9911796707
TMI Blog2004 (9) TMI 576X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee filed her return of income on 28th June, 2001 declaring the same income as in the earlier returns filed on 23rd June, 1993. 3. According to the Assessing Officer, information was received from DDI (Investigation), Faridabad that the assessee had received a sum of Rs. 1 lakh by way of cheque drawn on NRE account of Shri Subhash Sethi bearing No. 320169733 on American Express Bank, New Delhi. Subsequently, Shri Subhash Sethi, the alleged donor in his letter dated 25th July, 1995 addressed to Shri N.K. Katyal, Enforcement Officer stated that during his visit to India in February, 1993 he had met one Shri Mittal, Chartered Accountant, who advised him to open an NRE bank account in American Express Bank. A representative of Shri Mittal viz. Shri Umesh Mendiratta was appointed as Mandatee for this account. According to Mr. Subhash Sethi Shri Mittal assured that everything was perfectly legal and he would get margin of 30 per cent. On this understanding Shri Mittal agreed to arrange the funds to be deposited in the NRE account. Even the initial deposit was made by Mr. Mittal. According to Shri Subhash Sethi, he did not remit any funds to India. On his return to India in Febr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted any money in this account. Once the donor had denied the genuineness of the transaction, the documents relied upon by the assessee ceased to have a sanctity and to be sufficient material or evidence. In these circumstances, the Assessing Officer was required to consider the relevant circumstances having bearing on the issue. According to the learned Assessing Officer, the assessee had been furnished copy of statement of Shri Umesh Mendiratta, who also had admitted in his statement that he did not know Mr. Subhash Sethi and he was operating the account in question with American Express Bank at the instructions of his employer Shri S.K. Mittal. Shri Umesh Mendiratta stated that he did not know from where the foreign currency deposited in the account in question was procured because it was Mr. S.K. Mittal, who used to procure the foreign exchange. At the same time Shri Umesh Mendiratta stated that to the best of his knowledge Shri Subhash Sethi never deposited any foreign currency in this account. According to the Assessing Officer though the assessee was confronted with this letter of Shri Umesh Mendiratta, no explanation whatsoever was furnished by the assessee. Thus, there was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fixture. That the notice was a photocopy was not material. The fact remained that the notice under section 148 was duly served on the assessee. The assessee could not be allowed to get the benefit of a trivial, innocuous lapse, if the same at all could be considered to be a lapse, in the given facts and circumstances of the case. As to the contention of the assessee that the ld. Assessing Officer had not applied his mind, the learned CIT(A) held that it was not in dispute that the Assessing Officer had recorded reasons before issuing the notice under section 148. He had also obtained the approval before issuing a notice. The CIT, Rohtak had only directed the Assessing Officer to take immediate action and there was nothing wrong or abnormal in such directions. On merits, the legal heir of the assessee argued before the ld. CIT(A) that there was also an affidavit of Shri Subhash Sethi duly attested by Notary Public along with the gift deed. The learned Assessing Officer was not justified in ignoring that document. Regarding the subsequent statement of Shri Subhash Sethi, the legal heir argued that assessee had not been given any opportunity to cross examine Shri Subhash Sethi. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled by the assessee. Still aggrieved, the assessee is in appeal before me. 7. During the course of hearing before me, the learned counsel for the assessee challenged initiation of proceedings under section 147 on the ground that the statement of Shri Subhash Sethi was not authenticated and, therefore, the same could not constitute a basis for initiation of proceedings against the assessee. The assessee was in possession of statement duly notarized given by Mr. Subhash Sethi confirming that the had withdrawn a sum of Rs. 1 lakh from his NRE account and given that amount to the assessee by way of gift. The assessee pointed out that he signature on these two documents did not tally. At any rate the alleged statement of Shri Subhash Sethi was given in a general way and did not name the assessee in particular. The reasons for which Mr. Sethi denied having made gifts to anyone were best known to him. Therefore, the Assessing Officer did not have sufficient material to form the belief that the assessee s income chargeable to tax had escaped assessment. The learned AR also argued that in the case of the assessee, there was no proper service of notice under section 148. That notice was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as full of contradictions. At one place Mr. Mendiratta said that he recognized Mr. Sethi and at other place, he stated that Mr. Sethi was not known to him. 10. The learned counsel argued that the assessee had relied upon the gift deed, affidavit of Mr. Subhash Sethi and the certificate of M/s. American Express Bank certifying the withdrawal of the sum of Rs. 1 lakh. Thus, the assessee had discharged the primary onus to prove the nature, source of funds, identity of donor and genuineness of transactions. It was established legal position that apparent state of affairs is true until contrary is proved. It was for the Assessing Officer to establish that the documents relied upon by the assessee were false and that the transaction was not genuine. The department did not produce Shri Subhash Sethi for cross examination on the ground that he was in the U.K. and merely relied upon the letter and the statement of the mandatee. The learned CIT(A), therefore, sustained the addition made by Assessing Officer on inadequate ground. The Assessing Officer directed the assessee to produce Mr. Subhash Sethi which was not necessary because the assessee had filed relevant documents. 11. The l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n iota of evidence apart from tailor made documents acquired by him by arranging receipt of funds by way of bogus gifts. It was not even the case of the assessee that the donor and the donee have met ever during their life time. These circumstances were sufficient to prove that it was the subsequent statement of Shri Subhash Sethi which narrated the true state of affairs. The learned DR strongly relied upon the reasonings of the Assessing Officer and the order of learned CIT(A). He has also placed considerable reliance on the judgment of Hon ble Punjab Haryana High Court in the case of Lalchand ( supra ). 13. I have carefully considered the rival submissions. I shall address to the assessee s challenge to initiation of proceedings under section 147 first. The assessee s attack is two fold. First, he argues that notice under section 148 was not served on the assessee in time. Secondly, he argues that the Assessing Officer did not have sufficient material for taking recourse to the provisions of section 147. As to the first aspect, I find that the Assessing Officer served the notice by affixture as the assessee was not traceable. Mere fact that the notice affixed was a photo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the very same Subhash Sethi to the appellant before them. After consideration, the Hon ble Delhi High Court held as under : "We have heard Mr. P.C. Jain, learned counsel for the appellant and Ms. Prem Lata Bansal, learned senior standing counsel for the revenue. It is vehemently submitted by Mr. Jain on behalf of the assessee that the Assessing Officer having relied on a letter, issued to a third party, namely, D.R.I., without confronting the assessee with the same, the assessment order is violative of principles of natural justice and that the assessee having furnished the documents in the form of affidavit of Subhash Sethi and the pay order issued by the American Express Bank, he had discharged the burden to prove that the gift was genuine. It is asserted that since the donor was not in India, he could not be produced before the Assessing Officer and, therefore, no adverse inference should have been drawn on that score. It is, thus, urged that the Tribunal having ignored these essential factors, its findings to the effect that the gift was not proved gives rise to a substantial question of law. We are unable to persuade ourselves to agree with learned counsel for the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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