss the appeal (Cross-objection) filed by the
assessee.
      As a result appeal of the AO and Cross-Objection of the assessee stand
Dismissed.
       Order pronounced in the open court on 4th December, 2012.
               4th December, 2012    

               Sd/-                                              Sd/-
 (.. /          B.R. MITTAL )                           (] /   RAJENDRA)
  / JUDICIAL MEMBER                              / ACCOUNTANT MEMBER


  Mumbai,

 Date: 4th December, 2012
TNMM

Copy to:

       1. Appellant
       2. Respondent
       3. The concerned CIT (A)
       4. The concerned CIT
       5. DR "J" Bench, ITAT, Mumbai
       6. Guard File
           //True Copy//

                                                          / BY ORDER,


                                               /  Dy./Asst.           Registrar
                                            ,  /                   ITAT, Mumbai
 
 
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