SOBHA NAVEEN AGARWAL,NAGPUR vs. ITO, JEYPORE WARD, JEYPORE

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK

BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER

ITA No.158/CTK/2018 Assessment Year : 2009-2010

Sobha Naveen Agarwal, Flat Vs. ITO Jeypore Ward, Jeypore. No.301, Kuber Regency, Congress Nagar, Nagpur. PAN/GIR No.AIOPA 5264 E (Appellant) .. ( Respondent)

Assessee by : None (written submission) Revenue by : Shri Piyush Kolhe, CIT DR

Date of Hearing : 27/09/ 2018 Date of Pronouncement : 28/09/ 2018

O R D E R Per N.S.Saini, AM This is an appeal filed by the assessee against the order of

the Ld Pr. Commissioner of Income Tax-1, Bhubaneswar dated

26.3.2018 for the assessment year 2009-2010.

Commissioner of Income Tax-1, Bhubaneswar was not justified in

holding the order passed by the Assessing Officer under section

143(3)/254 of the Act dated 30.3.2016 as erroneous and

prejudicial to the interest of the revenue.

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Income Tax-1, Bhubaneswar observed that the assessee had

declared addition to her capital account of Rs.15,00,000/- in the

financial year 2008-09 relating to assessment year 2009-2010 and

the sources of addition was explained to be cash gift received from

her husband, Shri Brindavandas Agarwal and her daughter Smt.

Deepali Agarwal of Rs.10,00,000/- and Rs.5,00,000/-,

respectively. The Assessing Officer added Rs.15,00,000/- in the

hands of the assessee being not satisfied with the creditworthiness

of the donor of the cash gifts. The assessee thereafter filed

appeal to the Tribunal and the Tribunal vide order dated 3.2.2015

set aside the order of the CIT(A) and restored the matter back to

the file of the Assessing Officer to re-examine the issue or

genuineness of cash gifts of Rs.15,00,000/- in the hands of the

assessee. While completing the assessment, the Assessing Officer

failed to re-examine the issue properly and could not apply his

mind to the genuineness of the transaction resulting in allowance

of this introduction to capital account of the assessee by accepting

cash gifts from her husband and daughter. Therefore, the

proceedings under section 263 of the Act were initiated by

issuance of notice dated 6.8.2018.

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observed that no prior withdrawals from bank accounts of the

respective donors were made before remittance of gifts as

evidenced from the bank statements submitted at the time of

assessment. Ld A.R. has neither referred about bank statement of

the donors nor explained any reason for absence of any

withdrawal from any of the bank accounts of the donors for this

purpose. He observed that it could not be explained how an

amount of Rs.15,00,000/- was provided as a cash gift from cash

in hand to the assessee avoiding the banking channel through

cheque/Demand draft mode. Therefore, the genuinity of the

transaction was not established beyond doubt and could not be

accepted on the details furnished during assessment proceedings.

Ld A.R. was silent about the observation of the CIT(A) while

confirming the addition on this issue made at the time of original

assessment by dismissing the relevant ground of appeal. He

observed that with these documents though the creditworthiness

of the donor may be established but the genuinity of the

transaction could not be proved beyond doubt. Therefore, the

claim of the assessee in this regard is not accepted and the

revision of the Assessing Officer’s order is warranted u/s.263 of

the Act being erroneous so far as prejudicial to the interest of the

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revenue. He relied on the decision of Hon’ble Supreme Court in

the case of Malabar Industrial Company vs CIT, 243 ITR 83 (SC),

wherein, it has been held that an incorrect assumption of facts or

an incorrect application of law will satisfy the requirement of the

order being erroneous. Therefore, he set aside the order of

assessment dated 30.3.2016 pertaining to this issue and restored

the matter back to the file of the Assessing Officer t redo the

assessment with regard to the said issue.

has been stated that in the appeal against the original order

passed u/s.143(3) on 27.12.2011, the Tribunal restored the

matter back to the file of the Assessing Officer for further

examination of the genuineness of the gifts of Rs.15 lakhs in ITA

No.105/CTK/2014 order dated 3.2.2015. It is submitted that in

the second round, the assessment was completed u/s.143(30/254

on 30.3.2016, wherein, the issue of gifts was thoroughly

examined by the Assessing Officer and accepted as genuine. This

fact was explained before the Ld Pr. Commissioner of Income Tax-

1, Bhubaneswar during 263 proceedings. Ld Pr. Commissioner of

Income Tax-1, Bhubaneswar set aside the order of the Assessing

Officer treating it as erroneous and also prejudicial to the interest

of the revenue. He has thrust upon the Assessing Officer to

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inquiry into the genuineness of the gifts again and re-do the

assessment. In these circumstances, it cannot be said that the

assessment is erroneous so far as prejudicial to the interest of the

revenue as the Assessing Officer thoroughly examined the issue

and accept the genuineness of the receipt of the gifts and

completed the assessment. It is submitted that the case laws

cited by the ld Pr. Commissioner of Income Tax-1, Bhubaneswar

are not applicable in the case of the assessee.

Income Tax-1, Bhubaneswar.

authorities and written submission filed by the assessee. In the

instant case, the assessee had declared addition to her capital

account of Rs.15,00,000/- in the financial year 2008-09 relating to

assessment year 2009-2010 and the sources of addition was

explained to be cash gift received from her husband, Shri

Brindavandas Agarwal and her daughter Smt. Deepali Agarwal of

Rs.10,00,000/- and Rs.5,00,000/-, respectively. The Assessing

Officer added Rs.15,00,000/- in the hands of the assessee being

not satisfied with the creditworthiness of the donor of the cash

gifts. The matter travelled upto the Tribunal and the Tribunal set

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aside the order of the CIT(A) with the direction to re-examine the

issue of genuineness of cash gifts of Rs.15 lakhs in the hands of

the assessee. The Assessing Officer completed the assessment in

pursuance to the Tribunal’s direction and accepted the claim of the

assessee regarding cash gifts of Rs.15 lakhs.

observed that while completing the assessment, the Assessing

Officer failed to re-examine the issue properly and could not apply

his mind about the genuineness of the transaction. Therefore, by

invoking the provisions of section 263 of the Act, he set aside the

order of the Assessing Officer and directed him to re-do the

assessment after conducting necessary inquiries and verification

on the issue.

appeal before us.

Assessing Officer being satisfied with the creditworthiness of the

donors accepted the cash gift of Rs.10 lakhs from her husband

Shri Brindavandas Agarwal and Rs.5 lakhs from her daughter Smt.

Deepali Agarwal in cash as genuine and no addition was made by

him in an order passed u/s.143(3) r.w.s 254 of the Act. The Pr.

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Commissioner of Income Tax was not justified in setting aside the

order of the Assessing Officer and restoring the matter back to his

file for verifying the genuineness of the gifts.

assessee has filed before him copies of capital account of Shri

Brindabandas Agarwal, husband of the assessee for the financial

years 2005-06 to 2008-09 to explain the source of gift of Rs.10

lakhs to the assessee. Similarly, the assessee has filed copies of

capital account from financial year 2003-04 to 2008-09 of her

daughter Smt. Deepali Agarwal to explain the source of gifts of

Rs.5 lakhs in cash received by the assessee. The assessee has

not filed copies of these capital accounts in the paper book filed

before us.

Income Tax, Cuttack that before him, the assessee filed cash flow

statement of both the donors from financial year 2005-06, capital

account, gift deed and confirmation letters to explain the

genuineness of gifts of Rs.10 lakhs in cash from the husband Shri

Brindabandas Agarwal and Rs.5 lakhs in cash from her daughter

Smt Deepali Agarwal. The cash flow statement has not been filed

by ld A.R. of the assessee in the paper book filed before us.

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Hence, we are unable to decide the issue completely. In the

above facts and circumstances of the case, we find no good

reason to interfere with the order of Pr. Commissioner of Income

Tax, Cuttack, who has set aside the order passed by the Assessing

Officer under section 143(3) r.w.s 254 of the Act and restored the

matter back to the file of the Assessing Officer to verify the

genuineness of gifts. We, therefore, dismiss the ground of appeal

of the assessee.

Order pronounced on 28/09/2018.

Sd/- sd/- (Pavan Kumar Gadale) (N.S Saini) JUDICIALMEMBER ACCOUNTANT MEMBER Cuttack; Dated 28/09/2018 B.K.Parida, SPS Copy of the Order forwarded to : 1. The Appellant : Sobha Naveen Agarwal, Nagpur

Sr. Pvt. Secretary, ITAT, Cuttack

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