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2016 (6) TMI 1004 - BOMBAY HIGH COURT

2016 (6) TMI 1004 - BOMBAY HIGH COURT - [2017] 390 ITR 292 - Revision u/s 263 - genuineness of the gift proved - Held that:- Assessing Officer was satisfied, consequent to making an enquiry and examining the evidence produced by the Assessing Officer, establishing the identity and creditworthiness of the donor as also the genuineness of the gift. The CIT in his order of Revision, does not indicate any doubts in respect of the genuineness of the evidence produced by the Assessee. The satisfaction .....

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ercise power under Section 263 of the Act. In fact, the Apex Court in Amitabh Bachchan (2016 (5) TMI 493 - SUPREME COURT ) has observed that there can be no doubt that where the view taken by the Assessing Officer is a possible view, interference under Section 263 of the Act, is not permissible. - Decided in favour of assessee - Income Tax Appeal No. 117 of 2014, Income Tax Appeal No. 119 of 2014 - Dated:- 16-6-2016 - M. S. Sanklecha And A. K. Menon, JJ. For the Appellant : Mr. Abhay Ahuja i/b. .....

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correct in cancelling the order u/s. 263 and in passing the said order whether it was justified in relying upon the decision of this Court in the case of CIT v/s. Gabriel India Ltd,. 203 ITR 108? 3. It is an agreed position between the parties that the issue for consideration in both the Assessment Years is identical i. e. the receipt of gifts from abroad However, the only distinction, in facts is that for Assessment Year 2007-08, there is only one donor i. e. Deepak Modi (father of the Respond .....

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ore, presently residing in Belgium for the last 40 years). During the course of Assessment Proceedings, the Assessing Officer for the purposes of establishing the identity, source and financial capacity of the donor, called upon the Respondent-Assessee to submit the following details: (a) Please furnish name and address of the persons who made gift; (b) Please furnish details of gifts received in last three years in the name of self and dependants; (c) Please prove the creditworthiness of Shri D .....

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rt of father Shri Deepak Modi; (f) Copy of Bank account (NRE A/c.) of father Shri Deepak Modi with Union Bank Nariman Point branch in the name of Deepak Modi. (iii) The Assessing Officer, on examination of the above and the explanation offered by the Respondent-Assessee was satisfied about genuineness of the gifts. Therefore, in his Assessment Order dated 31 December 2009 does not disturb the claim made by the Respondent-Assessee in respect of the gift received fromabroad for the Assessment Year .....

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edings for Assessment Year 2007-08 in respect of gift received from his father and also sister in the subject Assessment year. Details similar to that filed during the assessment proceedings for the Assessment Year 2007-08 were also filed in respect of gift received during the Assessment Year 2008-09 received by the Respondent-Assessee from his father - Mr. Deepak Modi. In particular a communication dated 10th December, 2010 received from Deepak Modi was also filed with the Assessing Officer poi .....

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reference issued by UBS Singapore Branch certifying the establishment of investment fund in Singapore of more than ₹ 50 Crores. The gift of ₹ 20.50 Crores came from the above investment funds by being transferred to NRE A/c with Union Bank, Mumbai; (ii) So far as gift of ₹ 116.60Crores received from his sister is concerned, the Respondent-Assessee filed confirmation letter received from his sister Mrs. Purvi Mayank Mehta. This letter inter alia provided details of her identity .....

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n A/c with UBS AG Singapore. It is these funds which were used to give gifts of ₹ 116.64 Crores to the Respondent-Assessee; (iii) On perusal of the aforesaid responses the Assessing Officer was satisfied with regard to the identity of the donor's source of the gift and financial capacity of the donors. Resultantly, accepting the claim of the gifts received by the Respondent-Assessee from his father and sister. Therefore, Assessing Officer did not disturb the amounts of ₹ 137 Cror .....

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Respondent-Assessee. The Respondent-Assessee responded by pointing out that due enquiry in respect of gifts was made by the Assessing Officer with regard to the identity, source and creditworthiness of the donors. It was also pointed out that the orders passed by the Assessing Officer not being erroneous, no occasion to exercise powers of Revision under Section 263 of the Act could arise; (d) Nevertheless the CIT by two separate orders dated 12th March, 2012 and 28th March, 2012, in exercise of .....

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n 68 of the Act. (e) Being aggrieved, the Respondent-Assessee by two separate appeals, assailed the orders dated 12th March, 2012 and 28th March, 2012 of the CIT before the Tribunal. In the impugned order, the Tribunal placed reliance upon the decision of this Court in CIT v/s. Gabriel India Ltd., 203 ITR 108 - and applying the principles therein allowed the appeals. It held that in the present facts, the Assessing Officer held enquiries with regard to the claim of the gifts received by the Resp .....

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enuineness of the gift is of the Assessing Officer on due enquiry. It records the fact that no discrepancy in the documents submitted to the Assessing Officer was noticed by the CIT before directing a further enquiry by the Assessing Officer. Besides, it holds that the order of the CIT does not establish that the view of the Assessing Officer, is erroneous. It in fact, proceeds on the basis that another view is likely by directing the Assessing Officer to make enquiries with regard to gifts rece .....

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f the Tribunal, the Revenue is in Appeal. Mr. Ahuja, Counsel appearing for the Revenue in support of the Appeal submits that the impugned order calls for interference on account of the following: (a) The Assessment Orders dated 31st December, 2009 and 30th December, 2010 in respect of the Assessment Years 2007-08 and 2008-09 respectively do not reflect any examination/ consideration of the genuineness of the gifts received by the Respondent-Assessee during the two subject Assessment Years. This .....

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Chang Jiang as claimed. Nor any enquiry done to find out whether the sister had earned amounts an account of Foreign Exchange Transactions as claimed. Thus, exercise of power under Section 263 of the Act by the CIT was called for; and (d) Reliance was also placed upon the decision of the Supreme Court in CIT v/s. Amitabh Bachchan 384 ITR 200 and the decision of the Delhi High Court in ITO v/s. DG Housing Projects Ltd., 343 ITR 329 to contend that this appeal ought to be admitted. 6. It is a sett .....

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, no occasion to exercise powers of Revision, can arise. Nor can Revisional power be exercised for directing a fuller inquiry to find out if the view taken is erroneous, when a view has already been taken after inquiry. This power of Revision can be exercised only where no inquiry as required under the law is done. It is not open to enquire in cases of inadequate inquiry. 7. Firstly, the Revenue contends that the exercise of powers under Section 263 of the Act is justified as in this case, as no .....

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d that if during Assessment proceedings queries were raised and the asessee responded to the same, then even if an Assessment order does not mention the same, it does not mean that the Assessing Officer has not applied his mind to the issues. It would be well nigh impossible for an Assessing Officer to complete all assessments assigned to him under Section 143(3) of the Act if he is required to deal with all issues which arose during the Assessment Proceedings. Thus, the Assessment Order primari .....

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essment proceedings for both the Assessment Years, the Assessing Officer issued a query memos to the assessee, calling upon him to justify the genuineness of the gifts. The Respondent-Assessee responded to the same by giving evidence of the communications received from his father and his sister i.e. the donors of the gifts along with the statement of their Bank accounts. On perusal, the Assessing Officer was satisfied about the identities of the donors, the source from where these funds have com .....

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ination of the person giving the evidence. It is only in cases where the evidence produced gives rise to suspicion about its veracity that further scrutiny is called for. If there is nothing on record to indicate that the evidence produced is not reliable and the Assessing Officer was satisfied with the same, then it is not open to the CIT to exercise his powers of Revision without the CIT recording how and why the order is erroneous due to not examining the donors. Thus, this objection to the i .....

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with the explanation offered on inquiry, it is not open to the CIT in exercise of his revsional powers direct that further enquiry has to be done. At the very highest, the case of the Revenue is that this is a case of inadequate inquiry and not of no enquiry. It is well settled that the jurisdiction under Section 263 of the Act can be exercised by the CIT only when its a case lack of enquiry and not one of inadequate enquiry. This view has been taken by this Court in the matter of CIT v/s. M/s. .....

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y. Thus, this is not a case of no inquiry, warranting order under Section 263 of the Act. Thus, this objection on the part of the Revenue, is also not sustainable. 10. The Revenue placed reliance upon the decision of the Delhi High Court in DG Housing Projects Ltd., (supra) that as the Assessing Officer had not enquired into the source of the source of the gifts received by the Assessee, the Assessment Order is erroneous. The aforesaid decision holds that the power of Revision under Section 263 .....

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re the Assessing Officer and that is not done. In the second class of cases, where the order is not exfacie erroneous, then the CIT must himself conduct an enquiry and determine it to be so. The Court held that it is not permissible to the CIT while exercising power under Section 263 of the Act to remit the issue to the Assessing Officer to reexamine the same and find out whether earlier order of Assessment is erroneous. It is the CIT who must hold that the order is erroneous, duly supported by .....

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ind out whether the order is erroneous by making further enquiry. This the decision of the Delhi High Court in DG Housing Projects Ltd., (supra), clearly negates. In the above view, the decision of Delhi High Curt in DG Housing Projects Ltd., (supra) would not assist the Revenue in the present facts. 11. Further, reliance is placed upon by the Revenue upon the decision of the Apex Court in Amitabh Bachchan (supra) to impugn the order of the Tribunal. In the facts of the Supreme Court decision, t .....

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the Act and treat the expenditure claimed as unexplained expenditure, the Assessee therein withdrew his revised return of income. Once this was done, the Assessing Officer accepted the same and did not make any further enquiry. The CIT in exercise of its powers under Section 263 of the Act noticed that the Assessee had after having pressed his claim for expenditure in cash, withdrew the claim by withdrawing the revised return of income. This was done only after the enquiry had commenced. This w .....

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us. Thus, the Bachchan's case was a case where once the claim was withdrawn, then enquiry which was to be conducted, was aborted by the Assessing Officer. Therefore, a case of nonenquiry. It may have been different, if the Assessing Officer had enquired into the cash expenditure and its source as claimed, to come to his own conclusion and even accepted the stand of the Assessee. In such a case, even if the CIT would have taken a view that the satisfaction of the Assessing Officer is not corr .....

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