TMI Blog2010 (8) TMI 1036X X X X Extracts X X X X X X X X Extracts X X X X ..... tax Act. The AO accordingly issued notice under section 148 on 6.11.2006. The assessee disputed the decision of AO to reopen the assessment and argued that assessment for assessment year 2002-03 had already been completed under section 143(1) on 6.3.2003 and therefore the same could not be reopened under section 147. The AO however did not accept the argument and observed that the return had only been processed and the assessee had been only issued an intimation under section 143(1) which was not an assessment. Therefore the assessment could be reopened legally. In appeal CIT(A) agreed with the AO that intimation under section 143(1) was not an assessment as held by Hon ble Supreme Court in case of Rajesh Jhaveri Stock Brokers Pvt. Ltd. (291 ITR 500). CIT(A) accordingly confirmed the order of AO reopening the assessment aggrieved by which the assessee is in appeal before the tribunal. 2.1 Before us the Learned AR for the assessee reiterated the submissions made before lower authorities whereas the Learned DR placed reliance on the orders of authorities below. The Learned AR also argued that even at the time of processing under section 143(1) there is application of mind by the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sue had been raised in case of Rajesh Jhaveri Stock Brokers Pvt. Ltd. (291 ITR 500) in which Hon ble Supreme Court held that intimation under section 143(1) was not an assessment and that reopening of assessment in which only intimation had been issued under section 143(1) could not be said to be due to change of opinion because while issuing intimation, the AO had no power to take a view on any matter relating to the return of income. We therefore following the said judgment hold that the reopening in this case was not based on change of opinion. We accordingly see no infirmity in the order of CIT(A) and the same is upheld. 3. The second dispute is regarding assessment of income on account of gift of immovable property received by the assessee from Engineering Mazdoor Sabha. The assessee had received gift of immovable property being the flat in Giriraj Coop. Hsg. Society on 26.4.2001 from M/s. Engineering Mazdoor Sabha through its president Shri R.J.Mehta. The said flat had been acquired by Engineering Mazdoor Sabha as per decree issued by Hon ble High Court in case no.399/4 of 1997 from Kirtikumar Dresswala and Mrs. Usha Kirtikumar Dresswala. The above persons owed money from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was not a case of personal gift as the assessee was a transferee in her capacity as representative of Engineering Mazdoor Sabha. The assessee would not have got the gift from the trade union but for her connection with the trade union and for the exercise of professional activities connected with the trade. Under section 28(iv) the value of any benefit/ perquisite whether convertible into money or not arising from business or the exercise of the profession has to be considered as profit and gains of business or profession. The gift in this case had definitely arisen from the exercise of business or profession. The AO also observed that the honorarium received from Engineering Mazdoor Sabha was always much lower compared to amounts received from Mumbai Mazdoor Sabha and may be the flat was gifted by Engineering Mazdoor Sabha to compensate for lower honorarium. The AO accordingly held that the gift was income under section 28(iv). The assessee had also raised an alternate argument that the value of gift should be the value adopted for the purpose of stamp duty which was ₹ 1,00,28,000/-. AO however noted that the assessee had credited the capital account by ₹ 1,96,28,314/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct nexus between the services rendered and the gift received. CIT(A) did not accept the argument that the gift was voluntary in nature. CIT(A) also did not accept the argument that what was assessable under section 28(iv) was only the nature of income enumerated in other sub sections of section 28. It was observed by him that any amount received in exercise of business and profession was taxable under section 28(iv). In the case of the assessee nexus between the gift and the professional services was clear. CIT(A) accordingly upheld the view taken by the AO that the gift was assessable under section 28(iv). He also upheld the decision of AO to tax the value of gifts at ₹ 1,96,28,314/- and not the value adopted for stamp duty purpose. Aggrieved by the said decision the assessee is in appeal before the tribunal. 3.4 Before us the Learned AR for the assessee reiterated the submissions made before lower authorities that gift received by the assessee was voluntary gift out of personal love and affection for the assessee on completion of 25th year of service with the union for the noble cause of workers. It was argued that for application of the provisions of section 28(iv), the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich had been assessed as a professional income. Further the resolution passed by the general council of the union authorizing the gift shows that the general council had resolved that some of the office bearers who had selflessly served the Sabha / Union in achieving its objectives and for its progress should be awarded by giving gifts and the president of the union was empowered to select the office bearers and to decided the appropriate gifts. It is thus clear that the gift had been given for the services rendered by the assessee. There is nothing in the resolution to show that the gift had been given because of personal esteem or out of love and respect not connected to any services given to the union. In fact, the resolution clearly shows that there was direct nexus between the gift given and the services rendered. Income from similar services by the assessee to the union was being regularly declared and assessed as professional income. We therefore see no infirmity in the order of CIT(A) holding that gift had arisen from exercise of profession and was assessable as income under section 28(iv). 3.5.1 The Learned AR has placed reliance on the decision of Mumbai bench of tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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