VANDANA GUPTA,NEW DELHI vs. ITO, NEW DELHI

This appeal by the assessee is directed against the order passed by the CIT(A)-XXIV, New Delhi, dated 14.2.2013, for the assessment year 2003-04.

The facts in brief are that the assessee is an individual engaged in the business of transport as proprietor of New Bhagwati Transport Services and share trading. Return of income for the assessment year 2003-04 was filed on 24.9.2004, declaring total income at Rs.1,40,670/-.

The ld. counsel for the assessee, Shri Naveen Gupta, submitted that the reopening is bad in law for the reason that reasons for reopening was not communicated by the AO. On a query from the Bench, he submitted that the assessee did not ask for the reason, but, nevertheless, non- furnishing of reasons makes the assessment bad in law in the light of the following:-

On merits, he submitted that the identity of the creditor was not in doubt and the capacity of the creditor was good because Shri Manoj Kumar Batra is assessed both to income-tax as well as wealth-tax. On genuineness of the transaction, he pointed out that the payment has been made through banking channels and memorandum of gift as well as affidavit were filed by Shri Manoj Kumar Batra in support of the impugned transaction.

The ld. Sr. DR, Shri O.P. Meena, on the other hand, opposed the contentions of the assessee and submitted that when the assessee did not ask for any reasons, the question of communicating the same does not arise.

On merits, he relied on para 3 of the ld.CIT(A)’s order and submitted that it is strange that a 43 year old married woman got a gift from a 41 year old man who is not related to her.

After hearing the rival submissions and perusing the relevant material on record, we hold as follows. The Hon’ble Gujarat High Court 3 in the case reported in 370 ITR 107 (Guj) was giving directions for future compliance by the AOs. This judgement was not available to the AO as on the date of completion of assessment on 3.12.2010. Vide the Third Member decision of the Kolkata Bench reported in 133 ITR 111, the assessment was set aside to the AO for furnishing reasons for reopening. This case law does not support the argument of the assessee that non-furnishing of reasons for reopening makes the assessment bad in law. Thus, this argument of the assessee is dismissed.

On merits, we find that the donor has given an affidavit as well as a memorandum of gift. He is assessed both to income-tax as well as wealth-tax. The AO has not conducted any inquiry nor examined the donor and made the addition u/s 68 on surmises and conjectures. The theory of preponderance of probabilities can be invoked when the facts and evidences filed by the assessee are not verifiable. In our view, the assessee has discharged the burden of proof that lay on her, whereas the AO has not discharged the onus that shifted to him. The addition of Rs.4 lac is, therefore, hereby deleted.

In the result, the appeal of the assessee is allowed in part.