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TMI Blog2012 (10) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... cided against revenue. - ITA No.6399/Mum/2010 - - - Dated:- 5-9-2012 - B R Mittal And B Ramakotaiah, JJ. Appellant Rep by: Ms Usha S Nair Respondent Rep by: Shri Vijay Mehta ORDER Per: B R Mittal, JM: The department has filed this appeal for assessment year 2006-07 against order dated 17.6.2010 of ld CIT(A) -38, Mumbai disputing the order of ld CIT(A) in deleting addition of Rs.98,56,827 made by the AO on account of gift of IMDs under section 56(2)v) of the Act. 2. The relevant facts giving rise to this appeal are that assessee received gift in the form of IMD of face value of USD 1,50,000 from Mrs Hansa Agarwal, NRI, residing at Sharjah on 25.9.2005. Thereafter, the assessee prematurely encashed the said IMD on 5th October, 2005 and received maturity amount of USD 2,22,452 equivalent to INR 98,56,827. The AO stated that the assessee utilized the unaccounted income of Group Company to obtain a non-genuine gift. The AO also contended that gift of IMDs is equivalent to gift of money and thus invoked the provisions of s. 56(2)(v) of the Act and made an addition to the total income of the assessee. The AO made the additions on the ground that the status of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a and that IMDs cannot be equivalent to money because IMD certificate is required to be presented together with the prescribed repayment application Form at least 60 days prior to the due date of maturity for receiving money against the certificate. The encashment is not permissible before the expiry of 60 days from the effective date of deposit and that Resident donees of the IMD certificates cannot further transfer IMD certificates. Ld CIT(A) stated that the other restrictions in respect of IMD certificates were also brought to his notice. Thus, it was submitted that IMDs are not money as the same cannot be currently accepted as a medium of exchange and that there are numerous restrictions on the transfer / gift of IMDs unlike in the case of money which is freely transferable. That IMDs at best can be treated at par with any other property which can be converted into money but by itself they cannot be treated as money and that they are not freely exchangeable as money and lack all the characteristics of money in terms of free transferability and acceptability. The assessee also relied upon the decision of Hon ble Supreme Court in the case of H.H. Sri Rama Verma v. CIT (187 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is implied that the aforesaid transaction relates to gift only and that the perquisites u/s. 68 have been complied with by the assessee. Therefore, the only dispute raised by the AO by invoking S. 56(2)(v) is whether the gift in question is gift of money or gift in kind . Ld CIT(A) after considering the submissions of the assessee has deleted the said addition on account of gift of IMD made by the AO u/s.56(2)(v) of the Act and relevant part of the order of ld CIT(A) reads as under: I have also gone through the evidences submitted in the course of assessment proceedings and the statement of Donor s husband recorded by the AO in the course of assessment proceedings. The appellant has furnished documentary evidences to establish the genuineness of the gift. These evidences are not disputed by the AO and no reasons have been given for disbelieving the same. In fact, the Donor s husband has deposed before the AO and the facts stated in the evidences submitted by the appellant have been corroborated in the statement recorded by the AO. It is precisely for this reason that the AO has not invoked the provisions of section 68 of the Act. It is true that in the course of search p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ehta in I.T.A. No.6804/M/2010 for the assessment year 2006-07 and vide order dated 31.1.2012 the Tribunal dismissed the appeal of the department by confirming the order of ld CIT(A). Ld A.R. submitted that in the said case also, grounds of appeal were similar as in the case of the assessee and referred page 22 of PB. He submitted that order of ld CIT(A) be confirmed by dismissing the appeal of department. 6. We have considered submissions of ld representatives of parties and orders of authorities below. We have also considered page 22 of PB, which contains grounds of appeal in I.T.A. No.6804/M/2010(supra) and find substance in the submission of ld A.R. that grounds of appeal of the assessee herein are identical save and except the amount. We observe that the Tribunal by its order dated 31.1.2012 after considering the orders of authorities below and relying on the decision of co-ordinate Bench in the case of ACIT vs. Anuj Agarwal, 130 TTJ 49(Mum) and also the decision of ITAT Vizag Bench in Sri Sarad Kumar Babulal Jain vs ITO (I.T.A. No.29/Viz/2011) order dated 11.8.2011 dismissed the appeal of department by confirming the order of ld CIT(A). We consider it prudent to state paras ..... X X X X Extracts X X X X X X X X Extracts X X X X
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