TMI Blog2014 (1) TMI 1403X X X X Extracts X X X X X X X X Extracts X X X X ..... For the Appellant : Shri Girish Dave Shri Vinayak Pandya For the Respondent : Shri Mohd. Rizwan ORDER Per D. Manmohan, V.P. This appeal by the assessee is directed against the order dated 11.02.2013 passed by CIT(A)-16, Mumbai and it pertains to A.Y. 2003-04. 2. Reopening of assessment by issuance of notice under section 147 of the Act and consequent addition of Rs. 3,00,000/- made by the AO is subject matter of dispute before the Tribunal. 3. Facts necessary for disposal of the appeal are stated in brief. For the year under consideration the assessee filed return of income along with Balance Sheet showing gifts received by her to the tune of Rs. 3,00,000/-. No action appears to have been taken on the return filed by the assessee on 04.12.2003. It appears that during the course of assessment proceedings initiated in the cases of Shri Bhagaram P. Mali, husband of the assessee, it was noticed that the assessee had received a gift of Rs. 3,00,000/- (Rs. 1,00,000/- 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erusal of the bank account details shows that one day prior to the gift a cheque of Rs. 1,00,000/- was credited to his account and the same has been transferred to the account of Smt. Chanda B. Mali on 18.05.2002 in the guise of gift. The income tax return filed for A.Y. 2001-02 by Shri Ripen shows that he has declared income of Rs. 49,227/- only. 5. Similarly the bank account of Shri Kamesh Prajapati also reflects deposit of a cheque of Rs. 1,00,000/- on 17.05.2002 and the same has been transferred to the account of Smt. Chanda B. Mali on 18.05.2002. For A.Y. 2002-03 Shri Kamesh Prajapati declared income of Rs. 51,048/- only. The AO further noticed that Shri Prajapati was only 23 years old at the time of gift. 6. In the same way Smt. Sheela M. Gala's bank statement shows deposit of a cheque on 17.05.2002 for a sum of Rs. 1,00,000/- which was transferred to the account of Smt. Chanda B. Mali on 18.05.2002. She had filed return of income for A.Y. 2001-02 declaring income of Rs. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne of the donors was recorded. Therefore it cannot be said that the assessment was reopened without having any information or reasons to believe that income had escaped assessment. He further observed that the reasons for reopening the assessment were provided to the assessee during the course of assessment proceedings but the assessee did not raise any objection to the reopening before the AO and thus the objection now raised is not maintainable. 10. As regards the statement of receipt of Rs. 3,00,000/- from three persons, claimed to be gifts from three donors, the learned CIT(A) observed that the onus is upon the assessee to prove; (a) the identity of the donors, (b) creditworthiness or capacity of the donors to make gift, and (c) the genuineness of the transaction. In the instant case the assessee merely proved the first limb, i.e. identity of the donors but she could not establish either the capacity of the donors to make the alleged gift or genuineness of the transaction. There 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. Mama ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hri Ripen J. Mamaniya was recorded on oath in the case of the husband of the assessee; since this statement was not taken during the course of assessee's assessment proceedings, the AO ought to have furnished a copy to the assessee but the same was not provided. Though the AO mentioned that he has verified the records and documents to come to a conclusion that the alleged gifts were income of the assessee it is not known as to what was the basis of such finding and what documents were verified since nothing was placed before the assessee before arriving at the conclusion and hence the assessment order was passed ignoring the principles of natural justice. He also relied upon several case law in support of his contention that reopening is bad in law since there is no tangible material before the AO to prove that income chargeable to tax has escaped assessment. 12. On the other hand, the learned D.R. submitted that there is no evidence to show that the assessee has maintained books of account 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent material to reopen the assessment that too beyond four yeaRs. At the time of hearing the learned counsel for the assessee submitted that gifts were recorded in the books of account but no specific ground appears to have been taken before the tax authorities to enable them to verify in detail. The learned counsel for the assessee submitted that an omnibus ground is raised stating that provisions of section 69A was wrongly invoked but it is admitted that no specific plea was raised even in the written submission that section 69A is not applicable with respect to gifts recorded in the books of account. The learned D.R. submitted that this requires verification and the learned counsel for the assessee did not raise any serious objection except claiming that the facts are already on record. It may be noticed that during the course of assessment proceedings the assessee called for reasons recorded and the same was supplied to the assessee but she did not choose to raise preliminary objection 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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