MRS. BHAVANA BHARAT PATODIA,MUMBAI vs. DY CIT CC-1(1), MUMBAI

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ITA 6020/MUM/2018Status: DisposedITAT Mumbai06 August 2021AY 2014-154 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the gifts from the brothers were from agriculturists and within the exemption limit, and the gift from the mother-in-law was supported by her substantial capital balance. The addition on account of sundry creditors was also deleted as the assessee's income was computed on a presumptive basis.

What were the facts?

Following a search action, the assessee received gifts from her brothers and mother-in-law. The Assessing Officer added these gifts to the assessee's income for lack of sufficient evidence.

What were the issues?

Whether gifts received by the assessee were adequately substantiated and whether the addition on account of sundry creditors was valid.

Which sections of the Income-tax Act were involved?

Section 153A,Section 41(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “F” BENCH, MUMBAI

Before: HON’BLE SHRI AMARJIT SINGH, JM & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM

For Appellant: Ms. Hiral Sejpal– Ld. AR
For Respondent: Shri Narendra Jangpangi– Ld. CIT-DR

Heard together (2 matters)

I.T.A. No.6020/Mum/2018
I.T.A. No.6021/Mum/2018

Read from the judgment's own cause title. This page is filed under one of them.

O R D E R Manoj Kumar Aggarwal (Accountant Member) 1.1 The grievance of the assessee in aforesaid appeals for Assessment Years (AY) 2014-15 & 2015-16 is common. It is admitted position that adjudication of any one appeal shall equally apply to the other appeal also. These appeals were heard on 26/07/2021 along with appeals of other family members of the group since issues were 2 Mrs. Bhavana Bharat Patodia Assessment Years: 2014-15 & 2015-16 common. For the purpose of adjudication, the appeal for AY 2014-15 is taken as the lead year which arises out of the order of learned Commissioner of Income-Tax (Appeals)-47, Mumbai [CIT(A)], dated 31/07/2018 in the matter of assessment framed by Ld. Assessing Officer (AO) u/s 143(3) r.w.s. 153A of the Act on 22/12/2016. The assessee is aggrieved by confirmation of certain additions in the impugned order. 1.2 Having heard rival submissions and upon perusal of relevant material on record, our adjudication would be as given in succeeding paragraphs.

2.

The material facts are that pursuant to search action on Balaji Group on 28/01/2015, the premises of the assessee were also covered under the search. In response to notice u/s 153A, the assessee offered returned income of Rs.4.78 Lacs which was the same as offered u/s 139(1). The assessee was saddled with addition of gift for Rs.2.96 Lacs which are adjudicated as under: - 3. Gifts 3.1 The assessee received gifts of Rs.0.99 Lacs & Rs.0.97 Lacs from her brothers Shri Ramesh D. Gajera and Shri Kishore D. Gajera. Another gift of Rs.1 Lac was received from her mother-in-law. These gifts were added to assessee’s income for want of sufficient evidences. The addition, upon confirmation by Ld. CIT(A), is in further challenge before us. 3.2 We find that similar issue of gift from aforesaid donors has been decided by us in assessee’s favor in as follows:- 3.5 Upon perusal of documents on record, we find that the mother of the assessee has declared income of Rs.1.78 Lacs during the year as miscellaneous income. However, upon perusal of her Balance Sheet as on 31/03/2014, as placed on record, it could be seen that she has capital balance of Rs.1287.32 Lacs which 3 Mrs. Bhavana Bharat Patodia Assessment Years: 2014-15 & 2015-16 has been invested in various forms. This capital balance is arrived at after reducing Gifts of Rs.4.94 Lacs and withdrawals of Rs.10.47 Lacs. The source of gift, in our opinion, could not solely be the current year’s income particularly in view of the fact that the mother of the assessee was on old lady and living in a joint family. There is no adverse material to prove the gifts. Therefore, the conclusion drawn by Ld. CIT(A) could not be sustained and we are inclined to delete the addition of Rs.1 Lacs. 3.6 So far as the two other donors are concerned, we find that both of them are agriculturist which is supported by their land holdings. The amounts of gifts are less than Rs.1 Lacs in each of the cases which was below exemption limit of Rs.2 Lacs. Therefore, there would be no obligation on the donors to file the return of income. The gifts are duly supported by the affidavits of the donors. The details of agricultural land have been well enumerated in their respective affidavits. Regarding allegation of immediate cash deposit, the donors being agriculturist working in remote village would receive the proceeds of agriculture in cash. The cash deposit need not match with harvesting season since there is no such requirement under law. Therefore, these two additions would stand deleted. We order so.

Facts being pari-materia the same, we delete the impugned addition and allow the appeal.

4.

AY 2015-16 4.1 The facts as well as issues are substantially the same in this year. The assessee was saddled with addition of gift received from her mother-in-law for Rs.0.97 Lacs. The addition was confirmed by Ld. CIT(A). Since we have deleted similar addition in AY 2014-15, taking the same view, the same stand deleted in this year also. 4.2 The last addition is u/s 41(1) for Rs.0.81 Lacs on account of sundry creditors. This issue stand covered in assessee’s favor by our adjudication in ITA No. 6012/Mum/2018 as follows: - 6.2 We find that in terms of Sec.44AD, the income is computed on presumptive basis and there is no need to maintain books of accounts. Therefore, the impugned addition, as made u/s 41(1), in our considered opinion, could not be sustained in the eyes of law. By deleting the same, we allow this ground of appeal.

Accordingly, this addition stands deleted. The appeal stands allowed.

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