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TMI Blog2016 (6) TMI 1004X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Respondent-Assessee) while for Assessment Year 2008-09, besides Mr. Deepak Modi, the sister of Respondent i.e. Mrs. Purvi Mehta is also a donor of gifts to the Respondent-Assessee. 4. Brief Facts (a) Assessment Year 2007-08: (i) The Respondent-Assessee had filed his return of income for Assessment Year 2007-08, declaring an income of Rs. 50.43 lakhs. The Respondent-Assessee had claimed an amount of Rs. 7 Crores as gift from his father - one Mr. Deepak Modi (NonResident Indian, citizen of Singapore, 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 Deepak Modi. (ii) In response, Respond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which trades in equities and bonds. Also enclosed was a letter of reference issued by UBS Singapore Branch certifying the establishment of investment fund in Singapore of more than Rs. 50 Crores. The gift of Rs. 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 Rs. 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 by giving her PAN and the fact that she is assessed as an Non resident Indian in India being a resident of Hong Kong (including address) and citizen of Belgium. Copies of her Bank Account with UBS AG Singapore from where the funds have been credited to Mr. Deepak Modi NRE A/c. with Union Bank of India, Mumbai. Copies of bank statements of UBS AG Singapore and of NRE A/c with Union Bank of India also submitted. Besides pointing out that she earned US $31,622,295 out of Foreign Exchange Transaction A/c with UBS AG Singapore. It is these funds which were used to give gifts of Rs. 116.64 Crores to the Respondent-Assessee; (iii) On perusal o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... two Assessment Years under consideration. In response to the queries of the Assessing Officer, the Respondent-Assessee filed various details to establish the identity of the donors, source of the gift as well as the creditworthiness of the donor. The Assessing Officer was satisfied with the explanations, along with evidence produced bythe Respondent-Assessee about the source, identity and creditworthiness of the donors. This satisfaction of the genuineness 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 received during the two years under consideration and if the same were not found genuine, then to apply Section 68 of then Act. The impugned order holds that the order in Revision passed by the CIT did not point out how the orders of the Assessing Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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 inquiry in respect of the gifts received during the subject years was done by the Assessing Officer for the Assessment orders for Assessment Years 2007-08 and 2008-09. This according to the Revenue is evident from the Assessment Orders dated 31st December, 2009 and 30th December, 2010 which does not even make a mention of the gifts received much less discuss and/or deal with the same. This issue is no longer res integra as this Court in Idea Cellular Ltd. V. DCIT reported in 301 ITR 407 has held 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Nor any inquiry was done to find out whether the sister had in fact earned amounts on account of Foreign Exchange Transactions as claimed by her. We find that this enquiry of a source of source is not the requirement of law. Once the Assessing Officer is satisfied 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. Shreepati Holdings & Finance Pvt. Ltd., unreported( ITA 1879 of 2013 dated 5th October,2013), by the Delhi High Court in CIT v/s. Vikas Polymers 341 ITR 537 and in DG Housing Projects(supra). In fact the Delhi High Court in DG Housing Projects (supra) while so holding placed reliance upon the decision of this Court in Gabriel (India) Ltd., (supra). It is very important to note that the CIT in his order under Section 263 of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 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, the Respondent-Assessee had filed a revised return, claiming additional expenses. During the Assessment Proceedings, the Assessing Officer called upon the Assessee to furnish the details with regard to the expenses claimed to be incurred. The Assessee therein pointed out that the payments for expenses had come out of cash balance available with him. When the Assessing Officer commenced enquiry in respect of the claim of expenditure out of cash balance available, seeking to invoke Section 69(C) of 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 withdrawal of revised income and cons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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