ANJU JOSHI,RAJASTHAN vs. ITO 14(2)(3), MUMBAI
What did the Tribunal hold?
The Tribunal noted that the CIT(A) did not address the assessee's contention regarding the gifting rules of RIB bonds and the tax-free nature of these bonds as stated by the issuing bank. Therefore, the issue requires fresh examination.
What were the facts?
The assessee received RIB bonds from a non-resident Indian and encashed them. The Assessing Officer added the value of these bonds under Section 68, which was confirmed by the CIT(A). The assessee's explanation regarding the donor's identity changed, and her creditworthiness was not proven.
What were the issues?
Whether the addition made under Section 68 for gifted RIB bonds is sustainable when the CIT(A) failed to consider the specific rules governing such bonds and their tax-free nature.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” Bench, Mumbai
O R D E R Per B.R. Baskaran (AM) :-
The appeal filed by the assessee is directed against the order dated 19.10.2006 passed by the learned CIT(A)-XIV, Mumbai and it relates to A.Y. 2003-04.
None appeared on behalf of the assessee even though the appeal was adjourned on the earlier occasion at the request of the counsel of the assessee. Hence, we proceed to dispose of the appeal ex-parte, without presence of the assessee.
Solitary issue urged in this appeal relates to assessment of ` 32,98,265/- u/s 68 of the Act, being gift of RIB Bonds received by the assessee from non-resident Indian.
2 Smt. Anju Joshi
We heard learned Departmental Representative and perused the record. The assessee received RIB bonds from Mr. Mahendra Durlabhi Desai and she encashed the same prematurely in October 2002. The Assessing Officer assessed the same u/s. 68 of the Act. The learned CIT(A) noticed that the assessee had claimed intially that the donor was her maternal uncle, but later on changed her stand by stating that the donor was her friend. It was noticed that the assessee has not proved the creditworthiness of the donor and hence the learned CIT(A) confirmed the addition
On going through the order passed by the learned CIT(A), we noticed that the assessee has relied upon the Rules and Regulations relating to RIB bonds, wherein it has been stated that the bonds can be gifted to a resident Indian. It was also contended that the State Bank of India, which issued the bonds, has stated at the time of issuing the bonds that the same shall be free from income tax, wealth tax and gift tax. We noticed that the learned CIT(A) has not addressed this contention of the assessee and he has not made any reference to the scheme under which RIB Bonds was issued. Under these set of facts, we are of the view that this issue requires fresh examination at the end of the learned CIT(A). Accordingly, we set aside his order and restore the same to his file for examining the issue afresh after affording adequate opportunity of being heard to the assessee.
In the result, appeal filed by the assessee is treated as allowed for statistical purposes. Order has been pronounced in the Court on 16.5.2017.
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