INCOME TAX OFFICER, BHILAI vs. SUSHILA DEVI JAIN

TAXC/42/2011HC ChhattisgarhCGHC01013681201028 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, each received a gift of ₹20,00,000/- on 09.10.2003 from Shri Hasmukh Bhagwanji Pattani, a donor residing in UAE. The gifts were in the form of demand drafts and were credited to the Assessees' bank accounts on 15.10.2003. The Assessees declared these amounts as gifts in their returns. The Assessing Officer (AO) issued notices under section 142(1) and requested the production of the Donor, which was not done. The AO, by order dated 29.12.2006, added ₹20,00,000/- to each Assessee's income, holding the gifts were not satisfactorily explained. The Commissioner of Income Tax (Appeals) (CIT-A) dismissed the Assessees' appeals. The Income Tax Appellate Tribunal (Tribunal) allowed the Assessees' appeals on 21.01.2010. The Department filed appeals against these orders. Penalty proceedings under section 271(1)(c) were initiated, and penalty was imposed on 18.03.2009. The CIT-A dismissed the penalty appeals, but the Tribunal allowed them on 03.06.2010, stating that since the additions were deleted, the penalty had no merit. The Department filed appeals against these penalty orders.

What did the High Court hold?

The High Court held that the Tribunal, after considering the declaration, certificate, and affidavit filed by the Donor, along with the fact that the entire transaction was routed through the bank, believed the genuineness of the gift. The Court considered this a finding of fact and stated that no interference was warranted. Therefore, the appeals by the Department were dismissed. Regarding the penalty proceedings, the Court noted that if the appeals arising out of the assessment proceedings were dismissed, then the appeals arising out of the penalty proceedings would have no merit and were liable to be dismissed. Consequently, 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? (This issue relates to assessment proceedings and turns on Section 68 or Section 69A of the Income Tax Act, 1961). 2. Whether, on the 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? (This issue relates to penalty proceedings and turns on Section 271(1)(c) of the Income Tax Act, 1961). Assessee's contentions (implied from the facts and Tribunal's decision): The Assessees contended that the gifts were genuine and provided supporting documents, including declarations, affidavits, and bank statements of the Donor, and that the transactions were routed through banking channels. Revenue's contentions (implied from the facts and High Court's admission of appeal): The Revenue contended that the Assessees failed to satisfactorily explain the gifts and did not produce the Donor, thus the genuineness and creditworthiness of the Donor were not proven.

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 JUDICATURE AT BILASPUR. CHHATTESGARH TAX CASE N0. ^ ^- ^ivisiong, "^{} APPELLANT ^Tncome Tax Officer, Ward-3, Bhilai, Oistrict- Durg (C.G.) VERSUS ^RESPONbENT ,AA ^- ^ VA^-"r ^t> ^' v^-1^ .V^-'rU^-' ";;.fr^A3> 'Smt. Sushila Devi Jain, W/o- Shri Anil Kumar Jain, Aged not known to the appellant C/o- Prem Jwellers, Jawahar Chowk, Durg, bistrict- burg (G.(y.) ^\A.* INCOME TAX APPEAL UNDER SECTCON 260-A OF THE INCOME TAX. 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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