Income Tax Appellate Tribunal - Ahmedabad
Shri Gyanchand M. Bardia, Ahmedabad vs The Income Tax Officer, Ward - 1(2)(2),, ... on 25 July, 2019
आयकरअपील यअ धकरण, अहमदाबाद यायपीठ 'B'- अहमदाबाद।
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD - BENCH 'B'
BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER
& SMT. MADHUMITA ROY, JUDICIAL MEMBER
आयकरअपीलसं.ITA No. 2244/Ahd/2017
नधा रणवष /Asstt. Year: 2014-15
Shri Gyanchand M. Barida Vs. ITO
Barida Mansion, Ward- 1(2)(2),
Kapasi Bazar, Kalupur, Ahmedabad
Ahmedabad- 380002
PAN:ACW PB6 217 G
अपीलाथ / (Appellant) तयथ /
् (Respondent)
Assessee by : None
Revenue by : Shri Vinod Tanwani, Sr. DR
सन
ु वाईक$तार ख/Date of Hearing : 02/07/2019
घोषणाक$तार ख/Date of Pronouncement: 25/07/2019
आदे श/O R D E R
PER MADHUMITA ROY- JM:
The instant appeal filed by assessee is directed against the order passed by
the Ld. CIT(A)-10, Ahmedabad dated 22.08.2017 arising out of the order dated
09.12.2016 passed by the ITO Ward-1(2)(2), Ahmedabad under Section 143(3) of
the Income Tax Act, 1961 (hereinafter referred to as 'the Act') whereby and
whereunder the addition to the tune of Rs. 59,65,320/- as against the return income
of Rs. 9,40,320/- has been confirmed for Assessment Year 2014-15.
2. The assessee an individual filed his return of income on 29.09.2014
declaring total income at Rs. 9,40,320/-. The matter was processed under Section
143(1) of the Act and finally addition to the tune of Rs. 59,65,320/- under Section
143(3) of the Act was made by the AO.
ITA No. 2244/Ahd/2017
A.Y. 2014-15
3. The brief facts leading to the case is this that the assessee received a gift of
Rs. 50,00,000/- from his HUF namely Gyanchand M. Baradia (HUF) which was
made through a declaration dated 16.07.2013 executed on a stamp paper not even
notarized. While determining total income to A.Y. 2012-13 the Ld. AO made an
addition of Rs. 1,02,00,000/- which was received by the assessee as a gift in that
year under consideration treating the same as assessee's income from other
sources. Since the same was confirmed by the appellate stage the details of the
instant gift in question to the tune of Rs. 50,00,000/- were asked for. The reply
given by the assessee was not found acceptable and the same was ultimately added
to the total income of the assessee. In appeal the same was confirmed on the basis
of the order passed by the predecessor in assessee's own case for A.Y. 2012-13
which is mentioned that Page 6 of the CIT(A)'s order against the assessee.
4. The said HUF comprises of Karta and self i.e. the appellant Shri Gyanchand
M. Barida, his wife Rajkumari and their son Rakesh who are the relatives
prescribed under Section 56(2). According to the Ld. AO the 'HUF' is not one of
the 'Relatives' as defined in the explanation (e) to the Section 56(2)(vii) and,
therefore, the gift so received from the HUF is not entitled to get the benefit under
the second proviso to Section 56(2)(vii) and, thus, the same has been taxed as an
'income from other sources' under Section 56 r.w.s. 68 of the Act. The assessee's
case is this that the HUF is a group of individuals and such individuals are the
'Relatives' specified under clause (e) of the explanation to Section 56(2)(vii) and,
therefore, the said gift cannot be taxed as an income of the appellant.
5. At the time of the hearing of the instant appeal the Ld. DR relied upon the
order passed by the Co-ordinate Bench in assessee's own case passed in ITA No.
1072/Ahd/2016 for A.Y. 2012-13 addition whereof was confirmed. However,
none appeared on behalf of the assessee neither any adjournment has been sought
for.
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A.Y. 2014-15
We have heard the Ld. DR and also gone through the records available
before us carefully including the order passed by the Co-ordinate Bench in
assessee's own case confirming such addition made in the A.Y. 2012-13 to the
tune of Rs. 1,02,00,000/-. The relevant portion is whereof as follows:-
"4. Learned Authorized Representative vehemently contends that both the lower
authorities have erred in law or as well as on facts in rejecting assessee's gift claim being
received from the HUF in question comprising of the three family members only. He quotes
Hon'ble apex court's judgment (supra) that the Income Tax Act does not postulate a separate
definition of an HUF as the same has to be applied as in Hindu law. Mr. Shah seeks to
emphasize that the other two HUF members i.e. assessee/karta's wife and son (supra) are
already covered in "relative" definition clauses 'A' and 'E' of the Explanation (e) (supra).
He states Assessing Officer and the CIT(A) have committed both illegality as well as
irregularity in assessing the sum in question u/s. 68 of the Act. He files a paper book
comprising of assessee's admissions dated 17.08.2015 filed before the CIT(A), HUF's bank
pass book indicating relevant sum transfer, assesse's letter dated 10.12.2015 submitted in
proceedings. HUF'S bank pass book from 13.03.2012 to 23.03.2012, letter dated 10.01.2016
in context of Assessing Officer's verification, Assessing Officer's remand report and
submissions dated 01.02.2016 against the remand findings the above case laws as well as
other co-ordinate bench's decisions Harshadbhai Dahyalal Vaidhya (HUF) vs. ITO (2013)
155 TTJ (Ahd) 71, Mumbai co-ordinate bench decision in Shri Hemal D. Shah vs. DCIT dated
08.03.2017 in TTA No.2627/Mum/2015 and DCIT vs. Ateev V. Gala in ITA
NO.1906/Mum/2014 dated April 19, 2017. He therefore seeks acceptance of instant appeal.
5. Mr. Shah's latter contention as per assessee's pleadings is that both the lower
authorities have not decided his alternative submission to be covered u/s. 10(2) of the Act.
Learned counsel is fair enough in not pressing for assessee's third substantive ground seeking
interest deduction of Rs.5,819/- claimed u/s. 57(iii) of the Act.
6. Learned Departmental Representative appearing at Revenue's behest strongly
supports both the lower authorities' findings adding assessee's alleged gift amount of Rs.
1,02,00,000/- received from his HUF.
7. We have given our thoughtful consideration to rival submissions. Case file perused.
The first dispute between the parties is qua validity of assessee's gift claim as received from
the HUF amounting to Rs. 1,02,00,000/- coming through banking channel. Both the lower
authorities are of the view that an HUF does not come under the specified category of a
relative in Section 56(2)(vii) as applicable w.e.f. 01.10.2009. The assessee's main reliance is
on this tribunal's Rajkot bench decision in Vineetkumar Raghavjibhai Bhalodia vs. ITO
(supra) accepting a similar gift claim of individual assessee from HUF. The Revenue has
preferred Tax Appeal No. 1326/2011 against the same before the hon'ble jurisdictional high
court. The same stood admitted on 23.10.2012 for final adjudication. The fact however
remains that much water has flown down the stream since the above co-ordinate bench
decision. The assessment year therein is 2005-06. Relevant statutory provision at that point of
time was Section 56(2)(v) of the Act. This followed clause (vi) in Section 56(2) increasing the
amount of Rs.50,000/- from earlier limit of Rs.25,000/- as applicable upto 01.10.2009. Then
came clause (vii) w.e.f. 01.10.2009 specifying the same to be applicable both in case of an
individual as well as HUF recipients. The legislature substituted clause (e) to Explanation in
Section 56(2)(vii) defining the term of "relative" to be applicable in case of an individual
assessee as well as HUF; with retrospective effect from 01.10.2009. The assessee is fair
enough in not disputing the fact that the former category in clause (i) of (e) defining a
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A.Y. 2014-15
"relative" qua an individual recipient does not include an HUF as a donor. The legislature
has incorporated clause (ii) therein to deal with an instance of an HUF donee only receiving
gifts from its members. We refer to Board's circular no. 1/2011 r.w. explanatory circular for
Finance Act, 2009, makes it clear in latter's clause no.24.2 that Section 56(ii) is an anti-abuse
provision. We also quote hon'ble apex court's judgment in CIT v. Sodra Devi [1957] 32 ITR
615 (SC), Smt. Tarulata Shyam v. CIT (1977) 108 ITR 345 (SC) and Keshavji Ravji & Co. v.
CIT (1990) 183 ITR 1 (SC) to observe that principles of literal interpretation in respect of the
relevant context vis-a-vis the legislation intention have to be applied here as there is no
ambiguity in definition of a "relative" in respect to an individual donee in the above definition
clause. Coupled with this, the legislature itself has accepted an HUF to be a donee in clause
(ii) of the "relatives" definition. We apply necessary implication principle to conclude in these
facts that the legislative intent is very clear that an HUF is not to be taken as a donor in case
of an individual recipient. Learned counsel's reliance on Surjit Lal Chhabda (supra) is
therefore not acceptable in this peculiar legislative backdrop of facts and circumstances.
Learned co-ordinate bench (supra) seem to have followed "Bholadia" case law which is no
more applicable in view of subsequent legislative developments vide Finance Act, 2012 w.e.f.
01.10.2009 (supra). We thus do not treat the same as finding precedents as per (1993) 202
ITR 222 (AP) CIT vs. B. R. Constructions (FB). The assessee's former plea of having received
a valid gift from his HUF is therefore declined.
8. Learned counsel at this stage refers to assesse's alternative plea that the CIT(A) has
not adjudicated the latter ground that the amount in question is exempt u/s. 10(2) of the Act.
We find no merit in the instant alternative plea as well since a gift sum which is not allowable
under the relevant specific clause cannot be accepted to be an exempt income u/s. 10(2) of the
Act. We thus treat instant latter plea to be mainly technical in nature devoid of merit."
We find that the issue is covered against the assessee in terms of the order
passed by the Co-ordinate Bench in ITA No. 1072/Ahd/2017 for A.Y. 2012-13 and
respectfully relying upon the same in the absence of any change circumstances we
decide the issue against the assessee. Thus, the order passed by the Ld. CIT(A) is
hereby confirmed. Assessee's appeal is thus dismissed.
6. In the result, the appeal of the assessee is dismissed.
[Order pronounced in the Court on 25-07-2019.]
Sd/- Sd/-
(WASEEM AHMED) (MADHUMITA ROY)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Ahmedabad; Dated 25/07/2019
TANMAY TRUE COPY
आदे शक$ त*ल+पअ,े+षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. -यथ / The Respondent.
3. संबं धतआयकरआय.
ु त/ Concerned CIT
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ITA No. 2244/Ahd/2017
A.Y. 2014-15
4. आयकरआय.
ु त(अपील) / The CIT(A)
5. +वभागीय त न ध, आयकरअपील यअ धकरण/ DR, ITAT,
6. गाड फाईल / Guard file.
आदे शानुसार/ BY ORDER
उप/सहायकपंजीकार (Dy./Asstt. Registrar) आयकरअपील यअ धकरण, अहमदाबाद / ITAT, Ahmedabad
1. Date of dictation : 02-07-2019
2. Date on which the typed draft is placed before the : 02-07-2019 Dictating Member.
3. Date on which the approved draft comes to the : 24-07-2019 Sr.P.S./P.S
4. Date on which the fair order is placed before the : 24-07-2019 Dictating Member for pronouncement.
5. Date on which fair order placed before Other :
Member
6. Date on which the fair order comes back to the : 30-07-2019 Sr.P.S./P.S.
7. Date on which the file goes to the Bench Clerk. : 30-07-2019
8. Date on which the file goes to the Head Clerk. :
9. The date on which the file goes to the Assistant :
Registrar for signature on the order.
10. Date of Despatch of the Order :
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