MR SUNIL KR. SAHA,KOLKATA vs. ITO, WD-55(1), KOLKATA, LUCKNOW

At the outset, it is noticed that this appeal by assessee is time barred by 299 days and assessee has filed condonation petition stating the reason illness supporting medical certificate. Ld. Sr. DR left the issue at the discretion of the bench. I feel that in the stated reasons the appeal should be admitted and delay should be condoned. Accordingly, I condone the delay and admit the appeal.

The first issue in this appeal of assessee is against the order of CIT(A) confirming the reopening of assessment u/s. 147 of the Act. Briefly stated facts are that the return of income by the assessee for AY 2004-05 was filed and return was processed u/s. 143(1) of the Act. Subsequently, the AO noticed from the accounts of the assessee that it had shown a gift of Rs.1,35,000/- and loan of Rs.3.5 lacs but no details were furnished and accordingly, he has reason to believe that the income chargeable to tax has escaped assessment and, therefore, initiated proceeding u/s. 147 of the Act. For this, the AO recorded the following reasons on 10.12.2010:

I have heard rival submissions and gone through facts and circumstances of the case. I find that the AO has merely recorded the reason that he is noticed from the account that the assessee has received a gift of Rs.1.35 lacs and loan of Rs.3.5 lacs but no details were furnished along with the return of income. Subsequently, while completing assessment u/s. 147 read with section 143(3) of the Act, the AO has made addition of Rs.1.35 lac being gift as unexplained. The assessee claimed that these gifts were small gifts received from different relatives during birth day and their marriage anniversary and not a single gift exceeding Rs.10,000/- in each case. Ld. Counsel for the assessee before us stated that the very reasons recorded are fallacious and AO has not found any reasonable believe for reopening the assessment. I find that the argument of Ld. Counsel for the assessee is convincing that the reasons recorded are based on the assessee’s accounts only and that also according to AO are without any details regarding gifts. I find that the assessee has disclosed these gifts in the Balance Sheet and what type of evidence are to be filed with the return of income it is not known. The assessee has made complete disclosure of gift in the return of income and there is no exterior information or any evidence with the revenue which provoked them to reopen the assessment. Accordingly, I quash the reassessment proceeding and allow the appeal of assessee.

In the result, the appeal of assessee is allowed.

Order is pronounced in the open court on 11.12.2015 Sd/- (Mahavir Singh) Judicial Member