DEVANG M. SHAH,MUMBAI vs. INCOME TAX OFFICER RANGE-17(1)(3), MUMBAI

O R D E R

PER AMARJIT SINGH, JM:

ITA No. 4782/M/2018 A.Y.2013-14 2. The Ld. CIT(A) ought to have appreciated the fact, that the additions are made on account of gift received from maternal grandfather (specified relative u/s 56) and hence cannot be charged to tax. 3. Your appellant craves leave to add to, alter, amend, modify or delete any of the grounds of appeal

.”

3. The brief facts of the case are that the assessee filed his return of income on 25.01.2014 declaring total income to the tune of Rs.4,59,890/- for the A.Y. 2013-14. The return was processed u/s 143(1) of the I.T. Act, 1961. Thereafter, the case was selected for scrutiny assessment under CASS. Notices u/s 143(2) & 142(1) of the Act were issued and served upon the assessee. The assessee has shown the income from House Property, Profits & Gains of Business, Capital Gains on sale of shares and Income from other sources comprising mainly of interest income. The assessee made the investment in the property, therefore, the necessary details were called. The assessee submitted an agreement dated 20.06.2012 and accordingly he along with two persons purchased a property bearing flat No.05, admeasuring 625 sq.ft. carpet area on 4th floor, Matru Mandir, J. Dadaji/Tardeo Road, Mumbai-400007 for a consideration of Rs.1,99,00,000/-. The total expenses were in sum of Rs.2,09,97,272/-. The assessee contribution was in sum of Rs.38,33,401/-. The assessee explained various sources including of Rs. 5 lacs received by way of medical reimbursement. The assessee submitted the copies of „Claim Settlement Vouchers‟ of Raksha TPA Pvt. Ltd. in support of mediclaim reimbursement of Rs.5,00,000/-. The assessee explained the sources for the investment in the mentioned property. The assessee claimed that at the time of his illness maternal grand-father Shri Premchand N. Shah paid the said amount which was reimbursed by the company. The contention of the assessee was not A.Y.2013-14 accepted and the amount in sum of Rs.5,28,729/- was added to the income of the assessee u/s 69C of the I.t. Act. The total income of the assessee was assessed to the tune of Rs.9,88,618/-. Feeling aggrieved, the assessee filed an appeal before the CIT(A) who dismissed the appeal of the assessee, therefore, the assessee has filed the present appeal before us.

4. All the issues are in connection with the confirmation of addition in sum of Rs.5,28,729/- u/s 69C of the Act by the CIT(A). The contention of the assessee is that the assessee became ill and at that time there was no fund with the family, therefore, the maternal grand-father late Shri Premchand N. Shah incurred the expenses of medicines/hospitalization and since the assessee was having medical claim, therefore, the said amount was reimbursement which was not liable to be treated as income. However, the Ld. Representative of the Department has refuted the said contentions. The factual position is not in dispute. The assessee invested a sum of Rs. 38,33,401which was explained by the assessee except an amount of Rs.5,00,000/-. It is not in dispute that the assessee received the medical reimbursement of Rs.5,00,000/- and in support of his claim submitted the „Claim Settlement Vouchers‟ of Raksha TPA Pvt. Ltd. The assessee was having the mediclaim policy with the Orient insurance company. The period of Policy was 19.01.2012 to 18.01.2013. The assessee was admitted two times in the hospital for which he incurred expenses and claimed reimbursement of the same. The relevant detail is hereby mentioned below:-

Date of Admission/Discharge 18.03.2012 / 21.03.2012 10.04.2012 / 13.04.2012 Date of claim settlement voucher 14.06.2012 24.07.2012 A.Y.2013-14 Claim No. 55621213035325 55621213060365 Claim Amount Rs.1,02,314 Rs.5,28,729 Net payable Rs.1,00,531 Rs.3,99,469 Cheque No. 283860 650535 5. The expenses were in sum of Rs.5,28,729/-. The assessee was insured to the extent of Rs.5,00,000/-, therefore, the amount in sum of Rs.5,00,000/- was returned. The explanation of the assessee is that his maternal grand-father Shri Premchand N. Shah paid the amount of Rs.5,00,000/- during his illness period and there was no intention to take back the money. Shri Premchand N. Shah had been expired and his son Bharat Shah filed an affidavit stated therein that his father paid a sum of Rs.5,00,000/- to the hospital. He also produced the death certificate of Shri Premchand N. Shah. The insured money was reimbursed and the payment made during the hospitalization of the assessee has been explained, therefore, we nowhere found that an amount of Rs.5,28,729/- is the income of the assessee. We nowhere found justification to add the said amount in the income of the assessee, therefore, in the said circumstances, we are of the view that the CIT(A) has wrongly confirmed the addition, hence, the finding is not justifiable. We set aside the finding of the CIT(A) on this issue and delete the addition to the extent of Rs.5,28,729/-. Accordingly, this issue is decided in favour of the assessee against the revenue.