Income Tax Appellate Tribunal - Pune
Shri Gurumukh M. Jagwani, Aurangabad vs Department Of Income Tax on 22 March, 2007
IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCH "A", PUNE
BEFORE SHRI I.C.SUDHIR JM AND SHRI RAJENDRA SINGH AM
I.T.A. No. 1764 & 1765/PN/2007
(Asstt. Year : 1999-2000 & 2000-01 )
Asstt. Commissioner of Income Tax, ... Appellant
Central Circle ,
Aurangabad
Vs.
Shri. Jethanand M. Jagwani ... Respondent
M/s. Laxmi Global Company,
88/1, Ajantha Road, Jalgaon
PAN :AAXPJ0671P
I.T.A. No. 1768 TO 1770/PN/2007
(Asstt. Year : 1999-2000 & 2001-02 )
Asstt. Commissioner of Income Tax, ... Appellant
Central Circle ,
Aurangabad
Vs.
Shri Gurumukh M. Jagwani ... Respondent
C/o Shri Jethanand M. Jagwani
M/s. Laxmi Industries, 84, Chincholi Village,
Jalgaon
PAN: ACXPJ0669D
Appellant by : Shri Hareshwar Sharma
Respondent by : Shri S.U. Pathak
ORDER
PER BENCH In these appeals, the Revenue has questioned first appellate orders on the common ground that the Ld CIT(A) has erred in deleting additions made u/s. 68 of the Act on account of amount credited in the books of account as gifts in the name of various persons.
2. In the cases of Shri Gurumukh Jagwani, the first appellate order has also been questioned by the Revenue on the ground that in the A.Ys. 1999-2000 and 2001-02, the Ld CIT(A) has erred in deleting the additions made u/s. 68 of the Act 2 ITA No.1764, 1765, 1768 to 1770/PN/2007 Shri Jethanand M Jagwani etc., (A.Ys. 1999-00,2000-01 & 2001-02) , made on account of amount credited in the books of account as loan in the name of various persons.
3. At the outset of hearing, the Ld. A.R. submitted that an identical issue under the similar facts and circumstances has been set aside to the file of the Ld CIT(A) for fresh consideration by the Tribunal in group cases of Shri Brijlal M. Jagwani and Others in ITA Nos. 1333 to 1336/PN/2007 (A.Ys. 2000-01 to 2003-04) (copy supplied). The Ld. A.R. adopted arguments advanced therein on behalf of the assessee and referred para Nos. 8, 9 & 17 of the said order of the Tribunal.
4. The Ld. D.R. did not dispute the above submission of the Ld. A.R. He, however, placed reliance on the assessment order in support of the Ground raised in the appeals. He submitted further that the Ld CIT(A) was not justified in deleting additions made on account of non-genuine gifts and cash credits without examining the genuineness of the transactions and by ignoring the findings given by the Hon'ble Supreme Court in the case of Smt.Sumati Dayal V/s. CIT (1995), 214 ITR 801 (S.C).
5. Having gone through the orders of the lower authorities, in view of the above cited decision and material available on record, we find that in the case of Jethanand M. Jagwani, the assessee Shri Jethanand M. Jagwani claimed to have received gift of Rs.8,48,000/- from the donor Shri Jaykumar Chandiram in the A.Y. 1999-2000 and gifts of Rs. 18,00,000/- from the donors Shri Jaykumar Chandiram (Rs. 9,00,000/- + Rs. 8,00,000/-) and Smt. Bhagibai Jagwani (Rs. 1,00,000/-) in the A.Y. 2000-01. Actually, search action was carried out at the premises of Shri Jethanand M. Jagwani and at the premises of his six brothers and close associated members. From the details gathered, it was noted that during the assessment years under consideration, the assessee had received above stated gifts. The A.O doubted genuineness of the claimed gifts and added the amount donated in the income of 3 ITA No.1764, 1765, 1768 to 1770/PN/2007 Shri Jethanand M Jagwani etc., (A.Ys. 1999-00,2000-01 & 2001-02) , the assessee u/s. 68 of the Act. The Ld. CIT(A) has deleted the addition in question with this observation that the asessee has satisfactorily explained the credit in as much as identity, genuineness and credit worthiness of creditors are concerned with evidence in the support. This action of the Ld CIT(A) has been questioned by the revenue before the Tribunal. Likewise in the case of Shri Gurumuk M. Jagwani, the assessee claimed to have received gift of Rs. 18,48,000/- from Kasan Badani (Rs. 5,00,000/- , Binakumar Badani Rs. (5,00,000/-) and Jaykumar Chandiram (Rs.8,48,000/-), thus Rs. 18,48,000/- in total in the A.Y. 1999-2000; of Rs. 12,00,000/- from Lajwani Ahuja (Rs. 10,00,000/-) and Bhagibai Jagwani (Rs. 2,00,000/-) in A.Y.2000-01 and of Rs. 1,00,000/- from Santoshkumar Lokwani in A.Y. 2001-02. The assessee also claimed to have received cash credit of Rs. 75000/- from the creditor Shri Hiranand Rohra in A.Y. 1999-2000 and Rs. 30,95,000/- from Biharilal Budhani (Rs. 11,95,000/-), Smt. Beena Badani (Rs.2,00,000/-), Gungrumal Chug (Rs.5,00,000/-), Shila Budhani (Rs.7,00,000/-) and Smt. Sunaina Budhani (Rs. 5,00,000/-) in A.Y. 2001-02. The A.O. doubted the genuineness of these transactions and added the same in the income of the assessee. The Ld CIT(A) has deleted the additions made on account of gifts with the observations that the assessee has established the identity and credit worthiness of the donors as well as genuineness of the transaction. He has also deleted the additions made on account of amount credit in the books of account as loan on the basis that the assessee has satisfactorily explained the credit in as much as identity, genuiness and credit worthiness of the creditors. These actions of the Ld CIT(A) has been questioned before us. The main contention of the Ld. D.R. remained that the assesses have failed to establish the genuineness of the transactions.
6. We find that under similar facts and circumstances in the case of Shri Brijlal M. Jagwani and Smt. Anita B. Jagwani (supra) of the Group, the Tribunal had set aside the matter to the file of the Ld CIT(A) for fresh consideration. The relevant 4 ITA No.1764, 1765, 1768 to 1770/PN/2007 Shri Jethanand M Jagwani etc., (A.Ys. 1999-00,2000-01 & 2001-02) , para Nos. 8, 9 & 10 of the said order of the Tribunal in the case of Shri Brijlal M. Jagwani (supra) are being reproduced here-in-under for ready reference :
"8. We have heard both the sides at length and also carefully examined the orders of the authorities below in the light of the compilation filed and the case laws cited. At the outset, it appears that the Learned CIT(Appeals) has ignored the comments of the concerned Asst.CIT, Central Circle, Aurangabad as made in the form of Remand Report dated 22/03/2007, wherein he has asked the assessee to submit the paper-book which was claimed to have been furnished before the first appellate authority. Though the first appellate authority has called for a Remand Report but altogether there was no discussion in the impugned appellate order now challenged before us. From the side of the Revenue an Officer of the rank of Asst.CIT, Central Circle was present but the impugned order of the Learned CIT(Appeals) is devoid of his comments. These are few fundamental reasons which compels us to rather consider twice before approving, if at all, the view of Learned CIT(Appeals).
9. As far as the facts of the case are concerned, undisputedly confirmations, Affidavits, identity, etc. were very much before the Revenue Authorities but in addition to the said evidence, the legal requirement is something else rather over and above the fulfillment of these preliminary conditions specially when the question is an acceptance of gift u/s. 68 of the I.T. Act, 1961. An allegation has also been made by the Assessing Officer that he wanted the presence of the Mr. Subhash Bhatija to be produced by the assessee, however, the said donor was never produced. On account of the non-production of Mr. Subhash Bhatija, the Assessing Officer has held that the genuineness of the gift remained unverified. An another fact can also not be ignored in respect of the gifts made by the donor Mr.Baldevkumar Kewalramani that impugned amount of Rs.15 lacs was stated to be the same amount which was transferred from M/s. Sai Traders a proprietary concern of the assessee. Hence, the strong objection of the Assessing Officer was that the amount which was received from the assessee had, in fact, in turn gifted by the said donor back to the assessee. Though the explanation was that the said amount was advanced by the donor to the assessee way back in the Assessment Year 2000-01 which was accepted by the Revenue Department, therefore, the source of the said gift in the hands of the donor was not under clout. This was the one side of the coin, however, the other 5 ITA No.1764, 1765, 1768 to 1770/PN/2007 Shri Jethanand M Jagwani etc., (A.Ys. 1999-00,2000-01 & 2001-02) , side of the coin have revealed different facts that there was a paltry bank balance of Rs.12,874/- in the accounts of the donor just before the gift. That was one of the reasons that the Assessing Officer has doubted the genuineness of the gift. Be that as it was, a legal issue has yet to be answered as raised by the Learned Authorised Representative of the assessee that whether the proceedings initiated u/s. 153A consequence upon the search were legal, in view of the fact that the assessment was finalized before the date of the search? This legal aspect was not touched by the Learned CIT(Appeals) while deciding the appeal, hence, this can be one of the valid reasons to restore the entire issue back to that stage. We have also noticed, as discussed above, that the Officer of the Revenue Department wanted certain information and the paper-book so that the Remand Report could be furnished. However, that attempt was not made from the side of the assessee and the Representation from the side of the Revenue remained incomplete. For this reason as well, we deem it justifiable to restore the entire issue back to the stage of Learned CIT(Appeals), so that not only the Assessee but the Revenue Department should also get fair opportunity particularly to represent their respective stands before the First Appellate Authority.
10. With these remarks, we hereby set aside the order of the Learned CIT(Appeals) and restore the issue back to that stage to be decided de novo as per law, as well as per our directions."
Similar view has been followed by the Tribunal on the issue in the case of Smt. Anita B.Jagwani (supra) vide para No. 17 of the order. We, thus, following the above decisión of the Tribunal in the cases of Shri Brijlal M. Jagwani and Smt. Anita B. Jagwani (supra), on an identical issue under the similar facts and circumstances, set aside the matter to the file of the Ld. CIT(A) to decide it afresh as per the above direction of the Tribunal in those cases. The Ground raising the issue of genuineness of gifts in the appeals is, thus, allowed for statistical purposes.
7. On similar line, we also set aside the issue of genuineness of the cash credit as here-in also, the three ingredients of Section 68 of the Act i.e. genuineness of 6 ITA No.1764, 1765, 1768 to 1770/PN/2007 Shri Jethanand M Jagwani etc., (A.Ys. 1999-00,2000-01 & 2001-02) , the transaction, identity and credit worthiness of the creditors are required to be established by the assessee and the same issue is involved here-in also, as above in the case of the claimed gifts. The Ground No.1 involving the issue of genuineness of cash credit in the appeals relating to Shri Gurumukh Jagwani is, thus, allowed for statistical purposes.
8. Consequently, the appeals are allowed for statistical purposes.
Order pronounced in the open Court on 15th October, 2010 Sd/- Sd/-
(RAJENDRA SINGH) (I.C. SUDHIR)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Pune dated the 15th October, 2010
US
Copy of the order is forwarded to :
1. Appellant
2. Respondent
3. CIT(A)- I, Nagpur
4. CIT (Central) Nagpur
5. D.R. ITAT 'A' Bench
6. Guard File
By order
Assistant Registrar,
Income Tax Appellate Tribunal, Pune Benches, Pune