Bombay High Court
N. Rajgopal vs The Addl. Commissioner Of Income Tax ... on 29 January, 2019
Bench: Akil Kureshi, M.S. Sanklecha
5. os itxa 1454-16.doc
R.M. AMBERKAR
(Private Secretary)
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
O.O.C.J.
INCOME TAX APPEAL NO. 1454 OF 2016
N. Rajgopal .. Appellant
Versus
The Addl. Commissioner of Income Tax, Range -23(3),
Mumbai .. Respondent
...................
Mr. Nishit Gandhi i/by Sameer Dalal for the Appellant
Mr. N.C. Mohanty for the Respondent
...................
CORAM : AKIL KURESHI &
M.S. SANKLECHA, JJ.
DATE : JANUARY 29, 2019.
P.C.:
1. The assessee has filed this appeal to challenge the judgment of the Income Tax Appellate Tribunal ("the Tribunal"
for short) dated 18.11.2015. Various questions have been raised by the assessee in the appeal. The principal issue, however, is with respect to the judgment of the Tribunal in confirming the view of the Assessing Officer and Commissioner of Income Tax (Appeals) ["CIT(A) for short] that the gifts of Resurgent India Bonds ("the Bonds" for short) was not genuine and therefore, the amount in question should be added to the assessee's income in terms 1 of 6 ::: Uploaded on - 31/01/2019 ::: Downloaded on - 31/01/2019 22:24:18 :::
5. os itxa 1454-16.doc of Section 68 of the Income Tax Act, 1961 ("the Act" for short).
2. Through amendment sought, learned counsel for the assessee had raised additional question questioning the jurisdiction of the Additional Commissioner of Income Tax to have acted as an Assessing Officer in the present case.
3. Brief facts are as under:-
(a) The appellant assessee is an individual. In the course of the assessment of his return for the assessment year 2003-04, the Assessing Officer noticed that the assessee had received gifts from various sources amounting to Rs. 25.90 lacs (rounded off) which was credited in the capital account of the assessee in the current year. Such gifts were as under:-
Sr. Name of the donor of gift Resurgent India Amount Indian Indian No. Certificate No. US $ Rate Rupees Per $ 1 Mani Thyagarajan B050777-B050777 5000 45 225000 2 Alok P. Jain B077574-B077574 5000 45 225000 3 Bhatia Dayal Chellaram C800390-C-800390 10000 45 450000 4 -do- A183050-A183051 2000 45 90000 5 Dilip Lekhraj Sawlani A037760-A037760 1000 45 45000 6 Prabhakar Ramakrishnan B058269-B058269 5000 45 225000 7 Patel Dhanlaxmiben Avindbhai C064112-C-064112 10000 45 450000 8 Raju M. Jham C049677-C-049677 10000 45 450000 9 Mani Tyagrajan B050778-B050778 5000 45 225000 2 of 6 ::: Uploaded on - 31/01/2019 ::: Downloaded on - 31/01/2019 22:24:18 :::
5. os itxa 1454-16.doc 10 Kirit Gosaliya - 4000 47.58 190343 11 P.V. Surendra - Rs. 15000 - 15000 Total 2590343 The Assessing Officer confronted the assessee primarily on the issue of genuineness of the gifts and after hearing the assessee held that the gifts were not genuine. He noted that the assessee was given several opportunities asking him to show the relationship between him and the donors and also to show credit worthiness. He was also asked to specify the investment made through such gifts. The assessee pointed out to the Assessing Officer that the gifts were received from third parties and it was, therefore, not possible for him to collect such details. The Assessing Officer disbelieved the gifts and added such income as assessee's unexplained cash credit in terms of Section 68 of the Act.
(b). The assessee carried the matter in appeal. Before the CIT(A), the assessee raised the contention that the Additional Commissioner of Income Tax who had passed the order of assessment was not competent to do so. He relied on Section 2(7A) of the Act. The Commissioner negativated such contention. On merits also, the Commissioner confirmed the view of the Assessing Officer and thus, dismissed the appeal.
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5. os itxa 1454-16.doc
(c). The assessee carried the matter in further appeal before the Tribunal. The Tribunal, by a detailed order, rejected the assessee's appeal. In such order, the Tribunal principally held that the gifts were not genuine. Reference was made to the materials on record suggesting that the assessee was unable to furnish most basic and necessary details from the donors from whom he had claimed to have sizable gifts. The Tribunal believes that there was no relationship between the donor and the donee and that there was no evidence to suggest that the gifts were actuated by mutual love and affection. Notably, the assessee had not raised the contention of lack of jurisdiction of the Assessing Officer.
4. We would first deal with the question of jurisdiction of the Assessing Officer. We notice that Section 2(7A) of the Act defines the term "Assessing Officer" as to mean every Revenue Officers mentioned therein. Reference to "Additional Commissioner" in the list of such officers was included by an amendment made under Finance Act, 2007 but with retrospective effect from 1.6.1994. Thus, by virtue 4 of 6 ::: Uploaded on - 31/01/2019 ::: Downloaded on - 31/01/2019 22:24:18 :::
5. os itxa 1454-16.doc of this amendment, an Additional Commissioner of Income Tax was included in the definition of "Assessing Officer". It is true, as pointed out by the learned counsel for the assessee that when the Additional Commissioner passed the order of assessment, Section 2(7A) did not contain a specific reference of an Additional Commissioner. However, when the statute has been amended with retrospective effect, the effect of such amendment must be applied to the pending proceedings as in the present case. Non-applying such amendment in the present proceedings would destroy the retrospectivity granted to it by the legislature. This contention of the assessee is, therefore, rejected.
5. In the context of the additions made by the Assessing Officer and ultimately sustained by the CIT (A) and the Tribunal, we do not see any question of law has arisen. Shorn of technicalities, the prime question before the Assessing Officer was with respect to the genuineness of the case. The assessee claimed to have received an amount of Rs. 25.90 Lacs (rounded off) which at the relevant time was sizable. The assessee failed to even produce must basic 5 of 6 ::: Uploaded on - 31/01/2019 ::: Downloaded on - 31/01/2019 22:24:18 :::
5. os itxa 1454-16.doc details pertaining to the donors. He had never claimed any relations with such persons. The assessee, in plain terms, even failed to establish the donors donee relationship as well as to disturb the stand of the Assessing Officer that the factum of unknown persons giving such sizable gifts without any occasion runs contrary to basis probability of human conduct. All in all, the entire issue is based on facts. The CIT(A) and the Tribunal concurrently held that the gifts were not genuine. Minimum consequences of such findings would be that the amount in question would be the assessee's unexplained cash credit to be brought to tax in terms of Section 68 of the Act. In the result, the Income Tax Appeal is dismissed.
[ M.S. SANKLECHA, J. ] [ AKIL KURESHI, J ]
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