SHASWATI BHATTACHARYA,HOOGHLY vs. ITO, WARD 2(4), HOOGHLY, HOOGHLY

This is an appeal filed by the assessee against the order of Ld. CIT(A)-6, Kolkata dated 06.05.2016 for AY 2010-11.

The sole issue raised by the assessee is against the addition of Rs.6,85,000/- made by the AO which was confirmed by the Ld. CIT(A) not believing the claim of the assessee that the said amount was a gift received from father in law.

The brief facts of the case are that the assessee is an individual lady and an authorized dealer of Hindusthan Petroleum Corporation Ltd. (HPCL) and also engaged in trading of seasonal crops. The assessee has filed her return of income u/s. 139(1) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”) on 28.09.2010 disclosing a total income of Rs.2,85,410/-. Later, the case was selected for scrutiny. The AO found from the perusal of the Balance Sheet of M/s. Madhuja Service Station (Proprietor) that the assessee received gifts from relative to the tune of Rs.6,85,000/- which was shown in the proprietor’s capital account. The AO asked the assessee to substantiate the receipt of gifts. Pursuant to the direction of the AO, the assessee replied that the gift was received from Shri Ram Lochan Bhattacharya who was the father in law of the assessee and that the same was Shaswati Bhattacharya, AY 2010-11 received through bank account. The AO issued notice u/s. 133(6) of the Act on 03.12.2012 to the donor Shri Ram Lochan Bhattacharya to confirm the transaction along with gift deed and to produce evidence of filing of return in the relevant assessment year with the accounts. The AO observes that there was no reply from the assessee. However, the Ld. AR of the assessee produced a gift deed authenticated by the Notary dated 05.02.2013. The AO noticed that there was a difference in the thumb impression shown in another gift deed filed on 06.02.2013. Taking note of the difference in the thumb impression and taking note of the fact that the transaction of gift was made on 28.04.2009 for Rs. 4 lacs and on 01.06.2009 of Rs.2,85,000/- the AO disbelieved the contention of the assessee that the gift was given out of love and affection to daughter in law by the donor from his past savings from agricultural income. And the AO was not satisfied with the source of the amount from the donor and in the absence of evidence of filing of return of income by the donor for the relevant AY 2010-11, he was of the opinion that it is an afterthought and, therefore, he disbelieved the claim of the assessee that she has received the amount of Rs.6,85,000/- as gift from the father in law. Aggrieved, the assessee preferred an appeal before the Ld. CIT(A) who confirmed the decision of the AO. Aggrieved, the assessee is before us.

We have heard rival submissions and gone through facts and circumstances of the case. We note that the assessee is an authorized dealer of (HPCL) and has shown in her proprietary concern’s Balance Sheet an amount of Rs.6,85,000/- as gift received from relative which was shown in her Capital Account. The AO issued notice u/s. 133(6) of the Act dated 03.12.2012 to Shri Ram Lochan Bhattacharya, the donor (father in law of the assessee) to confirm the transaction of gift. We note that the donor pursuant to the notice of the AO had filed the reply dated 04.02.2013 before the AO which we note from perusal of page 25 of the paper book. We note from the perusal of the said letter that the donor Shri Ram Lochan Bhattacharya had sent the reply in compliance of the notice u/s. 133(6) of the Act dated 31.12.2012 and the contents of that letter reveals that the donor Shri Ram Lochan Bhattacharya has affixed his thumb impression which has been identified by Advocate Shri Arup Kumar Pramanick and notarized before a Notary Public wherein the donor Shri Ram Lochan Bhattacharya has confirmed that he had gifted to his daughter in law (the assessee) the fact of gift amounting to Rs.4 lacs on 28.04.2009 through Allahabad Bank S.B Account Shaswati Bhattacharya, AY 2010-11 No. 265 and Rs.2,85,000/- on 01.06.2009 through his savings bank account. Page 26 of the paper book reveals that Shri Ram Lochan Bhattacharya, the donor had an account with Allahabad Bank SB A/c. No.

Page 27 of the paper book reveals that an amount of Rs. 4 lacs was transferred through cheque to SB A/c. No. 272 and Rs.2,85,000/- was transferred from the donor’s account to SB A/c No., 272 of the assessee. Paper Book page 29 reveals the deed of gift made by the donor in favour of the assessee which was also notarized and which was dated 05.02.2013. We note from perusal of page 31 of the paper book that the assessee had an account with Allahabad Bank SB A/c. No. 272 and from a perusal of page 32 of the paper book reveals that on 28.04.2009 an amount of Rs. 4 lacs was transferred to the assessee’s account from SB A/c No. 265 i.e. the donor’s account and Rs.2,85,000/- on 01.06.2009 transferred from the account of the donor. We have perused the gift deed dated 05.02.2013 which has been notarized as well as the reply dated 04.02.2013 which is also notarized. When asked by the bench to the Ld. AR of the assessee as to why the gift deed has been made after the issue of notice u/s. 133(6) of the Act, the Ld. AR stated that the gift deed earlier made got misplaced and however, the fact remains that the gift was made through the bank transaction. Genuineness of the gift is prima facie shown to have been made from the bank account of the father in law to the assessee because the transactions have been proved by the bank statements and nothing turns much on the fact of gift deed being made after the issue of notice u/s. 133(6) of the Act because the donor has transferred the amount in question from his bank account with Allahabad Bank on 28.04.2009 of Rs.4 lacs and on 01.06.2009 of Rs.2,85,000/- which we have verified from the paper book as stated above. The fact is that the AO has issued notice only on 03.12.2012 whereas that bank transaction has taken on 28.04.2009 and 01.06.2009. According to the Ld. AR, the gift deed which was prepared immediately after the amount was transferred through bank account got misplaced and, therefore, when the AO asked the assessee to produce the gift deed the donor after replying to the AO through notarized letter dated 04.12.2013 had got the gift deed notarized on 05.02.2013 and produced the same. The assessee’s claim is that the donor being father in law of the assessee has been a farmer and had four bighas of agricultural land in Gourhati Mouza having JL No. 112 and specifically bearing Dag Nos. 1042, 1043, 1044 and 3788 which yielded three crops during a year and since the amount of Rs.6,85,000/- was from the past savings of the donor and since the income was from Shaswati Bhattacharya, AY 2010-11 agricultural income the donor did not file the return of income. For substantiating the fact that the donor was the owner of four bighas of agricultural land the ld AR has produced the certificate from Pradhan in charge, Gourhati-2 Gram Panchayat. According to the Ld. AR, the assessee has discharged the onus on her to prove that the said amount has been received by her as gift from her father in law. Therefore, the addition made could not be sustained. We note that the assessee had produced her bank statement and the bank statement of the donor to prove that the amount has been transferred through banking channel. Thereafter, when the scrutiny was in progress pursuant to notice of the AO u/s. 133(6) of the Act the donor had replied through notarized letter wherein he confirmed about the gift to the assessee. The AO disbelieved the deed of gift only because it was notarized after issuing a notice u/s. 133(6) of the Act. We do not subscribe to the said action of the authorities below. Admittedly, the amount in question was transferred through banking channel from the account of the donor to the account of the assessee. The identity of the donor is not under challenge. The only disbelieving factor which the AO notices is that of difference in the thumb impression. We have compared the deed of gift and the reply given by the assessee dated 04.02.2013 which the AO has mistakenly stated in the assessment order as that of the gift deed and second gift deed dated 06.12.2013, which is wrong. There is only one gift deed i.e. dated 05.02.2013 and the other letter was basically a reply letter dated 04.02.2013. In both the cases we note that the letter as well as the gift deed has been notarized so the identity of the person whose thumb impression is affixed cannot be doubted without calling the Notary Public who attested the same and it need to be cross verified from him as to the veracity of the fact in question, which the AO has not done. Next is that the date of the gift deed is after issuing of 133(6) notice, we note that the gift deed was supposed to have been prepared by the donor and given to the assessee which the assessee claims to have been misplaced and, therefore, the duplicate copy of the same was notarized and given to the AO. Be that as it may, the fact of gift being given on 28.04.2009 and 01.06.2009 through banking channel is a fact and has been found to be correct and, therefore, even if the gift deed has been made after the gift has been made to the assessee cannot change the factual fact that the gift has been given to the assessee by the donor and the assessee has shown that the donor was a farmer who owns 4 bhigas of agricultural land which yields 3 seasonal crops and that the gift is from past saving which fact explains the Shaswati Bhattacharya, AY 2010-11 source. Without any other material on record the AO has passed his order on the basis of suspicion. Suspicion howsoever strong cannot take the place of evidence, therefore, we find force in the submission of the Ld. AR and taking into consideration the facts and material on record, we direct deletion of addition.