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Dy. CIT, CC-1, Baroda Versus Smt. Lalitaben Narhari Patel

2016 (5) TMI 217 - ITAT AHMEDABAD

Addition held to be gift of shares - Held that:- AO has connected the impugned gift with the sale of Gotri land and that issue is yet to be decided in AY 2009-10, therefore the ld.CIT(A) has rightly held that the gift being transferred “in kind” hence not to be taxed for the year under consideration

CIT(A) has rightly deleted the addition of ₹ 46,80,540/- as the gift which was part of the total gift received by family members at 4.70 crores formed part of the undisclosed sale co .....

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This appeal of Revenue is directed against the order of CIT(A)- IV, Ahmedabad dated 2.9.2011 vide appeal No.CIT(A)-IV/157/B/CC- 1/10-11 for Asst. Year 2008-09. Assessment was framed on 23.12.2010 u/s153A r.w.s. 143(3) of the IT Act, 1961 (in short the Act) by DCIT, CC-1, Baroda. Revenue has raised following grounds of appeal:- 1. The ld. CIT(A) has erred in law and on facts and circumstances of the case by deleting the addition of ₹ 46,80,540/- on account of gift received in kind by the as .....

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n to have accepted gift in kind in the form of equity shares of Sun Pharmaceuticals Industries Ltd. of 2400 shares and 1650 shares vide declarations of gift deed dated 7.2.2008 and 17.3.2008. On examining the details of gift with the seized paper material (collected in the course of search proceedings u/s 132 of the Act in the case of Amod group as well as the assessee on 11.2..2009) ld. Assessing Officer observed that gift was received from Shri Jayant Sanghavi and the market value of these sha .....

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Patel and Shri Navin Patel for acquiring from them large plot of land at Gotri for a consideration of ₹ 10.63 crores. Thereafter on the basis of detailed scrutiny of seized papers relating to Gotri land in Asst. Year 2009-10 it was held by ld. Assessing Officer that the total consideration of ₹ 22.61 crores (at the place of ₹ 10.63 crores) included the amount of gift of ₹ 4.70 crores received in the form of shares by the assessee and the family members. Further while fina .....

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77; 4.70 crores, cash of ₹ 3 crores received as on money admitted by Krupesh Paten in his statement recorded u/s 132(4) of the Act and ₹ 1.41 crores as tax component on the value of shares accepted by the donee from the husband of donor as the purchaser of the land. Accordingly value of shares gifts to the assessee at ₹ 46,80,540/- was added to the income of assessee and income was assessed at ₹ 60,75,850/-. 3. Aggrieved, assessee went in appeal before ld. CIT(A) who dele .....

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the other hand, ld. AR submitted that the issue is squarely covered by the decision of co-ordinate bench in the case of Shri Krupeshbhai N. Patel vs. DCIT, CC-1, Baroda in ITA No.590/Ahd/2011 for Asst. Year 2006-07 and others and further submitted that appeal of the Revenue challenging the order of the Tribunal was dismissed by Hon. Jurisdictional High Court in Tax Appeal No.938 of 2012 in the case of CIT vs. Krupeshbhai N. Patel vide order dated 29th April, 2013, (copy of judgment placed on rec .....

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ssessee has, in AY 2008-09 shown to have accepted gift in kind being equity shares of Sun Parmaceuticals Industries Ltd. respectively 2400 shares and 1650 shares vide declaration of gift deed dated 7.2.2008 and 17.3.2008. The donor is Shri Jayant Sanghavi not related to the assessee even distantly. The market value of these shares works out to ₹ 46,80,540/- on the day of declaration of gift. 6.1 In fact, the total amount of gifts received from Shri Jayant Sanghavi by the appellant and the .....

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is the husband of Smt. Vishakha Sanghvi to whom Gotri land has been sold by the family members of the AppelIant;Shri Krupeshbhai N. Patel and Shri Navinbhai N. Patel are nothing but part of undisclosed sale consideration in respect of Gotri land. 6.3 Thereafter, on the basis of detailed scrutiny of the seized papers relating to sale of Gotrii land in AY 2009-10 it was held by the AO that the total consideration of ₹ 22.61 crores included the amount of gifts of Rs, 4.70 crores received in t .....

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bhai Narharibhai Patel for AY 2008-09 as contained in para 9.8 to 9.12 of the order dated 30-08-2011 are reproduced as under : "9.8 Now let us examine the issue of gifts received in the form of shares from the Donor Shri Jayant Sanghvi, who is the husband of Smt. Vishakha Sanghvi to whom Gotri (and has sold for documented consideration of ₹ 10.62 crores. The Gifts in form of shares of value of ₹ 4.70 crores are received in Feb/March, 2008 by the appellant and the family members .....

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may be made during the life time of the donor, and while he is still capable of giving. If the done dies before acceptance, the gift is void of In view of the above the requisites of a valid gift are : "(1) There should be a donor and a donee. (2) The subject of the gift must be certain and existing and capable of transfer. (3) The gift should be made voluntarily and without consideration. (4) There should be a transfer on the part of the donor. (5) There should be an acceptance by or on be .....

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ithout consideration. For this purpose it is important to note that: - . (i) Shri Jayant Sanghvi is not related to the appellant and its family even though they may belong to the same community. (ii) There is no other occasion when the gift has been made by Shri Jayant Sanghvi or his family to the appellant and its family members. ' . . (iii) There is no religious or any other social occasion on which such huge gifts have been given. (iv) There is nothing on record to show that the appellant .....

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gifts in Feb/March 2008 from Shri Jayant Sanghvi and sale of Gotri (and affected after 1 or two months i.e. April, 2008 to Smt. Vishakha Sanghvi, wife of the donor of such huge gift, are totally independent transactions. Ttiis is a situation where the apparent does not reflect the reality. Therefore, I am in total agreement with the AO that taking into account the surrounding circumstances and test of human probabilities, such huge gifts received in the form of shares are not genuine mainly on a .....

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relevant period as per section 56(2) of the Act is of no relevance once it is held that the said gift is part of undisclosed sale consideration in respect of transfer of Gotri land as the sale consideration can always be in terms of money as well as kinds. 9.11 I agree with the additional submission made by the appellant that the undisclosed sale consideration in respect of transfer of Gotri land should be taxed in the year of transfer i.e. AY 2009-10 as per section 45(1) of the Act. Once it is .....

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the appellant and his family members are in fact towards undisclosed sale consideration of Gotri land. The addition of ₹ 4.70 crores made in AY 2009-10 in the hands of the appellant and Shri Navin N. Patel (joint owners) of ₹ 2,35,00,0007- each on protective basis is confirmed on substantive basis. Therefore, the addition of ₹ 65,83,830/- in AY 2008-09 made on account of non-genuineness of gifts by treating it as part of total sale consideration is, hereby, deleted." 8. In .....

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Ahd/2011 (Revenue s appeal) 20. Grounds are reproduced below:- 1. The Ld.CIT(A) has erred in law and on facts and circumstances of the case by deleting the addition of ₹ 28,05,666/- (Rs.28,05,666 in the case of Shri Navinbhai N.Patel) on account of sale of Ampad land on the basis of seized papers. 2. The Ld. CIT(A) has further erred in law and on facts and circumstances of the case by deleting the addition of ₹ 65,83,830/- (Rs.1,69,27,845 in the case of Shri Navinbhai N.Patel) on acc .....

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1,616, 626,627,637, 638/Ahd/11 CO Nos.12 & 13/Ahd/12 & CO Nos 20&21/Ahd/12 Shri Krupeshbhai N.Patel/Sh.Navinbhai N.Patel vs. DCIT Asst.Years - 2006-07 to 2009- 10 - 27 - 17/03/2008 respectively 3400 shares and 2300 shares were gifted. According to AO, the donor namely, Shri Jayant Sanghavi is not related to the assessee. The AO has noted the market value of the shares was at ₹ 65,83,830/-. The assessee has produced the gift-deeds and other evidences but according to AO those we .....

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