9911796707
TMI Blog2014 (1) TMI 1403X X X X Extracts X X X X X X X X Extracts X X X X ..... /- each) from Shri Kamesh Prajapati, Shri R. Mamaniya and Smt. Sheela M. Gala, who are no way related to the assessee. Based on the information received from the ACIT (OSD)-1, Central Range-7, Mumbai and upon verification of the documents the assessee's case was sought to be reopened by the AO, having noticed that there are reasons to believe that the alleged gifts are nothing but income of the assessee for A.Y. 2003-04 which has escaped assessment. Accordingly notice under section 148 of the Act dated 25.03.2010 was issued to the assessee which was duly served on 29.03.2010. Thereafter the AO issued notice under section 142(1) of the Act calling for the details such as name and address of the donors, confirmation of gifts, relationship with the donors, occasion of the gift and copies of the bank statements. In response to the said notice the assessee's representative requested the AO to treat the return of income filed under section 139(1) as the return filed under section 147 and also stated that the assessee had not received any reasons recorded for reopening the case. Subsequently notices under section 143(2) and section 142(1) of the Act were issued alongwith a questionnaire a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 80,550/- only. 7. Considering the facts the AO noticed that it is difficult to believe that persons having small means could have saved so much of amount and could have given gift to others without any consideration and without any occasion. He also noticed that the onus is on the assessee to prove the capacity of the donor to give the gift apart from proving the genuineness of the gift. Under these circumstances, the AO concluded that provisions of section 69A are applicable to the case in hand, which in turn says that if an assessee is found to be owner of any money and no explanation is offered for acquisition of the money, such amount may be deemed to be the income of the assessee for such financial year. In other words, the AO concluded that the assessee could not explain the capacity of the donors and hence the same has to be treated as income of the assessee under section 69A of the Act. 8. Aggrieved, assessee contended before the CIT(A) that reopening itself is bad in law since no new material was on record which may empower the AO to reopen the case. It was further contended that the assessee had credited in her capital account Rs. 3,00,000/- referable to the gifts rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is neither any relationship between the so called donors and the assessee nor any reciprocity established. To highlight the same, the learned CIT(A) observed that one of the donors, Shri Ripen J. Mamaniya did not even know his share of profit in the business of his father who in turn earns only Rs. 2 to 2.5 lakhs a year, still he is able to spare Rs. 1,00,000/- as gift to the assessee. Similarly, the other two donors also earned meagre income but yet chose to part with Rs. 1,00,000/- as gift and further the fact that there have been transfers of moneys in their bank accounts just prior to giving of gifts casts shadow of doubt with regard to the genuineness of the gifts. Under these circumstances the learned CIT(A) confirmed the action of the AO. 11. Further aggrieved, assessee is in appeal before the Tribunal. The learned counsel for the assessee strongly submitted that there is no basis for reopening of assessment and in fact the assessee was engaged in the business of lending money and earning interest income which was offered to tax. Gifts received by the assessee were reflected in the Balance Sheet and thus it can be said that they are recorded in the books of account. Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount and hence the plea of the assessee that section 69A is wrongly invoked deserves to be examined by calling for remand report by sending back the matter to the CIT(A). With regard to the other contentions it was submitted that reopening of assessment beyond four years is in accordance with law since the statement of Shri Ripen J. Mamaniya and further enquiries made by the AO are sufficient material to enable the AO to reopen the assessment even after expiry of four years from the end of the assessment year under consideration. He further submitted that the alleged donors are no way related to the assessee and their annual income is such that there would have been hardly any savings and in fact the first donor do not even know as to whether he has any share of the income earned by his father and an young boy of 23 years giving a gift of Rs. 1,00,000/- without any blood relation and without any reciprocity shows that the gift may not be true. It was submitted that the AO as well as the CIT(A) has thoroughly gone into the facts of the case while coming to the conclusion that there is sufficient material for reopening the assessment as well as for making the impugned addition, sin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on with regard to reopening of assessment on the ground that sufficient material is not available on record. In my considered opinion the AO as well as the learned CIT(A) were justified in upholding the reopening of assessment since the information obtained from the ACIT (OSD)-1, Central Range-7, Mumbai and further verification with regard to the source of their funds may be sufficient to prima facie arm the AO to reopen the assessment under section 147 of the Act since it can be said to be sufficient reason to believe that income chargeable to tax escaped assessment. In fact the AO has issued notices under section 143(2) and 142(1) of the Act and even at that stage the assessee appears to have not raised any objection; at the same time the AO chose to make addition under section 69A of the Act which comes into play only when money found in the hands of the assessee is not recorded in the books of account whereas in the instant case the assessee's Balance Sheet reflects gifts received, which may indicate that they are recorded in the books of account. Since no specific plea was taken the AO as well as the CIT(A) had no occasion to examine this aspect and for this limited purpose I ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
