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2015 (2) TMI 284 - HC - Income TaxRectification of mistake - gifts of ₹ 13.25 lacs received by the petitioner from one Kishan Punjabi (donor) were not genuine - Held that - It has not been shown to us that the findings reached by the Tribunal on examination of the statement of the donor is in any manner perverse and/or arbitrary. So far as reliance in the order dated 10th July, 2007 on th decision of the Supreme Court in P.Mohan Kala (2007 (5) TMI 192 - SUPREME Court) is concerned, it was pointed in the impugned order that it merely records the fact that a gift from abroad does not become genuine merely because it is routed through a banking channel. The Tribunal in its order dated 10th July, 2007 after recording the conclusion of the Supreme Court tested the order of the Commissioner of Income Tax (Appeals) keeping in view that mere receipt of gifts from a foreign party through banking channel would not make it genuine. In fact, it was one of the submissions of the petitioner before the Tribunal that the gift received from the donor who was a foreign national through established banking channel makes it a genuine gift. The petitioner attempted to point out that there are distinguishing features in the decision of P.Mohan Kala (supra) and in present case. However to our mind, facts of the case would not be material for the present purpose as the conclusions of the Supreme Court being relied upon is that in law mere routing of a gift through a banking channel would not by itself establish that the gift is genuine. This finding of the Supreme Court is applicable irrespective of the facts. The genuineness or nongenuineness of the gift would have to be established by other evidence. The Tribunal was thus justified in coming to the conclusion that there has been no error apparent on record in order dated 10th July, 2007. - Decided against assessee.
Issues Involved:
1. Validity of the Income Tax Appellate Tribunal's order dated 20th August 2010. 2. Consideration of the donor's statement dated 9th August 1999. 3. Reliance on the Supreme Court's decision in CIT vs. P. Mohan Kala (2007) without notice to the petitioner. 4. Scope of rectification under Section 254(2) of the Income Tax Act, 1961. 5. Interpretation and application of previous court orders dated 19th January 2009 and 22nd February 2010. Detailed Analysis: 1. Validity of the Income Tax Appellate Tribunal's Order: The petitioner challenged the Tribunal's order dated 20th August 2010, which rejected their Miscellaneous Application for rectification of the order dated 10th July 2007. The Tribunal had dismissed the petitioner's appeal for A.Y. 1995-96, upholding the Commissioner of Income Tax (Appeals) and the Assessing Officer's decision that the gifts received by the petitioner were not genuine. The Tribunal concluded that there was no mistake apparent on record warranting interference. 2. Consideration of the Donor's Statement: The petitioner argued that the Tribunal did not consider the donor's statement dated 9th August 1999 in its order dated 10th July 2007. The Tribunal, upon remand, considered the statement but found no mistake apparent on record. The Court noted that the Tribunal correctly understood the scope of its remand, which was limited to considering the donor's statement and the opportunity to address the reliance on the Supreme Court's decision in P. Mohan Kala. 3. Reliance on the Supreme Court's Decision Without Notice: The petitioner contended that the Tribunal relied on the Supreme Court's decision in CIT vs. P. Mohan Kala (2007) without notifying them, thus denying them the opportunity to explain its inapplicability to their case. The Tribunal, upon remand, allowed the petitioner to address this issue but ultimately concluded that there was no error apparent on record. 4. Scope of Rectification under Section 254(2): The petitioner argued that the Tribunal should have merely identified the mistake apparent on record and not decided the issue on merits. The Court referred to the decision in COMMISSIONER OF INCOME TAX VS. EARNEST EXPORTS LTD (2010) 323 ITR 577, which clarified that Section 254(2) is confined to rectifying mistakes apparent on record and does not allow for substituting the Tribunal's view. The Tribunal, in this case, did not substitute its view but considered the petitioner's submissions to determine if there was an error apparent on record. 5. Interpretation and Application of Previous Court Orders: The petitioner claimed that the Tribunal misinterpreted the court orders dated 19th January 2009 and 22nd February 2010, which restored the Miscellaneous Application for rectification. The Court clarified that these orders directed the Tribunal to consider only the donor's statement and the reliance on the Supreme Court's decision. The Tribunal correctly limited its scope to these issues and concluded that there was no mistake apparent on record. Conclusion: The Court found no merit in the petitioner's arguments and dismissed the petition. The Tribunal's decision to reject the rectification application was upheld, as it was based on a correct understanding of the limited scope of the remand and the absence of any apparent error on record.
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