INCOME TAX OFFICER, BHILAI vs. HULAS DEVI JAIN

TAXC/40/2011HC ChhattisgarhCGHC01013667201028 August 2013Author: HON'BLE THE CHIEF JUSTICE,HON'BLE SHRI JUSTICE SUNIL KUMAR SINHA6 pages
AI SummaryDismissed

What were the facts?

The Assessees, Smt. Hulas Devi Jain and Smt. Sushila Devi Jain, received gifts of ₹20,00,000 each on 09.10.2003 from Shri Hasmukh Bhagwanji Pattani, a donor residing in UAE. These amounts were credited to their bank accounts on 15.10.2003. The Assessing Officer (AO) initiated scrutiny, issued notices under section 142(1), and demanded production of the donor, which was not met. The AO added ₹20,00,000 to each assessee's income on 29.12.2006, deeming the gifts unexplained. Appeals to the Commissioner of Income Tax (Appeals) (CIT-A) were dismissed. The Income Tax Appellate Tribunal (Tribunal) allowed the assessees' appeals, deleting the additions. The Department filed appeals against the Tribunal's order. Penalty proceedings under section 271(1)(c) were also initiated, and penalties were imposed, which were subsequently deleted by the Tribunal following the deletion of additions in assessment proceedings. The Department also filed appeals against the penalty orders.

What did the High Court hold?

The High Court held that the Tribunal, after considering the declarations, certificates, and affidavits filed by the donor, along with the fact that the entire transaction was conducted through the bank, believed the genuineness of the gifts. The Court considered this a finding of fact and therefore, no interference was warranted in the appeals. Consequently, the appeals by the Department against the assessment proceedings were dismissed. Regarding the penalty proceedings, the Court noted that if the appeals arising out of the assessment proceedings were dismissed, then there would be no merit in the appeals arising out of the penalty proceedings. Therefore, the appeals of the Department against the penalty proceedings were also dismissed. The Court did not expressly leave any issue undecided.

What were the issues?

1. Whether, on the facts and circumstances of the case, the Tribunal was legally justified in deleting the addition of ₹20,00,000 received by the Assessee by way of gift, particularly when the Assessee has not given any cogent reason to prove the genuineness of the gift and creditworthiness of the Donor? (Question of law, turning on Section 68/69A of the Income Tax Act, 1961). Assessee's Contention (implied by Tribunal's allowance): The Tribunal was justified in deleting the addition. The Assessees produced various documents including declarations, affidavits, and bank statements of the donor, and the transactions were through banking channels, establishing the genuineness of the gifts. Revenue's Contention: The Tribunal was not justified in deleting the addition because the Assessees failed to provide cogent reasons to prove the genuineness of the gift and the creditworthiness of the donor. The donor was not produced before the AO or CIT-A. 2. Whether, on facts and in the circumstances of the case and in law, the Tribunal was justified in deleting the penalty of ₹20,00,000 imposed by the AO and which was sustained by the CIT-A also? (Question of law, turning on Section 271(1)(c) of the Income Tax Act, 1961). Assessee's Contention (implied by Tribunal's allowance): The penalty was liable to be deleted as the additions to income were deleted by the Tribunal. Revenue's Contention: The penalty was justified as the Assessees had concealed income by not satisfactorily explaining the gifts.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 142(1),Section 68,Section 69A,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF JUbICATURE AT BILASPUR. CHHATnseARH TAX CASE N0. Li0 z^U PPELLANT RESPONbENT ^ iD .-.-•- : e><" Tncome Tax Officer, Ward-3, Bhilai, District- Durg (C.G.) VERSUS >mt. Hulas Devi Jain, W/o- Shri Mohanlal Jain, Aged not '^.l^' i ^..-•" •,.. C/o- Prem Jwellers, Jawahar Chowk, ^tt'^ ^;^. INCOME TAX APPEAL UNbER SECTION 260-A OF THE known to the appellant C/o- Prem Jwellers, Jawah< burg, District- burg (C.<5.) INCOME -VAX. 1961

HIGHCOURT OF CHHATTISGARH AT BILASPUR DIVIS10N BENCH CORAM: HON'BLE SHRI YATINDRA SINGH, C.J. HON'BLESHRI SUNIL KUMAR SINHA, J Aopellant Respondent Aopellant Respondent Appellant Resoondent Appellant Respondent

1.

TaxCaseNo.40of2011 Income Tax Officer VERSUS Smt Hulas Devi Jain

2.

TaxCaseNo.42of2011 Income Tax Officer VERSUS Smt Sushila Devi Jain

3.

Tax Case No. 175 of 2010 Commissioner of Income Tax VERSUS Smt Hulas Devi Jain

4.

Tax Case No. 176 of 2010 Commissioner of Income Tax VERSUS Smt Sushila Devi Jain Income Tax Appeals under Section 260-A of the Income Tax. 1961 Appearance: Shri Anand Dadaria, counsel for the Appellant/ Department. Shri GN Purohit, Senior Counsel with Shri Abhishek Oswal, counsel for the Respondents/Assessees. JUDGE

The order continues below.

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