THE COMMR. OF INCOME TAX vs. RS AGGARWAL

Whether Reporters of Local Newspapers may be allowed to see the judgment ?

To be referred to the Reporters or not ?

Whether the judgment should be reported in the Digest ? *** By way of the present appeal, the revenue impugns the order, dated 28.2.2005, passed by the Income Tax Appellate Tribunal, Delhi Bench`B', New Delhi, upholding the order, dated 27.6.2003, passed by the Commissioner of Income Tax (Appeals), Faridabad. On the basis of information, received from the Additional Director of Income Tax (Investigation), Faridabad that the assessee had received a gift of Rs.5 lacs from one Sameer Mahajan from his NRE account No.99 with the New Bank of India, Defence Colony, New Delhi, a notice, dated 28.3.1997, was issued, under Section 148 of the Income Tax Act (for short herein after referred to as “the Act”). However, without examining the donor, the Assessing Officer, vide order dated 2.2.1999, dropped proceedings, accepting the gift to be genuine. The Commissioner of Income Tax, Rohtak, vide order dated 16.7.1999, passed under Section 263 of the Act, set aside the order of the Assessing Officer and directed to frame the order afresh, after following the procedure, in accordance with law on the ground that during proceedings, before the Enforcement Directorate, Sameer Mahajan had admitted that the gifts were bogus and were made for a consideration of 12% over and above the gifted amount. He also admitted that he had charged Rs.112/- for every Rs.100/- shown as gift. Consequently, the Assessing Officer directed the assessee to show the source of Rs.5.60 lacs, paid to Sameer Mahajan. The assessee prayed before the Assessing Officer that as Sameer Mahajan had not been examined by the Income Tax Department or cross-examined by the assessee, a notice be issued to Sameer Mahajan to attend proceedings so as to enable the assessee to cross-examine him. This request was declined and the Assessing Officer treated the amount of Rs.5.60 lacs as income of the assessee from undisclosed sources and completed the assessment on 28.3.2002 under Sections 143(3)/147/263 of the Act. The respondent, namely, the assessee thereafter filed an appeal before the Commissioner of Income Tax (Appeals), Faridabad. The Commissioner of Income Tax(Appeals), vide order dated 27.6.2003, deleted the addition of Rs.5.60 lacs and held that the Assessing Officer erred in relying upon the statement of Sameer Mahajan, made before the enforcement authorities. It was also held that the Assessing Officer failed to take into consideration the directions, issued by the Commissioner of Income Tax, Rohtak, in order, dated 16.7.1999, to summon and examine the donor and to examine the NRE account, maintained by the donor. It was also held that as the assessee had not been provided an opportunity to cross- examine the donor, the addition of a sum of Rs.5.60 lacs to his income, was unwarranted. The revenue thereafter filed an appeal before the Tribunal. The said appeal was dismissed, hence, the present appeal. Counsel for the appellant contends that the question of law, which arises for consideration, is as follows :- “Whether the Hon'ble ITAT on the facts and circumstances of the case, was right in law in deleting the addition of Rs.5,60,000/- by adducing wrong conclusion from the order, passed by CIT Rohtak, u/s 263 and by ignoring the onus, which lies on the part of the assessee to prove the genuineness of the gift.” Counsel for the appellant contends that the Commissioner of Income Tax (Appeals), as also the Tribunal held that the Assessing Officer failed to comply with the directions, issued by the Commissioner of Income Tax, Rohtak, directing him to summon and examine the donor and to examine his NRE account. It is contended that the Commissioner of Income Tax, Rohtak did not issue any such directions and, therefore, the Commissioner of Income Tax (Appeals), as also the Tribunal committed an error of law.